The U.S. Department of Homeland Security (DHS) U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking in the Federal Register , 85 FR 14176 (March 11, 2020), proposing to exempt portions of the system of records from one or more provisions of the Privacy Act because of criminal, civil, and administrative enforcement requirements. DHS issued the “DHS/CBP-002 Trusted and Registered Traveler Programs System of Records” in the Federal Register at 85 FR 14214 (March 11, 2020), to provide notice to the public that (1) DHS/CBP updated the name of the system of records from Global Enrollment System (GES); (2) DHS/CBP provided a more comprehensive description of the trusted and registered traveler programs to include Global Entry, NEXUS, Secure Electronic Network for Travelers Rapid Inspection (SENTRI), Free and Secure Trade (FAST) program, and U.S.-Asia Economic Cooperation (APEC) Business Travel Card (ABTC) Program; and (3) DHS/CBP removed references to CBP Trusted Worker Programs which are covered by the DHS/CBP-010 Persons Engaged in International Trade in Customs and Border Protection Licensed/Regulated Activities System of Records Notice, 73 FR 77753 (December 19, 2008).

DHS/CBP invited comments on both the notice of proposed rulemaking (NPRM) and System of Records Notice (SORN).

DHS received no comments on the NPRM and one non-substantive comment on the SORN. After full consideration of the public comment, the Department will implement the rulemaking as proposed.

For the reasons stated in the preamble, DHS amends chapter I of title 6, Code of Federal Regulations, as follows:

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches to maximize net benefits (including potential economic, environmental, public health, and safety advantages; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be significant and was reviewed by the Office of Management and Budget (OMB) under Executive Order 12866. In accordance with Executive Order 12866, the Agency conducted a Regulatory Impact Analysis, outlining the costs and benefits of implementing this program in rural America. The complete analysis is available in Docket No. RUS-20-TELECOM-0044. The following is a summary discussion of the Analysis:

This final rule does not directly address any specific market failure. The Agency is publishing this rulemaking action to codify the mandatory changes outlined in the 2018 Farm Bill. Many of the benefits provided by these mandatory changes include:

(1) Providing new information regarding grant eligibility in conjunction with the Farm Bill Broadband Program covered under 7 CFR part 1738;

(2) General language clarifications and duplication removals;

(3) Providing information for, or the removals of, specific service requirements;

(4) Changes in program financing thresholds to conform to the 2018 Farm Bill requirements;

(5) Additional application information to ensure criteria are met;

(6) New reporting requirements that ensure similar data is reported and collected across multiple USDA broadband programs to improve oversight and integrity; and

(7) Changes in language to ensure that programs can meet funding deadlines while still maintaining the integrity of the environmental review process.

These changes are expected to result in great transparency from the Agency and increased financing opportunities for providers of rural telecommunications services. Telecommunications services are having a profound effect on the Nation's economy, its strength and its growth by reducing the barriers of distance, remoteness, and time.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs has designated this rule as not being a major rule, as defined by 5 U.S.C. 804(2).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The Agency has determined that this rule meets the applicable standards provided in section 3 of the Executive order. In addition, all state and local laws and regulations that conflict with this rule will be preempted. No retroactive effect will be given to this rule.

This final rule has been excluded from the scope of Executive Order 12372 (Intergovernmental Consultation), which may require a consultation with state and local officials. See “Department Programs and Activities Excluded from Executive Order 12372,” 50 FR 47034 (Nov. 14, 1985).

The Administrative Procedures Act (APA) exempts from notice and comment requirements rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” (5 U.S.C.553(a)(2)). The Rural Telecommunications Program provides loans to borrowers at interest rates and on terms that are more favorable than those generally available from the private sector. RUS borrowers, as a result of obtaining Federal financing, receive economic benefits under the loan program. Based on this, any changes to the program fall under this exemption.

The Regulatory Flexibility Act (5 U.S.C. 601-602) (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the APA or any other statute. As outlined above, this rule is not subject to the APA under 5 U.S.C. 553(a)(2).

This final rule has been reviewed in accordance with 7 CFR part 1970 (“Environmental Policies and Procedures”). The Agency has determined that (i) this action meets the criteria established in 7 CFR 1970.53(f); (2) no extraordinary circumstances exist; and (iii) the action is not “connected” to other actions with potentially significant impacts, is not considered a “cumulative action” and is not precluded by 40 CFR 1506.1. Therefore, the Agency has determined that the action does not have a significant effect on the human environment, and therefore neither an Environmental Assessment nor an Environmental Impact Statement is required.

The Catalog of Federal Domestic Assistance (CFDA) number assigned to the Telecommunications Infrastructure Loans & Guarantees Program is 10.851. The Catalog is available on the internet at https://beta.sam.gov/ . The Government Publishing Office (GPO) prints and sells the CFDA to interested buyers. For information about purchasing the Catalog of Federal Domestic Assistance from GPO, call the Superintendent of Documents at (202) 512-1800 or toll free at (866) 512-1800, or access GPO's online bookstore at https://bookstore.gpo.gov .

This rule contains no federal mandates (under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995) for state, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act of 1995.

Rural Development is committed to complying with the E-Government Act of 2002, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

The policies contained in this rule do not have any substantial direct effect on 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. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

Broadband programs in general have a significant impact on Tribes. These specific statutory provisions, however, were predominantly mandatory, leaving very few areas for discretion for Tribal consultation and guidance. The primary areas of discretion were: (1) Removing guarantee fee language, (2) correcting a citation, (3) removing obsolete year 2000 compliance information and (4) removing a duplicative refinancing section.

USDA has held a series of Tribal consultations conducted by USDA Rural Development and USDA Office of Tribal Relations regarding tribal broadband. The consultations included consultations on (1) tribal broadband specifically (both at the national level and numerous regional and state level tribal consultations), (2) the USDA ReConnect broadband program, (3) participation with Department of Commerce NTIA on the Tribal Broadband Connectivity Program, and on (4) Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government” (1/20/21). Through these consultations, the USDA compiled the following Tribal government requested “Tribal Broadband Principles” which were considered and used where applicable in drafting this regulation:

• Require Tribal resolution. Require any new or legacy applicant for USDA funds proposing to serve Tribal lands to have a Tribal resolution of support to qualify for eligibility.

• Increase flexibility. Read any ambiguous statutory requirements and limitations as broadly as possible and in favor of Tribes in light of our trust obligations.

• Narrow duplication definition. Read “duplication” limitations as broadly and as flexibly as possible when working with Tribal nations to ensure their eligibility for USDA programs to serve their own lands.

• All self-certification. Tribal nations must be the certifiers of whether they are being served/are underserved or other similar requirements.

• Enforce compliance with Tribal laws. Include a requirement of compliance with Tribal laws and regulations in the sections of loan and grant agreements that require compliance with state and local laws. Enforce the terms of Federal loan and grant agreements which require compliance with local (including tribal) laws and regulatory bodies.

The Rural Development's Civil Rights Office reviewed this rule in accordance with USDA Regulation 4300-4, “Civil Rights Impact Analysis,” to identify any major civil rights impacts the rule might have on program participants on the basis of age, race, color, national origin, sex, or disability. The Rural Development's Civil Rights Office worked with the RUS program offices to compile program descriptions, data, and outreach activities strategies for the subject program. The Rural Development's Civil Rights Office assessed civil rights implications and impacts of eligibility criteria, methods of administration, and other requirements associated with the final rule including strategies to eliminate, alleviate, or mitigate (where applicable) civil rights impacts identified in the Civil Rights Impact Analysis. The Rural Development's Civil Rights Office agrees to monitor the implementation of all civil rights strategies that were instituted in connection with this final rule, evaluate their effectiveness, and take follow-up action where civil rights impacts may ensue.

The Information Collection and Recordkeeping requirements contained in this rule have been approved under OMB Control Number 0572-0079 and submitted for approval under OMB Control Number 0572-0154.

Rural Development is a mission area within the USDA comprising the Rural Utilities Service, Rural Housing Service, and Rural Business/Cooperative Service. Rural Development's mission is to increase economic opportunity and improve the quality of life for all rural Americans. Rural Development meets its mission by providing loans, loan guarantees, grants, and technical assistance through more than 40 programs aimed at creating and improving housing, business, and infrastructure throughout rural America.

The Agricultural Improvement Act of 2018 (2018 Farm Bill) made mandatory changes to the Rural Telephone Loan Program administered by the Telecommunications Program of the Rural Utilities Service.

These modifications to the program's regulations will allow RUS to fully implement the requirements of the 2018 Farm Bill. RUS is also taking the opportunity to make minor changes to the program regulations that will update or correct existing regulatory citations, data speeds, and other program provisions to bring them in line with the statutory changes required by the 2018 Farm Bill.

Changes to 7 CFR part 1735 “General Policies, Types of Loans, Loan Requirements—Telecommunications Program” include:

Adding paragraph (d) to § 1735.1. The addition of paragraph (d) provides notice to applicants that they may be eligible to receive grant assistance through Title VI which is governed by 7 CFR part 1738. The Agency determined this was the most effective way to provide this information.

The addition of a definition of Retail Broadband Service to § 1735.2. The definition provides information to the public on what the Agency considers “retail broadband service” for the purposes of this part.

Clarifying, at § 1735.10(a)(2)(ii), that multiuse networks that provide critical transportation-related services are considered integrated interoperable emergency communications and therefore are an eligible loan purpose.

Removing the requirement for a certificate of convenience and necessity from § 1735.12. While necessary when the program was implemented, the prevalence of services at this time and changes to state regulatory bodies has rendered the certificate meaningless for Agency purposes. The Agency also expanded the authority of the RUS Administrator, at § 1735.12(a), to determine non-duplication of services. Previously the Administrator only made that determination for states in which there was no regulatory body. This change will reduce the burden on applicants and aid in streamlining the application process. Clarification regarding non-duplication verification for existing borrowers is provided by the Agency, at § 1735.12(b).

Modifying the criteria at § 1735.12(c) to remove specific transmission and reception rates and require coverage as described in § 1735.11 for local area exchanges. These changes remove outdated terminology, create a single requirement which reduces confusion and creates consistency for all applicants.

Changing the thresholds, at § 1735.21, regarding refinancing to conform to 2018 Farm Bill requirements. Prior to the 2018 Farm Bill, the Agency was only able to refinance non-RUS loans as long as no more than 40 percent of the new loan was used for refinancing. The 2018 Farm Bill removed the 40 percent cap and extended the ability to refinance 100 percent of non-RUS and RUS debt. Refinancing limits will be published in the funding opportunity announcement opening an application window and based on amounts that are authorized for a given fiscal year. However, the Agency is considering limiting refinancing of non-RUS loans to 50 percent of the total loan amount while allowing 100 percent refinancing of existing RUS loans. Additional information was added to this section to provide information on loans eligible for refinancing as well as maximum amortizations.

Modifications to § 1735.22(f), (g), and (i) to remove outdated references to year 2000 compliant systems and correct an incorrect reference that was carried forward from a previous version of the regulation, respectively.

The addition of public notice filing and response requirements at § 1735.23. The notice will allow existing service providers to respond to pending applications before the agency that propose to provide broadband service outside of their territory that receives federal universal support.

New reporting requirements at § 1735.24. These new requirements ensure similar data is reported and collected across multiple USDA broadband programs to improve oversight and integrity.

Removal of refinancing language at § 1735.52 that is now duplicative due to the changes at § 1735.21.

Changes to 7 CFR part 1737, “Pre-Loan Policies and Procedures Common to Insured and Guaranteed Telecommunications Loans” include multiple changes to § 1737.22 to include the removal of the requirement for a certified copy of a certificate of convenience and necessity as that certificate is no longer required due to changes implemented by the 2018 Farm Bill.

Additional application information was added to § 1737.22(c) and (e) for loans involving refinancing. This additional information is necessary to ensure that the loans to be refinanced meet the criteria set forth in this regulation and the funding opportunity announcement that opens a funding window.

Changes at § 1737.90 to include language allowing obligation but not disbursal of funds, under certain circumstances, prior to the completion of historical or other types of review identified during the environmental review. This change allows for obligation of funds so awardees know that funds will be available while still maintaining the integrity of the environmental review process.

The Telecommunications Program and the organizations that apply for its funding face significant challenges putting in place projects that can deliver and maintain robust, affordable telecommunication services to rural consumers. These challenges include rapidly evolving technology, competition, and the ever-present higher costs of serving rural areas. The final rule will implement statutory changes required by the 2018 Farm Bill, as well as minor conforming changes that will update and/or correct existing regulatory citations, data speeds and other program provisions to ensure they are in line with the required statutory changes. The changes are expected to create greater program transparency and ensure program rules are clear and consistent.

Table 1 below shows which sections of the regulations were changed due to the statutory authority contained in the 2018 Farm Bill and those changes where RUS is exercising discretion to improve program clarity. If the sections of the regulations are not specifically stated within the table, no changes were made to those sections.

For reasons set forth in the preamble, 7 CFR parts 1735 and 1737 are amended as follows:

On March 18, 2020, an Airbus Model A321-231 airplane, powered by IAE V2533-A5 model turbofan engines, experienced an uncontained HPT 1st-stage disk failure that resulted in high-energy debris penetrating the engine cowling. Based on a preliminary analysis of this event, on March 21, 2020, the FAA issued Emergency AD 2020-07-51 (followed by publication in the Federal Register on April 13, 2020, as a Final Rule, Request for Comments (85 FR 20402)), which requires the removal from service of certain HPT 1st-stage disks installed on IAE V2522-A5, V2524-A5, V2525-D5, V2527-A5, V2527E-A5, V2527M-A5, V2528-D5, V2530-A5, and V2533-A5 model turbofan engines.

Pratt & Whitney (PW) determined that the failure of the V2533-A5 model turbofan engine was due to an undetected subsurface material defect in an HPT disk that may affect the life of the part. In June 2021, PW expanded its root cause analysis to include a review of records for all other IAE and PW engines that contain parts of similar material.

On July 29, 2021, PW provided its PW1100G analysis results to the FAA. PW's analysis identified a different population of HPT 1st-stage and HPT 2nd-stage disks installed on IAE PW1122G-JM, PW1124G1-JM, PW1124G-JM, PW1127G1-JM, PW1127GA-JM, PW1127G-JM, PW1129G-JM, PW1130G-JM, PW1133GA-JM, and PW1133G-JM model turbofan engines that are also affected by the unsafe condition in AD 2020-07-51 and require removal from service. This condition, if not addressed, could result in uncontained HPT disk failure, release of high-energy debris, damage to the engine, damage to the airplane, and loss of the airplane. The FAA is issuing this AD to address the unsafe condition on these products.

The FAA is issuing this AD because the agency has determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This AD requires the removal from service of certain HPT 1st-stage and HPT 2nd-stage disks installed on PW1122G-JM, PW1124G1-JM, PW1124G-JM, PW1127G1-JM, PW1127GA-JM, PW1127G-JM, PW1129G-JM, PW1130G-JM, PW1133GA-JM, and PW1133G-JM model turbofan engines.

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 foregoing notice and comment prior to adoption of this rule. PW determined that the failure of the V2533-A5 model turbofan engine was due to an undetected subsurface material defect in an HPT disk that may affect the life of the part. Based on the follow-on analysis performed since that event, PW has identified a different population of affected HPT 1st-stage and HPT 2nd-stage disks installed on IAE PW1122G-JM, PW1124G1-JM, PW1124G-JM, PW1127G1-JM, PW1127GA-JM, PW1127G-JM, PW1129G-JM, PW1130G-JM, PW1133GA-JM, and PW1133G-JM model turbofan engines that are affected by the same unsafe condition as contained in AD 2020-07-51 and require removal from service. These HPT disks have the highest risk of failure and require removal within 30 days after the effective date of this AD to prevent additional HPT disk failures and maintain an acceptable level of safety. This unsafe condition may result in loss of the airplane. The FAA considers removal of certain HPT 1st-stage and HPT 2nd-stage disks to be an urgent safety issue. 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 forego notice and comment.

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2021-0780 and Project Identifier AD-2021-00916-E” 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 Mark Taylor, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The requirements of the Regulatory Flexibility Act (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 FAA has determined that it has good cause to adopt this rule without prior notice and comment, RFA analysis is not required.

The FAA estimates that this AD affects 3 engines installed on airplanes of U.S. registry.

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

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

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

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

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

(1) Is not a “significant regulatory action” under Executive Order 12866, 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 amends the Class E airspace extending upward from 700 feet above the surface in Monroe, NC, to support IFR operations in the area.

The FAA published a notice of proposed rulemaking in the Federal Register (86 FR 35419, July 6, 2021) for Docket No. FAA-2021-0529 to amend Class E airspace extending upward from 700 feet above the surface at Charlotte-Monroe Executive Airport, Monroe, NC.

Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. One comment supporting this action was received.

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

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

The FAA is amending 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface at Charlotte-Monroe Executive Airport, Monroe, NC, by increasing the radius to 9.0 miles, (formerly 6.3 miles). In addition, this action updates the airport's name to Charlotte-Monroe Executive Airport (formerly Monroe Airport) and updates the geographical coordinates to coincide with the FAA's database.

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

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under 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 minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

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

This amendment to part 95 of the Federal Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR altitudes governing the operation of all aircraft in flight over a specified route or any portion of that route, as well as the changeover points (COPs) for Federal airways, jet routes, or direct routes as prescribed in part 95.

The specified IFR altitudes, when used in conjunction with the prescribed changeover points for those routes, ensure navigation aid coverage that is adequate for safe flight operations and free of frequency interference. The reasons and circumstances that create the need for this amendment involve matters of flight safety and operational efficiency in the National Airspace System, are related to published aeronautical charts that are essential to the user, and provide for the safe and efficient use of the navigable airspace. In addition, those various reasons or circumstances require making this amendment effective before the next scheduled charting and publication date of the flight information to assure its timely availability to the user. The effective date of this amendment reflects those considerations. In view of the close and immediate relationship between these regulatory changes and safety in air commerce, I find that notice and public procedure before adopting this amendment are impracticable and contrary to the public interest and that good cause exists for making the amendment 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 by the Administrator, part 95 of the Federal Aviation Regulations (14 CFR part 95) is amended as follows effective at 0901 UTC, October 7, 2021.

NASA has determined this rulemaking meets the criteria for a direct final rule because it makes non-substantive changes to provide updated available NASA airfield facilities. No opposition to the changes and no significant adverse comments are expected. However, if NASA receives significant adverse comments, it will withdraw this direct final rule by publishing a notification in the Federal Register . A significant adverse comment is one that explains: (1) Why the direct final rule is inappropriate, including challenges to the rule's underlying premise or approach; or (2) why the direct final rule will be ineffective or unacceptable without a change. In determining whether a comment necessitates withdrawal of this direct final rule, NASA will consider whether it warrants a substantive response in a notice and comment process.

