This SNOPR proposes to maintain a previous incorporation by reference in 10 CFR part 430 in the following industry standard:

International Electrotechnical Commission (“IEC”) standard 62301 (“IEC 62301”), Household electrical appliances—Measurement of standby power, (Edition 2.0, 2011-01).

Copies of IEC 62301 (Second Edition) can be obtained from the American National Standards Institute, 25 W 43rd Street, 4th Floor, New York, NY 10036, (212) 642-4900, or go to https://webstore.ansi.org.

For a further discussion of this standard, see section IV.M.

An EPS is a “covered product” for which DOE is authorized to establish and amend energy conservation standards and test procedures. (42 U.S.C. 6295(u)(1)(A)) DOE's energy conservation standards and test procedures for EPSs are currently prescribed at 10 CFR 430.32(w) and 430.23(bb), respectively. The following sections discuss DOE's authority to establish test procedures for EPSs and relevant background information regarding DOE's consideration of test procedures for this product.

The Energy Policy and Conservation Act, as amended (“EPCA”), 1 authorizes DOE to regulate the energy efficiency of certain consumer products and types of industrial equipment. (42 U.S.C. 6291-6317) Title III, Part B  2 of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles, which sets forth provisions designed to improve energy efficiency for a variety of products and equipment. These products include EPSs, the subject of this document. (42 U.S.C. 6291(36)(A); 42 U.S.C. 6295(u))

EPCA's energy conservation program consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), energy conservation standards (42 U.S.C. 6295), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), and the authority to require information and reports from manufacturers (42 U.S.C. 6296).

The Federal testing requirements consist of test procedures that manufacturers of covered products must use as the basis for: (1) Certifying to DOE that their products comply with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6295(s)), and (2) making representations about the efficiency of those consumer products (42 U.S.C. 6293(c)). Similarly, DOE must use these test procedures to determine whether the products comply with relevant standards promulgated under EPCA. (42 U.S.C. 6295(s))

Federal energy efficiency requirements for covered products established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions of EPCA. (42 U.S.C. 6297(d))

Under 42 U.S.C. 6293, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered products. EPCA requires that any test procedures prescribed or amended under this section be reasonably designed to produce test results which measure energy efficiency, energy use or estimated annual operating cost of a covered product during a representative average use cycle or period of use and not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))

In addition, EPCA requires that DOE amend its test procedures for all covered products to integrate measures of standby mode and off-mode energy consumption. (42 U.S.C. 6295(gg)(2)(A)) Standby mode and off-mode energy consumption must be incorporated into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product unless the current test procedures already account for and incorporate standby mode and off-mode energy consumption or such integration is technically infeasible. (42 U.S.C. 6295(gg)(2)(A)(i)) If an integrated test procedure is technically infeasible, DOE must prescribe separate standby mode and off-mode energy use test procedures for the covered product, if technically feasible. (42 U.S.C. 6295(gg)(2)(A)(ii)) Any such amendment must consider the most current versions of International Electrotechnical Commission (“IEC”) Standard 62301  3 and IEC Standard 62087  4 as applicable. (42 U.S.C. 6295(gg)(2)(A))

The Energy Policy Act of 2005 (“EPACT 2005”), Public Law 109-58 (August 8, 2005), amended EPCA by adding provisions related to EPSs. Among these provisions were a definition of EPS and a requirement that DOE prescribe “definitions and test procedures for the power use of battery chargers and external power supplies.” (42 U.S.C. 6295(u)(1)(A))

The Energy Independence and Security Act of 2007 (“EISA 2007”), Public Law 110-140 (December 19, 2007) later amended EPCA by modifying the EPS-related definitions prescribed at 42 U.S.C. 6291. While section 135(a)(3) of EPACT 2005 defined an EPS as “an external power supply circuit that is used to convert household electric current into DC current or lower-voltage alternating current (“AC”) to operate a consumer product,” section 301 of EISA 2007 further amended this definition by creating a subset of EPSs called Class A EPSs. EISA 2007 defined this subset of products as those EPSs that, in addition to meeting several other requirements common to all EPSs, are “able to convert [line voltage AC] to only 1 AC or DC output voltage at a time” and have “nameplate output power that is less than or equal to 250 watts.” (42 U.S.C. 6291(36)(C)(i)) As part of these amendments, EISA 2007 prescribed minimum standards for these products (hereafter referred to as “Level IV” standards based on the marking provisions detailed under 10 CFR 430.32(w)(4)) and directed DOE to publish a final rule to determine whether to amend these standards. 5 (42 U.S.C. 6295(u)(3)(A) and (D)) EISA 2007 also required DOE to publish a second rule to determine whether the standards then in effect should be amended. (42 U.S.C. 6295(u)(3)(D)(ii))

EISA 2007 also amended EPCA by defining the terms “active mode,” “standby mode,” and “off-mode.” Each of these modes corresponds to the operational status of a given product— e.g., whether it is (1) plugged into AC mains and switched “on” and performing its intended function, (2) plugged in but not performing its intended function ( i.e., simply standing by to be operated), or (3) plugged in, but switched “off,” if a manual on-off switch is present. Additionally, EISA 2007 required DOE to amend its test procedure to ensure that standby and off-mode energy consumption are measured. It also authorized DOE to amend, by rule, the definitions for active, standby, and off-mode, considering the most current versions of IEC Standards 62301 and 62087. (42 U.S.C. 6295(gg)(2)(A) (incorporating EISA 2007 amendments related to standby and off-mode energy)).

Following the amendments to EPCA under EISA 2007, Congress further amended EPCA to exclude EPSs used for certain security and life safety alarms and surveillance systems manufactured prior to July 1, 2017, from no-load standards. Public Law 111-360 (January 4, 2011). EPCA's EPS provisions were again amended by the Power and Security Systems (“PASS”) Act, which extended the rulemaking deadline and effective date established under the EISA 2007 amendments from July 1, 2015 and July 1, 2017, to July 1, 2021 and July 1, 2023, respectively. Public Law 115-78 (November 2, 2017); 131 Stat. 1256, 1256; 42 U.S.C. 6295(u)(3)(D)(ii)). The PASS Act also extended the exclusion of certain security and life safety alarms and surveillance systems from no-load standards until the effective date of the final rule issued under 42 U.S.C. 6295(u)(3)(D)(ii) and allowed the Secretary to treat some or all external power supplies designed to be connected to a security or life safety alarm or surveillance system as a separate product class or to further extend the exclusion. (42 U.S.C. 6295(u)(3)(E)(ii) and (iv))

Most recently, on January 12, 2018, the EPS Improvement Act of 2017, Public Law 115-115, amended EPCA to exclude the following devices from the EPS definition: Power supply circuits, drivers, or devices that are designed exclusively to be connected to and power (1) light-emitting diodes providing illumination, (2) organic light-emitting diodes providing illumination, or (3) ceiling fans using direct current motors. 6 (42 U.S.C. 6291(36)(A)(ii))

EPCA also requires that, at least once every 7 years, DOE evaluate test procedures for each type of covered product, including EPSs, to determine whether amended test procedures would more accurately or fully comply with the requirements for the test procedures to not be unduly burdensome to conduct and be reasonably designed to produce test results that reflect energy efficiency, energy use, and estimated operating costs during a representative average use cycle or period of use. (42 U.S.C. 6293(b)(1)(A))

If the Secretary determines, on her own behalf or in response to a petition by any interested person, that a test procedure should be prescribed or amended, the Secretary shall promptly publish in the Federal Register proposed test procedures and afford interested persons an opportunity to present oral and written data, views, and arguments with respect to such procedures. The comment period on a proposed rule to amend a test procedure shall be at least 60 days and may not exceed 270 days. In prescribing or amending a test procedure, the Secretary shall take into account such information as the Secretary determines relevant to such procedure, including technological developments relating to energy use or energy efficiency of the type (or class) of covered products involved. (42 U.S.C. 6293(b)(2)). If DOE determines that test procedure revisions are not appropriate, DOE must publish its determination not to amend the test procedures.

DOE's current EPS test procedures appear at 10 CFR part 430, subpart B, appendix Z, “Uniform Test Method for Measuring the Energy Consumption of External Power Supplies” (“Appendix Z”).

DOE published a NOPR to amend the test procedure on December 6, 2019. 80 FR 67106 (“December 2019 NOPR”). In the December 2019 NOPR, DOE proposed to add a definition for “commercial and industrial power supply” in its regulations to differentiate between EPSs, which are covered products, and non-consumer power supplies, which are not covered products. DOE also proposed to create a definition to address an adaptive EPS that conforms to the USB-PD specifications and revise its procedure to address their testing in a manner more representative of their actual use. Further, the proposed revisions would provide more specific instructions for testing single-voltage EPSs that have multiple output busses. Lastly, DOE proposed to reorganize the test procedure to centralize definitions, consolidate generally applicable requirements, and better delineate requirements for single-voltage, multiple-voltage, and adaptive EPSs. DOE sought comment from interested parties on the proposal. DOE held a public meeting related to this NOPR on December 11, 2019 (“December 2019 NOPR public meeting”).

DOE received comments in response to the December 2019 NOPR from the interested parties listed in Table I.1.

A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record. 7 This SNOPR addresses only those comments relevant to the proposals laid out in this document; all other relevant comments will be addressed in the final rule. The regulatory text as amended by the amendments proposed in both the December 2019 NOPR and this SNOPR is presented at the end of this document for the convenience of review of all the proposed amendments.

In this SNOPR, DOE proposes to supplement (or replace) those proposed amendments from the December 2019 NOPR with further amendments that would provide as follows:

(1) Remove reference in the scope section of appendix Z to direct operation and indirect operation Class A EPSs because there is no distinction in how these EPSs are tested.

(2) More explicitly align the test procedure with the scope of the energy conservation standards set forth at 10 CFR 430.32(w)(1) by excluding from testing devices for which the primary load of the converted voltage within the device is not delivered to a separate end use product.

(3) Specify testing requirements for EPSs that are packaged without an output cord to provide explicitly that these EPSs are tested with an output cord that is recommended for use by the manufacturer.

(4) Modify the proposal from the December 2019 NOPR to define “USB-PD” EPS so as to include programmable power supplies (“PPSs”) and USB-PD EPSs with optional voltages and currents; and further amend the definition of “nameplate output power” to specify that USB-PD EPSs must be tested at the lowest nameplate output voltage, which can be as low as 3.3 volts for PPSs, rather than at 5 volts (as was proposed in the December 2019 NOPR).

Additionally, DOE is modifying the December 2019 NOPR's proposal to relocate certain definitions. Specifically, DOE is no longer proposing to relocate the definitions of “Class A external power supply”, “basic-voltage external power supply”, “direct operation external power supply”, “indirect operation external power supply”, and “low-voltage external power supply” at 10 CFR 430.2 rather than include them in appendix Z.

The actions proposed in this SNOPR are summarized in Table II.1 and addressed in detail in section III of this document. Unless otherwise provided, DOE continues to propose the amendments presented in the December 2019 NOPR. To facilitate commenter review, the proposed regulatory text at the end of this document provides the proposed regulatory text from the December 2019 NOPR as modified by the proposals in this SNOPR.

To the extent that DOE has tentatively determined that its proposed amendments would impact the measured energy efficiency of an EPS, DOE proposes that testing according to such amendments, if made final, would not be required until such time as compliance is required with new and amended energy conservation standards, should such standard be established or amended. DOE has also tentatively determined that the proposal, if adopted, would not be unduly burdensome to conduct. DOE's proposed actions are addressed in detail in section III of this document.

In this SNOPR, DOE proposes to revise section 1 of appendix Z, which specifies the scope of the EPS test procedure, by removing references to direct operation EPSs and indirect operation Class A EPSs and instead state that the test procedure's scope includes all EPSs subject to the energy conservation standards set forth at 10 CFR 430.32(w)(1), except for those that meet the definition of a “commercial and industrial power supply” as defined in 10 CFR 430.2.

Deleting references to direct operation EPSs and indirect operation Class A EPSs from the scope section of the EPS test procedure at appendix Z would not alter the scope or the applicability of appendix Z. The test procedure to test direct operation and indirect operation EPSs is the same for both types of EPSs, and including these terms in the scope is unnecessary; therefore, DOE is proposing to remove the references.

Also, as part of the December 2019 NOPR, DOE proposed to define “commercial and industrial power supply” and exclude it from the definition of an EPS altogether. In this SNOPR, DOE proposes to maintain the current definition of an EPS and instead use the definition of a “commercial and industrial power supply” to exclude these EPSs from the scope of the appendix as described previously.

DOE requests feedback on its proposal to revise section 1 of appendix Z to remove references to direct operation EPSs and indirect operation Class A EPSs. DOE also requests feedback on its proposal to use the proposed definition of a “commercial and industrial power supply” to exclude such EPSs from the scope of the EPS test procedure.

In response to inquiries as to whether the EPS test procedure permits non-EPS-related functions to be disconnected when testing products with universal serial bus (“USB”) ports, DOE proposed in the December 2019 NOPR to specify that components and circuits unrelated to the EPS's functionality may be disconnected during testing as long as that disconnection does not impact the functionality of the EPS itself. 80 FR 67106, 67115 (December 6, 2019). For example, a surge protector with USB output ports may be tested with the surge protector circuit disconnected if it is distinct from the USB circuit and does not impact the EPS's functionality ( i.e., the circuit from household AC input to the USB output). Id.

Additionally, in a request for information (“RFI”) regarding the energy conservation standards for EPSs published on May 20, 2020 (“May 2020 RFI”), DOE solicited comment regarding how to differentiate between EPSs and products with power conversion as an auxiliary function. 85 FR 30636, 30639. DOE received comments that mostly supported the exclusion of devices with power conversion as an auxiliary function from EPS regulations.

In response to the December 2019 NOPR, CTA and NEMA/ALA raised concern that the proposed amendment would expand the scope of what is covered as an EPS as a result of what they understood to be a proposal to consider all devices with power conversion as an ancillary function (specifically products with USB, HDMI, CAT5, or similar ports) to be within the scope of EPS regulations. (CTA, No. 11 at pp. 3-4; NEMA/ALA, No. 12 at pp. 1-3, 6)

CTA commented that DOE's proposed addition of regulatory language referencing “circuits” in section 4(h) of the proposed amendments to appendix Z may lead to questions about the scope of the EPS regulations if DOE intends to further classify circuits as a type of EPS. (CTA, No. 11 at pp. 3-4) CTA also asserted that devices such as laptops, connected televisions, and mobile phone docking ports would potentially be brought under EPS regulations if devices with USB, HDMI, CAT5 or similar ports are considered EPSs. (CTA, No. 11 at p. 4) In addition, CTA raised the concern of potential double regulations for certain products that contain USB ports and are also subject to other energy conservations standards for another product, such as battery chargers. (CTA, No. 11 at p. 3) CTA recommended that DOE classify EPSs with other major functions into a separate product class, and state that such products are not subject to current EPS regulations. (CTA, No. 11 at p. 4)

NEMA/ALA stated that it would be impractical for DOE to enforce EPS regulations upon every product containing a USB, HDMI, or RJ-45 port. (NEMA/ALA, No. 12 at p. 1) NEMA/ALA also raised the issue of double regulations, stating that many devices, including commercial devices, whose energy use or energy efficiency is already regulated under EPCA, contain ports that provide power as an ancillary function. (NEMA/ALA, No. 12 at pp.1-2) NEMA/ALA suggested creating a definition for a “non-primary power supply,” or a similar term, that would encompass devices with power conversion as an ancillary function and exclude such devices from the definition of an EPS. (NEMA/ALA, No. 12 at pp. 2-3) NEMA/ALA also suggested amending the definition of an EPS to explicitly state that the presence of a USB, HDMI, or RJ-45 port (or similar) as a secondary or ancillary feature does not qualify the product as an EPS. (NEMA/ALA, No. 12 at pp. 5-6)

As discussed in section I.A of this document, EPCA defines EPS broadly as “an external power supply circuit that is used to convert household electric current into DC current or lower-voltage AC current to operate a consumer product.” (42 U.S.C. 6291(36)(A)(i)) The use of the term “external power supply circuit” in the proposed amendment to allow non-EPS functions to be disconnected would not change the scope of EPS regulations.

In response to the May 2020 RFI's solicitation for comment on devices with power conversion as an auxiliary function, The Power Tool Institute (“PTI”) and, separately, a collaboration of various industry commenters consisting of The Association of Home Appliance Manufacturers (“AHAM”), Information Technology Industry Council (“ITI”), Plumbing Manufacturers International (“PMI”), and PTI (collectively, the “Joint Commenters”) asserted that such devices fall out of the scope of EPS regulations and should not be subject to regulations unless DOE were to prescribe a standard specific to the end-use product. (Docket No. EERE-2020-BT-STD-0006, PTI, No. 4 at p. 1; Docket No. EERE-2020-BT-STD-0006, Joint Commenters, No. 10 at p. 2) The Joint Commenters further opposed the development of regulations for EPSs that are components of a product. (Docket No. EERE-2020-BT-STD-0006, Joint Commenters, No. 10 at p. 2)

In related comments received in response to the May 2020 RFI, the Northwest Energy Efficiency Alliance (“NEEA”), Natural Resource Defense Council (“NRDC”), and the Appliance Standards Awareness Project (“ASAP”) (hereafter, “NEEA/NRDC/ASAP”) and the CA IOUs commented that devices with power conversion as an auxiliary function are becoming increasingly more common on the market. (Docket No. EERE-2020-BT-STD-0006, NEEA/NRDC/ASAP, No. 6 at p. 12; Docket No. EERE-2020-BT-STD-0006, CA IOUs, No. 7 at pp. 8-9) NEEA/NRDC/ASAP asserted that these types of devices should be subject to EPS regulations. (Docket No. EERE-2020-BT-STD-0006, NEEA/NRDC/ASAP, No. 6 at p. 13) Additionally, NEEA/NRDC/ASAP stated that power supplies serving an auxiliary function in a device could consume significantly more energy in active and/or no-load modes as a result of these devices not being subject to EPS regulations. (Docket No. EERE-2020-BT-STD-0006, NEEA/NRDC/ASAP, No. 6 at pp. 12-13) The CA IOUs recommended that DOE evaluate the overall potential for covering products with power conversion as a secondary function and that DOE conduct a verification study to compare the energy performance of these types of devices to EPSs that are not included in a finished product as a secondary component. (Docket No. EERE-2020-BT-STD-0006, CA IOUs, No. 7 at pp. 8-9)

As discussed in section I.A of this document, EPCA defines “external power supply” as “an external power supply circuit that is used to convert household electric current into DC current or lower-voltage AC current to operate a consumer product.” (42 U.S.C. 6291(26)(A)(i)). The term does not include a power supply circuit, driver, or device that is designed exclusively to be connected to, and power: light-emitting diodes providing illumination; organic light-emitting diodes providing illumination; or ceiling fans using direct current motors. (42 U.S.C. 6291(26)(A)(ii)).

The proposed amendment in the December 2019 NOPR regarding the disconnection of components and circuits unrelated to the EPS functionality is for the purpose of providing additional instruction for the testing of EPSs that are currently subject to testing and that provide other functions unrelated to the power supply function. 84 FR 67106, 67115 (December 6, 2019). Use of the term “circuit” in the proposed direction that any functionality that is unrelated to the external power supply circuit may be disconnected during testing is consistent with the EPCA definition of an EPS. In the December 2019 NOPR, by way of example, DOE discussed an EPS that also provides the function of a surge protector with USB output ports as an example of an EPS with other major functions that may be disconnected during testing as long as that disconnection does not impact the functionality of the EPS itself. Id. DOE is maintaining the proposal as presented in the December 2019 NOPR.

In reviewing the comments to the NOPR as well as questions received via the Compliance Certification Management System, DOE also understands there may be uncertainty as to the devices subject to the test procedure. As noted, the test procedure applies to EPSs subject to the energy conservation standards at 10 CFR 430.32(w)(1). There are devices that are covered by the definition of EPS but that are not subject to the energy conservation standards and were not considered in the establishment of the energy conservation standards ( e.g., a television that has a USB port that also provides converted power). In order to provide further instruction regarding the scope of the test procedure, in addition to the proposed instruction regarding the disconnection of components and circuits unrelated to the EPS functionality, DOE proposes to add instructions as to certain devices excluded from the test procedure. Specifically, DOE proposes to specify that devices for which the primary load of the converted voltage within the device is not delivered to a separate end use product are not subject to the test procedure.

DOE intends for this proposed amendment to clarify that devices that provide power conversion only as an auxiliary operation ( e.g., televisions, laptop computers, and home appliances with USB output ports) are not subject to the test procedure. Devices containing USB output ports would remain in scope to the extent the USB output port represents the primary load of the device that houses the USB output port. Examples of such a device could include a surge protector with USB output ports, power-over-ethernet injectors, and wall outlets with USB output ports. As stated, DOE does not intend for this proposed amendment to change the existing scope but to instead provide manufacturers with additional certainty regarding those EPSs for which testing is required.

