This action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing Agreement and Order No. 983, as amended (7 CFR part 983), regulating the handling of pistachios grown in California, Arizona, and New Mexico. Part 983 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers and handlers of pistachios operating within the production area, and a public member.

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 12866 and 13563. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.

This proposed rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have tribal implications. AMS has determined this proposed rule is unlikely to have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, pistachio handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate would be applicable to all assessable pistachios for the 2021-22 production year and continue until amended, suspended, or terminated. The production year runs from September 1 to August 31. This proposed rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed no later than 20 days after the date of the entry of the ruling.

This proposed rule would increase the assessment rate from $0.00015 per pound of pistachios, the rate established for 2020-21 and subsequent production years, to $0.0007 per pound of pistachios for 2021-22 and subsequent production years.

The Order authorizes the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. Members are familiar with the Committee's needs and with costs of goods and services in their local area and are in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.

For 2020-21 and subsequent production years, the Committee recommended, and USDA approved, an assessment rate of $0.00015 per pound of pistachios. This assessment rate would continue to be in effect from production year to production year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on July 20, 2021, and unanimously recommended expenditures of $828,000 and an assessment rate of $0.0007 per pound of pistachios handled for 2021-22 and subsequent production years. In comparison, the prior year's budgeted expenditures were $679,800. The proposed assessment rate of $0.0007 is $0.00055 higher than the rate currently in effect. The Committee recommended increasing the assessment rate to pay for additional Committee staff in preparation for the retirement of key staff positions (manager and administrative assistant) and to provide adequate income to cover all of the Committee's budgeted expenses for the 2021-22 production year.

Major expenditures recommended by the Committee for the 2021-22 production year include $462,500 for personnel expenses, $125,000 for research, $100,000 for a contingency fund, $82,700 for administration, and $57,800 for office expenses. Budgeted expenses for these items in the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, and $57,600, respectively.

The Committee derived the recommended assessment rate by considering anticipated expenses, an estimated crop of 975,000 million pounds of pistachios, and the amount of funds available in the authorized reserve. Income derived from handler assessments, calculated at $682,500 (975,000,000 pounds multiplied by $0.0007 assessment rate), along with other income ($220,200), would be adequate to cover budgeted expenses of $828,000. Excess assessment revenue would be added to the Committee's reserve fund. Funds in the Committee's financial reserve are expected to be approximately $385,157 at the end of the 2021-22 production year, which would be within the Order's requirement of no more than approximately two production years' budgeted expenses.

The assessment rate proposed in this rulemaking would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate would be in effect for an indefinite period, the Committee will continue to meet prior to or during each production year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. Dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2022-23 production year budget, and those for subsequent production years, would be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 19 handlers subject to regulation under the Order, and approximately 1,624 producers of pistachios in the production area. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts of less than $1,000,000, and small agricultural service firms have been defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).

According to the National Agricultural Statistics Service (NASS), the national average producer price for pistachios for the 2019-20 production year was $2.75 per pound. Committee data indicates 2019-20 production year total pistachio production was 582,111,271 pounds. The total 2019-20 production year value of the pistachio crop was calculated as $1,600,805,995 (582,111,271 pounds times $2.75 per pound equals $1,600,805,995). Dividing the crop value by the estimated number of producers (1,624) yields an estimated average receipt per producer of $985,718, which is just below the SBA threshold for small producers.

According to USDA Market News data, the reported terminal price for 2021 for pistachios ranged between $150.00 to $250.00 per 25-pound carton. The average of this range is $200.00 ($150.00 plus $250.00 divided by 2 equals $200.00). Dividing the average value by 25-pounds per carton yields an estimated average price per pound of $8.00 ($200.00 average value for 25-pound carton divided by 25). Multiplying the 2019-20 production year total pistachio production of 582,111,271 pounds by the estimated average price per pound of $8.00 equals $4,656,890,168. Dividing this figure by 19 regulated handlers yields estimated average annual handler receipts of $245,099,483, which is well above the SBA threshold for small agriculture service firms.

Therefore, using the above data, and assuming a normal distribution, the majority of pistachio producers may be classified as small entities and the majority of handlers of pistachios may be classified as large entities.

The proposed assessment rate of $0.0007 that the Committee approved complies with section 983.71(b) of the Order, which states that any proposed assessment rate must not exceed one-half of one percent of the average price received by producers in the preceding production year. The average price received by producers in the preceding production year was $2.75 per pound of pistachios. Thus, $2.75 times 0.5 percent equals $0.01375, which is greater than the proposed assessment rate of $0.0007.

This proposal would increase the assessment rate collected from handlers for 2021-22 and subsequent production years from $0.00015 to $0.0007 per pound of pistachios. The Committee unanimously recommended 2021-22 production year expenditures of $828,000 and an assessment rate of $0.0007 per pound of pistachios handled. The proposed assessment rate of $0.0007 per pound of pistachios is $0.00055 higher than the current rate. The volume of assessable pistachios for the 2021-22 production year is estimated to be 975 million pounds. Thus, the $0.0007 per pound assessment rate should provide $682,500 in assessment income (975,000,000 multiplied by $0.0007). Income derived from handler assessments, along with an estimated $220,000 of other income, would be adequate to cover budgeted expenses for the 2021-22 production year.

Major expenditures recommended by the Committee for the 2021-22 production year include $462,500 for personnel expenses, $125,000 for research, $100,000 for a contingency fund, $82,700 for administration, and $57,800 for office expenses. Budgeted expenses for these items in the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, and $57,600, respectively.

The Committee recommended increasing the assessment rate due to cover the Committee's budgeted expenses for the 2021-22 production year and maintain its financial reserve. Additionally, the Committee has approved a hiring search for both the Manager and Administrative Assistant, as both are expected to retire in the near future. The increased assessment income would accommodate the hiring of additional staff to aid in the transition.

Prior to arriving at this budget and assessment rate recommendation, the Committee discussed an alternative that considered the timing of when additional staff salaries would be required to assist the management transition. However, the Committee determined that the recommended assessment rate would fully fund budgeted expenses, avoid utilizing reserves, and permit the Committee to hire the needed staff to facilitate the replacement of the key management positions.

This proposed rule would increase the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and a portion of assessment costs may be passed on to producers. However, these costs would be offset by benefits derived by the operation of the Order.

The Committee's meeting was widely publicized throughout the pistachio industry. All interested persons were invited to attend the meeting and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the July 20, 2021, meeting was a public meeting, and all entities, both large and small, were able to express views on this issue. Interested persons are invited to submit comments on this proposed rule, including regulatory and information collection impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes in those requirements would be necessary as a result of this proposed rule. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would not impose any additional reporting or recordkeeping requirements on either small or large pistachio handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 30-day comment period is provided to allow interested persons to respond to this proposed rule. All written comments timely received will be considered before a final determination is made on this matter.

For reasons set forth in the preamble, Agricultural Marketing Service proposes to amend 7 CFR part 983 as follows:

This action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing Agreement and Marketing Order No. 986, as amended (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part 986, (referred to as “the Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Council locally administers the Order and is comprised of growers and handlers of pecans operating within the production area, and one accumulator and one public member.

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 12866 and 13563. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.

This proposed rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have tribal implications. AMS has determined that this proposed rule is unlikely to have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, pecan handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rates would be applicable to all assessable pecans for the 2021-22 fiscal year, and continue until amended, suspended, or terminated.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

The Order provides that based on the recommendation of the Council or other available data, the Secretary shall fix three base rates of assessments for inshell pecans handled during each fiscal year. This proposed rule would decrease the assessment rates from $0.03 per pound for improved varieties and $0.02 per pound for native and seedling varieties and for substandard pecans, the rates that were established for the 2016-17 and subsequent fiscal years, to $0.01 per pound for improved varieties and $0.00 per pound for native and seedling varieties and for substandard pecans handled for the 2021-22 and subsequent fiscal years.

The Order authorizes the Council, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Council are familiar with the Council's needs and with the costs of goods and services in their local area and can formulate an appropriate budget and assessment rates. The assessment rates are formulated and discussed in a public meeting and all directly affected persons have an opportunity to participate and provide input.

For the 2016-17 and subsequent fiscal years, the Council recommended, and USDA approved, assessment rates of $0.03 per pound for improved varieties and $0.02 per pound for native and seedling varieties and for substandard pecans handled. The assessment rates continue in effect from fiscal year to fiscal year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Council or other information available to USDA.

The Council held a virtual meeting on September 22, 2021, and recommended 2021-22 expenditures of $9,002,508, and a decreased assessment rate of $0.01 per pound of improved varieties, and $0.00 per pound for native and seedling varieties and for substandard pecans. In comparison, the previous fiscal year's budget expenditures were $11,741,400. The assessment rate for improved varieties of $0.01 and the assessment rate of $0.00 for native and seedling varieties and for substandard pecans are $0.02 lower than the rates currently in effect.

On February 12, 2021, USDA established the Pecan Promotion, Research and Information Order, a new research and promotion program. Under the new program, research and promotion activities for pecans would be funded through the collection of assessments from U.S. growers and importers.

With the new program in effect, the Council recommended reducing expenditures for research and promotion under the Order. With these reductions, total budgeted expenditures for 2021-22 are estimated at $9,002,508 which is $2,738,892 less than the $11,741,400 budgeted for 2020-21. The Council unanimously voted to decrease the assessment rates to reflect the reduction in expenditures, and to offset the assessments collected under the new program so the assessment burden on the industry does not increase.

The major expenditures for the Council for the 2021-22 year include $2,510,000 for international relations, $2,180,000 for marketing, and $1,447,066 for general administration. Budgeted expenses for these items in 2020-21 were $1,968,000, $6,715,000, and $1,425,000, respectively.

The Council derived the recommended assessment rates by considering anticipated expenses, expected shipments of pecans, Market Access Program (MAP) funds, and the amount of funds available in the authorized reserve. Assessable shipments for the year are an estimated 315 million pounds of improved varieties, which should provide approximately $3,150,000 in assessment income (315,000,000 pounds multiplied by $0.01). Income derived from handler assessments calculated at the proposed rate, along with interest income, MAP funds, and funds from the Council's authorized reserve, would be adequate to cover projected budgeted expenses of $9,002,508. Funds in the reserve are estimated to be $2,800,000 at the end of the 2021-22 fiscal year, which would be within the maximum permitted by § 986.64 of the Order (approximately three fiscal years' expenses).

The proposed assessment rate would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Council or other available information.

Although these assessment rates would be in effect for an indefinite period, the Council will continue to meet prior to or during each fiscal year to recommend a budget of expenses and consider recommendations for modification of the assessment rates. The dates and times of Council meetings are available from the Council or USDA. Council meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate Council recommendations and other available information to determine whether modification of the assessment rates is needed. Further rulemaking would be undertaken as necessary. The Council's 2021-22 budget and those for subsequent fiscal years would be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 4,500 growers of pecans in the production area and approximately 150 handlers subject to regulation under the Order. Small agricultural growers are defined by the Small Business Administration (SBA) as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).

According to the National Agricultural Statistics Service (NASS), the 2020-21 crop value was $435.28 million. With a crop size of 305.36 million pounds, the season average grower price was $1.43. Dividing the $435.28 million crop value by the estimated number of pecan growers (4,500) yields an annual average receipts per grower estimate of $96,729. This is well below the SBA threshold for small growers.

Evidence presented at the pecan marketing order promulgation hearing indicates an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $1.43 for in-shell pecans yields an estimated annual handler price of $2.01 per pound. With a total 2020-21 utilization of 305.36 million pounds, the total estimated value of production at the handler level for the fiscal year was $613.77 million ($2.01 per pound multiplied by 305.36 million pounds). Dividing this $613.77 million figure by the number of handlers (150) yields an average annual receipts per handler estimate of $4.09 million. This is well below the SBA threshold for small agricultural service firms. Assuming a normal distribution, the majority of pecan growers and handlers may be classified as small entities.

This proposal would decrease the assessment rates collected from handlers for the 2021-22 and subsequent fiscal years from $0.03 to $0.01 per pound of improved varieties and from $0.02 to $0.00 per pound of native and seedling varieties and for substandard pecans handled. The Council recommended 2021-22 fiscal year expenditures of $9,002,508 and proposed assessment rates of $0.01 per pound for improved varieties and $0.00 per pound for native and seedling varieties and for substandard pecans. The proposed assessment rates are $0.02 per pound for improved varieties and $0.01 per pound for native and seedling varieties lower than 2016-17 rates. The quantity of assessable pecans for the 2021-22 fiscal year is estimated at 315 million pounds. Thus, the $0.01 per pound for improved varieties and $0.00 per pound for native and seedling varieties and for substandard pecans rate should provide $3,150,000 in assessment income. Income derived from handler assessments, along with interest income, MAP funds, and funds from the Council's authorized reserve, would be adequate to cover budgeted expenses.

The major expenditures projected by the Council for the 2021-22 year include $2,510,000 for international relations, $2,180,000 for marketing, and $1,447,066 for general administration. Budgeted expenses for these items in 2020-21 were $2,510,000, $6,285,000, and $1,447,066, respectively.

The Council recommended decreasing the assessment rates to reflect a reduction in research and promotion expenditures as these activities would be caried out by the new USDA research and promotion program also funded by the industry. Consequently, the Council recommended a corresponding decrease in the assessment rates to reflect the decrease in research and promotion expenditures.

Prior to arriving at the estimated expenditures and assessment rates, the Council considered information from various sources, such as the Council's Governance Committee. Alternative expenditure levels were discussed by this Committee, based upon the relative value of various activities to the pecan industry, and the impact of the new research and promotion program. The Council determined that based on the information currently available, program activities would be appropriately funded, and no alternate expenditure levels were deemed appropriate.

Using NASS data, a weighted average grower price for the past 3 seasons (2018-19 through 2020-21) is $1.66 per pound. This provides a reasonable forecast of the average grower price for 2021-22 season. The proposed assessment rate of $0.01 per pound for improved varieties represents 0.6 percent of the $1.66 weighted average price (six tenths of one percent; $0.01 divided by $1.66 × 100).

This action would decrease the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to growers. However, decreasing the assessment rates reduces the burden on handlers and may also reduce the burden on growers.

The September 22, 2021 Council meeting was widely publicized throughout the pecan industry. Meetings are held virtually or in a hybrid style. Participants have a choice whether to attend in person or virtually and can participate in the Council's deliberations on all issues. Interested persons are invited to submit comments on this proposed rule, including the regulatory and informational collection impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by the OMB and assigned OMB No. 0581-0291 Federal Marketing Order for Pecans. No changes in those requirements would be necessary because of this proposed rule. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would not impose any additional reporting or recordkeeping requirements on either small or large pecan handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendations submitted by the Council and other available information, USDA has determined that this proposed rule is consistent with and will effectuate the purposes of the Act.

A 30-day comment period is provided to allow interested persons to respond to this proposed rule. All written comments timely received will be considered before a final determination is made on this matter.

For the reasons set forth in the preamble, Agricultural Marketing Service proposes to amend 7 CFR part 986 as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2021-1019; Project Identifier 2020-CE-006-AD” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Jim Rutherford, Aviation Safety Engineer, FAA, General Aviation & Rotorcraft Section, International Validation Branch, FAA, 901 Locust, Room 301, Kansas City, MO 64106. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0063, dated March 18, 2020 (referred to after this as “the MCAI”), to address an unsafe condition on Schempp-Hirth Flugzeugbau GmbH Models Ventus-2a, Ventus-2b, Ventus-2c, Ventus-2cM, and Ventus-2cT gliders. The MCAI states:

You may examine the MCAI in the AD docket at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-1019.

The FAA reviewed Schempp-Hirth Flugzeugbau GmbH Working Instructions for Technical Note No. 349-42/825-57, Revision 2, dated February 24, 2020. This service information contains procedures for inspecting the pushrod, joint head, and bell crank of the flaperon control of the wings for corrosion or other damage, and replacing or servicing (repair) if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA also reviewed Schempp-Hirth Flugzeugbau GmbH Technical Note No. 349-42/825-57, Revision 2, dated February 24, 2020. This service information specifies inspecting the pushrod, joint head, and bell crank of the flaperon control of the wings by following Schempp-Hirth Flugzeugbau GmbH Working Instructions for Technical Note No. 349-42/825-57, Revision 2, dated February 24, 2020.

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

This proposed AD would require accomplishing the actions specified in the service information already described, except as described under “Differences Between this Proposed AD and the MCAI.”

The MCAI applies to Schempp-Hirth Flugzeugbau GmbH Model Ventus-2c, Ventus-2cM, and Ventus-2cT gliders, and this proposed AD would not because they do not have an FAA type certificate.

The FAA estimates that this AD, if adopted as proposed, would affect 33 gliders of U.S. registry. The FAA also estimates that it would take about 1 work-hour per glider to comply with the inspection that would be required by this proposed AD. Based on these figures, the FAA estimates the inspection cost of this proposed AD on U.S. operators to be $2,805 or $85 per glider, per inspection cycle.

In addition, the FAA estimates that each repair or replacement action required by this proposed AD would take up to 8 work-hours and require parts costing up to $800. Based on these figures, the FAA estimates the repair or replacement cost of this proposed AD on U.S. operators to be up to $1,480 per glider.

