Provisions of the Fair Chance Act were incorporated into the National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 116-92), which was signed into law by the President on December 20, 2019. The Fair Chance Act places limitations on agency requests for criminal history record information prior to conditional offer of employment. It also requires a complaint process by which applicants for appointment to a position in the civil service may submit a complaint, or any other information, relating to compliance with the requirements of the Fair Chance Act. Furthermore, the Fair Chance Act establishes requirements and procedures regarding penalties for violations.

On December 1, 2016, OPM issued a final rule at 81 FR 86555, that revised its regulations pertaining to when, during the hiring process, a hiring agency can request information typically collected during a background investigation from an applicant for Federal employment. The changes were to promote compliance with Merit System Principles as well as the goal of the Federal Interagency Reentry Council and the Presidential Memorandum of January 31, 2014, “Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own,” otherwise known as “Ban the Box” rules. As noted by OPM when it first promulgated the rule, the intent of the rule was to conform regulatory requirements to what OPM believed was already the predominant agency practice as many agencies already employed the practice of waiting until the later stages of the hiring process to collect criminal history information. OPM does not currently have any data to show whether the revised regulations affected agency hiring processes or were instead, as OPM anticipated, a codification of existing practices.

Currently OPM regulations, 5 CFR parts 330 and 731, prevent agencies, unless an exception is granted by OPM, from making inquiries into an applicant's criminal or credit history of the sort asked on the Optional Form (OF) 306 titled, Declaration for Federal Employment, `Background Information' section or other forms used to conduct suitability investigations for Federal employment unless the hiring agency has made a conditional offer of employment to the applicant. The Fair Chance Act contains the same prohibition with respect to criminal history and does not address credit history. The Act has elaborated on the methods of inquiry not permitted and also provides for certain exceptions to the rule. Furthermore, the Fair Chance Act requires OPM, when making additional exceptions, to give due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions.

OPM is proposing these provisions under section 1122(b)(1) of the Fair Chance Act, under which the Director of OPM “shall issue such regulations as are necessary to carry out chapter 92 of title 5, United States Code (as added by this subtitle).” OPM is also proposing these provisions to implement the requirements of 5 U.S.C. 9202(c)(2), as added by the Fair Chance Act, which requires the OPM Director to issue regulations identifying positions with respect to which the prohibition shall not apply giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions, beyond those already identified in the statute.

Unless otherwise required by law, an employee of an agency may not request, in oral or written form (including through the Declaration for Federal Employment (OPM Optional Form 306) or any similar successor form, the USAJOBS internet website, or any other electronic means) that an applicant for an appointment to a position in the civil service disclose criminal history record information regarding the applicant before the appointing authority extends a conditional offer to the applicant. Under the provisions of the Fair Chance Act, this prohibition does not apply under the following circumstances:

• Determinations of eligibility described under clause (i), (ii) or (iii) of 5 U.S.C. 9101(b)(1)(A) i.e., for (i) access to classified information; (ii) assignment to or retention in sensitive national security duties or positions; or (iii) acceptance or retention in the armed forces; or

• recruitment of a Federal law enforcement officer (defined in 18 U.S.C. 115(c)).

The Fair Chance Act applies to all appointments in the Executive branch; i.e., to appointments in the competitive service, the excepted service, and the Senior Executive Service (SES). Therefore, OPM is proposing to: (1) Revise the provisions in 5 CFR part 330, subpart M, which currently implements the Ban the Box rules for the competitive service, by removing the reference to criminal history so that the Fair Chance Act can be implemented for all types of appointments in a newly created part 920; (2) preserve the existing Ban the Box rules restricting pre-employment credit inquiries for appointments in the competitive service; and (3) amend part 731 to incorporate the exceptions to this provision as established by law and to refer agencies to the newly created part 920 for guidance on other types of positions for which the prohibition under the Act for collecting criminal history information will not apply. For the convenience of the reader, we are placing these provisions in the newly created part 920 rather than repeat the provisions in parts 302, Employment in the Excepted Service; 317, Employment in the Senior Executive Service; 319, Employment in Senior-Level and Scientific and Professional Positions; 330, and 731. OPM is also proposing to amend parts 302, 317, and 319 to include a reference as a reminder that these types of positions are subject to the provisions of the Fair Chance Act found in chapter 92 of title 5, U.S.C and 5 CFR part 920.

The regulations explain that agencies may request exceptions from OPM on a case-by-case basis. OPM will consider exceptions based on legitimate, job/position-related reasons, giving due consideration to requests for positions with specific job-related duties. Exceptions previously granted to agencies by OPM pursuant to 5 CFR part 330 subpart M ( i.e., the Ban the Box provisions) continue to be valid.

The proposed rule will continue to permit agencies to make an objection, pass-over request, or suitability determination on the basis of criminal or credit history record information only after the applicant's qualifications for the position being filled have been fairly assessed and the hiring agency has made a conditional offer of employment to the applicant.

Under section 9203, the Act requires the Director of OPM to establish and publish procedures under which an applicant for an appointment to a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee with 5 U.S.C. 9202. Under the provisions of section 9204, the Act further establishes minimum requirements regarding penalties for violations of the Act and provides that such penalties may be entered only after notice to the Federal employee accused and an opportunity for a hearing on the record (thereby, indirectly, establishing minimum procedural requirements before an adverse determination can be made). Finally, the Act requires the Director of OPM, by rule, to establish procedures providing for an appeal from any adverse action taken under section 9204 by no later than 30 days after the date of the action. The Act further notes in section 9205 that an adverse action taken under the Act shall not be subject to the procedures under chapter 75 of title 5 or, except as provided for the appeal process established under the Act, be subject to appeal or judicial review. Therefore, OPM is proposing new regulations governing complaint procedures under which an applicant for a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency with section 9202 of title 5, and adverse action and appeal procedures for alleged violations of section 9202 of title 5.

OPM is proposing to add § 302.107 to subpart A to incorporate the requirements of the Fair Chance Act. Proposed § 302.107 addresses when inquiries into an applicant's criminal history may be made and circumstances under which exceptions may be requested and considered by OPM.

OPM is proposing to add § 317.202 to subpart B to incorporate the requirements of the Fair Chance Act. Proposed § 317.202 addresses when inquiries into an applicant's criminal and credit history may be made and circumstances under which exceptions may be requested and considered by OPM.

OPM is proposing to add § 319.106 to subpart A to incorporate the requirements of the Fair Chance Act. Proposed § 319.106 addresses when inquiries into an applicant's criminal and credit history may be made and circumstances under which exceptions may be requested and considered by OPM.

The Fair Chance Act does not specifically address the timing of suitability inquiries into a job applicant's credit history. Nevertheless, the Presidential Memorandum of January 31, 2014, addresses this topic, and is still in effect. As a result, OPM's revision of § 330.1300 retains the prohibition on making inquiries into a job applicant's credit history and removes any reference to criminal history as that prohibition will be addressed in part 920.

The Fair Chance Act does not specifically address the timing of suitability inquiries into a job applicant's credit history. Nevertheless, the Presidential Memorandum of January 31, 2014, addresses this topic, and is still in effect. As a result, OPM's revision of § 731.103(d)(1) retains the prohibition on making inquiries into a job applicant's credit history and updates the reference to the prohibition relating to criminal history as reflected in the new part 920, which incorporates the requirements of the Fair Chance Act and addresses the circumstances under which exceptions may be requested and considered by OPM.

The Fair Chance Act directs OPM to establish and publish procedures under which an applicant for an appointment to a position in the civil service may submit a complaint, or any other information, regarding compliance with 5 U.S.C. 9202. Based on these unique requirements, OPM is proposing to add a new 5 CFR part 754 to implement the complaint procedure requirements of the Fair Chance Act. This new proposed rule falls under subpart A of 5 CFR part 754 as “Complaint Procedures.” The Fair Chance Act does not provide job applicants the ability to use any existing statutory or regulatory complaint procedures that may be available for other employment related complaints, such as the U.S. Office of Special Counsel, which investigates prohibited personnel practices. Thus, there currently is no regulatory framework for the complaint process for job applicants to allege violations of the nature described in the Fair Chance Act. The Fair Chance Act is also silent on who investigates complaints.

Under 5 U.S.C. 9203(2), the Director of OPM “shall . . . establish and publish procedures under which an applicant for an appointment to a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency with section 9202,” and section 1122(b)(1) of the Fair Chance Act, reprinted at 5 U.S.C. 9201 note, requires the Director to “issue such regulations as are necessary to carry out” this and the other requirements of chapter 92. More generally under 5 U.S.C. 1103(a)(5)(A), the Director is authorized to execute, administer, and enforce this and any other provision of civil service law. Under these authorities we are prescribing a complaint procedure under which an applicant will initially file a complaint, or any other information, and if applicable, supporting material with the employing agency, which will transmit the material to OPM.

To be acceptable for processing by OPM, the complaint, or any other information, and supporting material must be accompanied by a report of investigation. However, the only investigative authority in the Fair Chance Act is in section 9204(a), under which the Director of OPM must determine whether a violation has occurred “after notice and an opportunity for a hearing on the record.” This language encompasses adverse action procedures, as described in greater detail below, but it also encompasses the predicate fact-finding needed for OPM to either initiate an adverse action based on a complaint, dismiss the complaint, or require additional fact finding. Accordingly, OPM has determined that, under the proposed rule, subject to certain limitations and requirements, the best approach is for OPM to delegate to agencies its authority under 5 U.S.C. 9204(a) to investigate a complaint, or any other information, while reserving to OPM the authority under section 9204(a) to provide notice of a proposed adverse action and an opportunity to respond to the charges. 1

Under 5 U.S.C. 1104(a) and (b), OPM may delegate, in whole or in part, any personnel management function vested in or delegated to the Director and establish standards and oversight programs as necessary. In addition, under 5 CFR parts 5 and 10, OPM has responsibility to oversee the Federal personnel system and agency compliance with merit system principles and supporting laws, rules, regulations, Executive Orders, and OPM standards. OPM may set forth policies, procedures, standards, and supplementary guidance for the implementation of this part in OPM issuances. This includes, but is not limited to, procedures and guidance related to agency obligations to report to OPM actions taken to investigate any complaints filed by an applicant regarding an agency's compliance with 5 U.S.C. 9202 and adverse actions taken at the direction of OPM for non-compliance with 5 U.S.C. 9202. Therefore, OPM believes that with appropriate OPM guidance and oversight, agencies can investigate violations of Fair Chance Act requirements in a fair and impartial manner. OPM will then notify the agency employee of negative findings, provide an opportunity for the employee to be heard, and render a decision on the final record.

Subpart A applies to “a complaint, or any other information,” submitted by an applicant for an appointment to a position in the civil service relating to compliance with 5 U.S.C. 9202. Regarding “any other information,” it is conceivable that an applicant may ask a question or raise a concern about non-compliance with section 9202 without knowledge of an agency's specific complaint procedures. Agency procedures must address how to conduct outreach when an applicant initiates contact about a complaint.

The proposed rule describes who may utilize the agency complaint procedures described in § 754.102. Specifically, the complaint procedures are available to an applicant as the term applicant is defined in proposed § 920.101, which means a person who has applied to an agency under its procedures for accepting applications consistent with governmentwide regulations, as applicable.

Section 754.101 includes definitions that track the definitions in part 920, as described in greater detail below.

OPM was informed by other existing complaint procedures in establishing the processes required by the Fair Chance Act. OPM believes that establishing a process which is similar to other successful and effective processes will facilitate implementation of the Fair Chance Act complaint process in covered agencies as agencies are already familiar with these similar processes.

As noted above, within guidelines established by OPM and subject to OPM oversight, the proposed rule assigns to each agency covered by the Fair Chance Act regulations the responsibility to receive complaints, or any other information, and any applicable supporting material. Further, consistent with these OPM guidelines and oversight, the proposed rule delegates to each agency OPM's responsibility to conduct an investigation of the written complaint, or any other information, regarding compliance with 5 U.S.C. 9202. Agencies then would have responsibility to provide OPM the applicant's written complaint or any other information, along with supporting material and the results of the agency's investigation, so OPM may determine any further actions, such as additional investigative fact-finding or appropriate penalties, regarding violations of the Fair Chance Act requirements.

OPM believes there is ample precedent for agencies to establish internal procedures for receipt and investigation of employment-related complaints against the agency and to accomplish these tasks in a fair and impartial manner. For example, Federal employees may request their agency conduct a review of the classification of the employee's position and may appeal the classification decision to the agency under rules established by OPM. Another example concerns the responsibility of agencies to establish programs to promote equal opportunity and to identify and eliminate discriminatory practices and policies. This includes the responsibility to provide for the prompt, fair, and impartial processing of Equal Employment Opportunity (EEO) complaints under rules established by the Equal Employment Opportunity Commission (EEOC). These examples have helped inform OPM of successful procedures that can be modeled in establishing the processes required by the Fair Chance Act.

The proposed rule directs covered agencies to establish a complaint process within 90 days of the effective date of the final rule that allows an applicant to file a complaint, or submit any other information, within 30 calendar days of the date of the alleged non-compliance with 5 U.S.C. 9202 by an employee of the covered agency. The proposed rule further directs covered agencies to extend this time limit when the applicant shows that he or she was not notified of the time limits and was not otherwise aware of them, that he or she did not know and reasonably should not have known that the non-compliance with section 9202 occurred, to consider a reasonable accommodation of a disability, or for other proper and adequate reasons considered by the agency. OPM believes this provides applicants sufficient time to submit a complaint, or any other information, and is comparable to time limits for filing other types of employment-related complaints. It also provides an opportunity for the applicant to submit a complaint or any other information after 30 days if the applicant's rights to do so were not properly publicized. This highlights why it will be critical for agencies to widely publicize information regarding the complaint process to job applicants. The information must appear in agency job announcements. In addition to placing this information in job announcements, agencies should consider placing this information on agency websites/portals soliciting applications for those positions that do not require a posting on USAJOBS, such as excepted service positions. Finally, as noted above, the proposed rule requires that covered agencies conduct outreach about its complaint procedures, when an applicant initiates contact about an alleged violation.

The proposed rule requires covered agencies to investigate any complaint, or any other information, regarding compliance with section 9202. It notes that in order to carry out this function in an impartial manner, the same agency official(s) responsible for executing and advising on the recruitment action may not also be responsible for managing, advising, or overseeing the agency complaint process. Agencies otherwise have discretion to determine responsibility for investigating complaints, or any other information, under this process.

The proposed rule requires agencies to develop an impartial and appropriate factual record sufficient for OPM to make findings on the complaint. In other words, the record should allow a reasonable fact finder to draw conclusions as to whether non-compliance with section 9202 occurred. Agencies otherwise have discretion to determine the appropriate fact-finding methods to carry out this responsibility.

The proposed rule requires the agency to delegate sufficient authority to the investigator to secure the production, from agency employees and contractors of documentary evidence and testimonial evidence needed to report on and investigate the complaint. While agencies may have less control over the applicant's cooperation, applicants have an incentive to cooperate. If an agency notifies OPM that an applicant has refused to produce documentary or testimonial evidence sought during the investigation, OPM may direct the agency to suspend the investigation; or if the investigation continues despite an applicant's failure to participate, OPM may make an adverse inference or, in appropriate circumstances, dismiss the complaint.

In addition, the proposed rule requires the agency to complete the investigation within 60 calendar days of the filing of the complaint. Due to the narrow scope of section 9202, OPM believes that 60 calendar days is sufficient time to complete a thorough investigation.

