The Secretary of Homeland Security (Secretary) takes this action pursuant to his authorities concerning asylum determinations. The Homeland Security Act of 2002 (HSA), Public Law 107-296, as amended, transferred many functions related to the execution of Federal immigration law to the newly created DHS. The HSA amended the Immigration and Nationality Act (INA or the Act), charging the Secretary “with the administration and enforcement of this chapter and all other laws relating to the immigration and naturalization of aliens,” INA 103(a)(1), 8 U.S.C. 1103(a)(1), and granted the Secretary the power to take all actions “necessary for carrying out” the immigration laws, including the INA, id. 1103(a)(3). The HSA also transferred to DHS responsibility for affirmative asylum applications made outside the removal context. See 6 U.S.C. 271(b)(3). That authority has been delegated within DHS to U.S. Citizenship and Immigration Services (USCIS). USCIS asylum officers determine, in the first instance, whether a noncitizen's affirmative asylum application should be granted. See 8 CFR 208.4(b), 208.9. With limited exception, the Department of Justice Executive Office for Immigration Review has exclusive authority to adjudicate asylum applications filed by noncitizens who are in removal proceedings. See INA 103(g), 240; 8 U.S.C. 1103(g), 1229a. This broad division of functions and authorities informs the background of this rule.

Asylum is a discretionary benefit that generally can be granted to eligible noncitizens who are physically present or who arrive in the United States, irrespective of their status, subject to the requirements in section 208 of the INA, 8 U.S.C. 1158, and implementing regulations, see 8 CFR parts 208, 1208.

Section 208(d)(5) of the INA, 8 U.S.C. 1158(d)(5), imposes several mandates and procedural requirements for the consideration of asylum applications. Congress also specified that the Attorney General and Secretary of Homeland Security “may provide by regulation for any other conditions or limitations on the consideration of an application for asylum,” so long as those limitations are “not inconsistent with this chapter.” INA 208(d)(5)(B), 8 U.S.C. 1158(d)(5)(B). Thus, the current statutory framework leaves the Attorney General (and, after the HSA, also the Secretary) significant discretion to regulate consideration of asylum applications. USCIS regulations promulgated under this authority set agency procedures for asylum interviews, and require that applicants unable to communicate in English “must provide, at no expense to the Service, a competent interpreter fluent in both English and the applicant's native language or any other language in which the applicant is fluent.” 8 CFR 208.9(g). This requirement means that all asylum applicants who cannot communicate in English must bring an interpreter to their interview. Doing so, as required by the regulation, poses a serious health risk because of the COVID-19 pandemic.

Accordingly, this temporary final rule extends the rule published at 85 FR 59655, for a third time, to continue to mitigate the spread of COVID-19 by seeking to slow the transmission and spread of the disease during asylum interviews before USCIS asylum officers. To that end, this temporary final rule will extend the requirement in certain instances allowing noncitizens interviewed for this discretionary asylum benefit to use USCIS-provided interpreters during affirmative asylum interviews. This temporary final rule also provides that if a USCIS interpreter is unavailable, USCIS will either reschedule the interview and attribute the interview delay to USCIS for the purposes of employment authorization under 8 CFR 208.7, or USCIS may, in its discretion, allow the applicant to provide an interpreter.

On January 31, 2020, the Secretary of Health and Human Services (HHS) declared a public health emergency under section 319 of the Public Health Service Act (42 U.S.C. 247d), in response to COVID-19, which is caused by the SARS-CoV-2 virus. 1 Effective January 14, 2022, HHS renewed the determination that “a public health emergency exists and has existed since January 27, 2020, nationwide.”  2 On February 18, 2022, the President issued a continuation of the National Emergency concerning the COVID-19 pandemic. 3 As of March 4, 2022, there have been over 440 million confirmed cases of COVID-19 identified globally, resulting in more than 5.9 million deaths. 4 Approximately 78,428,884 cases have been identified in the United States, with about 242,345 new cases identified in the 7 days preceding February 28, 2022, and approximately 947,625 reported deaths due to the disease. 5 A more detailed background discussion of the COVID-19 pandemic is found in the original temporary final rule, as well as in the first and second extensions of the rule, and USCIS incorporates the discussions of the pandemic into this extension. See 85 FR 59655; 86 FR 15072; 86 FR 51781.

Since publication of the original temporary final rule, variants of the virus that causes COVID-19 have been reported in the United States. 6 Evidence suggests that some variants may spread more quickly and easily than others and at least one variant may cause more severe illness than other variants. 7 The COVID-19 Delta and Omicron variants were labeled as Variants of Concern (VOC) by the HHS SARS-CoV-2 Interagency Group (SIG), which defines VOCs as those with evidence of increased transmissibility and severe disease, reduced effectiveness of treatments or vaccines, and diagnostic detection failures. 8 Following the first Omicron case reported in the United States, on December 1, 2021, there was a rapid increase in infections and hospitalizations with multiple large clusters of outbreaks that peaked in mid-January 2022. 9 Since mid-January 2022, the number of COVID-19 infections and hospitalizations in the United States has decreased (as of March 6, 2022), although COVID-19 infections continue to be reported. 10

The U.S. Food and Drug Administration (FDA) granted approval for the Pfizer-BioNTech COVID-19 vaccine for individuals 16 years and older in August 2021  11 and the Moderna COVID-19 vaccine for individuals 18 years and older in January 2022. 12 While the vaccine is widely accessible in the United States, geographic data indicates a wide disparity in the percentages of fully vaccinated individuals by state, ranging from 50.3 percent in Alabama to 80.9 percent in Rhode Island, not taking into account United States territories. 13 Although the FDA has determined that approved COVID-19 vaccines are effective in eligible individuals, their effectiveness at preventing infection wanes over time, and thus, CDC guidance states that eligible individuals should receive COVID-19 vaccine booster shots after certain periods of time. 14 CDC's decision to begin booster shots in late 2021 was based on information about vaccine effectiveness and the impact of variants on vaccine effectiveness. 15 A January 2022 study indicated that the COVID-19 pandemic is driven by seasonality. 16 Another study indicated that seasonal factors, alongside the increased demand for healthcare resources due to seasonal influenza, should be taken into account when developing future intervention measures. 17

Ongoing research demonstrates that while there is high effectiveness of approved vaccines among eligible individuals, fully vaccinated individuals continue to experience breakthrough COVID-19 infections and may be either symptomatic or asymptomatic. 18 Nevertheless, CDC reports show that individuals who are unvaccinated have a greater risk of testing positive for COVID-19 and a greater risk of dying from COVID-19 than individuals who are fully vaccinated. 19

On February 25, 2022, CDC updated the framework for monitoring the spread of COVID-19 in communities across the United States. 20 The framework involves evaluating factors related to the severity of disease, including hospitalizations and hospital capacity, to help determine whether the level of COVID-19 and severe disease are low, medium, or high in a community (known as “COVID-19 community levels”). 21 Depending on the COVID-19 community level, CDC recommends different individual, household, and community-level prevention strategies, which may or may not include wearing facial covers indoors. 22 As a result of CDC's COVID-19 community levels guidance, the Safer Federal Workforce Task Force, which is led by the White House COVID-19 Response Team, issued updated facial covers and screening testing guidelines on February 28, 2022, for employees, contractors, and visitors to Federal buildings. 23

Widespread testing is available to confirm suspected cases of COVID-19 infection but testing performance varies by type, with antigen tests being less sensitive than Nucleic Acid Amplification Tests (NAATs). 24 This may require symptomatic people with negative tests to retest in order to confirm results. 25 CDC states that the predictive value of a test will also depend on COVID-19 community levels. 26 The use of NAATs in areas with a high COVID-19 community level and increased testing demand may result in test processing delays while a highly specific antigen test may result in many false positives in an area where infection rates are low. 27 This is because test predictive values are dependent on pretest probability, or the COVID-19 community level and the clinical context of those being tested. 28 CDC guidance states that individuals who were exposed to a person with COVID-19 may or may not need to self-quarantine depending on vaccination status and whether they develop symptoms. 29

USCIS continues its efforts to protect the health and safety of its employees and the public by requiring all federal employees, on-site contractors, and visitors to follow local USCIS guidance on physical distancing and workplace protection guidance consistent with CDC and agency guidance. 30 Also, USCIS regularly updates its guidance on facial covers for all employees and members of the public to reflect evolving CDC guidance. 31

USCIS has conducted 32,012 total asylum interviews between September 23, 2020 and March 7, 2022. 32 The original temporary final rule, implemented on September 23, 2020, and its extensions implemented on March 22 and September 20, 2021, and other noted public safety measures have helped mitigate the impact of COVID-19 and have been effective in keeping the USCIS workforce and the public safe. As of February 25, 2022, there have been 4,061 confirmed cases of COVID-19 exposure among USCIS employees and contractors. The overall percentage of positive cases reported among USCIS employees since the start of the pandemic is 14.3 percent.

Therefore, DHS has determined that it is in the best interest of the public and USCIS employees and contractors to extend the temporary final rule for 365 days. Under this third extension, USCIS will continue requiring asylum applicants who are unable to proceed with the interview in English to use government-provided telephonic contract interpreters if the applicants speak one of the 47 languages found on the Required Languages for Interpreter Services Blanket Purchase Agreement/U.S. General Services Administration Language Schedule (“GSA Schedule”). If the applicant does not speak or elects to speak a language not on the GSA Schedule, the applicant will be required to bring his or her own interpreter who is fluent in English and the elected language not on the GSA schedule, to the interview. In the second extension of the temporary final rule, published at 85 FR 59655, DHS also amended 8 CFR 208.9(h)(1) by allowing, in USCIS' discretion, an applicant for asylum to provide an interpreter when a USCIS interpreter is unavailable. See 86 FR 51781. Specifically, if a USCIS interpreter is unavailable, USCIS will either reschedule the interview and attribute the interview delay to USCIS for the purposes of employment authorization pursuant to 8 CFR 208.7, or USCIS may, in its discretion, allow the applicant to provide an interpreter.

DHS incorporates into this third extension, the justifications from the original temporary final rule and all subsequent extensions. The measures implemented since the original temporary final rule to protect employees, asylum applicants, and other members of the public, continue to be a priority for USCIS. Additionally, the modification to the second extension ( i.e., USCIS exercising discretion to allow an asylum applicant to bring an interpreter to the interview if a contract interpreter is unavailable), will remain in place. The modification has given USCIS flexibility to plan ahead in the limited circumstances when a contract interpreter is expected to be unavailable for an asylum interview, reducing the likelihood of canceled interviews and unused office space. This third extension also incorporates the discussions on the overall benefits of providing telephonic contract interpreters in reducing the risk of contracting COVID-19 for applicants, attorneys, interpreters, and USCIS employees, from the original temporary final rule and all extensions.

DHS has determined that there are reasonable grounds for considering potential exposure to SARS-CoV-2, including any emerging variants, as a public health concern and that these grounds are sufficient to extend the temporary final rule modifying the interpreter requirements for asylum applicants in order to lower the number of in-person attendees at asylum interviews. For 365 days following publication of this temporary final rule, DHS will continue to require non-English speaking asylum applicants appearing before USCIS to proceed with the asylum interview using USCIS' interpreter services if they are fluent in one of the 47 languages as discussed in the temporary final rule at 85 FR at 59657. 34 Additionally, as provided in 8 CFR 208.9(h)(1), DHS will continue to allow, in USCIS' discretion, an applicant for asylum to provide an interpreter when a USCIS interpreter is unavailable. In these limited circumstances, if a USCIS interpreter is unavailable, USCIS will either reschedule the interview and attribute the interview delay to USCIS for the purposes of employment authorization pursuant to 8 CFR 208.7, or USCIS may, in its discretion, allow the applicant to provide an interpreter. The interpreter will be required to follow USCIS COVID-19 protocols in place at the time of the interview, including sitting in a separate office. Once this temporary final rule is no longer in effect, asylum applicants unable to proceed with an affirmative asylum interview based on a Form I-589, Application for Asylum and for Withholding of Removal, in English before a USCIS asylum officer will be required to provide their own interpreters under 8 CFR 208.9(g).

Given the unique nature of the pandemic and the multiple challenges it has presented in the context of USCIS operations, the agency has had to modify its policies and procedures to adapt. Through the original temporary final rule and the first and second extensions, USCIS adapted and modified its procedures to keep the workforce and public safe while also striving to serve the customer. Outside of this rule, USCIS has adapted to the pandemic by developing electronic workflows for conducting interviews and completing the adjudication, and by monitoring language trends and interpreter availability.

DHS noted in the original temporary final rule, first extension, and second extension with modification, that it would evaluate the public health concerns and resource allocations to determine whether to extend the rule. DHS has determined that extending this temporary final rule is necessary for public safety. Accordingly, DHS is extending this temporary final rule for 365 days unless it is necessary to once again extend at a later date. This temporary final rule continues to apply to all affirmative asylum interviews conducted by USCIS across the nation. USCIS has determined that an extension of 365 days is appropriate given that: (1) The pandemic is ongoing;  35 (2) the highly contagious Omicron variant is circulating in the United States;  36 (3) while vaccines are widely available, data indicates a wide disparity in the percentages of fully vaccinated individuals by state, and fully vaccinated individuals continue to experience breakthrough SARS-CoV-2 infections;  37 and (4) although as of March 6, 2022, hospitalizations have decreased from January 2022, when they reached their highest 7-day average admission rate since the start of the pandemic, individuals continue to be hospitalized for COVID-19. 38

USCIS first published this temporary final rule on September 23, 2020, and subsequently found it necessary to publish two extensions to continue its mitigation efforts because of the ongoing pandemic. 39 The initial temporary final rule and each extension had an effective period of 180 days, which has resulted in this temporary final rule being in effect for 540 days. 40 Considering the period of time that the pandemic has been ongoing, the number of times USCIS has had to extend this temporary final rule, the continued uncertainty about emerging variants, and the inability to predict when the COVID-19 pandemic will end, USCIS has determined that an additional extension of 180 days will be insufficient and a 365-day extension will better serve the needs of the public and the agency. Extending this temporary final rule for 365 days will provide the public and USCIS with greater certainty and predictability about how long these mitigation efforts will remain in place. That is, with the additional time, the agency can proactively plan ahead and focus on providing consistent services to asylum applicants rather than expending limited resources frequently changing procedures and re-issuing guidance to staff and the public.

Recognizing that the COVID-19 pandemic is ongoing and unpredictable, DHS continues to constantly evaluate the public health concerns and its mitigation efforts. Within the next 365 days, it is possible that conditions may either improve or worsen. If conditions improve and the health concerns posed by COVID-19 are resolved before this temporary final rule expires, DHS will consider publishing a final rule terminating this temporary final rule prior to the expiration of this 365-day extension. However, if prior to the expiration of this extension, conditions remain static or worsen, DHS will again evaluate the public health concerns and resource allocations to determine if another extension is appropriate to further the goals of promoting public safety. After such evaluation and if another extension is determined to be necessary, DHS would publish any such extension via a rulemaking in the Federal Register .

DHS is issuing this extension as a temporary final rule pursuant to the APA's “good cause” exception. 5 U.S.C. 553(b)(B). DHS may forgo notice-and-comment rulemaking and a delayed effective date because the APA provides an exception from those requirements when an agency “for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B); see 5 U.S.C. 553(d)(3).