DOE requests comment on the proposed clarification in appendix Z to exclude explicitly those devices for which the primary load of the converted voltage within the device is not delivered to a separate end use product. Specifically, whether it adequately clarifies which devices are subject to the test procedure, and if not, how the test procedure could be further modified to provide further clarity regarding its scope.

In the December 2019 NOPR, DOE proposed moving all EPS-related definitions that are currently defined in 10 CFR 430.2 to the EPS test procedure at appendix Z. 84 FR 67106, 67115 (December 6, 2019). Specifically, DOE proposed to move the definitions of “adaptive external power supply”, “basic-voltage external power supply”, “direct operation external power supply”, “indirect operation external power supply”, and “low-voltage external power supply” from 10 CFR 430.2 to appendix Z. DOE did not propose to amend these definitions. Id. However, in this SNOPR, DOE is no longer proposing such a relocation because, except for the term “adaptive external power supply,” these terms are not used elsewhere in the test procedure. Because the terms “basic-voltage external power supply”, “direct operation external power supply”, “indirect operation external power supply”, and “low-voltage external power supply” are not used in the test procedure, those terms are more appropriately located in the general definitions section at 10 CFR 430.2. The term “adaptive external power supply” is specific to the test procedure, and, for ease of reference, DOE is proposing to move that definition to appendix Z.

In the December 2019 NOPR, DOE also proposed to include the definition of “Class A external power supply” in appendix Z while also retaining it at 10 CFR 430.2, where it currently exists. 84 FR 67106, 67115 (December 6, 2019). However, in this SNOPR, DOE proposes to retain the definition of a “Class A external power supply” only at 10 CFR 430.2 and not include it in the EPS test procedure at appendix Z because this term is not used in the EPS test procedure itself.

DOE requests feedback on maintaining the definitions of “Class A external power supply”, “basic-voltage external power supply”, “direct operation external power supply”, “indirect operation external power supply”, and “low-voltage external power supply” in their current location at 10 CFR 430.2. DOE also requests comment on the proposed relocation of the definition of “adaptive external power supply” to appendix Z.

The current EPS test procedure requires EPSs to be tested with the DC output cord supplied by the manufacturer. appendix Z, sec. 4(a)(i)(A). In a final rule published August 25, 2015 (“August 2015 final rule”), which established the current requirements regarding testing with the power cord, DOE stated that allowing an EPS to be tested without the power cord would ignore the losses associated with the cord and allow for an EPS that is less efficient than the efficiency standards intended. 80 FR 51424, 51429. Accordingly, DOE specified that EPSs must be tested with the output cord supplied by the manufacturer. Id.

DOE received multiple stakeholder inquiries regarding how to test EPSs that are not shipped with a DC output cord. In response to these inquiries, in the December 2019 NOPR, DOE proposed to amend the test procedure to explicitly state that if a wire or cord is not supplied by the manufacturer, then the EPS shall be tested at the output electrical contact that can be connected to a physical wire. 84 FR 67106, 67124 (December 6, 2019). DOE did not receive any comments on this amendment.

Since the analysis conducted in support of the December 2019 NOPR, DOE has observed an increasing number of EPSs that are not packaged or supplied with an accompanying DC output cord. 8   9   10 For example, as USB EPSs become more ubiquitous, it is likely that many consumers already own a USB cable, thereby reducing the demand for EPSs to be supplied with a USB output cord. The current test procedure does not provide explicit instructions to address this scenario, and DOE recognizes that the absence of these instructions may result in manufacturers testing such an EPS without the output cord, when in actual use they are likely used in conjunction with a cord already owned by the consumer. Testing an EPS without an output cord would ignore the losses that are associated with using the EPS with the cord in the real-world and, therefore, the rated efficiency of such an EPS would not be representative of real-world use ( i.e., the rated efficiency of an EPS tested without an output cord would be higher than that seen in real-world use). Additionally, the type of cord used to test such an EPS would also impact the measured efficiency because different cords may have different cord losses, thereby impacting the repeatability and reproducibility of the test procedure.

As such, in order to improve the representativeness and repeatability and reproducibility of the EPS test procedure, DOE is proposing to revise the procedure to explicitly state that if an EPS is not supplied with an output cord, then the EPS shall be tested with an output cord that is recommended for use by the manufacturer. If an EPS contains multiple output busses, each output bus would be tested with an output cord that is recommended for use by the manufacturer. Specifically, proposed Section 4(g)(1) of appendix Z would require testing each output port of an external power supply at the end of the wire or cord that connects to an end-use product, regardless of whether the end of the wire or cord is integrated into an end-use product or plugs into and out of an end-use product. If a separate wire or cord is provided by the manufacturer to connect the external power supply to an end-use product, this wire or cord would be used and testing would be performed at the end of the cord that connects to an end-use product. If a wire or cord is not supplied by the manufacturer, the external power supply would be tested with an output cord recommended for use by the manufacturer.

As indicated in the August 2015 final rule, the choice of power cord when testing may impact the measured energy use of an EPS. 80 FR 51424, 51429 (August 25, 2015). It is uncertain the extent to which this proposed amendment would impact the measured energy use of EPSs that are currently certified. If adopted, testing to this provision would not be required until such time as compliance is required with amended energy conservation standards, should such standards be adopted.

DOE requests comment on its proposed amendments for EPSs that are not supplied with output cords; and specifically, DOE requests comment on whether the test procedure should specify testing with a DC output cord recommended for use by manufacturers, or whether DOE should specify electrical specifications ( i.e., cord length, gauge, material) for the type of cord. For example, DOE could prescribe a table, as shown below, that contains electrical specifications of DC output cords for various ranges of nameplate output currents at the 100% loading condition.

These example electrical specifications are based on common electrical specifications of output cords that DOE has observed in the market.

If DOE were to prescribe electrical specifications for output cords, DOE seeks input from industry on what those electrical specifications should be, and/or whether there exists an industry standard that contains specifications for electrical cables, which DOE could incorporate by reference.

In the December 2019 NOPR, DOE proposed to adopt a test procedure for USB-PD EPSs (also called adaptive EPSs) that was prescribed in several granted test procedure waivers ( i.e., case Nos. EPS-001, EPS-002, EPS-003, EPS-004, 2017-014, 2018-005, and 2018-010  11 ). 84 FR 67106, 67111—67113 (December 6, 2019). An adaptive EPS is one with an output bus  12  that can alter its output voltage based on an established digital communication protocol with the end-use application without any user-generated action. As described in the December 2019 NOPR, in granting the test procedure waivers for certain basic models of adaptive EPSs, DOE determined that, while such EPSs are very much in scope of the existing test procedure, continuing to apply the current set of instructions in appendix Y to them would yield results that would be unrepresentative of the active-mode efficiency of those products. 84 FR 67106, 67112 (December 6, 2019). In granting the test procedure waivers, DOE concluded that when using a USB-PD EPS to charge an end-use product at the lowest voltage level of 5 volts, the product would rarely draw more than 2 amps of current ( i.e., a power draw of more than 10W). See 83 FR 11738, 11739 (December 6, 2019). Nonetheless, for a USB-PD EPS with a nameplate output current of 3 amps, the current DOE test procedure requires that the EPS's efficiency be measured at a current of 3 amps at the lowest voltage condition of 5 volts ( i.e., a power draw of 15W). As a result, the efficiency of that EPS, when evaluated at that higher power draw (15W v. 10W), would result in a measurement that is unrepresentative of the actual energy consumption characteristics of the USB-PD EPS being tested. See Id.

USB-PD EPSs covered by the referenced waivers must be tested such that when testing at the lowest achievable output voltage ( i.e., 5 volts), the output current shall be 2 amps (corresponding to an output power of 10W) at the 100% loading condition. The 75%, 50%, and 25% loading conditions are scaled accordingly under this alternate procedure ( i.e., 1.5 amps, 1 amp, and 0.5 amps, respectively). When tested in this manner, the resulting power draws are 10W, 7.5W, 5W, and 2.5W; this result is in contrast to the existing test procedure at appendix Z, which requires power draws of 15W, 11.25W, 7.5W, and 3.75W at the 100%, 75%, 50%, and 25% loading conditions, respectively. See 83 FR 11738, 11739-11740 (March 16, 2018). As a result, in the December 2019 NOPR, DOE proposed to amend appendix Z to adopt the alternate test procedure applicable to the adaptive EPSs covered by the test procedure waivers. 84 FR 67106, 67113 (December 6, 2019).

In response to the proposed definition of USB-PD EPS, ITI stated that the limitation in current and voltage (via the phrase “the voltages and currents must not exceed”) should be removed to avoid excluding USB-PD EPSs with additional optional additional voltages and currents. 13 (ITI, No. 13 at p. 3) According to ITI, the additional optional voltages and currents ensure that temperatures can be optimized inside laptop computers. ( Id. ) Moreover, ITI commented that the proposed definition of a USB-PD EPS does not include PPSs, which is defined in IEC 62680-1-2. ( Id. ) ITI stated that PPSs are able to output a minimum voltage of 3.3 volts, in contrast to the minimum voltage of 5 volts as specified in the proposed definition of a USB-PD EPS, such that equating the 2A loading condition with 10W ( i.e., 2 amps at 5 volts) creates a conflict when used with a PPS. ( Id. ) Accordingly, ITI recommended that DOE replace reference to “10W” with reference to “2A at the lowest nameplate output voltage.” ( Id. )

The alternate test procedure prescribed in the waivers references IEC 62680-1-2:2017 and specified the voltage and current requirements contained therein. See 84 FR 59365 (November 4, 2019); 83 FR 60830 (November 27, 2018); 83 FR 50905 (October 10, 2018); 83 FR 25448 (June 1, 2018); and 83 FR 11738 (March 16, 2018). The definition for USB-PD EPSs proposed in the December 2019 NOPR used the specific voltage and current requirements from IEC 62680-1-2:2017 as referenced in the waiver petitions ( i.e., requiring USB-PD EPSs to be rated at 3 amps at an output voltage of 5 volts, and: at no more than 3 amps at 9 volts; at 3 amps at 15 volts, and; at 5 amps at 20 volts) and required that only USB-PD EPSs meeting the proposed definition would be subject to the proposed test procedure. 84 FR 67106, 67113 (December 6, 2019). PPSs were not specified in IEC 62680-1-2 until a revised version, IEC 62680-1-2:2018, published on April 12, 2018.

DOE expects USB-PD EPSs with optional voltages and currents and PPSs to become more common in the market in the future as more end-use applications incorporate USB-PD for charging purposes. Moreover, because PPSs employ the same communication technology as USB-PD EPSs, DOE expects PPSs to rarely draw more than 2 amps of current at a lowest nameplate output 3.3 volts, similar to USB-PD EPSs with a lowest nameplate output voltage of 5 volts. Similarly, DOE expects USB-PD EPSs with additional optional voltages and currents, which can also have a lowest nameplate output voltage as low as 3.3 volts, to also rarely draw more than 2 amps of current at that output voltage.

In this SNOPR, DOE proposes to modify the proposed definition of a USB-PD EPS in order to include USB-PD EPSs with additional optional voltages and currents and PPSs, consistent with the updated industry standard. By modifying the definition of USB-PD EPS such that it would include PPS and USB-PD EPSs with additional optional voltages and currents, such products would be tested according to the alternate test procedure prescribed for USB-PD EPSs in the December 2019 NOPR.

In summary, DOE proposes to define USB-PD EPS as an adaptive EPS that utilizes a USB Type-C output port and uses a digital protocol to communicate between the EPS and the end-user product to automatically switch between any output voltage within the range of 3.3 volts to 20 volts. The USB-PD output bus must be capable of delivering 3 amps at the lowest output voltage, and the currents must not exceed any of the following values for the supported voltages: 3 amps at 9 volts; 3 amps at 15 volts; and 5 amps at 20 volts.

DOE also proposes to revise the definition of nameplate output power in order to provide for testing of PPSs and USB-PD EPSs with additional optional voltages and currents at 2 amps at the lowest nameplate output voltage, instead of at 5 volts, as was previously specified in the definition of nameplate output power. DOE proposes to revise the definition of nameplate output power to mean the power output of the power supply as specified on the manufacturer's label on the power supply housing or, if absent from the housing, as specified in documentation provided by the manufacturer. For an adaptive external power supply with USB-PD ports, the nameplate output power is the product of its lowest nameplate output voltage and 2 amps for each USB-PD port and as specified on the manufacturer's label or documentation at the highest voltage.

The proposed definition would result in PPSs and USB-PD EPSs with additional optional voltages and currents being tested according to the same alternate test procedure provided for USB-PD EPSs in the December 2019 NOPR.

DOE is not aware of any PPSs or USB-PD EPSs with additional optional voltages and currents on the market certified as EPSs, and thus DOE does not expect the proposed amendments to require the retesting or recertification of any basic EPS models.

DOE requests comments on the proposed amendments related to PPSs and USB-PD EPSs with optional voltages and currents.

In this SNOPR, DOE is proposing to clarify the scope of the EPS test procedure at appendix Z by removing references to direct operation and indirect operation Class A EPSs and providing additional detail regarding the subject EPSs. DOE is also proposing to (1) maintain the placement of certain definitions at 10 CFR 430.2 that DOE initially proposed to move to appendix Z in the NOPR, (2) provide additional specification for the testing of EPSs that do not ship with an output cord, and (3) align the testing requirements for PPS with those for USB-PD EPSs.

DOE has tentatively determined that the proposed amendments would not be unduly burdensome for manufacturers to conduct. Further details regarding the cost impact of the proposed amendments are presented in the following paragraphs.

In this SNOPR, DOE proposes to amend the EPS test procedure in appendix Z to provide additional clarity as to those EPSs subject to the test procedure. The proposal would remove reference in the scope section to direct operation EPSs and indirect operation Class A EPSs, as reference to these terms is duplicative with the instruction that the scope of the test procedure are those EPSs subject to standards. DOE also proposes to provide additional detail as to the products subject to the test procedure by noting that devices for which the primary load of the converted voltage within the device is not delivered to a separate end use product are not covered. DOE has tentatively determined that neither of these amendments would change the scope of the EPS test procedure. As such, the proposed amendments to the scoping language would not change (1) the scope of the products subject to the test procedure, (2) the cost to conduct the test procedure, or (3) the cost incurred by manufacturers to re-test any currently covered EPSs. Accordingly, these proposed amendments would not impact the test burden for any EPS manufacturer.

DOE requests comment on its initial determination that the proposed amendments regarding the scope of appendix Z, if finalized, would not cause any EPS manufacturers to incur any additional costs.

DOE proposes to specify that those EPSs that are not supplied with an output cord would be tested using an output cord recommended by the manufacturer. The current test procedure does not provide explicit instructions on how to test EPSs that are not supplied with an output cord. This proposed amendment would explicitly require EPS manufacturers to conduct the test at the end of an output cord that is connected to the output electrical contact. The addition of an output cord would introduce electrical losses in the test setup and would thus impact the efficiency measurement of an EPS. DOE acknowledges that the proposals related to the testing of EPSs that are not supplied with an output cord could impact the measured energy use of certain basic models—specifically, those models that were tested without an output cord or with an output cord different from what would be required by the proposed amendment. However, this proposal, if adopted, would not be required until such time as DOE were to amend the energy conservation standards for EPSs. Moreover, were this proposal adopted, it would not result in an increase in test burden as compared to the current test procedure, as it would not require any additional testing steps.

DOE requests comment on its initial determination that the proposed amendment to test EPSs shipped without an output cord with a manufacturer recommended cord, if finalized, would not increase the test burden as compared to the current test procedure once required.

DOE proposes to amend the definition of a USB-PD EPS, as proposed in the December 2019 NOPR, in order to include USB-PD EPSs with additional optional voltages and currents and PPSs. DOE is not aware of any USB-PD EPSs with additional optional voltages and currents or PPSs that are currently certified in DOE's Compliance Certification Database (“CCD”). Further, DOE has not received any waiver petitions under 10 CFR 430.27 for USB- PD EPSs with additional optional voltages and currents or PPSs. Accordingly, based on currently available data, DOE has preliminarily concluded that the proposed amendments would not alter the measured energy efficiency of any EPS basic models currently certified in DOE's CCD. Hence, manufacturers would not incur any additional costs compared to the existing test procedure.

DOE has preliminarily concluded that the proposed amendments, if finalized, would not impact the scope of the test procedure ( i.e., the proposal would not require manufacturers to test EPSs that are not already required to be tested) and would not alter the measured energy efficiency of EPSs under either the current test procedure or the alternate test procedure required under currently active test procedure waivers. For adaptive EPSs that meet the IEC 62680-1-2 specification (including PPSs and USB-PD EPSs with optional voltages and currents), the proposed approach is the same one required under the granted waivers. See 83 FR 11738 (March 16, 2018) (initial Decision & Order on joint waiver request from Apple, et al.), 83 FR 25448 (June 1, 2018) (Decision & Order on waiver request Huawei), 83 FR 50905 (October 10, 2018) (first waiver extension for Apple), and 83 FR 60830 (November 27, 2018) (second waiver extension for Apple). Moreover, DOE is not aware of any PPSs or USB-PD EPSs with additional optional voltages and currents on the market certified as EPSs, and thus DOE does not expect the proposed amendments to require the retesting or recertification of any basic EPS models. Accordingly, based on currently available data, DOE has preliminarily concluded that the proposed amendments would not alter the measured energy efficiency for such adaptive EPSs. Manufacturers would be able to continue to rely on data generated under the current test procedure, including any alternate test procedure permitted by DOE under a manufacturer-specific decision and order, should any of the proposed amendments be finalized.

DOE requests comment on its initial determination that its proposed amendment for USB-PD EPSs, if finalized, would not cause any EPS manufacturers to incur any additional costs.

EPCA prescribes that all representations of energy efficiency and energy use, including those made on marketing materials and product labels, must be made in accordance with an amended test procedure beginning 180 days after publication of such a test procedure final rule in the Federal Register . (42 U.S.C. 6293(c)(2)) The 180 day mandate applies to all test procedure changes in this proposed rule with the exception of proposed amendments related to testing EPSs that are not supplied with an output cord. Those requirements, if finalized, would not be required until such time as DOE were to amend the energy conservation standards for EPSs. As discussed previously in this document, appendix Z does not explicitly provide instructions for testing EPSs that are supplied without an output cord. Currently, a manufacturer may choose to test with a recommended output cord. Under the proposed test procedure, a manufacturer would be required to test with a recommended output cord only at such time as compliance is required with amended energy conservation standards, should such standards be amended.

If DOE were to publish an amended test procedure, EPCA provides an allowance for individual manufacturers to petition DOE for an extension of the 180-day period if the manufacturer would experience undue hardship in meeting the deadline. (42 U.S.C. 6293(c)(3)) To receive such an extension, petitions must be filed with DOE no later than 60 days before the end of the 180-day period and must detail how the manufacturer will experience undue hardship. ( Id. )

Should DOE amend the test procedure to address the issues presented in a waiver, the waiver would automatically terminate on the date on which use of that test procedure is required to demonstrate compliance. 10 CFR 430.27(h)(3). Recipients of any such waivers would be required to test those products that were subject to the waiver according to the amended test procedure as of the effective date of the amended test procedure. 10 CFR 430.27(i)(2). As part of this SNOPR, DOE continues to propose to adopt the alternate test procedure required under the waivers granted to Apple, Microsoft, Poin2, Bitland, and Huawei for testing USB-PD EPSs (Case Nos. EPS-001, EPS-002, EPS-003, and EPS-004), with the modifications discussed above to address PPSs. If the proposed amendments regarding the testing of adaptive EPSs were made final, the waivers issued to Apple, Microsoft, Poin2, Bitland, and Huawei would expire on the date on which testing were required using the amended test procedure. At such time Apple, Microsoft, Poin2, Bitland, and Huawei would be required to test the EPSs subject to the waivers according to the amended Federal test procedure.

The Office of Management and Budget (“OMB”) has determined that this test procedure rulemaking does not constitute a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (October 4, 1993). Accordingly, this action was not subject to review under the Executive order by the Office of Information and Regulatory Affairs (“OIRA”) in OMB.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis (“IRFA”) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. A regulatory flexibility analysis examines the impact of the rule on small entities and considers alternative ways of reducing negative effects. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003 to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's website: www.energy.gov/gc/office-general-counsel.

DOE reviewed this test procedure SNOPR pursuant to the Regulatory Flexibility Act and the procedures and policies previously discussed. DOE has concluded that this rule would not have a significant impact on a substantial number of small entities. The factual basis for this certification is set forth below. DOE will consider any comments on the certification in determining whether to adopt the proposed amendments to the test procedure contained in this document.

For manufacturers of EPSs, the Small Business Administration (“SBA”) has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the statute. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of the rule. 13 CFR part 121. The size standards are listed by North American Industry Classification System (“NAICS”) code and industry description and are available at www.sba.gov/document/support--table-size-standards. EPS manufacturing is classified under NAICS 335999, “All Other Miscellaneous Electrical Equipment and Component Manufacturing.” The SBA sets a threshold of 500 employees or less for an entity to be considered as a small business in this category.