The proposed rule requires the agency to provide OPM an administrative report on the investigation of a complaint within 30 calendar days of completing the investigation. This report should include all necessary information for OPM to make a determination on whether non-compliance with section 9202 occurred. The report should include the applicant's written complaint, or any other information submitted by the applicant, the agency's factual findings, a complete copy of all information gathered during the investigation, and any other information the agency believes OPM should consider. OPM may request the agency provide additional information as necessary. After review, OPM will notify the agency and the subject(s) of the complaint in writing of OPM's findings regarding the complaint, including any decision to initiate adverse action proceedings under 5 CFR part 754, subpart B, or to dismiss the complaint.

Agencies exercise authority under this section by delegation from OPM and must adhere to the OPM requirements for receipt and investigation of complaints or any other information, as stated in this section as well as any OPM issuances. Agencies must also implement policies and procedures and maintain records demonstrating that they employ reasonable methods to ensure adherence to the Fair Chance Act and OPM regulations and any subsequent issuances. OPM retains the exclusive authority to determine the sufficiency of an agency's complaint process, including the sufficiency of the investigation. OPM may direct further action if OPM determines it necessary for its adjudication of the complaint or any other information submitted regarding an allegation of non-compliance with section 9202.

The proposed language in this section provides that the applicant may select a representative of their choice to assist throughout the complaint process. It further notes that an agency may disallow an applicant's representative when the individual's activities as a representative would cause a conflict of interest or position, when the applicant designates an agency employee who cannot be released from their official duties because of the priority needs of the Government, or when the applicant designates an agency employee whose release would give rise to unreasonable costs to the Government. This is comparable to requirements and restrictions on representatives that are provided for in OPM regulations on classification appeals. OPM believes this is appropriate and fair for the applicant when balanced against the business and mission needs of the agency.

The Fair Chance Act does not require compliance with any existing statutory or regulatory adverse action procedures which are available for other conduct-related matters. Section 9204 prescribes certain penalties to be imposed by OPM for each violation of 5 U.S.C. 9202 and requires notice and an opportunity for a hearing on the record by OPM for any employee alleged to have committed a violation of section 9202. Section 9205 further notes that the procedures of chapter 75 of title 5, United States Code, are not applicable and that appeal or judicial review are not applicable except as provided under procedures established by the Director of OPM. Based on these unique requirements, OPM is proposing to add subpart B, Adverse Actions, under the new 5 CFR part 754, to implement a new adverse action and appeals process related to violations of the Fair Chance Act.

While implementing the requirements of the Fair Chance Act, we have also been mindful of the need to provide procedures that we are confident would provide for due process. Those include, at a minimum, a meaningful opportunity—before a decision is made on an adverse action—for an individual to know the charges and penalty and present a defense. In addition, in light of the case law available in relation to chapter 75 proceedings, we have concluded that it is prudent to provide for the ability to appeal the adverse action of a suspension for 15 days or more before an impartial adjudicator, a procedural right that would be available with respect to analogous penalties in a chapter 75 adverse action proceeding. The following sections identify the requirements proposed for this new subpart and briefly describe the purpose of each requirement.

This section describes which actions and employees are covered by the new adverse action procedures established by OPM and defines key terms used in the subpart. Employees of agencies as defined in section 920.101 are subject to the adverse action procedures established in this subpart.

This section also defines the terms “day,” “suspension,” “civil penalty,” and “Director.” The term “day” is consistent with how OPM defines this term in adverse action rules under 5 CFR part 752. The term “suspension” is similar to how OPM defines it under part 752 but modified for purposes of aligning it with the requirements of the Fair Chance Act. OPM believes it is appropriate to use similar definitions for the Fair Chance Act adverse action procedures to facilitate a common understanding of these terms. The term “civil penalty” is intended to clarify that this penalty is a form of monetary penalty on a covered agency employee which is separate and distinct from a suspension without pay. Finally, the term “Director” is consistent with how OPM defines it in other regulations promulgated by OPM. OPM believes this is consistent with the Director's statutory authority and otherwise will facilitate an effective process that allows the Director to timely respond to complaints from across the entire Executive Branch.

This section describes the specific penalties OPM may direct an agency to process when an agency employee has been found to have violated section 9202 of the Act. The Act specifies certain penalties for violations of the Act including written warnings, suspensions without pay, and civil penalties of various amounts depending on the violation. The Act provides that these actions are not subject to the procedures under chapter 75 of title 5, United States Code but under procedures established by OPM. Notably, the range of penalties includes some forms of penalty that are not enumerated under the “adverse actions” provisions found in chapter 75 of title 5, United States Code (written warnings, civil penalties), and another form of penalty that is found in chapter 75 and requires procedures set out in subchapter II of chapter 75 (suspensions of 15 days or more).

Since penalties of written warnings, suspensions without pay, and civil monetary penalties may be taken across multiple Federal agencies utilizing various systems and internal processes, the proposed rule specifies that the employing agency can be directed by OPM to (1) issue the employee a written warning; (2) process a suspension; and (3) collect a civil penalty after OPM determines a violation of section 9202 has occurred. This is comparable to OPM directing employing agencies to process actions taken by OPM, such as removal actions for suitability.

OPM proposes that the employing agency will collect a civil penalty and remit it to the Treasury, for deposit in the Treasury. OPM invites public comment on the method for collecting and remitting civil penalties.

OPM proposes that the employing agency must carry out the Director's order to suspend the employee as soon as practicable. This is consistent with the practice for suspensions under chapter 75. However, OPM proposes that if the Director orders a civil penalty, the penalty cannot be collected and remitted until the conclusion of any appeal to the Merit Systems Protection Board. This is consistent with 5 U.S.C. 1215(a)(3)(A), under which the Office of Special Counsel can pursue a civil penalty as a disciplinary action, but the penalty cannot be collected until the Board's proceedings have concluded. Deferring the collection of a civil penalty until resolution of the Board appeal will limit the possibility of having to collect civil penalties and then refund them if OPM's action is not sustained. OPM will track and monitor agencies' processing of OPM's orders by establishing new legal authority codes and remark codes to identify that the adverse actions are taken under 5 U.S.C. 9202. OPM's Guide to Processing Personnel Actions will be updated to reflect the new codes.

The proposed rule establishes the procedures to be utilized for actions taken under this subpart. The procedures in the subpart are similar, but not identical, to the adverse action procedures found at 5 CFR part 752. There are some very unique differences. For example, a written warning issued under this section is an adverse action and is subject to the same procedures and retention period as any other records of adverse actions.

The proposed rule specifies that the proposed action is made by the Director or Director's designee in order to implement the statutory requirements found in the Fair Chance Act. Since the Director is now required to make determinations involving employees in numerous agencies across the Executive Branch, the proposed rule provides that the Director may designate OPM officials to act on their behalf.

The proposed rule does provide for procedural rights appropriate to the situation: (1) A meaningful opportunity—before a decision is made on an adverse action—for an individual to know the charges and penalty and present a defense, with representation; and (2) the ability to appeal the adverse action of a suspension of 15 days or more before an impartial adjudicator. This is similar to what is found in 5 CFR part 752.

The proposed rule provides for a 30-day notice of any proposed action under this subpart. While notices of this length are typically only required for suspensions greater than 14 days under OPM's adverse action rules at 5 CFR part 752, OPM believes it is appropriate to propose a 30-day notice for any actions proposed under this subpart due to the unique nature of this process. OPM will have to notify employees who are located and employed in other Federal agencies, not just at OPM. In light of these requirements, OPM believes a 30-day notice for all proposed actions will facilitate an effective process by allowing all parties involved to be timely notified and to effectively respond to the proposed action.

The Fair Chance Act requires “notice and an opportunity for a hearing on the record” when OPM proposes an action and before OPM renders any decision. OPM proposes to fulfill this requirement by providing a notice of proposed action, an opportunity to review the material relied upon, an opportunity to respond orally and/or in writing to the notice of proposed action to the Director of OPM (or designee), and a decision by the Director of OPM (or delegated designee), to be followed by an appeal to the Merit Systems Protection Board (MSPB) if the action taken is a suspension of 15 days or longer. This comports with (and, at least at the lower end of the penalty range, exceeds) the 5th Amendment due process requirements for suspension of a tenured public employee. See Gilbert v. Homar, 520 U.S. 924, 929, 930, 933 (1997).

Except as described below, a hearing before an administrative law judge (ALJ) under the Administrative Procedure Act (APA) is not required. OPM notes that the term “notice and an opportunity for a hearing on the record” frequently invokes formal hearing procedures under the APA, 5 U.S.C. 554(a), 556-557. See, e.g., Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748 (6th Cir. 2004). An exception in section 554(a)(2) applies, however, “to the extent there is involved . . . the selection or tenure of an employee.” The phrase “there is involved” is broad, encompassing proceedings that implicate employee selection or tenure even if that subject matter is not the direct focus of the adjudication. Likewise, the APA's legislative history shows that the phrase “selection or tenure” in 5 U.S.C. 554(a)(2) is to be construed broadly, since “the selection and control of public personnel has been traditionally regarded as a largely discretionary function which, if to be overturned, should be done by separate legislation.” S. Rep. No. 79-758, at 16 (1945); see also Starrett v. Special Counsel, 792 F.2d 1246, 1252 (4th Cir. 1986).

The proposed rule provides that the employee's agency must give the employee who is in an active duty status a reasonable amount of official time to review the material relied on to support OPM's proposed action, to prepare and present an answer orally and in writing, and to secure affidavits. OPM may require the employee to furnish any answer to the proposed action, and affidavits and other documentary evidence in support of the employee's answer, within such time as would be reasonable, but not less than 7 days. The proposed rule provides that the OPM Director may designate an official who has authority to make or recommend a final decision on the proposed adverse action, hear the employee's oral answer, and consider any written response.

An employee covered by this part is entitled to be represented by an attorney or other representative. An agency may disallow as an employee's representative an individual whose activities as representative would cause a conflict of interest or position, or an employee of the agency whose release from their official position would give rise to unreasonable costs or whose priority work assignments preclude their release.

Whereas the hearing obligation for non-ALJs will be fulfilled by the procedures described above, OPM believes it is appropriate to provide a hearing opportunity before taking an adverse action against an ALJ. The exception in 5 U.S.C. 554(a)(2) does not apply to “a[n] administrative law judge appointed under section 3105 of this title.” Likewise, 5 U.S.C. 559 provides that a subsequent statute—such as the Fair Chance Act—“may not be held to supersede or modify” 5 U.S.C. 7521, governing the formal APA hearing rights of ALJs facing a suspension, “except to the extent that it does so expressly” (emphasis supplied). Finally, 5 U.S.C. 7521(b) includes a list of those statutes under which an action otherwise covered by 5 U.S.C. 7521(b) is excepted. Congress did not include the Fair Chance Act in the list of exceptions.

Since 5 U.S.C. 9205(b)(1) generally makes procedures under “chapter 75” inapplicable to adverse actions taken under the Fair Chance Act, without “expressly” superseding or modifying 5 U.S.C. 7521, the APA permits no deviation from the procedures in 5 U.S.C. 7521, when the alleged violator is an incumbent ALJ appointed under 5 U.S.C. 3105.

Accordingly, OPM proposes that if the employee alleged to have violated section 9202 is an ALJ appointed under section 3105, before OPM takes the proposed action the ALJ should have an opportunity for a hearing before the Merit Systems Protection Board and the Board should establish and determine whether good cause exists. Under 5 U.S.C. 1305, the proceeding must be governed by the regulations of the Board, not those of OPM. 2

Finally, the proposed rule provides that only the reasons specified in the notice of proposed action and any answer the employee or the employee's representative, or both, made to the designated official may be considered in deciding on the proposed action. In the case of ALJs, OPM must await the MSPB's good cause determination. The decision notice must specify in writing the reasons for the decision and advise the employee of any appeal rights. This facilitates satisfaction of minimum procedural rights.

The Fair Chance Act does not specify any appeal rights for penalties enacted for violations of the Act other than any appeal rights established by OPM. Under 5 U.S.C. 1103(a)(5), OPM has the broad authority to execute, administer, and enforce civil service rules and regulations. Therefore, pursuant to its statutory authority, as well as the President's delegation of his authority, OPM does have statutory authority to create the right of appeal to the Merit Systems Protection Board (MSPB) by regulation where appropriate. The Merit Systems Protection Board, in turn, has the responsibility to “hear, adjudicate, or provide for the hearing or adjudication, of all matters within the jurisdiction of the Board under . . . law, rule, or regulation,” and an employee may appeal to the Board “from any action which is appealable to the Board under any law, rule, or regulation.” 5 U.S.C. 1204(a)(1), 7701(a) (emphasis supplied). Both the U.S. Court of Appeals for the Federal Circuit and the Board have consistently affirmed the principle that the Board's enabling statute gives it appellate jurisdiction over actions that are made appealable to the Board by OPM regulation; and that where an appeal is solely by regulation, the regulation circumscribes the scope of the appeal. See Roberto v. Dep't of the Navy, 440 F.3d 1341, 1350 (Fed. Cir. 2006); Folio v. Dep't of Homeland Sec., 402 F.3d 1350, 1355 (Fed. Cir. 2005); Dowd v. United States, 713 F.2d 720, 722-23 (Fed. Cir. 1983); Gaxiola v. Dep't of the Air Force, 6 M.S.P.R. 515, 519 (1981). For example, a probationer has certain rights of appeal only as conferred by OPM regulation. OPM is prescribing an MSPB appeal right for adverse actions of 15 days or longer and for civil penalties taken under the Fair Chance Act as described below, when the alleged violator is an employee other than an ALJ.

For forms of misconduct not covered by the Fair Chance Act, written warnings and suspensions of 14 days or less do not have appeal rights to the MSPB. This was an intentional choice on Congress's part in passing the Civil Service Reform Act (CSRA). This scheme balances the interests of Federal employees with the needs of “sound and efficient administration.” See United States v. Fausto, 484 U.S. 439, 445 (1988). Prudently, the more serious the personnel action, the more robust are the remedies afforded. For example, “Chapter 75 of the Act governs adverse actions taken against employees for the `efficiency of the service,' which includes action . . . based on misconduct.” Fausto, at 446. Employees facing a “major adverse action” are entitled to MPSB review, and, if the decision is adverse, subsequent appeal to the MSPB's reviewing court, the U.S. Court of Appeals for the Federal Circuit. Id. at 447. A covered employee facing only a “minor adverse personnel action”—that is, a relatively short suspension—is entitled to less robust remedies, id. at 450: Namely, advance written notice, a reasonable time to respond, the right to be represented by an attorney, and a timely written decision, but not the right to full review by the MSPB and appeal to the Federal Circuit. 5 U.S.C. 7503(b).

For these reasons, OPM believes such appeal rights should not be conferred for written warnings and suspensions of 14 days or less taken under this subpart. This promotes efficiency and avoids creating inconsistencies on when appeal rights are provided for similar penalties on different types of misconduct. Moreover, for a short suspension under the Fair Chance Act, as for a short suspension under chapter 75, the procedures we propose—advance notice, an opportunity to review the material relied upon, and an opportunity for a written submission and an oral hearing before an OPM official, prior to any final action—are fair and adequate, without the need for an additional level of appeal to the MSPB.

Conversely, OPM has concluded that it would be appropriate to provide MSPB appeal rights for suspensions of more than 14 days under this subpart or any decision to impose a civil penalty. This facilitates a consistent approach to appeal rights for suspensions taken under the Fair Chance Act and under chapter 75. The agency will process any action at OPM's direction. Thus, there is no separate right of appeal to the agency from the decision. Any appeal to the MSPB will be against OPM and not against both OPM and the employee's agency.