The good cause exception for forgoing notice-and-comment rulemaking “excuses notice and comment in emergency situations, or where delay could result in serious harm.” Jifry v. FAA, 370 F.3d 1174, 1179 (D.C. Cir. 2004). Although the good cause exception is “narrowly construed and only reluctantly countenanced,” Tenn. Gas Pipeline Co. v. FERC, 969 F.2d 1141, 1144 (D.C. Cir. 1992), DHS has appropriately invoked the exception in this case, for the reasons discussed in this temporary final rule. When it became clear to DHS that the continuing public health emergency would warrant another extension of this temporary final rule, there was not sufficient time to provide notice and receive comment before the second extension would expire. Additionally, on multiple occasions, agencies have relied on this exception to promulgate both communicable disease-related  41 and immigration-related  42 interim rules, as well as to extend such rules. 43 Recently, the Department of State (DOS) and the Federal Emergency Management Agency (FEMA) promulgated or extended rules to mitigate or address the COVID-19 pandemic. On December 13, 2021, DOS issued a temporary final rule, Waiver of Personal Appearance and In-Person Oath Requirement for Certain Immigrant Visa Applicants Due to COVID-19, which provides flexibility for consular officers to waive the personal appearance of certain repeat immigrant visa applicants. DOS made the temporary final rule effective for 24 months based upon the belief that after 24 months the pandemic will be less acute and ordinary travel resumes. 44 On April 10, 2020, FEMA published a temporary final rule allocating certain health and medical resources for domestic use, so that these resources may not be exported from the United States without explicit approval by FEMA. 45 Citing the spread of COVID-19 and the resulting strain on the country's healthcare systems, FEMA explained the measures described in the rule were imperative and necessary to respond to the pandemic. 46 FEMA's original temporary final rule was extended on August 10, 2020, and then extended again on December 31, 2020, until June 30, 2021. 47

DHS is publishing this third extension as a temporary final rule because of the continuing COVID-19 pandemic and incorporates into this extension the discussion of good cause from the original temporary final rule and its extensions. As discussed earlier in this preamble, effective January 14, 2022, the Secretary of HHS renewed the determination that “a public health emergency exists and has existed since January 27, 2020 nationwide.”  48 On February 18, 2022, the President issued a notice on the continuation of the state of the National Emergency concerning the COVID-19 pandemic. 49

As of March 4, 2022, there have been over 440 million confirmed cases of COVID-19 identified globally, resulting in more than 5.9 million deaths. 50 Approximately 78,428,884 cases have been identified in the United States, with about 242,345 new cases identified in the 7 days preceding February 28, 2022, and approximately 947,625 reported deaths due to the disease. 51 Additionally, CDC is monitoring several variants of the virus that causes COVID-19. 52 Evidence suggests that some variants may spread faster and more easily than others and at least one variant may be associated with an increased risk of severe illness. 53 Although vaccines are widely accessible, there is wide disparity in the percentages of vaccinated individuals by state. 54

Ongoing research demonstrates that while there is high effectiveness of approved vaccines among eligible individuals, fully vaccinated individuals continue to experience breakthrough COVID-19 infections and may be either symptomatic or asymptomatic. 55 Nevertheless, CDC reports show that individuals who are unvaccinated have a greater risk of testing positive for COVID-19 and a greater risk of dying from COVID-19 than individuals who are fully vaccinated. 56 Given the continuing national emergency caused by COVID-19, there are still urgent and compelling circumstances to extend and continue this temporary final rule. USCIS cannot predict when the pandemic will end and believes that it is necessary to extend and continue this temporary final rule for another 365 days or until conditions improve and the health concerns posed by COVID-19 are mitigated to such a degree that these safety efforts are no longer necessary.

Throughout the COVID-19 pandemic, USCIS has continued to experience an increase in the affirmative asylum caseload, which, in turn, has created challenges in accommodating the interpretation needs of asylum applicants. Surges in other case types have also required USCIS to divert contract interpreter resources away from affirmative asylum. The increases continue presenting challenges to the agency and thus require USCIS to keep these procedures in place for an additional 365 days.

For the reasons stated, including the need to be responsive to the operational demands and challenges caused by the ongoing COVID-19 pandemic, DHS believes it has good cause to determine that ordinary notice and comment procedure is impracticable for this temporary action, and that moving expeditiously to make this change is in the best interest of the public.

Based on the continuing health emergency, USCIS continues to implement mitigation measures, 57 and concluded that the good cause exceptions in 5 U.S.C. 553(b)(B) and (d)(3) apply to this temporary final rule extension. Delaying implementation of this rule until the conclusion of notice-and-comment procedures and the 30-day delayed effective date would be impracticable and contrary to the public interest due to the need to continue agency operations, while continuing to mitigate the risks associated with the spread of COVID-19.

As of March 7, 2022, USCIS had 440,185 asylum applications, on behalf of 690,172 noncitizens, pending final adjudication. Ninety-five percent of these pending applications are awaiting an interview by an asylum officer. The USCIS backlog will continue to increase at a faster pace if USCIS is unable to safely and efficiently conduct asylum interviews. 58

This temporary final rule extension is promulgated as a response to COVID-19 and emerging variants. It is temporary, limited in application to only those asylum applicants who cannot proceed with the interview in English, and narrowly tailored to mitigate the spread of COVID-19. To not extend such a measure could cause serious and far-reaching public safety and health effects.

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, requires an agency to prepare and make available to the public a regulatory flexibility analysis that describes the effect of the rule on small entities ( i.e., small businesses, small organizations, and small governmental jurisdictions). A regulatory flexibility analysis is not required when a rule is exempt from notice-and-comment rulemaking.

This temporary final rule extension will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

OMB's Office of Information and Regulatory Affairs has determined that this action is not a major rule as defined by Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act). 5 U.S.C. 804(2). This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

Executive Orders (E.O.) 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 (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This rule is designated a significant regulatory action under E.O. 12866. Accordingly, the Office of Management and Budget (OMB) has reviewed this regulation. DHS, however, is proceeding under the emergency provision of Executive Order 12866 Section 6(a)(3)(D) based on the need to move expeditiously during the current public health emergency.

This action will continue to help asylum applicants proceed with their interviews in a safe manner, while protecting agency staff throughout the next year or until the health concerns posed by COVID-19 are resolved. As a result of the temporary final rule and subsequent extensions, USCIS has conducted 32,012 total asylum interviews between September 23, 2020 and March 7, 2022. This third extension is not expected to result in any additional costs to the government. In addition, even with the provision that permits, at USCIS' discretion, an applicant for asylum to provide an interpreter when a contract interpreter is unavailable, there are no additional costs to the applicant relative to what would be the requirements if the temporary final rule were not extended. In those limited circumstances, the interpreter will still be required to follow USCIS COVID-19 protocols in place at the time of the interview, including, but not limited to, sitting in a separate office. Following those COVID-19 protocols will not result in any additional costs for either the applicant or the interpreter.

Such contract interpreters will continue to be provided at no cost to the applicant. USCIS has an existing contract to provide telephonic interpretation and monitoring in interviews for all of its case types. USCIS has provided contract monitors for many years at interviews where the applicant brings an interpreter. In other words, almost all interviews that utilize a USCIS provided interpreter under this temporary final rule would have required instead a contracted monitor during asylum interviews conducted pre-pandemic. Additionally, the cost of monitoring and interpretation are identical under the current contract and monitors are no longer needed for interviews conducted through a USCIS-provided contract interpreter. Therefore, the continued extension of the temporary final rule is projected to be cost neutral or negligible for the government because USCIS is already paying for these services even without this rule.

In the limited circumstances where a contract interpreter is unavailable, USCIS will either reschedule the interview and attribute the interview delay to USCIS for the purposes of employment authorization pursuant to 8 CFR 208.7, or USCIS may, in its discretion, allow the applicant to provide an interpreter. In such cases, the applicant would be in the same position they would have been without this action.

DHS recognizes there are both quantitative and qualitative benefits that could be realized by providing an applicant for asylum the opportunity to bring their own interpreter when a contract interpreter is unavailable, such as the costs avoided that would otherwise be incurred due to rescheduling if a contract interpreter is unavailable—both for the applicant and USCIS—and the overall positive effect on applicants of having their asylum application timely adjudicated. Once this rule is no longer in effect, asylum applicants unable to proceed with an affirmative asylum interview before a USCIS asylum officer in English will again be required to provide their own interpreters under 8 CFR 208.9(g).

This rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This rule meets the applicable standards set forth in section 3(a) and 3(b)(2) of Executive Order 12988.

This rule does not propose new, or revisions to existing, “collection[s] of information” as that term is defined under the Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. chapter 35, and its implementing regulations, 5 CFR part 1320. As this would only span 365 days, USCIS does not anticipate a need to update the Form I-589, Application for Asylum and for Withholding of Removal, despite the existing language on the form instructions regarding interpreters. USCIS will continue to post updates on its Form I-589 website, https://www.uscis.gov/i-589, and other asylum and relevant web pages regarding the interview requirements in this regulation, as well as provide personal notice to applicants via the interview notices issued to applicants prior to their interview.

Accordingly, for the reasons set forth in the preamble, the Secretary of Homeland Security amends 8 CFR part 208 as follows:

FHFA is responsible for ensuring that the regulated entities operate in a safe and sound manner, including the maintenance of adequate capital and internal controls, that their operations and activities foster liquid, efficient, competitive, and resilient national housing finance markets, and that they carry out their public policy missions through authorized activities. See 12 U.S.C. 4513. These Orders are being issued under 12 U.S.C. 4516(a), which authorizes the Director of FHFA to require by Order that the regulated entities submit regular or special reports to FHFA and establishes remedies and procedures for failing to make reports required by Order. The Orders, through the accompanying Summary Instructions and Guidance, prescribe for the regulated entities the scenarios to be used for stress testing. The Summary Instructions and Guidance also provides to the regulated entities advice concerning the content and format of reports required by the Orders and the rule.

For the convenience of the affected parties and the public, the text of the Orders follows below in its entirety. The Orders and Summary Instructions and Guidance are also available for public inspection and copying at the Federal Housing Finance Agency's Freedom of Information Act (FOIA) Reading Room at https://www.fhfa.gov/AboutUs/FOIAPrivacy/Pages/Reading-Room.aspx by clicking on “Click here to view Orders” under the Final Opinions and Orders heading. You may also access these documents at http://www.fhfa.gov/SupervisionRegulation/DoddFrankActStressTests.

The text of the Orders is as follows:

Whereas, section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), as amended by section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) requires certain financial companies with total consolidated assets of more than $250 billion, and which are regulated by a primary Federal financial regulatory agency, to conduct periodic stress tests to determine whether the companies have the capital necessary to absorb losses as a result of severely adverse economic conditions;

Whereas, FHFA's rule implementing section 165(i)(2) of the Dodd-Frank Act, as amended by section 401 of EGRRCPA is codified as 12 CFR 1238 and requires that “[e]ach Enterprise must file a report in the manner and form established by FHFA.” 12 CFR 1238.5(b);

Whereas, The Board of Governors of the Federal Reserve System issued stress testing scenarios on February 10, 2022; and

Whereas, section 1314 of the Safety and Soundness Act, 12 U.S.C. 4514(a) authorizes the Director of FHFA to require regulated entities, by general or specific order, to submit such reports on their management, activities, and operation as the Director considers appropriate.

Now therefore, it is hereby Ordered as follows:

Each Enterprise shall report to FHFA and to the Board of Governors of the Federal Reserve System the results of the stress testing as required by 12 CFR 1238, in the form and with the content described therein and in the Summary Instructions and Guidance, with Appendices 1 through 7 thereto, accompanying this Order and dated March 10, 2022.

It is so ordered, this the 10th day of March, 2022.

This Order is effective immediately.

On September 27, 2021, FHFA published in the Federal Register a notice of proposed rulemaking (proposed rule) seeking comments on amendments to the ERCF that would refine the leverage buffer and the risk-based capital treatment for retained CRT exposures. 1 FHFA proposed these amendments to ensure that the ERCF appropriately reflects the risks inherent to the Enterprises' business models and contains proper incentives for the Enterprises to distribute acquired credit risk to private investors rather than to buy and hold that risk. In meeting these objectives, the proposed amendments would help restore FHFA's intended paradigm of having the Enterprises' leverage capital requirements and buffer provide a credible backstop to their risk-based capital requirements and buffers, enhancing the safety and soundness of the Enterprises. FHFA is now adopting in this final rule the proposed amendments, substantially as proposed.

FHFA published the ERCF on December 17, 2020  2 with the purpose of implementing a going-concern regulatory capital standard to ensure that each Enterprise operates in a safe and sound manner and is positioned to fulfill its statutory mission to provide stability and ongoing assistance to the secondary mortgage market across the economic cycle. 3 The ERCF, which became effective on February 16, 2021, aimed to address issues that arose during the notice and comment period such as the pro-cyclicality of the single-family risk-based capital requirements, the quality of Enterprise capital used to meet the capital requirements, and the quantity of required capital at the Enterprises. Accordingly, the ERCF is significantly stronger than the statutory framework which governed the Enterprises' capital requirements prior to entering conservatorships.

However, after finalizing the ERCF, FHFA identified specific aspects of the framework that might incentivize risk taking in certain economic environments and create disincentives to the Enterprises' CRT programs. Together, these features of the ERCF could result in an excessive buildup of risk accruing to taxpayers and the housing finance market, particularly because the Enterprises presently are severely undercapitalized and lack the resources on their own to safely absorb the credit risk associated with their normal operations.

FHFA views the transfer of risk, particularly credit risk, to a broad set of investors as an important tool to reduce taxpayer exposure to the risks posed by the Enterprises and to mitigate systemic risk caused by the size and monoline nature of the Enterprises' businesses. Since their development began in 2013, the CRT programs have been the Enterprises' primary mechanism to successfully effectuate reliable risk transfer to the private sector. Through these programs, the Enterprises have shed a significant amount of credit risk to help protect against potential losses while the PSPAs have significantly limited the Enterprises' ability to hold capital and withstand losses through normal operations. During this current period where the Enterprises are building capital, CRT remains an important risk mitigation tool to protect taxpayers against the heightened risk of potential PSPA draws in the event of a significant stress to the housing sector. It is therefore crucial that the Enterprises' capital requirements are appropriately sized, where the leverage capital framework is a credible backstop to the risk-based capital framework and where responsible and effective risk transfer is not unduly discouraged.

After carefully considering the comments on the proposed rule, and as described in this preamble, FHFA is adopting, substantially as proposed, amendments to the leverage buffer and risk-based capital treatment of CRT exposures. FHFA continues to believe that the amendments in this final rule will lessen the potential deterrents to Enterprise risk transfer by properly aligning incentives in the ERCF and will position the Enterprises to operate in a safe and sound manner to fulfill their statutory mission throughout the economic cycle, both during and after conservatorships. Specifically, the final rule will:

• Replace the fixed leverage buffer equal to 1.5 percent of an Enterprise's adjusted total assets with a dynamic leverage buffer equal to 50 percent of the Enterprise's stability capital buffer as calculated in accordance with 12 CFR 1240.400;

• Replace the prudential floor of 10 percent on the risk weight assigned to any retained CRT exposure with a prudential floor of 5 percent on the risk weight assigned to any retained CRT exposure; and

• Remove the requirement that an Enterprise must apply an overall effectiveness adjustment to its retained CRT exposures in accordance with 12 CFR 1240.44(f) and (i).