Subpart 14 of part 1204, promulgated July 29, 1991 [56 FR 35812], establishes the responsibilities, conditions, and procedures for the use of NASA airfield facilities by aircrafts not operated for the benefit of the Federal Government. Sections 1204.1401, 1204.1403, 1204.1404, and 1204.1405 will be amended to update the list of available NASA airfield facilities.

The National Aeronautics and Space Act (the Space Act), 51 U.S.C. 20113 (a), authorizes the Administrator of NASA to make, promulgate, issue, rescind, and amend rules and regulations governing the manner of its operations and the exercise of the powers vested in it by law.

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

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires an agency to prepare an initial regulatory flexibility analysis to be published at the time the proposed rule is published. This requirement does not apply if the agency “certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities” (5 U.S.C. 603). This rule removes one section from title 14 of the CFR and, therefore, does not have a significant economic impact on a substantial number of small entities.

This direct final rule does not contain any information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

E.O. 13132, “Federalism,” 64 FR 43255 (August 4, 1999), requires regulations to be reviewed for federalism effects on the institutional interest of states and local governments, and, if the effects are sufficiently substantial, preparation of the Federal assessment is required to assist senior policy makers. The amendments will not have any substantial direct effects on state and local governments within the meaning of the E.O.. Therefore, no federalism assessment is required.

Accordingly, under the authority of the National Aeronautics and Space Act, as amended, 51 U.S.C. 20113, NASA amends 14 CFR part 1204 as follows:

This final rule is promulgated under the authority of the TVA Act, as amended, 16 U.S.C. 831-831ee, Title V of the Independent Offices Appropriations Act of 1955, 31 U.S.C. 9701, and OMB Circular No. A-25. Under Section 26a of the TVA Act, no obstructions affecting navigation, flood control, or public lands or reservations shall be constructed, operated, or maintained across, along, or in the Tennessee River System without TVA's approval. Nonnavigable structures, such as floating cabins, are obstructions that require TVA's approval. In addition, Section 9b of the TVA Act provides that TVA may require floating cabins to be maintained by the owner to reasonable health, safety, and environmental standards. Section 9b also authorizes TVA to levy fees on floating cabin owners as necessary and reasonable to ensure compliance.

TVA is a multi-purpose federal agency that has been charged by Congress with promoting the wise use and conservation of the resources of the Tennessee Valley region, including the Tennessee River System. In carrying out this mission, TVA operates a system of dams and reservoirs on the Tennessee River and its tributaries for the purposes of navigation, flood control, and power production. Consistent with its mission, TVA also uses the system to improve water quality and water supply and to provide a wide range of public benefits, including recreation and natural resource stewardship.

To promote the unified development and regulation of the Tennessee River System, Congress directed TVA to approve obstructions across, along, or in the river system under Section 26a of the TVA Act. “Obstruction” is a broad term that includes, by way of example, boat docks, piers, boathouses, buoys, floats, boat launching ramps, fills, water intakes, devices for discharging effluents, bridges, aerial cables, culverts, pipelines, fish attractors, shoreline stabilization projects, channel excavations, and floating cabins. TVA also owns, as agent for the United States, much of the shoreland and inundated land along and under its reservoir system.

Since 1971, pursuant to Section 26a, TVA has prohibited the mooring on the Tennessee River System of new floating cabins (formerly nonnavigable houseboats) that are designed and used primarily for human habitation or occupation and not for transportation on the water. In particular, TVA amended its regulations in 1971 to prohibit the mooring or anchoring of new nonnavigable houseboats except those in existence before November 21, 1971. Criteria were established then to identify when a houseboat was considered “navigable” and the conditions under which existing nonnavigable houseboats would be allowed to remain. These criteria were characteristics that TVA determined were indicative of real watercraft; i.e., boats or vessels that are designed and used primarily to traverse water. In 1978, TVA reiterated the prohibited mooring of nonnavigable houseboats on the Tennessee River System except for those in existence on or before February 15, 1978.

Despite over 40 years of Section 26a regulations related to floating cabins, the number of floating cabins on the Tennessee River System continued to increase. In determining what action to take with respect to floating cabins, TVA prepared an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act. This EIS assessed the environmental and socioeconomic impacts of different policies to address the proliferation of floating cabins on the Tennessee River System. TVA released a draft of this EIS for public comment in June 2015 and held four public meetings and a webinar to provide information about its analyses and to facilitate public involvement. Public reaction to this situation varied widely.

Many members of the general public urged TVA to require the removal of all floating cabins since TVA's reservoirs are public resources and owners of floating cabins are occupying public areas. Owners of floating cabins generally supported additional reasonable regulation of their structures but argued against policies requiring their removal because of the investments they have made in the structures. Other commenters had concerns about discharges of blackwater (sewage) and graywater (showers, sinks, etc.) from floating cabins and shock and electrocution risks associated with the electrical connections to floating cabins. Commenting agencies consistently supported better regulation of floating cabins. The final EIS and associated documents can be found at https://www.tva.com/floatingcabins.

After considering the comments it received during the EIS process and its analyses of impacts, TVA identified as its preferred policy one that establishes standards to ensure safer mooring, electrical connections, and protection of water quality. Under the preferred policy, the mooring of new floating cabins would be prohibited on the Tennessee River System. The preferred policy would have required all existing floating cabins, including nonnavigable houseboats, to be removed from the Tennessee River System by January 1, 2036, and be subject to a regulatory program in the interim. On May 5, 2016, the TVA Board of Directors (Board) adopted the preferred policy, but the Board extended the removal date to May 5, 2046.

On December 16, 2016, Congress enacted the Water Infrastructure Improvements for the Nation Act of 2016 (WIIN Act). Title IV Section 5003 related to floating cabins and amended the TVA Act to include Section 9b. This new section of the TVA Act provides that TVA may approve and allow the use of floating cabins that were located on waters under the jurisdiction of TVA as of December 16, 2016, if the floating cabin is maintained to reasonable health, safety, and environmental standards as required by the Board and if the owner pays a compliance fee if assessed by TVA. The WIIN Act stipulates that TVA may not require the removal of a floating cabin that was located on the Tennessee River System as of December 16, 2016: (1) For a period of 15 years if it was granted a permit by TVA before the WIIN Act's enactment, or (2) for a period of five years if it was not granted a permit by TVA before the WIIN Act's enactment. It further stipulates that TVA may establish regulations to prevent the construction of new floating cabins. These regulations were planned in two phases.

TVA published Phase I rule amendments for floating cabins that became effective on October 1, 2018 (83 FR 44467). These amendments clarified the types of structures that TVA will regulate as a floating cabin and prohibited new floating cabins from mooring on the Tennessee River System after December 16, 2016. TVA estimates that approximately 2,250 floating cabins were moored on the Tennessee River System on December 16, 2016. These initial rule amendments also incorporated a requirement for owners to register their floating cabins and identified locations where floating cabins may moor.

This final rule includes health, safety, environmental, and permitting standards that will apply to all floating cabins. A diverse stakeholder group composed of 18 members provided input to TVA on the development and drafting of these standards. The group represented varied interests and perspectives. Members included representatives from floating cabin owners, lake user interests, fishing interests, marina owners, local power distributors, state and federal regulatory agencies, the insurance industry, and the general public. The full group met five times from August 2017 to June 2019 at various locations, including locations near Norris and Fontana Reservoirs where floating cabins are prevalent. Teleconferences were also held among three subgroups to develop and discuss recommendations in specific subject matter areas. An industry professional in marine electricity presented to the group and helped answer questions regarding electricity at marinas and in water. TVA tested and displayed ground fault protection devices for the group to observe and discuss.

Each of the three subgroups made recommendations for a subset of standards. Recommendations were presented to the full stakeholder group for wastewater, electrical, flotation, mooring, fees, permitting standards, and compliance. TVA reviewed and evaluated the recommendations and responded to each recommendation. TVA refined the recommendations and developed them into proposed rule amendments for publication for public review and comment. A draft of the rule amendments was reviewed with the stakeholder group in June 2019, and TVA made some modifications after that discussion. TVA published the proposed rule amendments for a 90-day public comment period on December 10, 2019 (84 FR 67386).

The final rule for floating cabins applies to all existing floating cabins, including those formerly referred to as nonnavigable houseboats originally permitted on or before February 15, 1978. All floating cabins and attached structures must be registered and obtain a new permit from TVA.

The final rule allows floating cabin owners additional time to register with TVA, until December 9, 2021. To obtain a Section 26a permit, owners of floating cabins will have until October 1, 2024, to comply with the standards in TVA's regulations and submit a complete permit application that certifies compliance and includes the payment of a permit application fee. TVA will not require floating cabin owners to pay the initial permit application fee if they possess a permit in their name issued before December 16, 2016, and the structure is compliant with the terms of the permit, constructed in accordance with the permit (same dimensions, attached structures such as docks, and utility connections), and moored at the permitted location. A change in ownership application fee, currently $250, will be charged each time an existing floating cabin owner requests a transfer of the permit to a new owner. Permits will only be transferrable if the structure is in full compliance with the existing permit; requests not compliant with the previous permit will be subject to the standard permit application fee, and modifications not compliant with the rules will be denied.

The permit application submission date of October 1, 2024, will give owners nearly four years from the publication of the final standards to bring structures into compliance. TVA encourages floating cabin owners to bring floating cabins into compliance and apply for a permit without delay. Upon submission of the application, owners of floating cabins may remain in place until TVA acts on the application. If TVA approves the application, TVA will issue a Section 26a permit to the owner. If TVA denies the application, the owner must either correct all deficiencies and submit a new application or remove the structure in accordance with Section 9b of the TVA Act and 18 CFR 1304.406.

Under the final rule, TVA will have the authority to require owners to remove their floating cabins if TVA determines a floating cabin is not in compliance with its permit, does not apply for a permit by October 1, 2024, or does not pay the compliance fee if levied by TVA. The requirement to remove a floating cabin will be in accordance with Section 9b of the TVA Act and 18 CFR 1304.406. All structures not removed by the applicable deadline may be removed by TVA at the owner's expense.

Unencased flotation ( i.e., Styrofoam) breaks apart over time, can harm wildlife, and becomes litter in reservoirs or along shorelines. Currently, all docks, floating cabins, and other water-use structures and facilities permitted by TVA are subject to 18 CFR 1304.400, which establishes flotation requirements to protect the environment from harmful flotation materials, such as Styrofoam and the contents of metal drums, which were common flotation devices in the past. TVA's current regulations prohibit unencased flotation unless it was previously allowed by TVA, was installed prior to September 8, 2003, and is still serviceable in TVA's judgment. TVA's current rules prohibit the installation of unencased flotation to repair or replace existing flotation that is no longer serviceable. This final rule requires the removal and replacement of all unencased flotation no later than December 31, 2031. If TVA determines that the existing unencased flotation is no longer serviceable prior to December 31, 2031, owners will have 24 months from notification from TVA to remove and replace it. These changes will apply to all Section 26a permits, including those authorizing floating cabins.

Some floating cabins are moored by running cables across the water to attach to a tree or other anchor on the shoreline. This potentially obstructs navigation and recreation, poses a potential hazard to public safety, and can detract from the scenic integrity of the areas where floating cabins are located. Current regulations require floating cabins to be moored in such a manner as to: (1) Avoid obstruction of or interference with navigation, flood control, public lands, or reservations; (2) avoid adverse effects on public lands or reservations; (3) prevent the preemption of public waters when moored in permanent locations outside of the approved harbor limits of commercial marinas; (4) protect land and land rights owned by the United States alongside and subjacent to TVA reservoirs from trespass and other unlawful and unreasonable uses; and (5) maintain, protect, and enhance the quality of the human environment.

These regulations will continue to apply to floating cabins. Two additional requirements will be added: (1) Floating cabin owners must ensure visibility of all mooring cables and (2) floating cabin owners must comply with 18 CFR 1304.205(c), which prohibits attachment to trees on TVA property. The method of mooring should be modified, if necessary, to eliminate navigation and safety hazards. If modification of the mooring method is not practical or feasible, TVA's permit will require the hazard to be marked to aid in visibility and to help avoid property damage and personal injury. Permit applicants must indicate how the structure is moored, and TVA will determine if that method is allowable. Any determinations on proper mooring and hazard marking will be made during the permit review process.

TVA's current regulations specify locations where floating cabins must be located. These include areas where the floating cabin was moored as of December 16, 2016, and the owner has sufficient land ownership or land rights as specified in the regulations; locations where the owner had written permission from TVA prior to December 16, 2016; or within the harbor limits of a commercial marina. To prevent sprawl and to better contain the impacts of floating cabins, the final rule prohibits relocation of permitted floating cabins to a different reservoir. TVA will consider applications to relocate existing floating cabins to any commercial marina on their respective reservoir that is willing to accept them. Any relocation, except within the harbor limits of the same marina, will require advance approval from TVA in the form of a new permit and concurrence from the receiving marina operator.

Floating cabins can also pose a threat to public safety due to unsafe electrical systems. TVA is aware that floating cabins are currently obtaining electricity from the shore via underwater cables, through onboard portable generators, and by other methods. TVA is not aware of any local, state, or federal entity that currently monitors the construction of floating cabins and enforces building codes. However, after the WIIN Act, these agencies may consider floating cabins to be more like houses rather than vessels, and agencies may determine to regulate and inspect those within their jurisdiction. If an agency chooses to regulate, floating cabins will be required to comply with all applicable federal, state, and local laws and regulations regarding electrical wiring and equipment. If a floating cabin is documented to be in violation of any federal, state, or local electrical standard or regulation by the respective regulatory agency, TVA will have the authority to revoke the permit and require removal of the floating cabin from the Tennessee River System if the violation is not corrected as specified by the regulatory agency in accordance with the agency's requirements.

In addition to and at a minimum, TVA will require all floating cabin owners to install ground fault protection and to use properly listed underwater cables. At two-year intervals, TVA will require floating cabin owners to provide certification that the floating cabin meets these requirements. TVA's electrical requirements are based on the 2017 National Electric Code (NEC). Ground fault protection requirements for floating buildings can be found in Section 553; requirements for marinas can be found in Section 555. Ground fault is defined in Section 100. NEC requires underwater cables for floating buildings to be extra hard usage portable power cables listed for wet locations and sunlight resistance. NEC table 400.4 provides a listing of flexible cable types and designations with these ratings.

Floating cabins use various methods to manage their wastewater (both blackwater and graywater). Some have holding tanks for blackwater and use pump-out facilities to dispose of it through land-based systems. TVA has received complaints of some floating cabins discharging blackwater and/or graywater directly to the reservoir. Graywater originates from sinks, showers, dishwashers, and washing machines and is often discharged by floating cabins directly to the reservoir. Blackwater and graywater discharges can contribute to water quality deterioration. Discharges are regulated by state environmental agencies and the EPA.

The final rule requires floating cabin owners to comply with discharge requirements set by local, state, or federal agencies and incorporates requirements of Section 401 of the Clean Water Act (CWA). If TVA is notified by a federal, state, or local agency that an owner of a floating cabin is not compliant with applicable discharge requirements and has failed to correct that deficiency after notification, TVA will have the authority to revoke the floating cabin's Section 26a permit and require the structure to be removed from the Tennessee River System. This should help induce more compliant behavior and complement federal, state, or local agency efforts.

TVA will require a Section 26a permit for all floating cabins, and all TVA permits must comply with the CWA. Section 401 of the CWA prohibits federal agencies from issuing a permit to conduct an activity, including the construction or operation of facilities, which may result in any discharge into navigable waters of the United States unless the applicable state agency has certified that the structure or activity will comply with applicable water quality standards or the certification has been waived. Floating cabin owners must request certification from the relevant certifying agency when applying for a Section 26a permit, and the certifying agency will determine whether to grant, grant with conditions, deny, or waive the certification. Some certifying agencies may determine to review and make one determination that applies to all floating cabins within its jurisdiction or may review each request for floating cabin permits individually. The respective certifying agencies will make this determination.

TVA will not grant a Section 26a permit for a floating cabin or other obstruction unless a required water quality certification has been provided or waived by the respective certifying agency. The final rule allows a reasonable period of time, not to exceed one year, for the certifying agency to take action. If a certifying agency has not acted within a reasonable period of time and the certification requirement is waived, TVA may then proceed with processing the Section 26a application. This will apply to all Section 26a permit applications, including floating cabins.

Floating cabins that fall into disrepair can threaten public safety, create a boating hazard, and create litter in reservoirs and along shorelines. Therefore, normal repair and maintenance of floating cabins is encouraged and may be undertaken without TVA's permission. By way of example, maintenance activities include painting; changing the internal walls within the existing enclosed space; replacing shingles, siding, electrical wiring, or plumbing; or adding new encased flotation that complies with the regulations. Maintenance activities do not include any activity that would modify any external walls or the dimensions (length, width, and height) of the floating cabin, including its enclosed or open spaces.

Any alteration to the dimensions or approved plans for a floating cabin will be deemed a structural modification and, if approvable, would require a new permit from TVA. Except for the following three exceptions, which must be approved in writing in advance by TVA, alterations will be prohibited. First, an alteration may be allowed if it is deemed necessary by TVA to comply with health, safety, and environmental standards. Second, TVA may allow changes in the roof pitch or allow open portions of the monolithic frame to be covered but no part of the floating cabin may exceed a total height of 14 feet above the lowest floor level of the floating cabin. Third, TVA may approve enclosure of open space on the monolithic frame of an existing floating cabin if the enclosure will not result in expansion to the dimensions (length, width, and height) of the monolithic frame; in which case, at least 24 contiguous square feet of open space with a minimum width of four feet must be retained on the monolithic frame for unrestricted boarding and a reduction in the footprint of attached structures may be required.

Floating cabins may be rebuilt to the exact same dimensions (length, width, and height), including both enclosed and open spaces, as previously approved by TVA. Owners will be required to apply to TVA 60 days in advance of proposed rebuilding and must receive prior written approval from TVA before beginning construction. TVA may require a new permit for the proposed rebuilding. Construction of the rebuilt floating cabin must be completed within 18 months of TVA's written approval to proceed.

To encourage reduction of the number and footprint of floating cabins on the Tennessee River System, TVA is proposing a program that, with a permit obtained in advance, may allow owners to permanently remove multiple existing floating cabins and replace them with a combined floating cabin that meets certain size requirements. Owners must provide evidence that all existing floating cabins to be removed existed on the Tennessee River System as of December 16, 2016, and must remove the existing floating cabins before construction on the combined floating cabin may begin. The permits for the removed floating cabins will be rendered invalid upon their removal. All combined floating cabins must locate within the harbor limits of a commercial marina and have the marina owner's permission. The combined floating cabin must be located on the same reservoir as any of the existing floating cabins that are to be removed in exchange. The maximum size allowable for the new structure would be the lesser of 1,000 square feet or the combined size of the monolithic frames of the removed floating cabins. Any amount of the combined size exceeding 1,000 square feet would be forfeited and could not be transferred to another party or another project. At least 24 contiguous square feet with a minimum width of four feet must remain open to allow for unrestricted boarding of the combined floating cabin. The maximum roof height is 14 feet above the lowest floor level. Attached structures, such as decks, may not be incorporated into the monolithic frame of the combined floating cabin.