The Board will have the authority to reverse OPM's action if the charges are not proved by preponderant evidence. If the Board finds that OPM has proved at least one specification of the charge by preponderant evidence, the Board must sustain the action. The Fair Chance Act does not incorporate the requirement in 5 U.S.C. 7503(a) and 7513(a) that an adverse action shall be “for such cause as will promote the efficiency of the service.” Accordingly, there is no requirement for OPM to prove a nexus between the employee's conduct and service efficiency, and the Board cannot mitigate the penalty. 3

OPM reads 5 U.S.C. 9205(b) as permitting the Director to decide which adverse actions are subject to appeal and which are not. Because the adverse action is ordered by OPM and only processed by the employing agency, there is no right to file an administrative grievance or contractual negotiated grievance for the adverse action under a negotiated grievance procedure. OPM, not the employing agency, orders the action under the Fair Chance Act. OPM is not a party in an agency's administrative grievance procedures, and OPM is not the subject of a collective bargaining agreement between an agency and an exclusive bargaining representative for that agency. 4 Therefore, an agency cannot overrule OPM's decision; the agency is merely processing an action taken by OPM. OPM invites public comment on whether a grievance procedure of some kind should be provided for short suspensions, and on how it would work considering that employing agencies lack discretion when OPM orders an adverse action.

This section outlines what OPM and the covered agency must maintain copies of, and their obligation under the Privacy Act.

OPM is proposing to regulate the provisions of the Fair Chance Act in 5 CFR part 920 because these provisions apply to positions in the excepted, Senior Executive, and competitive services. For the convenience of the reader, we are placing them in one location rather than repeat the provisions in parts 302, 317, 319, and 330, respectively. We also note that some agencies may have positions that are exempt from part 302 but not exempt from the provisions of the Fair Chance Act. Likewise, agencies may have positions akin to those in the SES, but which operate outside the provisions of part 317. Placing these rules in a common location not tied specifically to title 5 excepted service or SES rules will help mitigate any confusion as to their applicability governmentwide.

Proposed subpart A, of part 920 General Provisions, contains general provisions that are applicable to the timing of criminal history inquiries. Proposed section 920.101 contains definitions necessary for the administration of this part.

Proposed § 920.102 explains which positions are covered by this part and which positions may be excluded. Section 920.102(a) makes clear that positions in the competitive service, excepted service, and SES in executive agencies as well as positions in the United States Postal Service and the Postal Regulatory Commission are covered by this part. Section 920.102(b) states that for purposes of this part an exempt position is any position for which a hiring agency is required by statute to make inquiries into an applicant's criminal history prior to extending an offer of employment to the applicant.

The Fair Chance Act defines which agencies are covered by the Act. This definition includes an Executive Agency as such term is defined in 5 U.S.C. 105; the United States Postal Service and the Postal Regulatory Commission; and the Executive Office of the President. An “Executive agency” is defined in 5 U.S.C. 105 to mean an Executive Department under 5 U.S.C. 101, a Government corporation under 5 U.S.C. 103, and an independent establishment under 5 U.S.C. 104 (including the Government Accountability Office). Therefore, coverage of the Fair Chance Act is broad.

The definition of an “executive agency” in 5 U.S.C. 105 does not specifically include a “military department” as defined in 5 U.S.C. 102: Namely, the Department of the Army, the Department of the Navy, or the Department of the Air Force. OPM construes the Fair Chance Act to cover the military departments as well as the Department of Defense in which they reside, and proposes to include the military departments in the definition of a “agency.” Absent an expression of congressional intent to the contrary, because military departments are part of the Department of Defense, they are subject to those Civil Service laws that apply to an “executive agency” within the meaning of 5 U.S.C. 105. See White v. Dep't of the Army, 115 M.S.P.R. 664, 668 (2011). Yet “[t]he organizational history of the Department of Defense indicates that the military service departments were intended to function—at least, with respect to personnel matters—with the independence that generally characterizes executive departments outside the Department of Defense, rather than the limited kind of independence that generally characterizes organizations within those departments.” Pervez v. Dep't of Navy, 193 F.3d 1371, 1373 (Fed. Cir. 1999 (quoting Francis v. Dep't of the Navy, 53 M.S.P.R. 545, 549 (1992)). Thus, because of the military departments' “treatment as separate agencies for personnel purposes,” Pervez, 193 F.3d at 1374, OPM's proposed rule defines the military departments as separate “agencies” for purposes of complying with the Fair Chance Act.

While the coverage of Executive departments in 5 U.S.C. 101 is straightforward enough, 5 U.S.C. 9202(1) makes no specific exceptions for subdivisions of Executive departments which have their own statutory personnel authorities. Prominent examples include the Veterans Health Administration within the Department of Veterans Affairs, the Federal Aviation Administration within the Department of Transportation, the Transportation Security Administration within the Department of Homeland Security, and the intelligence components of the Department of Defense. We welcome comment on whether any statute establishing an alternative personnel system for a subdivision of a department or agency creates an exception from 5 U.S.C. 9202(1), notwithstanding the Fair Chance Act's later date of enactment.

The Fair Chance Act covers “Government corporations” and “independent establishments” as defined in 5 U.S.C. 103 and 104, and OPM must include them, generally, as covered “agencies” in our proposed rule. We note that these definitions have been broadly construed to cover a number of entities that have historically operated outside of the title 5 personnel system. Under 5 U.S.C. 103, “ `Government corporation' means a corporation owned or controlled by the Government of the United States,” and this text has been construed to include both corporations wholly owned by the U.S. Government, and mixed-ownership corporations under U.S. Government control, as specified in 31 U.S.C. 9101(2) and (3). See Snead v. Pension Benefit Guar. Corp., 74 M.S.P.R. 501, 503 (1997); Dockery v. Fed. Deposit Ins. Corp., 64 M.S.P.R. 458, 461-62 (1984). In light of this broad construction, we are soliciting comment on whether the authorizing statute of any Government corporation operates to make an exception from 5 U.S.C. 9202(1)'s coverage, notwithstanding the Fair Chance Act's later date of enactment.

The term “independent establishment” is defined in 5 U.S.C. 104 as “an establishment in the executive branch . . . which is not an Executive department, military department, Government corporation, or part thereof, or part of an independent establishment.” The term has been construed broadly to cover independent, free-standing establishments with their own structure, or entities that have been created by statute or executive order and are not privately owned or privately controlled. Applicability of the Fed. Vacancies Reform Act to Vacancies at the Int'l Monetary Fund and the World Bank, 24 Op. O.L.C. 58, 65-66 (2000); Hereford v. Tenn. Valley Auth., 88 M.S.P.R. 201, 205-206 (2001). There is no specific exception in 5 U.S.C. 104 for independent regulatory agencies or commissions as defined in 44 U.S.C. 3502(5), or for free-standing agencies that largely operate outside of the title 5 personnel system. Accordingly, we are soliciting comment on whether the authorizing statute of any independent establishment operates to make an exception from 5 U.S.C. 9202(1)'s coverage, notwithstanding the Fair Chance Act's later date of enactment.

Finally, 5 U.S.C. 9202(1)(B) expressly extends OPM's rulemaking and enforcement power under the Fair Chance Act to “the Executive Office of the President.” We construe this language as applying to an application for any competitive service position within the Executive Office of the President (EOP), consistent with OPM's broad legal authority over competitive service employment. Under 5 U.S.C. 3302 and 1104(a)(1), the President may “prescribe rules governing the competitive service” and “delegate . . . authority for personnel management functions” to OPM. The President has prescribed Civil Service Rules I and V, as codified in parts 1 and 5 of Title 5, Code of Federal Regulations. These rules state that for “all positions in the competitive service and . . . all incumbents of such positions,” OPM “may secure effective implementation of the civil service laws, rules, and regulations” by “[e]valuating the effectiveness of . . . agency compliance with and enforcement of applicable laws, rules, regulations and office directives” and “[i]nvestigating, or directing an agency to investigate and report on, apparent violations of applicable laws, rules, regulations, or directives requiring corrective action, found in the course of an evaluation.” 5 CFR 1.1, 5.2(b), (c). Following OPM's report of an evaluation or investigation, “[w]henever the Director issues specific instructions as to separation or other corrective action with regard to an employee, including cancellation of a personnel action, the head of the agency concerned shall comply with the Director's instructions;” and OPM “shall promulgate and enforce regulations necessary to carry out” these requirements. 5 CFR 5.1, 5.3(b).

In 5 U.S.C. 1103(a)(5)(A) and 1303(1), Congress has charged OPM with “executing, administering, and enforcing” these civil service rules and “investigat[ing] and report[ing] on matters concerning . . . the enforcement and effect” of these rules. These provisions do not restrict OPM's oversight authority over positions and employees in the competitive service based on where they are placed in the Executive branch. Thus, it would be consistent with preexisting authority for OPM to order a penalty under the Fair Chance Act as a corrective action, following an investigation and an adverse action proceeding, if an EOP employee is found to have made a prohibited inquiry to an applicant for a competitive service position.

However, OPM's oversight authority is more limited with respect to positions and employees in the excepted service. We do not believe Congress intended to subject applications for positions outside of the competitive service in every component of the Executive Office of the President to OPM's regulatory and enforcement jurisdiction under the Fair Chance Act, considering the established principle that some, but not all, EOP components are “independent establishments” of the Executive branch within the meaning of 5 U.S.C. 104, and thus within 5 U.S.C. 105's definition of an “executive agency” subject to regular title 5 employment rules.

The term “independent establishment” in 5 U.S.C. 104 has been construed to cover those free-standing components of the EOP which have their own structure and unity, such as the Office of Management and Budget; but to exclude from its coverage components of informal or ad hoc nature, i.e., working groups or task forces. See Applicability of the Fed. Vacancies Reform Act, 24 Op. O.L.C. at 65-66, 67. The term has also been held to exclude those EOP components which are not “independent establishments” by operation of other laws. See Haddon v. Walters, 43 F.3d 1488, 1490 (D.C. Cir. 1995) (noting the exclusion of the Executive Residence). 5 Thus OPM's proposed rule does not extend to applications for positions outside of the competitive service in these components of the Executive Office of the President.

In addition, the Act defines the terms “appointing authority,” “conditional offer,” and “criminal history record information.” An “appointing authority” is an employee in the executive branch of the Government of the United States that has authority to make appointments to positions in the civil service. “Conditional offer” means an offer of employment in a position in the civil service that is conditioned upon the results of a criminal history inquiry. The term “criminal history record information” has the meaning given the term in section 5 U.S.C. 9101(a), except as provided in subparagraphs (B) and (C) of section 9201. Subparagraph (B) states that criminal history record information includes any information described in the first sentence of section 9101(a)(2) that has been sealed or expunged pursuant to law. Subparagraph (C) states that criminal history record information includes information collected by a criminal justice agency, relating to an act or alleged act of juvenile delinquency, that is analogous to criminal history record information (including such information that has been sealed or expunged pursuant to law). OPM incorporates these definitions without additional interpretation, as they are clear on their face.

The Fair Chance Act uses the term “employee,” which is defined in 5 U.S.C. 2105; but effectively modifies the definition by including, in its coverage, the United States Postal Service and the Postal Regulatory Commission, which would otherwise be excluded from the definition by operation of 5 U.S.C. 2105(e). Accordingly, we are adding the following definition to proposed § 920.101: “Employee means an `employee' as defined in 5 U.S.C. 2105, and an employee of the United States Postal Service or the Postal Regulatory Commission.”

As described in greater detail below, we are defining “political appointment” as an appointment by the President without Senate confirmation (except those appointed under 5 CFR 213.3102(c)) because these are not positions of a confidential or policy determining character); an appointment to a position compensated under the Executive Schedule (5 U.S.C. 5312 through 5316); an appointment of a White House Fellow to be assigned as an assistant to a top-level Federal officer (5 CFR 213.3102(z)); a schedule C appointment (5 CFR 213.3301, 213.3302); a noncareer, limited term, or limited emergency Senior Executive Service appointment (5 CFR part 317, subpart F); an appointee to serve in a political capacity under agency-specific authority; and a provisional political appointment. This definition lists the different types of political appointing authorities found in regulation and statute.

Finally, we are defining an “applicant” as a person who has actually applied to an agency under its procedures for accepting applications. This definition resolves a textual ambiguity in 5 U.S.C. 9202(a). It makes clear that the Fair Chance Act's remedies are only for persons who have actually applied for Federal jobs, not for persons who, for example, are merely considering applying for a job, have saved a resume in an on-line applicant interface such as USAJOBS but have not yet submitted it in response to a job opportunity announcement, or have attended a recruiting event but have not yet formally applied for a vacancy. We note that for USAJOBS announcements, 5 CFR 330.104 requires agencies to notify applicants of how to submit an application and how the receipt of an application will be documented.

Proposed subpart B addresses when inquiries into an applicant's criminal history may be made. Proposed § 920.201 regulates this aspect of the Fair Chance Act. Proposed paragraph (a) states that an agency cannot request an applicant's criminal history information orally or in written form, prior to giving a conditional offer of employment. This includes the following points in the recruitment and hiring process: (1) Initial application, through a job opportunity announcement on USAJOBS, or through any recruitment/public notification such as on the agency's website/social media, etc.; (2) after an agency receives an initial application through its back-end system, through shared service providers/recruiters/contractors, or orally or via email and other forms of electronic notification; and (3) prior to, during, or after a job interview. This prohibition applies to agency personnel, shared service providers, contractors involved in the agency's recruitment and hiring process, automated systems (specific to the agency or governmentwide), etc.

Proposed paragraph (b) tracks the requirements of 5 U.S.C. 9202(b) and (c)(1). It allows agencies to make inquiries into a job applicant's criminal history, prior to making a conditional job offer to that applicant, if doing so is otherwise required by law, if the position requires a determination of eligibility for access to classified information or employment in a sensitive position, or eligibility for acceptance or retention in the armed forces (as described in 5 U.S.C. 9101(b)(1)(A)(i), (ii), or (iii)), or if it is a Federal law enforcement officer position (as defined in section 115(c) of title 18). We are clarifying that for this purpose a “sensitive position” is one that been so designated under the Position Designation System issued by OPM and the Office of Director of National Intelligence, which describes in greater detail agency requirements for designating positions that could bring about a material adverse effect on the national security. This conforms to our regulations governing sensitive positions in 5 CFR 1400.201.

The reference in the Fair Chance Act to a position requiring a determination of eligibility for acceptance or retention in the armed forces is ambiguous. By its terms the Fair Chance Act applies only to applicants for “an appointment to a position in the civil service,” not for acceptance into the armed forces. We construe this provision as relating to those positions in the civil service where the applicant is required to maintain military membership as a condition of civilian Federal employment, i.e., a dual-status military technician position. Our proposed rule incorporates this interpretation.

The Fair Chance Act applies to applicants to positions in the “civil service,” which, under 5 U.S.C. 2101(1), extends to “all appointive positions” in the executive branch. Proposed paragraph (b) makes an exception for applicants for political appointments, since political appointees provide confidential, policy-determining, or policy-advocating functions on behalf of the President or presidentially-appointed agency heads, and serve as personal advisors and representatives to the President and other senior administration officials. Pre-employment criminal history screening may be required for these positions prior to a conditional offer of employment, because of the utmost trust and discretion required in these positions and the potential for adverse publicity associated with unfit applicants. OPM is not making an exception for applicants to positions requiring appointment by the President with the advice and consent of the Senate. The Fair Chance Act already excludes such positions because a “conditional offer” is never extended for these positions under 5 U.S.C. 9202(a); rather, the individual is nominated and then confirmed.