In addition, the final rule will implement technical corrections to various provisions of the ERCF that was published on December 17, 2020, highlighted by a significant typographical error in the definition of the long-term HPI trend that constitutes the basis for calculating the single-family countercyclical adjustment.

Under the rule published on December 17, 2020 establishing the ERCF, an Enterprise will not be subject to any requirement in the ERCF until the compliance date for the requirement as detailed in the ERCF. The effective date for the ERCF was February 16, 2021. The effective date for the ERCF amendments and technical corrections in this final rule will be 60 days after the day of publication of this final rule in the Federal Register .

FHFA received 89 public comment letters on the proposed rule from a variety of interested parties, including private individuals, trade associations, consumer advocacy groups, think-tanks and institutes, and financial institutions. 4 In general, and as discussed in greater detail below in the relevant sections of this preamble, commenters were supportive of FHFA's proposed amendments to both the leverage buffer and the risk-based capital treatment of retained CRT exposures. Overall, most commenters supported FHFA's efforts to restore the intended paradigm between leverage capital and risk-based capital at the Enterprises and to properly incentivize risk transfer within the ERCF. However, as discussed in the relevant sections of this preamble, FHFA also received a number of comments indicating concern over various aspects of the proposed amendments.

Over half of the 89 comments FHFA received during this notice and comment period focused on issues not directly related to the proposed amendments or technical corrections. In these letters, commenters offered views on important topics such as loan-level pricing adjustments, incorporating guarantee fees into capital requirements, the ERCF grids and risk multipliers, the magnitude of single-family and multifamily risk weights, various other aspects of the CRT securitization framework, the costs of CRT transactions, and the overall complexity of the ERCF, among others. In addition, commenters offered views on housing finance reform and on matters relating to the Enterprises' conservatorships, including issues related to the Enterprises' consent to conservatorships in 2008, subsequent actions by FHFA or the U.S. Department of the Treasury (Treasury), the magnitude of funds remitted to Treasury by the Enterprises relative to cumulative draws, Treasury's financial interests in the Enterprises, and the PSPAs. FHFA acknowledges the importance of these topics and will thoroughly consider the public's feedback on these issues when relevant rulemakings and policy decisions are under consideration.

In addition to soliciting comments on the proposed amendments and technical corrections, FHFA also sought feedback on two additional topics related to the ERCF: The 20 percent risk weight floor on single-family and multifamily mortgage exposures and potential options for a countercyclical adjustment for multifamily mortgage exposures. FHFA received feedback on both topics.

FHFA asked the public whether, in light of the proposed changes to the leverage buffer and the risk-based capital requirements for retained CRT exposures, the prudential risk weight floor of 20 percent on single-family and multifamily mortgage exposures was appropriately calibrated. FHFA did not propose a change to the risk weight floor on single-family and multifamily mortgage exposures. Nine commenters provided feedback on this question, and the opinions expressed by commenters were varied.

Some commenters recommended reducing or eliminating the 20 percent risk weight floor. Among these commenters, some suggested that lowering the floor is appropriate due to the Enterprises' improved balance sheets and mortgage lending standards relative to pre-crisis economics. Others suggested that the 20 percent risk weight floor in the ERCF is not appropriately calibrated. Another commenter suggested that the 20 percent floor distorts market signals about risk and incentivizes risk taking by the Enterprises.

Conversely, some commenters recommended maintaining the 20 percent risk weight floor. Among these commenters, some suggested that such a floor is prudent to ensuring the safety and soundness of the Enterprises. One commenter suggested that the risk weight floor is useful as an incentive for the Enterprises to transfer credit risk on lower-risk exposures. Another commenter suggested that the risk weight floor is important to mitigate the model risks inherent in the risk-sensitive methodology FHFA used to calibrate risk weights for mortgage exposures. One commenter suggested that reducing this risk weight floor could significantly increase the gap between the credit risk capital requirements of the Enterprises and other market participants.

One of the key objectives FHFA cited for proposing amendments to the ERCF was to ensure the leverage capital framework was a credible backstop to the risk-based capital framework. Despite changes to the 2020 ERCF proposed rule  5 that increased risk-based capital under the 2020 ERCF final rule, including raising the 15 percent risk weight floor on single-family and multifamily mortgage exposures to 20 percent and changing the dataset on which the single-family countercyclical adjustment is calculated, tier 1 leverage capital remains greater than tier 1 risk-based capital at each Enterprise in the absence of the leverage buffer and CRT amendments in the proposed rule. Should FHFA materially reduce the 20 percent floor on single-family and multifamily mortgage exposures without taking additional action, the likelihood that the leverage framework would once again be the binding capital constraint for the Enterprises would significantly increase. For this reason, and given the commenters' diverse feedback, FHFA has determined not to take action related to the 20 percent risk weight floor on single-family and multifamily mortgage exposures at this time.

FHFA also asked the public to recommend an approach for mitigating the pro-cyclicality of the credit risk capital requirements for multifamily mortgage exposures that relies only on non-proprietary data or indices. Eight commenters provided feedback on this question, recommending three different types of approach. The first group of commenters suggested solutions following the same principles as FHFA's single-family countercyclical adjustment, where risk attributes such as the loan-to-value (LTV) ratio would be adjusted up or down depending on deviations from a long-term trend. For use in this approach, commenters recommended FHFA consider the property index published by the National Council of Real Estate Investment Fiduciaries (NCREIF), long-term vacancy rates, long-term property value and income growth rates, and adjusted cap rates. The second group of commenters recommended FHFA consider an approach where the countercyclical adjustment is based on ratios of index peaks to current values. Commenters suggested FHFA could use the NCREIF property index for property values and Enterprise investor reporting for net operating income (NOI). This approach would assume that the multifamily risk weights already account for a 35 percent shock to property values and a 15 percent shock to NOI, so an adjustment would be made only to the extent that the property value and/or NOI index ratios suggest a further adjustment is necessary. Finally, one commenter suggested that FHFA should address pro-cyclicality for multifamily mortgage exposures by replacing mark-to-market LTV with original LTV and mark-to-market debt service coverage ratio (DSCR) with original DSCR.

FHFA appreciates the public's feedback on this topic and is committed to addressing the pro-cyclicality in the capital required for multifamily mortgage exposures. However, given the complexity of potential solutions and the diversity of suggestions provided by commenters, FHFA has determined that this topic requires further consideration, potentially in a future rulemaking. Therefore, FHFA has determined not to take action related to a multifamily countercyclical adjustment at this time.

The proposed rule would amend the ERCF by replacing the fixed tier 1 capital leverage buffer equal to 1.5 percent of an Enterprise's adjusted total assets with a dynamic tier 1 capital leverage buffer equal to 50 percent of the Enterprise's stability capital buffer. 6 In the proposed rule, FHFA presented several benefits to this approach.

First, a properly calibrated leverage ratio requirement and leverage buffer are critical aspects of a sound regulatory capital framework. The purpose of leverage capital is to promote financial stability by establishing a robust capital floor that persists throughout the economic cycle and by limiting risk taking when risk-based capital may otherwise fall to unduly low levels. Recalibrating the 1.5 percent leverage buffer will promote safety and soundness and financial stability at the Enterprises by lessening the likelihood that leverage capital will drive Enterprise decision-making in the majority of economic environments and reduce the frequency in which an Enterprise has an incentive to take on more risk in a capital optimization strategy. Furthermore, restoring leverage capital to a position of a credible backstop will allow other aspects of the ERCF, namely the risk-based capital requirements, including the single-family countercyclical adjustment, to work as intended. Second, the proposed leverage buffer amendment will encourage the Enterprises to transfer risk rather than to buy and hold risk. Third, a leverage framework with a dynamic buffer that grows and shrinks as an Enterprise grows and shrinks, respectively, will function as a better backstop to a risk-based capital framework that includes a stability capital buffer linked to an Enterprise's size. And fourth, a dynamic leverage buffer that is tied to the stability capital buffer will further align the ERCF with Basel III standards. Internationally, under the latest Basel framework adopted by the Bank for International Settlements, global systemically important banks (G-SIBs) are required to hold a leverage buffer equal to 50 percent of their higher loss-absorbency risk-based requirements—a measure akin to the G-SIB surcharge in the U.S. banking framework—to tailor an institution's leverage ratio to its business activities and risk profile.

The vast majority of comments FHFA received supported decreasing the tier 1 capital leverage buffer from a fixed 1.5 percent of adjusted total assets. Many commenters supported FHFA's proposed approach, while some supported decreasing the leverage buffer without tying it to the stability capital buffer and others favored eliminating the leverage buffer altogether.

Many commenters who recommended decreasing the leverage buffer suggested doing so because it is preferrable for risk-based capital metrics to be the binding capital constraint more frequently than non-risk-based capital floors such as leverage. Commenters suggested that this paradigm helps eliminate incentives for the Enterprises to increase risk taking and risk retention while providing flexibility to the Enterprises as they manage risk and rebuild robust levels of capital. In addition, commenters agreed with FHFA that a smaller leverage buffer would encourage the transfer of mortgage credit risk from the Enterprises to private investors. Another commenter stated that the 1.5 percent leverage buffer is unnecessary relative to the Enterprises' recent stress test results, and that such a high buffer would likely be excessive to the point of impairing the Enterprises' ability to support the market and meet their mission.

Many commenters expressed their general support for FHFA's proposed approach of tying the leverage buffer to the stability capital buffer. Commenters contended that a dynamic leverage buffer that expands and contracts with an Enterprise as its size and strategy evolve would more accurately reflect the Enterprise's risk and thereby help facilitate the Enterprises' ability to carry out their missions through all economic cycles. Thus, commenters reasoned that the proposed approach would help leverage serve as a credible backstop to the risk-based capital framework and allow the Enterprises to withstand losses in excess of those experienced during the great financial crisis. Other commenters supported FHFA's effort to move toward a dynamic leverage buffer to better reflect the spirit and intent of the leverage ratio, and also because dynamic buffers have proven to be an effective tool for managing capital at the global systemically important banks. Another commenter suggested that the proposed approach will help provide stability in the mortgage market and increase investor confidence in the Enterprises and overall economy throughout the economic cycle, helping stave off the need for emergency taxpayer intervention. Another commenter stated that basing the leverage buffer on a risk-based capital metric is preferrable because it better reflects the varying levels of risk within an Enterprise's particular pool of total assets.

Some commenters expressed more reserved support for setting the leverage buffer equal to 50 percent of the stability capital buffer. Several commenters expressed concern that tying the leverage buffer to the stability capital buffer could have pro-cyclical implications in the sense that an Enterprise's market share tends to grow during a stress when other market participants are growing slowly or shrinking. Thus, requiring an Enterprise to increase its leverage buffer during the period when the Enterprise is fulfilling its countercyclical role could limit the Enterprise's ability to supply market liquidity when it is most needed. In contrast to these commenters' concern, FHFA anticipates that setting the leverage buffer equal to 50 percent of the stability capital buffer will actually reduce the pro-cyclicality of the leverage framework because increases to an Enterprise's adjusted total assets are reflected in the fixed 1.5 percent leverage buffer immediately whereas increases to an Enterprise's share of the overall mortgage market are reflected in the stability capital buffer with up to a two-year delay. 7 FHFA believes this delayed need to raise capital relative to the current ERCF will facilitate the Enterprises' abilities to provide liquidity to the mortgage market during a stress, even if an Enterprise grows its portfolio as a result of fulfilling its countercyclical mission.

A few other commenters supported FHFA's proposed amendments but recommended that FHFA: i. Continue to study the relationship between leverage, risk-based capital, and the stability capital buffer to determine definitively that the leverage buffer should be linked to the stability capital buffer; and ii. provide historical data affirming the proposed approach and demonstrating that under the proposed amendments leverage will rarely exceed risk-based capital.

Another commenter recommended that FHFA must ensure that its regulatory capital framework avoids discriminatory outcomes and promotes equitable treatment of borrowers and communities of color. One commenter supported FHFA's proposed amendments but expressed a desire for FHFA to be more anticipatory and expansive in the list of provisions it chooses to reconsider.

Some commenters recommended decreasing the leverage buffer but not tying it to the stability capital buffer. One commenter expressed concern that the stability capital buffer was itself arbitrarily determined, so by association a leverage buffer equal to 50 percent of the stability capital buffer is also arbitrarily determined. This commenter recommended that FHFA consider alternative methods of the setting the leverage buffer that are more closely tied to an Enterprise's risk. One commenter recommended that FHFA decrease an Enterprise's leverage buffer by some estimate of future guarantee fees. Similarly, another commenter recommended that FHFA decrease an Enterprise's leverage buffer to reflect risk transferred through CRT in the same way that the risk-based capital framework provides capital relief for CRT. Several commenters recommended FHFA simply reduce the leverage buffer from 1.5 percent of adjusted total assets to a lower percentage of adjusted total assets, such as 0.5 percent, because market share is not a reasonable representation of Enterprise risk.

Some commenters recommended FHFA eliminate the leverage buffer completely. These commenters generally viewed the leverage buffer as not necessary for the leverage framework to be a credible backstop to the risk-based capital framework. Two commenters suggested the 2.5 percent leverage capital requirement is itself sufficient as a credible backstop to risk-based capital in the ERCF. Another commenter suggested the leverage buffer is unnecessary because: i. Stress losses on a new month of originations are lower than the capital required by the ERCF; and ii. future guarantee fees provide a significant source of claims-paying resources, which are not considered as a source of capital in the framework. One commenter suggested FHFA eliminate the leverage buffer rather than decrease it because a future FHFA director can just as easily increase it again.

Finally, some commenters recommended that FHFA maintain the fixed 1.5 percent leverage buffer. One commenter claimed that FHFA does not provide evidence that the existing ERCF leverage-based requirements would be binding throughout the economic cycle, and that it is difficult to envision any realistic scenario in which the proposed amendments to the leverage buffer would result in a leverage-based requirement that could exceed the risk-based requirement, violating the concept of being a credible backstop. FHFA disagrees with the premise of this argument because the argument compares tier 1 leverage capital to adjusted total risk-based capital, which includes tier 2 capital. When looking only at tier 1 capital, one can readily construct realistic scenarios where tier 1 risk-based capital at an Enterprise decreases due to a period of sustained house price appreciation such that tier 1 leverage capital exceeds tier 1 risk-based capital and therefore leverage becomes the binding capital constraint.

The commenter also suggests that FHFA fails to explain how the calibration of the 1.5 percent leverage buffer is flawed and how the proposed leverage buffer is analogous to the risk-weighted-asset-based Basel leverage buffer for international G-SIBs. In the proposed rule, FHFA discussed how the leverage framework unduly disincentivizes risk transfer predominately due to the outsized leverage buffer, and how a fixed leverage buffer may not concurrently be appropriate for both a large and a small Enterprise. FHFA views these characteristics as flaws in the calibration of the leverage buffer because the design could result in taxpayers bearing excessive undue risk for as long as the Enterprises are in conservatorships and excessive risk to the housing finance market both during and after conservatorships. In addition, FHFA discussed how the proposed leverage buffer is similar to the Basel leverage buffer in that both are derived from measures that attempt to quantify the amount of systemic risk posed by the Enterprises and G-SIBs, respectively—the stability capital buffer in the ERCF and the G-SIB surcharge in the Basel framework. There are, of course, structural differences between the two buffers in both derivation and application, as is appropriate given that the Enterprises and the other financial institutions have different business models.