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

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

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD 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.

For the reasons discussed above, I certify this proposed regulation:

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

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

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

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

This document contains proposed amendments to 26 CFR parts 1 (Income Tax Regulations) and 301 (Procedure and Administration Regulations) under sections 5000A, 6055, and 6056 of the Internal Revenue Code (Code).

Beginning in 2014, under the Patient Protection and Affordable Care Act, Public Law 111-148, 124 Stat. 119 (2010), and the Health Care and Education Reconciliation Act of 2010, Public Law 111-152, 124 Stat. 1029 (2010) (collectively, the Affordable Care Act or ACA), eligible individuals who purchase coverage under a qualified health plan through a Health Insurance Exchange (Exchange) established under section 1311 of the ACA may claim a premium tax credit under section 36B of the Code. Section 36B and § 1.36B-3 of the Income Tax Regulations provide that a taxpayer is allowed a premium tax credit only for months that are coverage months for individuals in the taxpayer's family, as defined in § 1.36B-1(d). Under § 1.36B-3(c)(1)(iii), a “coverage month” for an individual includes only those months the individual is not eligible for minimum essential coverage other than coverage in the individual market.

Section 5000A was added to the Code by section 1501 of the ACA. Section 5000A(f)(1) defines “minimum essential coverage” to include various types of health plans and programs, including, for example, specified government-sponsored programs such as the Medicare program under Part A of title XVIII of the Social Security Act; the Medicaid program under Title XIX of the Social Security Act; the Children's Health Insurance Program under Title XXI of the Social Security Act (CHIP); the TRICARE program under chapter 55 of Title 10, United States Code (U.S.C.); health care programs for veterans and other individuals under chapter 17 or 18 of Title 38, U.S.C.; coverage for Peace Corps volunteers under 22 U.S.C. 2504(e); coverage under the Nonappropriated Fund Health Benefits Program under section 349 of Public Law 103-337; and coverage under an eligible employer-sponsored plan. Section 1.5000A-2(b)(2) of the Income Tax Regulations lists certain government-sponsored programs that do not constitute minimum essential coverage.

Section 5000A requires that individuals have minimum essential coverage for each month in the taxable year, qualify for an exemption from the minimum essential coverage requirement, or make an individual shared responsibility payment upon filing a federal income tax return. Section 11081 of Public Law 115-97, 131 Stat. 2054, 2092 (2017), commonly referred to as the Tax Cuts and Jobs Act (TCJA), reduces the individual shared responsibility payment amount to zero for months beginning after December 31, 2018.

Section 6055 of the Code provides that all persons who provide minimum essential coverage to an individual must report certain information to the IRS that identifies covered individuals and the period of coverage. See section 6055(a) and (b). Those persons also must furnish a statement to the covered individuals containing the same information. See section 6055(c). Under section 6055(a), (c)(2), and § 1.6055-1(f) and (g), every person that provides minimum essential coverage to an individual during the calendar year is required to file with the IRS an information return and a transmittal on or before February 28 (March 31 if filed electronically) of the year following the calendar year to which it relates and to furnish to the responsible individual identified on the return a written statement on or before January 31 of the year following the calendar year to which the statement relates. The information returns and written statements must include certain information about the reporting entity, the name and taxpayer identification number (TIN) of the responsible individual, the name and TIN of each individual covered under the health policy, and any other information specified in IRS instructional materials. See § 1.6055-1(e) and (g)(4). The IRS generally has designated Form 1094-B, Transmittal of Health Coverage Information Returns, and Form 1095-B, Health Coverage, to meet the section 6055 requirements.

Section 6056 of the Code requires an applicable large employer (ALE), as defined in section 4980H(c) of the Code, that is required to meet the requirements of section 4908H to file annually information returns and furnish written statements in relation to the health insurance, if any, that the employer offers to its full-time employees. These information returns and written statements are needed in order to administer the employer shared responsibility provisions of section 4980H.

Under section 6056(a), (c)(2), and § 301.6056-1(e) and (g), every ALE or member of an aggregated group that is determined to be an ALE (ALE member) is required to file with the IRS an information return and a transmittal on or before February 28 (March 31 if filed electronically) of the year following the calendar year to which it relates and to furnish to full-time employees a written statement on or before January 31 of the year following the calendar year to which the statement relates. The IRS generally has designated Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to meet the section 6056 requirements.

In addition, an ALE member that offers coverage through a self-insured health plan must complete the reporting required under section 6055, specifically the information regarding each individual enrolled in the self-insured health plan, using Form 1095-C, Part III, rather than Form 1095-B. ALE members use Form 1095-C, Part III, to meet the section 6055 reporting requirement for all employees. For individuals who are not full-time employees, ALE members report only certain information to reflect that the Form 1095-C is being used to complete the section 6055 reporting applicable to individuals who are not full-time employees, but not the section 6056 reporting applicable only to full-time employees.

The current regulations under sections 6055 and 6056 allow the IRS to grant an extension of time of up to 30 days to furnish Forms 1095-B and 1095-C for good cause shown. See §§ 1.6055-1(g)(4)(i)(B)( 1 ) and 301.6056-1(g)(1)(ii)(A). Additionally, filers of Forms 1095-B, 1094-C and 1095-C may receive an automatic 30-day extension of time to file the forms with the IRS by submitting Form 8809, Application for Extension of Time to File Information Returns, on or before the due date for filing the forms. See §§ 1.6081-1 and 1.6081-8.

Section 6721 imposes a penalty for failing to timely file an information return or for filing an incorrect or incomplete information return. Section 6722 imposes a penalty for failing to timely furnish an information statement or furnishing an incorrect or incomplete information statement. The section 6721 and 6722 penalties are imposed with regard to information returns and statements listed in section 6724(d), which include those required by sections 6055 and 6056. Section 6724 provides that no penalty will be imposed under section 6721 or 6722 with respect to any failure if it is shown that the failure is due to reasonable cause and not to willful neglect.

The preambles to the section 6055 and 6056 regulations provided that the IRS would not impose section 6721 and 6722 penalties on reporting entities for the reporting of 2015 health coverage and offers of coverage if those entities could show that they made good faith efforts to comply with the information reporting requirements (transitional good faith relief). See T.D. 9660, 79 FR 13220 at 13226 (Mar. 10, 2014); T.D. 9661, 79 FR 13231 at 13246 (Mar. 10, 2014). The transitional good faith relief covered incorrect or incomplete information, including TINs or dates of birth, reported on information returns or statements. The relief did not apply to a failure to timely file or furnish a return or statement, or when the filer failed to make a good faith effort to comply with the reporting requirements. The preambles to the section 6055 and 6056 regulations also stated that reporting entities failing to meet the reporting requirements of the regulations may have been eligible for penalty relief if the IRS determined the standards for reasonable cause under section 6724 were satisfied. The Treasury Department and the IRS reiterated the transitional good faith relief in Notice 2015-68, 2015-41 I.R.B. 547 (Oct. 13, 2015), and Notice 2015-87, 2015-52 I.R.B. 889 (Dec. 28, 2015).

Notice 2020-66, 2020-40 I.R.B. 785 (Sept. 28, 2020), provides that Medicaid coverage that is limited to COVID-19 testing and diagnostic services under section 6004(a)(3) of the Families First Coronavirus Response Act, Public Law 116-127, 134 Stat. 178 (Mar. 18, 2020) is not minimum essential coverage under a government-sponsored program. As a consequence, an individual's eligibility for such coverage for one or more months does not prevent those months from qualifying as coverage months for purposes of determining eligibility for the premium tax credit under section 36B. Notice 2020-66 applies to taxable years beginning in or after 2020.

Notice 2020-66 further indicates that the Treasury Department and the IRS intend to amend § 1.5000A-2 to provide guidance respecting Medicaid coverage for COVID-19 testing and diagnostic services. Accordingly, these proposed regulations propose to amend § 1.5000A-2 by adding Medicaid coverage for COVID-19 testing and diagnostic services to the enumerated health coverages under § 1.5000A-2(b)(2) that do not qualify as minimum essential coverage under a government-sponsored program.

Notice 2020-66 provides that taxpayers, including ALEs, may continue to rely on the guidance described in Notice 2020-66 if no proposed regulations or other guidance are released within 18 months after September 28, 2020, which is the date that Notice 2020-66 was published in the Internal Revenue Bulletin.

Through a series of notices, the Treasury Department and the IRS extended the due dates for furnishing statements to individuals under sections 6055 and 6056 for years 2015 through 2019. See Notice 2016-04, 2016-3 I.R.B. 279 (Jan. 19, 2016); Notice 2016-70, 2016-49 I.R.B. 784 (Dec. 5, 2016); Notice 2018-06, 2018-3 I.R.B. 300 (Jan. 16, 2018); Notice 2018-94, 2018-51 I.R.B. 1042 (Dec. 17, 2018); and Notice 2019-63, 2019-51 I.R.B. 1390 (Dec. 16, 2019). Those notices extended the due date for furnishing Forms 1095-B and 1095-C by 30 days (or the next business day if the 30th day fell on a Saturday, Sunday or legal holiday), except that for 2015 information statements, the furnishing due date was extended by 60 days.

In addition to extending the due dates for furnishing statements, Notices 2018-94 and 2019-63 stated that, as a result of the TCJA's reduction of the shared responsibility payment amount under section 5000A(c) to zero for months beginning after December 31, 2018, the Treasury Department and the IRS were studying how the reporting requirements under section 6055 should change, if at all, for future years. Notice 2019-63 also requested comments on whether an extension of the due date for furnishing statements to individuals pursuant to section 6056 would be necessary for future years, and whether the reporting requirements under section 6055 should change for future years. Only one comment was received.

Notice 2020-76, 2020-47 I.R.B. 1058 (Nov. 16, 2020) provided an automatic extension of time for reporting entities to furnish 2020 information statements (Forms 1095-B and 1095-C) to individuals from January 31, 2021, to March 2, 2021. The notice stated that the Treasury Department and the IRS determined that a substantial number of employers, insurers, and other providers of minimum essential coverage needed additional time beyond January 31, 2021, to gather and analyze the information necessary to prepare and issue the Forms 1095-B and 1095-C. Notice 2020-76 also provided that because of the grant of the automatic extension to March 2, 2021, for furnishing Forms 1095-B and 1095-C, §§ 1.6055-1(g)(4)(i)(B)(1) and 301.6056-1(g)(1)(ii)(A) (allowing the IRS to grant an extension of time of up to 30 days to furnish Forms 1095-B and 1095-C) would not apply. The notice did not extend the due dates for filing 2020 Forms 1095-B, 1094-C, or 1095-C with the IRS. The provisions of §§ 1.6081-1 and 1.6081-8 (allowing an automatic extension of time for filing information returns by submission of a Form 8809 before the due date) were not affected by Notice 2020-76.

The Treasury Department and the IRS received 119 public comments in response to Notice 2020-76. The commenters included health insurance providers, employers, associations, governmental agencies, payroll processors, and others. Nearly all commenters generally supported an extension of the due date for furnishing Forms 1095-B and 1095-C to responsible individuals and employees. The commenters generally indicated that the current January 31 deadline to furnish Forms 1095-B and 1095-C to responsible individuals and employees, under section 6055(c)(2) and 6056(c)(2), and §§ 1.6055-1(g)(4)(i)(A) and 1.6056-1(g)(1)(i), is difficult to meet.

Commenters noted that the process by which reporting entities compile accurate health coverage offer and enrollment information is complex and often takes more time than the current January 31 deadline allows. Employers are required to compile offer and enrollment information for large numbers of employees, sometimes from multiple systems, verify the accuracy of the information, and transmit the information to vendors so that the statements can be timely issued to individuals. Commenters further indicated that, while health coverage information is tracked throughout the year, accurate reporting on Forms 1095-B and 1095-C includes data and information from the month of December, which necessarily requires employers to spend substantial time after the close of the year compiling and verifying data. A number of commenters stated that the data and information necessary to prepare the forms is not available until mid-January and that the period required to prepare and mail the large numbers of forms can take from three to seven weeks.

Commenters also pointed out that the January 31 deadline for furnishing Forms 1095-B and 1095-C to individuals may make it difficult for employers to make changes to their benefit plans near the end of the calendar year. Commenters further noted that the January 31 deadline coincides with the due dates of other government forms, including Form W-2, Form 1099-NEC, Form 941 for the fourth quarter, and annual Forms 940 and 945. One commenter wrote that the substantial time necessary to complete Forms 1095-B and 1095-C is attributable to the fact that the information required depends upon detailed employer and employee activities. The commenter stated that, in some cases, employers must undertake a day-by-day or person-by-person assessment, which may lead to varied individual results in the codes that are required to be entered on the forms. These factors, the commenter noted, make the Forms 1095-B and 1095-C meaningfully distinguishable from other information returns on which aggregate dollar amounts are reported for the year—for example, Form W-2—without regard to day-by-day activity.

Some of the commenters indicated that, if a more permanent automatic extension of the January 31 furnishing deadline is not provided for future reporting, entities will annually request additional time to produce and mail accurate Forms 1095-B and 1095-C pursuant to the current extension procedures. The result would be that the IRS would need to process a significant number of extension requests each year.

To reduce administrative burdens for reporting entities and the IRS, the Treasury Department and the IRS have determined that the furnishing requirements under § 1.6055-1(g) should be modified by providing an automatic extension of time for reporting entities to furnish statements to responsible individuals. This proposed amendment to the regulations under section 6055 is consistent with Notice 2020-76.

Under these proposed regulations, § 1.6055-1(g)(4)(i) is proposed to be amended to provide that reporting entities are granted an automatic extension of time, not to exceed 30 days, in which to furnish the written statements required by § 1.6055-1(g). Because this extension is automatic, the proposed regulations eliminate the requirement in § 1.6055-1(g)(4)(i)(B)( 1 ) that a reporting entity make a written application to the IRS showing good cause to request an extension of time to furnish the statement. Under this proposed amendment to the regulations, statements (Forms 1095-B) furnished to responsible individuals will be timely if furnished no later than 30 days after January 31 of the calendar year following the calendar year in which minimum essential coverage is provided. If the extended furnishing date falls on a weekend day or legal holiday, statements will be timely if furnished on the next business day. See section 7503. The automatic 30-day extension would replace both the 30-day extension for good cause in § 1.6055-1(g)(4)(i)(B)( 1 ) and the authorization for the Commissioner to provide automatic extensions in § 1.6055-1(g)(4)(i)(B)( 2 ).

Notice 2020-76 indicates that, because the TCJA reduced the individual shared responsibility payment amount to zero for 2020, responsible individuals do not need the information on Form 1095-B to prepare and file their individual returns. Nonetheless, reporting entities required to furnish Forms 1095-B must expend resources to do so. In light of those factors, the Treasury Department and the IRS determined that relief from the penalty under section 6722 for failing to furnish a statement (Form 1095-B) required under section 6055 for 2020 was in the interest of sound tax administration in certain cases. Thus, Notice 2020-76 provided that the IRS would not assess a section 6722 penalty against a reporting entity for failing to furnish Form 1095-B to responsible individuals for 2020 in cases when two conditions were met (2020 section 6055 furnishing relief). First, a reporting entity was required to post a notice prominently on its website stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, along with a telephone number that responsible individuals may use to contact the reporting entity with any questions. Second, a reporting entity was required to provide a 2020 Form 1095-B to a responsible individual upon request within 30 days of the date the request was received. A reporting entity could furnish the statements to responsible individuals electronically if the requirements of § 1.6055-2 were satisfied.

Because of the combined reporting by ALE members under sections 6055 and 6056 on Form 1095-C for full-time employees of ALE members enrolled in self-insured health plans, the 2020 section 6055 furnishing relief was not extended to the requirement to furnish Forms 1095-C to full-time employees. The 2020 section 6055 furnishing relief, however, applied to penalty assessments related to the requirement to furnish Form 1095-C to a part-time employee enrolled in an ALE member's self-insured plan for any month in 2020, subject to the two requirements of the 2020 section 6055 furnishing relief. Finally, the 2020 section 6055 furnishing relief did not extend to the assessment of penalties relating to failures to file the 2020 Forms 1094-B or 1095-B or the Forms 1094-C or 1095-C, as applicable, with the IRS.

In response to Notice 2020-76, a number of health plan providers, governmental agencies, and associations requested that the 2020 section 6055 furnishing relief be made permanent or extended at least for the time periods when the individual shared responsibility payment amount is zero. These commenters echoed the considerations identified in Notice 2020-76 supporting the 2020 section 6055 furnishing relief. Namely, commenters pointed to the high costs associated with producing and mailing Forms 1095-B although individuals have no need for the information on the Form 1095-B to correctly compute federal tax liability and timely file returns. Commenters cited additional production and/or mailing costs ranging from a half million to more than four million dollars annually without the relief. One state agency reported receiving only 478 requests for Form 1095-B from approximately one million Medicaid recipients for 2019. Other commenters indicated that a small number of individuals need proof of minimum essential coverage to satisfy certain state requirements, but that very few individuals have otherwise requested the Form 1095-B. Some commenters pointed out that taxpayers may be confused by the receipt of Forms 1095-B.