Proposed paragraph (b) also describes other circumstances for which OPM may grant exceptions in response to a request from a hiring agency. OPM may grant exceptions on a case-by-case basis only when an agency demonstrates specific job-related reasons why the agency needs to evaluate an applicant's criminal history for a position prior to making a conditional offer giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions.

Proposed paragraph (c) adds the requirement to notify applicants of the prohibition in job opportunity announcements and on agency websites/portals for positions that do not require a posting on USAJOBS, such as excepted service positions, in addition to information about its complaint process as required by part 754 of this chapter.

Proposed § 920.202 defines what constitutes a violation of the Fair Chance Act and the prohibition in proposed § 920.201. Proposed paragraph (a) defines a violation as any oral or written request from criminal history information prior to a conditional job offer. Proposed paragraph (b) explains that a violation occurs when a prohibited inquiry is made by agency personnel, including when they act through shared service providers, contractors involved in the agency's recruitment/hiring process, or automated systems (specific to the agency or governmentwide).

This section also outlines several situations in which a violation could occur. An agency cannot request criminal history information upon the initial application, through a job opportunity announcement on USAJOBS, or through any recruitment/public notification such as on the agency's website/social media. An agency also cannot request this information after an agency receives an initial application through its back-end system, through shared service providers/recruiters/contractors, or orally or via email and other forms of electronic notification prior to giving the conditional offer. Additionally, the agency cannot request the information verbally prior to, during, or after a job interview prior to giving a conditional offer.

Proposed paragraph (c) provides that when a prohibited request, announcement, or communication is publicly posted or simultaneously distributed to multiple applicants, it constitutes a single violation. This resolves an ambiguity in the language of 5 U.S.C. 9202(a) and prevents the absurd and unintended outcome of thousands of violations and complaints arising from a single job opportunity announcement on USAJOBS.

Proposed paragraph (d) explains that any violation as defined in paragraph (a) is subject to the complaint and penalty procedures in part 754 of this chapter.

OPM is issuing this proposed rule to implement the provisions of the Fair Chance Act found in Chapter 92 of title 5, United States Code. This statute prohibits Federal agencies and Federal contractors from requesting that applicants for employment disclose criminal history record information before the agency makes a conditional offer of employment to that employee. The Fair Chance Act identifies some positions to which the prohibition shall not apply and requires OPM to issue regulations identifying additional positions to which the prohibition shall not apply. It also requires OPM to establish complaint procedures under which an applicant for a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency with the Fair Chance Act, and adverse action and appeal procedures when it has been determined that a Federal employee has violated the Fair Chance Act. OPM is implementing these statutory requirements in the least burdensome way it can while still effectuating the congressional purposes of the Fair Chance Act.

The proposed rule allows job applicants to present their qualifications and abilities for assessment and be considered based on their merits without the specter of a criminal record during the selection process. Employment of people with criminal records is the single most important influence on reducing re-offending. 6 The impact to communities and society includes reducing criminal justice costs, crime victimization costs, and the costs of incarceration to the reoffenders and their families. 7 Another significant impact of the proposed rule is that the Federal government, as the nation's largest employer and a model employer, will demonstrate an example of fair hiring practices by removing unnecessary barriers for people with records who desire to join the Federal workforce.

OPM believes there is significant value in being able to demonstrate the effect of these proposed regulations on both Federal agencies and formerly incarcerated individuals. As noted earlier, however, OPM currently does not have and is not aware of any data to show what impact, if any, OPM's existing “Ban the Box” rules have had on agency hiring processes. Therefore, OPM invites comments regarding any hiring data agencies may have that demonstrate the effect of either OPM's prior regulations or the potential impact of these proposed rules. This includes ways that these proposed rules may impact the size of applicant pools for positions not previously covered by OPM's regulation, including positions in the excepted service as well as positions in the United States Postal Service and the Postal Regulatory Commission.

OPM's implementing regulations are required by statute and cannot be avoided. In the proposed regulations for part 754, OPM fleshes out procedures for receiving and investigating complaints, or any other information, as well as procedural and appeal rights for an agency employee alleged to have violated section 9202. The statute establishes the agencies and employees covered by proposed 5 CFR part 754, available penalties that can be imposed for an employee found to have violated section 9202, and the 30-day timeframe for appealing an adverse action.

First, OPM considered the option of receiving complaints, and any other information, directly from applicants and conducting its own outreach and investigative fact-finding, as appropriate to the nature of the applicant's submission. However, OPM believes there is ample precedent for agencies to establish internal procedures for receipt and investigation of employment-related complaints against the agency and to accomplish these tasks in a fair and impartial manner. Therefore, we have laid out an approach that we believe is minimally burdensome for agencies. Subject to OPM guidelines and oversight, the proposed rule assigns to each agency covered by the Fair Chance Act regulations the responsibility to receive complaints, or any other information, and any applicable supporting material. Further, the proposed rule delegates to each agency OPM's responsibility to conduct an investigation of the complaint, or any other information, regarding compliance with 5 U.S.C. 9202. OPM believes that establishing a process which is similar to other successful and effective processes will facilitate implementation of the Fair Chance Act complaint process in covered agencies as agencies are already familiar with these similar processes. While the proposed rule provides parameters to guide agencies and facilitate governmentwide consistency, the assignment and delegation to agencies reduces the need for what would be more extensive regulations if OPM were directly receiving and investigating complaints, and other information, related to an alleged violation of section 9202.

Regarding the procedures for adverse actions, the statute requires notice and an opportunity for a hearing on the record by OPM for any employee alleged to have committed a violation of section 9202. Section 9205 further notes that the procedures of chapter 75 of title 5, United States Code, are not applicable and that appeal or judicial review are not applicable except as provided under procedures established by the Director of OPM. Because chapter 75 procedures are not available, it is necessary for OPM to propose an alternative to implement the unique procedural and appeal elements of the Fair Chance Act. In developing proposed procedures, OPM considered the benefits of adapting the adverse action procedures found at 5 CFR part 752 rather than another approach. Adapting the part 752 procedures affords agencies the benefit of familiarity, facilitates ease of transfer in knowledge and skills to the new regulations, and reduces the need for more extensive or complex regulations.

This rule will affect the operations of over 80 Federal agencies—ranging from cabinet-level departments to small independent agencies. This rule expands the prohibition on making inquiries into an applicant's criminal background prior to a conditional offer of employment. The prohibition currently applies to positions in the competitive service. The proposed rule would expand this prohibition to include agencies with positions in the excepted service and the Senior Executive Service. There are approximately 20 agencies in the Executive Branch that are fully in the excepted service that will be impacted by this rule. We estimate that this rule will require individuals employed by these agencies to develop policies and procedures to implement the rule when making appointments. For the purpose of this cost analysis, with regard to parts 302, 317, 319, 330, 731, and 920, the assumed average salary rate of Federal employees performing this work will be the rate in 2022 for GS-14, step 5, from the Washington, DC, locality pay table ($143,064 annual locality rate and $68.55 hourly locality rate). We assume that the total dollar value of labor, which includes wages, benefits, and overhead, is equal to 200 percent of the wage rate, resulting in an assumed labor cost of $137.10 per hour.

In order to comply with the regulatory changes in this proposed rule, affected agencies will need to review the rule and update their policies and procedures. We estimate that, in the first year following publication of the final rule, this will require an average of 250 hours of work by employees with an average hourly cost of $137.10. This would result in estimated costs in that first year of implementation of about $34,275 per agency, and about $2,742,000 in total governmentwide. We do not believe this rule will substantially increase the ongoing administrative costs to agencies (including the administrative costs of administering the program and hiring and training new staff).

Regarding the implementation of the regulatory requirements in proposed part 754, in the event of a complaint by an applicant, agencies will incur labor costs associated with the investigation into the complaint and OPM will incur labor costs associated with reviewing the results of the investigation and reaching a determination which could include issuing a notice of proposed action to the subject of the complaint, considering any response, and making a final determination. In the event OPM directs the employing agency to take an action as a result of a founded complaint, OPM would incur labor costs in responding to and/or defending any appeal by the subject of the complaint to the Merit Systems Protection Board.

In order to estimate the costs to implement the proposed regulatory requirements in part 754 for complaint procedures, adverse actions, and appeals, OPM made certain assumptions and considered that some costs may vary depending on agency size and the extent to which an agency is able to leverage existing policies, practices, and procedures. For this cost analysis, the assumed staffing for Federal employees performing the work required by the regulations in part 754 is one executive; one GS-14, step 5; a GS-15, step 5; and one GS-7, step 5 in the Washington, DC, locality area. The 2022 basic rate of pay for an executive at an agency with a certified SES performance appraisal system ranges from $135,468 to $203,700 annually, for an average of $169,584 per year or $81.26 per hour. For General Schedule employees in the Washington, DC, locality area, the 2022 pay table rates are $168,282 annually and $80.63 hourly for GS-15, step 5; $143,064 annually and $68.55 for GS-14, step 5, and $57,393 annually and $27.50 hourly for GS-7, step 5. We assume that the total dollar value of labor, which includes wages, benefits, and overhead, is equal to 200 percent of the wage rate, resulting in assumed hourly labor costs of $162.51 for an executive; $161.27 for a GS-15, step 5; $137.10 for a GS-14, step 5; and $55 for a GS-7, step 5.

As to overall complaint procedures, program implementation and oversight, OPM assumes it will incur certain upfront costs and then ongoing costs. For example, the establishment of new processing codes requires one-time updates to OPM's databases and personnel action processing handbook. After the issuance of any final rule effecting part 754, OPM may develop additional materials related to its implementation. This includes, but is not limited to, procedures and guidance related to agency obligations to report to OPM actions taken to investigation any complaints filed by an applicant regarding an agency's compliance with 5 U.S.C. 9902 and adverse actions taken at the direction of OPM for non-compliance with 5 U.S.C. 9202. OPM estimates that the cost for its implementation and oversight in the first year will be $30,370.00 and $3,687.04 on average in subsequent years.

OPM estimates that it will cost each agency $21,319.04 in the first year to establish an internal policy for handling alleged violations of 5 U.S.C. 9202. We assume that larger agencies advertise more vacancies and are therefore likely to receive a greater number of complaints. We estimate the annual cost of complaint intake and investigation for large agencies to be $172,746.00 (based on an average of 30 complaints per large agency); medium size agencies $115,164.00 (for 20 complaints); and small size agencies $57,582.00 (for 10 complaints). The total estimated cost for agencies to receive and investigate complaints is $345,492.00 annually, which averages to $5,758.20 per complaint.

For agency outreach regarding any other information that may potentially be an attempt to file a complaint for an alleged violation of 5 U.S.C. 9202, OPM again assumes that larger agencies advertise more vacancies and are therefore likely to experience a greater number of such instances. We estimate that large agencies on average may conduct 30 instances of outreach and incur $8,226.00 for the total number of instances. Medium size agencies may conduct outreach for 20 instances and incur $5,484.00 total. Small agencies may conduct outreach for 10 instances and incur $2,742.00 total. The total estimated annual cost of agency outreach is $16,452.00 and the average cost of agency outreach is $274.20 per instance.

Following agency intake, outreach (if applicable), and investigation, OPM is responsible for administering the adverse action procedures as outlined in proposed § 754.203. Based on the estimate for the annual number of complaints that Federal agencies may receive (60 for large, medium, and small agencies combined), OPM estimates that 75%, or 15, of the complaints may result in a finding of a violation of 5 U.S.C. 9202. While OPM will carefully review and consider each investigative file submitted by agencies, OPM expects that only those investigations that result in a finding of a violation will generate a meaningful increase in cost above staff's usual duties and responsibilities. Assuming 15 such cases, the total cost for OPM's administration of the adverse action procedures, including proposing an action, considering any reply, and issuing a decision, is estimated to be $159,818.40. The average cost for OPM per adverse action is $10,654.56.

Under the proposed regulation, agencies are responsible for processing any adverse action imposed by OPM. Agencies routinely process suspensions for other forms of misconduct. Thus, applying those same procedures to adverse actions imposed for violations of 5 U.S.C. 9202 will be a negligible cost for agencies. However, OPM does anticipate some cost for the one-time update to agency processing systems for the new codes established by OPM to identify that the adverse actions are taken under 5 U.S.C. 9202, as well as the establishment of agency procedures for the collection of civil penalties. OPM estimates the costs to agencies in the first year for updating their systems and procedures and processing actions to be $24,690.04. Thereafter, we estimate that the average cost for an agency to process an adverse action, including any civil penalty, is $960.50 per action.

The available penalties for violations of 5 U.S.C. 9202 include written warnings and short suspensions (14 days or less) that are not grievable or appealable. Further, an employee's first two violations of section 9202 will result in a penalty no stronger than a seven-day suspension. For only a third or subsequent violation would OPM impose a penalty that may be appealable to the MSPB. While such an appeal to the MSPB is possible, we believe that it will be rare that an employee violates section 9202 three or more times. OPM anticipates that if 15 adverse actions are imposed per year, only one on average will be appealable to the MSPB. We therefore do not believe there will be a measurable impact on MSPB operations and thus, we have not estimated costs for the MSPB.

Because any appeal filed is against OPM and not the employing agency, OPM will be responsible for defending the action. OPM estimates $11,447.84 to defend an appeal.

The remaining requirements of the proposed part 754 for complaint procedures, adverse actions, and appeals will require minimal costs for OPM or agencies. With respect to informing applicants of the agency's complaint procedures via the agency's public website and in vacancy announcements, the additional cost to agencies will be small. Agencies already provide notice on their public websites and in vacancy announcements about how an applicant can file an EEO complaint. Also, agencies provide information to the public on their external websites about how to file an Inspector General complaint. Thus, an additional notice does not present a significant additional cost. In conclusion, OPM estimates a cost of $598,141.47 to implement the complaint procedures under the proposed Fair Chance Act regulations in the first year and the recurring cost per year to be $32,782.34.

We note that OPM's rule, when finalized, may have indirect costs on other entities. Section 1122(d) of the Fair Chance Act amends section 207(d)(2) of the Congressional Accountability Act of 1995 to require the Board of Directors of the Office of Congressional Workplace Rights to promulgate regulations that are “the same” as OPM's “except to the extent that the Board may determine, for good cause shown and stated together with the regulation, that a modification of such regulations would be more effective for the implementation of the rights and protections under this section.” Section 1122(e) of the Fair Chance Act similarly amends 28 U.S.C. 604(e)(5)(B) to require the Director of the Administrative Office of the U.S. Courts to promulgate regulations that are “the same” as OPM's “except to the extent that the Director . . . may determine, for good cause shown and stated together with the regulation, that a modification of such regulations would be more effective for the implementation of the rights and protections under this subsection.” Finally, section 1123(c) of the Fair Chance Act requires the Federal Acquisition Regulation (FAR) Council to amend the FAR “to be consistent with” OPM's regulations “to the maximum extent practicable” and to “include together with such revision an explanation of any substantive modification of the Office of Personnel Management regulations, including an explanation of how such modification will more effectively implement the rights and protections under this section.”

Such indirect costs are not quantifiable since sections 1122(d)-(e) and 1123(c) of the Fair Chance Act give the other entities significant leeway to adopt, reject, or modify OPM's regulations with respect to the populations covered by those sections.