Furthermore, two commenters noted that the Financial Stability Oversight Council's (FSOC) review of the 2020 ERCF proposed rule found that capital requirements “that are materially less than those contemplated by [the proposed rule] would likely not adequately mitigate the potential stability risk posed by the Enterprises,” and that the proposed rule would result in a material two-thirds reduction to the leverage buffer, increasing risks to taxpayers and financial stability. FHFA generally agrees with the findings presented in FSOC's activities-based review of the secondary mortgage market. 8 However, similar to approaches followed by other financial regulators, FHFA intends to periodically review the ERCF and adjust various elements as necessary to ensure the safety and soundness of the Enterprises so they can carry out their mission throughout the economic cycle. In addition, FHFA notes that Federal Reserve officials have publicly identified binding leverage capital requirements under the Supplementary Leverage Ratio (SLR) framework as an important issue that must be addressed so that banks' incentives are not skewed to increase risk-taking. FHFA continues to agree with this guiding principle for the Enterprises under the ERCF.

The final rule adopts the dynamic tier 1 capital leverage buffer equal to 50 percent of the stability capital buffer as proposed. In consideration of the public comments on the proposed rule, FHFA continues to believe that such a leverage buffer determined in this manner will best position the Enterprises to fulfil their mission in a safe and sound manner throughout the economic cycle by ensuring that the leverage framework acts as a credible backstop to the risk-based capital framework and by encouraging the Enterprises to transfer credit risk rather than to buy and hold risk.

FHFA notes that the final rule will not change the tier 1 leverage capital requirement, which will remain at 2.5 percent of adjusted total assets. This requirement, plus other features of the ERCF such as the single-family countercyclical adjustment and the risk weight floor on single-family and multifamily mortgage exposures, will continue to mitigate the potential stability risk posed by the Enterprises and will ensure an Enterprise maintains robust capital even during the best economic conditions when risk-based capital requirements might fall due to significant house price appreciation.

In addition, FHFA continues to believe that the leverage buffer plays an important role in the ERCF, despite the recommendations of several commenters to eliminate the buffer. The leverage buffer represents a cushion above an Enterprise's 2.5 percent leverage ratio requirement that can be drawn down in a stress scenario without violating prompt corrective action, providing an Enterprise with flexibility to continue its normal operations without risk of breaching a requirement.

The proposed rule would replace the prudential floor of 10 percent on the risk weight assigned to any retained CRT exposure with a prudential floor of 5 percent on the risk weight assigned to any retained CRT exposure and would remove the requirement that an Enterprise must apply an overall effectiveness adjustment to its retained CRT exposures. 9

Many commenters expressed the view that CRT is an effective means by which to transfer risk to private markets, protect taxpayers, and stabilize the Enterprises and housing finance more generally. Consequently, the vast majority of comments FHFA received on the proposed amendments to the risk-based capital requirements for retained CRT exposures were generally supportive of the amendments. However, a minority of comments questioned the efficacy of CRT and noted that the amendments would weaken the Enterprises' financial resilience. Several other commenters offered broad critiques of and suggestions for the risk-based capital approach to CRT and the Enterprises' CRT programs more generally. While FHFA appreciates and considers all comments, the following discussion focuses on comments directly pertaining to the amendments put forward in the proposed rule.

In the proposed rule, FHFA contended that amending the CRT risk weight floor was necessary for two reasons. First, the 10 percent floor on the risk weight assigned to a retained CRT exposure unduly decreases the capital relief provided by CRT and reduces an Enterprise's incentives to engage in risk transfer. This occurs in part because the aggregate credit risk capital required for a retained CRT exposure is often greater than the aggregate credit risk capital required for the underlying exposures, especially when the credit risk capital requirements on the underlying whole loans and guarantees are low or the CRT is seasoned. Second, the 10 percent risk weight floor discourages CRT through its duplicative nature. The operational criteria for CRT, which state that FHFA must approve each transaction as being effective in transferring the credit risk, as well as the Enterprises' own ability to mitigate unknown risks through their underwriting standards and servicing and loss mitigation programs, lessen the need for a tranche-level risk weight floor as high as 10 percent.

Commenters were generally very supportive of the proposed amendment to the CRT risk weight floor. Commenters suggested that reducing the risk weight floor on retained CRT exposures from 10 percent to 5 percent raises the regulatory value of risk transfer closer to its economic value. Commenters stated that the change would restore the incentive for the Enterprises to engage in CRT to disperse credit risk among private investors and thereby lessen the systemic risk posed by the Enterprises. Commenters also suggested that transferring credit risk away from the Enterprises strengthens their safety and soundness and supports the overall mortgage market, including by promoting greater private market participation without an adverse impact on affordability. Several commenters supported the 5 percent floor because it represents a more market-sensitive treatment of CRT and better aligns capital to risk. In this regard, one commenter suggested that unduly high capital requirements will hamper an Enterprise's ability to fulfill its statutory mission of facilitating loans to low-income and very low-income borrowers and communities. In addition, commenters suggested that the 5 percent floor would provide reasonable protection from model risk while maintaining a conservative discount to equity capital, which has flexibility and fungibility advantages.

Furthermore, several commenters recommended lowering the CRT risk weight floor below 5 percent or eliminating it altogether. Commenters suggested that the floor is not analytically supported and provides excessive protection against CRT-related risks. One commenter's analysis suggested that CRT requirements are too stringent even if the floor is removed and recommended that FHFA calibrate the risk-based capital requirements for retained CRT exposures to be consistent with the economics of CRT transactions.

A few commenters recommended rejecting the proposed amendment in favor of the 10 percent risk weight floor. Several commenters claimed that the proposed amendment weakens the financial resilience of the Enterprises. These commenters suggested that the amendments will increase leverage at the Enterprises which will increase insolvency risk, and that FHFA should not balance incentivizing CRT with safety and soundness when considering capital standards.

Some commenters generally supported FHFA's proposal to lower the CRT risk weight floor but offered alternatives to the 5 percent floor in the proposed rule. A few commenters recommended that FHFA apply the CRT risk weight floor on a sliding scale such that the risk weight floor decreases as credit risk becomes more remote. A few commenters suggested that the floor should reflect an exposure-level analysis and perhaps be functionally related to economic variables such as seasoning or house price appreciation. One commenter recommended removing the floor and using an econometric approach that requires capital above the risk-based capital amount and provides a marginal benefit to risk reduction activities beyond stress loss.

The final rule adopts the prudential floor of 5 percent on the risk weight assigned to any retained CRT exposure as proposed. In consideration of the public comments on the proposed rule, FHFA continues to believe that a prudential risk weight of 5 percent sufficiently ensures the viability of CRTs while mitigating their safety and soundness, mission, and housing stability risks. The final rule does not eliminate the CRT risk weight floor, as recommended by some commenters, because the prudential floor for a retained CRT exposure avoids treating that exposure as posing no credit risk, which continues to be an important policy objective for FHFA. In addition, FHFA has determined to finalize the 5 percent risk weight floor as proposed rather than adopting one of the alternatives suggested by commenters in order to maintain consistency with other aspects of the CRT securitization framework that were designed with a static risk weight floor in mind.

In the proposed rule, FHFA presented rationale for eliminating the overall effectiveness adjustment due to the duplicative nature of the adjustment within the risk-based capital requirements for retained CRT exposures. Unlike the counterparty and loss-timing effectiveness adjustments in the CRT securitization framework, the overall effectiveness adjustment does not target specific risks. Rather, similar to the risk weight floor on retained CRT exposures and the CRT operational criteria, the overall effectiveness adjustment was designed to address risks that are difficult to measure, such as model risk and the loss-absorbing benefits of equity capital relative to CRT. FHFA reasoned that, considering the additional elements of the CRT securitization framework that also target these difficult-to-measure risks, the overall effectiveness adjustment is duplicative and creates an unnecessary disincentive for the Enterprises to engage in CRT.

The vast majority of comments supported FHFA's proposed amendment to eliminate the overall effectiveness adjustment from the CRT securitization framework. Several commenters contended that the overall effectiveness adjustment was redundant and was not analytically supported. Commenters also reasoned that the proposed amendment produces a CRT treatment that better recognizes the risk reduction in CRT through improved CRT economics, provides appropriate incentives for the transfer of credit risk, and that even after removing the overall effectiveness adjustment, the capital relief provided by the framework is conservative. One commenter maintained that the overall effectiveness adjustment can be removed without sacrificing the Enterprises' safety and soundness. Multiple commenters suggested that the elimination of the overall effectiveness adjustment would encourage the Enterprises to disperse credit risk among investors rather than retaining that risk where taxpayers are ultimately liable, and that the proposed amendment would facilitate the Enterprises to carry out their mission throughout the economic cycle.

Several commenters supported keeping the overall effectiveness adjustment. These commenters contended that the proposal to eliminate the overall effectiveness adjustment further weakens the financial resilience of the Enterprises to withstand future credit losses that may occur during an economic stress and that FHFA should keep the adjustment because it accounts for differences in loss-absorbing capacity between CRT and equity capital. Several other commenters recommended FHFA keep the overall effectiveness adjustment in the CRT securitization framework, but their support for this aspect of the framework was conditional on either eliminating the CRT risk weight floor or making substantive reductions to the proposed risk weight floor.

The final rule adopts the removal of the overall effectiveness adjustment as proposed. In consideration of the public comments on the proposed rule, FHFA continues to believe that the overall effectiveness adjustment should be eliminated from the risk-based capital requirements for retained CRT exposures. FHFA believes that the risk weight floor, loss timing effectiveness adjustment, counterparty effectiveness adjustments, and CRT operational criteria, including FHFA's authority to review and approve CRT transactions as effective in transferring credit risk, sufficiently protect the Enterprises from the potential safety and soundness risks posed by CRT.

The proposed rule would make technical corrections to the ERCF related to definitions, variable names, the single-family countercyclical adjustment, and CRT formulas that were not accurately reflected in the final rule published on December 17, 2020. These technical corrections would revise the ERCF for the following items:

• In § 1240.2, the definition of “Multifamily mortgage exposure” would be moved from its current location to a location that follows alphabetical order relative to the other definitions within the section. The definition of a multifamily mortgage exposure would not change.

• In § 1240.33, the definition of “Long-term HPI trend” would be updated to correct a typographical error that resulted in only the coefficient of the trendline formula, 0.66112295, being published. The corrected trendline formula would be 0.66112295 e   (0.002619948*t) . The Enterprises use the long-term HPI trend as the basis for calculating the single-family countercyclical adjustment. As published in the ERCF, the trendline would be a time-invariant horizontal line rather than a time-varying exponential function.

• In § 1240.33, the definition of OLTV for single-family mortgage exposures would be amended to include the parenthetical ( original loan-to-value ) after the acronym to provide additional clarity as to the meaning of OLTV. Single-family OLTV would continue to be based on the lesser of the appraised value and the sale price of the property securing the single-family mortgage.

• In § 1240.37, the second paragraph (d)(3)(iii) would be redesignated as (d)(3)(iv) to correct a typographical error.

• In § 1240.43(b)(1), the term “KG” would be replaced to correct a typographical error.

• In § 1240.44 we correct the following typographical errors:

○ In paragraph (b)(9)(i)(C), the term “( LTFUPB% )”;

○ In paragraph (b)(9)(i)(D), the term “LTF%”;

○ In paragraph (b)(9)(ii), the term “ LTF% ”;

○ In paragraph (b)(9)(ii)(B), the term “( CRTF15% )”;

○ In paragraph (b)(9)(ii)(C), the term “( CRT80NotF15% )”;

○ In paragraph (b)(9)(ii)(E)( 2 )( i ), the equation would be revised to correct typographical errors in the names of two variables within the equation;

○ In paragraph (b)(9)(ii)(E)( 2 )( iii ), the term “ LTF% ”;

○ In paragraph (c) introductory text, the term “ RW% ”;

○ In paragraph (c)(1), the term “ AggEL% ”;

○ In paragraph (g), the first three equations would be combined into one equation to correct a typographical error that erroneously split the equation into three distinct parts.

The final rule adopts the ERCF technical corrections as proposed.

The Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ) requires that regulations involving the collection of information receive clearance from the Office of Management and Budget (OMB). The final rule contains no such collection of information requiring OMB approval under the PRA. Therefore, no information has been submitted to OMB for review.

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

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

For the reasons stated in the Preamble, under the authority of 12 U.S.C. 4511, 4513, 4513b, 4514, 4515-17, 4526, 4611-4612, 4631-36, FHFA amends part 1240 of Title 12 of the Code of Federal Regulation as follows:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to various model helicopters with certain part-numbered externally-mounted Goodrich hoists installed. The NPRM published in the Federal Register on December 11, 2020 (85 FR 79930). In the NPRM, the FAA proposed to require replacing unmodified hoists, installing placards, revising the existing RFM for your helicopter, deactivating or removing a hoist if a partial peel out occurs, reviewing the helicopter's hoist slip load test records, repetitively inspecting the hoist cable and clutch, and reporting information to the manufacturer. The NPRM was prompted by a series of EASA ADs, the most recent at that time being EASA AD 2015-0226R5, Revision 5, dated July 23, 2020 (EASA AD 2015-0226R5), to correct an unsafe condition for various model helicopters with a Goodrich externally-mounted hoist with one of the following part numbers (P/Ns) or base P/Ns installed: 42315, 42325, 44301-10-1, 44301-10-2, 44301-10-4, 44301-10-5, 44301-10-6, 44301-10-7, 44301-10-8, 44301-10-9, 44301-10-10, 44301-10-11, 44311, 44312, 44314, 44315, 44316, or 44318. EASA advised of an initial incident of a rescue hoist containing a dummy test load of 552 lbs. that reeled-out without command of the operator and impacted the ground during a maintenance check flight because the overload clutch had failed. EASA stated that this condition, if not detected and corrected, could lead to further cases of in-flight loss of the hoist load, possibly resulting in injury to persons on the ground or in a hoisting accident.

Accordingly, EASA AD 2015-0226R5 required a records review to determine if the cable had exceeded the allowable limit in previous load testing, a repetitive load check and test of the clutch slip value, removal or deactivation of a hoist that could not be tested due to lack of approved instructions, replacement of the old clutch P/N with a new clutch developed by Goodrich to mitigate some of the factors resulting in clutch degradation, periodic replacement of the hoist, reduction of the maximum allowable load on the hoist, addition of operational limitations to the RFM, and replacement of the hoist after a partial peel out. EASA AD 2015-0226R5 also prohibited the installation of a replacement cable that has exceeded the allowable limit in previous load testing. EASA considered AD 2015-0226R5 to be interim action and advised further AD action may follow.