In light of the public comments received, § 1.6055-1(g)(4) is proposed to be amended by adding new paragraph (g)(4)(ii)(B) to provide an alternative manner for a reporting entity to timely furnish statements. Under this alternative manner of furnishing, the reporting entity must post a clear and conspicuous notice on the entity's website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent, and a telephone number that responsible individuals may use to contact a reporting entity with any questions. This alternative manner of furnishing will apply only to taxable years when the shared responsibility payment amount under section 5000A(b) is zero.

One commenter requested that, if the 2020 section 6055 furnishing relief is extended, a self-insured ALE member should continue to be permitted to use the relief for employees who are enrolled in the ALE's self-insured plan and who are not full-time employees of the ALE. The commenter also requested that the proposed regulations allow a self-insured ALE member to use the 2020 section 6055 furnishing relief for non-employees, such as former employees of the ALE, who are enrolled in the self-insured plan. The proposed regulations adopt both requests in the rules for the alternative method of furnishing. However, consistent with the guidance in Notice 2020-76, the proposed regulations do not allow ALE members to use the alternative method of furnishing for full-time employees who are enrolled in the self-insured plan.

The proposed regulations also address a suggestion of a commenter to Notice 2020-76 who requested that future guidance specify the time period a reporting entity is required to retain the notice on its website and also explain how prominent the notice must be. The provisions of proposed § 1.6055-1(g)(4)(ii)(B) provide that a reporting entity satisfies the furnishing requirements under § 1.6055-1(g)(4) by retaining the website notice until October 15 of the year following the calendar year to which the statement relates. Additionally, the proposed regulations clarify the requirement in Notice 2020-76 that a reporting entity include a prominently posted notice on its website. Under the proposal, a reporting entity must include a clear and conspicuous notice on the reporting entity's website that is reasonably accessible by individuals who may search the entity's website for tax information. A notice posted on a reporting entity's website will satisfy the requirement under proposed § 1.6055-1(g)(4)(ii)(B) if written in plain, non-technical terms and with letters of a font size large enough (including any visual clues or graphical figures) to call to a viewer's attention that the information pertains to tax statements reporting that individuals had health coverage. For example, a reporting entity's website that includes a statement on the main page, or a link on the main page, reading “Tax Information,” to a secondary page that includes a statement, in capital letters, “IMPORTANT HEALTH COVERAGE TAX DOCUMENTS;” explains how responsible individuals may request a copy of Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, as applicable; and includes the reporting entity's email address, mailing address, and telephone number, is a clear and conspicuous notice under these proposed regulations.

One commenter requested that the 2020 section 6055 furnishing relief be modified to allow a reporting entity to satisfy the furnishing requirement under § 1.6055-1(g) by including only a link to a member portal through which responsible individuals may receive a copy of the Form 1095-B via electronic download. The commenter stated that because responsible individuals will have located and navigated the website of a reporting entity to locate the entity's address and other contact information, the website notice informing individuals of the ability to request a Form 1095-B should not have to also include contact information. The commenter noted that the process under which responsible individuals will send written requests or call customer service representatives of reporting entities to request Forms 1095-B will take time and add costs to providing health care. Under the commenter's proposal, reporting entities that do not provide a member portal for individuals to download and receive the Form 1095-B will be required to include a website notice with an email address, physical address, and telephone number for individuals to call to request the form, consistent with the first condition of the 2020 section 6055 furnishing relief.

The requirement in these proposed regulations that a reporting entity include its email address, mailing address, and telephone number on a website notice informing individuals of the ability to request a Form 1095-B is consistent with other information reporting provisions. See, for example, § 1.6050S-1(c)(1)(iii)(G) (an educational institution or insurer issuing Form 1098-T, Tuition Statement, is required to include contact information on statement). A responsible individual may have questions about how to request a copy of the statement required under § 1.6055-1(g) for the taxable year or may have questions about some of the information on the statement. The proposed rule requiring the reporting entity's contact information on a posted website notice fulfills that need for responsible individuals. Accordingly, the comment recommending that a reporting entity may provide only website access to a member portal (and capability to electronically download Form 1095-B) without the reporting entity's contact information is not adopted.

If, in the future, the shared responsibility payment amount under section 5000A(b) is not zero, the Treasury Department and the IRS anticipate that reporting entities will need adequate time to develop or restart processes for preparing and mailing paper statements to responsible individuals. If the shared responsibility payment amount is modified in the future, the Treasury Department and the IRS anticipate providing guidance, if necessary, to allow sufficient time for reporting entities to restart the reporting process.

For the reasons discussed in section 2 of the Explanation of Provisions, the Treasury Department and the IRS have determined that, to reduce administrative burdens for ALE members and the IRS, the furnishing requirements under § 301.6056-1(g)(1) should be modified by providing an automatic extension of time for ALE members to furnish written statements to full-time employees. This proposed amendment to the regulations under section 6056 is consistent with Notice 2020-76.

Under these proposed regulations, § 301.6056-1(g)(1) is proposed to be amended to provide that ALE members are granted an automatic extension of time, not to exceed 30 days, in which to furnish the written statements to full-time employees. Because the extension is automatic, the proposed regulations eliminate the requirement in § 301.6056-1(g)(1)(ii)(A) that an ALE member make a written application to the IRS showing good cause or to otherwise request an extension of time to furnish the statement. Under this proposed amendment to the regulations, statements (Forms 1095-C) furnished to full-time employees will be timely if furnished no later than 30 days after January 31 of the calendar year in accordance with applicable Internal Revenue Service procedures and instructions. If the extended furnishing date falls on a weekend day or legal holiday, statements will be timely furnished if provided on the next business day. See section 7503. The automatic 30-day extension would replace both the 30-day extension for good cause in § 301.6056-1(g)(1)(ii)(A) and the authorization for the Commissioner to provide automatic extensions in § 301.6056-1(g)(1)(ii)(B).

As noted in the Background section of this preamble, the preambles to the regulations under sections 6055 and 6056 provided that the IRS would grant transitional good faith relief by not imposing penalties under sections 6721 and 6722 on reporting entities for the reporting of 2015 health coverage and offers of coverage if those entities could show that they made good faith efforts to comply with the information reporting requirements. See T.D. 9660; T.D. 9661. The Treasury Department and the IRS extended that transitional good faith relief for years 2015 through 2019 in the series of notices that extended the due dates for the requirements for furnishing statements to individuals under sections 6055 and 6056 for those years. See Notice 2016-04; Notice 2016-70; Notice 2018-06; Notice 2018-94; Notice 2019-63; and Notice 2020-76. In Notice 2020-76, the Treasury Department and the IRS stated that 2020 was the last year that transitional good faith relief would be provided. Thus, the transitional good faith relief from penalties under sections 6721 and 6722 for the reporting of incorrect or incomplete information on information returns or statements is not available for reporting for tax year 2021 and subsequent years.

This good faith relief was intended to be transitional to accommodate public concerns with implementing the then newly enacted reporting requirements under the ACA. These reporting requirements have now been in place for six years, and transitional relief is no longer appropriate. Some commenters requested that the relief be extended due to continued difficulty in understanding the reporting requirements, periodic changes to the ACA, and the uncertainty related to the COVID-19 pandemic. Although the Treasury Department and the IRS are sympathetic to those concerns, additional good faith relief is not necessary to address them. The reasonable cause exception under section 6724 already provides adequate relief from penalties under sections 6721 and 6722 for filers who have reasonable cause for failing to timely or accurately complete their reporting requirements. Therefore, the Treasury Department and the IRS will discontinue the transitional good faith relief after tax year 2020.

In Notice 2015-68, the Treasury Department and the IRS announced that they intended to propose regulations under section 6055 that would: (1) Provide that health insurance issuers must report coverage in a catastrophic plan; (2) allow filers reporting on insured group health plans to use a truncated TIN to identify the employer on the statement furnished to a taxpayer; and (3) specify when a provider of minimum essential coverage is not required to report duplicative or supplemental coverage. The notice also invited comments on issues relating to TIN solicitation and provided that until the issuance of additional guidance, reporting entities would not be subject to penalties for failure to report a TIN if they met certain requirements. Finally, the notice advised that governments of United States possessions or territories are not required to report coverage under Medicaid and the Children's Health Insurance Program (CHIP) and that a state government agency sponsoring coverage under the Basic Health Program is required to report that coverage.

On August 2, 2016, the Treasury Department and the IRS published a notice of proposed rulemaking (REG-103058-16) in the Federal Register (81 FR 50671) (2016 proposed regulations). Consistent with Notice 2015-68, the 2016 proposed regulations proposed to address catastrophic health coverage, truncated TINs, and duplicative or supplemental coverage. With regard to TIN solicitations, the 2016 proposed regulations incorporated the penalty relief in Notice 2015-68, with certain revisions to the requirements in response to comments. The 2016 proposed regulations also proposed to incorporate the guidance in Notice 2015-68 related to United States possessions or territories and reporting regarding the Basic Health Program. The 2016 proposed regulations provided that, until the regulations were finalized, reporting entities could rely on the guidance in Notice 2015-68. In addition, any issuer that voluntarily files returns or furnishes statements on catastrophic coverage before final regulations are issued will not be subject to penalties for those returns or statements. See Notice 2017-41, 2017-34 I.R.B. 211 (Aug. 21, 2017).

The Treasury Department and the IRS received 16 comments on the 2016 proposed regulations but have not issued a Treasury Decision finalizing the 2016 proposed regulations. No public hearing was requested or held. The Treasury Department and the IRS are renewing their request for comments on all aspects of the 2016 proposed regulations and, after considering the comments received, intend to finalize the 2016 proposed regulations as part of any Treasury Decision finalizing these proposed regulations. Written or electronic comments must be received by February 4, 2022.

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

The regulations under § 1.5000A-2, once final, are proposed to apply for months beginning after September 28, 2020. For months beginning on or after January 1, 2020, and before September 28, 2020, taxpayers may continue to rely on Notice 2020-66. Taxpayers may rely on § 1.5000A-2 of these proposed regulations for months beginning after September 28, 2020, and before the date a Treasury Decision finalizing these regulations is published in the Federal Register . The regulations under §§ 1.6055-1 and 301.6056-1, once final, are proposed to apply for calendar years beginning after December 31, 2021. Taxpayers may rely on §§ 1.6055-1 and 301.6056-1 of these proposed regulations for calendar years beginning after December 31, 2020, and before the date a Treasury Decision finalizing the regulations is published in the Federal Register . See the 2016 proposed regulations for the proposed applicability dates of those proposed rules.

These proposed regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the Office of Management and Budget (OMB) regarding review of tax regulations.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

There is no collection of information contained in these proposed regulations. The collections of information contained in §§ 1.6055-1 and 301.6056-1 were previously reviewed and approved by OMB in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and are associated with control numbers 1545-2251 (associated with Form 1095-C) and 1545-2252 (associated with Form 1095-B).

The Paperwork Reduction Act (44 U.S.C. 3501-3520) relates to information collection requests by any government agency. A collection of information generally means the “obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public, of facts or opinions by or for an agency, regardless of form or format, calling for either (1) answers to identical questions posted to, or identical reporting or recordkeeping requirements imposed on ten or more persons, other than agencies, instrumentalities, or employees of the United States, or (2) answers to questions posed to agencies, instrumentalities, or employees of the United States which are to be used for general statistical purposes.” 44 U.S.C. 3502(3). A collection of information is commonly referred to as a reporting, recordkeeping, or disclosure requirement.

These proposed regulations do not require a reporting entity to provide any information to the Federal government, to maintain specific records, or to disclose any additional information that the reporting entity did not already have a requirement to disclose.

When an agency issues a proposed rulemaking, the Regulatory Flexibility Act (5 U.S.C. chapter 6) (Act) requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” that “describe[s] the impact of the proposed rule on small entities.” 5 U.S.C. 603(a). The term “small entities” is defined in 5 U.S.C. 601 to mean “small business,” “small organization,” and “small governmental jurisdiction,” which are also defined in 5 U.S.C. 601. Small business size standards define whether a business is “small” and have been established for types of economic activities, or industry, generally under the North American Industry Classification System (NAICS). See Title 13, Part 121 of the Code of Federal Regulations (titled “Small Business Size Regulations”). The size standards look at various factors, including annual receipts, number of employees, and amount of assets, to determine whether the business is small. See Title 13, Part 121.201 of the Code of Federal Regulations for the Small Business Size Standards by NAICS Industry.

Section 605 of the Act provides an exception to the requirement to prepare an initial regulatory flexibility analysis if the agency certifies that the proposed rulemaking will not have a significant economic impact on a substantial number of small entities.

The Treasury Department and the IRS conclude that, although the overall impact of these proposed regulations will substantially reduce the burden on small entities, these proposed regulations, if finalized, will impact a substantial number of small entities and the economic impact on those small entities will be significant. As a result, although the impact of these regulations is positive for small entities, an initial regulatory flexibility analysis is required.

Description of the reasons why the agency action is being considered.

The proposed regulations under § 1.5000A-2 propose to make permanent the guidance in Notice 2020-66 regarding whether certain Medicaid coverage of COVID-19 testing and diagnostic services is minimum essential coverage. The proposed regulations under §§ 1.6055-1 and 301.6056-1 propose to make permanent the extension of time to furnish Forms 1095-B and 1095-C to responsible individuals and employees that has been provided every year since 2015. The proposed regulations under § 1.6055-1 also allow reporting entities to furnish the statement required by section 6055 by providing notice on their website and by providing the statement to the responsible individual upon request.

The proposed regulations under § 1.5000A-2 will ensure that taxpayers have accurate guidance when determining whether they have minimum essential coverage, which in turn will assist taxpayers in determining whether they qualify for the premium tax credit. The proposed regulations under §§ 1.6055-1 and 301.6056-1 will reduce the burden on reporting entities by extending the time to satisfy their reporting obligations with regard to health care coverage without worrying whether the penalty under section 6722 will be imposed. The extension should result in increased timely and accurate reporting. Those proposed regulations also reduce the burden on reporting entities by providing a low-cost option to satisfy the reporting obligation under section 6055 at a time when responsible individuals do not need the information to complete their returns.

Statement of the objectives of, and the legal basis for, the proposed rule.

The principal objectives of the proposed regulations are to provide taxpayers with definitive guidance of what constitutes, or does not constitute, minimum essential coverage, to provide reporting entities with a sufficient amount of time to complete and furnish accurate statements to responsible individuals and full-time employees, and to offer reporting entities under section 6055 a minimally burdensome option by which to furnish the required statement. The legal basis for defining minimum essential coverage is section 5000A(f)(1)(E), which provides the Secretary of the Treasury or her delegate (Secretary) with the authority to determine what types of health coverage constitute minimum essential coverage. The legal basis for the extended due date was originally set forth in the series of notices referenced in the Explanation of Provisions section above, under which the Treasury Department and the IRS extended the dates for furnishing statements to responsible individuals and full-time employees, providing that taxpayers that satisfy the furnishing requirement by the extended due date will not be subject to penalties under sections 6721 and 6722. Section 6724(a) provides that no penalty is imposed under section 6721 or 6722 if it is shown that the failure is due to reasonable cause and not to willful neglect. Section 7803(a)(2)(A) gives the Commissioner the power to administer, manage, conduct, direct, and supervise the execution and application of internal revenue laws. That same legal basis applies for these proposed regulations. Additionally, §§ 1.6055-1(g)(4)(i)(B) and 301.6056-1(g)(1)(ii) provide the Secretary with the authority to provide extensions of time to furnish statements under sections 6055 and 6056. Regarding the form of the statement to be furnished, sections 6055(b)(1)(A) and 6056(b)(1) provide the Secretary with the authority to prescribe the form of the return that is the basis for the furnishing requirements in sections 6055(c) and 6056(c).

Description and estimate (where feasible) of the number of small entities subject to the proposed rule.

The proposed regulations apply to health insurance issuers, self-insured employers, government agencies, and other providers of minimum essential coverage required to furnish individual statements regarding such coverage under section 6055 and ALE members that are required to furnish information relating to health insurance that the ALE offers to its full-time employees under section 6056. An estimate of the number of small entities subject to the proposed regulations is not feasible because a correlation between small taxpayers and this type of reporting cannot be made. The proposed regulations affect all industries. Taxpayers using any NAICS code could be subject to the proposed regulations.

Description of the projected reporting, recordkeeping, and related requirements of the proposed rule, including an estimate of the classes of small entities that will be subject to the requirements and the type of professional skills necessary for preparation of the report or record.

As discussed in the Paperwork Reduction Act section above, these proposed regulations do not impose any reporting, recordkeeping, or similar requirements on any small entities.

Identification, to the extent practicable, of all relevant Federal rules that may duplicate, overlap, or conflict with the proposed rule.

The proposed regulations do not duplicate, overlap, or conflict with any Federal statutes or other rules.

Description of any significant alternatives to the proposed rule that accomplish the stated objectives of applicable statutes and minimize any significant economic impact on small entities.

The Treasury Department and the IRS have determined that, without a legislative change, there are no viable alternatives to the provisions in the proposed regulations that would enable reporting entities to continue to satisfy their reporting obligations with a lesser burden.

