In its January 18, 2022, opinion, the United States Court of Appeals for the District of Columbia Circuit remanded to the Department of Energy (“DOE”) the final rule, Energy Conservation Program: Energy Conservation Standards for Commercial Packaged Boilers, EERE-2013-BT-STD-0030. See American Public Gas Association v. United States Department of Energy, No. 20-1068 (Jan. 18, 2022), 2022 WL 151923. In its opinion, the court determined that DOE failed to provide meaningful responses to comments with respect to three distinct issues related to the modeling used during the rulemaking proceeding: (1) The random assignment of boilers to buildings; (2) forecasted fuel prices; and (3) estimated burner operating hours. As a result, the court concluded that DOE failed to adequately explain why the rule satisfies the applicable clear and convincing evidence standard. To afford DOE the opportunity to cure these “failures to explain,” the court remanded the final rule to DOE for the agency to take appropriate remedial action within 90 days. In this document, DOE provides further explanation addressing the three issues the court identified.

The American Society of Heating, Refrigerating, and Air-Conditioning Engineers (“ASHRAE”) Standard 90.1 (ASHRAE Standard 90.1), “Energy Standard for Buildings Except Low-Rise Residential Buildings,” sets industry energy efficiency levels for, among other things, commercial packaged boilers (“CPBs”). The Energy Policy and Conservation Act (“EPCA”) directs that if ASHRAE amends Standard 90.1, DOE must adopt amended standards at the new ASHRAE efficiency level, unless DOE determines, supported by clear and convincing evidence, that adoption of a more stringent level would produce significant additional conservation of energy and would be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) Under EPCA, DOE must also review energy efficiency standards for CPBs every six years and determine, based on clear and convincing evidence, whether adoption of a more stringent standard would result in significant additional conservation of energy and is technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(C)) In determining whether a proposed standard is economically justified, EPCA requires DOE to consider the following seven factors: (1) Economic impacts on manufacturers and consumers; (2) changes in total installation and operating costs for the covered product, i.e., life-cycle costs; (3) total energy savings; (4) any likely decrease in a product's utility or performance; (5) impacts on competition as determined by the Attorney General; (6) need for national energy conversation; and (7) other factors DOE considers relevant. (42 U.S.C. 6313(a)(6)(B)(ii))

As ASHRAE has not amended the standards for CPBs since 2007, 1 DOE initiated the required 6-year lookback review in 2013. 2 DOE proposed amended standards for CPBs in a notice of proposed rulemaking published on March 24, 2016. 81 FR 15836. Subsequently, DOE issued a final rule amending standards for CPBs that was published on January 10, 2020. 85 FR 1592 (“January 2020 Final Rule”).

In response to the remand in American Public Gas Association v. United States Department of Energy, the following discussion supplements the January 2020 Final Rule explanation of and response to comments regarding the assignment of boiler efficiencies to buildings, forecasted fuel prices, and estimated burner operating hours. The following discussion provides additional detail of the analyses presented in the final technical support document (“TSD”) accompanying the January 2020 Final Rule.

DOE's initial response to stakeholders regarding the assignment of boiler efficiencies to buildings in the Monte Carlo model used to calculate life-cycle cost (“LCC”) changes is in section IV.F.11 of the January 2020 Final Rule. 85 FR 1592, 1637-1638.

The LCC calculates, at the consumer level, the discounted savings in operating costs (less maintenance and repair costs) throughout the estimated life of the covered equipment, compared to any increase in the installed cost for the equipment likely to result directly from the imposition of the standard. In conducting the LCC analysis, DOE first forecasts equipment shipments in the absence of new or amended standards (“no-new-standards case”), including the distribution of equipment efficiency across all consumers. To estimate the impact that new or amended standards would have on LCC (and energy savings), DOE then uses a “roll-up” scenario, which takes into consideration the same market failures as in the no-new-standards scenario, as discussed further below, to determine what changes will occur under the new standards. A roll-up scenario assumes that equipment efficiencies in the no-new-standards case, which do not meet the standard level under consideration, would “roll up” to the lowest efficiency required to meet the new efficiency standard level. For example, the January 2020 Final Rule established a minimum thermal efficiency of 84 percent for small gas-fired hot water CPBs (the product class with the largest number of shipments). But DOE estimates that in 2020 approximately 81.3 percent of the market for small gas-fired hot water CPBs already meets this minimum thermal efficiency. 3 As a result, DOE's analysis rolls up only the remaining 18.7 percent of the market, comprised of the least-efficient CPBs available, to the new minimum thermal efficiency of 84%. This roll-up in efficiencies results in the projected LCC and energy savings from the amended standard by forcing the less than 20% segment of the market that purchases lower efficiency CPBs to purchase a more-efficient, minimally compliant CPB. Consumers already purchasing higher efficiency equipment, more than 80% of the market in this example, are not impacted by a new or amended standard set at a lower efficiency level and, as a result, do not account for any of the LCC or energy savings projected to result from the amended rule.

To conduct its LCC analysis, DOE has developed spreadsheet models combined with a commercially available program ( i.e., Crystal Ball). This allows DOE to explicitly model both the uncertainty and the variability in the inputs to the model using Monte Carlo simulation and probability distributions. The LCC results are displayed as distributions of impacts compared to the baseline conditions. Results are based on 10,000 samples per Monte Carlo simulation run.

As discussed in the January 2020 Final Rule  4 and the accompanying TSD, 5 to develop the no-new-standards case, DOE assembled data on the share of models in each equipment class, separated by draft type, 6 based on the Air-Conditioning, Heating and Refrigeration Institute (“AHRI”) certification directory and on shipments data submitted by AHRI for small gas-fired hot water (“SGHW”) and large gas-fired hot water (“LGHW”) equipment classes broken down by efficiency. DOE utilized these data to develop the no-new-standards case efficiency distribution for each CPB equipment class. The efficiency distribution developed by DOE for each product class resulted in a shipment-weighted average efficiency that was consistent with the shipment-weighted values submitted by AHRI. This efficiency distribution was then used in assigning the efficiencies of installed CPBs under the no-new standards case.

To conduct the Monte Carlo simulation for the LCC analysis of a given product class in which the efficiencies of installed models are forecast over the analysis period, DOE developed a building sample from the Energy Information Administration's (“EIA”) 2012 Commercial Building Energy Consumption Survey (“CBECS 2012”)  7 and the 2009 Residential Energy Consumption Survey (“RECS 2009”). 8 CBECS is a national sample survey that collects information on the stock of U.S. commercial buildings, including their energy-related building characteristics and energy usage data (consumption and expenditures). Commercial buildings include all buildings in which at least half of the floorspace is used for a purpose that is not residential, industrial, or agricultural. Similarly, RECS is a nationally representative sample of housing units that collects energy characteristics on the housing unit, usage patterns, and household demographics. This information is combined with data from energy suppliers to these homes to estimate energy costs and usage for heating, cooling, appliances and other end uses.

Each building in the sample was then assigned a boiler efficiency sampled from the no-new-standards case efficiency distribution for the appropriate equipment class. DOE was not able to assign a CPB efficiency to a building in the no-new-standards case based on building characteristics, since CBECS 2012 and RECS 2009 did not provide enough information to distinguish installed boilers by application type, distribution system, or return water temperature, and there were no shipments data disaggregating boiler efficiency by region or other criteria. The efficiency of a boiler was assigned based on the forecasted efficiency distribution (which is constrained by the shipment and model data collected by DOE and submitted by AHRI) and accounts for consumers that are already purchasing efficient CPBs. 9

For example, as previously discussed, the January 2020 Final Rule established a minimum thermal efficiency of 84 percent for small gas-fired hot water CPBs (the product class with the largest number of shipments), but DOE estimates that in 2020 approximately 81.3 percent of the market for small gas-fired hot water CPBs already meets this minimum thermal efficiency and thus will not be impacted by the final rule. The assignment of CPB efficiency in the LCC accounts for this distribution ( e.g., as models with at least an 84 percent efficiency represent approximately 81.3 percent of the market, there was an 81.3-percent chance that a building would be assigned a boiler with an 84 percent efficiency or higher).

As noted in the January 2020 Final Rule, AHRI and Burnham Holdings commented that the random assignment of no-new-standards case efficiencies (sampled from the developed efficiency distribution) in the LCC model is not correct, as this inherently assumes that the purchasers do not pay attention to costs and benefits in a world without standards. 85 FR 1592, 1637-1638. Instead, AHRI proposed an alternate approach that assigned the highest boiler efficiencies to scenarios involving the shortest payback periods. 85 FR 1592, 1637. In other words, AHRI assumed there were no market failures affecting consumer boiler purchases.

While DOE acknowledges that economic factors may play a role when building owners or builders decide on what type of boiler to install, assignment of boiler efficiency for a given installation, based solely on economic measures such as life-cycle cost or simple payback period, most likely would not fully and accurately reflect actual real-world installations. There are a number of commercial sector market failures discussed in the economics literature, including a number of case studies, that illustrate how purchasing decisions with respect to energy efficiency are likely to not be completely correlated with energy use, as described below. DOE noted some of these market failures affecting purchasing decisions in sections IV.F.11 and VI.A of the January 2020 Final Rule, such as information asymmetry and the high costs of gathering and analyzing relevant information, the misaligned incentives between building owners (or landlords) and building operators, and the external benefits of improved energy efficiency (such as climate and health benefits) not captured by users of the equipment. 85 FR 1592, 1638, 1676. DOE also noted these same market failures in the March 2016 notice of proposed rulemaking. 81 FR 15836, 15913. The following discussion further expands on these market failures impacting the commercial sector and supplements DOE's discussion from the January 2020 Final Rule. Additionally, DOE has since become aware of several case studies and sources of data specific to the commercial packaged boiler market that support DOE's conclusion regarding the existence of market failures and DOE's assignment of boiler efficiency in the no-new-standards case. These case studies and sources of data further supplement and expand upon DOE's conclusion in the January 2020 Final Rule that an assignment of boiler efficiency based solely on calculated payback, without consideration of these market failures, “reflects an overly optimistic and unrealistic working market” and “may unreasonably bias the results.” 85 FR 1592, 1637.

There are several market failures or barriers that affect energy decisions generally. Some of those that affect the commercial sector specifically are detailed below. However, more generally, there are several behavioral factors that can influence the purchasing decisions of complicated multi-attribute products, such as boilers. For example, consumers (or decision makers in an organization) are highly influenced by choice architecture, defined as the framing of the decision, the surrounding circumstances of the purchase, the alternatives available, and how they're presented for any given choice scenario. 10 The same consumer or decision maker may make different choices depending on the characteristics of the decision context ( e.g., the timing of the purchase, competing demands for funds), which have nothing to do with the characteristics of the alternatives themselves or their prices. Consumers or decision makers also face a variety of other behavioral phenomena including loss aversion, sensitivity to information salience, and other forms of bounded rationality. 11 Thaler, who won the Nobel Prize in Economics in 2017 for his contributions to behavioral economics, and Sunstein point out that these behavioral factors are strongest when the decisions are complex and infrequent, when feedback on the decision is muted and slow, and when there is a high degree of information asymmetry. 12 These characteristics describe almost all purchasing situations of appliances and equipment, including CPBs. The installation of a new or replacement CPB in a commercial building is a complex, technical decision involving many actors and is done very infrequently, as evidenced by the CPB mean lifetime of nearly 25 years. 85 FR 1592, 1634. Additionally, it would take at least one full heating season for any impacts on operating costs to be fully apparent. Further, if the purchaser of the CPB is not the entity paying the energy costs ( e.g., a building owner and tenant), there may be little to no feedback on the purchase. These behavioral factors are in addition to the more specific market failures described as follows.

It is often assumed that because commercial and industrial customers are businesses that have trained or experienced individuals making decisions regarding investments in cost-saving measures, some of the commonly observed market failures present in the general population of residential customers should not be as prevalent in a commercial setting. However, there are many characteristics of organizational structure and historic circumstance in commercial settings that can lead to underinvestment in energy efficiency.

First, a recognized problem in commercial settings is the principal-agent problem, where the building owner (or building developer) selects the equipment and the tenant (or subsequent building owner) pays for energy costs. 13 14 Indeed, more than a quarter of commercial buildings with a boiler in the CBECS 2012 sample are occupied at least in part by a tenant, not the building owner (indicating that, in DOE's experience, the building owner likely is not responsible for paying energy costs). Additionally, some commercial buildings have multiple tenants. There are other similar misaligned incentives embedded in the organizational structure within a given firm or business that can impact the choice of a CPB. For example, if one department or individual within an organization is responsible for capital expenditures (and therefore equipment selection) while a separate department or individual is responsible for paying the energy bills, a market failure similar to the principal-agent problem can result. 15 Additionally, managers may have other responsibilities and often have other incentives besides operating cost minimization, such as satisfying shareholder expectations, which can sometimes be focused on short-term returns. 16 Decision-making related to commercial buildings is highly complex and involves gathering information from and for a variety of different market actors. It is common to see conflicting goals across various actors within the same organization as well as information asymmetries between market actors in the energy efficiency context in commercial building construction. 17

Second, the nature of the organizational structure and design can influence priorities for capital budgeting, resulting in choices that do not necessarily maximize profitability. 18 Even factors as simple as unmotivated staff or lack of priority-setting and/or a lack of a long-term energy strategy can have a sizable effect on the likelihood that an energy efficient investment will be undertaken. 19 U.S. tax rules for commercial buildings may incentivize lower capital expenditures, since capital costs must be depreciated over many years, whereas operating costs can be fully deducted from taxable income or passed through directly to building tenants. 20

Third, there are asymmetric information and other potential market failures in financial markets in general, which can affect decisions by firms with regard to their choice among alternative investment options, with energy efficiency being one such option. 21 Asymmetric information in financial markets is particularly pronounced with regard to energy efficiency investments. 22 There is a dearth of information about risk and volatility related to energy efficiency investments, and energy efficiency investment metrics may not be as visible to investment managers, 23 which can bias firms towards more certain or familiar options. This market failure results not because the returns from energy efficiency as an investment are inherently riskier, but because information about the risk itself tends not to be available in the same way it is for other types of investment, like stocks or bonds. In some cases energy efficiency is not a formal investment category used by financial managers, and if there is a formal category for energy efficiency within the investment portfolio options assessed by financial managers, they are seen as weakly strategic and not seen as likely to increase competitive advantage. 24 This information asymmetry extends to commercial investors, lenders, and real-estate financing, which is biased against new and perhaps unfamiliar technology (even though it may be economically beneficial). 25 Another market failure known as the first-mover disadvantage can exacerbate this bias against adopting new technologies, as the successful integration of new technology in a particular context by one actor generates information about cost-savings, and other actors in the market can then benefit from that information by following suit; yet because the first to adopt a new technology bears the risk but cannot keep to themselves all the informational benefits, firms may inefficiently underinvest in new technologies. 26

In sum, the commercial and industrial sectors face many market failures that can result in an under-investment in energy efficiency. This means that discount rates implied by hurdle rates  27 and required payback periods of many firms are higher than the appropriate cost of capital for the investment. 28 The preceding arguments for the existence of market failures in the commercial and industrial sectors are corroborated by empirical evidence. One study in particular showed evidence of substantial gains in energy efficiency that could have been achieved without negative repercussions on profitability, but the investments had not been undertaken by firms. 29 The study found that multiple organizational and institutional factors caused firms to require shorter payback periods and higher returns than the cost of capital for alternative investments of similar risk. Another study demonstrated similar results with firms requiring very short payback periods of 1-2 years in order to adopt energy-saving projects, implying hurdle rates of 50 to 100 percent, despite the potential economic benefits. 30 A number of other case studies similarly demonstrate the existence of market failures preventing the adoption of energy-efficient technologies in a variety of commercial sectors around the world, including office buildings, 31 supermarkets, 32 and the electric motor market. 33

The existence of market failures in the commercial and industrial sectors is well supported by the economics literature and by a number of case studies. If DOE developed an efficiency distribution that assigned boiler efficiency in the no-new-standards case solely according to energy use or economic considerations such as life-cycle cost or payback period, the resulting distribution of efficiencies within the building sample would not reflect any of the market failures or behavioral factors above. DOE thus concludes such a distribution would not be representative of the CPB market. Further, even if a specific building/organization is not subject to the market failures above, the purchasing decision of CPB efficiency can be highly complex and influenced by a number of factors not captured by the building characteristics available in the CBECS or RECS samples. These factors can lead to building owners choosing a CPB efficiency that deviates from the efficiency predicted using only energy use or economic considerations such as life-cycle cost or payback period (as calculated using the information from CBECS 2012 or RECS 2009).

DOE notes that EIA's Annual Energy Outlook  34 (“AEO”) is another energy use model that implicitly includes market failures in the commercial sector. In particular, the commercial demand module  35 includes behavioral rules regarding capital purchases such that in replacement and retrofit decisions, there is a strong bias in favor of equipment of the same technology ( e.g., boiler efficiency) despite the potential economic benefit of choosing other technology options. Additionally, the module assumes a distribution of time preferences regarding current versus future expenditures. For space heating, approximately half of the total commercial floorspace is assigned one of the two highest time preference premiums. This translates into very high discount rates (and hurdle rates) and represents floorspace for which equipment with the lowest capital cost will almost always be purchased without consideration of operating costs. DOE's assumptions regarding market failures are therefore consistent with other prominent energy consumption models.

Although the January 2020 rulemaking record sufficiently supports DOE's approach, DOE conducted an additional search after the January 2020 Final Rule was issued for documentation of actual recent gas-fired commercial hot water boiler installations that included efficiency details, to further supplement DOE's conclusions that market failures cause consumers to base purchasing decisions on factors other than minimizing payback periods. 36 This additional documentation, as discussed in more detail below, further reinforces the validity of DOE's approach to assigning boiler efficiencies in the January 2020 Final Rule.

First, DOE obtained data from the Federal Energy Management Program (“FEMP”)  37 on commercial gas-fired hot water boiler installations in government buildings from 2000 to 2013. DOE divided the data into the same North and Rest of Country regions  38 as considered in the 2007 residential furnace final rule. 72 FR 65136, 65146-65147 (Nov. 19, 2007). One might expect that highly efficient condensing boilers would be more common in colder climates. However, these data show that in warm climates in the Rest of Country states, including California, Texas, Oklahoma, Hawaii, and others, condensing boilers, which are generally more efficient, were typically installed (95 percent of buildings had a condensing boiler installation out of 60 buildings, with one building installing both condensing and non-condensing boilers). In contrast, in colder climates in the North, including West Virginia, New Jersey, Washington, and others, non-condensing boilers, which are generally less efficient, are not uncommon (47 percent of buildings had a non-condensing boiler installation out of 19 buildings). 39 DOE acknowledges that condensing fractions are likely higher for the buildings in the FEMP data during this time period compared to other commercial buildings due to Federal mandates and management goals related to energy efficiency and conservation. DOE also acknowledges the small sample size of buildings with CPB installations obtained from FEMP. However, using economic criteria based on energy use or payback period alone, one might not predict that non-condensing gas-fired boilers would be more likely installed in colder climates. These real-world installations are indicative of complex decision-making.

DOE also gathered recent installation data and case studies for areas within the North region that demonstrate a significant fraction of installations are for non-condensing commercial boilers. Data on building permits from Milwaukee  40 indicate that there are many installations of gas-fired non-condensing hot water boilers in a very cold climate (46 percent of buildings had a non-condensing boiler installed out of 50 remodeled buildings). 41 42 In a study in Massachusetts, interviewed manufacturers stated that they expect the market for non-condensing boilers to persist for some replacement situations. 43 In a study of 105 multifamily buildings in Minnesota (ranging in size from 5 units to over 50 units), 85 percent of buildings with a gas-fired boiler have a non-condensing gas boiler despite the cold climate. 44 These studies indicate that a cold climate (and therefore a large heating load) does not necessarily mean that high-efficiency boilers will predominate. Additionally, in the case of an emergency replacement ( e.g., a boiler failing in the middle of winter), buildings are likely to adopt a familiar “like-for-like” replacement with the same technology. If the existing technology is non-condensing, then these emergency replacements are likely to be non-condensing as well, even in a cold climate.

Finally, DOE also examined the data available in Northwest Energy Efficiency Alliance's 2019 Commercial Building Stock Assessment “CBSA”), published in May 2020. 45 The CBSA is a regional study characterizing the energy consumption and building characteristics of commercial buildings throughout the Northwest region of the country. The study consists of detailed site visits to 932 commercial buildings across 12 building types and includes on-site assessments, building staff interviews, and utility submission of energy consumption data. The rated boiler efficiency is a key variable captured by CBSA, with efficiencies of installed boilers ranging from below 80 percent to 97 percent. For gas-fired hot water boilers, an efficiency of 85 percent and below is generally considered to be non-condensing.

DOE specifically examined the subset of buildings with gas-fired, mechanical draft, hot water boilers whose function includes space heating. DOE limited the subset of buildings to those with a boiler input capacity equal to or greater than 300,000 Btu/h to match the CPB equipment class definitions. Building characteristics include the conditioned floor area and the annual, weather-normalized gas consumption in therms  46 ( i.e., normalized to the weather in a typical year). Some buildings have multiple identical boilers staged together into one system (with a boiler system input capacity equal to the sum of each individual boiler's input capacity). 47 Some buildings are served by multiple boiler systems, likely servicing different sections of the building. In these cases, the conditioned floor area and facility gas consumption were split evenly among the number of boiler systems for ease of comparison. In total this subset represents 53 boiler systems, although not every building includes a complete set of data. Table III.1 shows the number of boiler systems above and below a rated efficiency of 86 percent, across a number of different characteristics. For each characteristic, the sample is approximately divided into two similarly sized subsets, with an additional subset showing the extreme end of the distribution.