The FAA issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to various model helicopters with certain part-numbered externally-mounted Goodrich hoists installed. The SNPRM published in the Federal Register on September 30, 2021 (86 FR 54129). The SNPRM proposed to revise the NPRM by adding a figure and revising certain requirements, including changes to the temperatures in the maximum hoist load limitations and adding the cost of a (field) load check tool. The SNPRM was prompted by changes from the public comments, which expanded the scope of the NPRM.

Although the NPRM and SNPRM discussed the unsafe condition as described by EASA in EASA AD 2015-0226R5, the FAA based most of the proposed requirements in both the NPRM and the SNPRM on service information issued by Goodrich for all helicopter models with an affected hoist. For the replacement intervals proposed in paragraph (g)(1) of the NPRM and SNPRM, the FAA based those actions on portions of the EASA AD that are not model specific.

Since the FAA issued the SNPRM, EASA has revised EASA AD 2015-0226R5 and issued EASA AD 2015-0226R6, Revision 6, dated December 8, 2021, and corrected December 20, 2021 (EASA AD 2015-0226R6). EASA AD 2015-0226R6 adds a new helicopter model-specific replacement/overhaul interval for affected hoists with a new overload clutch. After reviewing the changes in EASA AD 2015-0226R6, the FAA has determined that no changes to this AD are necessary.

The FAA received comments from Bell Textron Canada Limited (Bell Canada), Collins Aerospace, and Transport Canada. The following presents the comments received on the SNPRM and the FAA's response to each comment.

Collins Aerospace commented that two new potential costs could impact operators: Groundings from an inability to update the fleet and contract penalties for operational contracts requiring the use of a 600-lb rated hoist.

The cost analysis in AD rulemaking actions includes only the costs associated with complying with the AD, which does not include indirect costs such as down-time and loss of revenue.

Bell Canada and Transport Canada stated that, because Canada is the state of design for Model 429 and 430 helicopters, the FAA should review Transport Canada AD CF-2017-23, dated July 7, 2017 (Transport Canada AD CF-2017-23), and revise the FAA's proposed AD accordingly. The commenters stated that they discussed the corrective actions in Transport Canada AD CF-2017-23 and tailored its limitations and operating parameters specifically for Bell Canada Model 429 and 430 helicopters. Bell Canada stated that because the related EASA AD was issued unilaterally, the mitigations in Transport Canada AD CF-2017-23 are better suited for Model 429 and 430 helicopters than those in the EASA AD.

The FAA reviewed Transport Canada AD CF-2017-23, which is applicable to, and has some different requirements for, certain Bell Canada Model 429 and 430 helicopters. This FAA AD applies to affected Goodrich hoists, regardless of the model helicopter they are installed on, to address the risk to the fleet independent of the helicopter installation. Accordingly, the FAA based its AD on Goodrich's service information and not on any model-specific requirements. Operators may request approval of model-specific corrective actions as an alternative method of compliance (AMOC) under the provisions of paragraph (h) of this AD.

Collins Aerospace requested the FAA extend the compliance time for replacing an affected hoist with a hoist that has an improved overload clutch assembly from 12 months to 24 months. In support, Collins Aerospace stated 24 months is an acceptable time based on improved data from the initial load checks and subsequent checks with a load check tool. Additionally, Collins Aerospace stated it does not have the capacity to provide improved overload clutch assemblies for the entire fleet within 12 months.

The FAA agrees because no additional reports of low pulling hoists have been received since issuance of the SNPRM. The FAA has revised this final rule accordingly.

In the SNPRM, the FAA proposed to require a placard and RFM limitation that warned the pilot about excessive maneuvering with a load on an extended cable and limited the maximum sustained bank angle to 20 degrees. Bell Canada stated that limits on bank angle (and pendulum angle) are difficult to monitor by aircrew and will increase crew workload, and therefore prohibiting maneuvering with load on extended cable is necessary to manage the risk of clutch slippage. The FAA infers that Bell Canada is requesting the FAA prohibit maneuvering with load on an extended cable for Model 429 and 430 helicopters.

The FAA disagrees with changing the flight limitation from a bank angle limit to a maneuvering prohibition. The FAA determined that limiting the bank angle in conjunction with a reduced maximum load mitigates the unsafe condition. The attitude indicator, which is used by the pilot to monitor the bank angle while maneuvering an external load, is in the pilot's normal field of view and is regularly monitored; therefore, any additional workload is minimal. The FAA does agree that requiring the aircrew to monitor the lateral pendulum angle of the hoist cable with respect to the helicopter's vertical axis would not be an acceptable limitation because it would not be measurable or enforceable.

In the SNPRM, the FAA proposed to require a placard and revision to the RFM to reduce the weight limitations for the hoist load based on the outside air temperature. Bell Canada stated that the FAA's proposed limitations include a de-rating factor of 50 lbs, which is not warranted for Bell Canada Model 429 and 430 helicopters. In support, Bell Canada stated that the de-rating factor was established to accommodate certain maneuvering, which has been prohibited for the Bell Canada products.

The FAA determined the de-rating factor is necessary because it directly correlates to the bank angle limitation required by this AD.

Collins Aerospace requested the FAA change the proposed maximum hoist load limitations to distinguishing between non-modified hoists (without the number “4” as the first digit of its serial number (S/N)) and modified hoists with a new clutch (with the number “4” as the first digit of its S/N). Collins Aerospace stated that after EASA AD 2015-0226R1 was issued, Goodrich performed a series of characterization tests that demonstrated the performance envelope of the modified hoist in various conditions. According to Collins Aerospace, the results of these tests as documented in Goodrich Report No. 49000-1087, Revision A, dated July 31, 2017, indicate that margins are maintained with a less restrictive temperature limitation than those imposed on non-modified hoists.

As the FAA explained in the SNPRM, the FAA disagrees with requiring different maximum hoist load limitations for non-modified hoists and modified hoists. After reviewing the data in the report referenced by the commenter, the FAA determined it does not demonstrate with an acceptable level of confidence that less restrictive temperature limitations are appropriate for modified hoists.

In the SNPRM, the FAA proposed to prohibit use of the hoist if a partial peel out occurs, through both a placard limitation and a requirement to deactivate or remove the hoist. Bell Canada requested the FAA remove the proposed placard requirement because it only requires that the pilot cease using the hoist before the next flight and does not provide crew instructions to be executed during the hoist operation.

The placard provides requirements for the crew following any partial peel out. The FAA determined that the most effective way to provide this information to the aircrew is through a placard.

In the SNPRM, the FAA proposed to define partial peel out as occurring when 20 inches or more of the hoist cable reels off of the cable drum in one clutch slip incident. Bell Canada requested the FAA change this definition to “approximately” 20 inches. Bell Canada stated that a finite 20 inches will be difficult to measure; “approximately 20 inches” would be consistent with the Goodrich service information.

A measurement of “approximately 20 inches” would be vague in that it may be interpreted in more than one way. The operator is capable of measuring 20 or more inches of the hoist cable by, for example, using slippage markings on the cable.

Affected helicopters include helicopters that have been approved by the aviation authorities of Canada, Italy, France, and Germany and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA about the unsafe condition described in its AD. The FAA reviewed the relevant data, considered the comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for the changes described previously, this AD is adopted as proposed in the SNPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Goodrich Alert Service Bulletin No. ASB 44301-10-18, Revision 6, dated October 10, 2016, which specifies maximum hoist load limitations with respect to ambient temperature and describes actions and conditions that could reduce the capacity of the clutch. This service information also specifies procedures for inspecting the cable and inspecting the clutch by performing a cable conditioning lift and a hoist slip load test.

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.

EASA AD 2015-0226R5 requires repetitively replacing the hoist with a modified hoist, whereas this AD requires a one-time replacement of the hoist with a modified hoist that has the improved clutch assembly installed. EASA AD 2015-0226R5 requires adding a placard or operational limitation to the RFM warning that exceeding 15° of lateral pendulum angle/helicopter vertical axis can lead to clutch slippage, and this AD does not. EASA AD 2015-0226R5 requires adding an operating limitation to the RFM limiting the number of persons who can be hoisted, whereas this AD does not. This AD requires replacing the cable before the next hoist operation if a cable has previously been load-tested at more than 1,500 lbs or at an unknown weight during at least one cable pull, while EASA AD 2015-0226R5 requires this replacement during multiple cable pulls. This AD requires visually inspecting and measuring the diameter of the cable before and after performing a cable conditioning and a hoist slip load test, whereas EASA AD 2015-0226R5 does not. This AD requires performing the cable conditioning and hoist slip load test within 30 days after the effective date of this AD, unless already done within the last 6 calendar months, and thereafter at intervals not to exceed 6 months, 400 lifts, or 300 cycles. EASA AD 2015-0226R5 specifies performing the hoist slip load test according to the compliance time of the design approval holder instead. After the installation (not reinstallation) of a modified hoist, EASA AD 2015-0226R5 requires performing an initial hoist load check/test prior to hoisting operation, whereas this AD does not.

The FAA considers this AD an interim action. The inspection reports required by this AD will enable better insight into the condition of the hoists, and eventually be used to develop final action to address the unsafe condition. Once final action has been identified, the FAA might consider further rulemaking.

The FAA estimates that this AD affects 2,911 hoists installed on helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Replacing a clutch takes about 8 work-hours and parts cost about $24,000 for an estimated cost of $24,680 per hoist. Alternatively, replacing a hoist takes about 8 work-hours and parts cost about $200,000 for an estimated cost of $200,680 per hoist.

Revising the existing RFM for your helicopter and installing placards takes about 0.5 work-hour for an estimated cost of $43 per helicopter and $125,173 for the U.S. fleet.

Deactivating or removing a hoist that experiences a partial peel out takes about 2 work-hours for an estimated cost of $170.

Reviewing records takes about 0.5 work-hour for an estimated cost of $43 per helicopter and $125,173 for the U.S. fleet.

Inspecting the cable and performing a cable conditioning lift and hoist slip load test takes about 2 work-hours for an estimated cost of $170 per helicopter and $494,870 for the U.S. fleet per inspection cycle. A load check tool costs about $11,171. Reporting the hoist slip load test information takes about 0.25 work-hour for a cost of $21 per helicopter and $61,131 for the U.S. fleet per reporting cycle.

Replacing the cable takes about 3 work-hours and parts cost about $3,150 for a total replacement cost of $3,405 per hoist.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 0.25 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

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

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

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

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

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

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

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

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

Background

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2021-0160, dated July 5, 2021 (EASA AD 2021-0160), to correct an unsafe condition for Airbus Helicopters Deutschland GmbH (AHD), formerly Eurocopter Deutschland GmbH, Model MBB-BK117 D-3 helicopters, all serial numbers, including Model MBB-BK117 D-2 helicopters that have been converted into Model MBB-BK117 D-3 helicopters through Airbus Helicopters Service Bulletin MBB-BK117 D-2-00-003.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Airbus Helicopters Deutschland GmbH Model MBB-BK 117 D-3 helicopters. The NPRM published in the Federal Register on January 14, 2022 (87 FR 2368). The NPRM was prompted by reports of an M/R blade lead-lag damper in a tilted position. EASA advises that subsequent investigation results determined that the tolerances stack-up may lead to an insufficient clamping on the bearing pin. The NPRM proposed to require inspecting the FCU, and corrective actions if necessary, as well as rework and re-identification of the bearing pin.

The FAA is issuing this AD to address this unsafe condition, which if not detected and corrected, could result in an unbalance of the M/R system, excessive vibration, and reduced control of the helicopter. See EASA AD 2021-0160 for additional background information.

The FAA received no comments on the NPRM or on the determination of the costs.

These helicopters have been approved by EASA and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA about the unsafe condition described in its AD. The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these helicopters. This AD is adopted as proposed in the NPRM.

EASA AD 2021-0160 requires a one-time inspection of the affected FCU and depending on findings, accomplishment of applicable corrective actions. EASA AD 2021-0160 also requires after the initial FCU inspection, re-working and re-identifying each affected part by marking the part with a letter “M.” EASA AD 2021-0160 also prohibits installing an affected FCU or affected part on any helicopter.

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

The FAA reviewed Airbus Helicopters Alert Service Bulletin ASB MBB-BK117 D-3-62A-002, dated June 29, 2021, which specifies procedures for a one-time inspection of the FCU and re-work of the bearing pin installed on the support assembly.

The FAA estimates that this AD affects 41 helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Inspecting each FCU, including inspecting each rotor hub-shaft, hexagonal screw, nut, damper assembly, bearing pin, support assembly, spherical bearing, and integrated bearing sleeve, takes about 3 work-hours for an estimated cost of $255 per FCU inspection and $10,455 for the U.S. fleet per FCU inspection.

Reworking and re-identifying the bearing pin takes about 0.5 work-hour for an estimated cost of $43 per helicopter and $1,763 for the U.S. fleet per bearing pin.

The FAA has received no definitive data on which to base the cost estimates for the on-condition repairs specified in this AD.

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

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

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

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

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

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

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

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

In March 2020, the United States Federal Communications Commission (FCC) adopted final rules authorizing flexible use of the 3.7-3.98 GHz band for next generation services, including 5G and other advanced spectrum-based services. 1 Pursuant to these rules, C-Band wireless broadband deployment was permitted to occur in phases with the opportunity for operations in the lower 0.1 GHz of the band (3.7-3.8 GHz) in certain markets beginning on January 19, 2022. This AD refers to “5G C-Band” interference, but wireless broadband technologies, other than 5G, may use the same frequency band. 2 These other uses of the same frequency band are within the scope of this AD since they would introduce the same risk of radio altimeter interference as 5G C-Band.

The radio altimeter is an important aircraft instrument, and its intended function is to provide direct height-above-terrain/water information to a variety of aircraft systems. Commercial aviation radio altimeters operate in the 4.2-4.4 GHz band, which is separated by 0.22 GHz from the C-Band telecommunication systems in the 3.7-3.98 GHz band. The radio altimeter is more precise than a barometric altimeter and for that reason is used where aircraft height over the ground needs to be precisely measured, such as autoland, manual landings, or other low altitude operations. The receiver on the radio altimeter is typically highly accurate, however it may deliver erroneous results in the presence of out-of-band radio frequency emissions from other frequency bands. The radio altimeter must detect faint signals reflected off the ground to measure altitude, in a manner similar to radar. Out-of-band signals could significantly degrade radio altimeter functions during critical phases of flight, if the altimeter is unable to sufficiently reject those signals.

The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12) to address the effect of 5G C-Band interference on all transport and commuter category airplanes equipped with a radio (also known as radar) altimeter. AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations, which require radio altimeter data to land in low visibility conditions, when in the presence of 5G C-Band interference as identified by NOTAM. The FAA issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground ( e.g., landing flare), could lead to loss of continued safe flight and landing.

Since the FAA issued AD 2021-23-12, Boeing has continued to evaluate potential 5G C-Band interference on aircraft systems that rely on radio altimeter inputs. Boeing issued Boeing Multi Operator Message MOM-MOM-22-0034-01B(R2), dated January 28, 2022; Boeing Multi Operator Message MOM-MOM-22-0033-01B(R1), dated January 31, 2022; and Boeing Flight Crew Operations Manual Bulletin TB1-55, “Radio Altimeter Anomalies due to 5G C-Band Wireless Broadband Interference in the United States,” dated January 29, 2022.