Accordingly, the Treasury Department and the IRS conclude that the provisions of the proposed regulations will most effectively promote sound tax administration. The revisions to the definition of what is not minimum essential coverage in § 1.5000A-2 will provide concrete advice to ensure that taxpayers can adequately determine whether they have minimum essential coverage. An automatic extension of time to furnish statements under proposed §§ 1.6055-1(g)(4)(i) and 301.6056-1(g)(1) will assist in timely and more accurate reporting. Last, the additional electronic manner of furnishing a statement in proposed § 1.6055-1(g)(4)(ii)(B), at a time when the shared responsibility payment amount is zero, will help reporting entities reduce costs, while still satisfying their statutory reporting obligations. Accordingly, implementation of these proposed regulations will increase tax compliance by providing definitive guidance and will allow reporting entities the time needed to furnish timely and accurate statements, with minimal production and distribution burden regarding the furnishing.

Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel of the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a state, local, or tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). This proposed rule does not include any Federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on state and local governments, and is not required by statute, or preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

Before these proposed regulations or the 2016 proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the ADDRESSES section. The Treasury Department and the IRS request comments on all aspects of these proposed regulations, as well as all aspects of the 2016 proposed regulations. Any electronic comments submitted, and to the extent practicable any paper comments submitted, will be made available at www.regulations.gov or upon request. All comments, including comments on the 2016 proposed regulations, should reference REG-109128-21.

A public hearing will be scheduled if requested in writing by any person who timely submits written comments. Requests for a public hearing are also encouraged to be made electronically. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register . Announcement 2020-4, 2020-17 I.R.B. 1 (Apr. 20, 2020), provides that until further notice, public hearings conducted by the IRS will be held telephonically. Any telephonic hearing will be made accessible to people with disabilities.

The principal author of these proposed regulations is Gerald Semasek, Office of Associate Chief Counsel (Income Tax and Accounting). Other personnel from the Treasury Department and the IRS participated in their development.

The Captain of the Port Sector Ohio Valley (COTP) proposes to amend section 165.801 of Title 33 of the Code of Federal Regulations (CFR) to update our regulations for annual fireworks displays and other events in the Eighth Coast Guard District requiring safety zones with respect to those in Sector Ohio Valley's area of responsibility (AOR).

The current list of annual and recurring safety zones in Sector Ohio AOR is published under 33 CFR 165.801 in Table no. 1 for annual and recurring safety zones in the AOR. The most recent list was created May 18, 2021 through the rulemaking 86 FR 26837.

The Coast Guard proposes to amend and update the safety zone regulations under 33 CFR part 165 to include the most up to date list of recurring safety zones for events held on or around navigable waters within Sector Ohio Valley's AOR. These events include air shows, fireworks displays, and other marine events requiring a limited access area restricting vessel traffic for safety purposes. The current list in 33 CFR 165.801 needs to be amended to provide new information on existing safety zones, and to include new safety zones expected to recur annually or biannually, and to remove safety zones that are no longer required. Issuing individual regulations for each new safety zone, amendment, or removal of an existing safety zone would create unnecessary administrative costs and burdens. This single proposed rulemaking would considerably reduce administrative overhead and provide the public with notice through publication in the Federal Register of the upcoming recurring safety zone regulations.

The Coast Guard encourages the public to participate in this proposed rulemaking through the comment process so that any necessary changes can be identified and implemented in a timely and efficient manner. The Coast Guard will address all public comments accordingly, whether through response, additional revision to the regulation, or otherwise.

Part 165 of Title 33 of the CFR contains regulations establishing limited access areas to restrict vessel traffic for the safety of persons and property. Section 165.801 establishes recurring safety zones to restrict vessel transit into and through specified areas to protect spectators, mariners, and other persons and property from potential hazards presented during certain events taking place in the AOR. This section requires amendment from time to time to properly reflect the recurring safety zone regulations in the AOR. This proposed rule would amend and update § 165.801 by revising the current Table 1.

This proposed rule would add the following 2 safety zones to the existing Table 1 of § 165.801 as follows:

This proposed rule would remove the following 4 safety zones to the existing Table 1 of § 165.801 as follows:

This proposed rule would amend the following 1 safety zone to the existing Table 1 of § 165.801 as follows:

The effect of this proposed rule would be to restrict general navigation in the safety zones during the events. Vessels intending to transit the designated waterway through the safety zones would only be allowed to transit the area when the COTP, or a designated representative, has deemed it safe to do so or at the completion of the event. The proposed annually recurring safety zones are necessary to provide for the safety of life on navigable waters during the events.

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

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

The Coast Guard expects the economic impact of this proposed rule to be minimal, therefore a full regulatory evaluation is unnecessary. This proposed rule would establish safety zones limiting access to certain areas under 33 CFR part 165 within Sector Ohio Valley's AOR. The effect of this proposed rulemaking would not be significant because these safety zones would be limited in scope and duration. Additionally, the public would be given advance notification through the Federal Register , and/or Notices of Enforcement and, thus, will be able to plan operations around the safety zones. Broadcast Notices to Mariners, Local Notices to Mariners, and Safety Marine Information Broadcasts would inform the community of these safety zones. Vessel traffic would be allowed to request permission from the COTP or a designated representative to enter the restricted areas. Broadcast Notices to Mariners, Local Notices to Mariners, and Safety Marine Information Broadcasts would inform the community of these safety zones. Vessel traffic would be allowed to request permission from the COTP or a designated representative to enter the restricted areas.

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

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

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

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

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

Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

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

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments through the Federal Decision Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2021-0874 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the https://www.regulations.gov Frequently Asked Questions web page. We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

Wisconsin submitted this SIP revision request on April 6, 2021, and supplemental information on June 22, 2021, and July 27, 2021. This submittal includes revisions to the definitions in Chapter NR 400, to the minor construction permit program in Chapter NR 406, and to the operating permit program in Chapter NR 407. Specifically, Wisconsin is requesting to repeal NR 406.03(1e)(a), (b), and (j), NR 406.04(1f)(c) and (Note), NR 407.02(6)(a)3.(Note), NR 407.11(1)(e) and (3)(c), and NR 407.12(1)(b)(Note) and (e); to amend NR 400.02(130), (136m)(intro.) and (b), NR 406.02(6), NR 406.03(1e)(intro.), (c), (1m)(a), (b), (2)(b)2.c. and (g), NR 406.04(1)(i)(intro.), 2, 3, 4, (m)(intro.), (zg)1, (1k)(intro.), (1q)(f), (g), (2)(h), (4)(a)5, (b)(title), (b), (h)2, (j)2, and (7), NR 406.17(3)(d), NR 407.02(9), NR 407.03(1)(intro.), (1m)(a)2, (c)1, (2)(f) and (g), NR 407.05(2) and (6), NR 407.105(3)(b), NR 407.11(1)(a), NR 407.14(1m)(d), and NR 407.15(5); and to create NR 400.02(136m)(b)(Note), (136r), (162)(a)61 and 62, NR 406.04(1)(a)4m, (bm), (1f)(f) and (4)(e)3, NR 407.03(1)(a)4m, (bm) and (2)(ba).

Wisconsin's Department of Natural Resources (WDNR) has requested administrative changes to its definitions in Section NR 400. The definitions of “reconstruction” and “restricted use RICE” have been amended, the definition for “RICE” was created, and two hazardous air pollutants (HAPS) have been included to be consistent with the Federal definition for volatile organic compounds (VOC).

WDNR also submitted changes to its minor source construction permitting program, NR 406. The definition of “permit revision” in NR 406.02(6), and definitions of “commence construction” and “commence modification” were amended to align with the Federal definitions. The list of activities in NR 406.03 (1e) was revised to remove language that is outdated. The requirements for application forms were also clarified.

The State amended NR 406.03(1m) to clarify the procedures for applying for a construction permit waiver. Additionally, the State amended the meaning of economic hardship to remove language restricting economic or financial hardship that could “preclude the project in its entirety.”

Wisconsin created provisions NR 406.04(1)(a)4m and NR 407.03(1)(a)4m for external combustion sources that fire ultra-low sulfur diesel fuel oil to comply with 40 CFR 80.510. An exemption for the incineration of confiscated drugs by a government agency using certain equipment with specific parameters and limits was added at NR 406.04(1)(bm) and NR 407.03(1)(bm).

Wisconsin amended the provisions in NR 406.04(1)(i) to clarify that research and testing exemptions may only be provided for temporary changes or temporary equipment. Wisconsin created NR 406.04(1f)(f) to require that an operation permit application shall be submitted prior to commencing construction or modification even when no construction permit is required.

The State also amended the Plantwide Applicability Limit (PAL) provision at NR 406.04(1f)(f) clarifying that new or modified sources exempt from construction permitting under a PAL must be included in an operation permit application submitted prior to commencing construction or modification. Wisconsin is also clarifying in NR 406.04(1k) that the exemption for projects evaluated for significant net emissions increase can only be requested prior to commencing construction, and that this exemption is only available for the modification of an existing emission unit and not for the construction of a new emission unit.

Revisions to NR 406.04(4)(b) allow an exemption for emissions units that must meet new or revised VOC reasonably available control technology (RACT) rules to also apply to new or revised nitrogen oxides (NO X ) RACT.

The State has also revised NR 406.04 to clarify that an increase in hours of operation does not constitute an exclusion from modification if the change is subject to certain Federal requirements, and to clarify that the emissions increase being referred to is the maximum theoretical emissions increase.

Revisions were made to NR 406.17(3) to clarify when sources are ineligible for coverage under a registration construction permit. Also a note referencing previous EPA guidance on determining when a source can become an area source referred to as “once in always in” has been removed as this guidance is no longer applicable. 1

The definition of “synthetic minor source” in NR 407.02 has been amended to match the Federal policy and guidance on the types of actions and permit conditions necessary to establish a facility as a synthetic minor source.

The permit exemptions in NR 407.03(1m)(a)2 and (c)1, and NR 407.03(2)(f) and (g), are available if the facility is not subject to an emission limitation or emission standard under section 111 or 112, are amended to be consistent with the parallel exemptions in NR 406.

NR 407.03(2)(ba) is created to correct an error by including an exemption for particulate matter less than 10 microns not to exceed 3.4 pounds per hour to make the exemption in NR 407 consistent with that in NR 406.

NR 407.05(2) and (6) are amended to remove certain requirements relating to submitting multiple paper copies of application materials.

NR 407.105(3)(b) is amended to replace “standard or regulation” with “emission limitation or emission standard”.

NR 407.11(1)(e) and (3)(c) under administrative permit revisions and NR 407.12(1)(b)(Note) and (e) under minor permit revision are repealed.

NR 407.14(1m)(d) is amended to clarify that correcting a typographical error must not substantively change the meaning of a permit condition.

NR 407.15 (5), failure to pay fees, is amended to add citations to Wisconsin statute s. 285.

A. Except for the revisions discussed below in Section II.B, Wisconsin's submittal includes administrative and non-substantive changes such as the removal of outdated language, clarifications of rule applicability and correction of errors, and changes to ensure conformance with Federal requirements. These revisions remove provisions that are obsolete, revise rule language for consistency, or clarify provisions which are already in effect as a matter of law in the State program. These changes are not substantive, do not affect emissions, and do not interfere with requirements of the Clean Air Act (CAA). Therefore, EPA is proposing to approve these revisions.

B. The following revisions in Wisconsin's submittal require further analysis: The creation of new exemptions from minor source air permitting and the revisions to exemptions from minor source air permitting. Specifically, EPA will review the following below: (1) The permit exemption for fuel burning installations combusting ultra-low sulfur diesel fuel, (2) the exemption for incineration of small quantities of confiscated drugs by a government agency, (3) the revision to allow temporary steam generating units to operate up to 24 hours simultaneously with the units they are temporarily replacing during periods of startup and shutdown, and (4) the revision to State RACT. EPA is using the following criteria to review these changes for compliance with Federal requirements—40 CFR part 51, subpart I—Review of New Sources and Modifications, and section 110(l) of the CAA.

40 CFR 51.160 requires that the SIP set forth legally enforceable procedures that enable the state or local agency to determine whether any construction or modification of a source will (1) cause a violation of the SIP or (2) interfere with attainment or maintenance of a national ambient air quality standard (NAAQS). Section 110(l) of the CAA provides that a revision to a SIP submitted by a state shall be only be adopted by the state after reasonable notice and public hearing, and the Administrator shall not approve a revision to a SIP if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress, or any other applicable requirement of this chapter.

WDNR provided opportunities to comment on the proposed rule during a public comment period from March 5, 2019 through April 24, 2019, and at a public hearing held on April 17, 2019, in accordance with chapter 227 of the Wisconsin Statutes. Based on our review of the public process documentation included in the submittal, we find that the Wisconsin has provided sufficient evidence of public notice and opportunity for comment and public hearings prior to submittal of this SIP revision and has satisfied the procedural requirements for notice and a public hearing under CAA section 110(l).

For the provisions in 40 CFR 51.160, and section 110(l) of the CAA that require that the revisions may not cause a violation of the SIP or interfere with attainment or maintenance of a NAAQS, Wisconsin's submittal includes an analysis to demonstrate these requirements will be met. For the reasons discussed below, the new and revised exemptions in the submittal will not interfere with any SIP requirement or any applicable requirement concerning attainment.

Wisconsin provided an analysis for the following changes: The exemptions in NR 406.04(1)(a)4m and NR 407.03(1)(a)4m for external combustion sources that fire ultra-low sulfur diesel fuel oil; the exemptions in NR 406.04(1)(bm) and NR 407.03(1)(bm) for incinerators operated by a government agency that burn confiscated drugs and meet other requirements; the revisions to NR 406.04(1)(zg) to allow temporary steam generating units to operate at the same time as the permanent steam generation equipment it is replacing for up to 24 hours during startup or shutdown; and the revisions to NR 406.04(4)(b) to allow the exemption for emissions units that must meet new or revised VOC RACT rules, to also apply to new or revised NO X RACT rules.

For the exemptions in NR 406.04(1)(a)4m, and NR 407.03(1)(a)4m regarding ultra-low sulfur, Wisconsin provided in its analysis that this exemption increased the size of exempt units from 10 million British thermal units per hour (MMBtu/hr) to 25 MMBtu/hr for external combustion furnaces firing ultra-low sulfur diesel fuel. Because of the reduction in sulfur content in ultra-low sulfur diesel fuel, emissions will not increase when the unit size is increased to 25 MMBtu/hr and emissions will remain below all existing SIP-approved exemption thresholds.

For the exemption in NR 406.04(1)(bm) and NR 407.03(1)(bm) for incinerators operated by government agencies to burn certain confiscated drugs, Wisconsin provided that this exemption follows Federal regulations that exclude incineration of confiscated drugs by law enforcement and border patrols from the applicable National Emission Standards for Hazardous Air Pollutants requirements (40 CFR 60.2887(p)). Wisconsin also provided emissions estimates (for maximum theoretical emissions) based on uncontrolled emission factors for medical waste incineration. The State deems these factors similar and appropriate because confiscated drugs are likely to be burned with plastic or foil packaging and possibly needles. Wisconsin's analysis also assumed the worst-case fuel for the emission calculations. Wisconsin's emission estimates demonstrate that combusting confiscated drugs under the parameters required by NR 406.04(1)(bm) and NR 407.03(1)(bm) will result in emissions that are less than the existing SIP-approved permit exemption thresholds in NR 406.04(2) and NR 407.03(2). In addition, the rules require the use of a monitoring device that continuously measures and records the temperature of the secondary chamber of the incinerator to ensure a proper destruction efficiency.

For the revision to the exemption in NR 406.04(1)(zg) for temporary steam generating units, Wisconsin explained in its analysis that the current unrevised SIP-approved exemption limits these temporary units to operating a total of 3,200 hours during nine calendar months, and this limit is unchanged by the revision. Therefore, the maximum emissions will not increase. The exemption also continues to require that the NAAQS are protected at all times the temporary units are operating.

The revision to NR 406.04(4)(b) excludes from permit modifications changes needed for the source to assure compliance with any new or revised RACT requirements for NO X . The revision adds NO X to the existing exemption which was for VOC RACT. Before any new or revised NO X RACT rules can be SIP-approved, there will need to be a demonstration under section 110(l) of the CAA for that submittal.

For the reasons set forth above, EPA is proposing to approve the requested revisions to Wisconsin's SIP as submitted on April 6, 2021. These revisions were included in the certified Board Order AM-24-12b and published in the Wisconsin Administrative Register #777B on September 28, 2020. Based on the information submitted by Wisconsin on April 6, 2021, June 22, 2021, and July 27, 2021, EPA has determined that Wisconsin's submittal is approvable and there were no deficiencies found that would prevent EPA approval.

In this rule, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference revisions to Wisconsin Administrative Code rules NR 400, 406 and 407 as published in the Wisconsin Register #777B on September 28, 2020, effective October 1, 2020, discussed in section I of this preamble. EPA has made, and will continue to make, these documents generally available through www.regulations.gov and at the EPA Region 5 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011); Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

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

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

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

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

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

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

• Does not provide 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).