As previously discussed in section III.E, DOE does not anticipate that any EPS manufacturer, large or small, would incur any additional testing costs as a result of these proposed test procedure amendments, if finalized.

Therefore, DOE concludes that the impacts of the proposed test procedure amendments proposed in this SNOPR would not have a “significant economic impact on a substantial number of small entities,” and that the preparation of an IRFA is not warranted. DOE will transmit the certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b).

DOE requests comment on its initial determination that no small businesses would incur any additional cost due to the proposed test procedure amendments, if finalized, until compliance with a future energy conservation is required.

Manufacturers of EPSs must certify to DOE that their products comply with any applicable energy conservation standards. To certify compliance, manufacturers must first obtain test data for their products according to the DOE test procedures, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including EPSs. (10 CFR part 429, subpart B.) The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (“PRA”). This requirement has been approved by OMB under OMB control number 1910-1400. Public reporting burden for the certification is estimated to average 35 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

The proposals presented in this SNOPR, if adopted, would not require the recertification of any basic model currently certified on the CCD nor would they require the reporting of information not currently required.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

In this proposed rule, DOE proposes test procedure amendments that it expects will be used to develop and implement future energy conservation standards for external power supplies. DOE has determined that this proposed rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and DOE's implementing regulations at 10 CFR part 1021. Specifically, DOE has determined that adopting test procedures for measuring energy efficiency of consumer products and industrial equipment is consistent with activities identified in 10 CFR part 1021, appendix A to subpart D, A5 and A6. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 10, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has determined that it would 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of this proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132.

Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) 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. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the proposed rule meets the relevant standards of Executive Order 12988.

Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at www.energy.gov/gc/office-general-counsel. DOE examined this proposed rule according to UMRA and its statement of policy and determined that the rule contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure of $100 million or more in any year, so these requirements do not apply.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This proposed rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this proposed regulation would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed this proposed rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

The proposed regulatory action to amend the test procedure for measuring the energy efficiency of EPSs is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C. 788; “FEAA”) Section 32 essentially provides in relevant part that, where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the Federal Trade Commission (“FTC”) concerning the impact of the commercial or industry standards on competition.

The proposed modifications to the test procedure for EPSs do not incorporate any new industry standards.

In this SNOPR, DOE proposes to maintain the current incorporation by reference of IEC 62301 Ed. 2.0, and create a new section 1 in appendix Z, titled “incorporation by reference”, to enumerate the specific provisions of the standard that are applicable to the EPS test procedure in appendix Z. Specifically, section 1 of appendix Z would limit use of the material incorporated by reference to the following sections of the IEC 62301:

IEC 62301, “Household electrical appliances—Measurement of standby power,” Edition 2.0, 2011-01:

• Section 4.4.1, “Power measurement uncertainty”;

• Section 5.3.3, “Average reading method”;

• Annex B, “Notes on the measurement of low power modes”; and

• Annex D, “Determination of uncertainty of measurement”.

IEC 62301 is an industry-accepted standard for measuring the standby power of household electrical appliances. This standard is reasonably available and can be obtained from the American National Standards Institute at the following address:

American National Standards Institute, 25 W 43rd Street, 4th Floor, New York, NY 10036, (212) 642-4936, or by visiting https://webstore.ansi.org.

The time and date of the webinar meeting are listed in the DATES section at the beginning of this document. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE's website: https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=1. Participants are responsible for ensuring their systems are compatible with the webinar software.

Any person who has an interest in the topics addressed in this SNOPR, or who is representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation at the webinar. Requests should be sent by email to: ApplianceStandardsQuestions@ee.doe.gov. Persons who wish to speak should include with their request a computer file in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format that briefly describes the nature of their interest in this rulemaking and the topics they wish to discuss. Such persons should also provide a daytime telephone number where they can be reached.

Persons requesting to speak should briefly describe the nature of their interest in this rulemaking and provide a telephone number for contact. DOE requests persons selected to make an oral presentation to submit an advance copy of their statements at least two weeks before the webinar. At its discretion, DOE may permit persons who cannot supply an advance copy of their statement to participate, if those persons have made advance alternative arrangements with the Building Technologies Office. As necessary, requests to give an oral presentation should ask for such alternative arrangements.

DOE will designate a DOE official to preside at the webinar and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the webinar. There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. After the webinar and until the end of the comment period, interested parties may submit further comments on the proceedings and any aspect of the rulemaking.

The webinar will be conducted in an informal, conference style. DOE will present summaries of comments received before the webinar, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit, as time permits, other participants to comment briefly on any general statements.

At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the webinar will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the webinar.

A transcript of the webinar will be included in the docket, which can be viewed as described in the Docket section at the beginning of this SNOPR. In addition, any person may buy a copy of the transcript from the transcribing reporter.

DOE will accept comments, data and information regarding this proposed rule no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments using any of the methods described in the ADDRESSES section at the beginning of this document.

Submitting comments via www.regulations.gov. The www.regulations.gov web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.

However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.

Do not submit to www.regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (“CBI”)). Comments submitted through www.regulations.gov cannot be claimed as CBI. Comments received through the website will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section.

DOE processes submissions made through www.regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that www.regulations.gov provides after you have successfully uploaded your comment.

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Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:

The Secretary of Energy has approved publication of this supplemental notice of proposed rulemaking.

This document of the Department of Energy was signed on October 19, 2021, by Kelly Speakes-Backman, Principal Deputy Assistant Secretary and Acting Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

For the reasons stated in the preamble, DOE is proposing to amend part 430 of Chapter II of Title 10, Code of Federal Regulations as set forth below:

The addition and revision read as follows:

This proposal seeks to implement two legislative enactments that affect how SBA calculates a business concern's size to determine whether the business qualifies as small for SBA's contracting, loan, 1 and assistance programs. First, section 863 of the National Defense Authorization Act for Fiscal Year 2021, Public Law 116-283 (“NDAA”), changed the averaging period for SBA's employee-based size standards from 12 months to 24 months. Second, the Small Business Runway Extension Act of 2018, Public Law 115-324 (“SBREA”) amended section 3(a)(2)(C)(ii)(II) of the Small Business Act, 15 U.S.C. 632(a)(2)(C)(ii)(II), to modify the requirements for proposed small business size standards prescribed by an agency without separate statutory authority to issue size standards.

Section 863 of the NDAA amended two provisions of section 3(a)(2) of the Small Business Act, which sets forth requirements for an agency that would prescribe a proposed size standard. First, the NDAA provides that those requirements apply to the SBA when the agency acts pursuant to the authority in section 3(a)(2)(A) for SBA to specify small business definitions or size standards. Second, the NDAA amends section 3(a)(2)(C)(ii)(I) such that a proposed size standard for a manufacturing concern must provide for determining the size of the concern based on the employment during each of the concern's pay periods for the preceding 24 months. Previously, the statute specified the use of a 12-month period.

SBA proposes to implement the change to a 24-month period by amending 13 CFR 121.106. Section 121.106 currently provides that the size of a business concern under an employee-based size standard is calculated by averaging the concern's number of employees for each pay period in the preceding completed 12 calendar months. Part-time and temporary employees count as full-time employees, and the concern aggregates the employees of its domestic and foreign affiliates. SBA proposes to change the 12-month period in § 121.106 to a 24-month period. As a result, a concern would average its employees over all pay periods in the preceding completed 24 months. If it has not been in business for 24 months, the concern would average its number of employees for each pay period during which it has been in business.

This change to § 121.106 would apply to all employee-based size standards. Those size standards predominantly apply to manufacturers but not exclusively. Firms also use SBA's employee-based size standards in certain mining, utilities, transportation, publishing, telecommunications, insurance, research and development, and environmental remediation industries. Significant to government contracting, nonmanufacturers also qualify for small business status for government procurement using an employee-based size standard. Though nonmanufacturers and the nonmanufacturing industries are not covered by the NDAA's change to proposed size standards, SBA believes that it would be unworkable to use a 24-month average for manufacturing industries but retain a 12-month average for other industries with employee-based size standards. Firms may participate in multiple industries, and it is burdensome to use different averaging periods for different industries with employee-based size standards. SBA seeks comment on whether to include nonmanufacturers and nonmanufacturing industries in the change to a 24-month average for employee-based standards.

In a final rule published December 5, 2019 (84 FR 66561), SBA implemented the SBREA by making changes to its receipts-based size standards for all SBA programs except the Business Loan and Disaster Loan Programs. The excepted programs include: (i) The 7(a) Loan Program, the Microloan Program, the Intermediary Lending Pilot Program, and the Development Company Loan Program (collectively, the “Business Loan Programs”); and (ii) the Physical Disaster Business Loans, Economic Injury Disaster Loans, Military Reservist Economic Injury Disaster Loans, and Immediate Disaster Assistance Program loans (collectively, the “Disaster Loan Programs”).

This proposed rule would extend the changes to SBA's receipts-based size standards to the Business Loan and Disaster Loan Programs. Currently, applicants in those loan programs must calculate their average annual receipts using a 3-year average. Under this proposal, applicants may choose to use either a 3-year average or a 5-year average. Thus, an applicant might be eligible for assistance if its 5-year average is equal to or less than the size standard, even if it would otherwise be ineligible because its 3-year average exceeds that size standard.

SBA also proposes to use the same treatment in SBA's SBIC program by SBIC applicants to choose to use either a 3-year average or a 5-year average. Recipients of SBIC assistance were not specifically identified in the December 2019 rulemaking that applied to all programs. Therefore, interested parties likely were not attuned to the effect that the December 2019 final rule might have on SBIC participants. This proposed rule invites SBICs and their portfolio companies to comment on SBA's proposed changes to the size rules for that program.

Like the changes in the December 2019 final rule, these proposed changes will expand the eligibility for SBA assistance to larger small businesses and some mid-sized businesses. An advanced small business may be able to retain its small business status for a longer period, if it is close to exceeding the size standard. A mid-sized business may be able to regain its small business status, if it would otherwise have exceeded the size standard.

These proposed changes differ in some respects from what SBA implemented in the earlier final rule. In particular, this proposal does not use the “transition period” that SBA included with the December 2019 final rule. That rule applied size-standard changes to the SBA government contracting programs and other non-loan programs. Starting on January 6, 2020, those programs began permitting participants to elect whether to use a 3-year average or a 5-year average to calculate average annual receipts. That election will end on January 6, 2022, however, marking the end of the transition period for those changes. After January 6, 2022, all government contractors will use a 5-year average for average annual receipts.

Conversely, the changes here allow for an election but do not have a transition period. SBA intends to make the election available indefinitely. This recognizes the differences between the loan programs and the government contracting programs, where firms are competing against one another. Where there is competition, businesses should be competing on an equal basis; therefore, the December 2019 final rule provided that, after the end of the transition period, government contractors all would use a 5-year averaging period. By contrast, in the loan programs, loan applicants are evaluated on an applicant-by-applicant basis. It is thus unnecessary to ensure that applicants use the same size criteria. As a result, SBA does not believe it is necessary to limit the election in the loan programs to a two-year period.

In soliciting comment for the December 2019 final rule, SBA received some comments from participants in the Business Loan programs. SBA has considered those comments in preparing this proposed rule.

Prior commenters asked that SBA use the 5-year average only for calculating average annual receipts, not for other loan application purposes. Accordingly, this proposal only authorizes the 3-or-5-year election for the calculation of receipts, not for any other purpose. Other calculations remain unchanged.

Prior commenters also asked that SBA authorize the Business Loan Programs to continue to use a 3-year average. Accordingly, this proposal uses an election, not a mandate. For the most part, lenders and applicants will continue to be able to use a 3-year average. The only exception will be where the applicant would not qualify as a small business using a 3-year average. In that case, the applicant may use a 5-year average if that would qualify the applicant as small. The applicant also might be able to qualify for loan assistance using the alternative size standard in section 3(a)(5)(B) of the Small Business Act.

In paragraphs (c)(1), (c)(2), and (c)(3), SBA proposes to add the SBIC program to the list of programs that are excepted from SBA's current rule on calculating average annual receipts.

In paragraph (c)(4), SBA proposes to amend the calculation of average annual receipts for the Business Loan, Disaster Loan, and SBIC Programs. A business in those programs may calculate its receipts using either a 3-year average or a 5-year average for the purposes of determining its size under a receipts-based size standard. This change does not affect the calculation of any other figures in SBA's programs. In particular, alternative size standards are not affected by this change.

In paragraphs (b)(1) and (b)(3), SBA proposes to amend the current 12-month averaging period to a 24-month averaging period. Businesses that have been in existence for more than 24 months would calculate their number of employees by averaging the number of employees for each pay period for the preceding completed 24 months. Businesses that have been in existence for fewer than 24 months would average their number of employees for each pay period during their existence.

In paragraph (a)(1)(i), SBA proposes to amend the averaging period for size standards proposed by other agencies from a 12-month period to a 24-month averaging period.

SBA invites comments, input, or suggestions from interested parties on its proposal to change the 12-month averaging period for employee-based size standards to a 24-month averaging period.

SBA also invites comments, input, or suggestions from interested parties on its proposal to permit businesses in the Business Loan, Disaster Loan, and SBIC programs to use either a 3-year average or a 5-year average for calculating average annual receipts for the purposes of qualifying as a small business. The comments should address the following specific issues pertaining to the SBA's proposal:

1. SBA invites input on its proposal to allow for a 3-or-5-year election indefinitely, rather than using a transition period that would end the election on a specified date.

2. SBA invites input on the effects that this proposal would have on applicants and lenders in the Business Loan Program.

3. SBA invites input on the effects that this proposal would have on SBICs.

4. SBA invites input on the effects that this proposal would have on the Disaster Loan Program.

The Office of Management and Budget (OMB) has determined that this proposed rule is a significant regulatory action for purposes of Executive Order 12866. Accordingly, below, SBA provides a benefit-cost analysis of this proposed rule, including: (1) A statement of the need for the proposed action, and (2) an evaluation of the benefits and costs—both quantitative and qualitative—of this regulatory action.

OIRA has determined that this is not a major rule under 5 U.S.C. 804(2).

Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (codified at 5 U.S.C. 801-808), also known as the Congressional Review Act or CRA, 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. SBA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the CRA cannot take effect until 60 days after it is published in the Federal Register . OIRA has determined that this rule is not a “major rule” as defined by 5 U.S.C. 804(2).

As stated elsewhere, the Small Business Act delegates to SBA's Administrator the responsibility for establishing small business size definitions (usually referred to as “size standards”). First, Public Law 116-283 changed the averaging period for SBA's employee-based size standards from 12 months to 24 months. Second, in 2018, Public Law 115-324 modified the requirements for proposed small business size standards prescribed by an agency without separate statutory authority to issue size standards. Specifically, Public Law 115-324 changed the averaging period for receipts-based size standards for services industries from 3 years to 5 years.

The need of this proposed rule is to carry out the intent of Public Law 116-283 and Public Law 115-324, and to ensure consistency in the calculation of average number of employees and average annual receipts for size standards across the Federal Government. In addition to the averaging requirements, size standards prescribed under section 3(a)(2)(C)(ii) of the Small Business Act must meet two other requirements: (1) Be proposed with an opportunity for public notice and comment, and (2) be approved by the Administrator. Neither Public Law 116-283 nor Public Law 115-324 repeals these 2 requirements, and this proposed rule satisfies these requirements.

SBA's mission is to aid and assist small businesses through a variety of financial, procurement, business development and counseling, and disaster assistance programs. This regulatory action promotes the Administration's goals and objectives and meets the SBA's statutory responsibility to implement a new law impacting size definitions for small businesses. One of SBA's goals in support of promoting the Administration's objectives is to help small businesses succeed through access to capital, Federal Government contracts and purchases, and management, technical and disaster assistance.

Changing the periods for calculating average number of employees from 12 months to 24 months may enable some mid-size businesses that have just exceeded size standards to regain small business status. Similarly, it could also allow some advanced and larger small businesses about to exceed size standards to retain their small status for a longer period. However, it could also result in some advanced small businesses having the 24-months employee average that happens to be higher than the 12-month employee average, thus ejecting them out of their small business status sooner. Detailed impacts of the proposed change are discussed below.

It is difficult to determine the actual number of small and mid-size businesses that would be impacted by Public Law 116-283 and this regulatory action because there is no data on businesses' employment by month or by pay period. The employment data from the Economic Census special tabulation are only available once every 5 years. Similarly, the System for Award Management (SAM) only records the data on the concern's average number of employees for each pay period in the preceding completed 12 calendar months, but not their employee counts for each pay period or each month. For example, the 12-month average employee data for January 2020 is an average of number of employees for each pay period during preceding completed 12 calendar months ( i.e., January 2019 to December 2019). Similarly, the 24-month average employee value for January 2020 is an average of number of employees for each pay period during preceding completed 24 calendar months ( i.e., January 2018 to December 2019).

Given the lack of employment data for each pay period or each month, SBA approximates a firm's 24-month average number of employees for January 2020 as follows:

To estimate the 24-month employee average using the above formula, SBA analyzed the 2019 SAM extracts (as of September 1, 2019) and 2018 SAM extracts (as of September 1, 2018). The 24-month average employee formula would only work for businesses that were present in both 2018 and 2019 SAM extracts. One challenge was that some businesses found in 2019 SAM could not be found in 2018 SAM and vice versa. Excluding entities registered in SAM for purposes other than government contracting and entities ineligible for small business consideration (such as foreign governments and state-controlled institutions of higher learning), there were a total of 152,450 unique business concerns in 2019 SAM subject to at least one employee-based size standard. Of these concerns, 131,295 (or about 86.1 percent) were “small” in all North American Industry Classification System (NAICS) industries, 2,663 (or 1.7 percent) were “small” in some industries and “not small” in other industries, and 18,492 (or 12.1 percent) were “not small” in any industry subject to an employee-based size standard.

Excluding entities with “null” or “zero” employee values, 128,599 firms (or about 84.4 percent) appeared both in 2019 SAM and in 2018 SAM and were included in the 24-month average employee approximation and calculation of number of businesses impacted. Of those 128,599 matched firms subject to an employee-based size standard, 108,541 (or about 84.4 percent) were “small” in all NAICS industries, 2,526 (or 2.0 percent) were “small” in some industries and other than small (“not small”) in other industries, and 17,532 (or about 13.6 percent) were “not small” in any industry. In other words, 133,958 (or 87.9 percent) of 152,450 total concerns in SAM 2019 and 111,067 (or 86.4 percent) of 128,599 total matched firms were small in at least one NAICS industry with an employee-based size standard. These results are summarized in Table 1, “Size Status of Businesses in Industries Subject to Employee-Based Size Standards,” below.

According to Table 2, “Distribution of Business Concerns Subject to Employee-Based Size Standards by Number of NAICS Codes,” below, the distribution of firms by the number of NAICS codes in the matched data is very similar to that for the overall 2019 SAM data. About 45 percent of firms were in only one NAICS code that has an employee-based size standard, about 40 percent in 2-5 NAICS codes, about 9 percent in 6-10 NAICS codes, and about 5 percent in more than 10 NAICS codes. In other words, 55 percent of firms were in multiple NAICS codes with employee-based size standards. Thus, it is quite possible that the proposed change may impact a firm's small business status in multiple industries. For purposes of this analysis, an impacted firm is defined as one that would be impacted by the change in terms of gaining, regaining, extending, or losing small business status in at least one industry with an employee-based size standard.

A central premise of Public Law 116-283 is that a 24-month employee average (as opposed to a 12-month employee average) would enable some mid-size businesses who have recently exceeded the size standard to regain small business status and some advanced small businesses close to exceeding the size standard to retain their small business status for a longer period. However, this premise would only hold true when businesses' monthly employees are rising. When businesses' monthly employees are declining, due to economic downturns or other factors, the 24-month employee average could be higher than the 12-month employee average, thereby causing small businesses close to their size standards based on the 12-month average to lose their small business status sooner. In some cases where the 24-month employee average could be higher than the size standard, thereby forcing small businesses to lose their small status immediately when the longer 24-month averaging period becomes effective. Additionally, such businesses with declining employees would have to wait longer to regain their small business status.

Changing the periods for calculating average annual receipts from 3 years to 5 years, pursuant to Public Law 115-324, may enable some mid-size businesses that have just exceeded size standards to regain small business status. Similarly, it could also allow some advanced and larger small businesses about to exceed size standards to retain their small business status for a longer period. However, it could also result in some advanced small businesses having a 5-year receipts average that happens to be higher than the 3-year receipts average, thus ejecting them out of their small business status sooner. To mitigate this negative impact, SBA proposes to allow applicants to its Business Loan, Disaster Loan, and SBIC Programs to choose either a 3-year average or a 5-year average. Thus, an applicant might be eligible for assistance if its 5-year average is equal to or less than the size standard, even if it would otherwise be ineligible under the 3-year average. Detailed impacts of the proposed change are discussed below.