Based on Boeing's data, the FAA identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, and 747-400F series airplanes. The FAA determined anomalies due to 5G C-Band interference may affect multiple other airplane systems using radio altimeter data, regardless of the approach type or weather. These anomalies may not be evident until very low altitudes. Impacted systems include, but are not limited to, autopilot flight director system; autothrottle system; engines; flight controls; flight instruments; traffic alert and collision avoidance system (TCAS); ground proximity warning system (GPWS); and configuration warnings.

In the event of 5G C-Band interference, landing performance and flightcrew workload can be adversely impacted. 5G C-Band interference may have multiple effects, including:

• Autopilot Flight Director System: NO AUTOLAND caution or advisory message may be shown; NO AUTOLAND autopilot status annunciation may be shown; autopilot may disengage when LAND 2 or LAND 3 status is shown; the flight directors may provide erroneous guidance during ILS approaches; LNAV and VNAV modes may not engage or may engage at an erroneous altitude after departure; autoland flare mode and runway alignment may not occur or may activate earlier or later than expected; or TO/GA mode may not be available.

• Autothrottle System: Autothrottle can remain in SPD (speed) mode and may advance to maintain speed during flare instead of reducing the thrust to IDLE at approximately 25 feet radio altitude; or autothrottle may retard to IDLE prematurely.

• Engines: Thrust levers being set to IDLE in-flight may result in ground idle.

• Flight Controls: SPEEDBRAKE EXT Caution message may not be available. Automatic speedbrake deployment may not occur after touchdown.

• Flight Instruments: The radio altimeter indication may not be shown or may be erroneous; the RADIO minimums indications (flashing or turning amber) may not occur; the rising runway symbol may not be shown or may be erroneous; the localizer deviation alert amber scale and flashing pointer may not be shown (deviation indications are still available); the glideslope deviation alert amber scale and flashing pointer may not be shown (deviation indications are still available); or the Flight Path Vector (FPV) may be biased out of view.

• TCAS: TCAS alerts may not be available (TCAS alerts that do occur will be valid); or TCAS inhibits for resolution advisories may be erroneous.

• GPWS: GPWS alerts may not be available or may be erroneous (although look-ahead terrain alerting remains available); radio altimeter-based altitude and minimums aural callouts during approach may not be available or erroneous; or windshear detection systems (predictive and reactive) may be inoperative.

• Configuration Warnings: Erroneous CONFIG GEAR warning alert may occur.

• Other simultaneous flight deck effects associated with the 5G C-Band interference could increase pilot workload.

These effects may cause erroneous indications and annunciations, as well as conflicting information, to be provided to the flightcrew during a critical phase of flight. There may also be a lack of cues present to elicit prompt go-around or recovery initiation. These effects could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane and is an unsafe condition. Thus, the FAA has determined that prompt identification of a potential problem and initiation of a go-around are required to ensure the capability for continued safe flight and landing.

To address this unsafe condition, this AD mandates procedures for operators to incorporate specific operating procedures for takeoff, ILS approaches, non-precision approaches, and go-around and missed approaches, when in the presence of 5G C-Band interference as identified by NOTAMs.

Finally, the FAA notes that AD 2021-23-12 remains in effect and thus prohibits certain ILS approaches. Thus, this AD addresses procedures applicable only to those ILS approaches not prohibited by AD 2021-23-12.

The FAA is issuing this AD to address the unsafe condition on these products.

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

This AD requires revising the limitations and operating procedures sections of the existing AFM to incorporate specific operating procedures for takeoff, instrument landing system (ILS) approaches, non-precision approaches, and go-around and missed approaches, when in the presence of 5G C-Band interference as identified by NOTAMs.

Section 91.9 prohibits any person from operating a civil aircraft without complying with the operating limitations specified in the AFM. FAA regulations also require operators to furnish pilots with any changes to the AFM (14 CFR 121.137) and pilots in command to be familiar with the AFM (14 CFR 91.505).

The FAA considers this AD to be an interim action. If final action is later identified, the FAA might consider further rulemaking.

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

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because the FAA determined that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 5G C-Band, and a determination that during takeoff, approach, landings, and go-arounds, as a result of this interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. This increased flightcrew workload could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane. The urgency is based on the hazard presented by 5G C-Band interference, and on C-Band wireless broadband deployment, which has been occurring in phases with operations beginning on January 19, 2022. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).

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

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under ADDRESSES . Include Docket No. FAA-2022-0279 and Project Identifier AD-2022-00257-T at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Dean Thompson, Aerospace Engineer, Systems and Equipment Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3165; email: Dean.R.Thompson@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

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

The FAA estimates that this AD affects 126 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

In response to Russia's February 2022 further invasion of Ukraine and Belarus' substantial enabling of this invasion, the Bureau of Industry and Security (BIS) imposed extensive sanctions on Russia and Belarus under the Export Administration Regulations (15 CFR parts 730-774) (EAR) by implementing the final rule, Implementation of Sanctions Against Russia Under the Export Administration Regulations (EAR), effective February 24, 2022 (“Russia Sanctions rule”)  1 and three subsequent final rules published in March 2022, Imposition of Sanctions Against Belarus Under the Export Administration Regulations (EAR), effective March 2, 2022 (“Belarus Sanctions rule”);  2 Expansion of Sanctions Against the Russian Industry Sector Under the Export Administration Regulations (EAR), effective March 3, 2022 (“Industry Sector Sanctions rule”);  3 and Further Imposition of Sanctions Against Russia with the Addition of Certain Entities to the Entity List, effective March 3, 2022 (“Russia Entity List rule”). 4 BIS also published an additional rule in March 2022, Addition to the List of Countries Excluded from Certain License Requirements under the Export Administration Regulations (EAR), effective March 4, 2022 (“South Korea exclusion rule”)  5 that added South Korea to the list of countries in supplement no. 3 to part 746 that are excluded from certain § 746.8 license requirements that pertain to items destined for Russia or Belarus. As described in the Russia Sanctions rule's preamble, as well as in the other rules published in March 2022, Russia's invasion of Ukraine, and Belarus's substantial enabling of Russia's invasion of Ukraine, flagrantly violates international law, is contrary to U.S. national security and foreign policy interests, and undermines global order, peace, and security, necessitating the imposition of stringent sanctions.

By restricting Russia's and Belarus's access to `luxury goods' in order to increase the costs on Russian and Belarusian persons who support the government of Russia and its invasion of Ukraine, the export control measures implemented in this final rule build upon the policy objectives set forth in the Russian Sanctions rule and in the Belarus Sanctions rule. These individuals include Russian and Belarusian persons (together, Russian and Belarusian oligarchs and malign actors), wherever located, who have been designated by the Department of the Treasury, Office of Foreign Assets Control's (OFAC) under or pursuant to certain Russia and Ukraine-related Executive Orders issued in response to Russia's 2014 occupation of Crimea and related destabilizing conduct in Ukraine and are listed on the List of Specially Designated Nationals and Blocked Persons (SDN List) maintained by OFAC. See http://www.treasury.gov/sdn.

The changes made by this rule are intended to limit access to `luxury goods' by restricting the export, reexport and transfer (in-country) of certain items subject to the EAR that are desired by wealthy Russian and Belarusian citizens, including Russian and Belarusian oligarchs and malign actors. Limiting the export, reexport, and transfer (in-country) of `luxury goods' will undermine the ability of these Russian and Belarusian individuals to acquire luxury items, thereby further highlighting to these influential individuals the financial consequences to their lifestyle of Russia's invasion of Ukraine. With respect to these Russian and Belarusian oligarchs and malign actors, these restrictions on access to `luxury goods' complement asset blocking measures imposed by OFAC and by partner and allied countries. By restricting Russian and Belarusian oligarchs' and malign actors' access to `luxury goods,' the United States is also highlighting to such actors, the loss of the benefits of full participation in the international market.

The export controls in this rule target `luxury goods' for export or reexport to or transfer within Russia or Belarus, as well as to certain Russian and Belarusian oligarchs and malign actors, wherever they are located. This rule is part of larger U.S. Government and partner and allied country actions intended to steadily increase the financial consequences on Russia and Belarus as a result of Russia's invasion of Ukraine and Belarus's substantial enabling of Russia's invasion, as well as on Russian and Belarusian individuals who have supported Russia's destabilizing conduct since Russia's 2014 occupation of the Crimea region of Ukraine.

Through this rule, BIS is implementing two new license requirements: One that applies to `luxury goods' subject to the EAR that are destined for Russia or Belarus and another that applies to such items that are destined for Russian and Belarusian oligarchs and malign actors, regardless of their geographical location, who have been designated by OFAC under certain Russia- or Ukraine-related Executive orders. For purposes of these new license requirements, a `luxury good' refers to any item that is identified in new supplement no. 5 to part 746 of the EAR. The license requirement specific to Russia and Belarus for `luxury goods' is added under new § 746.10(a)(1) of the EAR (`Luxury goods' license requirements for Russia and Belarus) (Embargoes and Other Special Controls). The license requirement specific to the designated Russian and Belarusian oligarchs and malign actors for `luxury goods' is added under new § 746.10(a)(2) of the EAR (Worldwide license requirement for `luxury goods' for designated Russian and Belarusian oligarch and malign actors).

The new license requirements set forth in paragraphs (a)(1) and (2) apply to the `luxury goods' identified in supplement no. 5 to part 746. The difference between the two new license requirements is that while the license requirements under paragraph (a)(1) apply to exports and reexports to Russia and Belarus or transfers within Russia and Belarus, regardless of the end user, the license requirement under paragraph (a)(2) is a worldwide license requirement that applies to Russian and Belarusian oligarchs and malign actors designated by OFAC pursuant to certain specified Executive Orders, as described further below.

A very limited number of license exceptions described in § 746.10(c)(1) and (2) may be used to overcome the license requirements in § 746.10(a)(1) if all of the applicable requirements of the license exceptions can be met. No license exceptions are available to overcome the license requirements in § 746.10(a)(2). When a license is required, applications for such items will be subject to a policy of denial.

This final rule adds a new § 746.10 (`Luxury goods' sanctions against Russia and Belarus and Russian and Belarusian Oligarchs and Malign Actors). This new section consists of two new license requirements added under paragraphs (a)(1) and (2). This rule also adds paragraph (b) to § 746.10 to specify the license review policy for the new license requirements under paragraphs (a)(1) and (2). Additionally, this rule adds paragraph (c) to § 746.10 to exclude the use of EAR license exceptions to overcome the license requirements under new paragraphs (a)(1) and (2), except for the limited number of license exceptions identified under paragraphs (c)(1) and (2). Finally, this rule adds supplement no. 5 to part 746 that identifies the `luxury goods' that are subject to the license requirements under paragraphs (a)(1) and (2) to § 746.10. These changes are described in greater detail below.

This rule adds new paragraph (a)(1) that imposes license requirements for exports and reexports to or transfers within Russia and Belarus of the `luxury goods' identified in new supplement no. 5 to part 746. This license requirement is in addition to license requirements specified on the Commerce Control List (CCL) in supplement no. 1 to part 774 of the EAR and in other provisions of the EAR, including part 744 and §§ 746.5 and 746.8. New supplement no. 5 to part 746, which is also added to the EAR in this rule, is the listing of the `luxury goods' that are subject to a license requirement under paragraphs (a)(1) and (2), as described below.

This rule adds paragraph (a)(2) to impose license requirements for exports and reexports to or transfers (in-country), of `luxury goods' identified in new supplement no. 5 to part 746, to certain Russian and Belarusian oligarchs and malign actors (as described below), wherever located. This license requirement is in addition to license requirements specified on the CCL in supplement no. 1 to part 774 of the EAR and in other provisions of the EAR, including part 744 and §§ 746.5 and 746.8.

The Russian and Belarusian oligarchs and malign actors to whom this new license requirement under paragraph (a)(2) applies are individuals who have been designated by OFAC under or pursuant to seven Executive orders and identified on the SDN List. The applicable SDN List identifiers for persons designated pursuant to these seven Executive Orders are: [RUSSIA-EO14024], [UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], [UKRAINE-EO13685], [BELARUS], and [BELARUS-EO14038]. The license requirement applies to exports, reexports, or transfers (in-country) worldwide of any `luxury good' “subject to the EAR” identified in supplement no. 5 to this part that is destined for any designated Russian or Belarusian oligarch or malign actor, or in situations in which a party to the transaction is a Russian or Belarusian oligarch or malign actor who has been designated in or pursuant to one of the specified Executive orders. This rule specifies that for purposes of paragraph (a)(2), an `oligarch or malign actor' is any natural person that is designated on the SDN List with any of the designations referenced in paragraph (a)(2).

This rule also adds a note to paragraph (a) to specify that for purposes of paragraphs (a)(1) and (2), a `luxury good' means any item that is identified in supplement no. 5 to part 746. BIS estimates that these new controls in § 746.10(a)(1) and (2) will result in an additional 750 license applications being submitted to BIS annually.

Under paragraph (b) (Licensing Policy) of § 746.10, applications for export or reexport to or transfer within Russia or Belarus that require a license under new paragraph (a)(1), and applications for exports, reexports, or transfers (in-country) worldwide that are destined for Russian or Belarusian oligarchs and malign actors that are subject to the new license requirement (or in situations in which the latter are parties to the transaction as described in § 748.5(c) through (f) of the EAR) that require a license under new paragraph (a)(2) will be reviewed under a policy of denial.

Under paragraph (c) (License Exceptions), this rule specifies that a limited number of license exceptions may overcome the license requirements in § 746.10(a)(1) for transactions involving Russia or Belarus. Specifically, the only license exceptions that are available to overcome the license requirements in § 746.10(a)(1) are as follows: License Exception BAG, excluding firearms and ammunition (paragraph (e)), § 740.14; and License Exception AVS for saloon stores and supplies under § 740.15(b)(3)(v), excluding saloon stores and supplies for any aircraft registered in, owned, or controlled by, or under charter or lease by Russia, Belarus or a national of Russia or Belarus. The limited AVS eligibility is included to cover third country airlines flying to Russia or Belarus.

This rule also specifies that no license exceptions may overcome the license requirements in § 746.10(a)(2) that apply to the designated Russian and Belarusian oligarchs and malign actors.

This final rule adds a new supplement no. 5 to part 746: `Luxury Goods' that Require a License for Export, Reexport, and Transfer (In-Country) to or within Russia or Belarus Pursuant to § 746.10(a)(1) and (2). This supplement is the listing of the `luxury goods' that are subject to the license requirements under paragraphs (a)(1) and (2) of § 746.10. This supplement includes three columns consisting of the Schedule B, 2-Digit Chapter Headings, and 10-Digit Commodity Descriptions and Per Unit Wholesale Price in the U.S. if applicable. This new supplement will assist exporters, reexporters, and transferors in determining whether an item at issue falls within the scope of this supplement no. 5 to part 746 and consequently will require a license under § 746.10(a)(1) and (2) of the EAR.

Based on the foregoing changes to the EAR, this final rule also makes certain conforming revisions to the Commerce Country Chart in supplement no. 1 to part 738.