With written approval from TVA, floating cabins may be accompanied by floating attached structures, such as decks, platforms, or Jet Ski ports. All attached structures must be permitted to the floating cabin owner, and the owner must provide evidence of approval from the marina operator. The square footage of attached structures may not be incorporated into the monolithic frame of the floating cabin. Attached structures may not exceed 14 feet in height from the lowest floor level, may not be enclosed, and must comply with 18 CFR 1304.204(p), which prohibits covered second stories. The total footprint of all attached structures for a single floating cabin cannot exceed 400 square feet or the total footprint of the existing attached structures that were part of the floating cabin as of December 16, 2016, whichever is greater. Floating cabins with attached structures as of this date may remain with written approval from TVA, but requests to rebuild or reconfigure the attached structures' square footage must comply with the requirements above. Requests for certain structural modifications or a combined floating cabin will require the square footage of the attached structures to also be reduced to 400 square feet.

In addition to the changes affecting floating cabins and those for flotation and discharges applicable to all Section 26a permits, the final rule provides other minor amendments to the Section 26a regulations. These include changes to the TVA locations where applications should be addressed, clarification regarding the size of residential water-use facilities in pre-existing developments, and other minor edits for clarity and consistency in the regulations.

TVA received 62 comments during the public review period, all via email. Comments were received from 59 individuals (three individuals sent comments in two separate emails). One email from the Floating Home Alliance Board of Directors represented the views of many floating cabin owners. The following discussion describes a summary of the comments received, provides TVA's response to the comments, and describes changes, if any, made by TVA to the rule based on the comments. TVA appreciates the perspectives, interests, and concerns expressed by all commenters.

Comment: Some commenters stated that TVA's regulations, standards, and inspections should apply consistently to all structures on TVA reservoirs, particularly residential docks. Commenters asserted that TVA is focusing on something that has never been a problem and docks are far more dangerous, particularly with regard to electrical.

TVA Response: Section 26a of the TVA Act requires the advance written approval of TVA for all floating cabins, private residential docks, and other obstructions. Since 1971, TVA has recognized the necessity to prohibit construction of new nonnavigable houseboats (the early version of floating cabins) and established regulations exclusively for their authorization and management on TVA reservoirs. This was due to their unique nature as a habitable enclosed structure, their included amenities, and their impacts on navigation, public land, and water quality. The WIIN Act allows existing floating cabins to remain on the water only if the owner maintains the structure in accordance with reasonable health, safety, and environmental standards set by the Board.

TVA has previously established corresponding standards for private residential water-use facilities. Subparts C and D of the TVA Section 26a regulations set forth the standards for private water-use facilities, such as boat docks, in substantial detail and restrict these facilities in ways that floating cabins are not restricted. For example, living space or sleeping areas are prohibited; enclosed space is limited to 32 square feet for storage; and toilets, sinks, and electrical appliances are not allowed. Electrical lines and service to private docks must be installed in compliance with all state and local electrical codes (satisfactory evidence of compliance to be provided to TVA upon request); and electrical service must be installed with an electrical disconnect that is located above the 500-year floodplain or flood risk profile whichever is higher, and is accessible during flood events.

Floating cabins raise unique safety and environmental concerns because many, for example, have electrical service supplied by submerged electrical lines, are equipped with household appliances, and generate wastewater.

TVA studied the impact of floating cabins in its EIS using an extensive amount of existing information and additional data collection and analysis to support its finding of potential impacts to human health and the environment from floating cabins. These findings were based on existing information, literature on the known effects on resources, comments by agencies and the public about impacts that they experience, internal TVA resource specialists, and professional judgment. The potential adverse impacts from sewage discharges into public waterways and the risk and potential harm to the public safety from poorly maintained electrical wiring are well established and understood. TVA acknowledged that the severity of current impacts is not well-sourced in available information. However, TVA concluded in its EIS that the severity of impacts will increase if the proliferation of floating cabins is not controlled and operating standards are not established. It is appropriate that TVA acts to address such potential impacts before they become severe.

Comment: Floating cabins are typically made up of multiple sections, the monolithic frame of the main cabin footprint and the floating attached structures, such as decks and walkways. Numerous commenters expressed a desire to combine the total footprint of all components and rebuild to one monolithic frame. The rationale of some commenters was that it is safer to have fewer structures, would make the waterway cleaner from the “mess of lashed together garbage,” and is better suited for modern lake activities. Others want to rebuild a floating cabin to a different configuration and change the size of enclosed space while not exceeding the total current footprint. Still others stated that expansions to either the monolithic frame or the attached structures should be allowed.

TVA Response: One of TVA's management goals of the floating cabin program is to prevent an increase in total square footage of the structures. Currently, the total footprint inventory of the monolithic frames of existing floating cabins is over 1.7 million square feet; there is an additional 1 million square feet of attached structure inventory. Allowing the size of the monolithic frames and/or enclosed space to increase will result in more living space and increased impacts to water quality, navigation, and privatization of public waters. For those reasons, floating cabin owners will not be allowed to incorporate the footprint of attached structures into the footprint of the monolithic frame. The final rule does provide an opportunity for floating cabin owners to increase enclosed space on the existing monolithic frame in exchange for a reduction in the footprint of the attached structures. This reduction aligns with the comments about multiple structures pieced together for each floating cabin and the potential risks they pose. TVA also made modifications to the draft rule to clarify that reconfigurations of attached structures could be considered so long as the total footprint did not exceed the specified limits.

Comment: TVA's draft rule proposed that floating cabin owners would be required to reduce attached structures to 250 square feet when requesting certain structural modifications or utilizing the combination program. Although many comments were received about the negative effects of multiple attached structures accompanying floating cabins, some commenters opposed this proposal. The commenters' rationale was generally that additional enclosed space on the monolithic frame would not result in an expansion of water space used and, therefore, would not require a reduction of the attached structures. Others argued that 250 square feet of open space was too little to utilize recreationally. Some felt the reduction was a penalty for making improvements and adding living space to the floating cabin.

TVA Response: TVA agrees that floating cabins should be maintained in a good state of repair; however, enlarging enclosed space is not a necessary improvement for enjoyment of existing floating cabins. TVA will not require a reduction in the attached structures that existed as of December 16, 2016, unless the owner requests to make certain modifications to their floating cabin; namely, increasing the enclosed space on the monolithic frame or utilizing the combination program. To counter the impacts of the larger living space and to address concerns of multiple, potentially difficult to manage attached structures, TVA considers this reduction a reasonable compromise. In response to the comments on the draft rule, TVA has increased the maximum footprint for attached structures to 400 square feet.

Comment: Multiple commenters expressed a desire to add additional attached structures to existing floating cabins. Jet Ski ports were the most commonly mentioned type of attached structure. Some commenters stated these additions were minor in size and impacts.

TVA Response: The final rule allows for the addition of attached structures up to a total footprint of 400 square feet. TVA calculates footprint as the rectangular or square area of the attached structure (length times width at the structures widest and longest points). The footprint of each attached structure will be added together to determine the total footprint. Floating cabins accompanied by attached structures of a greater footprint that existed as of December 16, 2016, may remain. Attached structures could be modified to add additional items, such as Jet Ski ports, or different configurations as long as the total footprint remains the same. All items that consume water surface area will be calculated in the total footprint. While the individual impacts from adding additional structures to any individual floating cabin may be minor, the cumulative impacts of these additions could result in a significant increase in square footage of occupied surface area on the reservoirs. One of TVA's goals is to prevent floating cabins from taking up additional square footage on the water.

Comment: Multiple commenters requested that TVA increase the maximum size of a combined floating cabin; some suggested 1,800 square feet, one suggested 2,000 square feet, and one suggested no size limitation.

TVA Response: TVA's goal with the combination program is to reduce the number and footprint of floating cabins on the Tennessee River System, especially those in a state of disrepair. Analysis of TVA's inventory data revealed that a significant majority of floating cabins are smaller than 1,000 square feet. The 1,000-square-foot maximum provides floating cabin owners adequate incentive to utilize the program while staying in line with TVA's goals for the floating cabin program. This size is also consistent with TVA's residential dock footprint standards.

Comment: Multiple commenters stated that mooring compliance should be the responsibility of the marina owner, not the floating cabin owner. Others opposed TVA's restriction against securing mooring lines to trees on TVA property.

TVA Response: Multiple mooring systems are utilized across TVA reservoirs that are dependent on topography, reservoir level fluctuations, and level of effort to manage. TVA will permit the mooring obstructions accordingly. For example, in marinas where the floating cabins are moored independently to the bottom of the reservoir and the floating cabin owner is responsible for the purchase and installation of that mooring system, TVA will consider permitting the mooring infrastructure to the floating cabin owner. In other cases where the marina operator installs a mooring grid and each floating cabin anchors to the grid, the components of the mooring system will be permitted to each responsible party ( i.e., mooring grid is the responsibility of the marina owner, individual anchors are the responsibility of the floating cabin owner). TVA will continue to prohibit the anchoring of all cables, chains, and poles (for both floating cabins and other water-use facilities) to trees on TVA property. Anchoring to trees on private property will require permission from the private property owner.

Comment: Some commenters requested strict enforcement of wastewater discharge regulations. Others agreed that wastewater restrictions should align with local or state requirements. One commenter stated it was impractical to request the collection and/or purification of graywater and believed effects from graywater discharge were a non-issue.

TVA Response: Discharges of blackwater and graywater are regulated by the EPA and the state agencies that are responsible for issuing National Pollutant Discharge Elimination System permits for facilities that discharge sewage or other wastewater. Pursuant to Section 401 of the Clean Water Act, if a structure or activity for which federal approval is sought may result in any discharge into navigable waters of the United States, then the applicant must also request certification from the relevant state certifying agency when applying for a Section 26a permit. If the certifying agency denies certification on appropriate grounds, TVA will not be able to issue the Section 26a permit. If the certifying agency grants certification with appropriate conditions, those conditions are required to be incorporated in the Section 26a permit. If the conditions of that certification are violated or TVA is notified of an unresolved violation by one of these regulatory agencies, TVA is authorized to revoke the Section 26a permit and require removal of the floating cabin in compliance with the WIIN Act.

Comment: Some commenters requested clarification on the electrical inspection requirements. Others asked for more details on the equipment necessary to comply with the rule.

TVA Response: In response to the comments, TVA has clarified its intent regarding electrical inspections and clarified the inspection interval. While specific requirements and equipment are subject to National Electric Code standards, TVA will provide examples of equipment and installation options on its website at www.tva.com/floatingcabins.

Comment: Most comments related to flotation were complimentary of TVA's proposal to eliminate all unencased flotation by 2031. A few commenters requested that TVA make this a requirement earlier than 2031.

TVA Response: TVA has prohibited the use of new unencased floatation since 2003. Because this requirement applies to all obstructions (including, but not limited to, residential docks and marina facilities), the final rule includes the proposed deadline. In the event that TVA deems existing flotation is no longer serviceable, it must be replaced within 24 months of notification from TVA.

Comment: Some commenters expressed concerns with manufactured houseboats being considered floating cabins. They felt that since vessels are already regulated, additional regulation as floating cabins was unnecessary. Others commented on the floating docks and other attached structures associated with some navigable houseboats. Some commenters expressed their desire for only these “mooring docks” to be considered floating cabins while arguing that the houseboats moored to the docks should not be regulated as floating cabins, but instead as vessels.

TVA Response: The determination of a structure as a floating cabin is in TVA's sole discretion and its judgment will be guided by criteria defined in previous rule amendments. It is not TVA's intent to regulate vessels. With regard to docks and other water-use facilities not associated with floating cabins, those structures are regulated under TVA's Section 26a jurisdiction and approval is subject to the applicable regulations. In general, individually- owned “mooring docks” or other water-use facilities in marina harbor limits associated with a vessel will not be permitted and will not be considered a floating cabin.

Comment: Some commenters requested that TVA use a later date than December 16, 2016, for the date on which floating cabins and attached structures are considered existing and allowed to remain on the reservoirs if they comply with TVA's regulations. The main reason stated in support of this request is that many floating cabin owners were not aware of the new regulations before this date.

TVA Response: TVA has formally engaged the public and floating cabin community related to its review of these structures since April 30, 2014, when it published the Notice of Intent to assess impacts of floating cabins and invited public comments on scoping. TVA's Draft EIS was published in June 2015, which included proposed standards for regulation. Various opportunities for public engagement and education have been offered, including the Board's public listening sessions. December 16, 2016, is the date selected by Congress when it passed the WIIN Act. Pursuant to the WIIN Act, TVA published this “cutoff date” in the prior Section 26a rule amendments.

Comment: Commenters had questions and requested clarification about the fees TVA will charge. One commenter stated that TVA is collecting an excessive amount of money for registration, transfer, alteration, combination, relocation, and yearly fees with no transparency or accountability.

TVA Response: TVA has standard permit application fees that apply to all Section 26a requests, including floating cabins. Currently, the standard permit application fee for a minor activity, which includes most floating cabins, is $500. Modifications to an existing obstruction require a new permit, and the application fee is $500. The application fee for a change in ownership with no associated modifications is $250. Requests for major construction activities are assessed a $1,000 application fee and are full cost recovery. There is no fee for registration of a floating cabin.

Section 26a permit application fees are governed by TVA's Administrative Cost Recovery regulations (18 CFR part 1310) and are assessed per application, regardless of the number of items requested in a single application (there is not an additional fee for each item requested). While TVA was granted the authority by the WIIN Act to levy a compliance fee for floating cabins, TVA will not establish that charge at this time.

Comment: Numerous commenters expressed general support for the final rule amendments. Many expressed appreciation for TVA's collaborative approach at managing the Floating Cabin Program and drafting reasonable regulations. Others commented that TVA's documentation, inventory, registration, and inspection of floating cabins is an appropriate way to ensure owners are held accountable for properly maintaining their structures. Others emphasized that TVA should regularly and fairly enforce the regulations.

TVA Response: TVA acknowledges these comments and agrees with the need to have reasonable standards and rules, have consistent enforcement of regulations, and avoid overly burdensome requirements. TVA appreciates the input and feedback received from the stakeholder group.

In determining what action to take with respect to floating cabins, TVA prepared an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act. This EIS assessed the environmental and socioeconomic impacts of different policies to address the proliferation of floating cabins on the Tennessee River System. TVA released a draft of this EIS for public comment in June 2015 and held four public meetings and a webinar to provide information about its analyses and to facilitate public involvement. The final EIS and associated documents can be found at https://www.tva.com/floatingcabins. One of the alternatives evaluated by TVA in the EIS was to approve and issue permits for the mooring of existing floating cabins that meet new minimum standards and to prohibit new floating cabins. TVA previously published a final rule that clarified the types of structures that TVA will regulate as a floating cabin and prohibited new floating cabins from mooring on the Tennessee River System. This final rule establishes minimum health, safety, environmental, and permitting standards that existing floating cabins will be required to meet. TVA's analysis of this alternative in the EIS determined that prohibiting new floating cabins and applying new standards would result in minor beneficial impacts to many resource areas ( e.g., water quality, recreation, cultural resources), but that the alternative may result in significant economic effects to some floating cabin owners or marina operators, depending on the extent to which their floating cabin would need to be updated to meet the new standards.

This final rule is a “significant regulatory action” under the criteria set forth in section 3(f) of Executive Order 12866, “Regulatory Planning and Review.” 58 FR 51735 (October 4, 1993). Accordingly, this action was subject to review by the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget (“OMB”). TVA has determined it will not have an economically significant annual effect of $100 million or more or result in expenditures of $100 million in any one year by state, local, or tribal governments or by the private sector. TVA estimates there are approximately 2,200 floating cabins on the Tennessee River System. TVA's estimate on compliance costs include the following ranges for each Floating Cabin provision: (1) Wastewater: $4,000-$8,000; (2) flotation: $10,000-$15,000; (3) mooring: $3,000-$5,000; (4) electrical: $250-$5,000. Most of the costs described are one-time investments, and not every floating cabin will require modifications in each area as many are already in compliance with one or more of the new provisions. As a result, this final rule will not exceed $100 million in annual impact.

This final rule contains no federal mandates for state, local, or tribal government or for the private sector. The rule will not have a substantial direct effect on the States or Indian tribes, on the relationship between the Federal Government and the States or Indian tribes, or on the distribution of power and responsibilities between the Federal Government and States or Indian tribes. Nor will the rule have concerns for environmental health or safety risks that may disproportionately affect children, have significant effect on the supply, distribution, or use of energy, or disproportionally impact low income or minority populations.

Unified development and regulation of the Tennessee River System through an approval process for obstructions across, along, or in the river system and management of United States-owned land entrusted to TVA are federal functions for which TVA is responsible under the TVA Act, as amended. In general, the final rule updates or clarifies TVA's regulations relating to the standards that floating cabins will be required to meet in order to remain on the Tennessee River System. The final rule will establish a charge for individuals or entities that request certain services from TVA relating to use of its property, reservoirs, and permitting for a floating cabin. Absent a request for these services for a Section 26a permit, no entity or individual would be forced to pay a charge. None of the charges would be applied retroactively. The final rule also amends TVA's regulations to clarify a date certain by which all unencased flotation must be removed from TVA's reservoirs. The proposal also amends TVA's regulations to establish a time period after which TVA will deem a state's water quality certification decision to be waived and proceed with processing of Section 26a permit applications. TVA will continue to appropriately review specific requests in accordance with applicable laws, regulations, and Executive Orders.

Under the Regulatory Flexibility Act, 5 U.S.C. 605, TVA is required to prepare a regulatory flexibility analysis unless the head of the agency certifies that the proposal will not have a significant economic impact on a substantial number of small entities. TVA's Chief Executive Officer has certified that this proposal will not have a significant economic impact on a substantial number of small entities. The statute defines “small entity” as a “small business,” “small organization” (further defined as a “not-for-profit enterprise”), or a “small governmental jurisdiction.” Most floating cabins are owned by individuals and not businesses, not-for-profit enterprises, or small governmental jurisdictions, and therefore relatively few “small entities” will be affected by TVA's proposal. Even if the final rule tangentially impacts marinas that accommodate floating cabins, this represents only 29% of marinas on TVA reservoirs. Accordingly, this rule will not have a significant impact on a substantial number of small entities; no regulatory flexibility analysis is required; and TVA's Chief Executive Officer has made the requisite certification.

Section 26a Permit Application.

OMB Approval Number: 3316-0060.

This rule contains information collection requirements for registration and permitting of floating cabins, which were approved by the Office of Management and Budget (OMB) on June 18, 2019.