Across each characteristic, there is a lack of any strong correlation with the efficiency of the existing boiler system. Buildings with boilers servicing a larger conditioned floor area do not preferentially have higher efficiency boilers. The same is true for buildings with higher capacity boilers installed, and for buildings with higher annual gas consumption. Additionally, neither the buildings with the largest conditioned floor area, the buildings with the largest capacity boilers, nor the buildings with the highest annual weather-normalized gas consumption have a systematic preference for high efficiency boilers. Without the consideration of potential market failures, one would expect a correlation with boiler efficiency. 48

These examples indicate that CPB purchasing decisions are most likely subject to several market failures. These decisions can be complex and are not always made based on total building energy use, life-cycle cost, or payback period estimates. The data show that condensing and non-condensing boilers are installed in a variety of building types and that the building characteristics do not correlate strongly with the existing boiler efficiency.

For these reasons, DOE selected a random assignment of CPB boiler efficiency (sampled from the developed efficiency distribution, which is consistent with the overall shipment-weighted efficiency data submitted by AHRI) as a more appropriate representation of the market than if that assignment was based on energy use or payback period only. DOE acknowledges that a random sampling from a distribution of boiler efficiency is an approximation of what takes place in the commercial boiler market. However, given the factors discussed in the preceding paragraphs, DOE explains that an approach that relied only on apparent cost-effectiveness criteria using the information available in the CBECS or RECS samples would lead to a more unrepresentative estimate of the potential impact on the CPB market from an energy conservation standard compared to DOE's current approach.

At the present time, there are insufficient data to analyze site-specific economics that take into account a multitude of technical and other non-economic decision-making criteria in the analyses, as well as model the effects of various market failures, on a building-by-building level. In the absence of such a model and the necessary supporting data, DOE concludes that using a random assignment sampled from the developed efficiency distributions (consistent with stakeholder-submitted data) is a reasonable approach, one that simulates behavior in the CPB market, where market failures result in purchasing decisions not being perfectly aligned with economic interests, more realistically than relying only on apparent cost-effectiveness criteria derived from the limited information in CBECS or RECS. DOE further emphasizes that its approach does not assume that all purchasers of CPBs make economically irrational decisions ( i.e., the lack of a correlation is not the same as a negative correlation). As part of the random assignment, some buildings with large heating loads will be assigned higher efficiency CPBs, and some buildings with particularly low heating loads will be assigned baseline CPBs, which aligns with the available data. By using this approach, DOE acknowledges the uncertainty inherent in the data and minimizes any bias in the analysis by using random assignment, as opposed to assuming certain market conditions that are unsupported given the available evidence.

Finally, even if DOE were to assume the random assignment approach produced some overstatement of the economic benefits of the new standards—because one were to conclude that even with all of those market failures there may be more strictly rational purchasers in the market than the random distribution accounts for—for all of the reasons discussed above any such overstatement would be small and would not alter DOE's conclusion that the revised standards are economically justified. That is particularly clear given that DOE considers numerous factors in addition to any savings to consumers. For instance, the January 2020 Final Rule is expected to result in cumulative emission reductions of 16 million metric tons of carbon dioxide and 41 thousand tons of nitrogen oxides, among other pollutants. The present monetized value of the nitrogen oxide emissions reduction, for example, is estimated to be $35 million at a 7-percent discount rate and $99 million at a 3-percent discount rate. 85 FR 1592, 1597. There are also many significant unquantified benefits from the Rule, including additional environmental and public health benefits. When considering these benefits together with the other statutory factors listed in 42 U.S.C. 6313(a)(6)(B)(ii), DOE has an abiding conviction that its determination that the benefits of the standard exceed its burdens, i.e., the standard is economically justified, is highly probable to be true. As a result, DOE found clear and convincing evidence that the standard was economically justified.

DOE clarifies its response to stakeholders in section IV.F.4 of the January 2020 Final Rule regarding the estimation of energy prices in the LCC analysis. 85 FR 1592, 1631-32.

As described in the January 2020 Final Rule and final rule TSD, DOE developed marginal energy prices (electricity, natural gas, and fuel oil) for use in the LCC analysis. 49 A marginal energy price reflects the cost or benefit of adding or subtracting one additional unit of energy consumption. The starting point for the estimation of marginal energy prices is with publicly available average energy prices published by the EIA in various publications (Form 826 data, natural gas prices, and State Energy Data System). 50 These data are disaggregated by state and by month and can be aggregated into the same reportable domains used in RECS and census divisions used in CBECS. The price data by month allow DOE to separately estimate winter (heating season) and non-winter (cooling season) energy prices. The detailed breakdown of these average energy prices by fuel type, region, and month is available in appendix 8C of the final rule TSD.

EIA data additionally provides historical monthly energy consumption and total energy expenditures by state. By analyzing how total expenditures change with changes in energy consumption, DOE can estimate seasonal marginal energy price factors. These changes in expenditures are due to the marginal changes in energy consumption and exclude, for example, fixed costs, connection fees, and other surcharges. In a regression of total expenditures versus total energy consumption, the slope represents the marginal price. DOE used a 10-year average across the same regional divisions in either RECS or CBECS to determine seasonal marginal price factors in order to transform the average energy prices into marginal energy prices. The detailed breakdown of these marginal energy price factors by fuel type and region, for both winter and non-winter months, is available in appendix 8C of the final rule TSD.

These detailed estimates of marginal energy prices are then used in the LCC and NIA analyses. To project energy prices in future years, DOE relied on energy price projections from EIA's AEO to develop energy price indices over time and scaled marginal prices accordingly.

In response to the notice of proposed rulemaking published prior to the January 2020 Final Rule, DOE received comments on marginal energy prices and, in particular, on the accuracy of the marginal rates paid by larger load consumers. DOE noted that the Gas Associations (American Gas Association, American Public Gas Association) commented that the analysis should adjust the energy price calculation methodology using marginal prices to use a tariff-based approach to make the analysis more robust. Spire commented that DOE used erroneous utility marginal energy pricing and forecasts in its analysis resulting in overstated benefits, and that consumers with large loads do not pay the same marginal rates as an average commercial consumer. PG&E agreed with Spire that larger consumers pay less for utilities. And AHRI commented that the marginal gas rates do not accurately reflect what larger consumers pay. 85 FR 1592, 1632. DOE further acknowledged comments from Spire asserting that EIA data is completely inaccurate for its largest consumers and that transport rates are typically used, and from Phoenix Energy Management stating that the largest consumers also hedge gas prices by buying and selling futures and commenting that it is extremely difficult to figure out what the true cost of the energy is. Id.

Regarding the usage of EIA data and comparisons to tariff data, DOE emphasizes that the EIA data provide complete coverage of all utilities and all customers, including larger commercial and industrial utility customers that may have discounted energy prices. The actual rates paid by individual customers are captured and reflected in the EIA data and are averaged over all customers in a state. DOE has previously compared these two approaches for determining marginal energy price factors in the residential sector. In a September 2016 supplemental notice of proposed rulemaking for residential furnaces, DOE compared its marginal natural gas price approach using EIA data with marginal natural gas price factors determined from residential tariffs submitted by stakeholders. 81 FR 65719, 65784 (Sept. 23, 2016). The submitted tariffs represented only a small subset of utilities and states and were not nationally representative, but DOE found that its marginal price factors were generally comparable to those computed from the tariff data (averaging across rate tiers). 51 DOE noted that a full tariff-based analysis would require information on each household's total baseline gas consumption (to establish which rate tier is applicable) and how many customers are served by a utility on a given tariff. These data were not available in the public domain. By relying on EIA data, DOE noted, its marginal price factors represented all utilities and all states, averaging over all customers, and was therefore “more representative of a large group of consumers with diverse baseline gas usage levels than an approach that uses only tariffs.” 81 FR 65719, 65784. While the above comparative analysis was conducted for residential consumers, the general conclusions regarding the accuracy of EIA data relative to tariff data remain the same for commercial consumers. DOE uses EIA data for determining both residential and commercial electricity prices and the nature of the data is the same for both sectors. DOE further notes that not all operators of CPBs are larger load utility customers. As reflected in the building sample derived from CBECS 2012 and RECS 2009 data, there are a range of buildings with varying characteristics, including multi-family residential buildings, that operate CPBs. The buildings in the LCC sample have varying heating load, square footage, and boiler capacity. Operators of CPBs are varied, some large and some smaller, and thus the determination of the applicable marginal energy price should reflect the average operator of CPBs.

DOE's approach is based on the largest, most comprehensive, most granular national data sets on commercial energy prices that are publicly available from EIA. The data from EIA are the highest quality energy price data available to DOE. The resulting estimated marginal energy prices do represent an average across all commercial customers in a given region (state or group of states for RECS, census division for CBECS). Some customers may have a lower marginal energy price, while others may have a higher marginal energy price. With respect to large customers who may pay a lower energy price, no tariffs were submitted to DOE during the rulemaking for analysis. Tariffs for individual non-residential customers can be very complex and generally depend on both total energy use and peak demand (especially for electricity). These tariffs vary significantly from one utility to another. While DOE was unable to identify data to provide a basis for determining a potentially lower price for larger commercial and industrial utility customers, either on a state-by-state basis or in a nationally representative manner, the historic data on which DOE did rely includes such discounts. The EIA data include both large non-residential customers with a potentially lower rate as well as more typical non-residential customers with a potentially higher rate. Thus, to the extent larger consumers of energy pay lower marginal rates, those lower rates are already incorporated into the EIA data, which would drive down EIA's marginal rates for all consumers. If DOE were to adjust downward the marginal energy price for a small subset of individual customers in the LCC Monte Carlo sample as suggested by commenters, it would also have to adjust upward the marginal energy price for all other customers in the sample to maintain the same marginal energy price averaged over all customers. Even assuming DOE could accomplish those adjustments in a reliable or accurate way, this upward adjustment in marginal energy price would affect the majority of buildings in the LCC sample. Operational cost savings would therefore both decrease and increase for different buildings in the LCC sample, yielding substantially the same overall average LCC savings result as DOE's current estimate.

In summary, DOE's current approach utilizes an estimate of marginal energy prices and captures the impact of actual utility rates paid by all customers, including those that enjoy lower marginal rates for whatever reason, in an aggregated fashion. Adjustments to this methodology are unlikely to change the average LCC results and therefore the conclusions of the January 2020 Final Rule are insensitive to this issue.

DOE clarifies its response to stakeholders in section IV.F.11 of the January 2020 Final Rule regarding the estimation of burner operating hours (“BOHs”) in the LCC analysis. 85 FR 1592, 1637.

BOHs are used to estimate energy consumption of elements other than the heating element ( e.g., electronic controls, fans). The BOHs are not used to estimate the amount of fuel consumed to meet a heating load but are the result of a separate heating load estimation and an assumed CPB capacity. Instead, heating load and the efficiency of the CPB are used to determine fuel consumption. As a result, CPBs with the same efficiency level, but different capacities will have different BOHs in meeting the same heating load. For example, in meeting a specific heating load a CPB with a lower capacity will have higher BOHs than a similarly efficient CPB with a higher capacity. The lower capacity CPB will burn fuel at a lower rate so it will need to be on longer to meet the heating load as compared to a larger capacity CPB, which will burn fuel at a higher rate. While the hours of operation differ between the CPBs of different capacities, the amount of fuel burned is the same ( i.e., the heating load and unit efficiency, not hours of operation, dictate fuel consumption). BOHs are therefore not a crucial component of determining operating costs in the LCC analysis. Operating costs are dominated by fuel consumption to meet the heating load, which as described in further detail below, is not dependent on any assumptions regarding BOHs.

A full discussion of boiler energy use and the determination of BOHs is available in chapter 7 and appendix 7B of the final rule TSD. 52 BOHs represent the amount of time the burner operates at full load. BOHs are not a primary input parameter separately estimated by DOE, but rather a derived quantity that is largely determined from the space heating fuel consumption reported in CBECS 2012 or RECS 2009. As described previously, CBECS and RECS are large, nationally representative surveys and the energy consumption and expenditure estimates are derived directly from utility billing data. CBECS and RECS data are the most robust energy consumption data for space heating available to DOE. CBECS and RECS form the basis of the LCC Monte Carlo sample for CPBs and both CBECS and RECS report space heating fuel consumption for each building in the surveys (determined from utility bill data). DOE estimated each building's heating load from this reported fuel consumption, coupled with estimates of the historical boiler efficiency, building shell efficiency, and adjustments for average climate conditions in each region. 53 BOHs are then calculated using the building heating load and the efficiency of the CPB of that building. BOHs are utilized to estimate auxiliary electricity consumption for the circulating pump, draft inducer (if applicable), igniter, and standby power. 54

In the January 2020 Final Rule DOE included comments from AHRI in which AHRI posited that either due to DOE's sizing assumption and/or due to the use of the CBECS energy use data in the sample itself, the energy use model produced excessively high operating hours in some instances and that these distort the economic results; and that AHRI's consultant suggested that a more logical approach for estimating may be to use directly measured data or estimated load data. 85 FR 1592, 1637.

As discussed, DOE derived the BOHs from CBECS and RECS data. BOH values are determined from building heating loads, which are themselves derived from reported fuel consumption data taken form large, nationally representative surveys. DOE therefore has a high degree of confidence in the resulting building heating loads. The presence of high BOHs in some instances is not an indication of an error, but due to the representative boiler capacity assigned in that instance. 55 However, the building heating load and resulting fuel consumption are fixed and these are the primary determinant of operating costs. Furthermore, adjusting the BOHs downward in some instances would require adjusting upward the BOHs in other instances to maintain the same average capacity, yielding the substantially the same overall average LCC results.

Once each building's heating load is determined, DOE can estimate BOHs in both the no-new-standards case and all potential standards cases using the assigned boiler efficiency, boiler capacity, and the number of boilers assigned to each building, with adjustments made for estimated return water temperatures and part load operation. 56 BOHs are constrained in the model to be, at most, 5,840 hours per year (two thirds of a year), although the vast majority of boilers have BOHs that are significantly lower than this maximum value. 57 For all but one product class, the median BOHs are below 1,000 hours. For context, 1,000 hours of operation represents approximately 8-9 hours per day for 4 months or 5-6 hours per day for 6 months. These median values are not unreasonable expectations for when the burner is on during the winter heating season in a commercial building, depending on the local climate. Furthermore, some commercial buildings may require heating for longer periods during the day during winter, including possibly 24 hours a day ( e.g., hospitals). BOHs of over 2000 hours represent one end of the distribution and only apply to a subset of buildings where heating loads are driven higher by climate, size, age, etc.; similarly, some buildings have BOHs under 500 hours, representing the other end of the distribution. Given that the median BOHs derived from the estimated building heating loads represent reasonable operating conditions, DOE therefore has no reason to suspect the building heating loads derived from CBECS and RECS are erroneous.

BOHs are inversely related to the number of boilers and overall boiler capacity assigned to each building. This means that in a building with multiple boilers, each individual boiler has fewer BOHs to meet the building heating load compared to another building with a similar building heating load with only a single boiler at the same capacity. The same is also true when comparing two single boilers of different capacity; the higher capacity boiler will have lower BOHs to meet the same building heating load. Larger capacity CPBs are typically installed in buildings with larger heating loads, but these loads are not necessarily proportional to the increase in CPB capacity. Therefore, it is not unusual for the larger capacity CPB equipment classes to have lower median BOHs in some instances.

Because BOHs are a derived quantity and not a primary input parameter, the estimated fuel consumption of each building in the LCC sample would be the same regardless of the assigned boiler capacity and number of boilers in a given building. BOHs do not affect the fuel consumption of the sample building. The annual fuel consumption in the no-new-standards and standards cases is largely set by the building heating load determined from CBECS or RECS, coupled with the assigned boiler efficiency. There may be individual buildings in the LCC sample at the extreme ends of the distribution with high or low BOHs due to the assigned boiler capacity. If, in the field, a larger capacity boiler (or multiple boilers) with the same efficiency were installed instead in that building, BOHs would go down but overall fuel consumption would remain the same to match the building heating load. Similarly, at the low end of the distribution, if a lower capacity boiler were installed in the field instead, BOHs would increase but fuel consumption would remain the same. The only impact of changes to BOHs would be with electricity consumption. Electricity consumption while the boiler is on would decrease with decreasing BOHs and increase with increasing BOHs; however, electricity consumption is a minor component of overall operating costs. 58 Adjustments to these BOHs at either end of the distribution would yield an overall average LCC savings result substantially the same as DOE's current estimate. In summary, higher and lower capacities may be present in the field (with correspondingly lower and higher BOHs), however the net result of any adjustments would be a minimal impact to average LCC savings and the percentage of negatively impacted consumers.

As an illustration of the small impact of electricity consumption adjustments, a small gas-fired hot water CPB at a thermal efficiency of 84 percent with a typical heating load has an estimated average annual fuel use of 863.7 million Btus per year (“MMBtu/yr”) and an estimated average annual electricity consumption of 683.5 kilowatt-hours per year (“kWh/yr”). 59 Assuming this CPB is in New England, with a commercial natural gas price of $10.56/MMBtu and a commercial electricity price of $0.15/kWh, 60 this results in an annual operating cost of $9,121 for natural gas and $103 for electricity. The electricity consumption of the auxiliary equipment and standby power accounts for approximately 1 percent of total energy costs. The difference in electricity consumption between efficiency levels is an even smaller fraction, compared to the difference in natural gas consumption between efficiency levels. Changes to BOHs both upward and downward would have a negligible impact on overall LCC savings results given that the fuel consumption is the dominant factor and it is determined by the heating load and assigned boiler efficiency. Therefore, the conclusions of the January 2020 Final Rule are insensitive to adjustments to BOHs.

DOE has concluded that the determinations made pursuant to the various procedural requirements applicable to the January 2020 Final Rule remain unchanged for this supplemental response to comments. These determinations are set forth in the January 2020 Final Rule. 85 FR 1592, 1676-1681. Because the rule was remanded without vacatur for further explanation, DOE was able to provide this explanation without opening another notice and comment period. See Chamber of Commerce v. SEC, 443 F.3d 890, 900 (D.C. Cir. 2006).

In the alternative, however, DOE finds that, pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b), there is good cause to not issue a separate notice to solicit public comment on the supplemental responses to comments contained in this document. This document does not change the determinations made by DOE in the January 2020 Final Rule, but is a supplement to that final rule, which already went through notice and comment. This document provides further explanation to the response to comments already provided. In addition, this supplement to the January 2020 Final Rule is issued pursuant to a court order directing DOE to provide supplemental responses to certain comments within 90 days. Issuing a separate notice to solicit public comment during that time period would be impracticable, unnecessary, and contrary to the public interest.

This document of the Department of Energy was signed on April 14, 2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We are amending the allowable levels for fluoride in bottled water to which fluoride is added, to be consistent with the updated recommendation by the PHS on the optimal fluoride concentration in community water systems that add fluoride for the prevention of dental caries.

The final rule revises the quality standard for bottled water (found in §  165.110(b) (21 CFR 165.110(b)) to set the allowable level for fluoride at 0.7 mg/L in domestically packaged and imported bottled water to which fluoride has been added.

This final rule updates the quality standard for bottled water, consistent with our authority in sections 401, 403, and 701(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 341, 343, and 371(a)). We discuss our legal authority in greater detail in section III.

This final rule revises the quality standard regulations so that the allowable level for fluoride is 0.7 mg/L in bottled water to which fluoride has been added, which is consistent with the current PHS recommendation on the optimal level of fluoride in community water systems that add fluoride for the prevention of dental caries. We estimate that there will be one-time costs to read and understand the rule for all bottled water manufacturers and one-time costs to verify the fluoride level after adjustment of the manufacturing process for bottled water manufacturers that choose to add fluoride to their product. The one-time costs range between $214,370.26 and $333,338.24. When discounted at 7 percent over 10 years, the annualized costs range from $30,521.50 to $47,459.87. When discounted at 3 percent over 10 years the annualized costs range from $25,130.73 to $39,077.41.

In 1973, FDA established standards of quality for bottled water, including allowable levels for fluoride, based on the PHS' 1962 Drinking Water Standards (38 FR 32558, November 26, 1973). In adopting the 1962 PHS drinking water standard for fluoride, FDA concluded that the addition of fluoride to bottled water should be permitted to be consistent with the policy of allowing community water fluoridation (38 FR 32558 at 32561). For bottled water to which fluoride is added that is packaged in the United States, FDA established as the allowable level a range (0.8 to 1.7 mg/L) based on the annual average maximum daily air temperatures at the location where the bottled water is sold at retail. For imported bottled water, we established a single allowable level for fluoride in bottled water to which fluoride is added (0.8 mg/L).