It is difficult to determine the actual number of small and mid-size businesses that would be impacted by Public Law 115-324 and this regulatory action because there is no annual data on receipts of businesses. The annual receipts data from the Economic Census special tabulation are only available once every 5 years. Similarly, the System for Award Management (SAM) only records the data on 3-year average annual receipts of businesses over their 3 preceding fiscal years, but not their annual receipts for each fiscal year. For example, the receipts data for year 2019 is an average of annual receipts for 2018, 2017, and 2016. Similarly, the receipts data for 2018 is an average of annual receipts for 2017, 2016, and 2015, and so on. A 5-year receipts average for 2019 would be an average of annual receipts for 2018, 2017, 2016, 2015, and 2014.

Given the lack of annual receipts for each year, SBA approximated a firm's 5-year average annual revenue for 2019 as follows:

This result may slightly underestimate the 5-year revenue average when annual revenues are rising ( i.e., 2015 revenue >2014 revenue >2013 revenue) and overestimate it if annual revenues are declining ( i.e., 2015 revenue <2014 revenue <2013 revenue).

To estimate the 5-year receipts average for 2019 using the above formula, SBA analyzed the 2019 SAM extracts (as of September 1, 2019) and 2016 SAM extracts (as of September 1, 2016). The above 5-year average annual receipts formula would only work for businesses that were present in both 2016 and 2018 SAM extracts. One challenge was that some businesses found in 2019 SAM could not be found in 2016 SAM and vice versa. Excluding entities registered in SAM for purposes other than government contracting and entities ineligible for small business consideration (such as foreign governments and state-controlled institutions of higher learning), there were a total of 334,990 unique business concerns in 2019 SAM subject to at least one receipts-based size standard. Of these concerns, 282,671 (or about 84.4 percent) were “small” in all North American Industry Classification System (NAICS) industries, 9,783 (or 2.9 percent) were “small” in some industries and “not small” in other industries, and 42,536 (or 12.7 percent) were “not small” in any industry.

Excluding entities with “null” or “zero” receipts values, 192,295 firms (or about 57.4 percent) appeared both in 2019 SAM and in 2016 SAM and were included in the 5-year average annual receipts approximation and calculation of number of businesses impacted. Of those 192,295 matched firms subject to a receipts-based size standard, 152,040 (or about 79 percent) were “small” in all NAICS industries, 8,081 (or 4.2 percent) were “small” in some industries and other than small (“not small”) in other industries, and 32,174 (or about 16.7 percent) were “not small” in any industry. In other words, 292,454 (or 87.3 percent) of 334,990 total concerns in SAM 2019 and 160,121 (or 83.3 percent) of 192,295 total matched firms were small in at least one NAICS industry with a receipts-based size standard. These results are summarized in Table 3, “Size Status of Businesses in Industries Subject to Receipts-Based Size Standards,” below.

According to Table 4, “Distribution of Business Concerns Subject to Receipts-Based Size Standards by Number of NAICS Codes,” below, the distribution of firms by the number of NAICS codes in the matched data is very similar to that for the overall 2019 SAM data. About 41-43 percent of firms were in only one NAICS code that has a receipts-based size standard, about 35 percent in 2-5 NAICS codes, about 12 percent in 6-10 NAICS codes, and about 8-10 percent in more than 10 NAICS codes. In other words, 57-59 percent of firms were in multiple NAICS codes with receipts-based size standards. Thus, it is quite possible that the proposed change may impact a firm's small business status in multiple industries. For purposes of this analysis, an impacted firm is defined as one that would be impacted by the change in terms of gaining, regaining, extending, or losing small business status in at least one industry with a receipts-based size standard.

A central premise of Public Law 115-324 is that a 5-year annual receipts average (as opposed to a 3-year annual receipts average) would enable some mid-size businesses who have recently exceeded the size standard to regain small business status and some advanced small businesses close to exceeding the size standard to retain their small business status for a longer period. However, this premise would only hold true when businesses' annual revenues are rising. When businesses' annual revenues are declining, due to economic downturns or other factors, the 5-year annual receipts average could be higher than the 3-year annual receipts average, thereby causing small businesses close to their size standards to lose their small business status sooner. To mitigate such negative impacts on small businesses, SBA proposes, in consideration of public comments on the prior proposed rule and the results from its own analysis, to permit businesses in the Business Loan, Disaster Loan, and SBIC Programs to use either a 3-year average or a 5-year average for calculating average annual receipts for the purposes of qualifying as a small business.

By comparing the approximated 24-month employee average with the current employee-based size standard for each of the 128,599 matched business concerns in each NAICS code subject to an employee-based size standard, SBA identifies the following 4 possible impacts from changing the averaging period for employees from 12 months to 24 months:

i. The number of mid-size businesses that have exceeded the size standard and would regain small business status in at least one NAICS industry with an employee-based size standard ( i.e., 12-month average > size standard ≥ 24-month average)—expansive impact;

ii. The number of advanced small businesses within 10 percent below the size standard that would have their small business status extended for a longer period in at least one NAICS industry with an employee-based standard (24-month average < 12-month average ≤ size standard and 0.9*size standard < 12-month average ≤ size standard)—expansive impact;

iii. The number of currently small businesses that would lose their small business status in at least one NAICS industry subjected to an employee-based size standard ( i.e., 12-month average ≤ size standard < 24-month average)—contractive impact; and

iv. The number of advanced small businesses within 10 percent below the size standard that would have their small status shortened in at least one NAICS industry subject to an employee-based standard (12-month average < 24-month average ≤ size standard and 0.9*size standard < 12-month average ≤ size standard)—contractive impact.

In this proposed rule, SBA is changing the period for calculation of average employees for all of its employee-based size standards from 12 months to 24 months. The purpose of Public Law 116-283 is to allow small businesses more time to grow and develop competitiveness and infrastructure so that they are better prepared to succeed under full and open competition once they outgrow the size threshold. However, as stated previously, a longer 24-month averaging period may not always and necessarily provide relief to every small business concern. As discussed previously, when monthly employees are declining, the 24-month average would be higher than the 12-month average, thereby ejecting some advanced small businesses out of their small business status sooner or rendering some small businesses under the 12-month average not small immediately.

As discussed earlier, the change in the averaging period for employees from 12 months to 24 months results in four different types of impacts on small businesses: (i) Enabling current large or mid-size businesses to gain small business status (impact i); (ii) enabling current advanced small businesses to lengthen their small business status (impact ii); (iii) causing current small businesses to lose their small business status (impact iii); and (iv) causing current small businesses to shorten their small business status (impact iv). Table 5, “Percentage Distribution of Impacted Firms with Employee Based Size Standards by the Number of NAICS Codes,” below, provides these results based on the 2019 SAM—2018 SAM matched firms.

It is highly notable that the distribution of impacted firms by the number of NAICS codes, as shown in Table 5, is very different as compared to a similar distribution based on the overall matched and total 2019 SAM data ( see Table 2), especially with respect to firms with only one NAICS code and those with more than 5 NAICS codes. For example, about 45 percent of all firms in the overall data were associated with only one NAICS code, as compared only about 20 percent among impacted firms. Similarly, firms with more than 5 NAICS codes accounted for about 13-14 percent of all firms in the original data, as compared to 30-40 percent among impacted firms. It is also notable that, among the industries with employee-based size standard, NAICS Sectors 31-33 and 42 together accounted for about 90 percent of impacted firms (in terms of both contractive and expansive impacts), with Sector 31-33 (Manufacturing) accounting for about 65 percent and Sector 42 (Wholesale Trade) about 25 percent.

Each of these impacts was then multiplied by an applicable factor or ratio, as shown in the last column of Table 1, to obtain the respective impacts corresponding to all firms in 2019 SAM subject to at least one employee-based size standard. These results are presented below in Table 6, “Impacts from Changing the Averaging Period for Employees from 12 Months to 24 Months.” The last column of the table shows the percent of firms impacted relative to all business concerns in 2019 SAM. Because the SAM data only captures businesses that are primarily interested in Federal procurement opportunities, the SAM-based results do not fully capture the impacts the proposed change may have on businesses participating in various non-procurement programs that apply to SBA's employee-based size standards, such as SBA loan programs and exemptions from compliance with paperwork and other regulatory requirements.

The Economic Census, combined with the Census of Agriculture and County Business Patterns Reports, provides for each NAICS code information on the number of total small and large businesses subjected to an employee-based size standard. Based on the matched SAM data, SBA computed percentages of businesses impacted under each impact category for each NAICS industry subject to an employee-based size standard. By applying such percentages to the 2012 Economic Census tabulation (the latest available), SBA estimated the number of all businesses impacted under each impact type for each NAICS code subject to an employee-based size standard. These results are presented in Table 7, “Impacts from Changing the Averaging Period for Employees from 12 Months to 24 Months (2012 Economic Census),” below.

Currently large or mid-size businesses regaining small business status would become eligible for various benefits as small business concerns, including access to Federal set-aside contracts, SBA's guaranteed loans and disaster assistance, reduced patent fees, and exemptions from various compliance and paperwork requirements. With their small business status extended, advanced small businesses would continue to receive such benefits for a longer period. However, the proposed change may also cause some small businesses to lose their small business status in at least one employee-based size standard and access to small business assistance, especially Federal set-aside opportunities.

By comparing the approximated 5-year annual receipts average with the current receipts-based size standard for each of the 192,295 matched business concerns in each NAICS code subject to a receipts-based size standard, in this proposed rule, SBA identifies the following 4 possible impacts from changing the averaging period for annual receipts from 3 years to 5 years:

i. The number of mid-size businesses that have exceeded the size standard and would regain small business status in at least one NAICS industry with a receipts-based size standard ( i.e., 3-year average > size standard ≥ 5-year average)—expansive impact;

ii. The number of advanced small businesses within 10 percent below the size standard that would have their small business status extended for a longer period in at least one NAICS industry with a receipts-based standard (5-year average < 3-year average ≤ size standard and 0.9*size standard < 3-year average ≤ size standard)—expansive impact;

iii. The number of currently small businesses that would lose their small business status in at least one NAICS industry subjected to a receipts-based size standard ( i.e., 3-year average ≤ size standard < 5-year average)—contractive impact; and

iv. The number of advanced small businesses within 10 percent below the size standard that would have their small business status shortened in at least one NAICS industry subject to a receipts-based standard (3-year average < 5-year average ≤ size standard and 0.9*size standard < 3-year average ≤ size standard)—contractive impact.

In this proposed rule, SBA is changing the period for calculation of average annual receipts for SBA receipts-based size standards for Business Loan, Disaster Loan, and SBIC Programs from 3 years to 5 years. The purpose of Public Law 115-324 is to allow small businesses more time to grow and develop competitiveness and infrastructure so that they are better prepared to succeed under full and open competition once they outgrow the size threshold. However, a longer 5-year averaging period may not always and necessarily provide relief to every small business concern. As discussed in the prior proposed rule, when annual revenues are declining or when annual revenues for the latest 3 years are lower than those for the earliest 2 years of the 5-year period, the 5-year average would be higher than the 3-year average, thereby ejecting some advanced small businesses out of their small business status sooner or rendering some small businesses under the 3-year average not small immediately.

There are 4 different types of impacts on small businesses from changes to the averaging period for annual receipts from 3 years to 5 years as follows: (i) Enabling current large or mid-size businesses to gain small business status (impact i); (ii) enabling current advanced small businesses to lengthen their small business status (impact ii); (iii) causing current small businesses to lose their small business status (impact iii); and (iv) causing current small businesses to shorten their small business status (impact iv).

However, with the SBA's proposal to permit businesses in the Business Loan, Disaster Loan, and SBIC programs to use either a 3-year average or a 5-year average for calculating average annual receipts for the purposes of qualifying as a small business, the two contractive impacts (namely impact (iii) and impact (iv)) do not apply to this proposed rule. Accordingly, this proposed rule provides the analysis of the two expansive impacts of changing the averaging periods for annual receipts from 3 years to 5 years (namely impact (i) and impact (ii)) only.

Table 8, “Percentage Distribution of Impacted Firms with Receipts Based Size Standards by the Number of NAICS Codes,” below, provides these results based on the 2019 SAM—2016 SAM matched firms.

It is highly notable that the distribution of impacted firms by the number of NAICS codes, as shown in Table 8, is very different as compared to a similar distribution based on the overall matched and total 2019 SAM data ( see Table 4), especially with respect to firms with only one NAICS code and those with more than 5 NAICS codes. For example, as shown in Table 4, above, more than 40 percent of all firms in the overall data were associated with only one NAICS code, as compared to less than 15 percent among impacted firms in Table 8. Similarly, firms with more than 5 NAICS codes accounted for about 20 percent of all firms in the original data, as compared to more than 50 percent among impacted firms. It is also notable that, among the industries with receipts based size standards, NAICS Sectors 54, 56, and 23 together accounted for more than 70 percent of impacted firms, with Sector 54 (Professional, Scientific and Technical Services) accounting for about 30-35 percent, followed by Sector 23 (Construction) about 25-30 percent, and Sector 56 (Administrative and Support, Waste Management and Remediation Services) about 10-13 percent.

Each of these impacts was then multiplied by an applicable factor or ratio, as shown in the last column of Table 3, to obtain the respective impacts corresponding to all firms in 2019 SAM subject to at least one receipts-based size standard. These results are presented below in Table 9, “Impacts from Changing the Averaging Period for Receipts from 3 Years to 5 Years.” The last column of the table shows the percent of firms impacted relative to all business concerns in 2019 SAM.

Because the SAM data only captures businesses that are primarily interested in Federal procurement opportunities, the SAM-based results do not fully capture the impacts the proposed change may have on businesses participating in various non-procurement programs that apply SBA's receipts-based size standards, such as exemptions from compliance with paperwork and other regulatory requirements.

The Economic Census, combined with the Census of Agriculture and County Business Patterns Reports, provides for each NAICS code information on the number of total small and large businesses subjected to a receipts-based size standard. Based on the matched SAM data, SBA computed percentages of businesses impacted under each impact category for each NAICS industry subject to a receipts-based size standard. By applying such percentages to the 2012 Economic Census tabulation, SBA estimated the number of all businesses impacted under each impact type for each NAICS code subject to a receipts-based size standard. These results are presented in Table 10, “Impacts from Changing the Averaging Period for Receipts from 3 Years to 5 Years (2012 Economic Census),” below.

Currently large or mid-size businesses regaining small business status would get various benefits as small business concerns, including access to SBA loan programs, and exemptions from various compliance and paperwork requirements. With their small business status extended, advanced small businesses would continue to receive such benefits for a longer period. However, the change from 3-year average receipts to 5-year average may also harm some small businesses by causing them to lose or shorten their small business status in at least one receipts-based size standard, thereby depriving them of access to small business assistance, including SBA's lending. To mitigate such impacts, SBA is allowing businesses to elect either the 3-year average annual receipts or the 5-year average annual receipts for the Business Loan, Disaster Loan, and SBIC programs. SBA seeks comment on implementation of Public Law 115-324 for the Business Loan, Disaster Loan, and SBIC programs.

In this rulemaking, SBA establishes an appropriate baseline to evaluate benefits, costs, or transfer impacts of this action and alternative approaches considered, if any. A baseline should represent the agency's best assessment of what the world would look like absent the regulatory action. For a new regulatory action modifying an existing regulation (such as changing the calculation of the average number of employees from 12 months to 24 months), a baseline assuming no change to the regulation ( i.e., maintaining the status quo) generally provides an appropriate benchmark for evaluating benefits, costs, or transfer impacts of proposed regulatory changes and their alternatives.

Based on the 2012 Economic Census special tabulations (the latest available), 2012 County Business Patterns Reports (for industries not covered by the Economic Census), and 2012 Agricultural Census tabulations (for agricultural industries), of a total of about 7.2 million firms in all industries with employee-based size standards, about 96 percent were considered small and 4 percent other than small under the 12-month employee average. Similarly, of 334,990 businesses that were subject to at least one employee-based size standard and eligible for Federal contracting, 87.3 percent were small in at least one NAICS code and 12.7 percent other than small in all NAICS codes with an employee-based size standard.

Based on the data from the Federal Procurement Data System—Next Generation (FPDS-NG) for fiscal year 2019, on average, about 39,714 unique firms in industries subject to employee-based size standards received at least one Federal contract during 2019, of which 85.3 percent were small. Businesses subject to employee-based size standards received $232.6 billion in annual average Federal contract dollars in 2019, of which nearly $47 billion or about 20.2 percent went to small businesses. Of total dollars awarded to small businesses subject to employee-based size standards, $23.8 billion or 50.6 percent was awarded through various small business set-aside programs and 49.4 percent was awarded through non-set aside contracts.

Based on SBA's internal data on its loan programs, small businesses subject to employee-based size standards received, on an annual basis, a total of 7,672 7(a) and 504 loans for fiscal years 2018-2020, totaling $4.9 billion, of which 75 percent was issued through the 7(a) program and 25 percent was issued through the CDC/504 program. During fiscal years 2016-2018, small businesses in those industries also received about 400 loans through the SBA's disaster loan program, totaling about $0.04 billion on an annual basis. Table 11, “Baseline Analysis of Employee-Based Size Standards,” below, provides these baseline results.

Besides set-aside contracting and financial assistance discussed above, small businesses also benefit through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through Federal agencies that use SBA's size standards. However, SBA has no data to estimate the number of small businesses receiving such benefits.

As mentioned previously, businesses that would regain or lose small business status can be identified by comparing their 24-month employee average with the employee-based size standard. That is, if the 24-month employee average of a firm currently above the size standard is lower than the applicable employee-based size standard, that firm will gain or regain small business status. Similarly, if the 24-month employee average of a currently small business is higher than the size standard, that business will lose its small business status. However, to estimate the number of small businesses that would benefit by having their small business status extended for a longer period or would be penalized by having their small size status shortened, SBA considered small businesses whose 12-month employee average was within 10 percent below their employee-based size thresholds. Small businesses that are not immediately impacted may be impacted either negatively or positively someday as they continue to grow and approach the size standard threshold.

For this new regulatory action modifying an existing regulation (such as changing the average annual receipts calculation from 3 years to 5 years), a baseline assuming no change to the regulation ( i.e., maintaining the status quo) generally provides an appropriate benchmark for evaluating benefits, costs, or transfer impacts of proposed regulatory changes and their alternatives.

Based on the 2012 Economic Census special tabulations (the latest available), 2012 County Business Patterns Reports (for industries not covered by the Economic Census), and 2012 Agricultural Census tabulations (for agricultural industries), of a total of about 7.2 million firms in all industries with receipts-based size standards, about 96 percent are considered small and 4 percent other-than-small under the 3-year annual receipts average. Similarly, of 334,990 businesses in SAM 2019 that were subject to at least one receipts-based size standard and eligible to qualify as small business concerns, 87.3 percent were small in at least one NAICS code and 12.7 percent other than small in all NAICS codes.

Based on SBA's internal data on its loan programs, small businesses subject to receipts-based size standards received, on an annual basis, a total of about 50,150 7(a) and 504 loans for fiscal years 2018-2020, totaling nearly $24 billion, of which 85 percent was issued through the 7(a) program and 15 percent was issued through the CDC/504 program. During fiscal years 2016-2018, small businesses in those industries also received about 5,585 loans through the SBA's disaster loan program, totaling about $0.5 billion on an annual basis. Table 12, “Baseline Analysis of Receipts-Based Size Standards,” below, provides these baseline results.

Besides financial assistance discussed above, small businesses also benefit through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through Federal agencies that use SBA's size standards. However, SBA has no data to estimate the number of small businesses receiving such benefits. Similarly, due to the lack of data, SBA is not able to determine impacts the proposed rule will have on small businesses participating in other agencies' programs that are subject to their own size standards based on average annual receipts.

Businesses that would regain or expand their small business status can be identified by comparing the estimate of their 5-year receipts average with the size standard. That is, if the 5-year receipts average of a firm currently above the size standard is lower than the applicable size standard, that firm will gain or regain small business status. To estimate the number of small businesses that would benefit by having their small business status extended for a longer period or would be penalized by having their small business status shortened, SBA considered small businesses whose 3-year average annual receipts was within 10 percent below their receipts-based size thresholds. Depending upon whether their annual receipts are growing or declining, small businesses that are not immediately impacted may be impacted, either positively ( i.e., gaining small business status) or negatively ( i.e., losing small business status) someday as they continue to grow and approach the size standard threshold as in the current 3-year averaging method. However, SBA is not able to quantify such impacts now.

The most significant expansive effects to businesses from the proposed change in the averaging period for calculation of the number of employees for size standards from 12 months to 24 months include: (i) Enabling some mid-size businesses currently categorized above their corresponding size standards to gain or regain small business size status and thereby qualify for participation in Federal assistance intended for small businesses, and (ii) allowing some advanced and larger small businesses close to their size thresholds to lengthen their small business status for a longer period and thereby continue their participation in Federal small business programs. These programs include SBA's business and disaster loan programs and Federal procurement programs intended for small businesses. Federal procurement programs provide targeted, set-aside opportunities for small businesses under SBA's various business development and contracting programs, including 8(a)/Business Development (BD), HUBZone, Women-Owned Small Business (WOSB), Economically Disadvantaged Women-Owned Small Business (EDWOSB), and Service-Disabled Veteran-Owned Small Business (SDVOSB) programs. Expansive effects accruing to businesses gaining and extending small status are presented below in Table 13, “Expansive Impacts of Changing the Averaging Period for Employees from 12 Months to 24 Months.” The results in Table 13 pertain to businesses and industries subject to employee-based size standards only.