For the reasons set out in the preamble, the Tennessee Valley Authority amends 18 CFR part 1304 of the Code of Federal Regulations as follows:

The Families First Coronavirus Response Act (Families First Act), Public Law 116-127, 134 Stat. 178 (March 18, 2020), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281 (March 27, 2020), the COVID-related Tax Relief Act of 2020 (Tax Relief Act), enacted as Subtitle B of Title II of Division N of the Consolidated Appropriations Act, 2021, Public Law 116-260, 134 Stat.1182 (December 27, 2020), the Taxpayer Certainty and Disaster Relief Tax Act of 2020 (Relief Act), enacted as Division EE of the Consolidated Appropriations Act, 2021, and the American Rescue Plan Act of 2021 (the ARP), Public Law 117-2, 135 Stat. 4 (March 11, 2021), provide relief to taxpayers from economic hardships resulting from the Coronavirus Disease 2019 (COVID-19). As described below, this relief includes employment tax credits for certain wages paid by employers.

The Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA), enacted as Divisions E and C of the Families First Act, respectively, generally required employers with fewer than 500 employees to provide paid leave due to certain circumstances related to COVID-19. Sections 7001 and 7003 of the Families First Act generally provided that non-governmental employers subject to the paid leave requirements under EPSLA and EFMLEA were entitled to fully refundable tax credits to cover the wages paid for leave taken for those periods of time during which employees are unable to work or telework for specified reasons related to COVID-19, plus allocable qualified health plan expenses.

Although the requirement to provide employees with paid leave under EPSLA and EFMLEA expired December 31, 2020, the tax credits for qualified leave wages paid for periods of leave taken beginning on April 1, 2020, and ending on December 31, 2020, were extended by the Tax Relief Act through March 31, 2021, for paid leave that would have satisfied the requirements of EPSLA and EFMLEA.

The ARP added sections 3131 through 3133 of the Code, which extend the refundable tax credits for paid leave to non-governmental employers with fewer than 500 employees, and certain governmental entities  1 without regard to the number of employees, that provide paid sick and family leave for specified reasons related to COVID-19 with respect to periods of leave beginning on April 1, 2021, through September 30, 2021. The paid sick leave credit and the paid family leave credit (collectively, “paid sick and family leave credits”) under sections 3131 through 3133 are available to eligible employers that provide employees with paid leave that would have satisfied the requirements of EPSLA and EFMLEA, with certain modifications made pursuant to the ARP.

Under section 3131, a credit is available to eligible employers who pay qualified sick leave wages to an employee for up to 80 hours leave provided during the period beginning April 1, 2021, and ending September 30, 2021, if the employee is unable to work or telework because the employee:

(1) Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

(2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

(3) is experiencing symptoms of COVID-19 and seeking a medical diagnosis, is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and the employee has been exposed to COVID-19 or the employee's employer has requested the test or diagnosis, or the employee is obtaining immunization related to COVID-19 or recovering from any injury, disability, illness, or condition related to the immunization;

(4) is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

(5) is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of the son or daughter is unavailable, due to COVID-19 precautions; or

(6) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services (HHS) in consultation with the Secretaries of the Treasury and Labor. The Secretary of HHS has specified, after consultation with the Secretaries of Treasury and Labor, that a substantially similar condition is one in which the employee takes leave:

• To accompany an individual to obtain immunization related to COVID-19, or

• to care for an individual who is recovering from any injury, disability, illness, or condition related to the immunization. 2

If an employee is unable to work or telework for reasons related to COVID-19 described in (1), (2), or (3) above, qualified sick leave wages are wages paid at the employee's regular rate of pay or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to a maximum of $511 per day and $5,110 in the aggregate. If an employee is unable to work or telework for reasons related to COVID-19 described in (4), (5), or (6) above, qualified sick leave wages are two-thirds of the wages paid at the employee's regular rate of pay or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to a maximum of $200 per day and $2,000 in the aggregate.

Under section 3132, a credit is available to eligible employers who pay qualified family leave wages to an employee for up to 12 weeks of paid family leave provided during the period beginning April 1, 2021, and ending September 30, 2021, if the employee is unable to work or telework due to any of the conditions for which eligible employers may provide paid sick leave. Qualified family leave wages are two-thirds of the wages paid at the employee's regular rate of pay, up to a maximum of $200 per day and $12,000 in the aggregate.

An eligible employer may not receive the paid family leave credit for the same wages for which it received the paid sick leave credit. Further, an eligible employer that receives the credits for qualified sick leave wages under section 3131 of the Code and qualified family leave wages under section 3132 of the Code (collectively, “qualified leave wages”) may not receive the employee retention credit allowed under section 2301 of the CARES Act or section 3134 of the Code based on the same wages. For the second calendar quarter of 2021, if an eligible employer receives the employee retention credit under section 2301 of the CARES Act based on wages paid that are also qualified leave wages on which the employer may claim the paid sick and family leave credits, the employer must reduce any paid sick and family leave credits by the amount of the credit allowed under section 2301 of the CARES Act that is attributable to those same wages. See sections 3131(f)(3) and 3132(f)(3). For the third and fourth calendar quarters of 2021, any qualified leave wages eligible employers take into account for purposes of the paid sick and family leave credits may not be taken into account for purposes of the employee retention credit under section 3134 of the Code. See section 3134(c)(3)(D).

The paid sick and family leave credits are also reduced by the amount of the credit allowed under section 41 (the credit for increasing research activities) with respect to wages taken into account for determining both the credit under section 41 and the paid sick and family leave credits. In addition, any wages taken into account in determining paid sick and family leave credits cannot be taken into account as wages for purposes of the credits under sections 45A, 45P, 45S, and 51. See sections 3131(f)(3) and 3132(f)(3).

Sections 3131(f)(2) and 3132(f)(2) provide that, for purposes of sections 3131 and 3132, respectively, the term “wages” means wages as defined in section 3121(a), determined without regard to paragraphs (1) through (22) of section 3121(b), and compensation as defined in section 3231(e), determined without regard to the sentence in section 3231(e)(1) that begins “Such term does not include remuneration”. Eligible employers are entitled to receive a credit equal to the amount of qualified leave wages paid under sections 3131 and 3132. Under sections 3131(d) and 3132(d), the credit is increased by the eligible employer's cost of maintaining health insurance coverage allocable to the qualified leave wages (“allocable qualified health plan expenses”). Under sections 3131(e) and 3132(e), the credit is also increased by certain amounts paid under collectively bargained agreements by the eligible employer that are properly allocable to the qualified leave wages (“certain collectively bargained contributions”), subject to the daily and aggregate credit limitations. The credits for the qualified leave wages and the collectively bargained contributions combined cannot exceed the $511 daily and $5110 aggregate limitation or $200 daily and $2000 aggregate limitation for paid sick leave and the $200 daily and $12,000 aggregate limitation for paid family leave. However, the credit for the allocable qualified health expenses is in addition to the credit for the qualified leave wages and not subject to the daily and aggregate credit limitations.

Under sections 3131 and 3132, qualified leave wages are subject to the taxes imposed on employers by sections 3111(a) (employer's share of social security tax), 3111(b), and 3221(a), but section 3133(a) provides that the paid sick and family leave credits under sections 3131 and 3132 are increased by the amount of the taxes imposed by sections 3111(a), 3111(b), and 3221(a) on qualified leave wages.

The paid sick and family leave credits under sections 3131 and 3132 are allowed against the taxes imposed on employers under section 3111(b) (the Hospital Insurance tax (Medicare tax)), and against so much of the taxes imposed under section 3221(a) (the Railroad Retirement Tax Act Tier 1 tax) as are attributable to the rate in effect under section 3111(b), as applicable, on all wages and compensation paid to all employees, and any credit amounts in excess of these taxes are treated as an overpayment to be refunded under sections 6402(a) and 6413(b) of the Code. See sections 3131(b)(4)(A), 3131(f)(1), 3132(b)(3)(A), and 3132(f)(1).

Section 2301 of the CARES Act, as originally enacted, provides for an employee retention credit for eligible employers, including tax-exempt organizations, that pay qualified wages, including certain health plan expenses, to some or all employees after March 12, 2020, and before January 1, 2021. Section 206 of the Relief Act adopted amendments and technical changes to section 2301 of the CARES Act for qualified wages paid after March 12, 2020, and before January 1, 2021, primarily expanding eligibility for certain employers to claim the credit. Section 206 of the Relief Act is effective retroactive to the effective date of section 2301 of the CARES Act. Section 207 of the Relief Act, which is effective for calendar quarters beginning after December 31, 2020, further amends section 2301 of the CARES Act to extend the application of the employee retention credit to qualified wages paid after December 31, 2020, and before July 1, 2021, and to modify the calculation of the credit amount for qualified wages paid during that time. Section 9651 of the ARP enacted section 3134 of the Code, effective for calendar quarters beginning after June 30, 2021, to provide an employee retention credit for qualified wages paid after June 30, 2021, and before January 1, 2022. The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) will continue to monitor potential legislation related to the employee retention credit that may impact certain rules described in this preamble.

The employee retention credit is available to any employer carrying on a trade or business during a calendar quarter that meets the requirements to be an eligible employer under section 3134, which include experiencing a full or partial suspension of business operations due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19, experiencing a decline in gross receipts, or qualifying as a recovery startup business.

For eligible employers that averaged more than 500 full-time employees (within the meaning of section 4980H) during 2019 (large eligible employers), qualified wages are wages and compensation (including allocable qualified health plan expenses), up to $10,000 per employee per calendar quarter, paid to employees for the time during which they are not providing services due to a full or partial suspension of business operations or a decline in gross receipts. For eligible employers that averaged 500 full-time employees or fewer during 2019 (small eligible employers), and for severely financially distressed employers as defined in section 3134(c)(3)(C)(ii) that are also large eligible employers, qualified wages are the wages and compensation (including allocable qualified health plan expenses), up to $10,000 per employee per calendar quarter, paid with respect to an employee (regardless of whether the employee is performing services) during any period in the calendar quarter in which the business operations are fully or partially suspended due to a governmental order or during any calendar quarter in which the employer is experiencing a decline in gross receipts. If an employer was not in existence in 2019, an employer may use the average number of full-time employees in 2020 rather than 2019. If an employer is an eligible employer due to being a recovery startup business, the maximum aggregate employee retention credit the employer may claim in a calendar quarter is $50,000. In the third and fourth calendar quarters of 2021, a recovery startup business that is a small eligible employer may treat all wages paid with respect to an employee during the quarter as qualified wages. See Notice 2021-49.

The same wages or compensation cannot be counted for both the paid sick and family leave credits under sections 3131 and 3132 and the employee retention credit under section 3134. Qualified wages for the employee retention credit also do not include any wages taken into account under sections 41, 45A, 45P, 45S, 51, and 1396 of the Code. See section 3134(c)(3)(D). Additionally, qualified wages do not include amounts taken into account as payroll costs for Paycheck Protection Program loan forgiveness and certain grants. See section 3134(h).

Section 3134(c)(4)(A) provides that, for purposes of section 3134, the term “wages” means wages as defined in section 3121(a)  3 and compensation as defined in section 3231(e).

The employee retention credit under section 3134 is equal to 70 percent of qualified wages paid. The credit is allowed against the taxes imposed on employers under section 3111(b), first reduced by any tax credits allowed under sections 3131 and 3132, and against so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, first reduced by any credits allowed under sections 3131 and 3132, on all wages and compensation paid to all employees. Any credit amounts in excess of these taxes are treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of the Code.

Sections 3131(b)(4)(A), 3132(b)(3)(A), and 3134(b)(3) provide that if the amount of the paid sick and family leave credits (which would include any increases in the credits under section 3133(a)) and employee retention credit exceeds the taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, for any calendar quarter, after application of the other credits previously applied, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b).

Section 6402(a) generally provides that, within the applicable period of limitations, overpayments may be credited against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and any remaining balance refunded to such person. Section 6413(b) provides that if more than the correct amount of employment tax imposed by sections 3101, 3111, 3201, 3221, or 3402 is paid or deducted and the overpayment cannot be adjusted under section 6413(a). 4 the amount of the overpayment shall be refunded (subject to the applicable statute of limitations) as the Secretary may prescribe in regulations.

The IRS revised Form 941, Employer's Quarterly Federal Tax Return, Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, Form 944, Employer's Annual Federal Tax Return, and Form CT-1, Employer's Annual Railroad Retirement Tax Return, so that employers may use these returns to claim the paid sick and family leave credits under sections 3131 through 3133 and the employee retention credit under section 3134. The revised employment tax returns allow for any of these credits in excess of the taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, to be credited against other employment taxes and then for any remaining balance to be credited or refunded to the employer in accordance with section 6402(a) or section 6413(b).

Sections 3131(b)(4)(B) and 3132(b)(3)(B) provide that, in anticipation of the paid sick and family leave credits under these sections (which would include any increases in the credits under section 3133(a)), including any refundable portions, these credits are to be advanced, according to forms and instructions provided by the Secretary, up to the total allowable amount of the credits and subject to applicable limits for the calendar quarter. Section 3134(j)(2) provides that eligible employers for which the average number of full-time employees (within the meaning of section 4980H) employed by the eligible employer during 2019 was not greater than 500 may elect for any calendar quarter to receive an advance payment of the employee retention credit for the quarter in an amount not to exceed 70 percent of the average quarterly wages paid in calendar year 2019.

To implement the advance payment provisions, employers that are eligible to receive an advance of the tax credits may use IRS Form 7200, Advance Payment of Employer Credits Due To COVID-19, to request an advance of the paid sick and family leave credits and the employee retention credit. Employers are required to reconcile any advance payments claimed on Form 7200 with total credits claimed and total taxes due on their employment tax returns.

A refund or credit of any portion of these tax credits, regardless of whether they are advanced, to a taxpayer in excess of the amount to which the taxpayer is entitled is an erroneous refund that the employer must repay.

Section 6201 authorizes the Secretary to determine and assess tax liabilities including interest, additional amounts, additions to the tax, and assessable penalties. However, the general authority to assess tax liabilities under section 6201(a) does not provide for the assessment of any non-rebate  5 portion of an erroneous refund of a refundable tax credit, which may include a portion of the credits available under sections 3131, 3132, and 3134, if the refund exceeds the amounts to which an employer is properly entitled. While these types of erroneous refunds are generally recovered or recaptured through agreed upon voluntary repayments, setoff, or through litigation, the Code in some instances, such as in sections 3131, 3132, and 3134, provides for the administrative recapture of these non-rebate refunds either by directly authorizing assessment of the erroneous non-rebate refunds or by authorizing the promulgation of regulations or other guidance to do so.

Specifically, with regard to the paid sick and family leave credits, sections 3131(g) and 3132(g) provide, in relevant part, that the Secretary will provide such regulations or other guidance as may be necessary to carry out the purposes of the credits, including regulations or other guidance to prevent the avoidance of the purposes of the limitations under this provision and to recapture the benefit of the credit in cases where there is a subsequent adjustment to the credit. See sections 3131(g)(1), 3131(g)(4), 3132(g)(1), and 3132(g)(4). With regard to the employee retention credit, section 3134(j)(3)(B) allows for the direct assessment of certain erroneous refunds of advanced portions of the credit by providing that if a small eligible employer specified in section 3134(j)(2) receives excess advance payments of the credit, then the taxes imposed under section 3111(b) or so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, for the calendar quarter are increased by the amount of the excess. Section 3134(m)(3) further provides that the Secretary will issue such forms, instructions, regulations, and other guidance as are necessary to prevent the avoidance of the purposes of the limitations under section 3134.

On July 29, 2020, temporary regulations (TD 9904) amending the Employment Tax Regulations under sections 3111 and 3221 to provide for the recapture of erroneous refunds of the paid sick and family leave credits under the Families First Act and erroneous refunds of the employee retention credit under the CARES Act, pursuant to the authority granted under these acts to prescribe those regulations, were published in the Federal Register (85 FR 45514). A notice of proposed rulemaking (REG-111879-20) cross-referencing the temporary regulations was published in the Federal Register on the same day (85 FR 45551). Because the ARP did not amend the Families First Act or CARES Act to extend the paid leave credits and employee retention credit provided thereunder, but rather enacted new Code sections that provide for similar credits, the temporary regulations in TD 9904 do not apply to the credits under the ARP. Therefore, separate regulations are required to provide for the recapture of the erroneous refund of these credits pursuant to the authority granted under sections 3131, 3132, and 3134.

Accordingly, this document amends the Employment Tax Regulations (26 CFR part 31) by adding temporary regulations under new sections 3131, 3132, and 3134 of the Code. Concurrent with the publication of this Treasury decision, the Treasury Department and the IRS are publishing in the Proposed Rules section of this issue of the Federal Register a notice of proposed rulemaking (REG-109077-21) on this subject that cross-references the text of these temporary regulations. See section 7805(e)(1). Interested persons are directed to the ADDRESSES and Comments and Requests for a Public Hearing sections of the preamble to REG-109077-21 for information on submitting public comments or requesting a public hearing on the proposed regulations.

Sections 3131(b)(3), 3131(b)(4)(A), 3131(f)(1), 3132(b)(2), 3132(b)(3)(A), 3132(f)(1), 3134(b)(2), 3134(b)(3), and 3134(c)(1) provide that the credits described in these sections are taken against the taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, (although for the employee retention credit, the taxes are first reduced by any paid sick and family leave credits). Additionally, if the amount of the credits exceeds these taxes for any calendar quarter, then the excess shall be treated as an overpayment to be refunded or credited under sections 6402(a) and 6413(b). Any credits claimed that exceed the amount to which the employer is entitled and that are actually credited or refunded by the IRS are considered to be erroneous refunds of these credits. Section 3134(j)(3)(B) provides that if a small eligible employer specified in section 3134(j)(2) receives excess advance payments of the credit, then the taxes imposed under section 3111(b) or so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, for the calendar quarter are increased by the amount of the excess.

These temporary regulations provide that erroneous refunds of these credits are treated as underpayments of the taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable. These temporary regulations authorize the IRS to assess any credits erroneously credited, paid, or refunded in excess of the amount allowed as if those amounts were taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, subject to assessment and administrative collection procedures. This allows the IRS to prevent the avoidance of the purposes of the limitations under the credit provisions and to recover the erroneous refund amounts efficiently, while also preserving administrative protections afforded to taxpayers with respect to contesting their tax liabilities under the Code and avoiding unnecessary costs and burdens associated with litigation. These assessment and administrative collection procedures may apply in the normal course in processing employment tax returns that include advances in excess of claimed credits and in examining returns for excess claimed credits. These assessment and administrative collection procedures do not replace the existing recapture methods, but rather represent an alternative method available to the IRS.

Specifically, these temporary regulations provide that any amount of the credits for qualified leave wages and certain collectively bargained contributions under sections 3131 and 3132, plus any amount of credits for qualified health plan expenses under sections 3131(d) and 3132(d), and including any increases in these credits under section 3133, and any amount of the employee retention credit for qualified wages under section 3134 of the Code that are erroneously refunded or credited to an employer shall be treated as underpayments of the taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, by the employer and may be administratively assessed and collected in the same manner as the taxes. These temporary regulations provide that the determination of any amount of credits erroneously refunded must take into account any credit amounts advanced to an employer under the process established by the IRS in accordance with sections 3131(b)(4)(B), 3132(b)(3)(B) and 3134(j)(2).