In 2015, the PHS updated and replaced its 1962 Drinking Water Standards related to community water fluoridation and recommended an optimal fluoride concentration of 0.7 mg/L. This recommendation is published in a Federal Register notice entitled “Public Health Service Recommendation for Fluoride Concentration in Drinking Water for Prevention of Dental Caries” (80 FR 24936, May 1, 2015). The same year, we issued a letter to industry recommending, based on the updated PHS recommendation, that bottled water manufacturers not add fluoride to bottled water at concentrations greater than a final concentration of 0.7 mg/L (Ref. 1). In our letter, we also stated our intent to revise the allowable levels for fluoride in bottled water to which fluoride has been added to be consistent with the updated PHS recommendation. We did not receive any objections to the letter, and bottled water manufacturer input indicates that most bottled water to which fluoride has been added that is sold or offered for sale in the United States, whether domestic or imported, now has no more than 0.7 mg/L fluoride (Ref. 2).

In the Federal Register of April 3, 2019, we issued a proposed rule to amend the quality standard for bottled water (found in § 165.110(b)) to set the allowable level for fluoride at 0.7 mg/L in domestically packaged and imported bottled water to which fluoride has been added (84 FR 12975) (“proposed rule”). We explained the basis for the PHS's 2015 optimal fluoride concentration recommendation for drinking water, concluded that the basis is a sound public health measure that should also apply to bottled water, and noted that amending the allowable level for fluoride in bottled water to which fluoride had been added to 0.7 mg/L would be consistent with the updated PHS fluoride recommendation. We also stated that this may reduce any unnecessary confusion on the part of consumers from having the standard for fluoride added to bottled water differ from the PHS recommendations for community water fluoridation (84 FR 12975 at 12978).

In addition, consistent with the updated PHS recommendation, we proposed to remove references to annual averages of maximum daily air temperatures in §  165.110(b) because, as discussed in the updated PHS recommendation, data do not show a convincing relationship between fluid intake and ambient air temperature (84 FR 12975 at 12977).

We also proposed that the final rule be effective 60 days after the date of the final rule's publication in the Federal Register and a compliance date 120 days after the effective date.

The proposed rule provided a 60-day comment period. We received more than 90 comments. The comments came from individuals, academia, healthcare professionals, consumer advocacy groups, research associations, and industry trade associations. Among other things, the comments discussed:

• The level of added fluoride that should be in bottled water. Many comments supported our proposed level, but some opposed the addition of any fluoride to bottled water or supported an amount less than 0.7 mg/L. Additionally, some comments suggested that consumers should be able to choose between bottled water with and without added fluoride. Other comments suggested that we should do our own studies or consider additional research.

• The health effects of added fluoride to water. While some comments agreed that the proposed level would help prevent dental caries, some other comments expressed concern that the ingestion of fluoride could have adverse health effects, such as dental fluorosis, skeletal fluorosis, neurological toxicity, endocrine disruption, and lower IQ.

We are updating the quality standard establishing the allowable levels for fluoride in bottled water to which fluoride has been added, as set forth in this final rule, consistent with our authority in sections 401, 403, and 701(a) of the FD&C Act.

Section 401 of the FD&C Act directs the Secretary of the Department of Health and Human Services (the Secretary) to issue regulations fixing and establishing for any food a reasonable definition and standard of identity, quality, or fill of container whenever in the judgment of the Secretary such action will promote honesty and fair dealing in the interest of consumers.

Under section 403(h)(1) of the FD&C Act, a food is misbranded if it purports to be or is represented as a food for which a standard of quality has been prescribed by regulations under section 401 of the FD&C Act, and its quality falls below such standard, unless its label bears, in such manner and form as such regulations specify, a statement that it falls below such standard.

Under section 701(a) of the FD&C Act, we may issue regulations for the efficient enforcement of the FD&C Act to “effectuate a congressional objective expressed elsewhere in the Act” ( Association of American Physicians and Surgeons, Inc. v. FDA, 226 F. Supp. 2d 204 (D.D.C. 2002) (citing Pharm. Mfrs. Ass'n v. FDA, 484 F. Supp. 1179, 1183 (D. Del. 1980)). Updating this allowable level for fluoride in bottled water to be consistent with the updated PHS recommendation would help effectuate the congressional objective expressed in sections 401 and 403 of the FD&C Act.

We received no comments on our proposal to remove references to annual averages of maximum daily air temperatures in §  165.110(b) and are finalizing it without change. We received more than 90 comments on other provisions of the proposed rule, and each comment discussed one or more issues. The comments came from individuals, academia, healthcare professionals, consumer advocacy groups, research associations, and industry trade associations.

We describe and respond to the comments in sections B through F of this section. We have numbered each comment to help distinguish between different comments. We have grouped similar comments together under the same number, and, in some cases, we have separated different issues discussed in the same comment and designated them as distinct comments for purposes of our responses. The number assigned to each comment or comment topic is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.

Many comments made general remarks supporting or opposing the proposed rule without focusing on a particular proposed provision. In the following paragraphs, we discuss and respond to such general comments.

(Comment 1) Many comments expressed general support for the proposed rule. A few comments stated that the proposed rule, if finalized, would provide consistency between domestically packaged and imported bottled water.

(Response 1) We proposed to revise, and are revising, the allowable level for fluoride to 0.7 mg/L in bottled water to which fluoride has been added, a level consistent with the current PHS recommendations for the optimal level of fluoride in community water systems to prevent dental caries. The revised allowable level is consistent between domestically packaged and imported bottled water. As stated in the 2011 Department of Health and Human Services (HHS) notice proposing the revised recommended fluoride concentration, available data suggest that a concentration of 0.7 mg/L provides an optimal balance between the prevention of dental caries and the risk of dental fluorosis (76 FR 2383 at 2386). The PHS confirmed this in 2015 (80 FR 24936).

(Comment 2) A few comments advocated the availability of both fluoridated and non-fluoridated bottled water so that consumers have choices. One comment stated that FDA should not ask all bottlers to fluoridate to the 2015 PHS recommended level of 0.7 mg/L. Another said that consumers have a right to be aware of the content of their drinking water, and so FDA should require manufacturers who add fluoride to their water to label the amount added.

(Response 2) Our final rule revises the allowable level for fluoride to 0.7 mg/L for bottled water to which fluoride is added. Manufacturers are not required to fluoridate their water, or to fluoridate to a level of 0.7 mg/L. Instead, our regulations, at § 165.110(a)(1), provide that fluoride may be optionally added up to the allowable level.

Consumers can examine bottled water labeling to determine whether fluoride has been added. In the preamble to the 1995 final rule establishing the standard of identity and standard of quality for bottled water, we explained that bottled water with added fluoride would be a multi-ingredient food and, as such, its label must bear ingredient labeling (60 FR 57076 at 57079, November 13, 1995). If fluoride is added to bottled water, it must be declared in the ingredients list (21 CFR 101.4(a)(1)). In addition, the terms “fluoridated,” “fluoride added,” or “with added fluoride” may be used on the label or in labeling of bottled water that contains added fluoride (21 CFR 101.13(q)(8)). Finally, our regulations, at § 101.9(c)(5) (21 CFR 101.9(c)(5)), require the label declaration of fluoride in certain circumstances and allow for it voluntarily in all other cases.

While labeling the amount of fluoride added to bottled water is outside the scope of this rule, we note that mandatory declaration of the amount of fluoride is required if a claim about fluoride content is made on the label or in the labeling of foods (see §  101.9(c)(5)). We also addressed this in the preamble to our 2016 final rule entitled “Food Labeling: Revision of the Nutrition and Supplement Facts Labels” (81 FR 33742, May 27, 2016) (Nutrition Facts Label final rule). We declined to require the declaration of fluoride because, among other reasons, fluoride is a nonessential nutrient, a daily reference intake cannot be established based on available quantitative intake recommendations, and total fluoride intake can come from sources other than bottled water (81 FR 33742 at 33881).

(Comment 3) Some comments stated that FDA should not rely on the PHS recommendation and FDA should provide its own scientific justification for the fluoride level in the proposed rule. A few others asked FDA to review studies published on the safety of fluoride and community water fluoridation after the 2015 PHS recommendation.

(Response 3) We disagree with the comments stating that FDA should not rely on the PHS recommendation. In the preamble to the proposed rule, we explained the basis for the PHS's 2015 recommendation and concluded that the basis is a sound public health measure that should also apply to bottled water to which fluoride is added. Furthermore, the PHS recommended 0.7 mg/L fluoride after systematic reviews of existing science by a Federal interdepartmental, interagency panel of scientists, including scientists from FDA (76 FR 2383, January 13, 2011; 80 FR 24936, May 1, 2015). This is consistent with our approach in 1973, when we established the allowable levels for fluoride in bottled water based on the PHS's 1962 Drinking Water Standards. At that time we also concluded that the addition of fluoride to bottled water should be permitted to be consistent with the policy of community water fluoridation (38 FR 32558 at 32561). We also believe this will help promote honesty and fair dealing in the interest of consumers under section 401 of the FD&C Act (21 U.S.C. 341) in that consumers may expect the levels of fluoride added to bottled water to be consistent with the levels of fluoride in public drinking water.

We recognize that additional studies on the safety of fluoride have published since the publication of the 2015 PHS recommendation. We do not believe these studies contradict the PHS recommendation, and neither these studies nor the body of literature we have reviewed show adverse health effects of fluoride in humans up to the level we are finalizing. The PHS recommendation has not changed, and we maintain that the addition of fluoride to bottled water should be permitted to be consistent with the policy of community water fluoridation. Given that the comments provided no new information indicating the need to duplicate the scientific evaluation already conducted by PHS, we are revising the allowable level for fluoride in bottled water to which fluoride is added based on the 2015 PHS recommendation.

(Comment 4) Some comments opposed the addition of any fluoride to bottled water. A few stated that fluoride is a contaminant, poison, or an industrial waste product, and suggested that our adoption of an optimal fluoride concentration, or use of the term “optimal,” is an endorsement of fluoridation or encourages the fluoridation of bottled water. Some comments listed possible adverse health effects of water fluoridation, such as dental fluorosis, skeletal fluorosis, neurological toxicity, endocrine disruption, and lower IQ. Some stated that the prevention of dental caries by ingesting fluoride does not have adequate scientific support and topical application of fluoride through toothpaste or mouthwash, or by a dentist, is a better way to prevent dental caries.

(Response 4) As an initial matter, we consider fluoride to be a nutrient. As stated in our response to comment 3, the addition of fluoride to bottled water should be permitted to be consistent with the PHS recommended level of community water fluoridation, and the PHS recommendation is a sound public health measure that should also apply to bottled water to which fluoride is added. The PHS recommendation addressed the potential for dental fluorosis as well as concerns about other adverse effects from water fluoridation (80 FR 24936 at 24940 through 24942). The PHS recommendation also addressed the concerns regarding the safety of fluoride additives (80 FR 24936 at 24942 through 24943). The comments did not provide, and we are not aware of, evidence that fluoride added to bottled water up to 0.7 mg/L is a contaminant or poison, or that fluoride is an industrial waste product.

Regarding the comments suggesting that this rule endorses or encourages bottled water fluoridation, we note in our response to comment 2 that the rule does not require manufacturers to fluoridate their water, or to fluoridate to a level of 0.7 mg/L. Instead, our regulations, at § 165.110(a)(1), provide that fluoride may be optionally added up to the allowable level. We also note that we are not adopting or identifying an optimum fluoride level for bottled water to which fluoride has been added, and we maintain that the addition of fluoride to bottled water should be consistent with the policy of community water fluoridation.

Regarding the ingestion of fluoride, we recognize that consumers are also exposed to fluoride from other sources. The PHS considered the availability of other fluoride-containing products, including toothpastes, mouth rinses, and professionally applied fluoride compounds, when establishing the 0.7 mg/L optimum level for community water fluoridation (80 FR 24936 at 24937 through 24938). The PHS also stated that community water fluoridation is a major factor responsible for the decline of the prevalence and severity of dental caries during the second half of the 20th century, and that, when analyses were limited to studies conducted after the introduction of other sources of fluoride, especially fluoride toothpaste, beneficial effects across the lifespan from community water fluoridation were still apparent (80 FR 24936 at 24937).

(Comment 5) One comment supported the proposal but asked whether the reduction of the amount of added fluoride in bottled water will have any other unforeseen long-term effects on the population.

(Response 5) The comment did not provide, and we are not aware of, any information regarding unforeseen long-term effects on the population of a 0.7 mg/L fluoride limit in bottled water to which fluoride is added.

(Comment 6) Some comments that supported the proposed rule specifically supported the proposed level of 0.7 mg/L and stated that the level is consistent with public health recommendations, FDA guidance, and current industry practice.

(Response 6) As we noted in our response to comment 1, we proposed to revise the standard for the allowable level for fluoride to 0.7 mg/L in bottled water to which fluoride has been added, a level consistent with the updated PHS recommendations. As stated in the 2011 HHS notice proposing the revised recommended fluoride concentration, available data suggest that a fluoride concentration of 0.7 mg/L provides an optimal balance between the prevention of dental caries and the risk of dental fluorosis (76 FR 2383 at 2386). Moreover, this may reduce any unnecessary confusion on the part of consumers from having the standard for fluoride added to bottled water differ from the PHS recommendations for community water fluoridation, or different standards for domestically packaged and imported bottled water.

(Comment 7) One comment said that there is no need for this rule because there is no immediate danger in the levels of fluoride in bottled water.

(Response 7) We disagree that there is no need for this rule or that an “immediate danger” is needed to take this action. This final rule is consistent with our authority in sections 401, 403, and 701(a) of the FD&C Act. We have concluded that the basis for PHS' updated recommendation of optimum fluoridation level of 0.7 mg/L in community water is a sound public health measure that should also apply to bottled water.

When we adopted the 1962 PHS drinking water standard for fluoride, we concluded that the addition of fluoride to bottled water should be permitted to be consistent with the policy of allowing community water fluoridation (38 FR 32558 at 32561). In addition, this rule may reduce any unnecessary confusion on the part of consumers from having the standard for fluoride added to bottled water differ from the PHS recommendations for community water fluoridation, or different standards for domestically packaged and imported bottled water.

(Comment 8) Some comments asked FDA to regulate the level of fluoride naturally present in bottled water. A few comments specifically asked FDA to reduce the allowable levels for naturally occurring fluoride to 0.7 mg/L, and a few others indicated that FDA should not permit the sale of bottled water with natural fluoride concentrations above 0.7 mg/L.

(Response 8) The regulation of bottled water to which no fluoride is added is outside the scope of this rule. Our regulations, at § 165.110(b)(4)(ii)(A) and (B), limit the amount of fluoride in domestic and imported bottled water to which no fluoride is added. Those levels range from 1.4 to 2.4 mg/L. Our current revision of the allowable levels of fluoride in bottled water is based on the 2015 PHS recommendation, which does not affect community water systems with naturally occurring fluoride in water at concentrations greater than 0.7 mg/L (80 FR 24936 at 24937). Therefore, we are not revising the allowable levels for fluoride in bottled water to which fluoride has not been added by the manufacturer.

We note that the maximum fluoride level we are finalizing limits the total amount of fluoride that may be present in bottled water to which fluoride is added—that is, the sum of added and naturally occurring fluoride amounts in bottled water to which fluoride is added may not exceed 0.7 mg/L.

(Comment 9) Several comments expressed concern that even if the amount of added fluoride is safe, the final fluoride level in bottled water to which fluoride is added may be unsafe because either: (a) The water to which fluoride is added may already contain fluoride; or (b) ingestion of both fluoridated community water and bottled water to which fluoride is added would lead to fluoride overconsumption.

(Response 9) As we noted in our response to comment 8, the maximum fluoride level we are finalizing limits the total amount of fluoride that may be present in bottled water to which fluoride is added—that is, the sum of added and naturally occurring fluoride amounts in bottled water to which fluoride is added may not exceed 0.7 mg/L. The regulation of bottled water to which no fluoride is added (which may contain naturally occurring fluoride) and of municipal water is outside the scope of this rule. However, the PHS considered the availability of other fluoride-containing products when establishing the 0.7 mg/L optimum level for community water fluoridation (80 FR 24936 at 24937).

(Comment 10) One comment recommended a level of 0.6 mg/L and cited the recommendation from the New Hampshire Department of Environmental Services (NH DES) (Ref. 3).

(Response 10) The NH DES recommends a drinking water fluoride level of 0.6 to 0.8 mg/L. It references the Centers for Disease Control and Prevention (CDC) community water fluoridation website (Ref. 4), which further references the 2015 U.S. PHS recommended level of 0.7 mg/L. As such, the NH DES's recommendation is consistent with the 2015 PHS recommendation. The comment did not provide other information to support the 0.6 mg/L level. Therefore, we are not revising the allowable level to 0.6 mg/L.

(Comment 11) One comment asked FDA to create an acceptable range of fluoride for the purposes of compliance with the rule, because such a range would appropriately recognize that: (a) Adding fluoride to bottled water is not an exact process; and (b) existing FDA regulations require added minerals to be present at least at the level declared on the label. The comment stated that this type of operational flexibility is needed because the level of fluoride in a bottled water product with added fluoride will be subject to some variation, consistent with good manufacturing practices. The comment said that, if the proposed rule is finalized without the requested range for compliance, the rule would appear to create a paradox with respect to compliance with two sets of FDA regulations: (1) This rule, which establishes 0.7 mg/L as the maximum or ceiling for bottled water to which fluoride is added; and (2) the FDA compliance standard for nutrition labeling, which establishes the declared level as the minimum or floor by requiring a composite sample tested for an added mineral like fluoride to contain the mineral at least 100 percent of the declared level. The comment specifically asked FDA to establish a range of 0.6 to 1.0 mg/L for fluoride in bottled water intended for children 4 years and older and adults, and a separate range of 0.4 to 0.7 mg/L for fluoride in bottled water intended for infants and toddlers under 4 years of age.

(Response 11) We decline to create a compliance range and are finalizing the revision of the standard for the allowable level for fluoride to 0.7 mg/L in bottled water to which fluoride has been added.

We recognize that there are potential variabilities in adding fluoride in bottled water during manufacturing and variabilities during fluoride measurement. We also recognize that the CDC proposed an operational control range of 0.6 to 1.0 mg/L in community water systems that adjust fluoride (83 FR 32666, July 13, 2018). The proposed range is based on the ability of community water systems to stay successfully within a particular operational control range (83 FR 32666 at 32667). The comment did not provide information on fluoride variations within community water systems that are applicable to a bottled water manufacturing environment or to support the requested compliance ranges. Additionally, we have no information, and received no comments, suggesting that some current single-level fluoride standards that have no compliance range ( e.g., 0.8 mg/L for bottled water to which fluoride is added and that is at an annual average of maximum daily air temperature between 79.3 to 90.5 °F) have posed unreasonable challenges to the bottled water industry.

We agree that our regulations require added minerals to be present at least at the level declared on the label. Our regulations, at § 101.9(g)(4)(i), state that a food with a label declaration of, among other things, a mineral that meets our definition of a Class I nutrient is misbranded under section 403(a) of the FD&C Act unless its nutrient content is formulated to be at least equal to the value for that nutrient declared on the label. We explained in the Nutrition Facts Label final rule that we consider fluoride to be a nutrient, and specifically, a mineral (81 FR 33742 at 33883). Added fluoride is a Class I nutrient for nutrition labeling purposes because it is an added nutrient in fortified or fabricated foods (§ 101.9(g)(3)(i)).

A label declaration is required if a claim about fluoride content is made on the label or in the labeling of foods (see § 101.9(c)(5)). Our regulations would require the fluoride levels in such products to be at least at the level declared on the label. That minimum fluoride level is not incompatible with the fluoride level finalized in this rule. We understand that, to account for process variability, industry may formulate to a slightly higher fluoride content to ensure the impacted products consistently meet the minimum requirement for nutrient declaration as described in § 101.9(g)(4)(i). We expect that the slight overage of fluoride used to account for process variability is small and would be consistent with current good manufacturing practice (§ 101.9(g)(6)). In addition, an FDA sample for nutrient analysis consists of a composite of 12 subsamples (consumer units), with one sample taken from each of 12 different randomly chosen shipping cases, to be representative of a lot (§ 101.9(g)(2)). FDA conducts nutrient analyses using appropriate methods as given in the Official Methods of Analysis of the AOAC International (id.). Therefore, our sampling procedure for compliance purposes already takes into account the sample variabilities within a lot. Furthermore, as discussed in our response to comment 2, bottled water manufacturers that fluoridate their water are not required to fluoridate to a level of 0.7 mg/L—lower levels are permitted. A bottled water manufacturer could target a fluoridation level below 0.7 mg/L, and, even with the slight overage consistent with current good manufacturing practices, we would expect the finished product to be in compliance with both the labeling requirement in § 101.9(g)(4)(i) and the allowable level for fluoride finalized in this rule.

(Comment 12) A few comments expressed concern that dental fluorosis could occur in infants who consume infant formula reconstituted with fluoridated bottled water.

(Response 12) The PHS considered this when they issued their 2015 recommendation. They stated that, if an infant is consuming only infant formula mixed with fluoridated water, there may be an increased chance for permanent teeth to have mild dental fluorosis (80 FR 24936 at 24940 through 24941). To lessen this chance, parents may choose to use low-fluoride bottled water some of the time to mix infant formula, e.g., bottled waters labeled as deionized, purified, demineralized, or distilled, and without any fluoride added after purification treatment (80 FR 24936 at 24940). However, the PHS concluded that their recommendation to lower the fluoride concentration for community water fluoridation should decrease fluoride exposure during the time of enamel formation, from birth through 8 years of age for most permanent teeth, and further lessen the chance for children's teeth to have dental fluorosis, while keeping the decay prevention benefits of fluoridated water (80 FR 24936). We expect the same balance between the prevention of dental caries and the risk of dental fluorosis from consumption of bottled water to which fluoride is added because this rule revises the allowable fluoride level in those products to be consistent with the 2015 PHS recommendation. The comments provided no new information on this topic, and we agree with PHS' analysis.