The Mecklenburg County LIP was submitted to EPA on June 14, 1990, and EPA approved the plan on May 2, 1991. See 56 FR 20140. Mecklenburg County prepared three submittals in order to modify the LIP for, among other things, general consistency with the North Carolina SIP. 1 The three submittals were submitted as follows: NCDAQ transmitted the October 25, 2017, submittal to EPA but later withdrew it from review through a letter dated February 15, 2019. On April 24, 2020, NCDAQ resubmitted the October 25, 2017, update to EPA and also submitted the January 21, 2016, and January 14, 2019, updates. Due to an inconsistency with public notice at the local level, these submittals were withdrawn from EPA through a letter dated February 15, 2019. Mecklenburg County corrected this error, and NCDAQ submitted the updates to EPA in a submittal dated April 24, 2020. 2

The April 24, 2020, submittal updates several MCAPCO rules incorporated into the LIP and adds several rules to more closely align the LIP with the SIP. The January 21, 2016, portion of this submission includes reorganization and updates to rules contained in MCAPCO Section 2.0600, including MCAPCO Rules 2.0601, Purpose and Scope; 2.0602, Definitions; 2.0604, Exceptions to Monitoring and Reporting Requirements; 2.0607, Large Wood and Wood-Fossil Fuel Combination Units; and 2.0610, Delegation Federal Monitoring Requirements. 3 Additionally, the submittal seeks to add MCAPCO Rules 2.0605, General Recordkeeping and Reporting Requirements; 2.0611, Monitoring Emissions from Other Sources; and 2.0613, Quality Assurance Program to the LIP. EPA is proposing to approve the updates and new rules because they improve alignment of the LIP and the SIP and will not interfere with any applicable CAA requirements. The remainder of this section discusses the proposed changes to the LIP.

The April 24, 2020, submittal includes updates to Rule 2.0601, Purpose and Scope. This rule outlines the purpose of this section and references several other specific rules that may also include monitoring, recordkeeping, and reporting requirements for specific facilities and operations. The proposed changes to the LIP-approved version of this rule include the addition of references to Rules 2.1110, National Emissions Standards for Hazardous Air Pollutants, and 2.1111, Maximum Achievable Control Technology. The revisions also removed a reference to Rule 2.0525, National Emission Standards for Hazardous Air Pollutants, which was moved to Rule 2.1110 listed above. The changes more closely align the rule with the corresponding SIP-approved state rule at 15A NCAC 02D .0601, Purpose and Scope. EPA most recently approved updates to 15A NCAC 02D .0601 into the SIP on August 25, 2021. See 86 FR 47393. EPA is proposing to approve the updates to Rule 2.0601 because they better align the LIP with the SIP and will not interfere with any applicable CAA requirements.

The April 24, 2020, submittal includes updates to Rule 2.0602, Definitions. This rule provides definitions that apply to Section 2.0600, Monitoring: Recordkeeping: Reporting. The proposed changes to the LIP-approved rule include the addition of the following definitions: Applicable requirement, Calendar quarters, Permit condition, and Petroleum refinery. Additionally, the rules are re-organized alphabetically, and the definitions of Distillate Oils and Fuel Oils are updated. These revisions more closely align the rule with the corresponding SIP-approved state rule at 15A NCAC 02D .0602, Definitions. EPA most recently approved updates to 15A NCAC 02D .0602 into the SIP on August 25, 2021. See 86 FR 47393. EPA is proposing to approve the updates to Rule 2.0602 because they better align the LIP with the SIP and will not interfere with any applicable CAA requirements.

The April 24, 2020, submittal renumbers LIP-approved Rule 2.0607, Exceptions to Monitoring and Reporting Requirements, as Rule 2.0604 and updates the text of the rule as described below. 4 This rule outlines a limited exception to monitoring if monitoring equipment malfunctions, provides an exemption to monitoring during short-term operation, and provides a general exception if a source is exempted from needing a permit by MCAPCO Rule 1.5211— Applicability. The proposed amendments update the requirements moved from Rule 2.0607 to this rule, adds language to clarify that malfunctions resulting from inadequate or poor operation and maintenance are not exempted and that records be maintained to show the source operated less than 30 days in a 12-month period, and adds language to require monitoring for sources exempted from permitting by Rule 1.5211, Applicability, if monitoring is required by a specific rule in another section or enforcement settlement. These changes more closely align the rule with the corresponding SIP-approved state rule at 15A NCAC 02D .0604, Exceptions to Monitoring and Reporting Requirements. EPA most recently approved updates to 15A NCAC 02D .0604 in the SIP on August 25, 2021. See 86 FR 47393. EPA is proposing to approve the updates to Rule 2.0604 because they better align the LIP with the SIP and will not interfere with any applicable CAA requirements.

The April 24, 2020, submittal renumbers LIP-approved Rule 2.0605— Wood and Wood-Fossil Combination Units as Rule 2.0607. 5 In its place, a new Rule 2.0605 is added with the title “ General Recordkeeping and Reporting Requirements.” The new version of Rule 2.0605 outlines general requirements for monitoring, recordkeeping and reporting that owners and operators at specific facilities must follow. It further describes specific criteria that would trigger the retrieval of records by MCAQ from the subject facility. The changes more closely align the rule with the corresponding SIP-approved state rule at 15A NCAC 02D .0605, General Recordkeeping and Reporting Requirements. EPA most recently approved updates to 15A NCAC 02D .0605 in the SIP on October 31, 2007. See 72 FR 61531. EPA is proposing to approve the updates to Rule 2.0605 because they better align the LIP with the SIP and will not interfere with any applicable CAA requirements.

The April 24, 2020, submittal renumbers LIP-approved Rule 2.0605 as Rule 2.0607, Large Wood and Wood-Fossil Fuel Combination Units and updates the text of the rule as described below. This rule outlines requirements for facilities that burn wood or wood-fossil fuel combinations that generate steam at a specific rate. These specified facilities may also fall under additional monitoring, recordkeeping, and reporting requirements outlined in additional LIP regulations noted within this rule. Mecklenburg made several revisions to the LIP-approved rule to reorganize the rule and to update requirements for quality assurance of monitoring data. These changes more closely align the rule with the corresponding SIP-approved state rule at 15A NCAC 02D .0607, Large Wood and Wood-Fossil Fuel Combination Units. EPA most recently approved updates to 15A NCAC 02D .0607 in the SIP on August 8, 2002. See 67 FR 51461. EPA is proposing to approve the updates to Rule 2.0607 because they better align the LIP with the SIP and will not interfere with any applicable CAA requirements.

The April 24, 2020, revision modifies Rule 2.0610, Delegation Federal Monitoring Requirements, by making updates to references. Rule 2.0610 was most recently approved by EPA on October 22, 2002 (67 FR 64999) and establishes applicability of specific monitoring requirements for sources subject to New Source Performance Standards (NSPS) under 40 CFR part 60, National Emission Standards for Hazardous Air Pollutants (NESHAPs) under for 40 CFR part 61 and 63, and Acid Rain regulations under 40 CFR part 75. The rule further specifies that sources not subject to monitoring, recordkeeping, and reporting under these programs shall comply with Rule 2.0611— Monitoring Emissions from Other Sources, which is discussed below. These revisions to Rule 2.0610 more closely align the rule with the corresponding SIP-approved state rule, 15A NCAC 02D .0610, Federal Monitoring Requirements. EPA most recently incorporated updates to the state rule in North Carolina's SIP on August 8, 2002. See 67 FR 51461. EPA is proposing to approve the updates to Rule 2.0610 because they better align the LIP with the SIP and will not interfere with any applicable CAA requirements.

The April 24, 2020, submittal adds Rule 2.0611, Monitoring Emissions from Other Sources. This rule is proposed for adoption into the LIP to add certain monitoring, recordkeeping, and reporting requirements for sources not covered by other rules. The rule includes certain recordkeeping requirements applicable to such sources and specifies that the Director of MCAQ may require additional monitoring and recordkeeping for such sources. Adding this rule would more closely align the LIP with the corresponding SIP-approved state rule at 15A NCAC 02D .0611, Monitoring Emissions from Other Sources. EPA most recently approved updates to 15A NCAC 02D .0611 in the SIP on August 8, 2002. See 67 FR 51461. EPA is proposing to approve Rule 2.0611 into the LIP because the approval will strengthen the LIP's overall monitoring, recordkeeping, and reporting requirements by ensuring that sources not subject to monitoring, recordkeeping, and reporting requirements under other rules are nonetheless subject to the requirements of this rule, will better align the LIP with the SIP, and will not interfere with any applicable CAA requirements.

The April 24, 2020, submittal adds Rule 2.0613, Quality Assurance Program. This rule is proposed for adoption into the LIP to require facilities that operate a monitoring device to develop a quality assurance program (QAP). The proposed rule additionally allows the Director to require the QAP to be submitted when certain conditions are met, lists the components of a QAP, lists QAP requirements for gaseous continuous emissions monitory system (CEMS), defines certification procedures, references 40 CFR part 58 for QAP for ambient monitors, requires QAP be available for inspection withing 30 days of monitor certification, and requires the Director to approve QAP within 30 days. Adding this rule would more closely align the LIP with the corresponding SIP-approved state rule at 15A NCAC 02D .0613, Quality Assurance Program. EPA most recently approved updates to 15A NCAC 02D .0613 in the SIP on August 8, 2002. See 67 FR 51461. EPA is proposing to approve Rule 2.0613 into the LIP because the approval will establish uniform standards for quality assurance at sources required to operate a monitoring device, will better align the LIP with the SIP, and will not interfere with any applicable CAA requirements.

In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to approve MCAPCO Rules 2.0601, Purpose and Scope; 2.0602, Definitions; 2.0604, Exceptions to Monitoring and Reporting Requirements; 2.0605, General Recordkeeping and Reporting Requirements; 2.0607, Large Wood and Wood-Fossil Fuel Combination Units; 2.0610, Delegation Federal Monitoring Requirements; 2.0611, Monitoring Emissions from Other Sources; and 2.0613, Quality Assurance Program, all of which have an effective date of December 15, 2015, into the Mecklenburg County portion of the North Carolina SIP. EPA has made and will continue to make these materials generally available through www.regulations.gov and at the EPA Region 4 Office (please contact the person identified in the For Further Information Contact section of this preamble for more information).

EPA is proposing to approve the aforementioned revisions and additions to the Mecklenburg LIP. Specifically, EPA is proposing to approve revisions to MCAPCO Rules 2.0601, Purpose and Scope; 2.0602, Definitions; 2.0604, Exceptions to Monitoring and Reporting Requirements; 2.0607, Large Wood and Wood-Fossil Fuel Combination Units; and 2.0610, Delegation Federal Monitoring Requirements. EPA is also proposing to approve the addition of Rules 2.0605, General Recordkeeping and Reporting Requirements; 2.0611, Monitoring Emissions from Other Sources; and 2.0613, Quality Assurance Program into the Mecklenburg LIP. EPA is proposing to approve these revisions because they are consistent with the CAA.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided they meet the criteria of the CAA. This proposed 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 proposed 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 (Public Law 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).

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 rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

Throughout this document wherever “we” or “our” is used, it refers to EPA.

On February 22, 2013, a Federal Register notice of proposed rulemaking was published outlining EPA's policy at the time with respect to SIP provisions related to periods of SSM. EPA analyzed specific SSM SIP provisions and explained how each one either did or did not comply with the CAA with regard to excess emission events. 1 For each SIP provision that EPA determined to be inconsistent with the CAA, EPA proposed to find that the existing SIP provision was substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call under CAA section 110(k)(5). On September 17, 2014, EPA issued a document supplementing and revising what the Agency had previously proposed on February 22, 2013, in light of a D.C. Circuit decision that determined the CAA precludes authority of the EPA to create affirmative defense provisions applicable to private civil suits. EPA outlined its updated policy that affirmative defense SIP provisions are not consistent with CAA requirements. EPA proposed in the supplemental proposal document to apply its revised interpretation of the CAA to specific affirmative defense SIP provisions and proposed SIP calls for those provisions where appropriate (79 FR 55920, September 17, 2014).

On June 12, 2015, pursuant to CAA section 110(k)(5), EPA finalized “State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls To Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction,” (80 FR 33839, June 12, 2015), hereafter referred to as the “2015 SSM SIP Action.” The 2015 SSM SIP Action clarified, restated, and updated EPA's interpretation that SSM exemption and affirmative defense SIP provisions are inconsistent with CAA requirements. The 2015 SSM SIP Action found that certain SIP provisions in 36 states were substantially inadequate to meet CAA requirements and issued a SIP call to those states to submit SIP revisions to address the inadequacies. EPA established an 18-month deadline by which the affected states had to submit such SIP revisions. States were required to submit corrective revisions to their SIPs in response to the SIP calls by November 22, 2016. The detailed rationale for issuing the SIP call to Alaska can be found in the 2015 SSM SIP Action and preceding proposed actions.

EPA issued a Memorandum in October 2020 (2020 Memorandum), which stated that certain provisions governing SSM periods in SIPs could be viewed as consistent with CAA requirements. 2 Importantly, the 2020 Memorandum stated that it “did not alter in any way the determinations made in the 2015 SSM SIP Action that identified specific state SIP provisions that were substantially inadequate to meet the requirements of the Act.” Accordingly, the 2020 Memorandum had no direct impact on the SIP call issued to Alaska in 2015. The 2020 Memorandum did, however, indicate EPA's intent at the time to review SIP calls that were issued in the 2015 SSM SIP Action to determine whether EPA should maintain, modify, or withdraw particular SIP calls through future agency actions.

On September 30, 2021, EPA's Deputy Administrator withdrew the 2020 Memorandum and announced EPA's return to the policy articulated in the 2015 SSM SIP Action (2021 Memorandum). 3 As articulated in the 2021 Memorandum, SIP provisions that contain exemptions or affirmative defense provisions are not consistent with CAA requirements and, therefore, generally are not approvable if contained in a SIP submission. The 2021 Memorandum also retracted the prior statement from the 2020 Memorandum of EPA's plans to review and potentially modify or withdraw particular SIP calls. That statement no longer reflects EPA's intent. EPA intends to implement the principles laid out in the 2015 SSM SIP Action as the agency takes action on SIP submissions, including this SIP submittal provided in response to the 2015 SIP call.

With regard to the Alaska SIP, in the 2015 SSM SIP Action, EPA determined that 18 AAC 50.240 was substantially inadequate to meet CAA requirements (80 FR 33973, June 12, 2015). The provision provided: “Excess emissions determined to be unavoidable under this section will be excused and are not subject to penalty. This section does not limit the department's power to enjoin the emission or require corrective action.” The rationale underlying EPA's determination that the provision was substantially inadequate to meet CAA requirements, and therefore to issue a SIP call to Alaska to remedy the provision, is detailed in the 2015 SSM SIP Action and the accompanying proposals.

Alaska submitted a SIP revision on January 9, 2017, in response to the SIP call issued in the 2015 SSM SIP Action. In its submission, Alaska is requesting that EPA revise the Alaska SIP by removing 18 AAC 50.240 in its entirety, thereby removing this provision from the Alaska SIP.

EPA is proposing to approve Alaska's January 9, 2017, SIP submission, which would remove the provision identified as inconsistent with CAA requirements from the Alaska SIP. Alaska is retaining 18 AAC 50.240 for state law purposes only, with revisions to clarify that (1) all excess emissions are violations and (2) the provision applies only to Alaska in exercising its enforcement authority and therefore does not preclude citizens or EPA from seeking injunctive relief or civil penalties for excess emissions. Alaska submitted the revised state-only version of 18 AAC 50.240 solely for informational purposes to show a complete record of the clarifications. Based on the revisions to 18 AAC 50.240 made by Alaska and Alaska's request to remove it from the Alaska SIP, EPA proposes to find that Alaska's January 9, 2017, SIP revision is consistent with CAA requirements and adequately addresses the specific deficiencies that EPA identified in the 2015 SSM SIP Action with respect to the Alaska SIP.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). EPA is proposing to approve Alaska's January 9, 2017, SIP submission requesting removal of 18 AAC 50.240 “Excess Emissions” from the Alaska SIP. We are proposing approval of the SIP revision because we have determined that it is consistent with the requirements for SIP provisions under the CAA. EPA is further proposing to determine that such SIP revision corrects the deficiency identified in the June 12, 2015, SIP call. EPA is not reopening the 2015 SSM SIP Action and is only taking comment on whether this SIP revision is consistent with CAA requirements and whether it addresses the substantial inadequacy in the specific Alaska SIP provision (18 AAC 50.240) identified in the 2015 SSM SIP Action.

In this document, EPA is proposing to remove in a final rule, regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to remove the incorporation by reference of “18 AAC 50.240” in 40 CFR 52.70, as described in Section II of this preamble. EPA has made, and will continue to make, these documents generally available through https://www.regulations.gov and at the EPA Region 10 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

The Alaska SIP does not 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, this rulemaking does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

In this action, EPA is proposing to list 2,3,3,3-tetrafluoroprop-1-ene, also known as hydrofluoroolefin (HFO)-1234yf or R-1234yf, hereafter referred to as “HFO-1234yf,” as acceptable, subject to use conditions, as of 30 days after publication of any final rule, for MVAC systems  1 in the following types of newly manufactured nonroad vehicles, 2 including some vehicles that are also considered heavy-duty (HD)  3 vehicles:

• Agricultural tractors with greater than 40 horsepower (HP);

• Self-propelled agricultural machinery;

• Compact equipment;

• Construction, forestry, and mining equipment; and

• Commercial utility vehicles.