As shown in Table 13, of 21,155 firms not currently considered small in any employee-based size standards, 390 (or 1.8 percent) would benefit from the proposed change by gaining or regaining small status under the 24-month employee average in at least one NAICS industry that is subject to an employee-based size standard. Additionally, 373 or 0.3 percent of small businesses within 10 percent below size standards would see their average number of employees decrease under the 24-month averaging period, consequently enabling them to keep their size status for a longer period.

Using the 2012 Economic Census, SBA estimated that about 280 or 1.3 percent of currently large businesses would gain or regain small status and about 1,200 or 0.2 percent of total small businesses would see their small business status extended for a longer period as the result of the change in the calculation of employees. These results are shown in Table 13, below.

With more businesses qualifying as small under the proposed change in the calculation of employees, Federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs. Growing small businesses that are close to exceeding the current employee-based size standards will be able to retain their small business status for a longer period under the 24-month employee average, thereby enabling them to continue to benefit from the small business programs.

Based on the FPDS-NG data for fiscal year 2019, as shown in Table 13, SBA estimates that those newly qualified small businesses ( i.e., large businesses gaining small status) under the proposed rule, if adopted, could receive about $333 million in small business contract dollars annually under SBA's small business, 8(a)/BD, HUBZone, WOSB, EDWOSB, and SDVOSB programs. That represents a 0.7 percent increase to total small business contract dollars from the baseline in Table 11, above. Additionally, small businesses could receive approximately $90 million in additional small business contract dollars because of extension of their small business status, which is about a 0.2 percent increase from the total small business contract dollars in the baseline. That is, businesses gaining or extending small business status could receive about $423 million in additional small business contract dollars, which is a 0.9 percent increase to the total small business dollars in the baseline.

Under SBA's 7(a) and 504 loan programs, based on the data for fiscal years 2018-2020, SBA estimates up to about 1 SBA 7(a) and 504 loans totaling nearly $0.01 million could be made to these newly qualified small businesses under the proposed change. Additionally, small businesses could receive about 1 SBA 7(a) and 504 loans totaling nearly $.02 million due to the extension of their size status. These amounts represent a .001 percent increases to the 7(a) and 504 loan amount in the baseline.

Newly qualified small businesses and those with extended small business status under the 24-month averaging period may also benefit from the SBA's disaster loan program. However, since the benefit provided through this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a meaningful estimate of this impact. Based on the historical trends of the SBA's disaster loan data which shows that firms receiving loans under employee-based size standards are well below the industry size thresholds, SBA estimates that newly defined small businesses and small businesses extending small business status for a longer period would not receive any additional disaster loans under the proposed change.

The added competition from more businesses qualifying as small may result in lower prices to the Federal Government for procurements set aside or reserved for small businesses, but SBA cannot quantify this impact. Costs could be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. However, with agencies likely setting aside more contracts for small businesses in response to a larger pool of small businesses under the proposed change, HUBZone firms might actually end up getting more set-aside contracts and fewer full and open contracts, thereby resulting in some cost savings to Federal agencies. While SBA cannot estimate such costs savings, as it is impossible to determine the number and value of unrestricted contracts to be otherwise awarded to HUBZone firms that will be awarded as set-asides, such cost savings are likely to be relatively small as only a small fraction of full and open contracts are awarded to HUBZone businesses.

Additionally, the newly defined small businesses, as well as those with a longer small business status, would also benefit from reduced fees, less paperwork, and fewer compliance requirements but SBA has no data to quantify this impact.

The proposed change will also address some of the challenges and uncertainties small businesses face in the open market once they graduate from their small business status. Small and mid-size businesses experience a considerable disadvantage in competing for full and open contracts against large businesses, including the largest in the industry. These large businesses often have several competitive advantages over small and mid-size firms, including vast past performance qualifications and experience, strong brand-name recognition, a plethora of professional certifications, security clearances, and greater financial and marketing resources. Small and mid-size businesses cannot afford to maintain these resources, leaving them at a considerable disadvantage.

With contracts getting bigger, one large set-aside contract could throw a firm out of its small business size status, thereby subjecting it to certain requirements that apply to other-than-small firms, such as developing subcontracting plans. That firm may not have the infrastructure, existing business processes, and/or other resources in place in order to comply with such requirements. This may also result in constant shuffling between small and other-than-small status.

By allowing smaller mid-size companies that have just exceeded the size threshold to regain small business status and advanced small businesses close to size standards to prolong their small business status for a longer period, this proposed rule can expand the pool of qualified small firms for agencies to draw upon to meet their small business requirements.

The most significant benefits to businesses from the change in the period for calculation of average annual receipts from 3 years to 5 years include: (i) Enabling some mid-size businesses currently categorized above their corresponding size standards to gain or regain small business status and thereby qualify for participation in Federal assistance intended for small businesses, including access to SBA's financial assistance and (ii) allowing some advanced and larger small businesses close to their size thresholds to lengthen their small business status for a longer period and thereby continue their participation in SBA's Business Loan, Disaster Loan and SBIC Programs. Benefits accruing to businesses gaining and extending small business status are presented below in Table 14, “Expansive Impacts of Changing the Averaging Period for Receipts from 3 Years to 5 Years.” The results in Table 14 pertain to businesses and industries subject to SBA's receipts-based size standards only.

As shown in Table 14, of 42,536 firms not currently considered small in any receipts-based size standards, 3,320 (or 6.4 percent) would benefit from the proposed change by gaining or regaining small business status under the 5-year receipts average in at least one NAICS industry that is subject to a receipts-based size standard. Additionally, nearly 3,600 or 1.2 percent of small businesses within 10 percent below size standards would see their annual receipts decrease under the 5-year averaging period, consequently enabling them to keep their small business status for a longer period.

Using the 2012 Economic Census, SBA estimated that more than 5,900 or 3.3 percent of currently large businesses would gain or regain small business status and more than 61,250 or 0.9 percent of total small businesses would see their small business status extended for a longer period as the result of this proposed rule. These results are shown in Table 14, below.

Growing small businesses that are close to exceeding the current size standards will be able to retain their small business status for a longer period under the 5-year receipts average, thereby enabling them to continue to benefit from the small business programs.

Under SBA's 7(a) and 504 loan programs, based on the data for fiscal years 2018-2020, SBA estimates that about 1 SBA 7(a) and 504 loans totaling $0.2 million could be made to these newly qualified small businesses under the proposed change. Additionally, small businesses could receive up to 4 SBA 7(a) and 504 loans totaling $1.9 million due to the expansion of their size status. Together, these amounts represent a 0.01 percent increase to the loan amount in the baseline.

Newly qualified small businesses and those with extended small business status will also benefit from the SBA's disaster loan program. Since the benefit provided through this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a meaningful estimate of this impact. However, based on the historical trends of the SBA disaster loan data, SBA estimates that, on an annual basis, the newly defined small businesses under the proposed change could receive about 1 disaster loan, totaling about $0.003 million. Similarly, extending small business status for a longer period could result in small businesses receiving 1 disaster loans, totaling about $0.01 million. These results are presented in Table 14, above.

Additionally, the newly defined small businesses, as well as those with a longer small business status, would also benefit from reduced fees, less paperwork, and fewer compliance requirements but SBA has no data to quantify this impact.

As stated previously, the change enacted under Public Law 116-283 may not always and necessarily benefit every small business concern. When businesses' monthly employees are declining or when the number of employees for the latest 12 months are lower than those for the earliest 12 months of the 24-month averaging period, the 24-month employee average would be higher than the 12-month average, thereby ejecting small businesses out of their small status sooner or rendering some small businesses other than small immediately. Such small businesses would no longer be eligible for Federal small business opportunities, such as SBA's loans, Federal small business contracts, and other Federal assistance available to small businesses. These impacts are provided in Table 15, “Contractive Impacts from Changing the Averaging Period for Employees from 12 Months to 24 Months,” below.

SBA estimates that, of 133,958 firms in 2019 SAM that were small under at least one employee-based size standard based on the 12-month employee average, 260 firms (or 0.2 percent) would lose their small status and another 100 firms (or 0.08 percent) would see their size status shortened as a result of the proposed change. Similarly, based on the 2012 Economic Census data, 763 firms would lose their small business status and 287 firms would see their size status shortened, which represent, respectively, 0.1 percent and 0.04 percent of total small firms subject to an employee-based size standard.

Based on the contract awards data from FPDS-NG for fiscal year 2019, businesses losing or shortening small status would lose access to about $266 million in Federal small business contract collars, which is about a 0.6 percent decrease from the corresponding value in the baseline. Similarly, based on the SBA's loan data for fiscal years 2018-2020 and the number of impacted firms from the Economic Census, SBA estimates that businesses losing or shortening small business status would also lose access to about $0.02 million in SBA 7(a) and 504 loans. Based on the historical trends of the SBA's disaster loan data which shows that firms receiving loans under employee-based size standards are well below the industry size thresholds, SBA estimates that businesses losing or shortening small business status would not lose access to any additional disaster loans under the proposed change.

Businesses losing small status and those with size status shortened would also be deprived of other Federal benefits available, including reduced fees and exemptions from certain paperwork and compliance requirements. However, there exists no data to quantify this impact.

Additionally, by enabling mid-size businesses to regain small business status and lengthening the small business status of advanced and successful larger small businesses, the proposed rule may disadvantage smaller small businesses in more need of Federal assistance than their larger counterparts in competing for Federal opportunities. SBA frequently receives concerns from smaller small businesses that they lack resources, past performance qualifications and expertise to be able to compete against more resourceful, qualified and experienced large small businesses for Federal opportunities for small businesses.

Besides having to register in SAM to be able to participate in Federal contracting and update the SAM profile annually, small businesses incur no direct costs to gain or retain their small business status. All businesses willing to do business with the Federal Government have to register in SAM and update their SAM profiles annually, regardless of their size status. SBA believes that a vast majority of businesses that are willing to participate in Federal contracting are already registered in SAM. Furthermore, this proposed rule does not establish the new size standards for the first time; rather, it merely proposes to modify the calculation of annual average receipts that apply to the existing size standards in accordance with a statutory requirement.

The proposed change may entail some additional administrative costs to the Federal Government because more businesses may qualify as small for Federal small business programs. For example, there will be more firms seeking SBA's loans; more firms eligible for enrollment in the Dynamic Small Business Search (DSBS) database or in certify.sba.gov; more firms seeking certification as 8(a)/BD or HUBZone firms or qualifying for small business, WOSB, EDWOSB, and SDVOSB status; and more firms applying for SBA's 8(a)/BD and Mentor-Protégé programs. With an expanded pool of small businesses, it is likely that Federal agencies will set aside more contracts for small businesses under the proposed change. One may surmise that this might result in a higher number of small business size protests and additional processing costs to agencies. However, the SBA's historical data on size protests actually show that the number of size protests actually decreased after an increase in the number of businesses qualifying as small as a result of size standards revisions as part of the first 5-year review of size standards. Specifically, on an annual basis, the number of size protests dropped from about 600 during fiscal years 2011-2013 (review of most receipts-based size standards was completed by the end of fiscal year 2013) to less than 500 during fiscal years 2017-2019. However, with more months of the data to be reviewed, 24-month averaging may increase time needed by size specialists to process a size protest. Among those newly defined small businesses seeking SBA's loans, there could be some additional costs associated with compliance and verification of their small business status. However, small business lenders have an option of using the tangible net worth and net income based alternative size standard instead of using the industry-based size standard to establish eligibility for SBA's loans. For these reasons, SBA believes that these added administrative costs will be minor because necessary mechanisms are already in place to handle these added requirements.

Additionally, some Federal contracts may possibly have higher costs. With a greater number of businesses defined as small under the proposed change, Federal agencies may choose to set aside more contracts for competition among small businesses only instead of using full and open competition. The movement of contracts from unrestricted competition to small business set-aside contracts might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers under the proposed change. However, the additional costs associated with fewer bidders are expected to be minor since, by law, procurements may be set aside for small businesses under the 8(a)/BD, HUBZone, WOSB, EDWOSB, or SDVOSB programs only if awards are expected to be made at fair and reasonable prices.

Costs may also be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. However, with agencies likely setting aside more contracts for small businesses in response to the availability of a larger pool of small businesses under the proposed change to the averaging period for employees from 12 months to 24 months, HUBZone firms might actually end up getting fewer full and open contracts, thereby resulting in some cost savings to agencies. However, such cost savings are likely to be minimal as only a small fraction of unrestricted contracts are awarded to HUBZone businesses.

As stated previously, the change enacted under Public Law 115-324 may not always and necessarily benefit every small business concern. When businesses' annual revenues are declining or when annual revenues for the latest 3 years are lower than those for the earliest 2 years of the 5-year period, the 5-year average would be higher than the 3-year average, thereby ejecting small businesses out of their small business status sooner or rendering some small businesses other than small immediately. Similarly, small businesses that lose their small business status would have to wait longer to qualify as small again. Such small businesses would no longer be eligible for Federal small business opportunities, such as Federal small business contracts, SBA loan programs and other Federal benefits (such as reduced fees and exemptions from certain paperwork and compliance requirements) available to small businesses. However, the SBA's proposal to allow businesses applying for its Business Loan, Disaster Loan and SBIC Programs to elect to use either the 3-year receipts average or the 5-year receipts average will mitigate such impacts. Moreover, the change in the averaging period for receipts in this proposed rule only applies to businesses in the SBA Business Loan, Disaster Loan, and SBIC Programs. In other words, the change in the calculation of average annual receipts in this proposed rule will have no impacts on businesses participating in Federal procurement and all other non-procurement programs except SBA loan programs.

By enabling mid-size businesses to regain small business status and lengthening the small business status of advanced and successful larger small businesses, the proposed rule may disadvantage smaller small businesses in more need of Federal assistance than their larger counterparts in competing for Federal opportunities. SBA frequently receives concerns from smaller small businesses that they lack resources, past performance qualifications and expertise to be able to compete against more resourceful, qualified and experienced larger small businesses for Federal opportunities for small businesses. SBA believes that overall benefits to small businesses from this proposed rule change outweigh the costs to small businesses.

As discussed elsewhere, the proposed change in averaging period for employees would result in four primary impacts, which can be categorized as either having a `expansive impact' or `contractive impact' on size status of both currently large and small businesses. Allowing some currently large firms to gain small business status and some advanced small firms to remain small for a longer period represents the expansive impact of the proposed rule. Causing some currently small firms to lose or shorten their small business is the contractive impact.

Although businesses in a majority of industries with employee-based size standards would be both positively and negatively impacted by this proposed rule, in totality the number of firms with expansive impacts was generally greater than the number of firms with contractive impacts. The proposed rule would result in a net gain of about $158 million (or 0.3 percent increase from the baseline) in Federal small business contract dollars. The net impact of the proposed rule on SBA loans was also positive, but very small. Specifically, SBA estimates a net gain of $0.01 million in 7(a) and 504 loans and no change in disaster loans to small firms as a result of changing the period for calculating the average number of employees for size standards from 12 months to 24 months. Net impacts of the proposed rule are summarized in Table 16, “Net Impact from Changing the Averaging Period for Employees from 12 Months to 24 Months,” below.

Under the SBA's proposal allowing businesses to elect to choose either a 3-year receipts average or a 5-year receipts average to establish small business eligibility for its Business Loan, Disaster Loan, and SBIC Programs, none of the currently eligible small businesses will experience a contractive impact from the proposed change. In other words, the proposed change will not cause any currently small businesses to lose or shorten their small business status. The proposed change will enable some mid-size businesses above the size standard gain or regain small business status and some advanced small businesses close to the size standard to lengthen their small status. In the absence of contractive impacts, the expansive impacts shown in Table 14 (above) will also represent as net impacts of the proposed change.

The proposed change may result in some redistribution of Federal contracts between businesses gaining or extending small status and large businesses, and between businesses gaining or extending small status and other existing small businesses. However, it would have no impact on the overall economic activity since the total Federal contract dollars available for businesses to compete for will not change. While SBA cannot quantify with certainty the actual outcome of the gains and losses from the redistribution of contracts among different groups of businesses, it can identify several probable impacts in qualitative terms. With the availability of a larger pool of small businesses under the proposed change, some unrestricted Federal contracts may be set aside for small businesses. As a result, large businesses may lose access to some Federal contracts. Similarly, some currently small businesses may obtain fewer set-aside contracts due to the increased competition from some large businesses qualifying as small and advanced small businesses remaining small for a longer period. This impact may be offset by a greater number of procurements being set aside for all small businesses. With large businesses qualifying as small and advanced larger small businesses remaining small for a longer period under the proposed rule, smaller small businesses could face some disadvantages in competing for set-aside contracts against their larger counterparts. However, SBA cannot quantify these impacts.

The change from a 3-year averaging period to a 5-year averaging period may result in some redistribution of Federal contracts between businesses gaining or extending small business status and large businesses, and between businesses gaining or extending small business status and other existing small businesses. However, since the change in calculation of receipts in this proposed rule does not apply to Federal contracting, these distributional impacts are not relevant for changing the averaging period for receipts from 3 years to 5 years.

This action meets applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. This action does not have retroactive or preemptive effect.

For purposes of Executive Order 13132, SBA has determined that this proposed rule 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. Therefore, SBA has determined that this final rule has no federalism implications warranting preparation of a federalism assessment.

Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. A description of the need for this regulatory action and benefits and costs associated with this action, including possible distributional impacts that relate to Executive Order 13563, is included above in the Benefit-Cost Analysis under Executive Order 12866. Additionally, Executive Order 13563, Section 6, calls for retrospective analyses of existing rules.

Following the enactment of Public Law 115-324, SBA issued a public notice advising business and contracting communities that SBA must go through a rulemaking process to implement the new law and that businesses still must report their receipts based on a 3-year average until SBA changes its regulations. SBA updated the Small Business Procurement Advisory Council (SBPAC) at its March 26, 2019, April 23, 2019, and August 26, 2019, meetings about SBA's rulemaking process to implement Public Law 115-324. On April 18, 2019, SBA also presented an update on the implementation of Public Law 115-324 at the 2019 Annual Government Procurement Conference. Through phone calls and emails, SBA also advised business and contracting communities and other interested parties about the SBA's process to implement the new law.

Under the Regulatory Flexibility Act (RFA), this proposed rule may have a significant economic impact on a substantial number of small businesses in industries subject to both employee-based and receipts-based size standards. As described above, this rule may affect small businesses in those industries seeking assistance under Federal small business programs. Specifically, the change in the averaging period for calculating the number employees for size standards from 12 months to 24 months may have a significant impact on a substantial number of businesses in industries subject to employee based size standards in terms of qualifying for Federal small business programs, including Federal contracts set aside for small businesses and SBA's loan programs. Similarly, the proposed change in the averaging period for receipts from 3 years to 5 years will also impact a substantial number of businesses in the SBA Business Loan, Disaster Loan, and SBIC programs.

Immediately below, SBA sets forth an initial regulatory flexibility analysis (IRFA) of proposed rule to address the following questions: (1) What is the need for and objective of the rule?; (2) What is SBA's description and estimate of the number of small businesses to which the rule will apply?; (3) What are the projected reporting, record-keeping, and other compliance requirements of the rule?; (4) What are the relevant Federal rules that may duplicate, overlap, or conflict with the rule?; and (5) What alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small businesses?

First, section 863 of the NDAA 2021, Public Law 116-283, changed the averaging period for SBA's employee-based size standards from 12 months to 24 months. The intent of this proposed rule is to implement Public Law 116-283 by amending 13 CFR 121.106 such that a concern would average its employees over all pay periods in the preceding completed 24 months. Second, in 2018, Public Law 115-324 amended section 3(a)(2)(C)(ii)(II) of the Small Business Act by modifying the period for calculating average annual receipts for prescribing size standards for business concerns in services industries by an agency without separate statutory authority to issue size standards from 3 years to 5 years. In a final rule published December 5, 2019 (84 FR 66561), SBA implemented Public Law 115-324 by making changes to its receipts-based size standards for all SBA programs except the Business Loan and Disaster Loan Programs. This proposed rule would extend the changes to SBA's receipts-based size standards for the Business Loan, Disaster Loan, and SBIC Programs.

This proposed rule applies to all small businesses that are subject to either an employee-based or a receipts-based size standard. Based on the 2012 Economic Census special tabulations, 2012 County Business Patterns Reports, and 2012 Agricultural Census tabulations, of a total of 680,266 firms in all industries with employee-based size standards to which this proposed rule will apply, 657,942 or about 96.7 percent are considered small under the 12-month employee average. Of 152,450 total concerns in SAM 2019 to which an employee-based size standard will apply, about 133,958 or 87.9 percent were small in at least one NAICS industry with an employee-based size standard. Similarly, based on the data from FPDS-NG for fiscal year 2019, about 39,700 unique firms in industries subject to employee-based size standards received at least one Federal contract in 2019, of which 85.3 percent, or 33,867 were small.