As discussed in our response to comment 2, fluoride added to bottled water must be declared in the ingredient list in accordance with § 101.4. Consumers can examine bottled water labeling to determine whether fluoride has been added by, for instance, noting the type of bottled water ( e.g., purified) and reading the ingredient declaration ( i.e., for whether fluoride is listed as an ingredient).

(Comment 13) One comment expressed concern over bottled water manufactured prior to the effective date of the final rule. It asked whether these products can continue to be sold, and if these products would impact consumer health. The comment suggested FDA state publicly that bottled water produced under the current standard will not adversely influence consumers health so that the consumer can keep buying in the period between the effective date and the compliance date. The comment also stated that the proposed compliance date of 120 days after the effective date is too tight for large companies, which may need a longer time to adjust all of their fluoridated water products.

(Response 13) The comment provided, and we are aware of, no information suggesting that that there will be product remaining in inventories that does not comply with the rule after the compliance date, and that large companies may need a longer time to adjust their fluoridated products. We stated in the proposed rule that many bottled water manufacturers in the United States have already adjusted their addition of fluoride to obtain the 0.7 mg/L fluoride in their finished bottled water in response to the updated 2015 PHS recommendation and FDA's April 27, 2015, letter to manufacturers, distributors or importers of bottled water (84 FR 12975 at 12977). We received no comments from bottled water manufacturers or industry groups expressing concerns with inventory remaining after the compliance date. Therefore, we do not expect any significant amount of bottled water products to which fluoride has been added and whose fluoride are at levels above 0.7 mg/L to remain in inventory after the compliance date. We are finalizing the effective and compliance dates as proposed. With regard to the comment's question about the impact on public health of bottled water manufactured prior to this rule's effective date that meets the previous quality standard for added fluoride, we do not have safety concerns. We note that any such bottled water would be misbranded if it did not comply with the label statement requirements under § 165.110(c).

Many comments addressed aspects of fluoride other than the allowable level in bottled water to which fluoride is added. Some aspects, such as allowable fluoride levels in municipal water systems, the price of bottled water, and other substances that we could consider requiring or allowing in bottled water, are outside the scope of the rule, and we will not address them here.

We discuss the other miscellaneous comments in the following paragraphs.

(Comment 14) One comment said that too many children, especially infants, are ingesting too much fluoride. The comment said that the warning statement “Do Not Use Fluoridated Water For Infants or Making Formula” must be placed on fluoridated water, and the warning statement “For Adult Use Only” should be placed on fluoridated water.

(Response 14) As discussed in our response to comment 2, fluoride added to bottled water must be declared in the ingredient list in accordance with § 101.4. Consumers can examine bottled water labeling to determine whether fluoride has been added by, for instance, noting the type of bottled water ( e.g., purified) and reading the ingredient declaration ( i.e., for whether fluoride is listed as an ingredient). Parents may choose whether to give fluoridated bottled water to children and whether to use bottled water with added fluoride to mix infant formula. Additionally, as we explained in our response to comment 12, the level we are finalizing balances the prevention of dental caries and the risk of dental fluorosis from consumption of bottled water to which fluoride is added. The comment provided no new information on this topic. Therefore, we decline to revise the rule as suggested by the comment.

(Comment 15) One comment asked whether the determination about Indian Tribal Governments in the proposed rule has changed.

(Response 15) In the proposed rule, we tentatively concluded that the rule does not contain policies that would have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Our tentative conclusion has not changed. The comment did not provide any information that would cause us to reexamine or alter our tentative conclusion.

Effective date: This rule is effective June 21, 2022.

Compliance date: The compliance date of this final rule is October 17, 2022.

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). This final rule has been designated by the Office of Information and Regulatory Affairs as a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because updating the standards of the allowable level for fluoride in bottled water to which fluoride has been added specified in this final rule will not significantly increase costs to bottled water manufacturers, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $158 million, using the most current (2020) Implicit Price Deflator for the Gross Domestic Product. This final rule will not result in an expenditure in any year that meets or exceeds this amount.

The rule revises the bottled water quality standard for the allowable level for fluoride to 0.7 mg/L in bottled water to which fluoride has been added, a level consistent with the updated PHS recommendations for the optimal level of fluoride in community water systems to prevent dental caries (tooth decay).

There will be one-time costs to read and understand the rule for all bottled water manufacturers and one-time costs to verify the fluoride level after adjustment of the manufacturing process for bottled water manufacturers that choose to add fluoride to their product. The one-time costs range between $214,370.26 and $333,338.24. When discounted at 7 percent over 10 years, the annualized costs range from $30,521.50 to $47,459.87. When discounted at 3 percent over 10 years the annualized costs range from $25,130.73 to $39,077.41.

We have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the final rule. The full analysis of economic impacts is available in the docket for this final rule (Ref. 5) and at https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations.

We have determined under 21 CFR 25.32(m) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. We have determined that this rule has federalism impacts as it amends the standard of quality regulations for bottled water. The existing standard of quality is not new and already preempts State laws because it is within the scope of section 403A of the FD&C Act, an express preemption provision.

We have analyzed this rule in accordance with the principles set forth in Executive Order 13175. We have determined that the rule does not contain policies that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, we conclude that the rule does not contain policies that have tribal implications as defined in the Executive order and, consequently, a tribal summary impact statement is not required.

The following references are on display at the Dockets Management Staff (see ADDRESSES ) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they also are available electronically at https://www.regulations.gov. FDA has verified the website addresses, as of the date this document publishes in the Federal Register , but websites are subject to change over time.

Therefore, under the Federal Food, Drug, and Cosmetic Act, and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 165 is amended as follows:

The Coast Guard will enforce the special local regulations in 33 CFR 100.701, Table 1 to § 100.701, paragraph (b), Item 2, from 7 p.m. until 8 p.m. on April 22, 2022 for the annual Conch Republic Navy Parade and Battle in Key West, Florida. This action is being taken to provide for the safety of life on the navigable waters of the Key West Harbor during the simulated battle event. Our regulation for Recurring Marine Events within Seventh Coast Guard District, § 100.701, Table 1 to § 100.701, paragraph (b), Item 2, specifies the location of the regulated area for the reenactment of the battle within the Key West Harbor.

During the enforcement period, as reflected in § 100.701, no person or vessel may enter, transit through, anchor within, or remain within the established regulated areas without approval from the Captain of the Port Key West or designated representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. The U.S. company, Space Exploration Technologies Corporation (Space X) Axiom-1 and the National Aeronautics and Space Administration (NASA) Crew-3 capsule recovery missions were approved and scheduled less than 30 days before the need for the five safety zones to be in place starting on April 17, 2022. Publishing an NPRM would be impracticable and contrary to the public interest since the missions would begin before completion of the rulemaking process, thereby inhibiting the Coast Guard's ability to protect against the hazards associated with the recovery missions.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable and contrary to the public interest because the temporary safety zones must be established on April 17, 2022, to mitigate safety concerns during the capsule recovery missions.

On January 1, 2021, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Pub. L. 116-283) (Authorization Act) was enacted. Its section 8343 (134 Stat. 4710) calls for the Coast Guard to conduct a 2-year pilot program to establish and implement a process to establish safety zones to address special activities in the exclusive economic zone (EEZ). 1 These special activities include space activities carried out by United States citizens. The Seventh District Commander, Captain of the Port Jacksonville, and Captain of the Port St. Petersburg have determined that potential hazards associated with the Space X Axiom-1 and the NASA Crew-3 capsule recovery missions present a safety concern for anyone within the perimeter of the five safety zones. The safety zones will only be activated at a reasonable time before a recovery mission and deactivated once the area is no longer hazardous. The purpose of this rule is to ensure the safety of astronauts, vessels, mariners, and the navigable waters in the safety zones before, during, and after the scheduled event. The Coast Guard is issuing this rule under authority of section 8343 of the Authorization Act and 46 U.S.C. 70034.

The Coast Guard is establishing five temporary safety zones. The Space X Axiom-1 and Crew-3 recovery missions may occur within one of the five following sites: Cape Canaveral, Daytona, Jacksonville, Tampa, and Tallahassee, Florida. Based on mission and environmental factors, Space X and NASA will determine which of the sites will be utilized approximately one day before capsule reentry and recovery. The appropriate safety zone will then be activated at a reasonable time before the recovery mission and deactivated once the area is no longer hazardous. Coast Guard District Eight may also establish temporary safety zones for recovery missions in its respective area of responsibility for these missions.

The five temporary safety zones are listed below and include all waters within the coordinates from surface to bottom. The coordinates are based on the projected reentry locations as determined from telemetry data and modeling by Space X.

(1) Cape Canaveral site:

(2) Daytona site:

(3) Jacksonville site:

(4) Tampa site:

(5) Tallahassee site:

When the safety zones are activated, the COTP or a designated representative will be able to restrict vessel movement including but not limited to transiting, anchoring, or mooring within the safety zone to protect vessels from hazards associated with rocket and capsule recovery missions. Active restrictions are based on mission specific recovery exclusion areas provided by Space X and NASA, are temporary in nature, and would only be enacted and enforced at a reasonable time prior to and after a recovery. Since the safety zones fall in the EEZ, only United States flagged vessels are subject to safety zone enforcement. The determination of risk would be at the discretion of the COTP and informed by the mission specific recovery exclusion areas provided by Space X and NASA.

The COTP will inform the public of the activation or status of the safety zones by Local Notice to Mariners and Broadcast Notice to Mariners on VHF-FM channel 16.

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

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

This regulatory action determination is based on the size, location, duration, and scope of the safety zones. The safety zones are limited in size and location to only those areas where capsule re-entry is reasonably expected to occur. Of the five safety zones, only one may will be activated for approximately two hours and only at a reasonable time prior to re-entry, then deactivated once the area is no longer hazardous. The safety zones are limited in scope, as vessel traffic will be able to safely transit around the safety zones which will impact a small part of the United States exclusive economic zone (EEZ) within the Atlantic Ocean and Gulf of Mexico.

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

The total time of the safety zone activation and thus restriction to the public is expected to be approximately two hours per capsule recovery, of which two instances are projected during prior to the expiration of this rule. Vessels would be able to transit around the activated safety zone location during these recoveries. We do not anticipate any significant economic impact resulting from activation of the safety zones.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishing of five temporary safety zones, one of which may be activated on two occasions for approximately two hours between April 17, 2022 and May 15, 2022 for a Space X and NASA mission. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard will enforce the safety zone listed in 33 CFR 165.939 for the Cleveland National Airshow daily from 9 a.m. through 6 p.m. on September 1 through September 5, 2022. This action is being taken to provide for the safety of life on navigable waterways during this multi-day event. Our regulation for annual events in the Captain of the Port Buffalo Zone identifies the regulated area for the Cleveland National Airshow which encompasses all U.S. waters of Lake Erie and Cleveland Harbor (near Burke Lakefront Airport) from 41°30′20″ N and 081°42′20″ W to 41°30′50″ N and 081°42′49″ W, to 41°32′09″ N and 081°39′49″ W, to 41°31′53″ N and 081°39′24″ W.

Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within the safety zone during the enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or her designated representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port Buffalo via VHF Channel 16. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port Buffalo or her designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

In addition to this notification of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners and marine information broadcasts.

The Coast Guard will enforce the safety zone listed in 33 CFR 165.939 item b.12 in Table 1 for the Lake Erie Open Water Swim from 6:45 a.m. through 11:15 a.m. on July 9, 2022. This action is being taken to provide for the safety of life on navigable waterways during this event. Our regulation for annual events in the Captain of the Port Buffalo zone, § 165.939, specifies the location of the safety zone for the Lake Erie Open Water Swim as all U.S. waters of Lake Erie, south of a line drawn between positions 41°29′30″ N, 081°44′21″ W and 41°29′21″ N, 081°45′04″ W to the shore. During the enforcement period, as reflected in § 165.23, entry into, transiting, or anchoring within the safety zone during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or a designated representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port Buffalo or a designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

In addition to this notice of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Buffalo determines that the safety zone need not be enforced for the full duration stated in this notice, they may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. We must establish this regulation by May 7, 2022 and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing this rule.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable and contrary to the public interest because immediate action is necessary to protect persons and property from the dangers associated with the event.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Ohio Valley (COTP) has determined that potential hazards associated with the private fireworks display, occurring on May 7, 2022 from 9:30 p.m. until 10pm, will be a safety concern for all navigable waters on the Ohio River, extending the entire width of the river, between mile markers (MM) 469.0-470.0. The purpose of this rule is to ensure the safety of life and vessels on these navigable waters before, during, and after the scheduled event.

This rule establishes a safety zone from 9:30 p.m. until 10 p.m. on May 7, 2022 on all navigable waters of the Ohio River, extending the entire width of the river, between MM 469.0 and 470.0. Transit into and through this area is prohibited during periods of enforcement on this date and time. The periods of enforcement will be prior to, during, and 30 minutes after any vessel movement and during the fireowrks display. The Coast Guard was informed that the event will take place from 9:30 p.m. until 10 p.m. Enforcement of the regulated area will occur during the fireworks display. The duration of the temporary safety zone is intended to ensure the safety of life and vessels on these navigable waters before, during, and after the scheduled event. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard assigned to units under the operational control of Sector Ohio Valley. They may be contacted on VHF-FM Channel 16 or by telephone at 1-800-253-7465. Persons and vessels permitted to enter this regulated area must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or the designated representative.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. This safety zone will be in place between Mile Markers (MM) 469.0 and 470.0 Ohio River on May 7, 2022 from 9:30 p.m. until 10 p.m. The Coast Guard will issue written Local Notice to Mariners and Broadcast Notice to Mariners via VHF-FM marine channel 16 about the temporary safety zone, and this rule also allows vessels to seek permission from the COTP or a designated representative to enter the area.

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

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone lasting thirty minutes that prohibits entry on all navigable waters of the Ohio River between MM 469.0 and 470.0. It is categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

On September 17, 2021, the Coast Guard published a notice of proposed rulemaking entitled “Regulated Navigation Area; Offshore, Cape Canaveral, Florida” in the Federal Register (86 FR 51845) in order to replace the existing safety zone in 33 CFR 165.775 with a regulated navigation area (RNA). During the comment period on the NPRM that ended on October 18, 2021, we received three comments.

On January 7, 2022, the Coast Guard published a supplemental notice of proposed rulemaking (SNPRM) in the Federal Register (87 FR 916). Section III of the SNPRM provides a summary of the comments and the Coast Guard's responses to those comments. The SNPRM revised the regulatory text from the original NPRM to expand the list of RNA exclusionary zones to include additional missions which are expected to be conducted. The SNPRM also included the Captain of the Port's (COTP) consideration of analysis from U.S. Space Launch Delta 45 (SLD 45) when activating an RNA exclusionary zone. No other changes were made in the SNPRM. The comment period on the SNPRM closed on March 16, 2022. No comments were submitted on the SNPRM.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Seventh District Commander and the Captain of the Port Jacksonville have determined that potential hazards associated with rocket launches from Cape Canaveral, FL, display a safety concern for anyone within the perimeter of the RNA exclusionary zones. The RNA will only be activated a reasonable time before a launch and deactivated once the area is no longer hazardous. The purpose of this rule is to ensure safety of vessels, mariners, and the navigable waters in the RNA before, during, and after the scheduled event.

We received no comments on our SNPRM published January 7, 2022. In the final rule, the Coast Guard is making one change. The Coast Guard is revising § 165.775(b) “Definitions” to clarify that the Coast Guard representative in the Merril Operations Center (MOC) is a designated representative of the COTP.

The final rule establishes an RNA in the following areas: All waters offshore Cape Canaveral from surface to bottom, encompassed by a line connecting the following points beginning with Point 1 at 28°48′54″ N, 80°28′40″ W; thence southwest to Point 2 at 28°43′20″ N, 80°41′00″ W; thence south along the shoreline to Point 3 at 28°25′18″ N, 80°34′43″ W; thence continuing south offshore to Point 4 at 28°11′00″ N, 80°29′00″ W; thence east to Point 5 at 28°10′00″ N, 80°21′13″ W; thence north along the 12 nautical mile line back to Point 1. Coordinates are in the World Geodetic System 1984 (WGS 1984). These coordinates are based on the furthest north and south trajectories of typical rocket launch vehicles originating from Cape Canaveral. In addition, there are five launch hazard areas in which the majority of rocket launches will fall and are meant to alert mariners to the general areas in which launches will occur. We list the coordinates and locations of the five launch hazard areas in the regulatory text of this RNA.

When the RNA is deemed activated, the COTP or a designated representative will be able to restrict vessel movement including but not limited to transiting, anchoring, or mooring within this RNA to protect vessels from hazards associated with rocket launches. Active restrictions are based on mission specific launch exclusion areas provided by the SLD 45, are temporary in nature, and would only be enacted and enforced prior to and just after a launch. The COTP would be able to activate any single area, a combination of areas, or establish areas within the RNA boundary area as warranted by specific risks posed by individual launches. The determination of risk would be at the discretion of the COTP and informed by the mission specific launch exclusion areas provided by SLD 45.

The COTP will inform the public of the activation or status of the RNA and specific exclusion areas, by Broadcast Notice to Mariners on VHF-FM channel 16, Public Notice of Enforcement, on-scene presence, and by the display of a yellow ball from a 90-foot pole near the shoreline.

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

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

The RNA will operate in a similar way to the existing safety zone, but will reduce the size of exclusionary areas for each specific rocket launch. We expect the economic impact of this rule to be so minimal that a full regulatory evaluation is unnecessary. The RNA will only be activated a reasonable time before a launch and deactivated once the area is no longer hazardous.

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

The total time of the RNA activation and thus restriction to the public is expected to be approximately one hour per launch. Vessels would be able to transit around the activated RNA locations during these launches. We do not anticipate any significant economic impact resulting from activation of the RNA.

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency′s responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the activation of a RNA with smaller exclusionary zones. The activation of the RNA is expected to be an hour total per occurrence. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

A CMP is defined in the Inflation Adjustment Act (28 U.S.C. 2461 note) as any penalty, fine, or other sanction that is (1) for a specific monetary amount as provided by Federal law, or has a maximum amount provided for by Federal law; (2) assessed or enforced by an agency pursuant to Federal law; and (3) assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.

The Inflation Adjustment Act provides for the regular evaluation of CMPs to ensure that they continue to maintain their deterrent value. The Inflation Adjustment Act required that each agency issue regulations to adjust its CMPs beginning in 1996 and at least every four years thereafter. The Department published its most recent cost adjustment to its CMPs in the Federal Register on February 3, 2021 (86 FR 7974), and those adjustments became effective on the date of publication.

The 2015 Act (section 701 of Pub. L. 114-74) amended the Inflation Adjustment Act to improve the effectiveness of CMPs and to maintain their deterrent effect.

The 2015 Act requires agencies to: (1) Adjust the level of CMPs with an initial “catch-up” adjustment through an interim final rule (IFR); and (2) make subsequent annual adjustments for inflation. Catch-up adjustments are based on the percentage change between the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October in the year the penalty was last adjusted by a statute other than the Inflation Adjustment Act, and the October 2015 CPI-U. Annual inflation adjustments are based on the percentage change between the October CPI-U preceding the date of each statutory adjustment, and the prior year's October CPI-U. 1 The Department published an IFR with the initial “catch-up” penalty adjustment amounts on August 1, 2016 (81 FR 50321).

In these final regulations, based on the CPI-U for the month of October 2021, not seasonally adjusted, we are annually adjusting each CMP amount by a multiplier for 2022 of 1.06222, as directed by the Office of Management and Budget (OMB) Memorandum No. M-22-07 issued on December 15, 2021.

The following analysis calculates new CMPs for penalty statutes in the order in which they appear in 34 CFR 36.2. The penalty amounts are being adjusted up based on the multiplier of 1.06222 provided in OMB Memorandum No. M-22-07.

Statute: 20 U.S.C. 1015(c)(5).

Current Regulations: The CMP for 20 U.S.C. 1015(c)(5) (Section 131(c)(5) of the Higher Education Act of 1965, as amended (HEA)), as last set out in statute in 1998 (Pub. L. 105-244, title I, section 101(a), October 7, 1998, 112 Stat. 1602), is a fine of up to $25,000 for failure by an institution of higher education (IHE) to provide information on the cost of higher education to the Commissioner of Education Statistics. In the 2021 final rule, we increased this amount to $39,693.

New Regulations: The new penalty for this section is $42,163.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new penalty is calculated as follows: $39,693 × 1.06222 = $42,162.69, which makes the adjusted penalty $42,163, when rounded to the nearest dollar.

Statute: 20 U.S.C. 1022d(a)(3).

Current Regulations: The CMP for 20 U.S.C. 1022d(a)(3) (Section 205(a)(3) of the HEA), as last set out in statute in 2008 (Pub. L. 110-315, title II, section 201(2), August 14, 2008, 122 Stat. 3147), is a fine of up to $27,500 for failure by an IHE to provide information to the State and the public regarding its teacher-preparation programs. In the 2021 final rule, we increased this amount to $33,062.