In certain situations, third-party payors claim tax credits on behalf of their common law employer clients. These temporary regulations address this situation by providing that employers against which an erroneous refund of credits may be assessed as an underpayment include persons treated as the employer under sections 3401(d), 3504, and 3511, consistent with their liability for the employment taxes against which the credits applied.

Sections 3131(h) and 3132(h) provide that the paid sick and family leave credits apply to wages paid with respect to a period of leave taken beginning on April 1, 2021 and ending on September 30, 2021. Section 3134(n) provides that the employee retention tax credit applies to wages paid after June 30, 2021, and before January 1, 2022.

Pursuant to section 7805(b)(2) of the Code, these temporary regulations are permitted to apply before the dates provided under section 7805(b)(1), including the date on which these temporary regulations are filed with the Federal Register , because these temporary regulations are being issued within 18 months of the date of the enactment of the relevant statutory provisions. Accordingly, these temporary regulations apply to all credits under sections 3131 and 3132, including any increases to the credits under section 3133, credited or refunded on or after April 1, 2021, including advanced refunds, as well as all credits under section 3134 that are credited or refunded on or after July 1, 2021, including advanced refunds. These applicability dates correspond to the effective dates of the statutory sections that provide for these credits and that authorize guidance to allow for the administrative recapture of erroneous refunds of these credits.

The Office of Management and Budget's Office of Information and Regulatory Analysis has determined that these temporary regulations are not significant and not subject to review under section 6(b) of Executive Order 12866.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), the Secretary certifies that these temporary regulations will not have a significant economic impact on a substantial number of small entities because these temporary regulations impose no compliance burden on any business entities, including small entities. Although these temporary regulations will apply to all employers eligible for the tax credits under sections 3131, 3132, and 3134, including small businesses and tax-exempt organizations with fewer than 500 employees, and will therefore be likely to affect a substantial number of small entities, the economic impact will not be significant. These temporary regulations do not affect the employer's employment tax reporting or the necessary information to substantiate entitlement to the credits. Rather, these temporary regulations merely implement the statutory authority granted under sections 3131(g), 3132(g), and 3134(m) that authorize the IRS to assess, reconcile, and recapture any portion of the credits erroneously credited, paid, or refunded in excess of the actual amount allowed as if the amounts were taxes imposed under section 3111(b) and so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b), as applicable, subject to assessment and administrative collection procedures. Notwithstanding this certification, the Treasury Department and the IRS invite comments on any impact these temporary regulations would have on small entities.

Pursuant to section 7805(f), these temporary regulations have been submitted to the Chief Counsel of the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

The Treasury Department and the IRS have determined that there is good cause to issue these regulations as temporary regulations. Employers were required to file Form 941, Employer's Quarterly Federal Tax Return, for the second quarter of calendar year 2021 by July 31, 2021, as required by section 6071 of the Code and Treas. Reg. § 31.6071(a)-1. Employers use Form 941 to claim paid sick and family leave credits and the employee retention credit, as well as to report any advance of these credits they received during the calendar quarter. In filing their second quarter 2021 Form 941, some employers may have already received, as an advance, refund amounts in excess of the credits to which they are entitled. In addition to the statutory authority provided by section 3134(j)(3) with regard to erroneous advance refunds of the employee retention credit, these temporary regulations authorize the assessment of any erroneous refunds of the credits. Without these temporary regulations, in some instances the IRS may not be able to avoid bringing costly and burdensome litigation to recover the erroneous refunds. Further, comments are being solicited in the cross-referenced notice of proposed rulemaking that is in this issue of the Federal Register , and any comments will be considered before final regulations are issued.

IRS notices and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at http://www.irs.gov.

The principal author of these temporary regulations is NaLee Park, Office of the Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). However, other personnel from the Treasury Department and the IRS participated in the development of these temporary regulations.

Accordingly, 26 CFR part 31 is amended as follows:

Throughout this document, “we,” “us” and “our” refer to the EPA.

On June 1, 2021 (86 FR 29227), the EPA proposed a limited approval and limited disapproval of the following rule that was submitted for incorporation into the California SIP.

We proposed a limited approval because we determined that this rule improves the SIP and is largely consistent with the relevant CAA requirements. We simultaneously proposed a limited disapproval because some rule provisions conflict with section 110 and part D of the Act. The following provisions do not satisfy the requirements of section 110 and part D of title I of the Act and prevent full approval of the SIP revision.

1. MDAQMD Rule 1160 section (C)(2)(b) allows for engines to comply with an alternative emission reduction provision instead of the concentration-based emission limits for NO X . Specifically, this alternative provision allows for owners or operators of applicable equipment to submit a plan for alternative emissions reduction that would achieve an 80% or 90% reduction of emissions from a baseline emission rate. Because the rule does not clearly specify how to calculate the baseline emission rate, the rule is not sufficiently clear to constitute an enforceable emission limitation, control measure, means or technique, as required under section 110(a)(2) of the Act. Furthermore, the rule leaves the approval of the NO X emission reduction alternative to the District without EPA review or approval of the alternative into the SIP. Because the rule is not clear with respect to how to calculate the baseline emission rate, and the approval of an alternative limit lies solely with the District, this provision allows for overbroad discretion on the part of the Director to modify requirements of the SIP without the procedures required under section 110 of the Act. In addition, the ambiguous alternative emission reduction provision could allow many units to emit more than the concentration limit in the rule by, in some cases, more than two times. Additionally, the alternative limits have not been justified as meeting the reasonably available control technology (RACT) requirement.

2. Under section (C)(2)(b)(v), the alternative emission reduction option also allows for units operating at the same facility to aggregate their emissions in order to comply with the percentage reduction. This type of provision (emissions aggregation) constitutes an economic incentive program (EIP) under the EPA's 2001 EIP guidance. 1 As discussed in the proposed rule, the rule provisions do not meet the criteria for EIP integrity because they fail to require that any excess emission reductions credited through the provision be surplus ( i.e., not required by any other federally enforceable provision). This omission could allow reductions that are otherwise federally required to be aggregated and therefore allow greater emissions at other units.

3. The compliance determination requirements described in section (E)(1)(c) do not require adequate source testing for emission units without emission control equipment. The requirements do not specify any frequency for testing beyond the initial compliance test, and do not specify what criteria must be met for certified manufacturer emission rates to be evidence of compliance.

The EPA's proposed action provided a 30-day public comment period. During this period, we received one comment from the MDAQMD expressing concern regarding the EPA's communication with the District in advance of the proposed action, indicating that these issues could have been raised sooner to give the District an opportunity to address them in the local rulemaking process. Although the comment expressed concern about the EPA's communications with the District during the rule development process, the comment did not criticize the substance of the deficiencies identified by the EPA in the proposed rulemaking and described the EPA's concerns as “legitimate.” The District also stated they would be initiating a local rulemaking process in the near future to resolve these issues. Accordingly, we acknowledge the concerns raised by the District, but do not consider the comment to be suggesting that the EPA take a different course of action in the current rulemaking.

No comments were submitted that change our assessment of the rule as described in our proposed action. Therefore, as authorized by the grant of authority to approve and disapprove SIP submissions contained in sections 110(k)(3) and 301(a) of the Act, the EPA is finalizing a limited approval and limited disapproval of the submitted rule. Our limited approval incorporates the submitted rule into the California SIP, including those provisions identified as deficient.

As a result of the limited disapproval, the EPA must promulgate a Federal implementation plan (FIP) under section 110(c) unless we approve subsequent SIP revisions that correct the rule deficiencies within 24 months.

In addition, the offset sanction in CAA section 179(b)(2) will be imposed 18 months after the effective date of this action, and the highway funding sanction in CAA section 179(b)(1) six months after the offset sanction is imposed. A sanction will not be imposed if the EPA determines that a subsequent SIP submission corrects the identified deficiencies before the applicable deadline.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the MDAQMD rule described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

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

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

Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.

The EPA lacks the discretionary authority to address environmental justice in this rulemaking.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by November 9, 2021. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

For the reasons stated in the preamble, the Environmental Protection Agency amends part 52, chapter I, title 40 of the Code of Federal Regulations as follows:

Throughout this document, “we,” “us” and “our” refer to the EPA.

On April 5, 2021 (86 FR 17567), the EPA proposed to approve the following rules into the California SIP.

In our proposed rule, we erroneously stated that an earlier version of EKAPCD Rule 425.2 had been approved into the SIP on October 28, 1999 (64 FR 57991). That version of the rule was approved into the SIP on September 24, 1999 (64 FR 51688). We proposed to approve these rules because we determined that they comply with the relevant CAA requirements. Our proposed action contains more information on the rules and our evaluation.

The EPA's proposed action provided a 30-day public comment period. During this period, we received no comments.

No comments were submitted. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is fully approving these rules into the California SIP.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the local air district rules described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by November 9, 2021. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:

The information in this section is organized as follows:

Based on a petition submitted to the EPA, Energy requested technical amendments to an existing exclusion from the list of federally listed wastes set forth in 40 Code of Federal Regulations (CFR) 261.33 previously issued to the United States Department of Energy (Energy) for the Hanford Federal Facility, or Hanford Site in Richland, Washington (Current delisting). See 40 CFR part 261, appendix IX, Table 2. This existing exclusion applies to treated effluent generated by Hanford's 200 Area Effluent Treatment Facility (ETF). The requested amendments relate to the planned startup of the Hanford Waste Treatment and Immobilization Plant (WTP). Details of Energy's requested technical amendments are more fully described in EPA's proposed regulatory amendments to the existing delisting at 86 (FR) 30237, June 7, 2021. After consideration of comments received on the EPA's proposed regulatory amendments, the EPA is finalizing these amendments as proposed. The EPA is also making one grammatical clarification identified after the proposal cited above.

The EPA received one anonymous set of comments on the proposed regulatory amendments. These comments, and the EPA's evaluation of them, are described below.

This commenter raises several issues. One common theme is that there are data gaps or other uncertainties regarding the ability of the Effluent Treatment Facility to manage future wastes from the WTP. The following sections address each of the comments that have a clear nexus to the proposed modification of the existing 200-Area ETF delisting.

The commenter stated “It appears that the current petition revision is solely to address acetonitrile, but that there are other unknowns and chemicals of concern to be submitted at a later date for future delisting petitions. There is no guarantee that there will be a future capability to treat the future unknowns, leaving a considerable risk of what to do with non-compliant effluent from the WTP.”

In promulgating significant revisions to the 200-ETF delisting in 2005 (70 FR 44498, July 30, 2012), Ecology and EPA explicitly intended to broadly expand the waste streams that the ETF could process within the scope of the treated effluent delisting. More specifically, the final delisting rule stated “The effect of these changes is to allow the 200 Area ETF to fulfill an expanded role in supporting Hanford Facility cleanup actions beyond those activities considered in the 1995 delisting rulemaking. In particular, these changes will allow the 200 Area ETF to treat mixed wastewaters from a number of additional sources beyond 242-A Evaporator process condensate (PC) upon which the original delisting was based.” ( See 70 FR 44497, July 30, 2012).

Consistent with this objective, the 2005 delisting modifications established a detailed mechanism based on the concept of a treatability envelope, which defines the ability of the ETF system overall to treat a wide range of waste constituents. This mechanism is based on an engineering model of the various unit operations within the ETF treatment train. Additionally, constituent-specific data for a wide range of constituents were used on a waste-stream specific basis to evaluate the treatability of that waste stream as part of the waste acceptance process for the ETF. A target goal with this approach was to establish a delisting framework that could consider future waste streams for which characterization data was not available at the time, but that could be managed in the future. More importantly, as Ecology and EPA noted in the 2005 delisting rulemaking “[s]ince Energy could not reasonably provide detailed characterization of wastes streams that have yet to be generated, EPA proposed a waste acceptance framework based on an engineering evaluation of waste streams. This model provides a degree of confidence that treatment in the 200 Area ETF will meet delisting exclusion limits to the same degree of confidence as if detailed waste stream characterization were available, while avoiding the need to frequently revise the delisting rule itself.” ( See 70 FR 44499, July 30, 2012).

Liquid effluents from the Waste Treatment Plant are one example of wastes that, in 2005, were expected to be generated in the future, but were not sufficiently characterized in order to be evaluated at that time. Since the 2005 modifications, the Department of Energy has made progress in both the design and operation of the planned WTP, including a detailed characterization of the liquid effluents from the WTP through engineering design and modelling. ( See the engineering report and associated supporting calculation documents provided in the docket for the current delisting modifications). From this work, Energy identified a number of constituents in WTP liquid effluent that would need to be considered in the context of the ETF delisting. Energy has provided a request to the EPA (21-ECD-001774 dated June 29, 2021, available in the Hanford administrative records at www.hanford.gov ) to consider five of these additional constituents through a modification of Tables C-1 and C-2 pursuant to Condition (1)(b) of the existing delisting. This request is consistent with the mechanism already in place under the existing delisting. Because the June 29, 2021 request is outside the scope of this modification to the delisting rule itself, the request to add five additional constituents identified in the June 29, 2021 request are not further considered in this comment response, but will be addressed by EPA's expected future response to the June 29, 2021 request.

As documented in its request for a modification of the 200 Area ETF delisting, Energy identified that acetonitrile exceeded the existing treatability envelope for that constituent. Based on our analysis of information provided by Energy for the current proposed modification, and the overall structure and content of the 2005 modifications to the delisting, EPA and Ecology have determined that with the current proposed modifications, the 200-Area ETF is fully capable of accepting reasonably expected liquid effluents from the WTP, and that there is little if any regulatory, environmental, or project risk associated with WTP liquid effluents that would warrant future modifications of the 200 Area ETF delisting.

The commenter also raised a concern about a lack of pilot scale testing for WTP effluent. In particular the commenter states “In the case of 242-A condensate, condensates had been sampled, and surrogate wastes were processed through pilot scale ETF treatment units in order to provide an `up front' petition” and “No pilot scale processes have been conducted for the current WTP EMF effluent. There is no pilot EMF and no integrated pilot scale Direct Feed Low Activity Waste (DFLAW) process treatment train. The integrated WTP `pilot scale' equipment does not exist for DFLAW. Rather WTP itself is being built as a full-scale pilot plant, with unknown and uncertain (but certain to be expensive) results.”

Ecology and EPA acknowledge that the current proposed delisting rule modification changes are based on projections, not full-scale operations or demonstration testing. With respect to acetonitrile, the proposed changes to the delisting rule are specifically targeted to ensure an implementable mechanism is in place. This will allow demonstration testing as necessary, to expand the treatability envelope for acetonitrile. Therefore, before full-scale operation of the DFLAW configuration of the WTP begins, Energy will have performed exactly the type of direct demonstration that this comment speaks to. As discussed more fully in the 2005 delisting modification action, the current 200-Area ETF delisting is explicitly structured to accommodate new constituents where such new constituents are within the treatment capacity of ETF (as reflected in the waste-stream specific waste processing strategy required by the delisting rule). New constituents can be accepted for treatment in the 200 Area ETF without modification of the delisting. For new constituents that would require changes to a treatability envelope, the new demonstration testing mechanism in the current proposal would be applied.

The commenter raises multiple issues regarding secondary waste associated with the 200-Area ETF system. In particular the commenter states “[a] defined secondary waste disposition path is needed for the solids/brine produced by treatment of WTP EMF hot operations effluent.” And “DOE has initiated an additional project to install the capability to load-out brine from the ETF STT's concentrate tanks into totes for shipment off-site. This project will mitigate brine removal issues from the STT and expand the capacity of WTP EMF hot operations effluent treated[.]”

Information in the proposed delisting docket notes that ETF brine could be sent off-site for further treatment. ( See RPP-RPT-62739, pages 35, 38, 39, and 108). While this may be a valid issue, secondary wastes are not within the scope of the proposed modifications to the 200-Area ETF delisting.

The commenter notes that Energy has identified multiple additional constituents associated with liquid effluent from the WTP. In particular, the commenter states “[a]dditionally, RPP-RPT-60974 lists constituents in the projected WTP EMF hot operations wastewater profile that are not included in the delisting treatability envelope, including 2-hexanone, 2-butoxyethanol, acetate, glycolate, oxalate, boron, and manganese. These additional constituents (and their associated limits) will need to be added to the delisting approval treatability envelope. A project is underway to complete this action.” and “EPA has noted that acetonitrile is difficult to destroy. Will the yet undiscovered other constituents be similarly difficult to destroy, potentially leading to more `off-site' promises and off-site risks?”

Ecology and EPA agree that the enumerated constituents have been identified by Energy. However, the mechanism established in the 2005 revisions of the ETF delisting, specifically the treatability group concept, was established to address exactly this circumstance. ( See Condition (1)(b) of the current delisting). Ecology and EPA are expecting a written request from Energy to modify Tables C-1 and C-2 in the existing delisting, to incorporate these additional constituents. Because treatment of these constituents is expected to be well within the treatability envelope of the associated treatability group (to which they will be added), no change to the delisting rule itself is necessary.

Ecology and EPA have determined (based on their review of the information provided by Energy regarding new constituents associated with the WTP) that the methodology used by Energy in developing this information is sound and defensible. There is no substantial risk of unidentified constituents appearing in WTP liquid effluents that would preclude acceptance of such wastes for treatment at the 200 Area ETF. Ecology and EPA also note that the 2005 revision to the ETF delisting include rigorous waste characterization and waste treatment plan requirements prior to acceptance of any waste for treatment at the 200 Area ETF, ensuring that even in the remote instance that constituents (or levels of constituents) which would cause a waste to be unacceptable for treatment at ETF are identified prior to waste receipt.

The commenter also raised concerns regarding Energy's current proposal to send secondary wastes from the ETF (brine, acetonitrile concentrate) to an off-site treatment, storage or disposal facility. In particular, the commenter states “[a]ny tank-waste-related feeds to LERF/ETF [Liquid Effluent Retention Facility/Effluent Treatment Facility] and any brines produced as a result of the changing `projections' of WTP waste compositions as described in the current delisting petition, should be prohibited from off-site treatment. The cradle to grave liability for this waste rests with DOE, and DOE should not share it with a facility that has a poor track record and a poor environmental location.” and the second citation in the comment discussed in the previous section “Addition of new constituents”.

Regarding the risks associated with treatment of ETF secondary wastes at off-site facilities, Ecology ensures that all such wastes are treated, stored and disposed at approved facilities and in full compliance with all dangerous waste regulations and applicable permits in a manner fully protective of human health and the environment. However, concerns related to treatment, storage or disposal of secondary wastes are not subject to delisting and to this current delisting rule modification proposal.