Based on the same data sources listed above, of a total of 7.2 million firms in all industries with receipts-based size standards to which this final rule will apply, 6.9 million or about 96 percent are considered small under the 3-years receipts average. Of 334,990 total concerns in SAM 2019 to which a receipts-based size standard will apply, 292,454 or 87.3 percent were small in at least one NAICS industry with a receipts-based size standard.

The proposed rule changes existing reporting or record-keeping requirements for small businesses. To qualify for Federal procurement and a few other programs, businesses are required to register in SAM and to self-certify that they are small at least once annually. Therefore, businesses opting to participate in those programs must comply with SAM requirements. There are no costs associated with SAM registration or certification. The change in the calculation of employees from a 12-month averaging period to a 24-month averaging period may result in some redistribution of Federal contracts between businesses gaining or extending small status and large businesses, and between businesses gaining or extending small status and other existing small businesses. However, it would have no impact on the overall economic activity since the total Federal contract dollars available for businesses to compete for will not change. Since the change in the calculation of annual average receipts in this proposed rule only applies to SBA loan programs, this will have no impact on Federal contracting and associated record-keeping requirements.

Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C. 632(a)(2)(C), Federal agencies must use SBA's size standards to define a small business, unless specifically authorized by statute to do otherwise. In 1995, SBA published in the Federal Register a list of statutory and regulatory size standards that identified the application of SBA's size standards as well as other size standards used by Federal agencies (60 FR 57988 (November 24, 1995)). SBA is not aware of any Federal rule that would duplicate or conflict with establishing size standards.

However, the Small Business Act and SBA's regulations allow Federal agencies to develop different size standards if they believe that SBA's size standards are not appropriate for their programs, with the approval of SBA's Administrator (13 CFR 121.903). The Regulatory Flexibility Act, 5 U.S.C. 601(3), authorizes an Agency to establish an alternative small business definition, after consultation with the Office of Advocacy of the U.S. Small Business Administration.

By law, SBA is required to develop numerical size standards for establishing eligibility for Federal small business assistance programs. Other than varying size standards by industry and changing the size measures or changing a measurement period, no practical alternative exists to the systems of numerical size standards. As stated elsewhere, the objective of this final rule is to change SBA's regulations on the calculation of business size in terms of average number of employees to implement Public Law 116-283 for all SBA programs and average annual receipts to implement Public Law 115-324 for the SBA's Business Loan, Disaster Loan and SBIC programs.

This rule is expected to affect a substantial number of small entities, but the effects are not expected to be significant. However, to mitigate any unintended negative impacts of a 5-year averaging period on small businesses and to allow small businesses to continue to use the 3-year receipts average, in this proposed rule, SBA is allowing applicants in Business Loan, Disaster Loan and SBIC programs to elect to calculate average annual receipts using either a 3-year averaging period or a 5-year averaging period.

For purposes of the Paperwork Reduction Act, 44 U.S.C. Chapter 35, SBA has determined that this proposed rule would amend an information collection (SBA Form 355, Information for Small Business Size Determination, OMB Control Number 3245-0101). SBA will revise Instruction No. 5 to specify that respondents will use a 24-month average to calculate number of employees. In Part II, question 10, respondents will then provide an average number of employees over 24 months.

Concurrently with publication of this proposed rule, SBA is submitting to OMB an Information Collection Review based on the changes described above. SBA has determined that the changes to the Form 355 will not impact the paperwork burden, and it will remain at 4 hours.

SBA will revise the SBA Form 480, Size Status Declaration, for SBIC applicants. The form would reflect the change to the 24-month average for applicants using an employee-based size standard, and the change to an election between a 3-year average and a 5-year average for applicants using a receipts-based size standard. The metrics for the alternative size standard for SBIC applicants would not change.

SBA will revise Part M (Size Analysis) of SBA Form 1920 (7(a) Lender Application), OMB Control No.: 3245-0348, and Exhibit 4 of SBA Form 1244 (504 Loan Application), OMB Control No.: 3245-0071. The revisions would reflect the change to an election between a 3-year average or a 5-year average for applicants using a receipts-based size standard. The metrics for the alternative size standard for 7(a) and 504 applicants would not change.

For the reasons set forth in the preamble, SBA proposes to amend 13 CFR part 121 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 the 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 would modify the National Airspace System as necessary to preserve the safe and efficient flow of air traffic.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA-2021-0849; Airspace Docket No. 21-ACE-17) and be submitted in triplicate to the Docket Management Facility (see the ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2021-0849; Airspace Docket No. 21-ACE-17.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified comment closing date will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Operations Support Group, Central Service Center, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the ADDRESSES section of this document. FAA Order JO 7400.11F lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is planning to decommission the Oswego, KS, VOR in July 2022. The Oswego VOR was one of the candidate VORs identified for discontinuance by the FAA's VOR MON program and listed in the Final policy statement notice, “Provision of Navigation Services for the Next Generation Air Transportation System (NextGen) Transition to Performance-Based Navigation (PBN) (Plan for Establishing a VOR Minimum Operational Network),” published in the Federal Register of July 26, 2016 (81 FR 48694), Docket No. FAA-2011-1082.

Although the VOR portion of the Oswego VOR/DME is planned for decommissioning, the co-located Distance Measuring Equipment (DME) is being retained to support NextGen PBN flight procedure requirements.

The VOR Federal airways effected by the Oswego VOR decommissioning are V-161, V-190, V-307, and V-516. With the planned decommissioning of the Oswego VOR, the remaining ground-based NAVAID coverage in the area is insufficient to enable the continuity of the affected airways. As such, proposed modifications to V-161 and V-307 would result in gaps in the airways and to V-190 would result in the airway being shortened, as well as the proposed revocation of V-516 in its entirety. To overcome the proposed modifications and revocation to the affected airways, instrument flight rules (IFR) traffic could use portions of adjacent VOR Federal airways, including V-63, V-73, V-88, V-131, V-132, V-140, and V-350, or receive air traffic control (ATC) radar vectors to fly around or through the affected area. Additionally, IFR pilots equipped with RNAV capabilities could also navigate point to point using the existing fixes that would remain in place to support continued operations though the affected area. Visual flight rules (VFR) pilots who elect to navigate via the affected ATS routes could also take advantage of the adjacent ATS routes or ATC services listed previously.

The FAA is proposing an amendment to 14 CFR part 71 to amend VOR Federal airways V-161, V-190, and V-307, and remove VOR Federal airway V-516 due to the planned decommissioning of the Oswego, KS, VOR. The proposed VOR Federal airway actions are described below.

V-161: V-161 currently extends between the Three Rivers, TX, VOR/Tactical Air Navigation (VORTAC) and the Gopher, MN, VORTAC; and between the International Falls, MN, VOR/DME and the Winnipeg, MB, Canada, VORTAC, excluding the airspace within Canada. The FAA proposes to remove the airway segment overlying the Oswego, KS, VOR/DME between the Tulsa, OK, VORTAC and Butler, MO, VORTAC. The unaffected portions of the existing airway would remain as charted.

V-190: V-190 currently extends between the Phoenix, AZ, VORTAC and the Springfield, MO, VORTAC. The FAA proposes to remove the airway segment overlying the Oswego, KS, VOR/DME between the Bartlesville, OK, VOR/DME and Springfield, MO, VORTAC. The unaffected portions of the existing airway would remain as charted.

V-307: V-307 currently extends between the Harrison, AR, VOR/DME and the Omaha, IA, VORTAC. The FAA proposes to remove the airway segment overlying the Oswego, KS, VOR/DME between the Neosho, MO, VOR/DME and Chanute, KS, VOR/DME. Additional changes to other portions of the airway have been proposed in a separate NPRM. The unaffected portions of the existing airway would remain as charted.

V-516: V-516 currently extends between the Pioneer, OK, VORTAC and the Oswego, KS, VOR/DME. The FAA proposes to remove the airway in its entirety.

All NAVAID radials listed in the VOR Federal airway descriptions below are unchanged and stated in True degrees.

VOR Federal airways are published in paragraph 6010(a) of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document would be published subsequently in FAA JO 7400.11.

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

The FAA has determined that this proposed 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 Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” prior to any FAA final regulatory action.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the 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 would modify the National Airspace System (NAS) as necessary to preserve the safe and efficient flow of air traffic.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA-2021-0821; Airspace Docket No. 21-ASW-1) and be submitted in triplicate to the Docket Management Facility (see the ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2021-0821; Airspace Docket No. 21-ASW-1.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified comment closing date will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the office of the Operations Support Group, Central Service Center, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the ADDRESSES section of this document. FAA Order JO 7400.11F lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is planning to decommission the Borger, TX, VOR in July 2022. The Borger VOR was one of the candidate VORs identified for discontinuance by the FAA's VOR MON program and listed in the Final policy statement notice, “Provision of Navigation Services for the Next Generation Air Transportation System (NextGen) Transition to Performance-Based Navigation (PBN) (Plan for Establishing a VOR Minimum Operational Network),” published in the Federal Register of July 26, 2016 (81 FR 48694), Docket No. FAA-2011-1082.

Although the VOR portion of the Borger VORTAC is planned for decommissioning, the co-located Tactical Air Navigation (TACAN) portion of the NAVAID, which includes Distance Measuring Equipment (DME) service, is being retained to support NextGen PBN flight procedure requirements.

The air traffic service (ATS) routes effected by the Borger VOR decommissioning are Jet Routes J-8 and J-142, and VOR Federal airways V-272, V-304, and V-390. With the planned decommissioning of the Borger VOR, the remaining ground-based NAVAID coverage in the area is insufficient to enable the continuity of the affected ATS routes. As such, proposed modification to J-8 would result in a gap in the route and to V-272 would result in the airway being shortened, as well as the proposed revocation of J-142, V-304, and V-390 in their entirety. To overcome the proposed modifications and revocations to the affected ATS routes, instrument flight rules (IFR) traffic could use portions of adjacent ATS routes, including J-6, J-14, J-58, J-76, J-78, and J-98 in the high altitude enroute structure and V-12, V-47, V-81, V-190, V-280, and V-402 in the low altitude enroute structure, or receive air traffic control (ATC) radar vectors to fly around or through the affected area. Additionally, IFR pilots equipped with RNAV capabilities could also navigate point to point using the existing NAVAIDs and fixes that would remain in place to support continued operations though the affected area. Visual flight rules (VFR) pilots who elect to navigate via the affected ATS routes could also take advantage of the adjacent ATS routes or ATC services listed previously.

Further, the FAA proposes to establish RNAV route T-420 between the Dalhart, TX, VORTAC and Will Rogers, OK, VORTAC. The new T-route would, in part, mitigate the proposed removal of the V-272 airway segment affected by the planned Borger VOR decommissioning, reduce air traffic control (ATC) sector workload and complexity, and reduce pilot-to-controller communication. The new route would also increase NAS capacity in the route's vicinity and assist ATC when non-radar procedures are required due to frequent outages of the Amarillo Approach Control radar. Finally, the new T-route would provide airspace users equipped with RNAV an ATS route between the Dalhart, TX, area eastward to the Oklahoma City, OK, area and support the FAA's NextGen efforts to modernize the NAS navigation system from a ground-based system to a satellite-based system.

The FAA is proposing an amendment to 14 CFR part 71 to amend Jet Route J-8 and VOR Federal airway V-272; establish RNAV route T-420; and remove Jet Route J-142 and VOR Federal airways V-304 and V-390 due to the planned decommissioning of the Borger, TX, VOR. The proposed ATS route actions are described below.

J-8: J-8 currently extends between the Needles, CA, VORTAC and the Casanova, VA, VORTAC. The FAA proposes to remove the route segment between the Fort Union, NM, VORTAC and the Kingfisher, OK, VORTAC. Additional changes to other portions of the route have been proposed in a separate NPRM. The unaffected portions of the existing airway would remain as charted.

J-142: J-142 currently extends between the Socorro, NM, VORTAC and the Borger, TX, VORTAC. The FAA proposes to remove the route segment between the Anton Chico, NM, VORTAC and Borger VORTAC due to the planned decommissioning of the Borger VOR. Additionally, the FAA proposes to remove the remaining route segment between the Socorro VORTAC and the Anton Chico VORTAC since the distance between the VORTACs is within NAVAID service volumes and pilots could file direct. As a result, the FAA proposes to remove J-142 in its entirety.

V-272: V-272 currently extends between the Dalhart, TX, VORTAC and the Will Rogers, OK, VORTAC. The FAA proposes to remove the airway segment between the Dalhart VORTAC and the Burns Flat, OK, VORTAC. The unaffected portions of the existing airway would remain as charted.

V-304: V-304 currently extends between the Panhandle, TX, VORTAC and the Lamar, CO, VOR/Distance Measuring Equipment (VOR/DME). The FAA proposes to remove the airway segment between the Panhandle VORTAC and Liberal, KS, VORTAC due to the planned decommissioning of the Borger VOR. Additionally, the FAA proposes to remove the remaining airway segment between the Liberal VORTAC and the Lamar VOR/DME since it overlays V-210 between the two NAVAIDs and will remain available for use by NAS users. As a result, the FAA proposes to remove V-304 in its entirety.

V-390: V-390 currently extends between the Tucumcari, NM, VORTAC and the Mitbee, OK, VORTAC. The FAA proposes to remove the airway in its entirety.

T-420: T-420 is a proposed new route that would extend between the Dalhart, TX, VORTAC and the Will Rogers, OK, VORTAC. This T-route would mitigate the proposed removal of the V-272 airway segment between the Dalhart, TX, VORTAC and the Burns Flat, OK, VORTAC (noted above), as well as provide RNAV routing capability from the Dalhart, TX, area, eastward to the Oklahoma City, OK, area.

All NAVAID radials listed in the Jet Route description below are unchanged and stated in True degrees.

Jet Routes are published in paragraph 2004, VOR Federal airways are published in paragraph 6010(a), and RNAV T-routes are published in paragraph 6011 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The ATS routes listed in this document would be published subsequently in FAA Order JO 7400.11.

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

The FAA has determined that this proposed 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 Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” prior to any FAA final regulatory action.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the 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 would modify the National Airspace System (NAS) as necessary to preserve the safe and efficient flow of air traffic.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA-2021-0822; Airspace Docket No. 21-AGL-1) and be submitted in triplicate to the Docket Management Facility (see the ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2021-0822; Airspace Docket No. 21-AGL-1.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified comment closing date will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Operations Support Group, Central Service Center, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the ADDRESSES section of this document. FAA Order JO 7400.11F lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is planning to decommission the Kokomo, IN, VOR in July 2022. The Kokomo VOR was one of the candidate VORs identified for discontinuance by the FAA's VOR MON program and listed in the Final policy statement notice, “Provision of Navigation Services for the Next Generation Air Transportation System (NextGen) Transition to Performance-Based Navigation (PBN) (Plan for Establishing a VOR Minimum Operational Network),” published in the Federal Register of July 26, 2016 (81 FR 48694), Docket No. FAA-2011-1082.

Although the VOR portion of the Kokomo VORTAC is planned for decommissioning, the co-located Distance Measuring Equipment (DME) is being retained to support NextGen PBN flight procedure requirements.

The VOR Federal airways affected by the Kokomo VOR decommissioning are V-96, V-214, V-285, and V-305. With the planned decommissioning of the Kokomo VOR, the remaining ground-based NAVAID coverage in the area is insufficient to enable the continuity of the affected airways. As such, proposed modifications to V-214, V-285, and V-305 would result in the airways being shortened, as well as the proposed revocation of V-96 in its entirety. To overcome the proposed modifications and revocation to the affected airways, instrument flight rules (IFR) traffic could use portions of adjacent VOR Federal airways, including V-11, V-38, V-51, V-55, V-97, V-192, V-210, V-340, and V-371, or receive air traffic control (ATC) radar vectors to fly around or through the affected area. Additionally, IFR pilots equipped with RNAV capabilities could also navigate point to point using the existing fixes that would remain in place to support continued operations through the affected area. Visual flight rules (VFR) pilots who elect to navigate via the affected ATS routes could also take advantage of the adjacent ATS routes or ATC services listed previously.

Prior to this NPRM, the FAA published a rule for Docket No. FAA-2021-0086 in the Federal Register (86 FR 52961; September 24, 2021), amending VOR Federal airway V-285 by removing the airway segment between the White Cloud, MI, VOR/DME and the Traverse City, MI, VOR/DME. That airway amendment, effective December 2, 2021, is included in this NPRM.

The FAA is proposing an amendment to 14 CFR part 71 to amend VOR Federal airways V-214, V-285, and V-305, and to remove VOR Federal airway V-96 due to the planned decommissioning of the Kokomo, IN, VOR. The proposed VOR Federal airway actions are described below.

V-96: V-96 currently extends between the Brickyard, IN, VORTAC and the intersection of the Fort Wayne, IN, VORTAC 071° and Flag City, OH, VORTAC 289° radials (TWERP fix). The FAA proposes to remove the airway in its entirety.

V-214: V-214 currently extends between the Kokomo, IN, VORTAC and the Muncie, IN, VOR/Distance Measuring Equipment (VOR/DME); between the intersection of the Appleton, OH, VORTAC 236° and Zanesville, OH, VOR/DME 274° radials (GLOOM fix) and the Bellaire, OH, VOR/DME; and between the Martinsburg, WV, VORTAC and the Teterboro, NJ, VOR/DME. The FAA proposes to remove the airway segment between the Kokomo, IN, VORTAC and the Muncie, IN, VOR/DME. The unaffected portions of the existing airway would remain as charted.

V-285: V-285 currently extends between the Brickyard, IN, VORTAC and the White Cloud, MI, VOR/DME. The FAA proposes to remove the airway segment between the Brickyard, IN, VORTAC and Goshen, IN, VORTAC. The unaffected portions of the existing airway would remain as charted.

V-305: V-305 currently extends between the El Dorado, AR, VOR/DME and the Kokomo, IN, VORTAC. The FAA proposes to remove the airway segment between the Brickyard, IN, VORTAC and Kokomo, IN, VORTAC. The unaffected portions of the existing airway would remain as charted.

All NAVAID radials listed in the VOR Federal airway descriptions below are unchanged and stated in True degrees.

VOR Federal airways are published in paragraph 6010(a) of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document would be published subsequently in FAA JO 7400.11.

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

The FAA has determined that this proposed 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 Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” prior to any FAA final regulatory action.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface of the earth to support IFR operations at Kit Carson County Airport, Burlington, CO.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2021-0917; Airspace Docket No. 21-ANM-45”. The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S 216th Street, Des Moines, WA 98198.

This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the ADDRESSES section of this document. FAA Order JO 7400.11F lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface of the earth at Kit Carson County Airport, Burlington, CO.

The proposed Class E airspace extending upward from 700 feet above ground level (AGL) would be amended to within a 6.5-mile radius of the airport with a 7.0-mile radius bump out from the 207° bearing from the airport clockwise to the 268° bearing from the airport, and extensions south, northwest, and north of the airport should be established to contain IFR departures to 1,200 feet above the surface and IFR arrivals descending below 1,500 feet above the surface. The southern extension would be within 2.6 miles on each side of the 160° bearing from the airport, extending from the 6.5-mile radius to 8.5 miles south of the airport. The northwest extension would be within 2.6 miles on each side of the 326° bearing from the airport, extending from the 6.5-mile radius to 7.5 miles northwest of the airport. Finally, the northern extension would be within 1.0 miles on each side of the 340° bearing from the airport, extending from the 6.5-mile radius to 10.8 miles north of the airport.

This action also proposes two administrative updates to the Class E legal description. The second line of the text header should be updated from “Burlington, Kit Carson County Airport, CO” to “Kit Carson County Airport”, to match the FAA database. Additionally, the third line of the text header should be updated from “(Lat. 39°14′41″ N, long. 102°17′05″ W) to “(Lat. 39°14′33″ N, long. 102°17′07″ W)” to match the FAA database.

Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.

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

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

This proposed rule addresses the requirement of section 335(a) of the FAA Reauthorization Act of 2018 (the FAARA 2018), codified at 49 U.S.C. 44701 note. Section 335(a) requires the FAA to conduct rulemaking to increase to 10 hours the minimum rest period for flight attendants in domestic, flag, and supplemental operations who are scheduled for a duty period of 14 hours or less; and to prohibit the reduction of the rest period under any circumstances. The FAA's existing regulations require only a 9-hour rest period for these flight attendants which can be reduced to 8 hours in certain circumstances. Consistent with the requirement of section 335(a) of the FAARA 2018, the FAA proposes to amend § 121.467(b)(2) and (b)(3) to require 10 hours of consecutive rest, remove the existing allowance for a reduction in rest time, and prohibit the reduction of the 10 hours of consecutive rest time under any circumstances.