New Regulations: The new penalty for this section is $35,119.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new penalty is calculated as follows: $33,062 × 1.06222 = $35,119.11, which makes the adjusted penalty $35,119, when rounded to the nearest dollar.

Statute: 20 U.S.C. 1082(g).

Current Regulations: The CMP for 20 U.S.C. 1082(g) (Section 432(g) of the HEA), as last set out in statute in 1986 (Pub. L. 99-498, title IV, section 402(a), October 17, 1986, 100 Stat. 1401), is a fine of up to $25,000 for violations by lenders and guaranty agencies of Title IV of the HEA, which authorizes the Federal Family Education Loan Program. In the 2021 final rule, we increased this amount to $59,017.

New Regulations: The new penalty for this section is $62,689.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new penalty is calculated as follows: $59,017 × 1.06222 = $62,689.03, which makes the adjusted penalty $62,689, when rounded to the nearest dollar.

Statute: 20 U.S.C. 1094(c)(3)(B).

Current Regulations: The CMP for 20 U.S.C. 1094(c)(3)(B) (Section 487(c)(3)(B) of the HEA), as set out in statute in 1986 (Pub. L. 99-498, title IV, section 407(a), October 17, 1986, 100 Stat. 1488), is a fine of up to $25,000 for an IHE's violation of Title IV of the HEA or its implementing regulations. Title IV authorizes various programs of student financial assistance. In the 2021 final rule, we increased this amount to $59,017.

New Regulations: The new penalty for this section is $62,689.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new penalty is calculated as follows: $59,017 × 1.06222 = $62,689.03, which makes the adjusted penalty $62,689, when rounded to the nearest dollar.

Statute: 20 U.S.C. 1228c(c)(2)(E).

Current Regulations: The CMP for 20 U.S.C. 1228c(c)(2)(E) (Section 429 of the General Education Provisions Act), as set out in statute in 1994 (Pub. L. 103-382, title II, section 238, October 20, 1994, 108 Stat. 3918), is a fine of up to $1,000 for an educational organization's failure to disclose certain information to minor students and their parents. In the 2021 final rule, we increased this amount to $1,742.

New Regulations: The new penalty for this section is $1,850.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new penalty is calculated as follows: $1,742 × 1.06222 = $1,850.38, which makes the adjusted penalty $1,850, when rounded to the nearest dollar.

Statute: 31 U.S.C. 1352(c)(1) and (c)(2)(A).

Current Regulations: The CMPs for 31 U.S.C. 1352(c)(1) and (c)(2)(A), as set out in statute in 1989 (Pub. L. 101-121, title III, section 319(a)(1), October 23, 1989, 103 Stat. 750), are a fine of $10,000 to $100,000 for recipients of Government grants, contracts, etc. that improperly lobby Congress or the Executive Branch with respect to the award of Government grants and contracts. In the 2021 final rule, we increased these amounts to $20,731 to $207,314.

New Regulations: The new penalties for these sections are $22,021 to $220,213.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new minimum penalty is calculated as follows: $20,731 × 1.06222 = $22,020.88, which makes the adjusted penalty $22,021, when rounded to the nearest dollar. The new maximum penalty is calculated as follows: $207,314 × 1.06222 = $220,213.07, which makes the adjusted penalty $220,213, when rounded to the nearest dollar.

Statute: 31 U.S.C. 3802(a)(1) and (a)(2).

Current Regulations: The CMPs for 31 U.S.C. 3802(a)(1) and (a)(2), as set out in statute in 1986 (Pub. L. 99-509, title VI, section 6103(a), Oct. 21, 1986, 100 Stat. 1937), are a fine of up to $5,000 for false claims and statements made to the Government. In the 2021 final rule, we increased this amount to $11,803.

New Regulations: The new penalty for this section is $12,537.

Reason: Using the multiplier of 1.06222 from OMB Memorandum No. M-22-07, the new penalty is calculated as follows: $11,803 × 1.06222 = $12,537.38, which makes the adjusted penalty $12,537 when rounded to the nearest dollar.

Under Executive Order 12866, it must be determined whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities in a material way (also referred to as “economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

We have determined that these final regulations: (1) Exclusively implement the annual adjustment; (2) are consistent with OMB Memorandum No. M-22-07; and (3) have an annual impact of less than $100 million. Therefore, based on OMB Memorandum No. M-22-07, this is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

We have also reviewed these regulations under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account, among other things, and to the extent practicable, the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or providing information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing these final regulations as required by statute and in accordance with OMB Memorandum No. M-22-07. The Secretary has no discretion to consider alternative approaches as delineated in the Executive order. Based on this analysis and the reasons stated in the preamble, the Department believes that these final regulations are consistent with the principles in Executive Order 13563.

Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the Department generally offers interested parties the opportunity to comment on proposed regulations. However, section 4(b)(2) of the 2015 Act (28 U.S.C. 2461 note) provides that the Secretary can adjust these 2022 penalty amounts notwithstanding the requirements of 5 U.S.C. 553. Therefore, the requirements of 5 U.S.C. 553 for notice and comment and delaying the effective date of a final rule do not apply here.

Pursuant to 5 U.S.C. 601(2), the Regulatory Flexibility Act applies only to rules for which an agency publishes a general notice of proposed rulemaking. The Regulatory Flexibility Act does not apply to this rulemaking because section 4(b)(2) of the 2015 Act (28 U.S.C. 2461 note) provides that the Secretary can adjust these 2021 penalty amounts without publishing a general notice of proposed rulemaking.

These regulations do not contain any information collection requirements.

This program is not subject to Executive Order 12372 and the regulations in 34 CFR part 79.

Based on our own review, we have determined that these regulations do not require transmission of information that any other agency or authority of the United States gathers or makes available.

Accessible Format: On request to the program contact person listed under FOR FURTHER INFORMATION CONTACT , individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or other accessible format.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

For the reasons discussed in the preamble, the Secretary amends parts 36 and 668 of title 34 of the Code of Federal Regulations as follows:

CEQ is issuing this final rule to amend three provisions of its regulations implementing the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., which are set forth in 40 CFR parts 1500 through 1508 (“NEPA regulations” or “CEQ regulations”). First, CEQ is revising 40 CFR 1502.13 on the requirement for a purpose and need statement in an environmental impact statement. The revision clarifies that agencies have discretion to consider a variety of factors when assessing an application for an authorization, removing the requirement that an agency base the purpose and need on the goals of an applicant and the agency's statutory authority. The final rule also makes a conforming edit to the definition of “reasonable alternatives” in 40 CFR 1508.1(z). Second, CEQ is revising 40 CFR 1507.3 to remove language that could be construed to limit agencies' flexibility to develop or revise procedures to implement NEPA specific to their programs and functions that may go beyond the CEQ regulatory requirements. Third, CEQ is revising the definition of “effects” in paragraph (g) of 40 CFR 1508.1 to include direct, indirect, and cumulative effects. CEQ is making these changes in order to better align the provisions with CEQ's extensive experience implementing NEPA and unique perspective on how NEPA can best inform agency decision making, as well as longstanding Federal agency experience and practice, NEPA's statutory text and purpose to protect and enhance the quality of the human environment, including making decisions informed by science, and case law interpreting NEPA's requirements.

Congress enacted NEPA in 1969 by a unanimous vote in the Senate and a nearly unanimous vote in the House  1 to declare an ambitious and visionary national policy to promote environmental protection for present and future generations. President Nixon signed NEPA into law on January 1, 1970. NEPA seeks to “encourage productive and enjoyable harmony” between humans and the environment, recognizing the “profound impact” of human activity and the “critical importance of restoring and maintaining environmental quality” to the overall welfare of humankind. Furthermore, NEPA seeks to promote efforts that will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of people, making it the continuing policy of the Federal Government to use all practicable means and measures to create and maintain conditions under which humans and nature can exist in productive harmony and fulfill the social, economic, and other requirements of present and future generations of Americans. It also recognizes that each person should have the opportunity to enjoy a healthy environment and has a responsibility to contribute to the preservation and enhancement of the environment. 42 U.S.C. 4321, 4331.

NEPA requires Federal agencies to interpret and administer Federal policies, regulations, and laws in accordance with NEPA's policies and to give appropriate consideration to environmental values in their decision making. To that end, section 102(2)(C) of NEPA requires Federal agencies to prepare “detailed statements,” referred to as environmental impact statements (EISs), for “every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment” and, in doing so, provide opportunities for public participation to help inform agency decision making. 42 U.S.C. 4332(2)(C). The EIS process embodies the understanding that informed decisions are better decisions, and that environmental conditions will improve when decision makers understand and consider environmental impacts. The EIS process also serves to enrich the understanding of the ecological systems and natural resources important to the Nation and helps guide sound decision making, including development, in line with the best available science and data. NEPA also established the Council on Environmental Quality (CEQ) in the Executive Office of the President, which advises the President on environmental policy matters and oversees Federal agencies' implementation of NEPA. 42 U.S.C. 4342.

In many respects, NEPA was a statute ahead of its time, and it remains relevant and vital today. It codifies the common-sense and fundamental idea of “look before you leap” to guide agency decision making, particularly in complex and consequential areas, because conducting sound environmental analysis before actions are taken reduces conflict and waste in the long run by avoiding unnecessary harms and uninformed decisions. It establishes a framework for agencies to ground decisions in sound science and recognizes that the public may have important ideas and information on how Federal actions can occur in a manner that reduces potential harms and enhances ecological, social, and economic well-being. See, e.g., 42 U.S.C. 4331, 4332(2)(A).

In 1970, President Nixon issued Executive Order (E.O.) 11514, Protection and Enhancement of Environmental Quality, directing CEQ to issue guidelines for implementation of section 102(2)(C) of NEPA. 2 In response, CEQ issued interim guidelines in April 1970, and revised the guidelines in 1971 and 1973. 3 In 1977, President Carter issued E.O. 11991, Relating to Protection and Enhancement of Environmental Quality, amending E.O. 11514 and directing CEQ to issue regulations for implementation of section 102(2)(C) of NEPA and requiring that Federal agencies comply with those regulations. 4 CEQ promulgated its NEPA regulations in 1978. 5 Issued 8 years after NEPA's enactment, the NEPA regulations reflected CEQ's interpretation of the statutory text and Congressional intent, expertise developed through issuing and revising the CEQ guidelines and advising Federal agencies on their implementation of NEPA, initial interpretations of the courts, and Federal agency experience implementing NEPA. The 1978 regulations reflected the fundamental principles of informed and science-based decision making, transparency, and public engagement Congress established in NEPA. They directed Federal agencies to issue and update periodically agency-specific implementing procedures to supplement CEQ's procedures and integrate the NEPA process into the agencies' specific programs and processes. Consistent with 42 U.S.C. 4332(2)(B), the regulations also required agencies to consult with CEQ in the development or update of these agency-specific procedures to ensure consistency with CEQ's regulations.

In 1981, CEQ issued the “Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations,”  6 one of numerous guidance documents CEQ has issued. The “Forty Questions” reflected CEQ's contemporaneous interpretation of the 1978 regulations and grew out of meetings CEQ held in ten Federal regions to discuss implementation of the CEQ regulations with Federal, state, and local government officials, which identified common questions. The Forty Questions guidance is the most comprehensive guidance CEQ has issued on the 1978 regulations, addressing a broad set of topics from alternatives to tiering. Since its issuance, CEQ has routinely identified the Forty Questions guidance as an invaluable tool for Federal, state, Tribal, and local governments and officials, and members of the public, who have questions about NEPA implementation. Since 1981, CEQ has issued more than 30 additional guidance documents on a range of topics including efficient and coordinated environmental reviews, mitigation and monitoring, and effects analyses. 7

CEQ made technical amendments to the 1978 implementing regulations in 1979  8 and amended one provision in 1986 (referred to collectively as 1978 regulations). 9 Otherwise, the regulations were left unchanged for over 40 years. As a result, CEQ and Federal agencies developed extensive experience implementing the 1978 regulations, and a large body of agency practice and case law developed based on them.

On August 15, 2017, President Trump issued E.O. 13807, Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects, 10 directing, in part, CEQ to establish and lead an interagency working group to identify and propose changes to the NEPA regulations. 11 In response, CEQ issued an advanced notice of proposed rulemaking (ANPRM) on June 20, 2018, requesting comment on potential revisions to “update and clarify” the CEQ regulations and including a list of questions on specific aspects of the regulations. 12 CEQ received approximately 12,500 comments. 13

On January 10, 2020, CEQ published a notice of proposed rulemaking (NPRM) proposing broad revisions to the 1978 NEPA regulations. 14 A wide range of stakeholders submitted more than 1.1 million comments on the proposed rule, 15 including state and local governments, Tribes, environmental advocacy organizations, professional and industry associations, other advocacy or non-profit organizations, businesses, and private citizens. Many commenters provided detailed feedback on the legality, policy wisdom, and potential consequences of the proposed amendments. In keeping with the proposed rule, the final rule, promulgated on July 16, 2020 (“2020 regulations” or “2020 rule”), made wholesale revisions to the regulations; it took effect on September 14, 2020. 16

In the months that followed the issuance of the 2020 regulations, five lawsuits were filed challenging the 2020 rule. 17 These cases challenge the 2020 rule on a variety of grounds, including under the Administrative Procedure Act (APA), NEPA, and the Endangered Species Act, contending that the rule exceeded CEQ's authority and that the related rulemaking process was procedurally and substantively defective. In response to CEQ and joint motions, the district courts have issued temporary stays in each of these cases, except for Wild Virginia v. Council on Environmental Quality, which the district court dismissed without prejudice on June 21, 2021, 18 and is currently on appeal to the U.S. Court of Appeals for the Fourth Circuit.

On January 20, 2021, President Biden issued E.O. 13990, Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, 19 to establish an Administration policy to listen to the science; improve public health and protect our environment; ensure access to clean air and water; limit exposure to dangerous chemicals and pesticides; hold polluters accountable, including those who disproportionately harm communities of color and low-income communities; reduce greenhouse gas emissions; bolster resilience to the impacts of climate change; restore and expand the Nation's treasures and monuments; and prioritize both environmental justice and the creation of well-paying union jobs necessary to achieve these goals. 20 The E.O. calls for Federal agencies to review existing regulations issued between January 20, 2017, and January 20, 2021, for consistency with the policy it articulates and to take appropriate action. The E.O. also revokes E.O. 13807 and directs agencies to promptly take steps to rescind any rules or regulations implementing it. An accompanying White House fact sheet, published on January 20, 2021, specifically directs CEQ to review the 2020 regulations for consistency with E.O. 13990's policy. 21

On January 27, 2021, the President signed E.O. 14008, Tackling the Climate Crisis at Home and Abroad, to establish a government-wide approach to the climate crisis by reducing greenhouse gas emissions and an Administration policy to increase climate resilience, transition to a clean-energy economy, address environmental justice and invest in disadvantaged communities, and spur well-paying union jobs and economic growth. 22 E.O. 14008 also requires the Chair of CEQ and the Director of the Office of Management and Budget (OMB) to ensure that Federal permitting decisions consider the effects of greenhouse gas emissions and climate change. 23

Consistent with E.O. 13990 and E.O. 14008, CEQ is engaged in a comprehensive review of the 2020 regulations to ensure that they provide for sound and efficient environmental review of Federal actions, including those actions integral to tackling the climate crisis, in a manner that enables meaningful public participation, advances environmental justice, respects Tribal sovereignty, protects our Nation's resources, and promotes better environmental and community outcomes. CEQ is taking a phased approach to its comprehensive review, which includes this Phase 1 rulemaking and a planned, more comprehensive Phase 2 rulemaking. Additionally, as a preliminary matter, CEQ issued an interim final rule on June 29, 2021, amending the requirement in 40 CFR 1507.3(b) for agencies to propose changes to existing agency-specific NEPA procedures by September 14, 2021, to make those procedures consistent with the 2020 regulations. 24 CEQ extended the date by 2 years to avoid agencies proposing changes to agency-specific implementing procedures on a tight deadline to conform to regulations that are undergoing extensive review and will likely change in the near future. CEQ requested comments on the interim final rule and received approximately 20 written submissions; summaries and responses to those comments are included in the response to comments document posted to the docket for this rulemaking.

As a next step in the phased approach, CEQ published a proposed rule  25 for the Phase 1 rulemaking on October 7, 2021. In the Phase 1 proposed rule, CEQ identified a discrete set of provisions that pose significant near-term interpretation or implementation challenges for Federal agencies; would have the most impact to agencies' NEPA processes during the interim period before a “Phase 2” rulemaking is complete and make sense to revert to the 1978 regulatory approach. In proposing to revert to language conforming to the approach in the 1978 regulations, the proposed rule addressed issues similar or identical to those the public and Federal agencies recently had the opportunity to consider and comment on during the rulemaking for the 2020 rule.

Publication of the proposed rule initiated a 45-day public comment period that concluded on November 22, 2021. CEQ received approximately 94,458 written comments in response to the proposed rule. Seventy-six comments were shared with CEQ during two virtual public meetings CEQ hosted on the proposed rule on October 19, 2021, and October 21, 2021. In total, CEQ received 94,534 comments on the proposed rule, which CEQ considered in the development of this final rule. A majority of the comments (approximately 93,893) were campaign form letters sent in response to an organized initiative and identical or very similar in form and content. CEQ received approximately 573 unique public comments, of which 362 were substantive comments raising a variety of issues related to the rulemaking approach and contents of the proposed rule. The vast majority of the unique comments expressed some level of support for the proposed rule. Many supportive comments included suggestions for Phase 2 or expressed general support for Phase 1 while also indicating that the commenters would have preferred for CEQ to have proposed more comprehensive changes in Phase 1. CEQ provides a summary of the comments received on the proposed rule and responses to those comment summaries in the document, “National Environmental Policy Act Implementing Regulations Revision Phase 1 Response to Comments” (Phase 1 Response to Comments) and provides below brief summaries of comments and responses related to the provisions in the final rule.

Separately, CEQ is developing a Phase 2 rulemaking to propose comprehensive revisions to the 2020 regulations and intends to issue a second proposed rule for notice and public comment. Both the Phase 1 and Phase 2 rulemakings are intended to ensure that the NEPA process provides for efficient and effective environmental reviews that are guided by science and are consistent with the statute's text and purpose; enhance clarity and certainty for Federal agencies, project proponents, and the public; inform the public about the potential environmental effects of Federal Government actions and enable full and fair public participation; and ultimately promote better informed Federal decisions that protect and enhance the quality of the human environment and advance environmental, climate change mitigation and resilience, and environmental justice objectives.

CEQ received multiple comments related to the phased approach that it has selected to organize its review of the 2020 regulations. Numerous commenters suggested that CEQ set aside the 2020 regulations entirely and reissue the 1978 regulations to serve as a baseline for consideration of further regulatory reforms. These commenters expressed overall support for the content of the Phase 1 proposed rule, but contended that other provisions in the 2020 regulations also pose near-term challenges and also should be revised to revert to the 1978 text. Some of these commenters expressed the view that a full repeal of the 2020 regulations is needed to prevent conflicts between existing agency NEPA procedures and the CEQ regulations. Some commenters also requested that CEQ reissue the 1978 regulations and not pursue additional revisions. CEQ also received many comments expressing support for the Phase 1 rulemaking and encouraging CEQ to quickly initiate and complete a Phase 2 rulemaking. Some of these commenters also identified additional provisions that the commenters contended Phase 1 should address or provided recommendations for consideration in Phase 2.

Other commenters requested that CEQ pursue one overall rulemaking, rather than a phased approach. These commenters expressed views that one rulemaking has advantages, including enabling stakeholders and the public to understand and comment on the full scope of changes at one time, rather than in two phases. Some of these commenters also expressed concern that the phased approach could result in confusion and inefficiency.

CEQ appreciates the views expressed by commenters on the phased approach and acknowledges that a single rulemaking process would have entailed different tradeoffs and conferred different benefits. However, CEQ considers the phased approach for its review of the 2020 regulations to strike the appropriate balance between the need to act quickly to address critical issues and the need to conduct a thorough review of the 2020 regulations. As explained above, CEQ determined that the phased approach will address important near-term implementation challenges while allowing sufficient time to conduct a thorough review of the 2020 regulations to determine what other changes, including additional reversions to the 1978 regulations and new revisions, may be necessary or appropriate. CEQ decided against proposing a full reversion to the 1978 regulations in Phase 1 to focus time and resources on the most pressing issues and avoid the administrative burdens associated with analyzing each provision in the 2020 regulations, considering whether to revert each provision to the 1978 language and the reasoning for doing so, and responding to comments on the large number of regulatory provisions that would be affected. CEQ is a small agency with limited resources and had concerns about undertaking two large rulemakings—one to revert to the 1978 regulations and a second to propose new updates.

With this final rule, CEQ is concluding Phase 1 and will continue its work on Phase 2. In Phase 2, CEQ will consider the NEPA regulations comprehensively and assess whether to revise additional provisions to revert to the language of the 1978 regulations or to propose other revisions based on its expertise, NEPA's policies and requirements, relevant case law, and feedback from Federal agencies and the public. Further information on the phased approach can be found in the Phase 1 Response to Comments.