The Fair Chance Act regulations will help level the playing field for applicants with a criminal history record, contribute to an equitable and diverse Federal workforce, and enhance transparency and accountability in the Federal hiring process. More than 70 million adults in the United States have an arrest or conviction record that can show up on a routine background check for employment. As a result, one in three adults may face serious challenges securing employment in order to provide for their families and communities. 8 With some exceptions, the Fair Chance Act prohibits Federal employers from requesting that an applicant disclose criminal history record information before the agency makes a conditional offer of employment to that applicant. The proposed regulations provide the opportunity for qualified applicants with records to advance in the hiring process just as a qualified applicant without a criminal history record would advance. Studies show that employment is the single most important factor in reducing recidivism; that people with criminal records are no more likely to be fired for misconduct than people without records; and that they are statistically less likely to quit, which saves employers in turnover costs. 9 Therefore, the regulations benefit not only the Federal government as an employer but also American society as a whole at the family and community levels.

This regulation will support the Administration's priority to advance comprehensive equity. Executive Order 14035 establishes an initiative on diversity, equity, inclusion, and accessibility (DEIA). As part of the DEIA Initiative, a Government-Wide Strategic Plan To Advance Diversity, Equity, and Accessibility In The Federal Workforce was released by OPM in November 2021. This new DEIA strategic plan directs agencies to prioritize a number of efforts to support sustainability and continued improvement on DEIA matters. The proposed rule can help Federal agencies realize the vision of the Federal government as a model employer in the areas of diversity, equity, and inclusion. There is evidence that people of color have less access to basic resources as compared to other segments of the American population. For example, Black women with records are most impacted by the high rate of unemployment for formerly incarcerated people. 10 By removing barriers to fair competition through the Fair Chance Act along with other initiatives, Federal agencies stand to gain a more diverse applicant pool, improve equity in the hiring process, and build or maintain a workforce fully representative of America.

Finally, another benefit of the proposed rule is increased transparency and accountability in the Federal hiring process. The regulations protect the rights of applicants who believe they have been subjected to a violation of 5 U.S.C. 9202 and holds accountable Federal employees found to have committed such a violation. This regulation should have a deterrent effect on supervisors, managers, and other employees involved in the hiring process to prevent them from engaging in activities that are in violation of the Fair Chance Act.

In addition to the questions posed in the regulatory analysis and given the limited information on the Federal Government's implementation on Ban the Box, OPM requests comment on the implementation and impacts of Ban the Box efforts in the private sectors. Such information will be useful for better understanding the impact of these regulations on hiring by Federal agencies. The types of information that OPM is interested in include, but are not limited to, the following:

• Based on what the private sector has done, what should OPM, Federal agencies, and the government as a whole hope to accomplish with implementation of these regulations?

• Has your organization's implementation of Ban the Box impacted and aided your organization's diversity, equity, inclusion, and accessibility efforts? If so, how?

• Does your hiring process include any proactive efforts or accommodations related to candidates who have a criminal history record? Have you taken any steps, such as streamlining or revising your application process to address barriers facing candidates who have a criminal history record?

• How many roles does your organization have that are currently open or will be open that can be filled by candidates with criminal history records? How many positions has your organization filled?

• How does your organization measure success with respect to hiring candidates with criminal history records? Do you have data or reports to share?

• To the extent your organization has data regarding the number of employees who have a criminal history record, what has been your experience with respect to those candidates and employee turnover? How does employee turnover for those with criminal history records compare to employee turnover for those without criminal history records?

• Has Ban the Box increased qualified applicants for hard-to-fill positions? If so, what types of positions?

• OPM recognizes that engaging in efforts to hire candidates with a criminal history record is not only an opportunity to diversify the federal government workforce but is also a chance to forge meaningful connections with job development experts in local communities. How has your organization partnered with local source partners to give you strategic access to talented individuals with criminal history records? What should OPM and federal agencies consider in this area?

• Are there actions that you have taken to better ensure that applicants with criminal history records can succeed once hired? How can OPM ensure federal agencies are ready to receive talented applicants who have criminal history records, once they receive conditional offers of employment?

• Many candidates with criminal history records who are qualified in terms of the skills they possess may not have previous job experience in the role, or may have a lengthy employment gap during a period of incarceration. As your organization recruits for your open roles, how have you focused on identifying candidates who, even though they may not have significant work experience, can demonstrate transferable skills that will make them successful in your organization?

• Some studies  11 suggest implementation of Ban the Box results in lower employment for certain groups. What should OPM and Federal agencies do to avoid these outcomes? Are there other studies to review and consider as part of the federal hiring process for these individuals to mitigate or avoid these outcomes?

• Are there additional ways that the Federal Government can be a model employer with respect to individuals with criminal history records?

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. In accordance with the provisions of Executive Order 12866, this rule was reviewed by the Office of Management and Budget as a significant, but not economically significant, rule.

The OPM Director certifies that this rule will not have a significant economic impact on a substantial number of small entities because it applies only to Federal agencies and employees.

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

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

This rule will not result in the expenditure by State, local or tribal governments of more than $100 million annually. Thus, no written assessment of unfunded mandates is required.

Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act or CRA) (5 U.S.C. 801 et seq. ) requires rules to be submitted to Congress before taking effect. OPM will submit to Congress and the Comptroller General of the United States a report regarding the issuance of this rule before its effective date, as required by 5 U.S.C. 801. The Office of Information and Regulatory Affairs in the Office of Management and Budget has determined that this rule is not a major rule as defined by the CRA (5 U.S.C. 804).

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number.

This rule makes reference to an OMB approved collection of information subject to the PRA titled Declaration for Federal Employment (OF 306), OMB Control Number 3206-0182, which has been submitted to OMB for review. This form is completed by applicants who are under consideration for Federal or Federal contract employment and collects information about an applicant's selective service registration, military service, and general background. The information collected on this form is mainly used to determine a person's acceptability for Federal and Federal contract employment, and their retirement status and life insurance enrollment. The information on this form may be used in conducting an investigation to determine a person's suitability or ability to hold a security clearance, and it may be disclosed to authorized officials making similar, subsequent determinations. The OF 306 asks for personal identifying data and information about violations of the law, past convictions, imprisonments, probations, parole, military court martial, delinquency on a Federal debt, Selective Service Registration, United States military service, Federal civilian or military retirement benefits received or applied for, and life insurance enrollment.

Public reporting burden for this collection of information is estimated to average 15 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

The annual reporting burden is estimated as follows:

Respondents: 315,478.

Total Annual Responses: 315,478.

Total Burden Hours: 78,870.

Interested persons are invited to send comments regarding burden estimates or any other aspect of this collection of information. OPM is soliciting comments to:

1. Evaluate the necessity and utility of the proposed information collection for the proper performance of the agency's functions, including whether the information will have practical utility;

2. evaluate the accuracy of the estimated burden, including the validity of the methodology and assumptions used;

3. enhance the quality, utility, and clarity of the information to be collected; and

4. use automated collection techniques or other forms of information technology to minimize the information collection burden. Submit comments on this collection of information no later than June 27, 2022, through https://www/regulations.gov and follow the instructions on the site.

A copy of the proposed information collection and the associated instructions is available at https://www.opm.gov/forms/pdf_fill/of0306.pdf. The systems of record notice for this collection is: https://www.opm.gov/information-management/privacy-policy/sorn/opm-sorn-govt-1-general-personnel-records.pdf.

Accordingly, OPM is proposing to amend chapter I of title 5, Code of Federal Regulations, as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would expand the availability of RNAV in Alaska and improve the efficient flow of air traffic within the NAS by lessoning the dependency on ground based navigation.

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

Communications should identify both docket numbers (FAA Docket No. FAA-2022-0434; Airspace Docket No. 19-AAL-69) and be submitted in triplicate to the Docket Management Facility (see ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2022-0434; Airspace Docket No. 19-AAL-69.” The postcard will be date/time stamped and returned to the commenter.

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

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

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

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

In 2003, Congress enacted the Vision 100—Century of Aviation Reauthorization Act (Pub L., 108-176), which established a joint planning and development office in the FAA to manage the work related to the Next Generation Air Transportation System (NextGen). Today, NextGen is an ongoing FAA-led modernization of the nation's air transportation system to make flying safer, more efficient, and more predictable.

In support of NextGen, this proposal is part of a larger and comprehensive RNAV T-route modernization project in the state of Alaska. The project's mission statement is “to modernize Alaska's Air Traffic Service route structure using satellite based navigation. Development of new T-routes and optimization of existing T-routes will enhance safety, increase efficiency and access, and will provide enroute continuity that is not subject to the restrictions associated with ground based airway navigation.” As part of this project, the FAA evaluated the existing Colored airway structure for: (a) Direct replacement ( i.e., overlay) with a T-route that offers a similar or lower Minimum Enroute Altitude (MEA) or Global Navigation Satellite System Minimum Enroute Altitude (GNSS MEA); (b) the replacement of the Colored airway with a T-route in an optimized but similar geographic area, while retaining similar or lower MEA; or (c) removal with no route structure (T-route) restored in that area because the value was determined to be insignificant.

Industry and users have indicated a desire that the FAA transition the Alaskan enroute navigation structure away from any dependency on NDBs, and move to develop and improve the RNAV route structure. The FAA believes this request is time sensitive given the increasing number of NDBs that are currently and/or scheduled out of service, and the lack of an NDB acquisition, maintenance, or sustainment program, which forces aircraft flying under Instrument Flight Rules (IFR) that are without de-icing protection to fly at higher MEAs, with the potentially associated loss of safety.

The FAA is proposing to amend RNAV T-route T-260. This proposed action is necessary due to the planned decommissioning of the Tin City, AK, (TNC) NDB and the Point Hope, AK, (PHO) NDB. Both NDBs will decommission as part of the RNAV modernization effort for the state of Alaska. The FAA proposes to replace the TNC and PHO, AK NDBs with the FEDEV and VANTY waypoints (WPs), respectively. Although the TNC NDB will decommission, the co-located DME will remain for use within the NAS. Further, this proposed amendment action would improve the RNAV satellite-based air traffic network in Alaska by planning for the future connectivity of future RNAV T-routes.

The FAA is proposing an amendment to 14 CFR part 71 to amend RNAV route T-260 in the vicinity of Nome, AK in support of a large and comprehensive T-route modernization project in the state of Alaska. The proposed RNAV T-route amendment is described below.

T-260: T-260 currently extends between the Point Hope, AK, (PHO) NDB and the NOME, AK, (OME) VHF Omnidirectional Radar/Distance Measuring Equipment (VOR/DME). The FAA proposes to replace the Point Hope, AK (PHO) NDB and the Tin City, AK, (TNC) NDB/DME with the VANTY and FEDEV WPs, respectively. The FAA also proposes to remove the COGNU, AK, WP from the legal description due to it having less than a 1 degree turn and is not required. As a result, T-260 would extend between the VANTY, AK, WP and the Nome, AK, VOR/DME.

United States Area Navigation Routes are published in paragraph 6011 of FAA Order JO 7400.11F dated August 10, 2021 and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The RNAV route listed in this document would be published subsequently in FAA Order JO 7400.11.

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

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

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

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

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

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

Communications should identify both docket numbers (FAA Docket No. FAA-2022-0436; Airspace Docket No. 22-ASW-1) and be submitted in triplicate to the Docket Management Facility (see ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2022-0436; Airspace Docket No. 22-ASW-1.” The postcard will be date/time stamped and returned to the commenter.

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

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

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

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

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

Although the VOR portion of the Eagle Lake VOR/DME is planned for decommissioning, the co-located DME portion of the NAVAID is being retained to support NextGen PBN flight procedure requirements.

The ATS routes effected by the Eagle Lake VOR decommissioning are VOR Federal airways V-198, V-212, V-556, and V-558, and RNAV route T-256. The V-198, V-556, V-558, and T-256 ATS routes are affected directly with the Eagle Lake VOR being included in the route descriptions. Whereas, V-212 is affected based on the navigational guidance the Eagle Lake VOR provides to a segment of the airway between the extended service volume limit of the San Antonio, TX, VOR/Tactical Air Navigation (VORTAC) NAVAID (SEEDS fix) and the intersection of the San Antonio VORTAC and the Industry, TX, VORTAC radials (WEMAR fix). Except for T-256, the planned decommissioning of the Eagle Lake VOR results in the remaining ground-based NAVAID coverage in the area being insufficient to enable the continuity of the affected ATS routes. As such, modifications to V-198 and V-556 would result in creating or extending gaps in the airways and modifications to V-212 and V-558 would result in the airways being shortened. And, modifications to T-256 would include the Eagle Lake VOR/DME route point being removed from the route description.

To overcome the affected ATS route gaps or removed segments, instrument flight rules (IFR) traffic could use portions of adjacent VOR Federal airways V-68 and V-222 to circumnavigate the affected area, or receive air traffic control (ATC) radar vectors to fly through the affected area. Additionally, IFR pilots equipped with RNAV capabilities could use T-200, T-220, and T-256, and the new T-466 proposed in this action, or navigate point to point using the existing fixes that would remain in place to support continued operations though the affected area. Visual flight rules (VFR) pilots who elect to navigate via the affected ATS routes could also take advantage of the adjacent ATS routes or ATC services listed previously.

Further, the FAA proposes to establish RNAV route T-466 between the San Angelo, TX, VORTAC and Sabine Pass, TX, VOR/DME. The proposed T-route would overlay the existing V-556 and, in part, mitigate the proposed removal of the V-556 segment between the Stonewall, TX, VORTAC and the Scholes, TX, VOR/DME. The new T-route would provide airspace users equipped with RNAV capabilities an enroute structure between the San Angelo, TX, area southeastward to the Galveston, TX, area and then northeastward to the Beaumont, TX, area, by transiting north of the San Antonio, TX, and New Braunfels, TX, areas and south of the Houston, TX, area. Lastly, the new T-route would support the FAA's NextGen efforts to modernize the NAS navigation system from a ground-based system to a satellite-based system.

The FAA is proposing an amendment to 14 CFR part 71 to amend VOR Federal airways V-198, V-212, V-556, and V-558; amend RNAV route T-256; and establish RNAV route T-466 due to the planned decommissioning of the Eagle Lake, TX, VOR. The proposed ATS route actions are described below.

V-198: V-198 currently extends between the San Simon, AZ, VORTAC and the Eagle Lake, TX, VOR/DME; and between the Sabine Pass, TX, VOR/DME and the Craig, FL, VORTAC. The FAA proposes to remove the route segment between the San Antonio, TX, VORTAC and the Eagle Lake, TX, VOR/DME. The unaffected portions of the existing airway would remain as charted.

V-212: V-212 currently extends between the San Antonio, TX, VORTAC and the Mc Comb, MS, VORTAC. The FAA proposes to remove the airway segment between the San Antonio, TX, VORTAC and the Industry, TX, VORTAC. The unaffected portions of the existing airway would remain as charted.

V-556: V-556 currently extends between the San Angelo, TX, VORTAC and the Sabine Pass, TX, VOR/DME. The FAA proposes to remove the airway segment between the Stonewall, TX, VORTAC and the Scholes, TX, VOR/DME. The unaffected portions of the existing airway would remain as charted.

V-558: V-558 currently extends between the Llano, TX, VORTAC and the Eagle Lake, TX, VOR/DME. The FAA proposes to remove the airway segment between the Industry, TX, VORTAC and the Eagle Lake, TX, VOR/DME. The unaffected portions of the existing airway would remain as charted.

T-256: T-256 currently extends between the San Antonio, TX, VORTAC and the Sabine, TX, VOR/DME. The FAA proposes to remove the Eagle Lake, TX, VOR/DME route point from the description as it is on a straight segment of the route and does not change the route structure between the San Antonio, TX, VORTAC and the MOLLR, TX, waypoint (WP). Additionally, the FAA proposes to add a RNAV route segment overlaying V-194 between the Sabine, TX, VOR/DME and the DAFLY, LA, WP being established near the Lafayette, LA, VORTAC. The full route legal description is listed in “The Proposed Amendment” section, below.