In supplement no. 1 to part 738 (Commerce Country Chart), as a conforming change, this final rule revises footnote 6 to add a reference to § 746.10 of the EAR for additional license requirements for exports, reexports, or transfers (in-country) to or within Russia or Belarus involving `luxury goods' “subject to the EAR” that are identified in supplement no. 5 to part 746 of the EAR, to facilitate exporters', reexporters', and transferors' awareness of the need to review the license requirements in § 746.10.

For the changes being made in this final rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on March 11, 2022, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR).

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (codified, as amended, at 50 U.S.C. 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. The International Emergency Economic Powers Act (IEEPA) (codified, as amended, at 50 U.S.C. 1701 et seq. ) and the Executive Order on Prohibiting Certain Imports, Exports, and New Investment with Respect to Continued Russian Federation Aggression, dated March 11, 2022 also serve as additional authorities for this rule. To the extent it applies to certain activities that are the subject of this rule, the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) (codified, as amended, at 22 U.S.C. 7201-7211) also serves as authority for this rule.

1. This final rule is not a “significant regulatory action” because it “pertain[s]” to a “military or foreign affairs function of the United States” under sec. 3(d)(2) of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule involves three collections of information. BIS believes there will be minimal burden changes to two of these collections—Five-Year Records Retention Requirement for Export Transactions and Boycott Actions (OMB control number 0694-0096) and Automated Export System (AES) Program (OMB control number 0607-0152).

However, “Multi-Purpose Application (OMB control number 0694-0088) will exceed existing estimates currently associated with this collection as the respondent burden will increase the estimated number of submissions by 750 for license applications submitted annually to BIS. BIS estimates the burden hours associated with this collection would increase by 382 ( i.e., 750 applications × 30.6 minutes per response) for a total estimated cost increase of $11,460 ( i.e., 382 hours × $30 per hour). The $30 per hour cost estimate for OMB control number 0694-0088 is consistent with the salary data for export compliance specialists currently available through glassdoor.com (glassdoor.com estimates that an export compliance specialist makes $55,280 annually, which computes to roughly $26.58 per hour). Consistent with 5 CFR 1320.13, BIS requested, and OMB has approved, emergency clearance for an increase in the burden estimate due to the additional license requirements imposed by this rule.

3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to section 1762 of the Export Control Reform Act of 2018 (50 U.S.C. 4821) (ECRA), this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date. While section 1762 of ECRA provides sufficient authority for such an exemption, this action is also independently exempt from these APA requirements because it involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)).

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

For the reasons stated in the preamble, parts 738 and 746 of the Export Administration Regulations (15 CFR parts 730 through 774) are amended as follows:

The Equal Employment Opportunity Commission (EEOC or Commission) recently upgraded some of its communication systems and certain telephone and facsimile numbers in use by the agency were changed. As a result, the EEOC's regulations require updating to correct a telephone number and a facsimile number. The telephone number, which is available for use by the public to access information about agency meetings, appears in the EEOC's regulations covering the Government in the Sunshine Act at 29 CFR 1612.7(a). The facsimile number appears in the EEOC's regulations on the Freedom of Information Act (FOIA) at 29 CFR 1610.7(b) and 1610.11(a); this number is one method by which requests or appeals under the FOIA may be submitted to the EEOC Office of Legal Counsel.

Accordingly, the Equal Employment Opportunity Commission amends 29 CFR parts 1610 and 1612 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, it is intended to refer to the EPA.

On December 14, 2012, the EPA revised the level of the primary annual PM 2.5 standard, lowering the level from 15.0 micrograms per cubic meter (µg/m 3 ) to 12.0 µg/m 3 . Effective April 15, 2015, EPA issued area designations for the 2012 annual PM 2.5 NAAQS. 1 In that action, EPA designated the Allegheny County, Pennsylvania area (Allegheny County Area) as a moderate nonattainment area for the 2012 annual PM 2.5 NAAQS. 2

On April 6, 2018, EPA published a “finding of failure to submit” under section 110(k) of the CAA, finding that several areas nationwide (including the Allegheny County Area) failed to submit required SIP elements for the 2012 annual PM 2.5 NAAQS. 3 At that time, Pennsylvania had failed to submit the following specific moderate area SIP elements for the Allegheny County Area: an attainment demonstration; control strategies analysis, including reasonably available control measures (RACM) and reasonably available control technology (RACT); a reasonable further progress (RFP) plan; quantitative milestones; emission inventories, and contingency measures. That finding of failure to submit triggered the sanctions clock under section 179 of the CAA, as well as an obligation under section 110(c) of the CAA for EPA to promulgate a FIP no later than two years from the effective date of the finding, if Pennsylvania had not submitted, and EPA did not approve, the required SIP submission.

Pennsylvania submitted the required Allegheny County Area PM 2.5 nonattainment plan (or the Allegheny County PM 2.5 Plan, or simply the Allegheny County Plan) on September 30, 2019. On November 1, 2019, EPA determined the submitted PM 2.5 Plan to be technically and administratively complete (in accordance with SIP completeness criteria of CAA section 110(k) and 40 CFR part 51, appendix V), correcting the finding of failure to submit deficiency with respect to the missing nonattainment area planning requirements for the Area under the 2012 PM 2.5 NAAQS and stopping the sanctions clock (but not the FIP clock) triggered by EPA's April 6, 2018 finding. On May 14, 2021 (86 FR 26388), EPA approved elements of the Allegheny County Area PM 2.5 Plan, except the required contingency measures element of the plan, which EPA conditionally approved. That final PM 2.5 Plan approval action terminated EPA's FIP obligation for all CAA required nonattainment plan elements except for the contingency measures element. As to the contingency measures element of the Allegheny County Area PM 2.5 Plan, EPA's May 14, 2021 conditional approval of the plan's contingency measures element suspended EPA's FIP obligation for the duration of the conditional approval of that element. If Pennsylvania timely submits a SIP revision containing approvable contingency measures by May 14, 2022, upon EPA's subsequent approval of that SIP revision, EPA's FIP obligation with respect to the contingency measures element of the Allegheny County Area PM 2.5 Plan will be terminated.

On September 3, 2021 (86 FR 49497), EPA proposed to determine that the Allegheny County Area is attaining the 2012 PM 2.5 annual NAAQS under the Clean Data Policy, 4 based on the most recent three years (2018-2020) of valid monitoring data. EPA proposed that, if finalized, the clean data determination would suspend Pennsylvania's obligation to submit the outstanding contingency measure element of the attainment plan for the PM 2.5 NAAQS for as long as the area continues to attain the 2012 annual PM 2.5 NAAQS. Additional details can be found in EPA's September 3, 2021 proposed action. 5 Finally, the September 3, 2021 action proposed to suspend the FIP clock triggered by the March 26, 2018, Finding of Failure to Submit action that were not halted by subsequent submittal and EPA approval of most elements of the attainment plan. 6

EPA's September 3, 2021 proposed clean data determination action for the Allegheny County nonattainment area for the PM 2.5 NAAQS opened a thirty-day public comment period, which closed on October 4, 2021. EPA received comments from three individual commenters. All comments received have been placed in the docket for this action. A summary of the relevant comments received and EPA's responses thereto are listed below.

Comment 1: The commenter stated that while they generally support the proposed clean data determination action, they disagree with the suspension of certain PM 2.5 plan requirements related to attainment—namely the attainment demonstration, RACM and RACT demonstrations, emission control strategies, RFP plan, quantitative milestones, and contingency measures. Given the lateness of Pennsylvania's submission of the required attainment plan in 2018, the commenter contends that Pennsylvania should adopt these requirements.

Response 1: Under EPA's longstanding Clean Data Policy interpretation as codified for PM 2.5 at 40 CFR 51.1015, a determination that a PM 2.5 nonattainment area has attained the NAAQS suspends the state's obligation to submit to EPA those SIP nonattainment planning elements related to attaining that NAAQS for as long as the area continues to attain the standard. Because the purpose of certain nonattainment plan elements is to help bring a violating area into attainment, if data shows that the area has attained, EPA interprets that these requirements should no longer be applicable. For more than two decades, and for many NAAQS, EPA has consistently applied its Clean Data Policy interpretation to attainment-related provisions of subparts 1, 2 and 4 of part D, title I of the CAA. The Clean Data Policy is the subject of several EPA memoranda and regulations and numerous individual rulemakings published in the Federal Register . These rulemakings have applied the interpretation to a broad spectrum of ozone, fine particulate matter, lead, and carbon monoxide NAAQS—including the 1997 and 2006 PM 2.5 NAAQS. The Clean Data Policy has been reviewed and upheld by Federal courts on a number of occasions. 7 The 2016 PM 2.5 SIP Requirements Rule's Clean Data Policy interpretation with respect to CAA subpart 4 aligns with that implemented under prior fine particulate matter NAAQS. 8 EPA has previously articulated its Clean Data Policy interpretation under CAA subpart 4 in implementing the PM 10 standard. 9

As described in the proposed action, the clean data determination does not suspend other CAA nonattainment plan requirements, such as an emissions inventory, nonattainment new source review requirements, and certain emission reduction requirements, that are considered independent of attainment. In any case, EPA's May 14, 2021, approval of Allegheny County's Plan for the 2012 Annual PM 2.5 NAAQS fully approved all required moderate area nonattainment plan elements—including nearly all elements referenced by the commenter—except for the contingency plan, which was conditionally approved. 10 Therefore, those SIP-approved plan elements for the 2012 PM 2.5 NAAQS are in place and in effect, regardless of the subsequent suspension of the obligation to submit them pursuant to this clean data determination. In the case of the contingency measures element of the PM 2.5 plan, which EPA conditionally approved, the clean data determination suspends the requirement to submit a SIP revision addressing that element as long as the area continues to attain the 2012 Annual PM 2.5 NAAQS. 11 Under the Clean Data Policy and the regulations adopted to address PM 2.5 , suspended plan elements would be permanently discharged if the area is redesignated to attainment. 12

Comment 2: The commenter contends that because many states failed to submit required SIP nonattainment plan elements to EPA in a timely manner, it is important that EPA establish a FIP under the authority of the CAA as a supplement to the SIP, and to step in to meet nonattainment planning requirement commitments on behalf of the states, if need be, and that the process for doing so be transparent to the public.

Response 2: As discussed in the prior response, Pennsylvania did submit a moderate PM 2.5 attainment plan, and EPA approved all the elements of that plan except for the contingency measures, which were conditionally approved. Full approval also means that these elements of the plan are in the SIP and federally enforceable. The purpose of a CAA section 110(c)(1) FIP is to provide a backstop where a state has failed to make a required submission or where EPA has disapproved a state's plan or found such plan to be deficient; in this case, where EPA has fully approved the state's plan, a FIP is not provided for under the CAA.

Regarding the contingency measures element, EPA's conditional approval requires the state to submit a SIP to remedy the conditional approval of the contingency measure plan element no later than May 14, 2022. 13 EPA's approval of the SIP revision addressing contingency measures would terminate the FIP clock for that outstanding plan element. However, upon the effective date of this Clean Data Determination, the requirement to submit the contingency measures element of the attainment SIP and EPA's FIP requirement for that element are suspended as long as the Allegheny County Area continues to attain the 2012 Annual PM 2.5 NAAQS. 14

EPA is finalizing this Clean Data Determination, under the Clean Data Policy, as proposed. Pursuant to 40 CFR 51.1015, EPA has determined that based on 3-years of certified, complete, and valid ambient air monitoring data between 2018 and 2020, the Allegheny County Area has attained the 2012 annual PM 2.5 NAAQS. Therefore, Pennsylvania's obligation to submit the attainment plan elements referenced in 40 CFR 51.1015(a)—including the conditionally approved contingency measures element of the attainment plan—are suspended as long as the area continues to attain the 2012 annual PM 2.5 NAAQS. For the Allegheny Area, EPA has already approved into the SIP the attainment demonstration, projected emissions inventories, RACM (including RACT), RFP plans, motor vehicle emissions budgets, and quantitative milestones for the Allegheny Area. The requirement to submit the conditionally approved contingency measures element is suspended until such time as: (1) EPA determines that the area has violated the 2012 Annual PM 2.5 NAAQS; (2) the area is redesignated to attainment, after which such requirements are permanently discharged; or (3) EPA determines that the area attained by its attainment date of December 31, 2021. 15

Although the plan submittal obligation has been suspended, this clean data determination action does not preclude Pennsylvania from submitting, nor the EPA from acting upon, the suspended attainment plan element. As a result of this final action, the FIP clock triggered by the EPA's March 26, 2018, Finding of Failure to Submit are suspended. 16

This final action does not constitute a redesignation of the Allegheny County nonattainment area to attainment for the 2012 annual PM 2.5 NAAQS under CAA section 107(d)(3) because Pennsylvania has not yet submitted a request for redesignation or a maintenance plan for the Area and EPA has not approved a maintenance plan for the Allegheny County Area meeting the requirements of section 175A of the CAA, nor has EPA determined that the Area has met the other CAA requirements for redesignation. The classification and designation status in 40 CFR part 81 remains Moderate nonattainment for this area until such time as the EPA determines that Pennsylvania has met the CAA requirements for redesignation to attainment for the Allegheny County PM 2.5 Area.

This action finalizes a clean data determination based on attainment of air quality and suspends certain Federal nonattainment planning requirements. This action imposes no new Federal requirements and imposes no additional requirements beyond those imposed by state law. For this reason, this final action:

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

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

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

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

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

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

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

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

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

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because this action imposes no new requirements to apply in Indian country located in the State, and EPA notes that this action will not impose direct costs on tribal governments or preempt tribal law.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 16, 2022. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action.

This action to determine attainment, under the Clean Data Policy, of Allegheny County nonattainment area for the 2012 Annual PM 2.5 NAAQS may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

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

On February 22, 2013, the EPA issued a Federal Register notice of proposed rulemaking 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,” hereafter referred to as the “2015 SSM SIP Action.”  2 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. The 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 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. 3 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 ADEQ and MCAQD in 2015. It also did not alter the EPA's prior proposal from 2017 to approve the ADEQ and MCAQD SIP revisions at issue in this action. The 2020 Memorandum did, however, indicate the EPA's intent at the time to review SIP calls that were issued in the 2015 SSM SIP Action to determine whether the 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 the EPA's return to the policy articulated in the 2015 SSM SIP Action (2021 Memorandum). 4 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. This policy approach is intended to ensure that all communities and populations, including minority, low-income and indigenous populations overburdened by air pollution, receive the full health and environmental protections provided by the CAA. 5 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 ADEQ's and MCAQD's SIP submittal, provided in response to the 2015 SIP call.

With regards to ADEQ and MCAQD, the SIP call identified R18-2-310 and Rule 140 because they contained improper affirmative defenses for excess emissions during startup, shutdown, and malfunction events. On March 9, 2017, the EPA proposed to approve removal of R18-2-310 and Rule 140 from the Arizona SIP. 6

As discussed in the proposal, EPA proposed to approve the removal of R18-2-310 and Rule 140 from the ADEQ and MCAQD portions of the Arizona SIP because such removal is consistent with CAA requirements and would correct the deficiency identified by the Agency in the 2015 SSM SIP Action.