This section summarizes and identifies CEQ's rationale for the regulatory changes included in the final rule. This section also briefly summarizes and responds to the comments CEQ received in response to the NPRM. CEQ has provided more detailed summaries and responses in the Phase 1 Response to Comments document, 26 which CEQ incorporates by reference and has made available in the docket for this rulemaking.

Many commenters expressed general support for CEQ's proposal and the general return to the language from the 1978 regulations for the provisions on purpose and need; agency NEPA procedures; and the definition of effects. These commenters stated that the 2020 rule weakened NEPA and that parts of the 2020 regulations were misguided and reflected a bias in favor of project proponents to the possible detriment of environmental values or the public interest. Several of these commenters indicated that the proposed revisions are important for providing clarity, certainty, and consistency.

Commenters who expressed general opposition to the proposed rule were generally supportive of the 2020 regulations. These commenters expressed disappointment about CEQ rescinding portions of the 2020 rule and expressed concerns that the proposed rule would slow down efforts to improve the nation's infrastructure or harm certain economic sectors. Some of these commenters agreed with the goals that CEQ identified as guiding this rulemaking, but stated that the 2020 rule advanced those goals.

CEQ acknowledges that there is both support for and opposition to the changes outlined in the NPRM, and that there are many additional provisions that commenters suggested CEQ should change in either the Phase 1 rulemaking or in future rulemakings. CEQ is considering these comments as it develops its proposed Phase 2 rule.

This Phase 1 final rule is guided by the extensive experience of CEQ and Federal agencies implementing NEPA for the last 50 years. CEQ is charged with overseeing NEPA implementation across the Federal Government and reviews every agency's proposed new or updated NEPA implementing procedures. Through this iterative process, CEQ engages with agencies to understand their specific authorities and programs to ensure they integrate consideration of environmental impacts into their decision-making processes. Additionally, CEQ frequently consults with agencies on the efficacy and effectiveness of NEPA implementation. Where necessary or appropriate, CEQ engages with agencies on NEPA reviews for specific projects or project types to provide advice and identify any emerging or cross-cutting issues that would benefit from CEQ issuing formal guidance or assisting with coordination. For example, CEQ has convened interagency working groups to promote efficient and effective environmental reviews for transportation and broadband projects. CEQ also has extensive experience providing written guidance to Federal agencies on a wide range of NEPA-related issues, including environmental justice, emergency actions, climate change, and more. 27 In addition, CEQ meets regularly with external stakeholders to understand their perspectives on the NEPA process. Finally, CEQ coordinates with other Federal agencies and components of the White House on a wide array of environmental issues, such as endangered species consultation or impacts to Federal lands and waters from federally authorized activities.

CEQ relied on this body of experience and expertise in developing this final rule. As discussed in detail in the following sections, CEQ is generally reverting to the approach in the 1978 regulations for these three provisions with non-substantive changes to the 1978 regulatory text to accommodate the current structure of the CEQ regulations. In doing so, CEQ intends for the Phase 1 final rule provisions to have the same meaning as the corresponding provisions in the regulations in effect from 1978 to September 2020.

The purpose and need section of an EIS identifies the agency's purpose for the proposed action and the need it serves. Developing a statement of the purpose and need is a vital early step in the NEPA process that is foundational to other elements of an EIS. For example, the purpose and need statement informs the range of reasonable alternatives that the agency analyzes and considers.

The 1978 regulations required that each EIS briefly state the underlying purpose and need to which the agency is responding in proposing the alternatives, including the proposed action. 40 CFR 1502.13 (2019). The 2020 regulations modified this requirement by adding specific language to address circumstances in which an agency's “statutory duty” is to consider an application for authorization, such as applications for permits or licenses. In those circumstances, the 2020 regulations require agencies to base the purpose and need on the goals of an applicant and the agency's authority. The 2020 rule added conforming language to a new definition of “reasonable alternatives” in § 1508.1(z). Specifically, the 2020 regulations define “reasonable alternatives” to mean “a reasonable range of alternatives that are technically and economically feasible, meet the purpose and need for the proposed action, and, where applicable, meet the goals of the applicant.”  28 In the NPRM for this rulemaking, CEQ proposed to revert to the language of the 1978 regulations in § 1502.13 and make a conforming edit to the definition of “reasonable alternatives” in § 1508.1(z) by deleting the reference to the goals of the applicant from the definition.

CEQ received comments that both supported and opposed the proposed changes in the NPRM to §§ 1502.13 and 1508.1(z). Some commenters supported the changes in the proposed rule, expressing the view that the changes would result in better decisions because agencies would consider a full range of alternatives and their effects without any arbitrary limitations tied to a project applicant or specific agency authorities. Commenters also expressed the view that the 2020 rule could be interpreted to allow or encourage agencies to prioritize an applicant's goals over the needs and goals of the public or the agency's own goals, and that the proposed rule would remedy these problems. Some commenters also specifically supported the retention of “technically and economically feasible” in the definition of “reasonable alternatives,” stating this is in alignment with previous CEQ guidance on the 1978 regulations. Many commenters agreed with CEQ's statements in the NPRM that the purpose and need statement should reflect understanding of an agency's statutory authority, the public interest, and an applicant's goals but that these should be framed in the context of the general goal of an action and not through an evaluation of whether an applicant can reach its specific goals. Some comments also indicated that the reference to agency authority is redundant and supported the proposed removal of this reference to avoid unnecessary confusion.

Other commenters opposed the proposed changes to §§ 1502.13 and 1508.1(z), contending that the language adopted in the 2020 rule provides clarity that agencies must base the purpose and need on the applicant's goals and agency's statutory authority. Commenters also expressed the view that the 1978 regulation resulted in some Federal agencies prioritizing agency goals over the goals of the applicant, and therefore, that the proposed rule would have the same effect. They further argued that analyses considering alternatives that do not meet an applicant's goals or that cannot be implemented by the applicant or agency are wasteful of both the applicant's and the agency's resources. Commenters also expressed the view that the proposed changes to purpose and need are not required by NEPA. For example, some commenters stated that there is no requirement to consider the public interest when developing a purpose and need statement for a non-Federal project. These commenters also objected to CEQ's statements in the NPRM that the 2020 regulations could be interpreted to require that an applicant's goals be the sole or primary factor for articulating purpose and need. These commenters contended that the 2020 rule's requirement that agencies consider alternatives that the applicant is capable of implementing does not foreclose consideration of potential environmental impacts or public interests. Further, these commenters stated that basing alternatives on the needs of an applicant does not unreasonably narrow the range of alternatives that an agency must consider because agencies still must consider the “no action alternative” and other reasonable alternatives that align with the goals of the applicant. Some commenters who supported retaining the reference to agency statutory authority agreed with CEQ that the language is confusing, but contended that CEQ should clarify it and that deleting the reference also will create confusion.

The inconsistent interpretations of the language in 40 CFR 1502.13 (2020) expressed by commenters to the NPRM, as well as commenters on the 2020 rule, demonstrate the ambiguity of the language and underscore the need for clarification. Some commenters read the language in the 2020 rule to make the applicant's goals and the agency's statutory authority the sole factors an agency can consider in formulating a purpose and need statement when considering an application for authorization. Other commenters read the language as allowing agencies to consider other, unenumerated factors. These comments demonstrate the ambiguity of the 2020 text, which CEQ is clarifying in this final rule.

CEQ specifically requested comment on the potential effects of the proposed changes to §§ 1502.13 and 1501.8(z) to the environmental review process, including timeframes for environmental review. In response, some commenters indicated they do not believe the proposed changes will affect the average timeline for the environmental review process. Other commenters stated that CEQ's proposed revisions to purpose and need will lead to unnecessarily time-consuming and costly expansions of the consideration of alternatives by agencies with little focus on the project's stated purpose. Some commenters expressed concern that the change to purpose and need would result in additional EISs as opposed to more efficient environmental assessments. CEQ did not receive any specific data or evidence from commenters that would address whether or not the proposed change would have an effect on the environmental review process, including timelines.

In the final rule, CEQ makes the changes as proposed. Specifically, the final rule amends the first sentence in § 1502.13 to require an EIS to state the purpose and need to which the agency is responding in proposing alternatives, including the proposed action. The rule removes the second sentence requiring agencies base the purpose and need on the goals of the applicant and the agency's authority when the agency is reviewing an application for authorization. Finally, the final rule removes the reference to the goals of the applicant from the definition of “reasonable alternatives” in § 1508.1(z).

CEQ makes these changes to address the ambiguity created by the 2020 rule language and ensure agencies have the flexibility to consider a variety of factors in developing the purpose and need statement and are not unnecessarily restricted by misconstruing this language to require agencies to prioritize an applicant's goals over other potentially relevant factors, including effectively carrying out the agency's policies and programs or the public interest. While CEQ does not interpret the 2020 rule language to require agencies to prioritize an applicant's goals above or to the exclusion of other relevant factors, CEQ finds that removing the language on applications for authorization and restoring the 1978 regulatory text is appropriate. The language of the 2020 rule could be misconstrued to inappropriately constrain the discretion of agencies in formulating a purpose and need statement, which would be inconsistent with fully informed decision making and sound environmental analysis. And even if interpreted to merely direct agencies to consider the applicant's goals and the agency's statutory authority alongside other relevant factors, CEQ deems it appropriate to strike the text because it is unnecessary and confusing.

Consistent with longstanding practice and to ensure informed decision making, agencies should have discretion to base the purpose and need for their actions on a variety of factors, which include the goals of the applicant, but not to the exclusion of other factors. Agencies have long considered myriad factors in developing a purpose and need statement. These include the agency's mission and the specifics of the agency decision, including statutory and regulatory requirements. Factors also may include national, agency, or other policy objectives applicable to a proposed action, such as a discretionary grant program targeted to achieve certain policy goals; desired conditions on the landscape or other environmental outcomes; local needs; and an applicant's goals. Additionally, when considering a project sponsored by an outside party, there may be actions by multiple Federal agencies for which the lead agency, in consultation with cooperating agencies, will need to craft the purpose and need statement in a manner to address all of the Federal agency actions ( e.g., funding and permits) covered by the NEPA document.

Finally, the goals of the applicant are an important, but not determinative, factor in developing a purpose and need statement for a variety of reasons, including helping to identify reasonable alternatives that are technically and economically feasible. Both the development of purpose and need statements and the identification of alternatives are governed by a rule of reason; the range of alternatives should be reasonable, practical, and not boundless. This approach is consistent with CEQ's longstanding position as set forth in the Forty Questions issued shortly after the promulgation of the 1978 regulations, where CEQ acknowledged that agencies must consider practicality and feasibility, without relying solely on the applicant's preference for identifying what alternatives are reasonable. 29 Additionally, removing this language does not foreclose an agency from considering the goals of the applicant.

The final rule also removes the reference to the agency's statutory authority from § 1502.13 because it is confusing and unnecessary. Federal agency discussions with CEQ and public comments, as reflected in both the 2020 Rule Response to Comments and the Phase 1 Response to Comments, demonstrate that some interpret this language to limit agencies' discretion in developing the purpose and need statement. The implication that an agency's authority is only relevant when the proposed action is for an authorization, such as a permit or license, is incorrect because an agency's statutory authority for its action is always a relevant consideration for developing a purpose and need statement irrespective of whether the proposed action is an authorization. The 2020 rule's addition of the text also is confusing because it suggested that a change in practice was intended. In fact, agencies have always considered their statutory authority and the scope of the agency decision when developing purpose and need statements. In CEQ's experience implementing the 1978 regulations, there has been little or no confusion among the agencies regarding these issues; therefore, the additional language is unnecessary. Furthermore, for projects involving multiple agency actions under different statutory authorities, the lead agency should have flexibility in crafting a purpose and need statement to address multiple agency decisions both for efficiency and effective decision making.

CEQ also makes these changes in the final rule because the language added by the 2020 rule may be interpreted in a manner that does not lay the appropriate groundwork for environmentally sound decision making when an agency considers a request for an authorization or reflect the best reading of the NEPA statute or case law. A properly drafted purpose and need statement should lead to consideration of the reasonable alternatives to the proposed action, consistent with NEPA's requirements. See 42 U.S.C. 4332(2)(C), 4332(2)(E). CEQ disagrees with commenters assertions that consideration of alternatives that do not meet an applicant's goals or cannot be implemented by the applicant will always waste applicant or agency resources or result in delays. There may be times when an agency identifies a reasonable range of alternatives that includes alternatives—other than the no action alternative—that are beyond the goals of the applicant or outside the agency's jurisdiction because the agency concludes that they are useful for the agency decision maker and the public to make an informed decision. Always tailoring the purpose and need to an applicant's goals when considering a request for an authorization could prevent an agency from considering alternatives that do not meet an applicant's stated goals, but better meet the policies and requirements set forth in NEPA and the agency's statutory authority and goals. The rule of reason continues to guide decision making in such contexts.

CEQ's concern that the 2020 regulation's change to § 1502.13 may be interpreted to unduly constrain the discretion of agencies leading to the development of unreasonably narrow purpose and need statements is consistent with a similar concern raised by the courts in reviewing agencies' purpose and need statements under the 1978 regulations. It is contrary to NEPA for agencies to “contrive a purpose so slender as to define competing `reasonable alternatives' out of consideration (and even out of existence).” Simmons v. U.S. Army Corps of Engineers, 120 F.3d 664, 666 (7th Cir. 1997) (citing 42 U.S.C. 4332(2)(E)). Constricting the definition of the project's purpose could exclude “truly” reasonable alternatives, making an EIS incompatible with NEPA's requirements. Id. See also, e.g., Nat'l Parks & Conservation Ass'n v. Bureau of Land Mgmt., 606 F.3d 1058, 1070 (9th Cir. 2010) (“Agencies enjoy `considerable discretion' to define the purpose and need of a project. However, `an agency cannot define its objectives in unreasonably narrow terms.'” (internal citations omitted)).

Other court decisions have deferred to agencies' purpose and need statements developed under the 1978 regulation that put weight on multiple factors rather than just an applicant's goals, recognizing those factors as appropriately within the scope of the agency's consideration. Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190 (D.C. Cir. 1991), which the 2020 final rule relied upon as the justification for language added to the purpose and need provision, is consistent with the language in the 1978 regulations that CEQ is restoring, and, in fact, interpreted and applied that language. In that case, in applying the traditional “rule of reason,” the court held that the agency's consideration of the applicant's goals to develop the purpose and need of the action was reasonable. Id. at 196-99. However, the court did not require all agencies to make the applicant's goals the sole (or even primary) factor in the formulation of the purpose and need in all factual and legal contexts. See id. Returning to the 1978 framework is consistent with case law affirming agency discretion to formulate purpose and need statements based on a variety of relevant factors.

Removing the language regarding an applicant's goals from § 1502.13 does not mean that an agency should consider a boundless set of alternatives. This final rule does not amend language in 40 CFR 1502.14 directing agencies to “[e]valuate reasonable alternatives to the proposed action,” and § 1508.1(z), as amended in this final rule, continues to define “reasonable alternatives” as “a reasonable range of alternatives that are technically and economically feasible and meet the purpose and need for the proposed action.” The principle that the range of alternatives should be reasonably related to the purpose and need is well-settled. See Westlands Water Dist. v. U.S. Dep't of the Interior, 376 F.3d 853, 868 (9th Cir. 2004); Process Gas Consumers Grp. v. U.S. Dep't of Agric., 694 F.2d 728, 769 (D.C. Circ. 1981).

The final rule will reduce confusing and unnecessary text and align the regulations more closely to the purposes underlying NEPA. These changes reaffirm agency discretion to identify and consider the factors relevant to formulating statements of purpose and need in view of the specific circumstances before the agency and the agency's responsibilities, including effectively carrying out agency policies and programs and considering the public interest and the goals of an applicant. CEQ disagrees with the assertions that returning or reaffirming agency discretion to consider multiple factors even where a private applicant is involved will result in significant additional burdens or negatively affect timelines. Agencies have significant experience under the 1978 regulations in considering a variety of factors when crafting purpose and need statements, including an applicant's goals. Furthermore, CEQ did not receive any data, but only general and speculative statements, in response to its specific request for comment on potential effects of the proposed changes to §§ 1502.13 and 1501.8(z) on the environmental review process, including timeframes for environmental review. CEQ notes that it is ultimately for the agency to determine what alternatives are needed to inform its decision making. Exploring and evaluating reasonable alternatives helps decision makers and the public examine other ways to meet the purpose and need of an action, including options with different environmental consequences or mitigation measures, and demonstrate to the public that the agency made an informed decision because it has explored such tradeoffs. CEQ also disagrees with the assertion that the changes to purpose and need in the final rule will directly result in an increase in the number of certain types of environmental review documents like EISs. Development of a purpose and need statement is separate from the assessment of whether a potential effect is significant, and therefore, whether an EIS is required. The changes made in the final rule will ensure agencies can make these determinations based on all relevant factors.

The 1978 regulations required Federal agencies to develop NEPA procedures through a notice and comment process to integrate NEPA reviews into their decision-making processes. Over the 40-year period that the 1978 regulations were in place, approximately 85 agencies issued procedures to facilitate agency compliance with NEPA. 30 Agencies have taken a wide range of approaches to their agency-specific NEPA procedures. Some have essentially incorporated the CEQ regulations by reference without much additional detail; others have issued procedures that tailor the NEPA process to the contexts in which they operate and integrate NEPA compliance with the agency's other statutory responsibilities or environmental requirements. 31 Consistent with 42 U.S.C. 4332(2)(B) and 40 CFR 1507.3 (2019), agencies consulted with CEQ in developing agency-specific procedures and CEQ determined that the procedures conformed with NEPA and the CEQ regulations before the agencies issued final procedures.

The 2020 rule amended 40 CFR 1507.3 to include “ceiling provisions” that made the CEQ regulations the maximum requirements agencies could include in their agency NEPA procedures. In adopting the ceiling provisions, the 2020 rule asserted that the ceiling provisions were intended to eliminate inconsistencies among agency-specific procedures and between agency procedures and the CEQ regulations by requiring that the 2020 regulations apply where existing agency NEPA procedures are inconsistent with the CEQ regulations absent a clear and fundamental conflict with another statutory requirement. The 2020 rule also required agencies to propose new or revised procedures within 12 months to eliminate any inconsistencies and prohibited agencies from imposing procedures or requirements additional to the CEQ regulations unless those additional procedures promote agency efficiency or are required by law.

In the Phase 1 NPRM, CEQ proposed to revise § 1507.3(a) and (b) to delete the ceiling provisions to provide that while agency NEPA procedures need to be consistent with the CEQ regulations, agencies have discretion and flexibility to develop procedures beyond the CEQ regulatory requirements, enabling agencies to address their specific programs, statutory mandates, and the contexts in which they operate. Specifically, the NPRM proposed to remove language from § 1507.3(a) stating that where existing agency NEPA procedures are “inconsistent” with the CEQ regulations, the CEQ regulations apply “unless there is a clear and fundamental conflict with the requirements of another statute.” The NPRM did not propose to amend the determination made in the 2020 rule in § 1507.3(a) that categorical exclusions established in agency NEPA procedures as of September 14, 2020, are consistent with the CEQ regulations. The NPRM also proposed to remove from § 1507.3(b) the language requiring agencies “to eliminate any inconsistencies” with the CEQ regulations and the prohibition on agencies imposing additional procedures or requirements beyond the CEQ regulations unless those additional procedures promoted agency efficiency or were required by law. The NPRM did not propose to further amend the requirement for agencies to propose new or revised NEPA procedures within 36 months, by September 14, 2023, as revised in the interim final rule, 32 as well as the encouragement for major subunits of departments to adopt their own procedures with the consent of the department.

Many commenters supported the proposed changes to § 1507.3, stating that the 2020 ceiling provisions were unnecessary and unhelpful because agencies should have flexibility to add additional requirements or detail to their NEPA procedures tailored to their unique needs and missions. Commenters also noted that the proposed change would assist agencies during the transition period before the completion of a Phase 2 rulemaking because it clarifies that agencies can and should continue to apply their existing NEPA procedures while CEQ finishes its review of the 2020 rule. They noted that without this change, agencies might be in the position of developing agency procedures that either conflict with NEPA or the 2020 regulations. Many commenters stated that the proposal would restore the ability of Federal agencies to develop agency-specific NEPA procedures to implement NEPA to the “fullest extent possible” consistent with 42 U.S.C. 4332. Some commenters who supported removing the ceiling provision noted that removing the provision may reduce, but will not eliminate, all of the harms of the 2020 rule because the 2020 rule is not being repealed.

Other commenters opposed the proposed changes to § 1507.3 as unnecessary because the 2020 regulations contain language allowing flexibility for agencies to tailor their NEPA procedures to improve efficiency. Some commenters also suggested that CEQ's proposed changes invite agencies to disregard the 2020 rule. Commenters indicated that the NPRM's proposed changes would result in inconsistencies and conflicts among agencies' NEPA procedures, increased litigation, costs, delays, and paperwork, and impede the Administration's goals. Commenters also requested that CEQ provide additional rationale and examples of agency confusion about the 2020 regulations.