T-466: T-466 is a proposed new RNAV route that would extend between the San Angelo, TX, VORTAC and the Sabine Pass, TX, VOR/DME. The T-route would overlay the current V-556 and, in part, mitigate the proposed removal of the V-556 segment between the Stonewall, TX, VORTAC and the Scholes, TX, VOR/DME. The new route would provide RNAV routing between the San Angelo, TX, area southeastward to the Galveston, TX, area and then northeastward to the Beaumont, TX, area. The full route legal description is listed in “The Proposed Amendment” section, below.

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

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

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

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

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

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

Congress granted the Assistant Secretary—Indian Affairs (then, the Commissioner of Indian Affairs) authority to “have management of all Indian affairs and of all matters arising out of Indian relations.”  1 This authority includes the authority to administratively acknowledge Indian Tribes. 2 The Congressional findings that supported the Federally Recognized Indian Tribe List Act of 1994 expressly acknowledged that Indian Tribes could be recognized “by the administrative procedures set forth in part 83 of the Code of Federal Regulations denominated `Procedures for Establishing that an American Indian Group Exists as an Indian Tribe,' ” and described the relationship that the United States has with federally recognized Indian Tribes. 3

The regulations that codify the process through which a group may petition the Department for acknowledgment as a federally recognized Indian Tribe are at 25 CFR part 83 (part 83). The regulations require groups petitioning for Federal acknowledgment to meet seven mandatory criteria, the satisfaction of which has been central to the Federal acknowledgment process since its inception. 4 The Department refers to the seven criteria as the (a) “Indian Entity Identification” criterion, (b) “Community” criterion, (c) “Political Authority” criterion, (d) “Governing Document” criterion, (e) “Descent” criterion, (f) “Unique Membership” criterion, and (g) “Congressional Termination” criterion. 5

First promulgated in 1978 at 25 CFR part 54 (1978 regulations), the Federal acknowledgment regulations were subsequently revised in 1994 and moved to part 83 (1994 regulations). The 1978 regulations did not provide a regulatory path that allowed re-petitioning, and since 1994, part 83 has expressly prohibited petitioners who have received a negative final determination from the Department from re-petitioning under part 83. 6

In a 2014 notice of proposed rulemaking (2014 proposed rule), the Department proposed giving previously denied petitioners a limited opportunity to re-petition. 7 The 2014 proposed rule proposed to allow re-petitioning only if:

• Any third parties that participated as a party in an administrative reconsideration or Federal Court appeal concerning the petitioner has consented in writing to the re-petitioning; and

• The petitioner proves, by a preponderance of the evidence, that either:

○ A change from the previous version of the regulations to the current version of the regulations warrants reconsideration of the final determination; or

○ The “reasonable likelihood” standard was misapplied in the final determination. 8

In the preamble of the 2014 proposed rule, the Department explained that the requirement of third-party consent would “recognize[ ] the equitable interests of third parties that expended sometimes significant resources to participate in the adjudication [of a final determination in a reconsideration or appeal] and have since developed reliance interests in the outcome of such adjudication.”  9 The Department did not discuss the extent to which the third-party consent condition might limit the number of re-petitioners. 10

Similarly, the Department did not specify the extent to which the other conditions listed above—requiring a denied petitioner to prove that either a change in the regulations or a misapplication of the reasonable likelihood standard warrants reconsideration—might limit the number of re-petitioners. However, as a general matter, the Department noted that “the changes to the regulations are generally intended to provide uniformity based on previous decisions,” so the circumstances in which re-petitioning might be “appropriate” would be “limited.”  11 The proposed rule did not identify any change to the seven mandatory criteria that “would likely change [any negative] previous final determination[s].”  12

Ultimately, in the 2015 final rule updating part 83, the Department expressly continued the ban. 13 In the preamble of the rule, the Department explained that “[t]he final rule promotes consistency, expressly providing that evidence or methodology that was sufficient to satisfy any particular criterion in a previous positive decision on that criterion will be sufficient to satisfy the criterion for a present petitioner.”  14 Additionally, the Department explained that “[t]he Department has petitions pending that have never been reviewed” and that “[a]llowing for re-petitioning by denied petitioners would be unfair to petitioners who have not yet had a review.”  15 Finally, the Department explained that re-petitioning “would hinder the goals of increasing efficiency and timeliness by imposing the additional workload associated with re-petitions on the Department, and [the Office of Federal Acknowledgment] in particular.”  16

In 2020, two Federal district courts—one in a case brought by a former petitioner seeking acknowledgement as the Chinook Indian Nation  17 and one in a case brought by a former petitioner seeking acknowledgement as the Burt Lake Band of Ottawa and Chippewa Indians  18 —held that the Department's stated reasons for implementing the ban, as articulated in the preamble to the 2015 final rule revising part 83, 19 were arbitrary and capricious under the Administrative Procedure Act (APA). As an initial matter, both courts agreed with the Department that the Department's authority over Indian affairs generally authorized a re-petition ban. 20 In addition, both courts noted that their review is highly deferential to the agency's decision under applicable tenets of administrative law. 21 As a result, the narrow question left for the courts to decide was whether the Department, in retaining the ban in the 2015 final rule, “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a `rational connection between the facts found and the choice made.' ”  22

Both courts concluded that the Department had not done so. The Chinook court held that the Department's reasons were “illogical, conclusory, and unsupported by the administrative record,” as well as not “rationally connect[ed] . . . to the evidence in the record.”  23 Similarly, the Burt Lake court concluded that the Department's reasons were “neither well-reasoned nor rationally connected to the facts in the record.”  24 Both courts found that despite the Department's argument that the 2015 revisions to part 83 did not change any substantive criteria other than those specifically identified, the Department had nevertheless failed to explain why, in light of those and other revisions and after having proposed a limited re-petition process in the 2014 proposed rule, the Department could permissibly maintain the ban. 25 The Chinook court focused in particular on a provision introduced in the 2015 final rule that sought to promote consistent implementation of the criteria and stated that “[t]here is no reason why new petitioners should be entitled to this `consistency' while past petitioners are not.”  26 More generally, the Burt Lake court linked reform of the [F]ederal acknowledgment process with an “opportunity to re-petition and to seek to satisfy the new criterion.”  27 Neither the Chinook nor Burt Lake courts struck down the 2015 final rule in whole or in part. Rather, both courts remanded the ban to the Department for further consideration.

On December 18, 2020, the Department announced its intent to reconsider the ban and invited federally recognized Indian Tribes to consult on whether to retain the ban or allow for re-petitioning. On February 25, 2021, the Department held a Tribal consultation session and solicited written comments on the ban through March 31, 2021. In response, the Department received 19 comments from federally recognized Indian Tribes, non-federally recognized groups, an inter-Tribal organization representing both federally recognized and State recognized Indian Tribes, various State and town representatives in Connecticut, and individuals. A majority of the commenters opposed the ban.

Following the comment period, the Department reviewed all comments and identified three options: (1) Keeping the ban in place; (2) creating a fact-based or time-limited avenue for re-petitioning; and (3) giving denied petitioners an opportunity to re-petition with few or no limitations. After considering each of these options, the history of the ban, the Federal district court opinions noted above, the comments received (which, as noted above, were predominantly opposed to the ban), and the legal foundation for the ban, the Department is proposing a continuation of the ban, for the reasons described here. The Department invites comments, particularly from denied petitioners, on its proposed approach as well as its reasoning.

The Department is proposing to continue the ban on re-petitioning, albeit with a revised justifications given the Chinook and Burt Lake courts' conclusion that the explanation for implementing the ban in the 2015 final rule was arbitrary and capricious. The Department is proposing to continue the ban for five main reasons: (1) The Department's previous negative final determinations are substantively sound and the Department is allowed to revise its regulations without reevaluating past final agency actions issued under the previous versions of those regulations; (2) denied petitioners received due process by virtue of the multiple administrative and Federal court avenues through which to challenge both the process and substance of a negative part 83 final determination; (3) the changes adopted in the Department's 2015 final rule do not warrant re-petitioning; (4) third parties and the Department have legitimate interests in the finality of the Department's final determinations; and (5) a denied petitioner's claimed availability of new evidence is not a compelling basis to allow re-petitioning. Each of these reasons is explained in more detail here.

The Department proposes to retain the ban on re-petitioning on the grounds that its previous negative final determinations are substantively sound, and the Department should be able to maintain the ability to improve its regulations without being required to reexamine previous decisions. In the 2015 final rule, the Department noted that the Federal acknowledgment process “has been criticized as `broken' and in need of reform” for being “too slow (a petition can take decades to be decided), expensive, burdensome, inefficient, intrusive, less than transparent and unpredictable.”  28 While the Department has reformed various aspects of part 83, the Department has maintained the validity of the seven mandatory criteria. Indeed, throughout the preamble of the 2015 final rule, the Department emphasized the part 83 process's integrity and substantive rigor. 29

In support of the Department's proposed approach, we note that each of the Department's 34 negative determinations was based on an exhaustive review of the facts and claims specific to each petitioner and a deliberate application of the criteria, resulting in a well-reasoned, legally defensible outcome. The Department's efforts in the 2015 final rule “to address assertions of arbitrariness,”  30 among other criticism, do not amount to an admission that its previous final determinations were somehow defective and, therefore, now deserving of reconsideration. Indeed, if an agency's revision of regulations amounted to an admission that previous determinations were defective, an agency would never revise its regulations.

Complaints that the Federal acknowledgment process under the previous versions of the regulations was “too slow . . . , expensive, burdensome, inefficient, intrusive, less than transparent and unpredictable,”  31 primarily concern procedural aspects of the process. The Department has consistently defended, and courts have consistently upheld, the Department's final determinations on the merits. 32 By contrast, the cases in which courts have sided with denied petitioners have primarily concerned not the merits of the Department's evaluations but issues relating to process, 33 which the Department has continued to address through its reforms, as discussed elsewhere.

Further, a rule requiring the Department to reevaluate its negative determinations after any amendment to part 83, no matter the strength of those determinations, the due process already afforded to the denied petitioners, the improbability of reversal, or legitimate interests in finality (discussed below), would hamper the Department's ability to improve the Federal acknowledgement process. The mere fact that the regulations changed does not inherently require Departmental reconsideration of previous decisions. Indeed, such an approach would effectively render an agency unable to modify regulations for concern that all decisions prior to amendment would need to be redecided.

The Department proposes a no re-petitioning approach because in the event that a denied petitioner claims that the Department inconsistently or otherwise unfairly applied the criteria to its petition, that petitioner already had the opportunity to raise such a claim in a timely manner during administrative reconsideration or judicial review of its negative determination. Having had such an opportunity, our approach is that previously denied petitioners should not be entitled to another evaluation under the 2015 regulations.

Since the inception of the Federal acknowledgment process, the Department has ensured that petitioners have multiple opportunities to submit and revise their petitions, receive and respond to technical assistance from Office of Federal Acknowledgment (OFA), address deficiencies in their materials, and supplement their evidence, all before receiving a proposed finding and, ultimately, a final determination. 34 Indeed, one of the reasons why the Federal acknowledgment process can be so lengthy is that petitioners often take many years to prepare their petitions, supplementing them with supporting documentation before deeming them complete and ready for Departmental review.

Prior to issuance of a final determination, our regulations have always allowed petitioners to challenge a negative proposed finding by presenting factual or legal arguments and evidence relied upon in the proposed finding in various administrative processes. 35 Following issuance of a final determination, petitioners denied under the 1994 regulations had the option to seek reconsideration with the Interior Board of Indian Appeals (IBIA), 36 while the 1978 regulations permitted the Secretary of the Interior to order administrative reconsideration. 37 Both the 1978 and 1994 regulations permitted reconsideration in response to a concern that the Department erroneously evaluated evidence. 38 The 1994 regulations further allowed denied petitioners to allege that “there are reasonable alternative interpretations, not previously considered, of the evidence used for the final determination, that would substantially affect the determination that the petitioner meets or does not meet one or more of the criteria.”  39 We believe that such provisions, permitting either the Secretary or the IBIA to review the merits of a negative final determination, provided due process protections for aggrieved petitioners.

Furthermore, a denied petitioner alleging an APA, constitutional, or other violation in its final determination had the opportunity to seek judicial review. To the extent that petitioners did not challenge a negative final determination in court, the Department proposes not to create a re-petition process as a substitute for a timely APA claim.

The Department proposes to not allow for re-petitioning under the 2015 regulations because the Department believes the changes do not warrant re-petitioning. First, none of the 2015 final rule's changes to each of the seven mandatory criteria justify re-petitioning, and the 2015 final rule did not change the reasonable likelihood standard that the Department applies in evaluating petitions for Federal acknowledgment. Further, even if the outcome of any of the Department's previous determinations would be different under the 2015 regulations, the Department believes it retains the authority to revise its regulations without reevaluating its previous determinations.

According to the Federal district court that decided Chinook and remanded the ban to the Department for further consideration, some or all of the changes in the 2015 final rule constitute “significant revisions that could prove dispositive for some re-petitioners.”  40 Although the Chinook court did not specify whether or how any such revision would affect any specific petitioner, the court identified changes in the 2015 final rule that it deemed “notable”: (1) A new “evaluation start date for criteria (b) [(Community)] and (c) [(Political Authority)]”; (2) a new ability “to rely on self-identification as an Indian tribe” for criterion (a) (Indian Entity Identification); (3) an “automatic satisfaction of criterion (e) [(Descent)] . . . through evidence of `a tribal roll directed by Congress or prepared by the Secretary . . . unless significant countervailing evidence establishes that the tribal roll is substantively inaccurate' ”; and (4) a “[l]oosening [of] the requirements for criterion (f) [(Unique Membership)].”  41 Additionally, the Burt Lake court likewise remanded the ban to the Department and identified another change in the 2015 final rule that it deemed “not minor”: The change in how the Department counts the number of marriages within a petitioner for the purpose of evaluating criterion (b) (Community). 42

This section of the proposed rule primarily seeks to explain that the changes that the Chinook and Burt Lake courts identified as potentially significant would not result in the reversal of the Department's previous negative final determinations.

In the 2015 final rule, the Department provided a thorough, well-reasoned explanation as to why the Department “does not classify the start date change, from 1789 or the time of first sustained contact to 1900, as a substantive change to the existing criteria,”  43 and the Department adopts that explanation here. Aside from reducing the documentary burden on petitioners, the Department reasoned that a 1900 start date for criteria (b) (Community) and (c) (Political Authority) is appropriate because “the time since 1900 has been shown to be an effective and reliable demonstration for historical times for criterion (a)” (Indian Entity Identification), and “utilization of [a 1900 start date for criterion (a)] for over 20 years has demonstrated that the date maintains the rigor of the criteria.”  44 In explaining why the 1900 start date will not compromise the rigor of the process, the Department stated that “1900 [was] squarely during the allotment and assimilation period of Federal policy that was particularly difficult for tribal governments,” when “there was little benefit and some risk to openly functioning as a tribal community and government.”  45

The Department proposes to not allow re-petitioning because the change to the start date for criteria (b) (Community) and (c) (Political Authority) would not result in the reversal of any previous negative determination. None of the 34 denied petitioners received a negative determination based solely on a failure to satisfy criterion (b) or (c) for the historical period (pre-1900). That is, every petitioner that failed to satisfy criterion (b) or (c) for the historical period also failed to satisfy the criterion for the period from 1900 until the present. 46 Therefore, the change in the start date for criteria (b) and (c) would not lead to a different outcome for any denied petitioner.