The EPA's proposed action provided a 30-day public comment period. EPA acknowledges that over four years have elapsed since the comment period closed. No additional comment period is needed because nothing in the intervening time period—including the issuance and subsequent withdrawal of the 2020 Memorandum—changed the basis for EPA's proposed action or the public's opportunity to view and comment on that basis. Accordingly, the March 9, 2017 notice provided the public with a full opportunity to comment on the issues raised by the proposed action. Three comments expressed support for the proposed action. A summary of the fourth comment from the Salt River Project Agricultural Improvement and Power District (“SRP” or “commenter”) and EPA's response is provided below.

Comment: The commenter states that it is inappropriate for the EPA to finalize its proposed approval of Arizona's response to the SSM SIP call until litigation before the United State Court of Appeals for the District of Columbia (D.C. Circuit) is resolved. In support of this claim, the commenter states that if the D.C. Circuit rules in favor of the petitioners who have challenged the 2015 SSM SIP call, the Arizona SIP will need to be revised again to reinsert the SSM provisions.

Response: The EPA respectfully disagrees with this comment. The Agency acknowledges that there exist pending challenges to the 2015 SSM SIP action in the D.C. Circuit. However, there is no requirement or expectation that EPA must postpone action while awaiting a court decision. ADEQ and MCAQD have submitted SIP revisions to the Agency that are fully approvable for the reasons outlined in the 2017 proposal notice. As a result, EPA has determined that it is appropriate to take action to approve the ADEQ and MCAQD SIP revisions in accordance with applicable CAA requirements. 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). The commenter has pointed to no alleged deficiency or other aspect that would lead the Agency to determine that the SIP revisions should be disapproved or that full approval of the SIP revisions is not otherwise appropriate.

We are also not persuaded by the commenter's assertion that the ADEQ and MCAQD portions of the Arizona SIP will need to be revised if the D.C. Circuit rules in favor of the petitioners. The CAA contains no requirement that affirmative defense provisions be included in SIPs. Therefore, there would be no obligation on states to submit such provisions, regardless of the outcome in the D.C. Circuit litigation.

As we recently reaffirmed in the 2021 Memorandum, EPA is implementing policy consistent with that outlined in the 2015 SSM SIP Action. That policy aligns with previous court decisions, including the D.C. Circuit's ruling in 2008, which found that inclusion of SSM exemptions in section 112 standards is not allowed under the CAA due to the generally applicable definition of emission limitations. 7 Additionally, in 2014 the D.C. Circuit vacated a provision in EPA regulations that allowed an affirmative defense if it met specific criteria. The court stated that EPA lacked authority to create such a defense because it would impermissibly encroach upon the authority of federal courts to find liability or impose remedies. 8 It was in light of the 2008 and 2014 court cases, as well as concerns about the public health impacts of SSM, that led EPA in its 2015 action to clarify and update its SSM policy to explain that automatic exemptions, discretionary exemptions, overly broad enforcement discretion provisions, and affirmative defense provisions like the ones at issue in today's action, will generally be viewed as inconsistent with CAA requirements.

No comments were submitted that change our assessment of the rules as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act and for the reasons identified in the 2017 proposal, the EPA is fully approving the removal of these rules from the ADEQ and MCAQD portions of the Arizona SIP. The Agency's final approval of this submission fully corrects the inadequacies in the ADEQ and MCAQD portions of the Arizona SIP that were identified in the EPA's 2015 SSM SIP Action.

In this document, the EPA is amending regulatory text that includes incorporation by reference. As described in Section I, Background, of this preamble and set forth in the amendments to 40 CFR part 52 below, EPA is removing provisions from the Arizona Administrative Code and Maricopa County portions of the Arizona State Implementation Plan, which is incorporated by reference in accordance with the requirements of 1 CFR part 51. The EPA has made and will continue to make the State Implementation Plan generally available through www.regulations.gov and at the EPA Region 9 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 16, 2022. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

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

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 (“CERCLA” or “the Act”), in response to the dangers of uncontrolled releases or threatened releases of hazardous substances, and releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. CERCLA was amended on October 17, 1986, by the Superfund Amendments and Reauthorization Act (“SARA”), Public Law 99-499, 100 Stat. 1613 et seq.

To implement CERCLA, the EPA promulgated the revised National Oil and Hazardous Substances Pollution Contingency Plan (“NCP”), 40 CFR part 300, on July 16, 1982 (47 FR 31180), pursuant to CERCLA section 105 and Executive Order 12316 (46 FR 42237, August 20, 1981). The NCP sets guidelines and procedures for responding to releases and threatened releases of hazardous substances, or releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. The EPA has revised the NCP on several occasions. The most recent comprehensive revision was on March 8, 1990 (55 FR 8666).

As required under section 105(a)(8)(A) of CERCLA, the NCP also includes “criteria for determining priorities among releases or threatened releases throughout the United States for the purpose of taking remedial action and, to the extent practicable, taking into account the potential urgency of such action, for the purpose of taking removal action.” “Removal” actions are defined broadly and include a wide range of actions taken to study, clean up, prevent or otherwise address releases and threatened releases of hazardous substances, pollutants or contaminants (42 U.S.C. 9601(23)).

The NPL is a list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States. The list, which is appendix B of the NCP (40 CFR part 300), was required under section 105(a)(8)(B) of CERCLA, as amended. Section 105(a)(8)(B) defines the NPL as a list of “releases” and the highest priority “facilities” and requires that the NPL be revised at least annually. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is of only limited significance, however, as it does not assign liability to any party or to the owner of any specific property. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

For purposes of listing, the NPL includes two sections, one of sites that are generally evaluated and cleaned up by the EPA (the “General Superfund section”) and one of sites that are owned or operated by other Federal agencies (the “Federal Facilities section”). With respect to sites in the Federal Facilities section, these sites are generally being addressed by other federal agencies. Under Executive Order 12580 (52 FR 2923, January 29, 1987) and CERCLA section 120, each Federal agency is responsible for carrying out most response actions at facilities under its own jurisdiction, custody or control, although the EPA is responsible for preparing a Hazard Ranking System (“HRS”) score and determining whether the facility is placed on the NPL.

There are three mechanisms for placing sites on the NPL for possible remedial action (see 40 CFR 300.425(c) of the NCP): (1) A site may be included on the NPL if it scores sufficiently high on the HRS, which the EPA promulgated as appendix A of the NCP (40 CFR part 300). The HRS serves as a screening tool to evaluate the relative potential of uncontrolled hazardous substances, pollutants or contaminants to pose a threat to human health or the environment. On December 14, 1990 (55 FR 51532), the EPA promulgated revisions to the HRS partly in response to CERCLA section 105(c), added by SARA. On January 9, 2017 (82 FR 2760), a subsurface intrusion component was added to the HRS to enable the EPA to consider human exposure to hazardous substances or pollutants and contaminants that enter regularly occupied structures through subsurface intrusion when evaluating sites for the NPL. The current HRS evaluates four pathways: Ground water, surface water, soil exposure and subsurface intrusion, and air. As a matter of agency policy, those sites that score 28.50 or greater on the HRS are eligible for the NPL. (2) Each state may designate a single site as its top priority to be listed on the NPL, without any HRS score. This provision of CERCLA requires that, to the extent practicable, the NPL include one facility designated by each state as the greatest danger to public health, welfare or the environment among known facilities in the state. This mechanism for listing is set out in the NCP at 40 CFR 300.425(c)(2). (3) The third mechanism for listing, included in the NCP at 40 CFR 300.425(c)(3), allows certain sites to be listed without any HRS score, if all of the following conditions are met:

• The Agency for Toxic Substances and Disease Registry (ATSDR) of the U.S. Public Health Service has issued a health advisory that recommends dissociation of individuals from the release.

• The EPA determines that the release poses a significant threat to public health.

• The EPA anticipates that it will be more cost-effective to use its remedial authority than to use its removal authority to respond to the release.

The EPA promulgated an original NPL of 406 sites on September 8, 1983 (48 FR 40658) and generally has updated it at least annually.

A site may undergo remedial action financed by the Trust Fund established under CERCLA (commonly referred to as the “Superfund”) only after it is placed on the NPL, as provided in the NCP at 40 CFR 300.425(b)(1). (“Remedial actions” are those “consistent with a permanent remedy, taken instead of or in addition to removal actions” (40 CFR 300.5).) However, under 40 CFR 300.425(b)(2), placing a site on the NPL “does not imply that monies will be expended.” The EPA may pursue other appropriate authorities to respond to the releases, including enforcement action under CERCLA and other laws.

The NPL does not describe releases in precise geographical terms; it would be neither feasible nor consistent with the limited purpose of the NPL (to identify releases that are priorities for further evaluation), for it to do so. Indeed, the precise nature and extent of the site are typically not known at the time of listing.

Although a CERCLA “facility” is broadly defined to include any area where a hazardous substance has “come to be located” (CERCLA section 101(9)), the listing process itself is not intended to define or reflect the boundaries of such facilities or releases. Of course, HRS data (if the HRS is used to list a site) upon which the NPL placement was based will, to some extent, describe the release(s) at issue. That is, the NPL site would include all releases evaluated as part of that HRS analysis.

When a site is listed, the approach generally used to describe the relevant release(s) is to delineate a geographical area (usually the area within an installation or plant boundaries) and identify the site by reference to that area. However, the NPL site is not necessarily coextensive with the boundaries of the installation or plant, and the boundaries of the installation or plant are not necessarily the “boundaries” of the site. Rather, the site consists of all contaminated areas within the area used to identify the site, as well as any other location where that contamination has come to be located, or from where that contamination came.

In other words, while geographic terms are often used to designate the site ( e.g., the “Jones Co. Plant site”) in terms of the property owned by a particular party, the site, properly understood, is not limited to that property ( e.g., it may extend beyond the property due to contaminant migration), and conversely may not occupy the full extent of the property ( e.g., where there are uncontaminated parts of the identified property, they may not be, strictly speaking, part of the “site”). The “site” is thus neither equal to, nor confined by, the boundaries of any specific property that may give the site its name, and the name itself should not be read to imply that this site is coextensive with the entire area within the property boundary of the installation or plant. In addition, the site name is merely used to help identify the geographic location of the contamination; and is not meant to constitute any determination of liability at a site. For example, the name “Jones Co. plant site,” does not imply that the Jones Company is responsible for the contamination located on the plant site.

EPA regulations provide that the remedial investigation (“RI”) “is a process undertaken . . . to determine the nature and extent of the problem presented by the release” as more information is developed on site contamination, and which is generally performed in an interactive fashion with the feasibility study (“FS”) (40 CFR 300.5). During the RI/FS process, the release may be found to be larger or smaller than was originally thought, as more is learned about the source(s) and the migration of the contamination. However, the HRS inquiry focuses on an evaluation of the threat posed and therefore the boundaries of the release need not be exactly defined. Moreover, it generally is impossible to discover the full extent of where the contamination “has come to be located” before all necessary studies and remedial work are completed at a site. Indeed, the known boundaries of the contamination can be expected to change over time. Thus, in most cases, it may be impossible to describe the boundaries of a release with absolute certainty.

Further, as noted previously, NPL listing does not assign liability to any party or to the owner of any specific property. Thus, if a party does not believe it is liable for releases on discrete parcels of property, it can submit supporting information to the agency at any time after it receives notice it is a potentially responsible party.

For these reasons, the NPL need not be amended as further research reveals more information about the location of the contamination or release.

The EPA may delete sites from the NPL where no further response is appropriate under Superfund, as explained in the NCP at 40 CFR 300.425(e). This section also provides that the EPA shall consult with states on proposed deletions and shall consider whether any of the following criteria have been met:

(i) Responsible parties or other persons have implemented all appropriate response actions required;

(ii) All appropriate Superfund-financed response has been implemented and no further response action is required; or

(iii) The remedial investigation has shown the release poses no significant threat to public health or the environment and taking of remedial measures is not appropriate.

In November 1995, the EPA initiated a policy to delete portions of NPL sites where cleanup is complete (60 FR 55465, November 1, 1995). Total site cleanup may take many years, while portions of the site may have been cleaned up and made available for productive use.

The EPA also has developed an NPL construction completion list (“CCL”) to simplify its system of categorizing sites and to better communicate the successful completion of cleanup activities (58 FR 12142, March 2, 1993). Inclusion of a site on the CCL has no legal significance.

Sites qualify for the CCL when: (1) Any necessary physical construction is complete, whether or not final cleanup levels or other requirements have been achieved; (2) the EPA has determined that the response action should be limited to measures that do not involve construction ( e.g., institutional controls); or (3) the site qualifies for deletion from the NPL. For more information on the CCL, see the EPA's internet site at https://www.epa.gov/superfund/construction-completions-national-priorities-list-npl-sites-number.

The Sitewide Ready for Anticipated Use measure represents important Superfund accomplishments, and the measure reflects the high priority the EPA places on considering anticipated future land use as part of the remedy selection process. See Guidance for Implementing the Sitewide Ready-for-Reuse Measure, May 24, 2006, OSWER 9365.0-36. This measure applies to final and deleted sites where construction is complete, all cleanup goals have been achieved, and all institutional or other controls are in place. The EPA has been successful on many occasions in carrying out remedial actions that ensure protectiveness of human health and the environment for current and future land uses, in a manner that allows contaminated properties to be restored to environmental and economic vitality. For further information, please go to https://www.epa.gov/superfund/about-superfund-cleanup-process#reuse.

In order to maintain close coordination with states and tribes in the NPL listing decision process, the EPA's policy is to determine the position of the states and tribes regarding sites that the EPA is considering for listing. This consultation process is outlined in two memoranda that can be found at the following website: https://www.epa.gov/ superfund/statetribal-correspondence-concerning-npl-site-listing.

The EPA has improved the transparency of the process by which state and tribal input is solicited. The EPA is using the Web and where appropriate more structured state and tribal correspondence that: (1) Explains the concerns at the site and the EPA's rationale for proceeding; (2) requests an explanation of how the state intends to address the site if placement on the NPL is not favored; and (3) emphasizes the transparent nature of the process by informing states that information on their responses will be publicly available.

A model letter and correspondence between the EPA and states and tribes where applicable, is available on the EPA's website at https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

Yes, documents relating to the evaluation and scoring of the sites in this final rule are contained in dockets located both at the EPA headquarters and in the EPA regional offices.

An electronic version of the public docket is available through https://www.regulations.gov (see table below for docket identification numbers). Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facilities identified in section II.D.

The headquarters docket for this rule contains the HRS score sheets, the documentation record describing the information used to compute the score, a list of documents referenced in the documentation record for each site and any other information used to support the NPL listing of the site.

The EPA regional dockets contain all the information in the headquarters docket, plus the actual reference documents containing the data principally relied upon by the EPA in calculating or evaluating the HRS score. These reference documents are available only in the regional dockets.

You may view the documents, by appointment only, after the publication of this rule. The hours of operation for the headquarters docket are from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal holidays. Please contact the regional dockets for hours. For addresses for the headquarters and regional dockets, see ADDRESSES section in the beginning portion of this preamble.

You may obtain a current list of NPL sites via the internet at https://www.epa.gov/superfund/national-priorities-list-npl-sites-site-name or by contacting the Superfund docket (see contact information in the beginning portion of this document).

This final rule adds the following 12 sites to the NPL, 11 to the General Superfund section and one to the Federal Facilities section. All of these sites are being added to the NPL based on an HRS score of 28.50 or above.