Some commenters suggested additional changes CEQ should consider to § 1507.3, including to develop a framework for CEQ review of agency NEPA procedures to ensure agency discretion is not boundless; require agencies to affirm their procedures were reviewed for consistency by CEQ; and require that Federal agencies make revisions to their procedures only with public notice and comment. While such changes are beyond the scope of this rulemaking, CEQ notes that agencies cannot make changes to their NEPA procedures without consulting with CEQ, providing notice and comment, and receiving a determination from CEQ that the proposed changes are consistent with NEPA and the CEQ regulations. See 40 CFR 1507.3(b)(1)-(2). CEQ will consider the ideas included in these comments in the development of its Phase 2 rulemaking.

The 2020 final rule did not include a detailed rationale for adoption of the “ceiling” provisions, although the 2020 proposed rule stated that they were intended to “prevent agencies from designing additional procedures that will result in increased costs or delays.” (85 FR 1693). The 2020 Final Rule Response to Comments document also stated that “it is important that agencies do not revise their procedures in a way that will impede integration” with other environmental review requirements or “otherwise result in heightened costs or delays.”  33 CEQ also asserted in the 2020 Final Rule Response to Comments that it had the authority to place limits on agency procedures pursuant to 42 U.S.C. 4344(3) and E.O. 11991. 34

CEQ has reexamined the rationales provided for the 2020 rule and the comments received on the Phase 1 NPRM and determined that finalizing the changes as proposed in the Phase 1 NPRM is appropriate. Doing so clarifies that agencies can and should continue to apply their existing NEPA procedures, consistent with the CEQ regulations in effect, while CEQ completes its review of and revisions to the 2020 regulations in its Phase 2 rulemaking. The final rule makes clear that agencies have this discretion by removing the ceiling provisions. The removal of the ceiling provisions allows agencies to exercise their discretion to develop and implement procedures beyond the CEQ regulatory requirements; however, agency procedures cannot conflict with current CEQ regulations. More generally and as discussed further below, these changes to § 1507.3 will promote better decisions, improve environmental and community outcomes, and spur innovation that advances NEPA's goals by giving agencies the flexibility to follow their existing procedures or develop new or revised NEPA procedures that best meet the agencies' statutory missions and enable integration of environmental considerations in their decision making in a flexible manner. Giving agencies the flexibility to innovate should increase the likelihood that agencies identify process improvements and efficiencies that benefit Federal agencies as well as project sponsors and other stakeholders, including the public. CEQ disagrees with the 2020 rule's assertions and some NPRM commenters' contentions that this change will result in increased costs and delays due to conflicts among agency NEPA procedures or between agency NEPA procedures and the CEQ regulations. A primary purpose of the longstanding process by which CEQ engages with agencies in the development of their NEPA procedures is to identify and resolve potential conflicts and ensure that agency-specific procedures conform with the CEQ regulations. Furthermore, the public has an opportunity to provide public comments on proposed agency NEPA procedures before they are finalized. These processes facilitate identification of potential conflicts, costs, or delays and give agencies opportunities to balance various policy and process considerations before establishing or changing their procedures.

The final rule's changes to § 1507.3 also will better achieve NEPA's objectives and statutory requirements. First, while CEQ is responsible for interpreting and overseeing NEPA implementation, all agencies are charged with administering the statute's requirements. See 42 U.S.C. 4332. NEPA expressly instructs agencies to develop methods and procedures in consultation with CEQ to ensure consideration of “environmental amenities and values” in decision making. See 42 U.S.C. 4332(2)(B). NEPA and the CEQ regulations, see 40 CFR 1507.3, call for agencies to take responsibility for their own procedures, even while consulting with CEQ. Agencies should be allowed to pursue the environmental aims of the statute, including by adopting and carrying out procedures that require additional or more specific environmental analysis than called for by the CEQ regulations. Furthermore, CEQ plays a critical role in reviewing and determining that an agency's NEPA procedures comply with NEPA and the CEQ regulations, which ensures that agency procedures integrate the NEPA process with agency decision making so that the public and decision makers are informed of the environmental consequences of agency decisions. See 40 CFR 1507.3(b), (e).

Second, removing these ceiling provisions improves alignment of the NEPA regulations with NEPA's statutory text, which directs agencies to pursue the statute's goals “to the fullest extent possible.” 42 U.S.C. 4332. The legislative history of NEPA indicates that the intent behind this statement was to ensure that all Federal agencies comply with NEPA as well as their statutory authorities and that “no agency shall utilize an excessively narrow construction of its existing statutory authorizations to avoid compliance.”  35  This final rule provides agencies the flexibility to comply with NEPA, including by allowing agencies to adopt agency-specific NEPA procedures that align with their unique missions, circumstances, and statutory mandates.

Agencies may more fully pursue NEPA's twin aims to consider environmental effects and inform the public by establishing procedures that provide for additional environmental review and public participation or evaluation of certain issues such as air and water quality impacts, environmental justice considerations, or habitat effects. See 42 U.S.C. 4332. Agency procedures could include more specific requirements for the development of environmental assessments to facilitate the decision-making process, such as requiring multiple alternatives or documentation of alternatives considered but dismissed. For example, the National Oceanic and Atmospheric Administration (NOAA), which, among other things, is responsible for the stewardship of the Nation's ocean resources and their habitat, might adopt agency-specific procedures on the analysis of impacts to species or habitats protected by the Endangered Species Act, the Marine Mammal Protection Act, or the Magnuson-Stevens Fishery Conservation and Management Act, as well as other vulnerable marine and coastal ecosystems. Removing the ceiling provision allows agencies to include such specificity, which can help lead to more effective reviews and provide efficiencies by fostering better integration of NEPA with other statutory requirements.

Third, upon further consideration, CEQ no longer agrees with the assertions in the 2020 Final Rule Response to Comments that setting the CEQ regulations as the ceiling puts agencies in the best position to reduce costs and delays in NEPA implementation, or that doing so will promote integration of NEPA and compliance with other environmental review requirements. The 2020 rule did not provide any support for the assertion that these changes would achieve those goals. It also did not explain why the process laid out in § 1507.3—requiring agencies to collaborate with CEQ on the development of their NEPA procedures, seek public comment on proposed procedures, and obtain CEQ conformity determinations—does not sufficiently advance the goal of ensuring an efficient and effective NEPA review. CEQ has reconsidered the ceiling provisions in light of this longstanding process, CEQ's experience implementing it, and the comments CEQ received on the proposed rule, and determined that the ceiling provisions create unnecessary rigidity in light of other mechanisms to promote consistency and coordination, and reduce costs and delays. CEQ also finds that the processes included in the 1978 regulations effectively promoted the integration of NEPA and other environmental reviews. See 40 CFR 1502.25 (2019). CEQ's review of agency procedures allows CEQ and the agency to discuss the rationale for any new or additional procedures or requirements proposed by agencies, and allows CEQ to promote consistency across the Federal Government, as appropriate, without limiting agencies' flexibility to do more than the CEQ regulations describe or otherwise inhibit innovation, including innovation and flexibilities that can improve agency efficiency.

As explained in section I.D, CEQ issued an interim final rule in June 2021 that extended by 2 years—to September 14, 2023—the deadline in 40 CFR 1507.3(b) for agencies to propose changes to their existing agency-specific NEPA procedures to make them consistent with the current CEQ regulations. The interim final rule explained that the extension would avoid agencies having to propose changes to their implementing procedures on a tight deadline to conform to regulations that are undergoing extensive review and will likely change in the near future.

The Administrative Procedure Act did not require CEQ to provide notice and an opportunity for public comment prior to extending the deadline. See, e.g., 86 FR 34156. Nevertheless, CEQ requested comments on the interim final rule and received approximately 20 written submissions. CEQ has provided summaries and responses to these comments in the response to comments document posted to the docket for this rulemaking. For the reasons set forth in the interim final rule and the response to comment document, and having now considered public comments, CEQ is finalizing in this rule the deadline extension originally made effective in the interim final rule.

NEPA requires Federal agencies to examine the environmental effects of their proposed actions and alternatives and any adverse environmental effects that cannot be avoided if the proposed action is implemented. 42 U.S.C. 4332(2)(C). The 1978 regulations defined “effects” to include “direct effects” and “indirect effects” and separately defined “cumulative impact.” See 40 CFR 1508.7, 1508.8 (2019). Section 1508.8(a) of the 1978 regulations defined “direct effects” as effects “caused by the action and occur at the same time and place.” Section 1508.8(b) of the 1978 regulations defined “indirect effects” as effects “caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable.” Section 1508.8 of the 1978 regulations also provided examples of indirect effects and effects generally, and noted that the terms “effects” and “impacts” as used in the regulations were synonymous. The 1978 regulations defined “cumulative impact” as “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.” Id. § 1508.7. The definition also stated that cumulative impacts “can result from individually minor but collectively significant actions taking place over a period of time.” Id.

The 2020 rule made several major changes to these definitions. The 2020 rule provided a single definition for “effects” or “impacts,” deleting the subcategorization of “direct” and “indirect” effects and the definition of “cumulative impacts.” The definition includes introductory text followed by three paragraphs designated (g)(1) through (3). The first clause of the introductory text provides that “[ e ] ffects or impacts means changes to the human environment from the proposed action or alternatives that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives.” The second clause provides that the definition of “effects” or “impacts” includes “those effects that occur at the same time and place as the proposed action or alternatives and may include effects that are later in time or farther removed in distance from the proposed action or alternatives.” The phrase “those effects that occur at the same time and place as the proposed action or alternatives,” is drawn verbatim from the description of direct effects in the 1978 regulations' definition of effects. The clause “ may include effects that are later in time or farther removed in distance,” is a modified version of the language describing indirect effects in the 1978 regulations' definition of effects; the 2020 rule qualified this description by adding “may include.” 40 CFR 1508.1(g) (2020) (emphasis added).

Following the introductory text, paragraph (g)(1) includes language identifying examples of effects, which is modified from the last paragraph of the 1978 definition of “effects.” Paragraph (g)(2) includes new text providing that a “`but for' causal relationship is insufficient to make an agency responsible for a particular effect under NEPA” and that agencies generally should not consider effects “if they are remote in time, geographically remote, or the product of a lengthy causal chain.” This paragraph also explicitly excludes “effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action.” Paragraph (g)(3) requires an agency's analysis of effects to be consistent with the definition of “effects” and explicitly repeals the definition of cumulative impact.

In the NPRM, CEQ proposed to revise the definition of “effects” or “impacts” in § 1508.1(g) to restore the substance of the definitions of “effects” and “cumulative impact” contained in the 1978 regulations. The NPRM also proposed to continue to provide one combined definition for the two terms, rather than reinstating separate definitions for “effects” and “cumulative impacts” as existed in the 1978 regulations, because separate definitions are unnecessary as reflected in the 1978 regulation's statement that the terms “impacts” and “effects” were synonymous.

The NPRM proposed the following specific amendments to § 1508.1(g). First the NPRM proposed to revise the introductory paragraph in § 1508.1(g) to define “effects” or “impacts” as “changes to the human environment from the proposed action or alternatives” that include “direct effects,” “indirect effects,” and “cumulative effects” as described in § 1508.1(g)(1) through (3), and remove the phrase “that are reasonably foreseeable and have a reasonably close causal relationship.”

Second, the NPRM proposed to revise each of the paragraphs (g)(1) through (3) and add a fourth paragraph (g)(4). Proposed paragraphs (g)(1) through (3) describe “direct effects,” “indirect effects,” and “cumulative effects,” and proposed paragraph (g)(4) provides a list of examples of effects similar to paragraph (g)(1) of the 2020 regulation. The NPRM proposed to move text included in the introductory paragraph of the 2020 regulations, but which originated in the 1978 regulations, into the relevant paragraphs. Specifically, the phrase “effects that occur at the same time and place” would be moved to the description of direct effects in paragraph (g)(1), and the phrase “effects that are later in time or farther removed in distance” would be moved to the description of indirect effects in paragraph (g)(2). The definition of cumulative effects in paragraph (g)(3) is made up of the language defining “cumulative impact” in the 1978 regulations with non-substantive edits for consistency with the current regulations. Paragraph (g)(4) includes proposed amended text from paragraph (g)(1) of the 2020 regulation providing a list of examples of effects. In paragraph (g)(4), the NPRM proposed to restore the language of the 1978 regulations and delete minor and non-substantive modifications made in the 2020 rule. Following the proposed amendments, the text in paragraph (g)(4) would be identical to the final sentence of the effects definition in the 1978 regulation.

Third, the NPRM proposed to delete in its entirety the text included in paragraph (g)(2) of the 2020 regulations, which states that a “but for” causal relationship is insufficient to make an agency responsible for a particular effect under NEPA; generally excludes from the definition of “effects” those that are remote in time, geographically remote, or the product of a lengthy causal chain; and fully excludes effects that the agency has no ability to prevent due to its limited statutory authority or that would occur regardless of the proposed action.

Fourth, the NPRM proposed to delete in its entirety the text included in paragraph (g)(3) of the 2020 regulations, which requires agencies to analyze effects consistent with the definition of “effects” and explicitly repeals the definition of “cumulative impact” from the 1978 regulations.

Finally, CEQ notes that the NPRM did not propose to include in the definition of “effects” or “impacts” the statement in the 1978 regulations' definition of “effects” that “[e]ffects and impacts as used in these regulations are synonymous.” See 40 CFR 1508.8(b) (2019). Because the NPRM proposed to continue to provide a single definition for “effects” or “impacts,” including that statement would be unnecessary and redundant.

CEQ received numerous comments on the proposed changes to § 1508.1(g), both expressing support for and opposition to the proposed changes. Many commenters supported the proposed revisions and restoring the concepts of direct, indirect, and cumulative effects or impacts to the regulations. Commenters expressed support for the proposed changes for a variety of reasons, including because the proposed changes better reflect NEPA principles and case law; help ensure the proper scope of analysis that NEPA requires, including analysis of effects on climate change, communities with environmental justice concerns, and wildlife; and provide clarity and consistency for the environmental review process. Many of these commenters identified the changes to the definitions of effects and impacts as the most damaging changes put in place by the 2020 rule. Some commenters specifically pointed to the importance of considering indirect and cumulative effects for addressing environmental justice concerns and climate change in environmental reviews, consistent with E.O. 13990 and the Administration's priority to assess and mitigate climate pollution. Commenters also contended that central to an agency considering whether an action will cause or contribute to undue burdens to a community is a review of cumulative impacts resulting from past, present, and reasonably foreseeable future actions and effects in a project area, including the impacts of climate change. Other commenters raised concerns about the 2020 rule's removal of language on direct, indirect, and cumulative effects and impacts and emphasized the importance of considering these categories of effects on wildlife and other natural resources. Some commenters agreed with the NPRM that the proposed changes will provide clarity to agencies, practitioners, and the public by helping agencies and the public evaluate and understand the full scope of reasonably foreseeable effects in NEPA reviews.

CEQ also received multiple comments expressing overall opposition to the proposed changes. Some commenters raised concerns that restoring the approach to impacts and effects in the 1978 regulations would lead to wider and more complex analysis in the NEPA process, require evaluation of impacts that are outside the scope of the decision, and go beyond the intent of the statute. These commenters stated that the proposed changes to the definition of effects will not improve NEPA compliance or agency certainty. Some commenters expressed the view that the proposed changes will result in undue burden on agencies, increased costs and litigation, and lengthier review times. Some commenters indicated that if CEQ restores the definition of effects in the final rule then the definition should include sideboards or other bounding criteria to prevent misuse, unnecessary delays, and increased costs. These commenters contended that requiring agencies to expend time and resources on analyzing and disclosing speculative effects adds time and cost to the NEPA process without providing value to decision makers or the public. Some commenters expressed concern specifically about the proposed rule's potential to delay critical infrastructure projects.

As discussed further in section II.C.iii and in the Phase 1 Response to Comments, CEQ has considered the comments in support of and opposed to the changes to the definition of “effects” in the proposed rule. With respect to the potential impacts to NEPA review timelines, CEQ is not aware of—and commenters did not provide—data supporting the claim that evaluation of direct, indirect, and cumulative effects necessarily leads to longer timelines, especially given the long history of agency and practitioner experience with analyzing these categories of impacts and effects under the 1978 regulations, as well as modern techniques leveraging science and technology to make environmental reviews comprehensive yet efficient. 36 CEQ considers the importance of clear and robust analysis of effects to informed agency decision making to outweigh the speculative potential for shorter NEPA documents or timeframes.

Furthermore, the deletion of the definition of “cumulative impacts” in the 2020 rule did not absolve agencies from evaluating reasonably foreseeable cumulative effects, and therefore, it is unclear that the deletion would narrow the scope of effects analyzed by agencies. Numerous commenters on the NPRM noted that the 2020 rule's changes to the definition of “effects” created uncertainty and confusion in agencies implementing NEPA. CEQ expects that substantively restoring these definitions, which were in place and in use for decades, will better clarify the effects agencies need to consider in their NEPA analyses and could help avoid delays or deficiencies in NEPA reviews caused by agency uncertainty over the proper scope of effects analysis. Furthermore, conducting a robust consideration of all reasonably foreseeable effects of a proposed action is not a delay; rather, doing so constitutes sound decision making and fulfills NEPA's statutory mandate. See 42 U.S.C. 4332. Therefore, based on CEQ's experience and expertise, this final rule strikes the proper balance of promoting informed decision making and completing environmental reviews expeditiously.

CEQ also considered comments regarding the potential for increased litigation. Both commenters in favor of and opposed to the NPRM's proposal to restore language from the 1978 regulations on direct, indirect, and cumulative effects raised concerns over increased litigation. CEQ considers the effect of the proposed changes on litigation to be difficult to predict, and therefore not a useful factor in determining the approach for this final rule.

Some commenters stated that Federal agencies have a statutory obligation to assess all of the relevant environmental effects of their proposed actions and argue that restoring the 1978 definition of “effects” would align the regulations with longstanding agency practice and judicial precedent. Commenters expressed the view that NEPA's plain language requires Federal agencies to address impacts to future as well as present generations, that this statutory mandate cannot be met without analyzing cumulative and indirect effects, and that courts have consistently affirmed this legal obligation. Other commenters stated that the changes to the definition of effects and impacts made by the 2020 rule are at odds with the statute's plain language, clear congressional intent, and decades of legal precedent and have created confusion and uncertainty.

Other commenters objected to the proposed rule contending that because NEPA does not include the terms “direct,” “indirect,” or “cumulative” effects, including those terms in the regulations is contrary to the plain language of the statute. Commenters also contended that the 2020 rule's elimination of those terms and replacement with a simplified definition of “effects” focused on reasonable foreseeability is in better alignment with NEPA's statutory language, the goals of the statute, and case law.

The restoration of direct, indirect, and cumulative effects as part of the definition of “effects” better reflects NEPA's statutory purpose, policy, and intent and is more consistent with the case law interpreting NEPA's requirements. NEPA sets forth a policy to encourage productive and enjoyable harmony between humans and their environment; to promote efforts that will prevent or eliminate damage to the environment and biosphere, and stimulate the health and welfare of people; and to enrich the understanding of the ecological systems and natural resources important to the Nation. 42 U.S.C. 4321. Accordingly, the U.S. Supreme Court has stated that NEPA promotes a “sweeping commitment to `prevent or eliminate damage to the environment and biosphere' by focusing Government and public attention on the environmental effects of proposed agency action.” Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371 (1989) (citing 42 U.S.C. 4321). The Court explained that NEPA requires agencies to take a “hard look” at the environmental effects of their planned actions, including indirect effects relevant to the dam project at issue in the case, such as potential changes in downstream water temperature that could reduce species survival. Id. at 374, 385.

Similarly, courts have long applied the concept of cumulative impacts or effects as identified in the 1978 regulations to NEPA analysis. See, e.g., NRDC v. Hodel, 865 F.2d 288, 297-98 (D.C. Cir. 1988) (stating, “NEPA, as interpreted by the courts, and CEQ regulations both require agencies to consider the cumulative impacts of proposed actions,” and holding that NEPA required the Secretary of the Interior to consider the cumulative impacts of offshore development in different areas of the Outer Continental Shelf). Even before CEQ issued regulations defining “effects” to include cumulative effects, the U.S. Supreme Court had interpreted NEPA to require consideration of “cumulative or synergistic environmental impact.” Kleppe v. Sierra Club, 427 U.S. 390, 410 (1976). Although this case focuses on programmatic review, the Court recognized the importance of considering the collective environmental effects of agency actions to inform the decision-making process. Id. (“Only through comprehensive consideration of pending proposals can the agency evaluate different courses of action.”). 37

Some commenters agreed with CEQ's statements in the NPRM about Department of Transportation v. Public Citizen, 541 U.S. 752 (2004), contending that the 2020 rule's interpretation of the decision to justify limits on effects analysis was incorrect and that the changes in the Phase 1 proposed rule align with the Supreme Court's decision. Commenters also expressed the view that the 2020 rule's reliance on or interpretation of Public Citizen to impose a categorical limitation on the scope of effects that agencies may permissibly analyze was fundamentally misguided because the decision identified the effects that an agency must consider, but did not limit the effects that an agency may consider. Commenters also expressed the view that the holding in Public Citizen is limited to the narrow circumstance in which an agency has no discretion to alter the activity that causes the effects in question. Additional commenters contended that if the Court intended to exclude cumulative effects or impacts from environmental review, the Court would have clearly said so. Based on these interpretations of Public Citizen, these commenters generally supported the NPRM's proposed definition of effects and requested that CEQ clarify that the case applies only in limited circumstances.