The commentor made several comments regarding a lack of direct waste stream characterization and lack of pilot plant data. In particular, the commenter stated “[i]n the case of 242-A condensate, condensates had been sampled, and surrogate wastes were processed through pilot scale ETF treatment units in order to provide an `up front' petition[]” and “[n]o pilot scale processes have been conducted for the current WTP EMF effluent. There is no pilot EMF and no integrated pilot scale DFLAW process treatment train. The integrated WTP `pilot scale' equipment does not exist for DFLAW. Rather WTP itself is being built as a full-scale pilot plant, with unknown and uncertain (but certain to be expensive) results.”

Ecology and EPA acknowledge that the current delisting rule modification changes are based on projections, not full-scale operations or demonstration testing. With respect to acetonitrile, the proposed changes to the delisting rule are specifically targeted to ensure an implementable mechanism is in place to allow demonstration testing as necessary to expand the treatability envelope for acetonitrile. Therefore, before full-scale operation of the DFLAW configuration of the WTP begins, Energy will have performed exactly the type of direct demonstration noted in these comments. As discussed more fully in the 2005 delisting modification action, the current 200-Area ETF delisting is explicitly structured to accommodate new constituents-where such new constituents are within the treatment capacity of ETF (as reflected in the waste-stream specific waste processing strategy) required by the delisting rule. Constituents can be accepted for treatment in the 200 Area ETF without modification of the delisting. For new constituents that would require changes to a treatability envelope, the new demonstration testing mechanism in the current proposal would be applied.

The commenter also raised an issue regarding alternate re-use practices as documented in RPT-63053, page 19 (This is the engineering report provided as Attachment 3 to the March 31, 2021 delisting modification request, included in the docket). Alternate reuse practices are provided for under Condition 7 of the current delisting, which is not being changed under the current modification proposal. Ecology and EPA understand that Energy will be seeking approval under Condition 7 for expanded treated effluent reuse practices at a later date. Approval of this change is outside of the current proposed delisting modification.

The EPA is also making one grammatical clarification identified after the regulatory amendment proposed rulemaking was published. The EPA is modifying the last phrase of Condition (6)(c) originally worded as “that the Energy will be liable for Energy's reliance on the void exclusion.” to read “. . .that Energy will be liable for Energy's reliance on the voided exclusion.”

EPA is finalizing Energy's requested amendments as proposed. Conditions of the existing delisting not modified by this action remain unchanged.

This rule is effective September 10, 2021. The Hazardous and Solid Waste Amendments of 1984 amended section 3010 of RCRA, 42 U.S.C. 6930(b)(1), to allow rules to become effective in less than six months when the regulated community does not need the six-month period to come into compliance. This rule reduces rather than increases the existing requirements and, therefore, is effective immediately upon publication under the Administrative Procedures Act, pursuant to 5 U.S.C. 553(d).

This exclusion modification is being issued under the federal RCRA delisting program. Therefore, only states subject to federal RCRA delisting provisions would be affected. This exclusion is not effective in states that have received authorization to make their own delisting decisions. Moreover, the exclusion modifications may not be effective in states having a dual system that includes federal RCRA requirements and their own requirements. The EPA allows states to impose their own regulatory requirements that are more stringent than EPA's, under Section 3009 of RCRA. These more stringent requirements may include a provision that prohibits a federally issued exclusion from taking effect in the state. As noted in the notice of proposed rulemaking, Ecology is expected to make a parallel delisting decision under their separate state authority.

Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

This action is exempt from review by the Office of Management and Budget because it is a rule of particular applicability, not general applicability. The action approves a modification of an existing delisting petition under RCRA for the petitioned waste at a particular facility.

This action is considered an Executive Order 13771 deregulatory action. This final rule maintains meaningful burden reduction afforded by the existing exclusion consistent with changes necessary to allow management of liquid effluents expected from startup and operation of Hanford's Waste Treatment and Immobilization Plant.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) because it only applies to a particular facility.

Because this rule is of particular applicability relating to a particular facility, it is not subject to the regulatory flexibility provision of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

This action does not contain any unfunded mandate as described in the Unfunded Mandates Reform Act (2 U.S.C. 1531-1538) and does not significantly or uniquely affect small governments. The action imposes no new enforceable duty on any state, local, or tribal governments or the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. This action applies only to a particular facility on non-tribal land. Thus, Executive Order 13175 does not apply to this action.

This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children.

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

This action does not involve technical standards as described by the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272).

The EPA believes that this action does not have disproportionately high or adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). The EPA has determined that this action will not have disproportionately high or adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment.

This action is exempt from the Congressional Review Act (5 U.S.C. 801 et seq. ) because it is a rule of particular applicability.

For the reasons set out in the preamble, the EPA amends 40 CFR part 261 as follows:

On August 28, 2020, the Federal Emergency Management Agency (FEMA) published a Notice of Proposed Rulemaking (NPRM) (85 FR 53474) to revise FEMA's Hazard Mitigation Assistance (HMA) program regulations to reflect current statutory authority and agency practice. 1 FEMA's HMA program regulations consist of the Flood Mitigation Assistance (FMA) grant program, the Hazard Mitigation Grant Program (HMGP), financial assistance for property acquisition and relocation of open space, and mitigation planning regulations. The NPRM proposed to revise the FMA grant program regulations to incorporate changes made by amendments to the National Flood Insurance Act of 1968 (NFIA). 2 The NPRM also proposed to update terms and definitions throughout the HMA and Mitigation Planning regulations to better align with uniform administrative requirements that apply to all Federal assistance.

The NPRM solicited public comment on these proposed changes. FEMA received five comments related to the rulemaking and one unrelated comment that was outside the scope of the rulemaking. (The unrelated comment was an expression of the commenter's political views and therefore not germane to this rule). FEMA does not consider the one unrelated comment in this preamble. In this final rule, FEMA adopts the changes it proposed in the NPRM with some minor revisions in consideration of the related comments as well as Title 2 of the Code of Federal Regulations (CFR) part 200. FEMA describes the comments received and changes to the final rule below.

FEMA received five written responses to the amendments to its Hazard Mitigation Assistance (HMA) program regulations. All commenters submitted responses online at regulations.gov. FEMA reviewed each unique comment and considered whether to change the regulation in response to the comment. A summary of each comment and FEMA's response is provided below. Responses are listed in order of Docket ID number.

This individual citizen recommended that FEMA eliminate the FMA program and reallocate those resources to be available for the purposes of obtaining open space. FEMA appreciates this comment and recognizes the importance of maintaining open space as a critical component of many hazard mitigation programs; indeed, this is why the acquisition of open space is one of the eligible project types under FEMA's HMA programs. However, FEMA lacks authority to eliminate the FMA program because FEMA is required by statute to implement this program (42 U.S.C. 4104c(a)(1)-(3)). FEMA also recognizes that a one size fits all approach to hazard mitigation is not aligned with the comprehensive community and hazard mitigation planning processes.

This individual citizen recommended that the definition of “community” be expanded to include community organizations. In response, FEMA notes that “community” is defined in statute in 42 U.S.C. 4104c(h)(1) and as a result, FEMA cannot reinterpret, expand or change this definition. Although private nonprofits and other private sector entities such as businesses, industry associations, native corporations, and individuals are unable to apply for FEMA's HMA programs based on statute, FEMA encourages partnerships and recognizes that these entities can provide value to projects eligible for HMA funding.

The Association of State Floodplain Managers (ASFPM) is an organization of professionals involved in floodplain management, flood hazard mitigation, the flood insurance, and flood preparedness, warning and recovery. The ASFPM Flood Mitigation Committee submitted a number of comments on behalf of the organization.

First, the ASFPM expressed concerns that the proposed 44 CFR 77.7(b) states that “[Pre-award] costs can only be incurred during the open application period for the FMA program.” Under FEMA's current practice, eligible pre-award costs may be incurred prior to application submission (limited by 44 CFR 79.8 to costs incurred during the open application period). However, it is not FEMA's intent to disallow otherwise eligible pre-award costs that were incurred prior to the open application period. In response to this comment, FEMA has removed the statement referenced above from 44 CFR 77.7(b). Costs incurred prior to award may be reimbursed if they meet the eligibility requirements and are in compliance with 2 CFR part 200 Subpart E, Cost Principles. Pre-award costs include costs directly related to developing an application or subapplication that are incurred prior to the date of the grant award and are allowed subject to FEMA approval at time of award. Such costs may include gathering National Environmental Policy Act (NEPA) data or developing a Benefit Cost Analysis (BCA), preparing design specifications (including the development of elevation plans), or conducting workshops or meetings related to development and submission of subapplications.

Second, the ASFPM identified that the proposed 44 CFR 77.6(c)(2)(vi) states, “Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible,” which is inconsistent with recent Notices of Funding Opportunity (NOFOs) speaking to the eligibility of “community mitigation projects,” which could qualify as non-localized flood risk reduction projects. It is not FEMA's intent for these project types to be ineligible under all circumstances. In response to this comment, FEMA has added language to 44 CFR 77.6(c)(2)(vi) for clarity and consistency with 42 U.S.C. 4014c(c)(3)(E), limiting funding to localized projects, except in rare instances. As a result, 44 CFR 77.6(c)(2)(vi) now reads, “Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible unless the Administrator specifically determines in approving a mitigation plan that such activities are the most cost-effective mitigation activities for the National Flood Mitigation Fund.” This change to the regulatory text reflects a change in FEMA's current practice and emphasizes that 42 U.S.C. 4014c allows the option to authorize these project types in very rare circumstances.

Third, the ASFPM noted that the revised HMA regulations do not specifically list project scoping (previously known as “advance assistance”) as an eligible activity under the proposed 44 CFR 77.6(c). However, project scoping is an eligible activity under FEMA's current practice. In response to this comment, therefore, FEMA has added paragraph (4) to the list of eligible activities in 44 CFR 77.6(c), it reads: “ Project Scoping. Activities that enable subapplicants to develop complete subapplications for eligible mitigation activities including but not limited to data development.”

Fourth, the ASFPM commented that punishing a State for an individual community's land use violation by withholding funding from the entire State (as outlined in the proposed 44 CFR 80.19(e)(2)) seems mismatched and extreme, and suggested that withholding award or assistance be limited to the community that is in violation. The relationship between the State as the recipient, and a local community as a subrecipient is defined in 2 CFR 200.1, 200.332, and 200.339. The penalty of holding the State accountable for a community violation is consistent with the State acting as the recipient of the grant and being primarily responsible for compliance with grant terms. As a result, FEMA has determined to retain in 44 CFR 80.19(e)(2) the option to enforce this penalty as a result of land use noncompliance. This is consistent with FEMA's current practice.

Fifth, the ASFPM identified the ongoing problem that States and communities are unable to access data on repetitive loss properties, severe repetitive loss properties, and National Flood Insurance Program (NFIP) insured structures due to FEMA's current restriction on privacy data. The ASFPM stated that this information is needed for the purposes of FEMA's application processes and the development of hazard mitigation plans. FEMA appreciates this feedback, is aware of this issue, and is currently working to address this problem throughout the Federal Insurance and Mitigation Administration (FIMA). In working on this issue, it is FEMA's intent to arrive at a solution that will both protect government interests and property owners' privacy, while also making the information that is needed accessible to communities.

This individual citizen spoke to the value and benefits of nature-based solutions and suggested that FEMA explicitly speak to nature-based solutions within the regulation. In response, FEMA notes that nature-based solutions are eligible under FMA under localized flood risk reduction projects or other activities as identified in a community's hazard mitigation plan, as has been FEMA's current practice. FEMA recognizes and embraces nature-based solutions as an approach to project design that can be applied to many different project types, but on its own is not a separate project type. Therefore, FEMA does not intend to identify and speak to nature-based solutions as a specific project type within the regulation. However, FEMA continues to advocate for the incorporation of nature-based solutions into mitigation activities funded through HMA grants.

This individual citizen encouraged FEMA to allow for the use of eminent domain for the purpose of carrying out involuntary buyout projects. The commenter speaks to proposed 44 CFR 80.11(a), which states “Eligible acquisition projects are those where the property owner participates voluntarily, and the recipient/subrecipient will not use its eminent domain authority to acquire the property for the open space purposes should negotiations fail.” FEMA does not intend to change the voluntary component of 44 CFR 80.11; however, FEMA offers clarification that this voluntary limitation is only applicable to open space projects. Voluntary property owner participation is not required under other project types. For example, if a community wanted to submit an application for a flood retention or control project, it could exercise its eminent domain powers to acquire applicable parcels. Furthermore, in response to this comment, FEMA notes that it is up to recipients to prioritize and submit projects for funding as outlined in 44 CFR 77.3(b)(3).

In response to the comment that noted inconsistencies with the regulatory text and Fiscal Year 2020 NOFOs for Flood Mitigation Assistance grants, the proposed 44 CFR 77.6(c)(2)(vi) now reads, “Localized flood risk reduction projects that lessen the frequency or severity of flooding and decrease predicted flood damages, and that do not duplicate the flood prevention activities of other Federal agencies. Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible unless the Administrator specifically determines in approving a mitigation plan that such activities are the most cost-effective mitigation activities for the National Flood Mitigation Fund.”

In response to the comment that project scoping (previously known as “advance assistance”) is not listed as an eligible activity under the proposed 44 CFR 77.6(c), FEMA has added § 77.6(c)(4): “ Project Scoping. Activities that enable subapplicants to develop complete subapplications for eligible mitigation activities including but not limited to data development.”

In response to the comment that expressed concerns regarding the statement “[Pre-award] costs can only be incurred during the open application period for the FMA program,” this statement has been removed. Section 77.7(b) now reads, “Pre-award costs. FEMA may fund eligible pre-award costs related to developing the application or subapplication at its discretion and as funds are available. Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project or planning proposal. Costs associated with implementation of the activity but incurred prior to award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed.”

In addition to the above and in order to align with 2 CFR part 200, FEMA removed its proposed definition of “management costs” in the proposed 44 CFR 77.2. The NPRM's proposed definition of “management costs” inadvertently tied it to FEMA's regulations implementing its authority under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford Act”). 3 However, the FMA Program is not authorized under the Stafford Act, but rather the National Flood Insurance Act. 4 As a result, direct and indirect administrative costs are governed by the cost principles of 2 CFR part 200 Subpart E, and FEMA has added the phrase “(direct and indirect administrative costs pursuant to 2 CFR part 200 Subpart E)” in 44 CFR 77.7(a)(1)(i) to clarify this. Because the FMA Program is authorized under the National Flood Insurance Act, FEMA also added the National Flood Insurance Act both to the Authority citation for 44 CFR part 201 and to section 201.1. Lastly, to conform with updates to 2 CFR published on August 13, 2020, 5 and other updates to statutory citations, FEMA removed the phrase “to carry out an activity under the FMA program” in the definition of “recipient” in 77.2(h) and updated citations to 2 CFR part 200 and 25 U.S.C. 5131 as necessary.

Executive Orders 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it.

FEMA did not receive any public comments relating to the RIA in the NPRM and has made no changes to this Regulatory Analysis as a result. Additionally, changes made to the Final Rule due to public comments were due to clarifications in regulatory text, and changes made to better conform the text with statute. These changes will not have an economic impact, and FEMA does not address them further in this analysis.

The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), Public Law 112-141, 126 Stat. 916, amended the National Flood Insurance Act of 1968 (NFIA) to require changes to FEMA's Hazard Mitigation Assistance (HMA) programs. FEMA implemented most of these changes through the Hazard Mitigation Assistance Guidance in 2013. 6 FEMA is now updating its HMA regulations to reflect these changes.

Following guidance in OMB Circular A-4, FEMA assessed the impacts of this rule against a no-action baseline as well as a pre-statutory baseline. The no-action baseline is an assessment against what the world would be like if the rule is not adopted. The pre-statutory baseline is an assessment against what the world would be like if the relevant statute(s) had not been adopted and, in this case, already been implemented through guidance.

Under a no-action baseline, this rule results in cost savings to FEMA, and familiarization costs to HMA recipients. Under a pre-statutory baseline, this rule results in familiarization costs to HMA recipients, cost savings to FEMA, distributional impacts, and qualitative benefits, but no marginal costs. The annual distributional impact of this rule is estimated at $24.96 million  7 in increased transfers from FEMA to HMA recipients.

FEMA addressed the substantive changes in this analysis and presented how they affect costs, benefits, and transfers. The remaining changes are nonsubstantive, meaning they are technical and include definitional updates and other changes that modernize and standardize regulations, reduce redundancy, or increase readability. The nonsubstantive changes do not have an economic impact. FEMA included a detailed marginal analysis table that summarizes the substantive and nonsubstantive changes in this rule and the related impacts in the public docket for this rulemaking available on www.regulations.gov under Docket ID FEMA-2019-0011-0002.

This rule affects all recipients of FEMA's Flood Mitigation Assistance (FMA) grants. Recipients include 56 State and territorial governments and 574 Indian Tribal governments. 8 Local governments and governmental organizations such as flood districts and sewer districts are considered subrecipients and must apply through a State or Indian Tribal government. For simplicity, FEMA refers to the affected population as “recipients” throughout the analysis, except in cases where there are different requirements for recipients or subrecipients.

BW-12 made substantial changes to FEMA's HMA programs. FEMA implemented most of these changes via the HMA Guidance in 2013. FEMA is now codifying those changes in this rule. Following guidance in OMB Circular A-4, FEMA assessed the impacts of this rule against a pre-statutory baseline covering 2006-2012 (pre-BW-12) and a no-action baseline covering 2013-2019  9 (post-BW-12).

The pre-statutory baseline shows the effects of the rule compared to the current regulations ( i.e., as if FEMA had not already implemented the changes through the HMA Guidance). The no-action baseline shows the effects of the rule compared to current FEMA practice ( i.e., compared to the HMA Guidance, which reflects FEMA's current practice, but not the current regulations).

Under the pre-statutory baseline, the rule has distributional impacts and qualitative benefits. The distributional impacts affect recipients of Repetitive Loss (RL) grants and Severe Repetitive Loss (SRL) grants that were combined into the FMA program pursuant to BW-12. Under BW-12, RL and SRL properties received increased assistance, while standard mitigation properties received decreased assistance. Under the no-action baseline, the only impacts are implementation costs and Federal cost savings. Table 1 shows the impacts of this rule under the pre-statutory and no-action baselines.

The primary effects of BW-12 that are codified by this rule resulted from changes in the Federal cost shares. A cost share is the portion of the costs of a Federally assisted project or program borne by the Federal Government. FEMA pays a portion of the cost of a project, or the Federal cost share, and the recipient pays the remaining share.

FMA Grant Cost Sharing Changes. The current regulations still reflect the pre-BW-12 cost share provisions of the RL and SRL grant programs. BW-12 modified these two programs and FEMA implemented the modifications in the 2013 HMA Guidance. The newly expanded FMA program now serves the recipients of these grant programs.

BW-12 increased the RL Federal cost share from 75 percent to between 75 and 90 percent, and increased the SRL Federal cost share from between 90 and 100 percent to 100 percent. Table 2 shows the cost shares by type of grant.