The FAA's authority to issue rules on aviation safety is found in Title 49 of the United States Code (U.S.C.). Subtitle I, Section 106 describes the authority of the FAA Administrator. Section 106(f) vests final authority in the Administrator for carrying out all functions, powers, and duties of the administration relating to the promulgation of regulations and rules.

Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. Section 44701(a)(4) requires the Administrator to promulgate regulations in the interest of safety for the “maximum hours or periods of service of airmen and other employees of air carriers.” Section 44701(a)(5) requires the Administrator to promulgate “regulations and minimum standards for other practices, methods, and procedure that the Administrator finds necessary for safety in air commerce and national security.” In addition, 49 U.S.C. 44701(d)(1)(A) specifically states that the Administrator, when prescribing safety regulations, must consider the duty of an air carrier to provide service with the highest possible degree of safety in the public interest. Such authority applies to the oversight the FAA exercises to ensure safety of air carrier operations, including crewmember flight, duty, and rest requirements.

Further, section 335(a) of the FAARA 2018 (Pub. L. 115-254, 132 Stat. 3186 (Oct. 5, 2018)), codified at 49 U.S.C. 44701 note, requires the FAA to amend the flight attendant duty period limitations and rest regulation to increase the minimum rest period for flight attendants in domestic, flag, and supplemental operations who are scheduled for a duty period of 14 hours or less. Section 335(a) also prohibits reduction of the rest period under any circumstances.

The FAA defines a flight attendant serving in operations conducted under 14 § part 121 as an individual, other than a flightcrew member, 1 who is assigned by a certificate holder conducting domestic, flag, or supplemental operations to duty in an aircraft during flight time and whose duties include activities related to ensuring cabin safety. 2 Section 121.391 specifies the minimum number of flight attendants required on board a flight, based on maximum payload capacity and seating capacity, for certificate holders conducting passenger-carrying operations under part 121. 3

Any person serving as a flight attendant in part 121 operations must complete the training and qualification requirements of part 121 subparts N and O. 4 These training and qualification requirements include specific programmed hours, 5 as well as airplane type specific knowledge and skill requirements.

Flight attendants are responsible for taking action during emergencies, including administering first aid, conducting aircraft evacuations, responding to inflight fires, managing medical emergencies, and handling passengers who threaten the safety of other passengers or might be unruly or disruptive. They must also be prepared to respond to situations that could threaten the safety of the passengers and the flight, including turbulent air, airplane decompression, and hijackings. They must know the location of emergency exits, fire extinguishers, first aid kits, flotation devices, oxygen masks, and emergency slides, and check emergency equipment before flight. They must assess and verify the suitability of passengers that occupy exit seating, brief passengers on safety equipment, evacuation, and crash landing procedures, and ensure compliance with applicable safety regulations.

On September 25, 2019, the FAA published an ANPRM, Flight Attendant Duty Period Limitations and Rest Requirements (84 FR 50349). The FAA determined that soliciting public input on the regulatory impact of the changes to flight attendant duty and rest requirements codified in Section 335(a) of the FAARA 2018 was appropriate. The FAA also intended for the ANPRM to provide additional avenues for public participation and to inform the FAA's analysis and rulemaking development.

The FAA received 216 comments on the ANPRM. Commenters included many individuals, Airlines for America (A4A), Endeavor Air, Air Line Pilots Association (ALPA), Transportation Trades Department (TTD), Transport Workers Union of America (TWU), American Academy of Sleep Medicine (AASM), Association of Flight Attendants (AFA), International Brotherhood of Teamsters (IBT), International Association of Machinists and Aerospace Workers (IAM), and Association of Professional Flight Attendants (AFPA).

The commenters raised three principal issues: Increased rest period, costs, and implementation. A4A and Endeavor Air provided information indicating the increased rest period would increase costs to certificate holders. ALPA, TTD, TWU, AASM, AFA, IBT, IAM, APFA, and many individuals supported the increased rest period, emphasizing the roles and responsibilities of flight attendants with regard to aviation safety, commenting that flight attendants' performance of their duties is fatigue-inducing and that they would benefit from increased rest. These commenters also stated that the increased rest would not always result in increased costs.

Many commenters supported increasing the rest period to at least 10 consecutive hours. AASM stated that providing flight attendants with a 10-hour minimum rest period should increase their sleep duration and subsequent on-the-job alertness and performance. Some commenters went further to request that the FAA require flight attendants to receive more rest hours, such as a period of 12 hours. Other commenters recommended that for every hour of duty, the FAA should require certificate holders to provide a flight attendant one hour or one and a half hours of rest. In addition, some commenters recommended that the rest period should only begin at hotel check-in, to maximize rest.

Some commenters asked the FAA to consider research on flight attendant fatigue and to look generally at its flight, duty, and rest scheme for flight attendants. AASM stated that further research is required to determine whether the minimum rest period should be modified for duty periods that encroach on the biological night. Additionally, one individual recommended the FAA review existing research on flight attendant fatigue from the Civil Aerospace Medical Institute (CAMI) and suggested that the FAA align flight attendant flight, duty, and rest requirements with flightcrew members' rest schemes.

A4A and Endeavor Air provided information indicating the increased rest period would increase costs to certificate holders. A4A commented that flight attendant rest requirements are necessary and that they strongly support scientifically validated and data-driven countermeasures to prevent fatigue. A4A stated, however, that regulations should be limited to implementing only what is required by the statute and stated the FAA should incorporate cost mitigation measures. A4A also mentioned that the FAA could achieve the safety benefits of this regulation effectively and more efficiently through a risk-based rule in lieu of prescriptive hours-based requirements.

The FAA's action to propose this rulemaking complies with the requirements of section 335(a) of the FAARA 2018. Accordingly, the FAA has scoped this rulemaking to address the discrete, specific statutory mandate in section 335(a) and does not propose further amendments to flight attendant flight, duty, and rest schemes, as some commenters suggested. In addition, the FAA lacks data and supporting research or studies that would support a further increase in the rest period.

The rest requirement provided in this rulemaking is a minimum rest requirement. The FAA notes that, while not part of this rulemaking, section 335(b) of the FAARA 2018 mandates certificate holders conducting operations under part 121 to submit to the FAA flight attendant fatigue risk management plans (FRMP), which encompass a risk-based approach to flight attendant rest consistent with the FAA regulations on rest requirements for flight attendants. Certificate holders have the option to amend their FRMPs to provide flight attendants with more rest than the FAA requires, and nothing in this NPRM would preclude a certificate holder from increasing the rest period.

A4A stated that implementing this proposal would reduce schedule flexibility, result in a potential loss of income for flight attendants, and increase cost to certificate holders due to new hire turnover costs, training costs, scheduling software costs, and travel costs. A4A estimated that it would cost $786 million over 10 years for the 66 percent of flight attendants who are employed by certificate holders that are members of A4A's organization, and estimated $1 billion over 10 years for all certificate holders. A4A noted that the increased rest period may result in flight attendants having “unpaid idle time” away from their home base, resulting in a reduction in the average pay credit per calendar day spent at work. A4A also stated that certificate holders will need to plan for 11 hours of rest instead of 10 hours, in order to ensure an appropriate buffer for delays, and that eliminating certificate holders' ability to reduce rest during day-of operations will drive extensive additional costs and harm flight attendants, who might otherwise choose to stay on duty longer. A4A stated that flight attendants may need to change the way they bid for schedules and may have to choose between flying longer at night or flying more days during the month to get the same hours they are getting now. A4A also stated that less senior flight attendants are likely to be exposed to trips that are most impacted by the implementation of section 335(a) and less desirable schedules, and that flight attendants will have fewer days off per month because they will have to increase the number of trips they fly each month to maintain the same number of flight hours and standard of living they had prior to implementing section 335(a).

A4A further commented that, if a certificate holder does not increase its flight attendant scheduling construction and aircraft route scheduling buffer, it will simply have to manage the consequences and costs of delays that arise out of irregular operations and maintenance. In these circumstances, A4A suggested certificate holders will have to remove the flight attendants that are about to “time out” because they have not received the scheduled rest required by section 335(a) and must assign other flight attendants (if any are available, which might not be the case at many smaller airports) to finish the trip while paying both the timed out and active flight attendant. In the alternative, A4A mentioned certificate holders might push back the departure time of the next flight to which these flight attendants are assigned in order to preserve the scheduled rest periods, creating a cascading chain of delays.

Endeavor Airlines provided a chart indicating that compliance with the increased rest period would result in initial costs of $205,000 and recurring costs of $203,800, based on their estimates for 2020, 2021, and 2022. It stated that because planned rest must increase, less daily activity would be scheduled, driving fewer days off. It also indicated that the increased rest would drive increased costs for software, new hires, and training.

AFA and IBT stated that multiple airlines have already included the additional rest that would result from the rule change required by section 335(a) in their contracts. AFA and IBT further state that these airlines have implemented the additional rest quickly and without incurring additional costs, and that the argument that the increased rest is too costly and difficult to implement is without merit. APFA, IAM, and TWU stated that it is unlikely that certificate holders would undertake any significant costs in implementing a change to a 10-hour minimum rest period for flight attendants. These commenters stated while some airlines claim possible additional costs, the vast majority of flight attendants are guaranteed approximately 10 hours of rest today under their existing terms of work. They also mentioned that costs of compliance would be minimal, as major certificate holders making up over 90 percent of total available seat miles of certificate holders affected by the proposed rule already schedule their crews with at least 10 hours of rest between shifts. TTD stated that current scheduling, operations, and training practices, combined with the fact that a number of certificate holders currently operate with 10-hour rest periods, means that costs incurred by certificate holders are likely to be tempered. TTD expressed skepticism that the rulemaking would qualify as an economically significant rule.

The FAA carefully analyzed the varied comments received on the economic impact of the required rulemaking. In the course of analyzing these comments to the ANPRM, the FAA determined it needed additional, individualized data. As a result, after the ANPRM comment period closed, the FAA conducted additional outreach as discussed later in this preamble.

Many commenters expressed concern that the FAA is past due on rulemaking and implementation of the section 335(a) mandate. APFA, IAM, and TWU stated that delay in implementation is inconsistent with Congressional requirements and that flight attendants deserved more rest, noting the physically demanding aspects of flight attendant duties. TTD endorsed the comments filed by APFA, IAM, and TWU and called on the FAA to proceed immediately with an interim final rule to implement the flight attendant duty period and rest requirements mandated by the FAARA 2018, stating that the FAA must not create artificial impediments to the promulgation of this urgently needed regulatory change. TTD stated that even if the FAA determines that the proposed rule is economically significant, that determination should have no impact on expeditiously publishing a final rule. TTD further stated that by taking aggressive action to apply these fatigue protections, the FAA can swiftly improve the safety and security of the aviation system. ALPA indicated that it understood that the majority of U.S. flight attendants either currently receive 10 hours of rest or would receive such rest by the time the FAA issues a final rule, and that delay in implementing the rest requirement is not acceptable in view of aviation safety and security.

AFA and other commenters stated they assumed the FAA would allow a six-month implementation period. AFA noted that after the FAA published the ANPRM (September 2019), Delta Airlines announced its plans to implement the new rest period in February 2020. AFA asserted that Delta's actions show that certificate holders can implement the new provisions in a few months' time. A4A, however, recommended the FAA propose and adopt an implementation period of at least 12 months to reduce costs.

Section 335(a) required the FAA, in a narrow timeframe, to modify an existing final rule to require that flight attendants receive increased rest. The FAA is implementing this rulemaking requirement consistent with the Administrative Procedure Act and DOT Order 2100.6A, Rulemaking and Guidance Procedures. Regarding comments addressing the compliance period, an extended implementation period would be inconsistent with the intent of this statutory mandate. Moreover, the FAA expects that a delay in the compliance period would only delay the realization of both benefits and costs. Additionally, a delay in the compliance period of less than a full year would be imperceptible in the monetized cost estimates.

The FAA received only limited quantitative information from certificate holders estimating costs in response to the questions contained in the ANPRM. A4A provided aggregated data, but the FAA needed individualized data to complete its regulatory impact analysis of the regulatory change required by section 335(a). Therefore, after the comment period for the ANPRM closed, the FAA conducted additional outreach to nine air carrier certificate holders that would be subject to the amended requirements. The FAA's outreach focused on the current amount of rest the certificate holder provided flight attendants; the impacts from implementing the statutorily mandated rest; and barriers to implementing the statutorily mandated rest. The FAA was able to gather sufficient data to assess the anticipated impacts of requiring the increased rest. Due to the proprietary and confidential nature of the information collected from certificate holders, the FAA has published this information as aggregated summary results. This NPRM and the regulatory evaluation for this proposed rule, however, summarize the correspondence with certificate holders and the information the FAA received from certificate holders to the extent necessary to inform the public of the bases for its proposed determinations in the regulatory evaluation.

Currently, certificate holders conducting domestic, flag, and supplemental operations must fulfill the flight attendant duty period limitations and rest requirements in 14 CFR 121.467. Paragraph (b) of § 121.467 provides that a flight attendant scheduled to a duty period of 14 hours or less must be given a scheduled rest period of at least nine consecutive hours. This rest period must occur between the completion of the scheduled duty period and the commencement of the subsequent duty period. The certificate holder may schedule or reduce the rest period to eight consecutive hours if the certificate holder provides a subsequent rest period of at least 10 consecutive hours that is scheduled to begin no later than 24 hours after the beginning of the reduced rest period.

Section 335(a) of the FAARA 2018 requires “[modification of] the final rule”  6 relating to flight attendant duty period limitations and rest requirements to “ensure that—(A) a flight attendant scheduled to a duty period of 14 hours or less is given a scheduled rest period of at least 10 consecutive hours; and (B) the rest period is not reduced under any circumstances.” Consistent with the requirement of section 335(a) of the FAARA 2018, the proposed rule would amend § 121.467(b)(2) and (b)(3) to require certificate holders operating under part 121 to provide 10 hours of consecutive rest for flight attendants scheduled to a duty period of 14 hours or less, remove the allowance for a reduction in rest, and explicitly prohibit a reduction in the 10 hours of rest. For the reasons described in the FAA's response to ANPRM comments on implementation, certificate holders would be required to comply with the proposed rule upon the effective date, 30 days after publication of the final rule in the Federal Register .

Federal agencies consider impacts of regulatory actions under a variety of executive orders and other requirements. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify the costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year. The current threshold after adjustment for inflation is $158,000,000, using the most current (2020) Implicit Price Deflator for the Gross Domestic Product. The FAA has provided a detailed Regulatory Impact Analysis (RIA) in the docket for this rulemaking. This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule.

In conducting these analyses, the FAA has determined that this proposed rule: Is a “significant regulatory action” as defined in section 3(f) of Executive Order 12866; may have a significant economic impact on a substantial number of small entities; will not create unnecessary obstacles to the foreign commerce of the United States; and will not impose an unfunded mandate on State, local, or tribal governments, or on the private sector.

This section provides a summary of the FAA's Regulatory Impact Analysis (RIA). Please see the RIA available in the docket for the rulemaking for more details.

The baseline for analysis of the incremental benefits and costs of the proposed rule includes the regulations regarding flight attendant rest and existing practices, the affected entities and flight attendants, and potential safety and health risks. Again, note that the baseline presented in this document predates the coronavirus (COVID-19) public health emergency. It is possible that when the rulemaking becomes final, the actual conditions for certificate holders may differ from the information collected prior to the public health emergency.

Currently, certificate holders conducting domestic, flag, or supplemental operations under 14 CFR part 121 must provide a flight attendant scheduled to a duty period of 14 hours or less a scheduled rest period of at least 9 consecutive hours. The certificate holder may schedule or reduce the rest period to eight consecutive hours if the certificate holder provides a subsequent rest period of at least 10 consecutive hours that is scheduled to begin no later than 24 hours after the beginning of the reduced rest period. In response to the FAARA 2018 and other circumstances (including that some airlines schedule flight attendants to be synchronized with those for pilots), 12 certificate holders already schedule flight attendants for 10 hours of rest. The provision may be reflected in a certificate holder's collective bargaining agreement with the flight attendant union.

The FAA's Safety Performance Analysis System (SPAS) contains information on certificate holders conducting operations under part 121 and the number of flight attendants. Table 1 provides a summary by category of carrier. 7

Bureau of Transportation Statistics data indicate that flight attendants serve hundreds of millions of passengers on close to 10 million flights annually in the United States. 8 Flight attendants perform safety and security functions while on duty in addition to serving customers. Voluntary reports submitted by flight attendants to the Aviation Safety Reporting System indicate the potential for fatigue to be associated with poor performance of safety and security related tasks. For example, in 2017, a flight attendant reported almost causing the gate agent to deploy a slide, which he/she attributed to, among other causes, having been fatigued. 9 Additional examples of voluntary reports regarding flight attendant fatigue are included in the RIA. Other reports included poor response to a passenger incident and feeling pressure to work despite being fatigued.

The benefits of the proposed regulation would include reductions in safety risks, and any improvements in flight attendant health, that may be associated with the increase in flight attendant minimum rest periods. Flight attendants must be prepared to respond quickly to emergencies including evacuations, crash impacts, post-crash or inflight fires, ditching, 10 runway over runs, security events, and similar situations. Commenters on the ANPRM note that the scientific bases for fatigue impacts on task performance are well understood, although the specific impact to flight attendant task performance has not been well-studied. Benefits of increasing the minimum flight attendant rest period may accrue through reduced safety risks. However, as discussed in additional detail in the RIA, any reductions in safety risk are likely to be small since they would also depend on the frequency which safety-oriented tasks occur, and currently U.S. air carriers experience very few accidents resulting in death or serious injury. Additionally, given the potential impact of fatigue on health, the proposed rule could also result in health benefits for flight attendants.

The FAA does not have sufficient data to estimate a baseline level of safety risk associated with flight attendant fatigue. In addition, it is also difficult to estimate (and the FAA does not have data on) the impact of the proposed rule in reducing flight attendant fatigue-related performance errors ( i.e., how outcomes will differ compared to under the current rest period). Similarly, because multiple factors affect flight attendant health, it is difficult to identify health risks specifically attributable to rest period-related fatigue and the impact of the proposed rest requirement in reducing that risk.

The FAA used data that it collects from certificate holders conducting operations under part 121 and information submitted in response to the ANPRM, as supplemented or verified through additional outreach, to estimate the costs that may be associated with the proposed rule. To better understand the ANPRM responses, the FAA conducted additional outreach to three major, three national, and three regional certificate holders in January and February 2020. This effort assisted in applying the ANPRM comment responses to estimate costs.

The FAA used this data and information to estimate incremental costs, including new hires of flight attendants, onboarding, training, travel, and modifying crew scheduling software. As some of these certificate holders implemented the proposed rest requirement around the time the FAARA 2018 was enacted or shortly thereafter, uncertainty exists regarding whether implementation occurred due to anticipation of the required rule change or other business reasons independent of regulatory action. Therefore, the FAA measures the costs of the proposed rule from two baselines to capture the different levels of incremental effects attributable to the rule, consistent with the Office of Management and Budget's (OMB) guidelines:  11

• Existing practices baseline—certificate holder practices at the time of the proposed rule.

• Pre-statutory baseline—certificate holder practices at the time of the FAARA 2018. 12

Table 2 shows the affected entities by category in each baseline scenario and the current number of flight attendants.

Table 3 provides the estimates of annualized and present value costs using both baselines. The key factor influencing the magnitude of the costs is the selection of the relevant baseline for the analysis. Note that uncertainties exist regarding the characterization of both baselines, as the FAA does not have complete information on existing practices or recent changes that carriers have made as a result of the FAARA 2018 or in anticipation of the rule. In addition, with respect to hires, it can be difficult to differentiate impacts due to a requirement to provide 10 hours of rest that cannot be reduced and other factors including growth or other trends. The outreach effort confirmed that the type of operations, which are specific to each certificate holder, affect the impacts.

Table 4 provides a breakout by category of certificate holder (for the seven percent discount rate scenario). The FAA modeled costs per certificate holder as a function of the certificate holder's size (number of flight attendants). Table 5 shows the estimated increases in flight attendants across categories by baseline scenario. These results are based on the hiring needs identified by commenters that responded to the ANPRM. However, the FAA acknowledges that the input values may not be sufficiently representative of the different certificate holders in each category.

Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.

Ground-level ozone is formed when nitrogen oxides (NO X ) and volatile organic compounds (VOCs) react in the presence of sunlight. Referred to as ozone precursors, these two pollutants are emitted by many types of pollution sources, including motor vehicles, power plants, industrial facilities, and area wide sources, such as consumer products and lawn and garden equipment. Scientific evidence indicates that adverse public health effects occur following a person's exposure to ozone. These effects are more pronounced in children and adults with lung disease. Breathing air containing ozone can reduce lung function and inflame airways, which can increase respiratory symptoms and aggravate asthma or other lung diseases. In 1979, in response to this scientific evidence, the EPA promulgated the first ozone NAAQS, the 0.12 part per million (ppm) 1-hour ozone NAAQS. 1 The EPA had previously promulgated a NAAQS for total photochemical oxidants.