Commenters who disagreed with the NPRM's interpretation of Public Citizen contended that the Court stated clearly that NEPA requires a reasonably close causal relationship between the environmental effect and alleged cause and that a “but for” causal relationship is insufficient to make an agency responsible for a particular effect under NEPA. Commenters also argued that the 2020 rule aligned with Public Citizen, because the Court held that consideration of actions beyond an agency's statutory authority serves no purpose and fails to satisfy NEPA's rule of reason. Commenters also asserted that the NPRM did not adequately explain CEQ's change in interpretation of Public Citizen in light of the 2020 rule's heavy reliance upon it.

CEQ has reexamined its interpretation of and reliance on the Public Citizen decision in the 2020 rule. The 2020 rule relied upon the decision to provide a broadly applicable statement on effects analysis that is not compelled by the opinion itself and that does not comport with CEQ's view of the proper scope of effects analysis in line with NEPA's informational purpose and longstanding agency practice and discretion. At issue in Public Citizen was whether the Federal Motor Carrier Safety Administration (FMCSA) had appropriately excluded from its NEPA analysis effects from Mexican trucks entering the United States that would occur if the President followed through on his intention to lift a moratorium on those trucks following FMCSA promulgating vehicle safety regulations. The Supreme Court explained that NEPA and the 1978 regulations are governed by a “rule of reason.” Id. at 767. FMCSA had no ability to deny certification if trucks met minimum requirements, and as a result, the Supreme Court held that FMCSA had lawfully defined the scope of its analysis, and that it was not arbitrary and capricious for FMCSA to exclude from its NEPA analysis effects that would occur if the President lifted the moratorium. Id. at 758-59.

In reaching that conclusion, the Court rejected application of “a particularly unyielding variation of `but for' causation, where an agency's action is considered a cause of an environmental effect even when the agency has no authority to prevent the effect.” Id. at 767. The Court stated that “NEPA requires `a reasonably close causal relationship' between the environmental effect and the alleged cause.” Id. And then it explained that “inherent in NEPA and its implementing regulations is a `rule of reason,' which ensures that agencies determine whether and to what extent to prepare an EIS based on the usefulness of any new potential information to the decisionmaking process.” Id. It further explained that “it would . . . not satisfy NEPA's `rule of reason' to require an agency to prepare a full EIS due to the environmental impact of an action it could not refuse to perform. Put another way, the legally relevant cause of the entry of the Mexican trucks is not FMCSA's action, but instead the actions of the President in lifting the moratorium and those of Congress in granting the President this authority while simultaneously limiting FMCSA's discretion.” Id. at 769.

The 2020 rule quoted the Court's statement on “but for” causation as a categorical limitation on effects analysis without recognizing the factual and legal context in which the statement was made, including the statements that immediately surrounded it. In fact, the Court tied its analysis of “but for” causation to a “critical feature” of the case—that FMCSA had no statutory authority to stop the process by which the trucks would operate. The Court explained that requiring FMCSA to consider the environmental impacts of those operations as effects of its action would violate the “rule of reason,” because the consideration would not fulfill NEPA's purpose of informing the decision maker. See id. at 768-69. Moreover, the Court affirmed FMCSA's consideration of effects under the 1978 regulations. See id. at 770. The Court did not hold that agencies may not consider a broader range of effects in other circumstances. The Court's focus was on situations “where an agency has no ability to prevent a certain effect due to its limited statutory authority.” Id. The 2020 rule could be read to apply universally the proximate causation principle of tort law when determining the scope of their NEPA analyses. This result is not compelled by the Public Citizen decision and is in significant tension with the Supreme Court's recognition that tort law and NEPA are governed by different principles that serve different policy objectives. See Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 775, FN 7 (1983). Instead, the Court held that FMCSA's effects analysis in the specific factual and legal context of its proposed action was reasonable and not arbitrary and capricious.

For these reasons, CEQ has reconsidered its reasoning and approach taken in the 2020 rule and does not deem it useful to include the “reasonably close causal relationship” and “but for” language drawn from Public Citizen, which dealt with a unique context in which an agency had no authority to direct or alter an outcome, in the broadly applicable NEPA regulations. Doing so inappropriately transforms a Court holding affirming an agency's exercise of discretion in a particular factual and legal context into a rule that could be read to limit agency discretion. Instead, as further discussed below, agencies are better guided by the longstanding principle of reasonable foreseeability and the rule of reason in implementing NEPA's directives.

Some commenters supported the removal of the 2020 language contending that it limits effects analysis to effects that are “reasonably foreseeable and have a reasonably close causal relationship” and because consequential reasonably foreseeable environmental effects may occur remote in time or place from the original action or be the product of a causal chain; for example, toxic releases into air or water and greenhouse gas emissions that contribute to climate change often occur remote in time or place from the original action or are a product of a causal chain. As such, these commenters stated that restoring the definition of effects to the 1978 regulations would provide for more sound decision making. Commenters also stated that the 2020 regulations' definition of “effects” requiring a close causal relationship potentially narrowed and improperly limited the scope of effects agencies would consider for proposed Federal actions. Commenters specifically pointed to the “but for” language in the 2020 regulations as adding uncertainty and noted that, under the 1978 regulations, agencies shared an understanding of how to assess the effects of a proposed action based on agency procedures and case law.

On the other hand, commenters opposing changes to the 2020 rule's definition of “effects” argued that limiting the NEPA analysis to those effects that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action is in line with common sense and jurisprudence. Others emphasized that the 2020 definition reasonably limits the scope of potential effects analysis and prevents reviews from considering impacts that bear little or no relationship to the proposed action, and therefore improves clarity and relevance of NEPA documents. These commenters asserted that the 2020 rule's addition of “reasonably foreseeable and reasonably close causal relationship” made a practical clarification that may reduce unnecessary analysis and inefficiencies. Other commenters suggested that, if CEQ reintroduces direct, indirect, and cumulative effects, the rule should clarify that these effects are limited to those that are “reasonably foreseeable.”

CEQ has reexamined the phrase “reasonably close causal relationship,” which the 2020 rule added to the definition of “effects” in part on the basis that consideration of effects should be limited by proximate cause principles from tort law. 38 CEQ now considers this phrase unnecessary and unhelpful because an agency's ability to exclude effects too attenuated from its actions is adequately addressed by the longstanding principle of reasonable foreseeability that has guided NEPA analysis for decades. See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 356 (1989). See also Sierra Club v. FERC, 867 F.3d 1357, 1371 (D.C. Cir. 2017) (citing EarthReports, Inc. v. FERC, 828 F.3d 949, 955 (D.C. Cir. 2016)). Furthermore, CEQ no longer deems it necessary to import principles of tort law into the NEPA regulations. Environmental review under NEPA serves different purposes, such as guiding sound agency decision making and future planning, that may reasonably entail a different scope of effects analysis than the distinct tort law context. See Metro. Edison Co., 460 U.S. at 775, FN 7 (1983) (“[W]e do not mean to suggest that any cause-effect relation too attenuated to merit damages in a tort suit would also be too attenuated to merit notice in an EIS; nor do we mean to suggest the converse. In the context of both tort law and NEPA, courts must look to the underlying policies or legislative intent in order to draw a manageable line between those causal changes that may make an actor responsible for an effect and those that do not.”). Keeping the 2020 limitation also would suggest that agency NEPA practitioners are required to apply a tort law legal standard where they would still have to exercise professional judgement in determining the scope of the effects analysis. CEQ is removing the phrase “reasonably close causal relationship” from the definition of “effects”; the definition will continue to include the phrase “reasonably foreseeable” consistent with longstanding interpretation to allow agencies the flexibility to conduct appropriate effects analysis in line with their discretion and NEPA's requirements.

CEQ also requested public comments on whether a Phase 2 rulemaking should provide more specificity about the manner in which agencies should analyze certain categories of effects. In response, some commenters suggested that the Phase 2 rulemaking should address how agencies address impacts from climate change and provide more specificity about how agencies analyze environmental justice impacts. Others emphasized that a Phase 2 rule should make the effects analysis more objective and less speculative or provide additional clarification to the definition of effects to produce more effective and focused environmental reviews. Some commenters requested CEQ issue guidance on analysis of effects, and some indicated that guidance might be more efficient than updating the regulations further in a Phase 2 rule. CEQ is considering these comments in the development of its Phase 2 rulemaking and its guidance on assessing greenhouse gas emissions and climate change in environmental reviews.

The final rule makes the changes proposed in the NPRM with minor modification. The final rule revises the introductory paragraph of § 1508.1(g) defining “effects” and “impacts” as “changes to the human environment from the proposed action or alternatives that are reasonably foreseeable.” The NPRM did not include the clause “that are reasonably foreseeable,” but the final rule retains this clause in response to comments. Doing so is consistent with the preamble to the NPRM, which consistently states that direct, indirect, and cumulative effects must be reasonably foreseeable. 86 FR 55765-67. While the NPRM proposed to remove the clause from the definition because reasonable foreseeability has always been central to defining the scope of effects, after considering comments, CEQ agrees that this clause enhances clarity in line with longstanding agency practice and NEPA case law. Therefore, CEQ has determined to retain this phrase in the final rule.

The final rule otherwise makes the changes as proposed in the NPRM. CEQ is including direct, indirect, and cumulative effects as part of the definition of “effects” or “impacts” to avoid disruption and uncertainty caused by the 2020 rule and clarify that agencies should continue to engage in the context-specific inquiry they have undertaken for more than 40 years to identify reasonably foreseeable effects of a proposed action and its alternatives, providing for sound decision making. The restoration of “cumulative impacts” from the 1978 regulations to include cumulative effects as a component of the definition of “effects” is a non-substantive change, as the 1978 regulations specifically provided that the terms “impacts” and “effects” are synonymous. Agencies should treat cumulative effects under the final rule in the same fashion as they treated cumulative impacts under the 1978 regulations.

As discussed in responding to comments above, restoring language on direct, indirect, and cumulative effects better promotes NEPA's statutory purposes and is more consistent with the extensive NEPA case law. See 42 U.S.C. 4321-4332. Restoring these phrases to the regulations also is consistent with this Administration's policies to be guided by science and to address environmental protection, climate change, and environmental justice. See, e.g., E.O. 13990  39 and E.O. 14008. 40 Returning to the approach in the 1978 regulations provides regulatory consistency and stability for Federal agencies, affected stakeholders, and the public. CEQ is not returning to these definitions because this is what has always been done, but because longstanding CEQ and Federal agency experience and practice has demonstrated that these interpretations promote the aims of the NEPA statute and are practical to implement. These interpretations also reasonably reflect the plain meaning of the statutory phrase “environmental impact,” and explicitly capture the indirect and cumulative nature of many environmental impacts.

CEQ is including direct, indirect, and cumulative effects as part of the definition of “effects” or “impacts” because they have long provided an understandable and effective framework for agencies to consider the effects of their proposed actions in a manner that is understandable to NEPA practitioners and the public. CEQ considers this approach to result in a more practical and easily implementable definition than the 2020 rule's definition of “effects” that explicitly captures the indirect and cumulative nature of many environmental effects, such as greenhouse gas emissions or habitat fragmentation. Upon further evaluation of the rationale for the 2020 rule and the comments CEQ received on the NPRM, CEQ does not consider the tort law standards of “close causal relationship” and “but for” causation to be ones that provide more clarity or predictability for NEPA practitioners, agency decision makers, or the public. Furthermore, as discussed in this section, CEQ does not consider the existing case law interpreting the 1978 definition of “effects” to require that the NEPA regulations limit agency discretion to identify reasonably foreseeable effects under such a standard. CEQ also is removing the potential limitations on consideration of temporally or geographically removed environmental effects, effects that are a product of a lengthy causal chain, and “effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action.” These qualifications may unduly limit agency discretion and stating them as categorical rules that limit effects analyses is in tension with NEPA's directives to produce a detailed statement on the “environmental impact of [a] proposed action,” “any adverse environmental effects which cannot be avoided,” and “the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity.” 42 U.S.C. 4332(2)(C). Furthermore, this language could lead Federal agencies to omit from analysis or disclosure critical categories of reasonably foreseeable effects that are temporally or geographically removed, such as climate effects, frustrating NEPA's core purpose and Congressional intent.

Although the 2020 rule preamble suggested that agencies could continue to consider indirect and cumulative effects, 41 an agency could misunderstand the language of the rule to prohibit considering indirect or cumulative effects of their proposed actions given the language in 40 CFR 1508.1(g)(3): “An agency's analysis of effects shall be consistent with this [definition of effects].” Additionally, the definition included inconsistent directions to agencies—the introductory paragraph stated that effects “may include effects that are later in time or farther removed in distance” but paragraph (g)(2) stated that agencies generally should not consider effects if they are remote in time or geographically remote. CEQ considers the clarification that indirect and cumulative effects are included in the definition of effects critical to ensuring that agency decision makers have a complete view of reasonably foreseeable effects of their proposed actions. 42

Defining “effects” to include direct, indirect, and cumulative effects will not result in consideration of a limitless universe of effects. The consideration of effects has always been bounded by a reasonableness standard, and, as discussed above, the final rule will retain language on reasonable foreseeability. While CEQ understands the importance of predictability, it is also critical that analyses are complete and scientifically accurate to ensure that decision makers and the public are fully informed.

Including direct and indirect effects in the definition of “effects” ensures that NEPA analyses disclose both adverse and beneficial effects over various timeframes, providing important information to decision makers. For example, a utility-scale solar facility could have short-term direct effects, such as adverse construction and land impacts. The facility also could have long-term indirect beneficial effects, such as reductions in air pollution, including greenhouse gas emissions, from the renewable energy generated by the solar facility that displaces more greenhouse gas-intensive energy sources (such as coal or natural gas) as an electricity source for years or decades into the future. As another example, air pollution, including greenhouse gas emissions, released by fossil fuel combustion is often a reasonably foreseeable indirect effect of proposed fossil fuel extraction that agencies should evaluate in the NEPA process, even if the pollution is remote in time or geographically remote from a proposed action. An agency decision maker can make a more informed decision about how a proposed action aligns with the agency's statutory authorities and policies when she has information on the comparative potential air pollution effects and greenhouse gas emissions of the proposed action and alternatives, including the no action alternative. The final rule's definition of “effects” provides clarity and ensures that agencies disclose such indirect effects.

CEQ also has reevaluated its position on cumulative effects and disagrees with the assertions in the 2020 rule that cumulative effects analyses divert agency resources from analyzing the most significant effects to effects that are irrelevant or inconsequential. Rather, consideration of reasonably foreseeable cumulative effects allows agencies and the public to understand the full scope of potential impacts from a proposed action, including how the incremental impacts of a proposed action contribute to cumulative environmental problems such as air pollution, water pollution, climate change, environmental injustice, and biodiversity loss. Science confirms that cumulative environmental harms, including repeated or frequent exposure to toxic air or water pollution, threaten human and environmental health and pose undue burdens on historically marginalized communities. 43 CEQ does not consider such harms to be inconsequential or irrelevant, but rather critical to sound agency decision making. By restoring the phrase “cumulative effects,” this final rule will make clear that agencies must fully analyze reasonably foreseeable cumulative effects before Federal decisions are made.

CEQ continues to have the goal that environmental reviews should be efficient and effective and will continue to evaluate the NEPA process for opportunities to improve timeliness consistent with NEPA's purposes. However, CEQ disagrees with the assertion in the 2020 rule that requiring analysis of reasonably foreseeable cumulative effects causes unacceptably long NEPA processes. CEQ considers the disclosure of all reasonably foreseeable direct, indirect, and cumulative effects to be critical to the informed decision-making process required by NEPA, see, e.g., 42 U.S.C. 4332, such that the benefits of any such disclosure outweigh any potential for shorter NEPA documents or timeframes. Moreover, nothing in this final rule suggests that a well-drafted NEPA document cannot be both concise and supported by thorough analysis. CEQ also disagrees with the 2020 rule's assertion that deleting reference to direct, indirect, and cumulative effects is necessary because agencies have devoted substantial resources categorizing effects as direct, indirect, or cumulative. 85 FR 43343. Nothing in the CEQ regulations requires agencies to categorize effects separately in this manner; instead, well-organized NEPA documents address the direct, indirect, and cumulative effects of particular resources in a cohesive and comprehensive manner. Agencies may discuss holistically all reasonably foreseeable direct, indirect, and cumulative effects, rather than delineating the categories in separate sections of a NEPA document, to facilitate the decision maker and the public's comprehensive understanding of the effects of the proposed actions and alternatives.

E.O. 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. 44 E.O. 13563 reaffirms the principles of E.O. 12866, calling for improvements in the Federal Government's regulatory system to promote predictability, reduce uncertainty, and use the best, most innovative, and least burdensome tools for achieving regulatory objectives. 45 Because this final rule applies to all Federal agencies, it is a significant regulatory action that CEQ submitted to OMB for review. The changes will remove uncertainty created by the 2020 rule to benefit agencies and the public. These changes do not obligate agencies to undertake longer, more complicated analyses. Furthermore, an effective NEPA process can save time and reduce overall project costs by identifying and avoiding problems, including potential significant effects, that may occur in later stages of project development. 46 Additionally, if agencies choose to consider additional alternatives and conduct clearer or more robust analyses, such analyses should improve societal outcomes by improving agency decision making. Because individual cases will vary, the magnitude of potential costs and benefits resulting from these proposed changes are difficult to anticipate. Therefore, CEQ has not quantified them. CEQ received a number of comments requesting that it revisit the regulatory impact analysis from the 2020 rule. Because this final rule mainly clarifies provisions, 47 CEQ considers Phase 2 to be the more appropriate rulemaking for any reconsideration of the regulatory impact analysis to the extent Phase 2 proposes substantive changes.

The Regulatory Flexibility Act (RFA), as amended, 5 U.S.C. 601 et seq., and E.O. 13272  48 require agencies to assess the impacts of proposed and final rules on small entities. Under the RFA, small entities include small businesses, small organizations, and small governmental jurisdictions. An agency must prepare a Regulatory Flexibility Analysis at the proposed and final rule stages unless it determines and certifies that the rule, if promulgated, would not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605(b). An agency need not perform an analysis of small entity impacts when a rule does not directly regulate small entities. See Mid-Tex Electric Coop., Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985). This final rule does not directly regulate small entities. Rather, it applies to Federal agencies and sets forth the process for their compliance with NEPA. Accordingly, CEQ hereby certifies that the rule will not have a significant economic impact on a substantial number of small entities.

Under the CEQ regulations, major Federal actions may include regulations. When CEQ issued regulations in 1978, it prepared a “special environmental assessment” for illustrative purposes pursuant to E.O. 11991. 49 The NPRM for the 1978 rule stated “the impacts of procedural regulations of this kind are not susceptible to detailed analysis beyond that set out in the assessment.”  50 Similarly, in 1986, while CEQ stated in the final rule amending its regulations that there were “substantial legal questions as to whether entities within the Executive Office of the President are required to prepare environmental assessments,” it also prepared a special environmental assessment. 51 The special environmental assessment issued in 1986 made a finding of no significant impact, and there was no finding made for the assessment of the 1978 final rule.

CEQ continues to take the position that a NEPA analysis is not required for establishing or updating NEPA procedures. See Heartwood v. U.S. Forest Serv., 230 F.3d 947, 954-55 (7th Cir. 2000) (finding that neither NEPA or the CEQ regulations required the Forest Service to conduct an environmental assessment or an EIS prior to the promulgation of its procedures creating a categorical exclusion). Nevertheless, based on past practice, CEQ developed a special environmental assessment, posted it in the docket, and invited comments. CEQ did not receive any comments, but made minor changes to the special environmental assessment, which CEQ has posted in the docket.

E.O. 13132 requires agencies to develop an accountable process to ensure meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications. 52 Policies that have federalism implications include regulations that have substantial direct effects on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government. This rule does not have federalism implications because it applies to Federal agencies, not states. However, CEQ notes that States may elect to assume NEPA responsibilities under Federal statutes. CEQ received comments in response to the NPRM from a number of States, including those that have assumed NEPA responsibilities, and considered these comments in development of the final rule.

CEQ acknowledges that it shares a government-to-government relationship with Tribes that differs from its relationship to the general public. E.O. 13175 requires agencies to have a process to ensure meaningful and timely input by Tribal officials in the development of policies that have Tribal implications. 53 Such policies include regulations that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. CEQ has assessed the impact of this final rule on Indian Tribal governments and has determined that the final rule would not significantly or uniquely affect these communities. However, CEQ recognizes the important role Tribes play in the NEPA process and held a government-to-government consultation on the NEPA regulations generally on September 30, 2021. CEQ also held a consultation specifically on the Phase 1 proposed rule on November 12, 2021. CEQ also invited Tribes and Alaska Native Corporations to provide early input on the Phase 2 rulemaking as well as CEQ's guidance on considering greenhouse gas emissions and climate change in NEPA reviews. In addition to the feedback provided during these consultation sessions, CEQ considered written comments that Tribes submitted during and after the consultations, as well as Tribal comments submitted during the public comment period. CEQ plans to continue to engage in additional government-to-government consultation with federally recognized Tribes and Alaska Native Corporations on its NEPA regulations. During consultation and in written comments, CEQ has received input on areas of importance to Tribes, many of which are around provisions that were not addressed in this Phase 1 rule. CEQ will consider this input for the Phase 2 rulemaking.