In the 2015 final rule, the Department characterized the change in criterion (a) as substantive. 47 Nevertheless, the change does not compel the Department to allow re-petitioning because none of the Department's negative determination hinged on criterion (a) alone. 48 Specifically, every denied petitioner that failed to satisfy criterion (a) failed to satisfy criteria (b) and (c) as well. 49 A reversal of a negative conclusion on criterion (a) in a previous determination would not change the overall negative result, given that a petitioner must satisfy all seven mandatory criteria. 50

In the 2015 final rule, the Department explained that “[t]he final criterion (e) remains substantively unchanged from the current criterion (e).”  51 Although the revised language of the criterion emphasizes the “great weight” that the Department places “on applicable tribal Federal rolls prepared at the direction of Congress or by the Department,” the rule explains that the revision “codifies past practice.”  52 As the 2015 final rule points out, since the inception of the Federal acknowledgment regulations, the Department has consistently relied on evidence of such rolls in evaluating whether a petitioner satisfies criterion (e). 53 The change in § 83.11(e)(1) ensures that the Department will continue to do so.

Under the 1994 regulations, criterion (f) listed three conditions that, if all met, exempted a petitioner from the requirement that “[t]he membership of the petitioning group [be] composed principally of persons who are not members of any acknowledged North American Indian tribe.”  54 The conditions were as follows: (1) “The [petitioner] . . . has functioned throughout history until the present as a separate and autonomous Indian tribal entity”; (2) “its members do not maintain a bilateral political relationship with the acknowledged tribe;” and (3) “its members have provided written confirmation of their membership in the petitioning group.”  55 The 2015 revision of part 83 deleted the second condition in this list but maintained the first and the third. 56

Section 11061 of the Tax Cuts and Jobs Act, Public Law 115-97, 131 Stat. 2054, 2091 (2017) (TCJA), amended section 2010(c)(3) of the Internal Revenue Code (Code) to provide that, for decedents dying and gifts made after December 31, 2017, and before January 1, 2026, the BEA is increased by $5 million to $10 million as adjusted for inflation (increased BEA). Under the TCJA, on January 1, 2026, the BEA will revert to $5 million as adjusted for inflation.

Section 11061 of the TCJA also added new section 2001(g)(2) to the general statute of the Code that imposes the Federal estate tax. Section 2001(g)(2) grants the Secretary of the Treasury or her delegate (Secretary) authority to prescribe such regulations as may be necessary or appropriate to carry out section 2001 with respect to any difference between the BEA applicable at the time of a decedent's death and the BEA applicable with respect to any gifts made by the decedent. This specific authority is in addition to the Secretary's preexisting authority under section 2010(c)(6) to prescribe such regulations as may be necessary or appropriate to carry out section 2010(c).

On November 26, 2019, the Treasury Department and the IRS published final regulations under section 2010 (TD 9884) in the Federal Register (84 FR 64995) to address situations described in section 2001(g)(2) (final regulations). The final regulations adopted § 20.2010-1(c), a special rule (special rule) applicable in cases where the credit against the estate tax that is attributable to the BEA is less at the date of death than the sum of the credits attributable to the BEA allowable in computing gift tax payable within the meaning of section 2001(b)(2) with regard to the decedent's lifetime gifts. In such cases, the portion of the credit against the net tentative estate tax that is attributable to the BEA is based on the sum of the credits attributable to the BEA allowable in computing gift tax payable regarding the decedent's lifetime gifts. The rule ensures that the estate of a donor is not taxed on completed gifts that, as a result of the increased BEA, were free of gift tax when made. The preamble to the final regulations stated that further consideration would be given to the issue of whether gifts that are not true inter vivos transfers, but rather are includible in the gross estate, should be excepted from the special rule, and that any proposal addressing this issue would benefit from notice and comment.

This document contains proposed amendments to the Estate Tax Regulations (26 CFR part 20) relating to the BEA described in section 2010(c)(3) of the Code (proposed regulations), for which purpose the final regulations reserved § 20.2010-1(c)(3). The special rule currently does not distinguish between: (i) Completed gifts that are treated as adjusted taxable gifts for estate tax purposes and that, by definition, are not included in the donor's gross estate; and (ii) completed gifts that are treated as testamentary transfers for estate tax purposes and are included in the donor's gross estate (includible gift). The Code and the regulations, however, do distinguish between these two types of transfers. Section 2001(b) (flush language) excludes from the term “adjusted taxable gifts” gifts that are includible in the gross estate. Section 2701(e)(6) and § 25.2701-5 similarly remove from adjusted taxable gifts transfers includible in the gross estate that previously were subject to the special valuation rules of section 2701. See also § 25.2702-6 (excluding from adjusted taxable gifts certain transfers includible in the gross estate that previously were subject to the special valuation rules of section 2702) and Rev. Rul. 84-25, 1984-1 C.B. 191 (excluding from adjusted taxable gifts completed transfers that will be satisfied with assets includible in the gross estate). In keeping with the statutory distinction between completed gifts that are treated as adjusted taxable gifts and completed gifts that are treated as testamentary transfers, these proposed regulations generally would deny the benefit of the special rule to includible gifts.

Regardless of whether a gift is treated as an adjusted taxable gift or as an includible gift for estate tax purposes, the Code ensures that the gift is treated consistently with respect to the credits allowable in the year in which the gift was made. See discussion of the five statutory steps of the estate tax computation in part III, Federal Estate Tax Computation Generally, in the Background section of the preamble to the notice of proposed rulemaking under section 2010 (REG-106706-18) published in the Federal Register (83 FR 59343) on November 23, 2018. The exclusion from adjusted taxable gifts of transfers includible in the gross estate does not affect the second step of the estate tax computation, the determination of a hypothetical gift tax referred to as the gift tax payable. Gift tax payable is based upon all post-1976 taxable gifts, whether or not included in the gross estate. See sections 2001(b)(2) and (g)(1), requiring the determination of a hypothetical gift tax on all post-1976 taxable gifts, which is a gift tax reduced, but not to below zero, by the credit amounts allowable in the years of the gifts. Both the hypothetical gift tax and the credit amounts are computed using the gift tax rates in effect at the date of death. Thus, for purposes of computing the estate tax, an includible gift receives credit for all credit amounts, including those attributable to the increased BEA, allowable in the years in which the gift was made.

A commenter recommended consideration of whether the special rule should apply to taxable gifts made during an increased BEA period that are essentially testamentary and thus are included in the gross estate rather than in adjusted taxable gifts. See discussion in part 6, Anti-Abuse Rule, of the Summary of Comments and Explanation of Revisions in the final regulations. If such transfers are subject to the special rule, they can be made in a manner designed to make the increased BEA available against the donor's estate tax despite the fact that the donor has retained the beneficial use of or the control of the transferred property. Examples of such transfers include gifts subject to a retained life estate or subject to other powers or interests as described in sections 2035 through 2038 and 2042 of the Code, gifts made by enforceable promise as described in Rev. Rul. 84-25, supra, and gifts subject to the special valuation rules of sections 2701 and 2702. In recommending an exception to the special rule, the commenter cautioned that attention should also be given to the potential to work around an exception that relies solely on whether gifts are includible in the gross estate. For example, a donor may attempt to make the increased BEA available against the estate tax under the special rule by the removal shortly before the donor's death of the donor's beneficial use of or the control of the transferred property. Examples of these types of transfers include the elimination by a third party, shortly before the donor's death, of the interests or powers that otherwise would have resulted in the inclusion of the transferred interest or property in the donor's gross estate; the payment shortly before death of a gift made by enforceable promise as described in Rev. Rul. 84-25, supra; and the transfer shortly before death of a section 2701 interest within the meaning of § 25.2701-5(a)(4) or a section 2702 interest within the meaning of § 25.2702-6(a)(1).

The purpose of the special rule is to ensure that bona fide inter vivos transfers of property are consistently treated as a transfer of property by gift for both gift and estate tax purposes. Bona fide inter vivos gifts are subject to the gift tax based on the values, gift tax rates, and exclusions applicable as of the date of the gift. While such a gift is treated as an adjusted taxable gift for purposes of determining the estate tax rate to be applied to the value of the taxable estate, the gift is not includible in the donor's gross estate at death and is not subject to the estate tax. The special rule avoids the imposition of the estate tax on the gift by ensuring that the gifted property is treated solely as an adjusted taxable gift and not also as property includible in the gross estate.

Unlike an adjusted taxable gift, however, a gift of property that is includible in the donor's gross estate is subject to estate tax based on the values, estate tax rates, and exclusions applicable as of the date of death. The Code itself ensures that an includible gift is not treated as both an adjusted taxable gift and an inclusion in the gross estate. See section 2001(b) (flush language), excluding from “adjusted taxable gifts” gifts that are includible in the gross estate. The Code also ensures that an includible gift receives credit for any credit amounts allowable in the years in which the gift was made. See sections 2001(b)(2) and (g)(1). The treatment of an includible gift for estate tax purposes results in the correct outcome without any application of the special rule: The property is included in the gross estate and subject to the BEA in effect at the donor's death.

There is a subset of includible gifts that the Code treats in a different fashion, but still in a way that results in the correct outcome without the application of the special rule. That subset consists of gifts made during an increased BEA period that are essentially testamentary, but the entire value of which is deductible for gift tax purposes by reason of the charitable or marital deduction (or both). Such transfers are excluded from adjusted taxable gifts because they never were taxable gifts in the first place. See section 2503(a), defining taxable gifts as the total amount of gifts made during the calendar year less the deductions provided in sections 2522 and 2523 for charitable and marital gifts, respectively. As a result of the exclusion of charitable and marital gifts from taxable gifts, and thus from adjusted taxable gifts, there would be no credits allocable to these gifts attributable to the BEA in computing gift tax payable within the meaning of section 2001(b)(2). Because no BEA is applicable to the deductible gifts, there will be no difference between the BEA applicable to these gifts attributable to the increased BEA and the BEA applicable to the decedent's estate. As a result, there is no possibility of inconsistent gift and estate taxation of such an includible gift, and thus no need for the application of the special rule.

Without additional rules, however, the application of the special rule to includible gifts results in securing the benefit of the increased BEA in circumstances where the donor continues to have the title, possession, use, benefit, control, or enjoyment of the transferred property during life. In those circumstances, there is no possibility of the inclusion of the gift in adjusted taxable gifts at the death of the donor, and therefore no need for the application of the special rule to transfers of such property. In those circumstances, it is appropriate that the amount includible or treated as includible as part of the gross estate (rather than as an adjusted taxable gift) is subject to estate tax with the benefit of only the BEA available at the date of death. Section 2001(g)(2) directs the Secretary to prescribe such regulations as may be necessary or appropriate to carry out section 2001 with respect to any difference between the BEA applicable at the time of the decedent's death and the BEA applicable with respect to any gifts made by the decedent. Given the plain language of the Code describing the computation of the estate tax and directing that certain transfers, including transfers made within three years of death that otherwise would have been includible in the gross estate, are treated as testamentary transfers and not as adjusted taxable gifts, it would be inappropriate to apply the special rule to includible gifts. This is particularly true where the inter vivos transfers are not true bona fide transfers in which the decedent “absolutely, unequivocally, irrevocably, and without possible reservations, parts with all of his title and all of his possession and all of his enjoyment of the transferred property.” Commissioner v. Church's Estate, 335 U.S. 632, 645 (1949). To prevent this inappropriate result, these proposed regulations would create an exception to the special rule applicable to includible gifts.

The same commenter suggested that any exception to the special rule relating to transfers within the scope of section 2701 be specifically addressed in § 25.2701-5. This suggestion is not adopted. Section 25.2701-5(a)(3) provides rules under which the estate of a decedent who made a transfer subject to section 2701 may reduce the decedent's adjusted taxable gifts in a manner similar to that of section 2001(b) so as to eliminate the amount duplicated in the transfer tax base. The amount of the reduction in adjusted taxable gifts is determined under § 25.2701-5(b). See also § 25.2702-6(b), providing a similar rule for certain interests previously subject to section 2702. Both §§ 25.2701-5 and 25.2702-6 address only the amount of adjusted taxable gifts but, with the exception of § 25.2701-5(e)(3), do not address the amount of the credits allowable in the multiple steps necessary to determine the estate tax. As previously discussed, the effect of the estate tax computation is to provide the decedent the benefit of any credit amounts allowable in the years of the gifts, determined at date of death gift tax rates, including the credit amount attributable to a section 2701 or 2702 transfer that was free of gift tax when made as a result of the increased BEA, regardless of whether the amount of adjusted taxable gifts is later reduced for estate tax purposes. Thus, while a reduction in the amount of adjusted taxable gifts eliminates amounts duplicated in the transfer tax base, it neither changes the existence of the transfer nor frees up the credit allocable to that transfer. See, e.g., the Background section of the preamble to Adjustments Under Special Valuation Rules (TD 8536), published in the Federal Register (59 FR 23152) on May 5, 1994, explaining that the § 25.2701-5 regulations do not “purge” a section 2701 transfer as if it had not occurred, but rather mitigate the effect of double taxation through a reduction in a decedent's adjusted taxable gifts.

As noted earlier, § 25.2701-5(e)(3) permits an adjustment to both the adjusted taxable gifts and gift tax payable of a consenting spouse. In the case of an election under section 2513 to split a section 2701 transfer with the donor's spouse, a later testamentary transfer of the section 2701 interest is treated as made solely by the donor spouse. The consenting spouse's adjusted taxable gifts and gift tax payable are each reduced to eliminate any remaining effect of the section 2701 interest on the consenting spouse in a manner that is generally consistent with the principles of sections 2001(d) and (e) (pertaining to the treatment of split gifts in the computation of the estate tax). This exception has no application to the donor spouse, who remains subject to the general rule of § 25.2701-5(a)(3). Thus, it is not necessary to address differences in the BEA in either § 25.2701-5 or § 25.2702-6(b).

Pursuant to sections 2010(c)(6) and 2001(g)(2) of the Code, the proposed regulations would add proposed § 20.2010-1(c)(3) to provide an exception to the special rule for transfers that are includible in the gross estate or are treated as includible in the gross estate for purposes of section 2001(b), including for example gifts subject to a retained life estate or subject to other powers or interests as described in sections 2035 through 2038 and 2042 of the Code regardless of whether the transfer was deductible pursuant to section 2522 or 2523, gifts made by enforceable promise, and other amounts that are duplicated in the transfer tax base, including a section 2701 interest within the meaning of § 25.2701-5(a)(4) and a section 2702 interest within the meaning of § 25.2702-6(a)(1). The exception to the special rule also would apply to transfers that would be described in the preceding sentence but for the transfer, elimination, or relinquishment within 18 months of the donor's date of death of the interest or power that would have caused inclusion in the gross estate, effectively allowing the donor to retain the enjoyment of the property for life. In addition to transfers, eliminations, or relinquishments by the donor, examples include the elimination, by a third party having the power to eliminate or extinguish the interest or power, of the interests or powers that otherwise would have resulted in inclusion of transferred property in the donor's gross estate; the payment of a gift made by enforceable promise as described in Rev. Rul. 84-25, supra; and the transfer of a section 2701 interest within the meaning of § 25.2701-5(a)(4) or a section 2702 interest within the meaning of § 25.2702-6(a)(1). For purposes of the preceding sentence, such transfers, eliminations, and relinquishments include those effectuated by the donor, the donor in conjunction with any other person, or by any other person, but do not include those effectuated by the expiration of the period described in the original instrument of transfer, whether by a death or the lapse of time.