EPA has previously listed HFO-1234yf as acceptable, subject to use conditions, in new light-duty (LD) passenger cars and trucks (76 FR 17488; March 29, 2011) and new medium-duty passenger vehicles (MDPV), HD pick-up trucks, and complete HD vans (81 FR 86778; December 1, 2016). The use conditions for those prior listings require that motor vehicle air conditioning (MVAC) systems designed to use HFO-1234yf meet the requirements of three technical safety standards developed by SAE International (SAE) ( i.e., SAE J639, SAE J1739, and SAE J2844) and are intended to mitigate flammability and toxicity risks. In this action, EPA is proposing to require the same use conditions, with certain updates discussed below, for MVAC systems designed to use HFO-1234yf in certain newly manufactured nonroad vehicles. EPA is proposing to list HFO-1234yf as acceptable, subject to use conditions, after its evaluation of human health and environmental information on various substitutes submitted to the Significant New Alternatives Policy (SNAP) program. In proposing to list HFO-1234yf as acceptable, subject to use conditions, this action would provide additional flexibility for industry stakeholders by expanding the list of acceptable substitutes for certain types of nonroad vehicles.

EPA is also proposing to adopt the current versions of SAE J639, SAE J1739, and SAE J2844 by incorporating them by reference into the use conditions for the nonroad vehicles addressed in this action. EPA also proposes to modify the use conditions for the previous listings of HFO-1234yf for MVAC systems in certain vehicles to replace the references to older versions of the three SAE standards with references to the current versions. The current versions of the three standards are SAE J639 (revised November 2020), “Safety and Design Standards for Motor Vehicle Refrigerant Vapor Compression Systems;” SAE J1739 (revised January 2021), “Potential Failure Mode and Effects Analysis (FMEA) Including Design FMEA, Supplemental FMEA-MSR, and Process FMEA;” and SAE J2844 (revised January 2013), “R-1234yf (HFO-1234yf) New Refrigerant Purity and Container Requirements for Use in Mobile Air-Conditioning Systems.”

In addition, EPA is proposing to include a use condition for HFO-1234yf to provide for servicing air conditioning systems in the nonroad vehicles addressed in this action, including use of small refrigerant cans (two pounds or less). The use condition, which would require specific servicing fittings, would apply to the nonroad vehicles for which we are newly proposing to list HFO-1234yf as acceptable, subject to use conditions, as well as for all types of vehicles for which EPA has previously listed HFO-1234yf as acceptable, subject to use conditions. For the existing listings, EPA is proposing to revise the existing use conditions to require unique servicing fittings for use with small cans (two pounds or less).

Finally, EPA is proposing to include a reference to the Agency's Significant New Use Rule (SNUR) for HFO-1234yf under the Toxic Substances Control Act (80 FR 37166, June 30, 2015) in Appendix B subpart G of part 82, under the `Comments' column, for the listings of HFO-1234yf for the nonroad vehicles addressed in this action, as well as for all the previous listings of HFO-1234yf as acceptable, subject to use conditions, for various vehicle types. The SNUR states that commercial users or consumers can only recharge MVAC systems with HFO-1234yf where the original charging of the system with HFO-1234yf was done by the original equipment manufacturer.

Aside from the proposed updates to refer to the most current versions of the SAE standards, the proposed addition of a use condition relating to servicing fittings for small cans, and the proposed reference to the June 2015 SNUR, the Agency is not reopening for comment other portions of the March 29, 2011, and December 1, 2016, final rules.

EPA notes that there are additional requirements that concern the sale or offer for sale of refrigerants, including a sales restriction under the regulations implementing section 608 of the CAA, which can be found at 40 CFR part 82 subpart F. These regulations collectively comprise the national recycling and emissions reduction program and may be commonly referred to as the stationary refrigeration and air conditioning management program. The general sales restriction provisions are codified at 82.154(c) and the specifications for self-sealing valves relevant to an exemption to the sales restriction for small cans of MVAC refrigerant are codified at 82.154(c)(2). This proposal does not propose to modify the provisions under 40 CFR 82.154, including the restriction on the sale of substitute refrigerants and requirements for self-sealing valves. The Agency is not proposing and is not reopening for comment regulations promulgated under section CAA 608.

The SNAP program implements section 612 of the Clean Air Act (CAA). Several major provisions of section 612 are:

Section 612 requires EPA to promulgate rules making it unlawful to replace any class I (chlorofluorocarbon (CFC), halon, carbon tetrachloride, methyl chloroform, methyl bromide fluorocarbon, and chlorobromomethane) or class II (hydrochlorofluorocarbon (HCFC)) ozone-depleting substances (ODS) with any substitute that the Administrator determines may present adverse effects to human health or the environment where the Administrator has identified an alternative that (1) reduces the overall risk to human health and the environment and (2) is currently or potentially available.

Section 612(c) requires EPA to publish a list of the substitutes that it finds to be unacceptable for specific uses and to publish a corresponding list of acceptable substitutes for specific uses.

Section 612(d) grants the right to any person to petition EPA to add a substance to, or delete a substance from, the lists published in accordance with section 612(c).

Section 612(e) directs EPA to require any person who produces a chemical substitute for a class I substance to notify the Agency not less than 90 days before a new or existing chemical is introduced into interstate commerce for significant new use as a substitute for a class I substance. 4 The producer must also provide the Agency with the producer's unpublished health and safety studies on such substitutes.

The regulations for the SNAP program are promulgated at 40 CFR part 82, subpart G, and the Agency's process for reviewing SNAP submissions is described in regulations at 40 CFR 82.180. Under these rules, the Agency has identified five types of listing decisions: Acceptable; acceptable subject to use conditions; acceptable subject to narrowed use limits; unacceptable; and pending (40 CFR 82.180(b)). Use conditions and narrowed use limits are both considered “use restrictions,” as described below. Substitutes that are deemed acceptable with no use restrictions (no use conditions or narrowed use limits) can be used for all applications within the relevant end-uses in the sector. After reviewing a substitute, the Agency may determine that a substitute is acceptable only if certain conditions in the way that the substitute is used are met to minimize risks to human health and the environment. EPA describes such substitutes as “acceptable subject to use conditions.” (40 CFR 82.180(b)(2)). For some substitutes, the Agency may permit a narrowed range of use within an end-use or sector. For example, the Agency may limit the use of a substitute to certain end-uses or specific applications within an industry sector. EPA describes these substitutes as “acceptable subject to narrowed use limits.” Under the narrowed use limit, users intending to adopt these substitutes “must ascertain that other alternatives are not technically feasible.” (40 CFR 82.180(b)(3)).

In making decisions regarding whether a substitute is acceptable or unacceptable, and whether substitutes present risks that are lower than or comparable to risks from other substitutes that are currently or potentially available in the end-uses under consideration, EPA examines the criteria in 40 CFR 82.180(a)(7): (i) Atmospheric effects and related health and environmental impacts; (ii) general population risks from ambient exposure to compounds with direct toxicity and to increased ground-level ozone; (iii) ecosystem risks; (iv) occupational risks; (v) consumer risks; (vi) flammability; and (vii) cost and availability of the substitute.

Many SNAP listings include “comments” or “further information” to provide additional information on substitutes. Since this additional information is not part of the regulatory decision, these statements are not binding for use of the substitute under the SNAP program. However, regulatory requirements so listed are binding as applicable under other regulatory programs ( e.g., worker protection regulations promulgated by the U.S. Occupational Safety and Health Administration (OSHA)). The “further information” classification does not necessarily include all other legal obligations pertaining to the use of the substitute. While the items listed are not legally binding under the SNAP program, EPA encourages users of substitutes to apply all statements in the “further information” column in their use of these substitutes. In many instances, the information simply refers to sound operating practices that have already been identified in existing industry and/or building codes or standards. Thus, many of the statements, if adopted, would not require the affected user to make significant changes in existing operating practices.

For additional information on the SNAP program, visit the SNAP portion of EPA's Ozone Layer Protection website at https://www.epa.gov/snap. Copies of the full lists of acceptable substitutes for ODS in all industrial sectors are available at https://www.epa.gov/snap/snap-substitutes-sector. For more information on the Agency's process for administering the SNAP program or criteria for evaluation of substitutes, refer to the initial SNAP rulemaking published March 18, 1994 (59 FR 13044), codified at 40 CFR part 82, subpart G. SNAP decisions and the appropriate Federal Register citations found at: https://www.epa.gov/snap/snap-regulations. Substitutes listed as unacceptable; acceptable, subject to narrowed use limits; or acceptable, subject to use conditions, are also listed in the appendices to 40 CFR part 82, subpart G.

In this proposed rule, EPA refers to listings made in a final rule issued on December 1, 2016, at 81 FR 86778 (“2016 Rule”) in which the Agency listed HFO-1234yf as acceptable, subject to use conditions, in new MDPV, HD pick-up trucks, and complete HD vans. The 2016 Rule also changed the listings for certain hydrofluorocarbons (HFCs) and blends from acceptable to unacceptable in various end-uses in the refrigeration and air conditioning, foam blowing, and fire suppression sectors. After a challenge to the 2016 Rule, the United States Court of Appeals for the District of Columbia Circuit (“the court”) issued a partial vacatur of the 2016 Rule “only to the extent it requires manufacturers to replace HFCs that were previously and lawfully installed as substitutes for ozone-depleting substances.”  5 The court's decision on the 2016 Rule did not vacate the listing of HFO-1234yf for certain types of vehicles, and this proposed rule is not EPA's response to the court's decision on the 2016 Rule.

The following list identifies types of regulated entities that may be affected by this proposed rule and their respective North American Industrial Classification System (NAICS) codes:

This list is not intended to be exhaustive but provides a guide for readers regarding types of entities likely to be regulated by this action if it becomes final as proposed. This list includes the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed above could also be regulated. To determine whether your facility, company, business, or organization could be affected by this action, you should carefully examine the regulations at 40 CFR part 82, subpart G. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

Below is a list of acronyms and abbreviations used in the preamble of this document:

EPA is proposing to list HFO-1234yf as acceptable, subject to use conditions, for MVAC systems in several types of newly manufactured nonroad vehicles, specifically: Agricultural tractors greater than 40 HP; self-propelled agricultural machinery; compact equipment; construction, forestry, and mining equipment; and commercial utility vehicles. All MVAC refrigerants listed as acceptable are subject to use conditions requiring labeling and the use of unique fittings as described in Appendix B to subpart G of part 82—Substitutes Subject to Use Restrictions and Unacceptable Substitutes. EPA is proposing to list HFO-1234yf as acceptable, subject to use conditions, in the five nonroad vehicle types. The proposed use conditions would require that MVAC systems designed to use HFO-1234yf meet the requirements of SAE J639, SAE J1739, and SAE J2844 and would help to ensure that use of HFO-1234yf will not have a significantly greater overall impact on human health and the environment than other alternatives for use in those vehicles. EPA is proposing to update the existing use conditions that are currently required for the use of HFO-1234yf in MVAC systems in newly manufactured LD vehicles, MDPVs, HD pick-up trucks, and complete HD vans and apply them to all the MVAC systems addressed in this proposal. The proposed use conditions are detailed below in section II.A.4, “What are the proposed use conditions?”

While EPA is proposing to list HFO-1234yf as acceptable, subject to use conditions, in certain newly manufactured nonroad vehicles, including some vehicles that would also be considered HD vehicles, we are requesting comment and information on development of HFO-1234yf MVAC systems for other types of HD vehicles not covered in this proposal, particularly HD on-road trucks ( i.e., Class 4-8 trucks between 14,001 and 33,000 or greater pounds). EPA intends to consider these comments in determining whether to initiate a separate rulemaking to list HFO-1234yf in these other vehicle types.

Under SNAP, MVAC systems cool the passenger compartment of LD passenger vehicles and trucks, HD vehicles ( e.g., large pick-ups, delivery trucks, and semi-trucks), off‐road vehicles, buses, and passenger rail vehicles. These systems are typically charged during vehicle manufacture, and the main components are connected by flexible refrigerant lines. Nonroad vehicles can be grouped into several categories ( i.e., agriculture, construction, recreation, and many other purposes). 6 The vehicle types addressed in today's proposal include certain types of newly manufactured nonroad vehicles, specifically:

• Agricultural tractors greater than 40 HP (including two-wheel drive (2WD), mechanical front-wheel drive (MFD), four-wheel drive (4WD), and track tractors) that are used for a number of agricultural applications such as farm work, planting, landscaping, and loading;  7 8

• Self-propelled agricultural machinery (including combines, grain and corn harvesters, sprayers, windrowers, and floaters) that are primarily used for harvesting, fertilizer, and herbicide operations;  9

• Compact equipment (including mini excavators, turf mowers, skid-steer loaders and tractors less than 40 HP) that are primarily used for agricultural operations and residential, commercial, and agricultural landscaping;  10

• Construction, forestry, and mining equipment (including excavators, bulldozers, wheel loaders, feller bunchers, log skidders, road graders, articulated trucks, sub-surface machines, horizontal directional drill, trenchers, and tracked crawlers) that are primarily used to excavate surface and subsurface materials during construction, landscaping, and road maintenance and building;  11 and

• Commercial utility vehicles that are primarily used for ranching, farming, hunting/fishing, construction, landscaping, property maintenance, railroad maintenance, forestry, and mining. 12

These nonroad vehicles are almost exclusively used and operated by professionals ( e.g., agricultural owners or skilled employees/operators) and vary by size, weight, use, and/or horsepower. 13 For example, commercial utility vehicles typically weigh between 1,200 and 2,400 pounds, while agricultural tractors >40 HP typically weigh between 39,000 and 50,000 pounds. 14 15 MVAC systems in these nonroad vehicles can have charge sizes ranging from 650 grams (23 ounces) to 3,400 grams (120 ounces) depending on the manufacturer and cab size, compared to a range of 390 grams (14 ounces) to 1,600 grams (56 ounces) for MVAC systems in light and medium duty passenger vehicles, HD pickups, and complete HD vans. 16 Additionally, unlike onroad passenger vehicles, for example, nonroad vehicles are limited to non-highway terrain ( e.g., fields, construction sites, forests, and mines), have more robust components, are operated at low working speeds, and there are typically a limited number of vehicles in the same location.

The American National Standards Institute/American Society of Heating, Refrigerating and Air Conditioning Engineers (ANSI/ASHRAE) Standard 34-2019 assigns a safety group classification for each refrigerant which consists of two to three alphanumeric characters ( e.g., A2L or B1). The initial capital letter indicates the toxicity and the numeral denotes the flammability. ASHRAE classifies Class A refrigerants as refrigerants for which toxicity has not been identified at concentrations less than or equal to 400 ppm by volume, based on data used to determine threshold limit value-time-weighted average (TLV-TWA) or consistent indices. Class B signifies refrigerants for which there is evidence of toxicity at concentrations below 400 ppm by volume, based on data used to determine TLV-TWA or consistent indices.

Refrigerants are also assigned a flammability classification of 1, 2, 2L, or 3. Tests for flammability are conducted in accordance with American Society for Testing and Materials (ASTM) E681 using a spark ignition source at 140 °F (60 °C) and 14.7 psia (101.3 kPa). 17 The flammability classification “1” is given to refrigerants that, when tested, show no flame propagation. The flammability classification “2” is given to refrigerants that, when tested, exhibit flame propagation, have a heat of combustion less than 19,000 kJ/kg (8,169 Btu/lb.), and have a lower flammability limit (LFL) greater than 0.10 kg/m 3 . The flammability classification “2L” is given to refrigerants that, when tested, exhibit flame propagation, have a heat of combustion less than 19,000 kJ/kg (8,169 BTU/lb.), have an LFL greater than 0.10 kg/m 3 , and have a maximum burning velocity of 10 cm/s or lower when tested at in dry air at 73.4 °F (23.0 °C) and 14.7 psia (101.3 kPa). The flammability classification “3” is given to refrigerants that, when tested, exhibit flame propagation and that either have a heat of combustion of 19,000 kJ/kg (8,169 BTU/lb.) or greater or have an LFL of 0.10 kg/m 3 or lower. Using these safety group classifications, ANSI/ASHRAE Standard 34-2019 categorizes HFO-1234yf in the A2L Safety Group.

When reviewing a substitute under SNAP, EPA compares the risk posed by that substitute to the risks posed by other alternatives and considers whether that specific substitute under review poses significantly more risk than other available or potentially available alternatives for the same use. For this action, EPA performed a comparative risk analysis, based on our criteria for review, including an evaluation of environmental impacts, flammability, and toxicity. Redacted submissions that do not include information claimed as CBI by the submitter and supporting documentation for HFO-1234yf are provided in the docket for this proposed rule (EPA-HQ-OAR-2021-0347 at https://www.regulations.gov ). EPA's assessments to examine the health and environmental risks of HFO-1234yf in each equipment type are also available in the docket for this proposed rule. 18 19 20 21 22

As explained more fully below, to help evaluate environmental, flammability, and toxicity risks resulting from the use of HFO-1234yf in certain types of newly manufactured nonroad vehicles, EPA considered the Agency's analyses  23 24 25 26 27 28 29 30 31 conducted in support of the 2011 (76 FR 17488; March 29, 2011) and 2016 (81 FR 86778; December 1, 2016) listing decisions for HFO-1234yf in MVAC systems, including information submitted during the public comment period of the proposal for the 2011 final decision (October 19, 2009; 74 FR 53445), such as the SAE Cooperative Research Project's (CRP) risk assessments. 32 33 34 35 36 These risk assessments are available in the docket for this proposed rule. The refrigerants to which HFO-1234yf was compared in the 2011 action for LD vehicles are the same refrigerants available for use in the nonroad vehicle types included in this proposal. In addition, EPA considered risk assessments  37 38 39 40 41 conducted by the Association of Equipment Manufacturers (AEM), an industry consortium of construction and agriculture equipment manufacturers, and found these were consistent with the Agency's assessments to examine the health and environmental risks of HFO-1234yf in each vehicle type.