On July 18, 1997, the EPA promulgated a revised ozone NAAQS of 0.08 ppm, averaged over eight hours. 2 This standard was determined to be more protective of public health than the previous 1979 1-hour ozone standard. In 2008, the EPA revised the 8- hour ozone NAAQS from 0.08 to 0.075 ppm. 3 On October 26, 2015, the EPA strengthened the ground-level ozone NAAQS to 0.070 ppm, based on extensive scientific evidence about ozone's effects on public health and welfare. 4 Effective August 3, 2018, the DMNFR area was designated as Marginal nonattainment for the more stringent 2015 8-hour ozone NAAQS. 5 The DMNFR NAA is comprised of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson counties and portions of Larimer and Weld counties. 6

CAA sections 172 and 182 identify requirements for ozone NAAs. Under section 172(c)(5) of the CAA Colorado is required to implement a NNSR Permit Program. 7 On July 27, 2020, through the Colorado Department of Public Health and Environment (CDPHE), Colorado submitted a SIP revision titled, “2015 Ozone National Ambient Air Quality Standard (NAAQS)—Denver Metro/North Front Range Marginal Nonattainment Area Requirements” to satisfy, in part, the NNSR permit program requirement under CAA section 172(c)(5). 8 Colorado met the reasonable notice and public hearing requirements of CAA section 110(a) for the SIP revision through notice in the Denver Legal Post on May 23, 2020, and a public hearing held on June 18, 2020. 9 Colorado's SIP revision also included a base year emission inventory and emission statement certification to satisfy additional Marginal nonattainment requirements under CAA sections 182(a)(1) and 182(a)(3)(B), respectively, which the EPA will act on separately from the NNSR certification that is the subject of this action.

NNSR is a preconstruction review permit program that applies to new major stationary sources or major modifications at existing sources within a NAA and is required pursuant to CAA sections 172(c)(5) and 173. 10

NNSR permit program requirements were adopted for the 2015 ozone NAAQS at 40 CFR 51.1314 by the implementation rule for the 2015 8-hour ozone NAAQS. 11 The minimum SIP requirements for NNSR permitting programs for the 2015 8-hour ozone NAAQS are located at 40 CFR 51.165. 12 These NNSR program requirements include those promulgated in the “Phase 2 Rule” implementing the 1997 8-hour ozone NAAQS, the 2008 Ozone NAAQS SIP implementation Rule, and the 2015 SIP Requirements Rule. 13 Under the Phase 2 Rule, the SIP for each ozone NAA must contain NNSR provisions that:

• Set major source thresholds for NO X and VOCs pursuant to 40 CFR 51.165(a)(1)(iv)(A)(1)(i)-(iv) and (2);

• Classify physical changes as a major source if the change would constitute a major source by itself pursuant to 40 CFR 51.165(a)(1)(iv)(A)(3);

• Consider any significant net emissions increase of NO X as a significant net emissions increase for ozone pursuant to 40 CFR 51.165(a)(1)(v)(E);

• Consider certain increases of VOC emissions in extreme ozone NAAs as a significant net emissions increase and a major modification for ozone pursuant to 40 CFR 51.165(a)(1)(v)(F);

• Set significant emissions rates for VOC and NO X as ozone precursors pursuant to 40 CFR 51.165(a)(1)(x)(A)-(C) and (E);

• Contain provisions for emissions reductions credits pursuant to 40 CFR 51.165(a)(3)(ii)(C)(1)-(2);

• Provide that the requirements applicable to VOC also apply to NO X pursuant to 40 CFR 51.165(a)(8); and

• Set offset ratios for VOC and NO X pursuant to 40 CFR 51.165(a)(9). 14

Colorado's SIP Revision certifies that Colorado's existing NNSR permit program, covering the DMNFR NAA for the 2015 8-hour ozone NAAQS, is at least as stringent as the minimum requirements for NNSR permitting programs for the ozone NAAQS at 40 CFR 51.165. 15 Colorado's SIP-approved NNSR program, established in the Colorado Code of Regulations (CCR), Regulation 3 Part D applies, in part, to any new major stationary source or major modification in a NAA which results in the emission of 100 tons per year or more of any NSR-regulated pollutant for which the area is nonattainment. 16 Additionally, Regulation 3 Part D specifies that a stationary source that is considered major for VOCs or NO X will be considered major for ozone. 17 General emission offset requirements of at least a 1.1:1 in Marginal ozone NAAs pursuant to CAA section 182(a)(4) are met by Regulation 3 Part D, section V.A.3.a(i)(a). 18 The EPA last approved revisions to Colorado's SIP-approved NNSR permit program on May 3, 2019, in submitted revisions to Regulation 3, Part D. 19 Furthermore, Colorado has previously submitted, and the EPA has approved on July 3, 2018, a SIP revision certifying that the State's federally approved NNSR permit program met the requirement in 40 CFR 51.1114 under the 2008 8-hour Ozone NAAQS, with the minimum SIP requirements for NNSR permit programs located in 40 CFR 51.165. 20 The EPA is proposing to approve Colorado's certification that the SIP-approved New Source Review permitting requirements in Regulation 3, Part D of the CCR meet the requirements located in 40 CFR 51.1314 and 40 CFR 51.165.

We are proposing to approve the NNSR Permit Program certification provided in Colorado's SIP revision. The certified NNSR Permit Program was prepared in accordance with requirements of sections 172(c)(5) and 173 of the CAA and fulfills the specific minimum SIP requirements of 40 CFR 51.165. The EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

Under the CAA, 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 CAA. Accordingly, this action merely proposes to approve 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 CAA; and

• Does not provide 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 EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed 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).

This is a summary of the Commission's document (Public Notice), in WT Docket No. 20-133; DA 21-1263, released on October 8, 2021. The full text of this document is available on the Commission's website at https://docs.fcc.gov/public/attachments/DA-21-1263A1.pdf. This document seeks to supplement the record of the Commission's Notice of Proposed Rulemaking ( NPRM ), Modernizing and Expanding Access, 85 FR 40168, July 6, 2020, to the 70/80/90 GHz Bands, WT Docket Nos. 20-133; 10-153, 15-244; FCC 20-76; RMs-11824, 11825, adopted June 9, 2020, and released June 10, 2020. The NPRM may also be downloaded https://docs.fcc.gov/public/attachments/FCC-20-76A1.pdf.

1. As described in greater detail in the 70/80/90 GHz NPRM (85 FR 40168, July 6, 2020), in the United States, the 70/80/90 GHz bands are allocated on a co-primary basis for Federal and non-Federal use, variously for terrestrial, satellite, radio astronomy and radiolocation uses. 1 In 2003, the Commission established a two-step, non-exclusive licensing regime for non-Federal use of the 70/80/90 GHz bands. Users must first obtain a nationwide, non-exclusive license from the Commission, and then register individual links through a third-party database manager. Non-Federal licensees may use the 70/80/90 GHz bands for any point-to-point, non-broadcast service.

2. In June 2020, the Commission adopted the 70/80/90 GHz NPRM, which sought comment on potential rule changes for non-Federal uses of the bands proposed by interested parties. Certain of these proposals, such as changes to antenna standards and link registration processes, were aimed at improving efficiency in traditional uses of the bands, such as wireless backhaul. Other inquiries contemplated use of the bands for new service offerings, such as Aeronet's proposals that the Commission authorize point-to-point links to endpoints in motion to facilitate broadband service to ships and aircraft, provided that they do not cause interference to other authorized uses. 2 The Commission also sought comment on whether the 70/80/90 GHz bands could accommodate other types of services, such as High Altitude Platform Stations (HAPS) or similar services. 3 In the record received in response to the 70/80/90 GHz NPRM, several commenters expressed support for the provision of new services in these bands, including bringing broadband internet access capabilities to areas where such access may not be consistently available. Other parties have expressed concerns about the introduction of new services in the bands.

3. In this document, the Commission provides an opportunity for commenters to supplement the record regarding the provision of new services in the 70/80/90 GHz bands. 4 In particular, the Commission is interested in the feasibility of permitting HAPS or other stratospheric-based platform services in these bands and the Commission seeks comment on coordinating with incumbents in the band. The Commission's rules define a “High Altitude Platform Station” as “[a] station located on an object at an altitude of 20 to 50 km and at a specified, nominal, fixed point relative to the Earth.”  5

4. The Commission seeks further input on whether it should consider authorizing HAPS or other stratospheric-based platform services in any portion of the 70/80/90 GHz bands. 6 How would HAPS be used in these bands? What sort of services would be provided or supported by these systems? The Commission also seeks comments on whether HAPS or other stratospheric-based platform services are likely to be commercially viable. 7 Alternatively, are stratospheric-based platform services likely to be developed to support non-commercial use, either for private, not-for-profit uses, or in support of local, state, or Federal governments?

5. The Commission also seeks comments on the potential for HAPS, or other stratospheric-based platform services, to cause harmful interference to incumbent or potential future services in these, or adjacent, bands including both terrestrial and satellite operations. Advocates for HAPS or similar services assert that they can coexist with incumbent users of the 70 GHz and 80 GHz bands and should be allowed to use these bands without an arbitrary ceiling, e.g., 50,000 feet, for nominally fixed or antennas in motion. If the Commission authorizes HAPS or other stratospheric-based platform services in these bands, are there any limitations or restrictions on the deployment of such services that the Commission should impose in order to guard against the potential for interference into incumbent operations, such as altitude restrictions, power limits, transmitter design considerations, directional constraints, additional emission limits, or other requirements, including new or revised coordination requirements? To aid other stakeholders in the bands, and the adjacent bands, to evaluate potential interference concerns and submit their own analyses, the Commission also seeks specific information about anticipated stratospheric-based platform system operating parameters including transmission direction, deployment densities, earth station elevation angles, station heights, antenna characteristics ( e.g. , antenna polarization, antenna pattern mask), station Equivalent Isotropically Radiated Power (EIRP), and operating bandwidths (including out-of-band performance).

6. In the 70/80/90 GHz NPRM, the Commission also sought comment on the international coordination implications of the services proposed. The Wireless Telecommunication Bureau now specifically seeks comment on any international implications related to HAPS or other stratospheric-based platform services in the 70/80/90 GHz bands.

7. If the Commission does authorize HAPS or other stratospheric-based services in some or all of the 70/80/90 GHz bands, what service rules should apply? Could these new services be registered and coordinated through the existing third-party database manager process? The Commission seeks comments on what changes to the registration and coordination process would be necessary to facilitate the deployment of HAPS or other stratospheric-based services. The current 70/80/90 GHz coordination process only considers fixed systems. If HAPS is authorized, should it be limited to nominally fixed stations?

8. Relatedly, the Commission also seeks to further develop the record on Aeronet's proposal to permit the use of “Scheduled Dynamic Datalinks” (SDDLs). In the 70/80/90 GHz NPRM, the Commission sought comment on how links to endpoints-in-motion could affect existing services in the 70/80/90 GHz bands. Several commenters filed comments and technical analyses supporting Aeronet's proposals, while several commenters express concern about potential interference to incumbents. In view of the concerns expressed, the Commission seeks further detailed technical studies demonstrating that deployment of SDDLs would not cause harmful interference to incumbents, co-primary users, adjacent band uses or potential future uses of the band, including FS, FSS, HAPS or other stratospheric-based platform services, and the adjacent band EESS (passive) and radio astronomy operations. To aid other stakeholders in the bands, and the adjacent bands, to evaluate potential interference concerns and submit their own analyses, the Commission also seeks specific information about anticipated SDDL system operating parameters, including station heights, antenna characteristics ( e.g. , antenna polarization, antenna pattern mask), station EIRP, operating bandwidths (including out-of-band performance), and ground station gains. In this context, the Commission notes that on October 4, 2021, Aeronet filed a coexistence analysis of its proposed SDDL system and the Space X satellite system. The Commission seeks comments on this filing, including the extent to which it addresses the questions raised in this paragraph and related stakeholder concerns.

This is a summary of the FCC's Order, DA 21-1297, released October 15, 2021. The full text of this Order is available at: https://docs.fcc.gov/public/attachments/DA-21-1297A1.pdf. The full text of Global Tel*Link Corporation (GTL)'s motion is available at: https://ecfsapi.fcc.gov/file/1007291601627/GTL%20Extension%20Request%20(10-6-21).pdf .

1. By this Order, the Wireline Competition Bureau (Bureau) of the Federal Communications Commission grants in part and denies in part a motion filed by Global Tel*Link Corporation (GTL) seeking extensions of time for (1) filing Paperwork Reduction Act (PRA) comments on new information collection requirements adopted in the 2021 ICS Order currently due October 25, 2021, (2) reply comments in response to the 2021 ICS Further Notice, currently due October 27, 2021, and (3) comments and reply comments regarding the Third Mandatory Data Collection, currently due November 4 and November 19, 2021. In view of GTL's Extension Request and the record developed in response to it, we grant an extension of time to file reply comments in response to the 2021 ICS Further Notice and deny GTL's other extension requests as set forth below. As a result, reply comments in response to the 2021 ICS Further Notice are now due on December 17, 2021. All other comment and reply comment deadlines in this proceeding remain unchanged.

2. On May 24, 2021, the Commission released the ICS Third Report and Order, Order on Reconsideration, and Fifth Further Notice of Proposed in this proceeding. In the 2021 ICS Order, the Commission adopted various rules, some of which require approval from the Office of Management and Budget (OMB) under the PRA. On August 25, 2021, the Federal Register published a notice setting a comment date of October 25, 2021 on the rules adopted in the 2021 ICS Order that require OMB approval under the PRA.

3. The 2021 ICS Further Notice set deadlines for filing comments and reply comments at 30 and 60 days, respectively, after a summary of the item was published in the Federal Register . The Federal Register published that summary on July 28, 2021, establishing an August 27, 2021 comment deadline and a September 27, 2021 reply comment deadline. In response to a prior motion for extension of time, the Bureau released an order extending those deadlines to September 27, 2021 and October 27, 2021, respectively.

4. As part of the 2021 ICS Order, the Commission also adopted a Third Mandatory Data Collection. The Commission directed WCB and the Office of Economics and Analytics (collectively WCB/OEA) to develop instructions and a template for the data collection to be submitted to OMB for its approval under the PRA no later than 90 days after the 2021 ICS Order becomes effective. We interpret this reference to the effective date of the 2021 ICS Order as referring to the effective date of the rules not requiring OMB approval under the PRA. That effective date is October 26, 2021. As the 2021 ICS Order will be effective on October 26, 2021, WCB/OEA must submit a template and instructions to OMB no later than January 24, 2022. On September 22, 2021, WCB/OEA released a public notice seeking comment on the proposed instructions, a template, and certification forms for the Third Mandatory Data Collection. The Third MDC Public Notice set the comment deadline at 30 days after the date of publication in the Federal Register and the reply comment deadline at 45 days after the date of publication in the Federal Register . The Federal Register published a summary of the public notice on October 5, 2021 and established deadlines of November 4, 2021 for comments and November 19, 2021 for reply comments on the Third MDC Public Notice.

5. On October 6, 2021, GTL filed its Extension Request, seeking to extend the filing deadlines for (1) PRA comments for the new information collection requirements adopted in the 2021 ICS Order from October 25, 2021 to November 8, 2021; (2) reply comments on the 2021 ICS Further Notice from October 27, 2021 to November 17, 2021; and (3) comments and reply comments on the Third Mandatory Data Collection from November 4, 2021 and November 19, 2021 to November 24, 2021 and December 9, 2021, respectively. GTL explains that it is “in the process of implementing the interim rates, ancillary service charges, and other changes” adopted in the 2021 ICS Order that will become effective October 26, 2021. GTL highlights that the October 26 implementation deadline in conjunction with the other comments deadlines present a “perfect storm” of deadlines and argues that “changing only one comment date will just continue to perpetuate the problem given the successive comment deadlines.” GTL submits that its extension requests are in the public interest because they would allow GTL and other providers to focus on the October 26, 2021 implementation deadline while allowing stakeholders time to evaluate the information submitted in initial comments on the 2021 ICS Further Notice and to respond to the questions in the Third MDC Public Notice. GTL explains that the National Sheriffs' Association, Securus Technologies, Pay Tel Communications, and NCIC Inmate Communications do not oppose its extension requests and that several advocacy groups support extending the reply comment deadline on the 2021 ICS Further Notice to December 10, 2021. GTL notes that the Prison Policy Initiative does not support extending that reply comment deadline but does not object to extending the PRA comment deadline and the deadlines on the Mandatory Data Collection.

6. On October 8, 2021, the Wright Petitioners, Benton Institute for Broadband & Society, Free Press, New America's Open Technology Institute, Public Knowledge, and the United Church of Christ, OC Inc. (the Public Interest Parties) filed a reply to GTL's Extension Request. The Public Interest Parties support extending the deadline to file reply comments in connection with the 2021 ICS Further Notice but oppose GTL's request for extensions of the PRA and Third Mandatory Data Collection deadlines. The Public Interest Parties also propose further extending the deadline for reply comments on the 2021 ICS Further Notice to December 17, 2021, arguing that such an extension “will allow interested parties to fully evaluate and respond to issues raised in the comments while also submitting PRA and Third Mandatory Data Collection comments.” The Public Interest Parties emphasize that “[g]iven the importance of obtaining updated cost data as soon as possible . . . it is critical that the Third Mandatory Data Collection is finalized `not later than 90 days' after the effective date of the 2021 ICS Order, as required by the Commission” and argue that extending deadlines related to the Third Mandatory Data Collection “is unnecessary, could harm the public interest, and risks delaying the collection itself.”

7. As set forth in section 1.46 of the Commission's rules, it is the policy of the Commission that extensions of time shall not be routinely granted. However, extensions may be considered “to the extent that good cause for an extension is demonstrated.” The criteria for granting requests for extensions of time “are that the extension be in the public interest, cause no harm to any party in the proceeding, and cause no significant delay.” The Commission has previously found that an extension of time is warranted when it is “necessary to ensure that the Commission receives full and informed responses and that affected parties have a meaningful opportunity to develop a complete record for the Commission's consideration.”

8. Here, we find good cause to extend the deadline to file reply comments in response to the 2021 ICS Further Notice, as proposed by both GTL and the Public Interest Parties. As an initial matter, we are sensitive to GTL's concern that the flow of implementation and comment deadlines in this proceeding create a “perfect storm” that, without some adjustment, would make it difficult for GTL and other parties to meaningfully participate in each comment process. We appreciate what appears to be the unanimous support of interested parties for the goal of more fully developing the record in this proceeding. By moving the deadline to file reply comments on the 2021 ICS Further Notice to well after both the deadline for reply comments on the Third MDC Public Notice and the December 6, 2021 deadline for PRA comments on the Third Mandatory Data Collection, we are persuaded that all interested parties will be granted sufficient time to meaningfully respond to each of the relevant deadlines. Accordingly, we extend the deadline to file reply comments in response to the 2021 ICS Further Notice to December 17, 2021.

9. However, we do not find good cause to extend the deadline for commenting on the paperwork implications of the consumer disclosure requirements and requirements for providers seeking waiver of the Commission's rate cap and ancillary charge fee caps adopted in the 2021 ICS Order. Parties have known that those requirements would be subject to OMB approval since the Commission released the 2021 ICS Order on May 24, 2021. Accordingly, we believe there has been ample time to consider the paperwork implications of those requirements, and no party has provided an explanation as to why an extension of this deadline would be reasonable or in the public interest in light of that fact. We find especially meaningful the fact that an extension of this deadline would only delay the effective date of the information collection requirements adopted in the 2021 ICS Order. The consumer disclosure requirements, for example, are grounded in the “strong public interest in facilitating greater transparency” with respect to inmate calling services rates for incarcerated people and their loved ones who “ultimately bear the burden of these payments.” As such, we conclude that an extension of this deadline would not serve the public interest.

10. We also do not find good cause to delay deadlines associated with the Third Mandatory Data Collection. As the Commission explained in the 2021 ICS Order, the Third Mandatory Data Collection “is essential to enable [it] to adopt permanent interstate and international rate caps,” and that “the benefits of conducting a third collection far outweigh any burden on providers.” GTL's proposal to extend the comment deadline risks delaying the Third Mandatory Data Collection. Moreover, delaying these comment deadlines could endanger the Commission-established January 24, 2022 deadline for WCB/OEA to submit the template and instructions for the Third Mandatory Data Collection to OMB, as any delays in these comment deadlines would significantly limit the time WCB/OEA have to review the comments prior to the January 24, 2022 deadline or alternatively would result in adversely delaying the submission of the data collection to OMB. In light of the clear importance and time constraints of the Third Mandatory Data Collection, we conclude that GTL has not shown good cause to extend these deadlines nor would it serve the public interest to do so.

11. On balance, we conclude that extending the reply comment deadline for the 2021 ICS Further Notice to December 17, 2021 will provide interested parties the time needed to participate in each comment or reply cycle as desired without unnecessarily impeding or delaying the Third Mandatory Data Collection or implementation of the transparency rules.

12. This action is taken pursuant to delegated authority 47 CFR 0.291.