Lowering the Cap and Removing the Frequency Restriction. Prior to BW-12, FMA funds for the development or update of the flood portion of community multi-hazard mitigation plans were capped at $150,000 in Federal funding for States and $50,000 for communities, with a total cap of $300,000 in Federal funding for applications statewide. FEMA could not award State or community planning grants more than once every 5 years.

BW-12 limited FMA grant funds to develop or update the flood portion of community multi-hazard mitigation plans to a $50,000 Federal share to any recipient or a $25,000 Federal share to any subrecipient. BW-12 also removed the restriction on awarding State or community planning grants more than once every 5 years. FEMA discusses the impacts of these changes in the costs section.

Shifting from State Allocations to Competition. Prior to BW-12, FEMA annually allocated FMA program funding to recipients based on the number of insured properties and RL properties present within the recipient's jurisdiction. Recipients that did not meet the minimum threshold to receive a target allocation had to apply against funds that were set aside for this purpose. BW-12 replaced this process with a fully competitive program that selects subapplications against agency priorities identified annually. This change allows FEMA to identify and mitigate properties with the highest risk from flooding, thereby providing the greatest savings to the NFIP.

Costs for this rule result from implementation of the rule, rather than the 2013 HMA Guidance. FEMA estimated these costs against the no-action baseline since these are directly attributable to updating the text of the regulation, and not program changes that FEMA already implemented.

Familiarization Costs. FEMA estimated familiarization costs for States, but not for local emergency management divisions or jurisdictions. FEMA assumed States regularly update their emergency response networks and notify local emergency management divisions on any changes. FEMA believes that States will continue to disseminate the new information through each State's established process. FEMA assumed that each State grant recipient will have two personnel that will need to familiarize themselves and understand the rule by reading the existing and new regulations to understand the changes. FEMA expects each person to spend one hour to become familiar with the changes. FEMA assumes that the rule is likely to be reviewed by each State's Emergency Management Director and one administrative support personnel. FEMA assumes that the U.S. Bureau of Labor Statistics (BLS) occupations Emergency Management Director (SOC: 11-9160, mean hourly wage $39.68)  10 and First-Line Supervisor of Office and Administrative Support Workers (SOC: 43-1010, mean hourly wage $28.91)  11 are most representative of these roles in a State. Using the 1.46 multiplier, 12 the fully loaded wage rates are $57.93 and $42.21 respectively. The estimated total cost of recipients making themselves familiar with the rule is $5,608 in year 1 ($1,041 per year annualized at 7 percent over 7 years, and $900 at 3 percent). ((56 recipients × 1 hour × $57.93 wage) + (56 recipients × 1 hour × $42.21 wage) = $5,608)

Summary of Costs. FEMA estimated the rule has familiarization costs of $5,608 in the first year of implementation. FEMA assumed that all staff and resources will come from existing sources and thus represent an opportunity cost.

This rule will be beneficial to both FEMA and Hazard Mitigation Grant recipients. While the benefits are not quantifiable, FEMA believes that changes implemented by BW-12 allow it to target the most vulnerable properties, and streamline the mitigation grant process. Under the no-action baseline, most changes in this rule are technical and include definitional updates and other changes made to harmonize FEMA regulations with current FEMA practices and HMA guidance, modernize and standardize the regulations, reduce redundancy, or increase readability. These changes are largely nonsubstantive and do not have an economic impact.

Cost Savings. FEMA estimated annual costs savings of $81,159 resulting from removal of the definition of “market value” at 44 CFR 79.2(f) and (g). The removal of “market value” is new to this regulation and was not implemented in previous guidance. Currently, the regulation requires FEMA to use the market value of a structure when making grant determinations. Removal of this requirement allows FEMA to consider the value of the structure listed on the flood insurance policy when considering a grant request related to a vulnerable structure, rather than the “market value.” This results in a reduction in the time it takes FEMA personnel to review a grant application. Using “market value” required additional research and appraisals, whereas the flood insurance property value is readily available to FEMA personnel. FEMA estimates that this change reduces the personnel time it takes to review a grant application by an estimated 2 hours per review for a total of $81,159 annually. The removal of “market value” may impact grant amounts due to possible differences from the insured value, but FEMA does not have data available to estimate this impact.

FEMA based its estimates on the estimated annual average number of FMA grant applications that required a market value review between 2013 and 2019 and the wage rates of the personnel reviewing the grants. The annual average number of grant requests was 545. Table 3 shows the annual number of grant requests for vulnerable properties that required a market value review between 2013 and 2019.

Reviews of the grant applications can vary widely from simple—all documentation accompanies the request and requires very little follow-up—to complex. For this analysis, FEMA chose to capture the variability in the grant application reviews by using a weighted average of the hours it takes to complete the reviews. FEMA estimated that 25 percent of the reviews are simple; these reviews take 8 hours each on average to complete. Reviews of applications that are average in their complexity comprise 50 percent of the reviews and are assumed to take 12 hours each. Twenty-five percent of the reviews are complex and take 16 hours on average to complete. 13 Taking a weighted average of the times listed and using the distribution of 25 percent simple/50 percent average/25 percent complex, FEMA estimated that grant application reviews take 12 hours on average to complete. ([(0.25 × 8) + (0.50 × 12) + (0.25 × 16)] = 12 hours)

Program Specialists (GS 13, step 5) and contracted Civil Engineers conduct the reviews, the Program Specialists conduct 75 percent of reviews and the Civil Engineers conduct the remaining 25 percent. The fully-loaded average hourly wage for GS 13, step 5 at the FEMA regional locations is $77.20  14 and FEMA estimates $66.23  15 is the fully-loaded hourly wage rate for Civil Engineers. Using the 12-hour average estimate for reviewing the grant application, FEMA estimated that each year it spends $486,952 on average to review FMA grant applications. ([(545 grant reviews × 12 hours per review × $77.20 hourly wage for Program Specialist × 0.75) + ([(545 grant reviews × 12 hours per review × $66.23 hourly wage for Civil Engineer × 0.25)] = $486,952.05)

FEMA estimated that removing the definition of “market value” will reduce its administrative burden by 2 hours per review. This results in each review taking 10 hours instead of 12, on average. Using the same calculation as above and 10 hours instead of 12 hours per review, FEMA's average amount spent each year on reviewing FMA grant applications will be $405,793 and results in an estimated annual cost savings of $81,159. ($486,952 − $405,793 = $81,159)

Clarification of Mitigation Grant Terms and Conditions. The current HMA grant program regulations contain inconsistencies or vague language that may cause confusion. Specifically, FEMA will add definitions for “Federal award” and “pass-through entity;” and replace definitions of “grantee,” “subgrant,” and “subgrantee” with “recipient,” “subaward,” and “subrecipient,” respectively. These changes will make the HMA regulations consistent with FEMA's other regulations.

Revising, Adding, or Removing Definitions. FEMA is revising existing definitions for clarification purposes, add several definitions to conform with BW-12 and current agency practice, and delete others that are obsolete. FEMA believes the changes are clear and more consistent with definitions used in 2 CFR part 200 and the HMA Guidance. 16

Shifting from Standard Mitigations to RL and SRL Structures. One of the main focuses of this rulemaking is on mitigation grants made to properties in the NFIP that have been repeatedly subject to costly loss claims. FEMA provides a range of available mitigation options including the FMA program to address vulnerable RL and SRL structures. Once a structure is mitigated through one of the programs, it could be protected from flooding, and can be removed from the repetitive flood loss list of un-mitigated properties insured by the NFIP. This reduces the flood vulnerability to RL and SRL structures, preventing further losses to the policyholders, as well as to FEMA. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013 when FEMA implemented it through the HMA Guidance.

Shifting from State Allocations to Competition. Before BW-12, FMA program funding was based on an allocation methodology that required an analysis of the number of insured properties and RL properties present within a jurisdiction and each State was allocated a share of the overall available funding. BW-12 changed this process to a fully-competitive program that allows FEMA to select subapplications according to FEMA priorities no matter the location.

This change lifted the constraints that were formerly in place against multiple eligible subrecipients in the same jurisdiction with vulnerable properties, allowing a more adequate coverage area within and across States and contributing to the increase in the size and volume of RL and SRL properties covered by each grant. FEMA is able to identify and mitigate properties with the highest risk from flooding and provide the greatest savings to the NFIP. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013 when FEMA implemented it through the HMA Guidance.

Eliminating the Limit on In-Kind Contributions. Eliminating the limit on in-kind contributions for a recipient's cost share modifies the nature, or make-up, of the recipient's contribution but does not change the overall dollar amount required for the recipient's contribution. FEMA believes this is advantageous because recipients and subrecipients are able to leverage their own optimal mix of in-kind and cash to meet their portion of the cost-share. There is no change to transfers between FEMA and grantees because the cost share does not change; however, the make-up of the recipient's portion changes.

Summary of Benefits. Under a no-action baseline FEMA believes this rule will promote a better understanding of the FMA program by updating the regulations that govern the HMA programs to conform with adjustments made by BW-12 and current agency practice. These changes will clarify existing requirements and help facilitate the flood portion of the Hazard Mitigation Grant Program processes.

FEMA estimated annual cost savings of $81,159 per year. Removing the definition of “market value” leads to cost savings to FEMA. Removing this definition will reduce the time it takes to conduct an initial grant application review by 2 hours.

Under a pre-statutory (pre-BW-12) baseline, FEMA believes there are considerable benefits associated with the shift to entirely competitive awards for the grants instead of the previous State-specific allocations, as well as the more flexible in-kind match option. The shift to more vulnerable RL and SRL properties by modifying the cost shares and giving priority to applications with the most vulnerable properties are expected to reduce the frequency of loss claims and promote community resiliency through mitigation. There are also qualitative benefits due to the elimination of the cap on FMA funding for States and communities and the opening of the program to a fully competitive award system. These changes enhance FEMA's ability to administer the FMA program in a more streamlined and cost effective manner. Removing State allocations of grant resources and accepting in-kind State contributions further streamline the program. Collectively, these benefits justify the rule and update FEMA's regulations to reflect current statutory authority.

Federal Cost Shares. The adjustments in cost shares made by BW-12 result in distributional impacts, with certain grant programs receiving relative increases and decreases in grant funds. To analyze the impact of changes to the cost shares, FEMA summarized available mitigation project data for standard, RL, and SRL grants. 17

Between 2006 and 2012 (pre-BW-12), FEMA provided a total of 390 grants to 244 recipients for 1,014 properties. The value of those grants was $292,374,087, with FEMA paying $205,762,109 and recipients paying $86,611,978. Table 4 shows the distribution of these grants by category.

The 390 grants from pre-BW-12 were one of three types—Standard Mitigation (up to 75 percent Federal cost share); RL (75 percent Federal cost share); or SRL (90-100 percent Federal cost share). Prior to BW-12, there were 379 Standard Mitigation grants with a total value of $287,026,260. FEMA's share was $201,618,219 and the recipients' share was $85,408,041 (70 percent average Federal cost share). For RL grants, there were five grants with a total value of $4,508,714. FEMA's share was $3,373,623 and the recipients' share was $1,135,091 (75 percent Federal cost share). For SRL grants, there were six grants made with a total value of $839,113. FEMA's share was $770,267 and the recipients' share was $68,846 (92 percent Federal cost share).

Post-BW-12 (2013-2019), FEMA provided a total of 624 grants to 1,153 recipients for 9,737 properties. The total value of those grants was $829,481,486. FEMA's share was $758,759,675 and recipients' share was $70,721,811. Table 5 shows the distribution of these grants by category.

These 624 grants were one of three types—Standard Mitigation (up to 75 percent Federal cost share); RL (75-90 percent Federal cost share); or SRL (90-100 percent Federal cost share) (all post-BW-12 cost shares). There were 132 Standard Mitigation grants with a total value of $60,036,266. FEMA's share was $41,833,737 and the recipients' share was $18,202,529 (70 percent average Federal cost share). For RL grants, there were 56 grants with a total value of $121,467,328. FEMA's share was $105,362,397 and the recipients' share was $16,104,931 (87 percent Federal cost share). For SRL grants, there were 436 grants made with a total value of $647,977,892. FEMA's share was $611,563,541 and the recipients' share was $36,414,351 (94 percent Federal cost share).

These grants often include some ineligible costs, including cost overruns or underruns, the use of insurance proceeds that FEMA deducted as a duplication of benefits, 18 or Increased Cost of Compliance (ICC), 19 so the actual cost shares do not equal the percentages listed above. For example, although SRL grants have a 100 percent Federal cost share, the actual average Federal share was 94 percent.

Changing Cost Share Amounts and to a Fully Competitive Grant Process for FMA.

Changing the cost shares had a distributional impact, where the proportion of Federal funds increased while the recipients' proportion decreased by the same amount. Similarly, the shift from State allocations of grant funding to a competitive-based program that allows grants to be allocated to the most vulnerable properties, resulted in distributional impacts where recipients in certain States receive more in grant funding where others see a decrease. FEMA was not able to isolate this effect from the effect of changing the cost shares, since they were implemented at the same time.

First, FEMA analyzed the shift in grant priorities as a distributional impact between grant programs. This was done by subtracting the total value of grants pre-BW-12 from the total value of grants post-BW-12 for each program, showing the relative decreases and increases by type of FMA grant caused by making the grants competitive and shifting funding to riskier properties. 20

• The seven-year total share of standard mitigation grants decreased by $226,989,994 post-BW-12 ($60,036,266−$287,026,260).

• The seven-year total share of RL grants increased by $116,958,614 post-BW-12 ($121,467,328−$4,508,714).

• The seven-year total share of SRL grants increased by $647,138,779 post-BW-12 ($647,977,892−$839,113).

This shows the total seven-year relative increases and decreases between FMA programs in terms of post-BW-12 grant funding: (−$226,989,994 for standard grants + $116,958,614 for SL grants + $647,138,779 SRL grants = $537,107,399).

Table 6 shows changes in the total number of grants as well as the Federal and non-Federal shares for all grants pre-BW-12 and post-BW-12 with the percent change in grants and funding.

When comparing pre-BW-12 standard mitigation grants to post-BW-12, the average annual total amount of funding dropped from $41 million to $8.6 million. For RL structures, the average annual amount of funding increased from $0.64 million to $17.4 million. For SRL structures, the average annual funding increased from $0.12 million to $92.6 million when compared to pre-BW-12. This reflects BW-12 shifting priority from standard mitigations to RL and SRL structures. FEMA's data indicate a trend toward both larger project sizes and an increased number of RL and SRL projects.

FEMA then analyzed the distributional impacts of the Federal cost shares that resulted from both the shift in priorities and the changes in cost shares. The Federal cost share for standard mitigation grants remained at 70 percent over the post-BW-12 period. The cost share for RL grants increased from an average of 75 percent pre-BW-12 to 87 percent post-BW-12. SRL grants had an average 92 percent cost share pre-BW-12 and a 94 percent cost share post-BW-12. FEMA also analyzed the change in the Federal cost share for the three grant categories together, which shows the impact of BW-12 changes to cost share amounts as well as shifting funding to RL and SRL grants, which have higher cost shares.

The total Federal share of all FMA grant categories pre-BW-12 was 70.4 percent [($205,762,109 ÷ $292,374,087) × 100]. Post BW-12, the Federal share was 91.5 percent [($758,759,675 ÷ $829,481,486) × 100]. The increase in transfers from FEMA to grantees as a result of the changed cost shares and changed priorities, in terms of post-BW-12 grant funding, was $174,739,761(91.5 percent −70.4 percent × $829,481,486) over seven years, or an average increase of $24,962,823 per year.

Under a no-action baseline, this rule results in no transfer impacts, as FEMA has already implemented the updated cost share percentages in the 2013 HMA Guidance. Under a pre-statutory (pre-BW-12) baseline, the revisions to the cost share and re-prioritization to grants with higher cost shares result in distributional transfer impacts shifting funding to the most vulnerable properties and an increase in transfers from FEMA to grant recipients. The discounted total seven-year transfers from FEMA to grant recipients are $174,739,761 million ($24.96 million annual average). 21

Mitigation Planning Grants. BW-12 lowered the funding cap on the amount of money that could be used for the flood portion of the individual multi-hazard mitigation plans from $150,000 in recipients and $50,000 for subrecipients to $50,000 per recipient and $25,000 per subrecipient, but removed a restriction that grantees could only receive funding for planning grants once every 5 years. Lowering the cap on Federal funds results in decreased funding per applicant. However, FEMA believes this is offset by the removal of the frequency restriction, which results in a negligible change in the number of approved applications and awards. FEMA found that the data does not show a substantial change in the number of applications, and thus FEMA assumed that the removal of the 5-year restriction is countered by the lowered cap on funding, resulting in minimal distributional impacts as shown in Table 7. Because FEMA implemented these changes concurrently, FEMA was unable to isolate the effects of individual changes.

Since 2013, FEMA has applied the new caps on funding for FMA planning grants per recipient and subrecipient. The caps align with and reflect FEMA's shift to focus the majority of FMA program funds on mitigating the risk to the most vulnerable properties. FEMA is no longer constrained by any limit on how often a recipient or subrecipient can receive a planning grant or the total amount that can be granted to a recipient. Further, the lower caps per recipient and subrecipient allow FEMA to assist more recipients and subrecipients.

Most of the changes in this rule are based on statute. FEMA has limited discretion in determining which changes to make. The changes that carry an economic impact under a pre-statutory (pre-BW-12) baseline are the changes to 44 CFR 79.4 (now 44 CFR 77.4): FMA Grant Federal Cost Shares and 44 CFR 79.6 (now 44 CFR 77.6): Flood Portion of Multi-Hazard Mitigation Plans. BW-12 prescribed these changes. These changes are neither new nor discretionary and FEMA did not consider alternatives.

Below, the OMB A-4 Accounting Statement presents the annualized costs, benefits, and transfer payments of the final rule in 2019 dollars using the no-action baseline. Accordingly, the below accounting statement shows the costs and benefits of this rule measured against what the world would be like if this rule were not adopted.

FEMA also assessed the impacts of this rule under the pre-statutory baseline. The pre-statutory baseline is an assessment against what the world would be like if the relevant statute(s) had not been adopted, and in this case, already been implemented through guidance. FEMA estimates the impact of the changes codified in this rule to primarily be an increase in transfers from FEMA to HMA recipients of $24.96 million annualized, due to the targeting of higher risk properties for grant funding. Additionally, the changes codified by this rule shifted from State-based allocations to a competitive process, allowing FEMA to select applications according to FEMA priorities rather than by location. This rule also eliminated limits on in-kind contributions, allowing recipients more flexibility to cover their portion of the cost shares. FEMA implemented the pre-statutory provisions of this rule in the 2013 HMA Unified Guidance.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq. ) requires agency review of proposed and final rules to assess their impact on small entities. When an agency promulgates a notice of proposed rulemaking under 5 U.S.C. 553, the agency must prepare a Final Regulatory Flexibility Analysis (FRFA) unless it determines and certifies pursuant to 5 U.S.C. 605(b) that a rule, if promulgated, will not have a significant impact on a substantial number of small entities. FEMA believes this rule does not have a significant economic impact on a substantial number of small entities.