The SNAP program considers a number of environmental criteria when evaluating substitutes: Ozone depleting potential (ODP); climate effects, primarily based on global warming potential (GWP); local air quality impacts, particularly potential impacts on smog formation from emissions of volatile organic compounds (VOC); and ecosystem effects, particularly from negative impacts on aquatic life. These and other environmental and health risks are discussed below.

HFO-1234yf is chemical substance identified as 2,3,3,3-tetrafluoroprop-1-ene (CAS Reg. No. 754-12-1). HFO-1234yf has a GWP of four, 42 43 which is similar to or lower than the GWP of other alternatives for the nonroad vehicles addressed in this proposal. For example, its GWP is significantly lower than that of HFC-134a, the refrigerant most widely used in these vehicles today, which has a GWP of 1,430. As shown in Table 1, two other alternatives, HFC-152a, 44 and CO 2   45 have GWPs of 124 and 1, respectively.

Other acceptable refrigerants for the nonroad vehicles addressed in today's proposal have GWPs ranging from 933 to 3,337. These include several blend refrigerants that are listed as acceptable, subject to use conditions, for these nonroad vehicles, including the HFC blends SP34E and R-426A (also known as RS-24) and the HCFC blends, R-416A (also known as HCFC Blend Beta or FRIGC FR12), R-406A, R-414A (also known as HCFC Blend Xi or GHG-X4), R-414B (also known as HCFC Blend Omicron), HCFC Blend Delta (also known as Free Zone), Freeze 12, GHG-X5, and HCFC Blend Lambda (also known as GHG-HP). In a final rule issued July 20, 2015, at 80 FR 42870 (“2015 Rule”), 46 EPA listed the use of certain refrigerant blends, including the ones mentioned above, as unacceptable in newly manufactured LD vehicles starting in MY 2017. EPA did not propose or finalize a change of status for use of the refrigerant blends in MVACs in nonroad vehicles. The refrigerant blends remain acceptable, subject to use conditions, for the nonroad vehicles addressed in this proposed rule. Also, although they are listed as acceptable, subject to use conditions, EPA is not aware of the use or development of HFC-152a, CO 2 , or any of the refrigerant blends above in newly manufactured nonroad vehicles. 47 Additionally, all MVAC refrigerants are subject to use conditions requiring labeling and the use of unique fittings, and the two lower-GWP alternatives currently approved for use in nonroad vehicles ( i.e., HFC-152a and CO 2 ) are subject to additional use conditions mitigating flammability and toxicity as appropriate to the alternative.

HFO-1234yf does not deplete the ozone layer. Similarly, HFC-134a, HFC-152a, CO 2 , the HFC blends SP34E, and R-426A do not deplete the ozone layer; however, the HCFC blends have ODPs ranging from 0.012 to 0.056.

HFO-1234yf, HFC-134a, HFC-152a, and CO 2 are exempt from the definition of VOC under CAA regulations (see 40 CFR 51.100(s)) addressing the development of state implementation plans (SIPs) to attain and maintain the National Ambient Air Quality Standards (NAAQS). The HFC blends and some of the HCFC blends have one or more components that are VOC.

Another potential environmental impact of HFO-1234yf is its atmospheric decomposition to trifluoroacetic acid (TFA, CF 3 COOH). TFA is a strong acid that may accumulate in soil, plants, and aquatic ecosystems over time and may have the potential to adversely impact plants, animals, and ecosystems. 48 Simulations have found that the amount of TFA in rainfall produced from a transition of all mobile air conditioners in the continental United States to HFO-1234yf has been estimated to be double or more the values observed in the United States in 2009 from all sources, natural and artificial ( i.e., HFC-134a). 49 In comparison, the amount of TFA produced from HFO-1234yf is expected to be higher than that of other fluorinated refrigerants in this end-use.

In support of the 2011 and 2016 listing decisions for HFO-1234yf in certain MVAC systems, EPA analyzed potential TFA concentrations from a full transition to HFO-1234yf in all refrigeration and stationary AC systems including all MVAC applications. 50 51 52 53 54 EPA has also considered this analysis in developing this proposal. The analysis found a maximum projected concentration of TFA in rainwater of approximately 1,700 ng/L. This maximum projected concentration identified in EPA's analysis, 1700 ng/L, 55 was roughly 34 percent higher than that projected in a 2009 peer reviewed article. 56 The difference in projected TFA concentrations in water is a reflection of EPA's reliance on higher emission estimates. 57 Even when relying on more conservative emission estimates, a concentration of 1700 ng/L corresponds to roughly 1/600th of the No-Observed-Adverse-Effect-Level (NOAEL) for the most sensitive algae species, which is also well below the NOAEL for the most sensitive aquatic animal species. 58

Since the 2011 final rule listing HFO-1234yf as acceptable for LD vehicles, additional research on TFA has been conducted. The United Nations Environment Programme (UNEP) Ozone Secretariat provided a summary of key information pertaining to TFA based on the 2014 Assessment Reports of the Environmental Effects Assessment Panel (EEAP) and the Scientific Assessment Panel (SAP) of the Montreal Protocol. The brief states, “While it is well established that TFA is a ubiquitous natural component in rivers, lakes, and other surface water bodies, uncertainties remain regarding anthropogenic sources, long-term fate and abundances as these are linked to current and future use and emissions of HFCs, HCFCs, and HFOs. Based on estimates to 2040, increases are predicted to remain relatively low and are therefore not expected to be a significant risk to human health or detrimental to the environment. Projected future increased loadings of TFA to playas, land-locked lakes, and the oceans due to continued use of HCFCs, HFCs, and replacement products such as HFOs are still judged to present negligible risks for aquatic organisms and humans.”  59 This UNEP brief also states that TFA and its salts “do not bioconcentrate in aquatic organisms, and do not biomagnify in the food chain. Thus, they present negligible risk to organisms higher on the food chain, including humans.” The 2018 Assessment Report of the EEAP reiterated that “[overall], there is no new evidence that contradicts the conclusion of our previous Assessments that exposure to current and projected concentrations of salts of TFA in surface waters present a minimal risk to the health of humans and the environment.”  60 EEAP also referred to a 2017 review of this topic  61 which reached a similar conclusion.

A 2014 study by Kazil, et al. 62 analyzed TFA deposition in the United States assuming 100 percent of all MVAC systems use HFO-1234yf. The results indicated that rainwater TFA concentrations, while varying strongly geographically, will be orders of magnitude lower compared to the levels at which toxic effects are observed in aquatic systems. More recently, the World Meteorological Organization (WMO) concluded that “[t]here is increased confidence that [TFA] produced from degradation of HFCs, HCFCs, and HFOs will not harm the environment over the next few decades,”  63 while also calling for periodic reevaluation of this conclusion. EPA likewise finds that the data on TFA are not sufficient to propose or establish additional restrictions under SNAP at this time. In sum, based on our consideration of these documents, the additional information available since our 2011 listing decision shows no greater risk than our earlier analysis. We further note that the requirements for the safe disposal of appliances and the venting prohibition under section 608 of the CAA, codified at 40 CFR 82.155 and 40 CFR 82.154(a), respectively, and accompanying refrigerant management requirements reduce emissions of these refrigerants. EPA intends to continue reviewing the research on potential impacts from TFA in the future and may consider taking additional action in the future if warranted.

Taking into consideration the analysis conducted in support of the 2011 listing decision, which was based on conservative emissions assumptions and a transition from HFC-134a to HFO-1234yf for all MVAC systems (not limited to LD vehicles), and the research that has been conducted since, EPA proposes that the use of HFO-1234yf in the nonroad vehicles addressed in this action will not pose a significant risk to the environment from atmospheric decomposition to TFA.

Based on the consideration of all of these environmental impacts, EPA proposes that HFO-1234yf does not pose significantly greater risk to the environment than the other alternatives for use in newly manufactured nonroad vehicles addressed in this action, and it poses significantly less risk than several of the alternatives with higher GWPs and ODPs.

HFO-1234yf is a flammable refrigerant classified as A2L under ASHRAE 34-2013. HFC-134a, CO 2, and the refrigerant blends SP34E and R-426A (also known as RS-24) and the HCFC blends, R-416A (also known as HCFC Blend Beta or FRIGC FR12), R-414A (also known as HCFC Blend Xi or GHG-X4), R-414B (also known as HCFC Blend Omicron), HCFC Blend Delta (also known as Free Zone), Freeze 12, GHG-X5, and HCFC Blend Lambda (also known as GHG-HP) are nonflammable refrigerants, while HFC-152a and R-406A are slightly more flammable than HFO-1234yf with an ASHRAE classification of A2. HFO-1234yf is flammable when its concentration in air is in the range of 6.2 percent and 12.3 percent by volume (62,000 ppm to 123,000 ppm). 64 In the presence of an ignition source ( e.g., static electricity, a spark resulting from a switch malfunction, or a cigarette), an explosion or a fire could occur when the concentration of HFO-1234yf exceeds its LFL of 62,000 ppm, posing a significant safety concern for workers and consumers if it is not handled carefully. However, HFO-1234yf is difficult to ignite and, in the event of ignition, the flames would propagate slowly. 65

With regards to flammability risks to workers, EPA's risk screens evaluated the potential for a fire from release and ignition in workplace situations and work-site operations, such as during equipment manufacture, servicing and disposal or recycling of vehicle end-of-life for the five nonroad vehicles. EPA considered the characteristics that could be different from LD and other HD vehicles, such as differences in the engine compartment size, passenger cabins, and operating conditions, and how those might impact risks. In order to determine the potential flammability risks during servicing or end-use in case of a release of refrigerant into the cab, concentrations of HFO-1234yf immediately following a 60 percent release of refrigerant over a period of one minute into the cab were compared to the LFL and upper flammability limit (UFL) for HFO-1234yf reported by ASHRAE Standard 34 ( i.e., 62,000 ppm and 123,000 ppm, respectively). The one-minute time duration is most appropriate for determining the risks of flammable refrigerants because the potential maximum instantaneous concentration can be estimated and compared to the LFL. Two key inputs to the models were the cab volume ( i.e., the space into which the refrigerant would leak) and the refrigerant charge size. Because passenger compartment volumes and refrigerant charge sizes can vary widely from model to model, the highest ratio of charge size to compartment volume identified was used as the input into the models.

In the event of a leak, SAE Standard J2772 specifies that nonroad vehicles be manufactured such that the pressure differential between the air conditioning system and the cab allows only up to 60 percent of the refrigerant charge to be released into the cab. 66 Independent testing of refrigerant releases from nonroad vehicles, according to SAE Standard J2772, found that the amount of refrigerant released following a line leak was much lower than 60 percent.

To represent a plausible worst-case scenario, EPA's box modeling assumed that 60 percent of the charge of the air conditioning systems for the five nonroad vehicles is released into the cab of the vehicles over a period of one minute. EPA's worst-case scenario box modeling resulted in the concentration of HFO-1234yf in the cab exceeding the LFL of 62,000 ppm, for the five nonroad vehicles. However, the estimated exposures were derived using conservative assumptions and represent worst-case scenarios with a low probability of occurrence, as the analyses assume a rapid release of refrigerant ( i.e., one minute), assume the minimum required fresh air intake, and do not consider the air recirculation rate for the nonroad vehicles or other variables that would potentially reduce the concentration levels in the air to below the flammable range for HFO-1234yf. Additionally, flammability concerns are further reduced due to the design of MVAC systems for the five vehicle types as described above in section II.A.1 and the low probability of collisions for these nonroad vehicles. MVAC systems in the nonroad vehicles are robust and made to withstand strenuous operation, which lowers the potential for line leaks due to wear. According to AEM, 67 68 69 70 71 the operator's compartment in agricultural tractors greater than 40 HP; self-propelled agricultural machinery; compact equipment; and construction, forestry, and mining equipment is a completely self-contained unit which provides an additional level of safety in a collision event. For commercial utility vehicles, which are smaller than the other four nonroad vehicle types, AEM noted that the engine compartment is contained in the rear of the vehicle, under the cargo bed, with the main components of the MVAC system in the front of the cabin with only the compressor and two lines near the engine. The potential for collisions is also less likely because most of the vehicles are operated by trained professionals, typically at low speed, and are only driven on the highway to move from one site or nonroad location to another.

In addition to the plausible worst-case scenario analysis, which employs a simple box model, EPA's risk screens reference modeling conducted by AEM in the flammability assessments. The AEM consortium used two different models in its assessments: (1) A box model to examine worst-case scenarios for a wide variety of nonroad vehicles addressed in this proposal and (2) a computational fluid dynamics (CFD)  72 73 74 75 76 77 model to more realistically represent the behavior of the leaked refrigerant in an nonroad vehicle.The AEM box model modeled the release of 60 percent of the refrigerant charge in the vehicles with varying charge and cab sizes and assumed a near-instantaneous leak of refrigerant over a period of 10 seconds. Six of the scenarios modeled in the box model resulted in the concentration of HFO-1234yf in the cab being equal to or exceeding the LFL; the concentrations from the remaining six scenarios were below the LFL. Similar to EPA's box modeling, the estimated exposures were derived using conservative assumptions and represent worst-case scenarios with a low probability of occurrence, as the analyses assume a rapid release of refrigerant, assume the minimum required fresh air intake ( i.e., 43 m 3 /hour), and do not consider the air recirculation rate for the nonroad vehicles or other variables that would potentially reduce the concentration levels in the air to below the flammable range for HFO-1234yf.

NMFS manages the GOA groundfish fisheries in the exclusive economic zone (EEZ) of the GOA under the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP). The Council prepared the FMP under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801 et seq. Regulations governing U.S. fisheries and implementing the FMP appear at 50 CFR parts 600, 679, and 680.

The FMP and its implementing regulations require that NMFS, after consultation with the Council, specify the total allowable catch (TAC) for each target species, the sum of which must be within the optimum yield (OY) range of 116,000 to 800,000 metric tons (mt) (§ 679.20(a)(1)(i)(B)). Section 679.20(c)(1) further requires NMFS to publish and solicit public comment on proposed annual TACs and apportionments thereof, Pacific halibut prohibited species catch (PSC) limits, and seasonal allowances of pollock and Pacific cod. The proposed harvest specifications in Tables 1 through 20 of this rule satisfy these requirements. For 2022 and 2023, the sum of the proposed TAC amounts is 409,039 mt.

Under § 679.20(c)(3), NMFS will publish the final 2022 and 2023 harvest specifications after (1) considering comments received within the comment period (see DATES ), (2) consulting with the Council at its December 2021 meeting, (3) considering information presented in the 2022 SIR to the Final EIS that assesses the need to prepare a Supplemental EIS (see ADDRESSES ), and (4) considering information presented in the final 2021 SAFE report prepared for the 2022 and 2023 groundfish fisheries.

In October 2021, the Council's Scientific and Statistical Committee (SSC), its Advisory Panel (AP), and the Council reviewed the most recent biological and harvest information about the condition of the GOA groundfish stocks. The Council's GOA Groundfish Plan Team (Plan Team) compiled and presented this information in the final 2020 SAFE report for the GOA groundfish fisheries, dated November 2020 (see ADDRESSES ). The SAFE report contains a review of the latest scientific analyses and estimates of each species' biomass and other biological parameters, as well as summaries of the available information on the GOA ecosystem and the economic condition of the groundfish fisheries off Alaska. From these data and analyses, the Plan Team recommends, and the SSC sets, an Overfishing Limit (OFL) and Acceptable Biological Catch (ABC) for each species or species group. The amounts proposed for the 2022 and 2023 OFLs and ABCs are based on the 2020 SAFE report. The AP and Council recommended that the proposed 2022 and 2023 TACs be set equal to proposed ABCs for all species and species groups, with the exception of the species and species groups further discussed below. The proposed OFLs, ABCs, and TACs could be changed in the final harvest specifications depending on the most recent scientific information contained in the final 2021 SAFE report. The stock assessments that will comprise, in part, the 2021 SAFE report are available at https://www.fisheries.noaa.gov/alaska/population-assessments/north-pacific-groundfish-stock-assessment-and-fishery-evaluation. The final 2021 SAFE report will be available from the same source.