In accordance with the Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FEMA examined the effects of the adjustments made by BW-12 and implemented by FEMA in the 2013 HMA Guidance on small entities. A small entity may be: A small independent business, defined as independently owned and operated, is organized for profit, and is not dominant in its field per the Small Business Act (5 U.S.C. 632); a small organization, defined as any not-for-profit enterprise which is independently owned and operated and is not dominant in its field (5 U.S.C. 601); or a small governmental jurisdiction (locality with fewer than 50,000 people) per 5 U.S.C. 601.

The rule directly affects all eligible FMA grant recipients. FEMA estimates that the changes from BW-12 affect FMA grant recipients that are small governmental jurisdictions with a population of less than 50,000, as defined at 5 U.S.C. 601(5). 22 To estimate the effects on small entities of the adjustments made by BW-12, and codified in this rule, FEMA used the same methodology used in the regulatory analysis. 23 In general, FEMA identified the affected population—recipients of FEMA's FMA grants—and analyzed how the changes affect those recipients. Using those results, FEMA then evaluated which recipients qualified as “small entities.” Eligible FMA grant recipients may include States, U.S. territories, and Indian Tribal governments; subrecipients may include local governments and governmental organizations such as flood, sewer, and water districts. FEMA removed from its RFA dataset and analysis any recipients that are States and U.S. territories because they have populations greater than 50,000. FEMA also removed any Indian Tribal governments because they are not included in the definition of a small entity. 24 The remaining recipients were either local governments or governmental organizations. FEMA used the U.S. Census Bureau's annual population estimates for 2019 produced by its Population Estimates Program (PEP)  25 to determine the population for each recipient. 26 Table 9 summarizes the number of small entities affected by the changes in BW-12.

Between 2006 and 2019, FEMA awarded a total of 1,551 FMA grants to mitigate flood risk to 4,521 properties. Of the total 1,551 recipients, 391 recipients, or 25.2 percent, had populations under 50,000 and are considered small entities. These small entities used the FMA grants to mitigate flood risk to 766 vulnerable properties. These 391 small entity recipients are all local governments.

Pre-BW-12, FEMA awarded 112 grants to small entities. Of these, 109 were for standard mitigation with an average Federal cost share of 73 percent, 2 were RL with an average Federal cost share of 82 percent, and 1 was SRL with a cost share of 90 percent.

Post-BW-12, FEMA awarded 279 grants to small entities. Of these, 40 were standard mitigation with an average Federal cost share of 69 percent, 3 were RL with an average Federal cost share of 88 percent, and 76 were SRL with an average Federal cost share of 90 percent. While the cost shares did not change significantly, more applicants received SRL grants when compared to the pre-BW-12 period. This shows the prioritization of more vulnerable properties.

This rule codifies legislative requirements included in the Biggert-Waters Flood Insurance Reform Act of 2012, Public Law 112-141, 126 Stat. 916 (BW-12), which amended the National Flood Insurance Act of 1968 (NFIA) and required changes to all major components of the National Flood Insurance Program (NFIP), including mitigation grants authorized under the NFIA. FEMA implemented the legislative requirements in BW-12 through policy/guidance in 2013 and is now codifying these changes in regulation, to reflect current agency practice, and to clarify existing regulations. Pursuant to 5 U.S.C. 605(b), FEMA certifies that this regulation will not have a significant economic impact on a substantial number of small entities.

Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on state, local, and Tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and Tribal governments and the private sector. This rule does not result in such an expenditure, and thus preparation of such a statement is not required.

Section 102 of the National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321 et seq. ) requires Federal agencies to consider the impacts of their proposed actions on the quality of the human environment. Each agency can develop categorical exclusions (catexes) to cover actions that have been demonstrated to not typically trigger significant impacts to the human environment individually or cumulatively. If an action does not qualify for a catex and has the potential to significantly affect the environment, agencies develop environmental assessments (EAs) to evaluate those actions. The Council on Environmental Quality's (CEQ) procedures for implementing NEPA, 40 CFR parts 1500 through 1508, require Federal agencies to prepare Environmental Impact Statements (EISs) for major Federal actions significantly affecting the quality of the human environment. At the end of the EA process, the agency will determine whether to make a Finding of No Significant Impact (FONSI) or whether to initiate the EIS process.

Under the National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. 4321 et seq. an agency must prepare an Environmental Assessment (EA) and Environmental Impact Statement (EIS) for any rulemaking that significantly affects the quality of the human environment. FEMA has determined that this rulemaking does not significantly affect the quality of the human environment and consequently has not prepared an EA or EIS.

Catex A3 included in the list of exclusion categories at Department of Homeland Security Instruction Manual 023-01-001-01, Revision 01, Implementation of the National Environmental Policy Act, Appendix A, issued November 6, 2014, covers the promulgation of rules, issuance of rulings or interpretations, and the development and publication of policies, orders, directives, notices, procedures, manuals, and advisory circulars if they meet certain criteria provided in A3(a-f). This rule meets the criteria in A3(a), (b), (c), and (d). The rule makes a number of regulatory revisions that are strictly administrative. In addition, the rule amends an existing regulation without changing its environmental effect, and also implements, without substantive change, statutory requirements and guidance documents. Because no extraordinary circumstances have been identified, this rule does not require the preparation of either an EA or an EIS as defined by NEPA. See Department of Homeland Security Instruction Manual 023-01-001-01, Revision 01, Implementation of the National Environmental Policy Act, section (V)(B)(2).

The Endangered Species Act (ESA) mandates that Federal agencies determine whether their proposed actions may affect listed species and/or their designated critical habitat (critical habitat has been designated for some, but not all listed species). Without authorization or exemption from Federal resource agencies, it is unlawful for any person, whether government employee or private citizen, to take listed animal species.

To comply with Section 7(a)(2) of the ESA, for every action that FEMA proposes to carry out, fund, or authorize, FEMA must first determine if species and habitat are present in the action area. If species are present in the action area, then FEMA must make one of the following determinations with respect to the effect of the proposed action on listed species and critical habitat: (1) No effect (NE); 2) may affect, but is not likely to adversely affect (NLAA); or 3) may affect and is likely to adversely affect (LAA).

This rule has been evaluated by FEMA and due to the administrative nature, FEMA has determined the rule does not have the potential to affect federally-listed species or designated critical habitat. As such, a “No Effect” determination has been made for these activities. Per the ESA regulations, notification to, and consultation with, the U.S. Fish and Wildlife Service and/or the National Marine Fisheries Service are not required for activities with a “No Effect” determination.

The National Historic Preservation Act (NHPA) (54 U.S.C. 300101, formerly 16 U.S.C. 470) was enacted in 1966, with various amendments throughout the years. Section 106 of the NHPA (54 U.S.C. 306108) requires Federal agencies to take into account the effect of their actions on any historic property. It mandates a consultation process in the early stages of project planning and must be completed prior to the approval of expenditure of any Federal funds for the undertaking. Subpart B of 36 CFR part 800 lays out a four-step Section 106 process to fulfill this obligation: (1) Initiate the process (800.3); (2) identify historic properties (800.4); (3) assess adverse effects (800.5); and (4) resolve adverse effects (800.6).

Pursuant to section 106 of the NHPA and its implementing regulations at 36 CFR part 800, FEMA has determined that this rule does not have the potential to cause effects to historic properties and in accordance with 36 CFR part 800.3(a)(1), FEMA has no further obligations under section 106.

Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the agency obtains approval from the Office of Management and Budget (OMB) for the collection and the collection displays a valid OMB control number. See 44 U.S.C. 3506, 3507. This rule contains collections of information that are subject to review by OMB. The information collections included in this rule are approved by OMB under control numbers 1660-0072 (Flood Mitigation Assistance (eGrants) and Grant Supplement Information), 1660-0062 (State/Local/Tribal Hazard Mitigation Plans), 1660-0026 (State Administrative Plan for the Hazard Mitigation Grant Program), and 1660-0076 (Hazard Mitigation Grant Program Application and Reporting). Currently, FEMA is working to reinstate 1660-0103 (Property Acquisition and Relocation for Open Space).

This rulemaking calls for no new collections of information under the PRA. This rule includes information currently collected by FEMA and approved in OMB information collections 1660-0072, 1660-0062, 1660-0026, and 1660-0076. Currently, FEMA is working to reinstate 1660-0103. The actions of this rulemaking do not impose any additional burden to this collection of information. The changes in this rulemaking do not change the forms, the substance of the forms, or the number of recipients who would submit the forms to FEMA.

Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a proposed regulation will result in a system of records. A record is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. See 5 U.S.C. 552a(a)(4). A system of records is a group of records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures.

The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires specific procedures when an agency takes action to develop or procure information technology that collects, maintains, or disseminates information that is in an identifiable form. This Act also applies when an agency initiates a new collection of information that will be collected, maintained, or disseminated using information technology if it includes any information in an identifiable form permitting the physical or online contacting of a specific individual. A Privacy Threshold Analysis was completed.

Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive Order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials.

Although Indian Tribal governments are potentially eligible applicants under HMA programs, FEMA has determined that this rule 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. There is no substantial direct compliance cost associated with this rule. The HMA programs are voluntary programs that provide funding to applicants, including Tribal governments, for eligible mitigation planning and projects that reduce disaster losses and protect life and property from future disaster damages. An Indian Tribal government may participate as either an applicant/recipient or a subapplicant/subrecipient. FEMA does not expect the regulatory changes in this rule to disproportionately affect Indian Tribal governments acting as recipients.

Executive Order 13132, Federalism, 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that 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. Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action.

FEMA has reviewed this rule under Executive Order 13132 and has determined that this rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore does not have federalism implications as defined by the Executive Order. FEMA has determined that this rule does not significantly affect the rights, roles, and responsibilities of States, and involves no preemption of State law nor does it limit State policymaking discretion. This rulemaking amends regulations governing voluntary grant programs that may be used by State, local and Tribal governments to fund eligible mitigation activities that reduce disaster losses and protect life and property from future disaster damages. States are not required to seek grant funding, and this rulemaking does not limit their policymaking discretion.

Pursuant to Executive Order 11988, each Federal agency is required to provide leadership and take action to reduce the risk of flood loss, to minimize the impact of floods on human safety, health and welfare, and to restore and preserve the natural and beneficial values served by floodplains in carrying out its responsibilities for (1) acquiring, managing, and disposing of Federal lands and facilities; (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. In carrying out these responsibilities, each agency must evaluate the potential effects of any actions it may take in a floodplain; to ensure that its planning programs and budget requests reflect consideration of flood hazards and floodplain management; and to prescribe procedures to implement the policies and requirements of the Executive Order.

Before promulgating any regulation, an agency must determine whether the regulation will affect a floodplain(s), and if so, the agency must consider alternatives to avoid adverse effects and incompatible development in the floodplain(s). If the head of the agency finds that the only practicable alternative consistent with the law and with the policy set forth in Executive Order 11988 is to promulgate a regulation that affects a floodplain(s), the agency must, prior to promulgating the regulation, design or modify the regulation in order to minimize potential harm to or within the floodplain, consistent with the agency's floodplain management regulations and prepare and circulate a notice containing an explanation of why the action is located in the floodplain. The purpose of the rule is to update FEMA's HMA program regulations to reflect statutory changes that have already been implemented. While the rule revises the regulations for FMA administered by the NFIP, it would not impact other NFIA regulations that pertain to land use, floodplain management, or flood insurance. The majority of the revisions in this rulemaking apply to the regulations for the FMA program, which is a voluntary grant program that provides funding for activities designed to reduce the risk of flood damage to structures insured under the NFIP. When FEMA undertakes specific actions that may have effects on floodplain management, FEMA follows the procedures set forth in 44 CFR part 9 to assure compliance with this Executive Order. These procedures include a specific, 8-step process for conducting floodplain management and wetland reviews. The rule does not change this process.

Pursuant to Executive Order 11990, each Federal agency must provide leadership and take action to minimize the destruction, loss or degradation of wetlands, and to preserve and enhance the natural and beneficial values of wetlands in carrying out the agency's responsibilities for (1) acquiring, managing, and disposing of Federal lands and facilities; and (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. Each agency, to the extent permitted by law, must avoid undertaking or providing assistance for new construction located in wetlands unless the head of the agency finds (1) that there is no practicable alternative to such construction, and (2) that the proposed action includes all practicable measures to minimize harm to wetlands which may result from such use. In making this finding the head of the agency may take into account economic, environmental and other pertinent factors.

In carrying out the activities described in the Executive Order, each agency must consider factors relevant to a proposal's effect on the survival and quality of the wetlands. Among these factors are: Public health, safety, and welfare, including water supply, quality, recharge and discharge; pollution; flood and storm hazards; and sediment and erosion; maintenance of natural systems, including conservation and long-term productivity of existing flora and fauna, species and habitat diversity and stability, hydrologic utility, fish, wildlife, timber, and food and fiber resources; and other uses of wetlands in the public interest, including recreational, scientific, and cultural uses.

The requirements of Executive Order 11990 apply in the context of the provision of Federal financial assistance relating to, among other things, construction and property improvement activities. However, this rule would not have an effect on land use or wetlands. The purpose of the rule is to update FEMA's HMA program regulations to reflect statutory changes that have already been implemented. While the rule revises the regulations for FMA administered by the NFIP, it does not impact other NFIP regulations that pertain to land use, floodplain management, or flood insurance. The majority of the revisions in this rulemaking apply to the regulations for the FMA program, which is a voluntary grant program that provides funding for activities designed to reduce the risk of flood damage to structures insured under the NFIP. When FEMA undertakes specific actions that may have effects on wetlands, FEMA follows the procedures set forth in 44 CFR part 9 to assure compliance with this Executive Order. These procedures include a specific, 8-step process for conducting floodplain management and wetland reviews. The rule would not change this process.

Pursuant to Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994, as amended by Executive Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates environmental justice into its policies and programs. The Executive Order requires each Federal agency to conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures that those programs, policies, and activities do not have the effect of excluding persons from participation in programs, denying persons the benefits of programs, or subjecting persons to discrimination because of race, color, or national origin. This rulemaking will not have a disproportionately high or adverse effect on human health or the environment.

Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801-808, before a rule can take effect, the Federal agency promulgating the rule must submit to Congress and to the Government Accountability Office (GAO) a copy of the rule, a concise general statement relating to the rule, including whether it is a major rule, the proposed effective date of the rule, a copy of any cost-benefit analysis, descriptions of the agency's actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act, and any other information or statements required by relevant executive orders.

FEMA has sent this rule to the Congress and to GAO pursuant to the CRA. The rule is not a major rule within the meaning of the CRA. It will not have an annual effect on the economy of $100,000,000 or more, it will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions, and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

For the reasons set forth in the preamble, FEMA amends 44 CFR parts 77, 78, 79, 80, 201, and 206 as follows:

Part 501 describes the basic statutory requirements of the Commission, the internal structure of the Commission, the functions of the Commission's organizational component offices, and outlines the delegation of the Commission's duties and authorities to these offices. The final rule reflects changes made as part of the Commission's Agency Reform and Long-Term Workforce Plan, developed under the guidance of Office of Management and Budget Memorandum 17-22, Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce, 1 as well as subsequent organizational changes. The Commission is amending its rules at 46 CFR part 501 to reflect the realignment of various offices and the elimination of certain positions, clarify the authority of office heads to delegate duties in their absence, and eliminate or modify certain out-of-date provisions.

In addition to making necessary updates to part 501, the final rule streamlines the information provided in part 501, removing certain information that the Commission will instead publish on its website or that is currently provided in other parts of the Code of Federal Regulations. The chart below describes the existing sections in part 501 and the nature of the changes made in the final rule.

Because the changes made in this proceeding reflect changes made to the internal procedure and organization of the Commission, and are routine and administrative, this rule is published as final. See 5 U.S.C. 553(b)(A) (excluding rules of agency organization, procedure, and practice from the notice and comment requirements of the Administrative Procedure Act).

The final rule is not a “rule” as defined by the Congressional Review Act (CRA), codified at 5 U.S.C. 801 et seq., and is not subject to the provisions of the CRA. The CRA adopts the Administrative Procedure Act's definition of a “rule” in 5 U.S.C. 551, subject to certain exclusions. See 5 U.S.C. 804(3). In particular, the CRA does not apply to rules relating to agency management and personnel and rules of agency organization, procedure, and practice that do not substantially affect the rights or obligations of non-agency parties. Id. This final rule relates to agency management and personnel as well as agency organization, procedures, and practices. Specifically, the final rule reflects changes to the internal management structure of the Commission, the elimination and addition of certain positions, and updates to out-of-date provisions regarding the Commission's internal organization. Neither the regulated community nor the public are substantially affected by these internal organizational changes. Therefore, the final rule is not a “rule” under the CRA and is not subject to the CRA's requirements.

The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601-612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must prepare and make available for public comment a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities. 5 U.S.C. 604. An agency is not required to publish a FRFA, however, for the following types of rules, which are excluded from the APA's notice-and-comment requirement: Interpretive rules; general statements of policy; rules of agency organization, procedure, or practice; and rules for which the agency for good cause finds that notice and comment is impracticable, unnecessary, or contrary to public interest. See 5 U.S.C. 553(b). As explained above, this final rule is a rule of agency organization, procedure, or practice. Therefore, the APA does not require publication of a notice of proposed rulemaking in this instance, and the Commission is not required to prepare a FRFA.

The Commission's regulations categorically exclude certain rulemakings from any requirement to prepare an environmental assessment or an environmental impact statement because they do not increase or decrease air, water, or noise pollution or the use of fossil fuels, recyclables, or energy. 46 CFR 504.4. This final rule makes changes to the Commission's internal organization and management structure, and thus falls within the categorical exclusion for matters related to Commission personnel. See 46 CFR 504.4(a)(28). Therefore, no environmental assessment or environmental impact statement is required.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).

The Administrative Procedure Act generally requires that a rule may not go into effect earlier than 30 days after publication in the Federal Register , unless an agency finds good cause for prescribing an earlier effective date. See 5 U.S.C. 553(c)(3). As described above, the final rule reflects internal organizational changes that have already been made as part of the of the Commission's Agency Reform and Long-Term Workforce Plan, and these changes do not materially affect regulated entities or the public. Accordingly, a delayed effective date is unnecessary, and the Commission finds that good cause exists for this rule to go into effect immediately upon publication in the Federal Register .

This rule meets the applicable standards in E.O. 12988 titled, “Civil Justice Reform,” to minimize litigation, eliminate ambiguity, and reduce burden. Section 3(b) of E.O. 12988 requires agencies to make every reasonable effort to ensure that each new regulation: (1) Clearly specifies the preemptive effect; (2) clearly specifies the effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct, while promoting simplification and burden reduction; (4) clearly specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. This document is consistent with that requirement.

The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading of this document to find this action in the Unified Agenda, available at http://www.reginfo.gov/public/do/eAgendaMain.