In November 2021, the Plan Team will update the 2020 SAFE report to include new information collected during 2021, such as NMFS stock surveys, revised stock assessments, and catch data. The Plan Team will compile this information and present the draft 2021 SAFE report at the December 2021 Council meeting. At that meeting, the SSC and the Council will review the 2021 SAFE report, and the Council will approve the 2021 SAFE report. The Council will consider information in the 2021 SAFE report, recommendations from the November 2021 Plan Team meeting and December 2021 SSC and AP meetings, public testimony, and relevant written public comments in making its recommendations for the final 2022 and 2023 harvest specifications. Pursuant to § 679.20(a)(2) and (3), the Council could recommend adjusting the TACs if warranted based on the biological condition of groundfish stocks or a variety of socioeconomic considerations, or if required to cause the sum of TACs to fall within the OY range.

In previous years, the most significant changes (relative to the amount of assessed tonnage of fish) to the OFLs and ABCs from the proposed to the final harvest specifications have been based on the most recent NMFS stock surveys. These surveys provide updated estimates of stock biomass and spatial distribution, and inform changes to the models used for producing stock assessments. At the September 2021 Plan Team meeting, NMFS scientists presented updated and new survey results. Scientists also discussed potential changes to assessment models, and accompanying preliminary stock estimates. At the October 2021 Council meeting, the SSC reviewed this information. The species with potential for a significant model change is rock sole. Model changes can result in changes to final OFLs, ABCs, and TACs.

In November 2021, the Plan Team will consider updated survey results and updated stock assessments for groundfish, which will be included in the draft 2021 SAFE report. If the 2021 SAFE report indicates that the stock biomass trend is increasing for a species, then the final 2022 and 2023 harvest specifications for that species may reflect an increase from the proposed harvest specifications. Conversely, if the 2021 SAFE report indicates that the stock biomass trend is decreasing for a species, then the final 2022 and 2023 harvest specifications may reflect a decrease from the proposed harvest specifications.

The proposed 2022 and 2023 OFLs and ABCs are based on the best available biological and scientific information, including projected biomass trends, information on assumed distribution of stock biomass, and revised technical methods used to calculate stock biomass. The FMP specifies the tiers to be used to calculate OFLs and ABCs. The tiers applicable to a particular stock or stock complex are determined by the level of reliable information available to the fisheries scientists. This information is categorized into a successive series of six tiers to define OFLs and ABCs, with Tier 1 representing the highest level of information quality available and Tier 6 representing the lowest level of information quality available. The Plan Team used the FMP tier structure to calculate OFLs and ABCs for each groundfish species. The SSC adopted the proposed 2022 and 2023 OFLs and ABCs recommended by the Plan Team for all groundfish species. The proposed 2022 and 2023 TACs are based on the best available biological and socioeconomic information. The Council adopted the SSC's OFL and ABC recommendations and the AP's TAC recommendations.

For Pacific cod, there is continued concern among stock assessment scientists about the stability of the Pacific cod stock, which may have substantial management implications for 2022 and 2023. In November 2021, NMFS will receive the GOA Pacific cod stock assessment, which will include information about this stock's spawning biomass. The Steller sea lion harvest control regulations at § 679.20(d)(4) state that if a biological assessment of the Pacific cod stock projects that the spawning biomass within an area will be equal to or below 20 percent of the projected unfished spawning biomass during a fishing year, the Regional Administrator must prohibit directed fishing within that area, and the directed fishery will remain closed until a subsequent biological assessment projects that the spawning biomass will exceed 20 percent of the projected unfished spawning biomass. Also, if Pacific cod spawning biomass falls below the B 17.5 % level, a rebuilding plan will be required to comply with provisions of the Magnuson-Stevens Act (16 U.S.C. 1854(e)).

The Council recommended proposed 2022 and 2023 TACs that are equal to proposed ABCs for all species and species groups, with the exception of pollock for the combined Western and Central GOA and West Yakutat District area, Pacific cod, shallow-water flatfish in the Western GOA, arrowtooth flounder in the Western GOA and the West Yakutat and Southeast Outside (SEO) Districts, flathead sole in the Western and Central GOA, Atka mackerel, and “other rockfish” in the SEO District.

The combined Western and Central Regulatory Areas and the West Yakutat (WYK) District of the Eastern Regulatory Area (the W/C/WYK) pollock TAC and the GOA Pacific cod TACs are set to account for the State of Alaska's (State) guideline harvest levels (GHL) for the State water pollock and Pacific cod fisheries so that the ABCs are not exceeded. The shallow-water flatfish, arrowtooth flounder, and flathead sole TACs are set to allow for increased harvest opportunities for these target species while conserving the halibut PSC limit for use in other fisheries. The Atka mackerel TAC is set to accommodate incidental catch amounts (ICA) in other fisheries. The “other rockfish” TAC in the SEO District is set to reduce the amount of discards of the species in that complex. These reductions are described below.

NMFS's proposed apportionments of groundfish species are based on the distribution of biomass among the regulatory areas over which NMFS manages the species. Additional regulations govern the apportionment of pollock, Pacific cod, and sablefish. Additional detail on apportionments of pollock, Pacific cod, and sablefish are described below.

The ABC for the pollock stock in the W/C/WYK Regulatory Area accounts for the GHL established by the State for the Prince William Sound (PWS) pollock fishery. The Plan Team, SSC, AP, and Council have recommended that the sum of all State water and Federal water pollock removals from the GOA not exceed ABC recommendations. For 2022 and 2023, the Council recommended the W/C/WYK pollock ABC include the amount to account for the State's PWS GHL. At the November 2018 Plan Team meeting, State fisheries managers recommended setting the future PWS GHL at 2.5 percent of the annual W/C/WYK pollock ABC. For 2022, this yields a PWS pollock GHL of 2,298 mt, a decrease of 345 mt from the 2021 PWS GHL of 2,643 mt. After accounting for the PWS GHL, the 2022 and 2023 pollock ABC for the combined W/C/WYK areas is then apportioned among four statistical areas (Areas 610, 620, 630, and 640) as both ABCs and TACs, as described below and detailed in Table 1. The total ABCs and TACs for the four statistical areas, plus the State GHL, do not exceed the combined W/C/WYK ABC. The proposed W/C/WYK 2022 and 2023 pollock ABC is 91,934 mt, and the proposed TAC is 89,636 mt.

Apportionments of pollock to the W/C/WYK management areas are considered to be apportionments of annual catch limit (ACL) rather than apportionments of ABCs. This more accurately reflects that such apportionments address management concerns, rather than biological or conservation concerns. In addition, apportionments of the ACL in this manner allow NMFS to balance any transfer of TAC among Areas 610, 620, and 630 pursuant to § 679.20(a)(5)(iv)(B) to ensure that the combined W/C/WYK ACL, ABC, and TAC are not exceeded.

NMFS proposes pollock TACs in the Western (Area 610) and Central (Areas 620 and 630) Regulatory Areas and the West Yakutat (Area 640) and the SEO (Area 650) Districts of the GOA (see Table 1). NMFS also proposes seasonal apportionment of the annual pollock TAC in the Western and Central Regulatory Areas of the GOA among Statistical Areas 610, 620, and 630. These apportionments are divided equally among the following two seasons: the A season (January 20 through May 31) and the B season (September 1 through November 1) (§§ 679.23(d)(2)(i) and (ii), and 679.20(a)(5)(iv)(A) and (B)). Additional detail is provided below; Table 2 lists these amounts.

The proposed 2022 and 2023 Pacific cod TACs are set to accommodate the State's GHLs for Pacific cod in State waters in the Western and Central Regulatory Areas, as well as in PWS (in the Eastern Regulatory Area) (see Table 1). The Plan Team, SSC, AP, and Council recommended that the sum of all State water and Federal water Pacific cod removals from the GOA not exceed ABC recommendations. Accordingly, the Council recommended the 2022 and 2023 Pacific cod TACs in the Western, Central, and Eastern Regulatory Areas to account for State GHLs. Therefore, the proposed 2022 and 2023 Pacific cod TACs are less than the proposed ABCs by the following amounts: (1) Western GOA, 3,868 mt; (2) Central GOA, 5,511 mt; and (3) Eastern GOA, 801 mt. These amounts reflect the State's 2022 and 2023 GHLs in these areas, which are 30 percent of the Western GOA proposed ABC, and 25 percent of the Eastern and Central GOA proposed ABCs.

The Western and Central GOA Pacific cod TACs are allocated among various gear and operational sectors. NMFS also establishes seasonal apportionments of the annual Pacific cod TACs in the Western and Central Regulatory Areas. The Pacific cod sector and seasonal apportionments are discussed in detail in a subsequent section and in Table 4 of this rule.

The Council's recommendation for sablefish area apportionments takes into account the prohibition on the use of trawl gear in the SEO District of the Eastern Regulatory Area (§ 679.7(b)(1)) and makes available five percent of the Eastern Regulatory Area (WYK and SEO Districts combined) TAC to vessels using trawl gear for use as incidental catch in other trawl groundfish fisheries in the WYK District (§ 679.20(a)(4)(i)). Additional detail is provided below. Tables 5 and 6 list the proposed 2022 and 2023 allocations of the sablefish TAC to fixed gear and trawl gear in the GOA.

For 2022 and 2023, the Council recommends and NMFS proposes the OFLs, ABCs, and TACs listed in Table 1. These amounts are consistent with the biological condition of groundfish stocks as described in the 2020 SAFE report. The proposed ABCs reflect harvest amounts that are less than the specified overfishing levels. The proposed TACs are adjusted for other biological and socioeconomic considerations. The sum of the proposed TACs for all GOA groundfish is 409,039 mt for 2022 and 2023, which is within the OY range specified by the FMP. These proposed amounts and apportionments by area, season, and sector are subject to change pending consideration of the 2021 SAFE report, public comment, and the Council's recommendations for the final 2022 and 2023 harvest specifications during its December 2021 meeting.

Section 679.20(b)(2) requires NMFS to set aside 20 percent of each TAC for pollock, Pacific cod, flatfish, sharks, and octopuses in reserve for possible apportionment at a later date during the fishing year. Section 679.20(b)(3) authorizes NMFS to reapportion all or part of these reserves. In 2021, NMFS reapportioned all of the reserves in the final harvest specifications. For 2022 and 2023, NMFS proposes reapportionment of each of the reserves for pollock, Pacific cod, flatfish, sharks, and octopuses back into the original TAC from which the reserve was derived. NMFS expects, based on recent harvest patterns, that such reserves will not be necessary and that the entire TAC for each of these species will be caught or are needed to promote efficient fisheries. The TACs in Table 1 reflect this proposed reapportionment of reserve amounts to the original TAC for these species and species groups, i.e., each proposed TAC for the above-mentioned species or species groups contains the full TAC recommended by the Council.

In the GOA, pollock is apportioned by season and area, and is further allocated for processing by inshore and offshore components. Pursuant to § 679.20(a)(5)(iv)(B), the annual pollock TAC specified for the Western and Central Regulatory Areas of the GOA is apportioned into two seasonal allowances of 50 percent. As established by § 679.23(d)(2)(i) through (ii), the A and B season allowances are available from January 20 through May 31 and September 1 through November 1, respectively.

The GOA pollock stock assessment continues to use a four-season methodology to determine pollock distribution in the Western and Central Regulatory Areas of the GOA to maintain continuity in the historical pollock apportionment time-series. Pollock TACs in the Western and Central Regulatory Areas of the GOA are apportioned among Statistical Areas 610, 620, and 630 in proportion to the distribution of pollock biomass determined by the most recent NMFS surveys, pursuant to § 679.20(a)(5)(iv)(A). The pollock chapter of the 2020 SAFE report (see ADDRESSES ) contains a comprehensive description of the apportionment and reasons for the minor changes from past apportionments. For purposes of specifying pollock between two seasons for the Western and Central Regulatory Areas of the GOA, NMFS has summed the A and B season apportionments and the C and D season apportionments as calculated in the 2020 GOA pollock assessment. This yields the seasonal amounts specified for the A season and the B season, respectively.

Within any fishing year, the amount by which a seasonal allowance is underharvested or overharvested may be added to, or subtracted from, subsequent seasonal allowances in a manner to be determined by the Regional Administrator (§ 679.20(a)(5)(iv)(B)). The rollover amount is limited to 20 percent of the subsequent seasonal TAC apportionment for the statistical area. Any unharvested pollock above the 20-percent limit could be further distributed to the subsequent season in the other statistical areas, in proportion to the estimated biomass to the subsequent season and in an amount no more than 20 percent of the seasonal TAC apportionment in those statistical areas (§ 679.20(a)(5)(iv)(B)). The proposed 2022 and 2023 pollock TACs in the WYK District of 4,706 mt and the SEO District of 10,148 mt are not allocated by season.

Table 2 lists the proposed 2022 and 2023 area apportionments and seasonal allowances of pollock in the Western and Central Regulatory Areas. The amounts of pollock for processing by the inshore and offshore components are not shown. Section 679.20(a)(6)(i) requires allocation of 100 percent of the pollock TAC in all regulatory areas and all seasonal allowances to vessels catching pollock for processing by the inshore component after subtraction of amounts projected by the Regional Administrator to be caught by, or delivered to, the offshore component incidental to directed fishing for other groundfish species. Thus, the amount of pollock available for harvest by vessels harvesting pollock for processing by the offshore component is the amount that will be taken as incidental catch during directed fishing for groundfish species other than pollock, up to the maximum retainable amounts allowed by §  679.20(e) and (f). At this time, these ICAs of pollock are unknown and will be determined during the fishing year during the course of fishing activities by the offshore component.

Pursuant to § 679.20(a)(12)(i), NMFS proposes allocations for the 2022 and 2023 Pacific cod TACs in the Western and Central Regulatory Areas of the GOA among gear and operational sectors. NMFS also proposes seasonal apportionments of the Pacific cod TACs in the Western and Central Regulatory Areas. A portion of the annual TAC is apportioned to the A season for hook-and-line, pot, and jig gear from January 1 through June 10, and for trawl gear from January 20 through June 10. The remainder of the annual TAC is apportioned to the B season for jig gear from June 10 through December 31, for hook-and-line and pot gear from September 1 through December 31, and for trawl gear from September 1 through November 1 (§§ 679.23(d)(3) and 679.20(a)(12)). NMFS also proposes allocating the 2022 and 2023 Pacific cod TACs annually between the inshore (90 percent) and offshore (10 percent) components in the Eastern Regulatory Area of the GOA (§ 679.20(a)(6)(ii)).

In the Western GOA, the Pacific cod TAC is apportioned seasonally first to vessels using jig gear, and then among catcher vessels (CV) using hook-and-line gear, catcher/processors (CP) using hook-and-line gear, CVs using trawl gear, CPs using trawl gear, and vessels using pot gear (§ 679.20(a)(12)(i)(A)). In the Central GOA, the Pacific cod TAC is apportioned seasonally first to vessels using jig gear, and then among CVs less than 50 feet in length overall using hook-and-line gear, CVs equal to or greater than 50 feet in length overall using hook-and-line gear, CPs using hook-and-line gear, CVs using trawl gear, CPs using trawl gear, and vessels using pot gear (§ 679.20(a)(12)(i)(B)). Excluding seasonal apportionments to the jig gear sector, NMFS proposes apportioning the remainder of the annual Pacific cod TACs as follows: the seasonal apportionments of the annual TAC in the Western GOA are 63.84 percent to the A season and 36.16 percent to the B season, and in the Central GOA are 64.16 percent to the A season and 35.84 percent to the B season.

Under § 679.20(a)(12)(ii), any overage or underage of the Pacific cod allowance from the A season may be subtracted from, or added to, the subsequent B season allowance. In addition, any portion of the hook-and-line, trawl, pot, or jig sector allocations that is determined by NMFS as likely to go unharvested by a sector may be reallocated to other sectors for harvest during the remainder of the fishing year.

Pursuant to § 679.20(a)(12)(i)(A) and (B), a portion of the annual Pacific cod TACs in the Western and Central GOA will be allocated to vessels with a Federal fisheries permit that use jig gear before the TACs are apportioned among other non-jig sectors. In accordance with the FMP, the annual jig sector allocations may increase to up to 6 percent of the annual Western and Central GOA Pacific cod TACs, depending on the annual performance of the jig sector (see Table 1 of Amendment 83 to the FMP for a detailed discussion of the jig sector allocation process (76 FR 74670, December 1, 2011)). Jig sector allocation increases are established for a minimum of two years.

NMFS has evaluated the historical harvest performance of the jig sector in the Western and Central GOA, and is proposing the 2022 and 2023 Pacific cod apportionments to this sector based on its historical harvest performance through 2021. NMFS did not evaluate the 2020 performance of the jig sectors in the Western and Central GOA. In 2020, the catch for the jig sectors could not reach 90 percent of the initial allocation required for a performance increase because NMFS prohibited directed fishing for all Pacific cod sectors (84 FR 70438, December 23, 2019). For 2022 and 2023, NMFS proposes that the jig sector receive 3.5 percent of the annual Pacific cod TAC in the Western GOA. The 2022 and 2023 allocations consist of a base allocation of 1.5 percent of the Western GOA Pacific cod TAC, and prior historical harvest performance increases of 2.0 percent. For 2022 and 2023, NMFS also proposes that the jig sector receive 1.0 percent of the annual Pacific cod TAC in the Central GOA. The 2022 and 2023 allocations consist of a base allocation of 1.0 percent, and no additional performance increase in the Central GOA. The 2014 through 2021 Pacific cod jig allocations, catch, and percent allocation changes are listed in Table 3.