The special rule, however, would continue to apply to transfers includible in the gross estate when the taxable amount of the gift is not material, that is, the taxable amount is 5 percent or less of the total amount of the transfer, valued as of the date of the transfer. Compare section 2037(a)(2), excluding from the gross estate property subject to a reversionary interest where the value of such interest immediately before death is 5 percent or less of the value of the transferred property; and section 2042(2), excluding from the term “incidents of ownership” reversionary interests where the value of such interest immediately before death is 5 percent or less of the value of the life insurance policy. See also section 673(a), treating the grantor as the owner for income tax purposes of any portion of a trust in which the grantor's reversionary interest exceeds 5 percent of the value of such portion as of the date of inception of that portion of the trust. This bright-line exception to the special rule is proposed in lieu of a facts and circumstances determination of whether a particular transfer was intended to take advantage of the increased BEA without depriving the donor of the use and enjoyment of the property.

The proposed exception to the special rule may be illustrated by the following example. Assume that when the BEA was $11.4 million, a donor gratuitously transferred the donor's enforceable $9 million promissory note to the donor's child. The transfer constituted a completed gift of $9 million. On the donor's death, the assets that are to be used to satisfy the note are part of the donor's gross estate, with the result that the note is treated as includible in the gross estate for purposes of section 2001(b). Thus, the $9 million gift is excluded from adjusted taxable gifts in computing the tentative estate tax under section 2001(b)(1). Nonetheless, if the donor dies after a statutory reduction in the BEA to $6.8 million, the credit to be applied in computing the estate tax is the credit based upon the $6.8 million of the BEA allowable as of the date of death.

Once these regulations have been published as final regulations, it is proposed that these regulations be applicable to the estates of decedents dying on or after April 27, 2022. The special rule will not be needed until the basic exclusion amount has been decreased by statute; under current law, that is scheduled to occur for the estates of decedents dying after 2025. However, if such a decrease is enacted on or after April 27, 2022 but before the issuance of final regulations, the best way to ensure that all estates will be subject to the same rules is to make this proposed exception to the special rule applicable to the estates of decedents dying on or after April 27, 2022.

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

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these proposed regulations will not have a significant economic impact on a substantial number of small entities. These proposed regulations apply to donors of gifts made after 2017 and to the estates of donors dying after a reduction in the BEA, and implement a change in the amount that is excluded from estate tax. Neither an individual nor the estate of a deceased individual is a small entity within the meaning of 5 U.S.C. 601(6). Accordingly, a regulatory flexibility analysis is not required.

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

Before these proposed regulations are adopted as final regulations, consideration will be given to any written or electronic comments that are submitted timely (in the manner described under the ADDRESSES heading) to the IRS. The Treasury Department and the IRS request comments on all aspects of the proposed regulations. Any electronic comments submitted, and to the extent practicable any paper comments submitted, will be made available at https://www.regulations.gov or upon request.

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

Rev. Rul. 84-25, 1984-1 C.B. 191, and Announcement 2020-4, 2020-17 IRB 1, are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

The principal author of these proposed regulations is John D. MacEachen, Office of the Associate Chief Counsel (Passthroughs and Special Industries). Other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR part 20 is proposed to be amended as follows:

On March 14, 2022, we published an NPRM entitled “Special Local Regulation; Nanticoke River, Sharptown, MD” in the Federal Register (87 FR 14193). The Coast Guard proposed to establish a temporary special local regulation for certain navigable waters of the Nanticoke River from 11 a.m. on May 13, 2022, through 6 p.m. on May 15, 2022. This action was necessary to provide for the safety of life on these waters during a power boat racing event on May 14, 2022, and May 15, 2022, as well as pre-race practice on May 13, 2022. This rulemaking would have prohibited persons and vessels from entering the regulated area unless authorized by the Captain of the Port Maryland-National Capital Region or the Coast Guard Event Patrol Commander.

The proposed rule is being withdrawn due to the regulated area no longer being necessary because the event sponsor will no longer be conducting the power boat racing event.

We issue this notice of withdrawal under the authority of 46 U.S.C. 70041.

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port New York DHS Department of Homeland Security FR Federal Register LLNR Light List Number NPRM Notice of proposed rulemaking OMB Office of Management and Budget § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

On March 7, 2022, the Coast Guard received an Application for Marine Event for the annual 4th of July fireworks display. The Captain of the Port New York (COTP) has determined that this event in close proximity to marine traffic poses a significant risk to public safety and property. The special local regulation proposed mimics those limited access areas established for 4th of July in previous years, with the addition of a moving protection zone around the loaded fireworks barges that will be enforced from the point of departure from the loading facility until placement in show position. As in previous years, a buffer zone will be established around the barges and four separate viewing areas that will separate vessels based on length. Multiple fireworks displays will commence simultaneously producing a relatively large fallout zone over the East River during a time when the East River and New York Harbor experiences heavy vessel congestion which necessitates the need for the control of vessel movement immediately before, during, and after this display.

The combination of multiple simultaneous fireworks displays on the East River where a significant increase of recreational vessel traffic is anticipated has the potential to result in serious injuries or fatalities. In order to protect the safety of all waterway users including event participants and spectators, this proposed rule would establish a moving protection zone around the loaded fireworks barges, a buffer zone around the barges while they are in show position, and four separate viewing areas separating vessels by size. The purpose of this proposed rulemaking is to ensure the safety of participants, non-participants, and transiting vessels on the navigable waters in the vicinity of the fireworks display and the spectator zone before, during, and after the scheduled event. The Coast Guard proposes this rulemaking under the authority of 46 U.S.C. 70041.

The Coast Guard proposes to establish a special local regulation annually on July 4th or July 5th from 5:30 p.m. through 11:30 p.m. This special local regulation will include a moving protection zone excluding all vessels from entering within a 25-yard radius from each loaded fireworks barge from the point of departure from the loading facility, during the transit of the New York Harbor, and until the placement in show position on the East River. The buffer zone will exclude all nonparticipating vessels from the area surrounding the barges immediately before, during, and after the display. Four separate viewing areas will be established that will separate vessels based on vessel length.

On August 15, 2003 the Coast Guard published a final rule entitled “Regulated Navigation Areas, Safety and Security Zones; Long Island Sound Marine Inspection and Captain of the Port Zone” in the Federal Register (68 FR 48798). With this rule we added 33 CFR 165.153 creating a regulated navigation area establishing a speed restriction in the vicinity of Naval Submarine Base New London and the Lower Thames River.

Later, on February 10, 2012, the Coast Guard published a final rule entitled “Special Local Regulations; Safety and Security Zones; Recurring Events in Captain of the Port Long Island Sound Zone” in the Federal Register (77 FR 6955). With this rule we added 33 CFR 100.100 and revised §§ 165.151 and 165.154. The changes removed 37 regulated areas, established 33 new safety zones, three special local regulations, one security zone, and consolidatde and simplified these regulations.

The Naval Submarine Base New London, Groton, CT, is the home to a portion of the U.S. Navy's Fast Attack Nuclear Submarines. During a recent security assessment of the base, it was determined that the existing security zone does not adequately cover the entirety of naval assets, piers, or planned pier extension projects. Therefore, Naval Submarine Base New London has requested to expand the existing security zone to safeguard its waterfront facility and its naval vessels while moored from destruction, loss, or injury from sabotage or other subversive acts, or other causes of a similar nature.

The purpose of this rulemaking is to modify and expand the existing security zone cited in 33 CFR 165.154(a)(3). The Captain of the Port Long Island Sound (COTP) proposes to modify current points in the boundary of the security zone. This would allow the zone to completely encompass the security barriers and allow room for planned pier expansion projects.

Part 165 of 33 CFR contains specific regulated navigation areas and limited access areas to prescribe general regulations for different types of limited or controlled access areas and regulated navigation areas and list specific areas and their boundaries. Section 165.154 establishes Safety and Security Zones: Captain of the Port Long Island Sound Zone.

The Coast Guard proposes to modify the location of the existing security zone listed in 33 CFR 165.154(a)(3) Safety and Security Zones: Captain of the Port Long Island Sound Zone, to expand the zone, as indicated in the illustration below. This expansion would allow the zone to completely encompass the security barriers and allow room to expand piers as required.

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

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

This regulatory action determination is based on the size, location, and duration of the security zone. Vessel traffic would be able to safely transit around the security zone which would impact a small designated area of the Thames River.

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

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

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

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

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

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

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

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

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a security zone to limit access near Naval Submarine Base New London, Groton, CT. Normally such actions are categorically excluded from further review under paragraph L60a of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

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

Submitting comments. We encourage you to submit comments through the Federal Decision Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2022-0082 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

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

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

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

Regional haze is visibility impairment that is produced by a multitude of sources and activities which are located across a broad geographic area and emit fine particulate matter (PM 2.5 ) ( e.g., sulfates, nitrates, organic carbon, elemental carbon, and soil dust) and their precursors ( e.g., sulfur dioxide (SO 2 ), nitrogen oxides (NO X ), and in some cases, ammonia and volatile organic compounds). Fine particle precursors react in the atmosphere to form PM 2.5 which impairs visibility by scattering and absorbing light. Visibility impairment ( i.e., light scattering) reduces the clarity, color, and visible distance that one can see. PM 2.5 can also cause serious health effects (including premature death, heart attacks, irregular heartbeat, aggravated asthma, decreased lung function, and increased respiratory symptoms) and mortality in humans and contributes to environmental effects such as acid deposition and eutrophication.

In section 169A of the 1977 Amendments to the CAA, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes as a national goal the prevention of any future, and the remedying of any existing, anthropogenic impairment of visibility in 156 national parks and wilderness areas designated as mandatory Class I federal areas. Congress added section 169B to the CAA in 1990 to address regional haze issues, and EPA promulgated the Regional Haze Rule (RHR), codified at 40 CFR 51.308, 1 on July 1, 1999. 2 The RHR established a requirement to submit a regional haze SIP which applies to all 50 states, the District of Columbia, and the Virgin Islands. 3

To address regional haze visibility impairment, the RHR established an iterative planning process that requires states in which Class I areas are located and states from which emissions may reasonably be anticipated to cause or contribute to any impairment of visibility in a Class I area to periodically submit SIP revisions to address regional haze visibility impairment. 4 Under the CAA, each SIP submission must contain “a long-term (ten to fifteen years) strategy for making reasonable progress toward meeting the national goal,” and the initial round of SIP submissions also had to address the statutory requirement that certain older, larger sources of visibility-impairing pollutants install and operate BART, as discussed further in Section I.B, below. 5 States' first regional haze SIPs were due by December 17, 2007, with subsequent SIP submissions containing revised long-term strategies originally due July 31, 2018, and every ten years thereafter. 6

Section 169A of the CAA directs states to evaluate the use of retrofit controls at certain larger, often uncontrolled, older stationary sources in order to address visibility impacts from these sources. Specifically, section 169A(b)(2) of the CAA requires states to revise their SIPs to contain such measures as may be necessary to make reasonable progress towards the national visibility goal, including a requirement that certain categories of existing major stationary sources built between 1962 and 1977 procure, install, and operate “Best Available Retrofit Technology” as determined by the state. On July 6, 2005, EPA published the Guidelines for BART Determinations Under the Regional Haze Rule at Appendix Y to 40 CFR part 51 (hereinafter referred to as the “BART Guidelines”) to assist states in the BART evaluation process. Under the RHR and the BART Guidelines, the BART evaluation process consists of three steps: (1) An identification of all BART-eligible sources, (2) an assessment of whether the BART-eligible sources are subject to BART, and (3) a determination of the BART controls. 7

States must conduct BART determinations for all “BART-eligible” sources that may reasonably be anticipated to cause or contribute to any visibility impairment in a Class I area, or in the alternative, adopt an emissions trading program or other alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART. In making a BART determination for a fossil fuel-fired electric generating plant with a total generating capacity in excess of 750 megawatts, a state must use the approach set forth in the BART Guidelines. A state is generally encouraged, but not required, to follow the BART Guidelines in other aspects. 8

A regional haze SIP must include source-specific BART emissions limits and compliance schedules for each source subject to BART. Once a state has made its BART determination, the BART controls must be installed and in operation as expeditiously as practicable, but no later than five years after the date of EPA approval of the regional haze SIP. See CAA section 169A(g)(4); 40 CFR 51.308(e)(1)(iv). In addition to what is required by the RHR, general SIP requirements mandate that the SIP must also include all regulatory requirements related to monitoring, recordkeeping, and reporting for the BART controls on the source. See CAA section 110(a)(2).

States undertook the BART determination process during the first implementation period. The BART requirement was a one-time requirement. BART-eligible sources may need to be re-assessed for additional controls in future implementation periods under the CAA's reasonable progress provisions. States should treat BART-eligible sources the same as other reasonable progress sources going forward. See 81 FR 26942, 26947 (May 4, 2016).

In the State's December 17, 2007, regional haze plan for the first implementation period, North Carolina identified 17 BART-eligible sources (six electric generating units (EGUs) and eleven non-EGUs) in the State. The non-EGUs submitted BART-exemption modeling demonstrations for NO X , SO 2 , and particulate matter (PM) as applicable to individual facilities. Nine of the 11 non-EGU sources demonstrated that they are not subject to BART by modeling less than the State's BART-exemption visibility impact threshold of 0.5 deciviews. The EGUs relied on the Clean Air Interstate Rule (CAIR)  9 as a BART alternative for NO X and SO 2 and submitted BART-exemption modeling demonstrations for PM. All of the EGUs demonstrated that they are not subject to BART for PM by modeling less than the State's BART-exemption threshold. See 77 FR 11858, 11874 (February 28, 2012).

North Carolina found that two non-EGUs (Blue Ridge Paper and PCS Phosphate) had modeled visibility impacts greater than the State's 0.5 deciview BART contribution threshold. Therefore, these two facilities were found subject to BART and submitted State permit applications including their proposed BART determinations. PCS Phosphate subsequently shut down its two sulfuric acid units subject to BART and these units were not further evaluated. For Blue Ridge Paper, North Carolina determined and EPA agreed that BART for the subject-to-BART units (two recovery furnaces, their associated smelt dissolving tanks, and the black liquor oxidation system) is the existing emissions control systems in place at the time of that determination. See 77 FR at 11874-75.

Through a letter dated April 13, 2021, and submitted to EPA on April 14, 2021, North Carolina submitted a SIP revision to modify its SIP-approved rule at 15A North Carolina Administrative Code (NCAC) 02D .0543, Best Available Retrofit Technology (NC BART Rule), which applies to BART-eligible sources. EPA incorporated this rule into North Carolina's SIP as part of EPA's limited approval action on the State's regional haze plan for the first implementation period. See 77 FR 38185 (June 27, 2012).

The proposed revisions to the NC BART Rule include the following changes. The submission removes 15A NCAC 02D .0543(g) because it is outdated, requiring the submission of BART permit applications by September 1, 2006. The submission also removes 15A NCAC 02D .0543(i) which required owners or operators of BART-eligible sources required to adopt BART controls in North Carolina to have installed and begun operation of the BART controls by December 31, 2012. The revision also renumbers .0543(h) to .0543(g) and removes the statement that EGUs covered under and complying with 15A NCAC 02D .2400, Clean Air Interstate Rules, are considered to be in compliance with the BART requirements for NO X and SO 2 under the NC BART Rule. Additionally, the revisions update the provisions for accessing EPA's Guidelines for Determining Best Available Retrofit Technology for Coal-fired Power Plants and Other Existing Stationary Facilities in a renumbered provision under 15A NCAC 02D .0543(h) (formerly provision (j)). The submission also includes non-substantive punctuation and wording changes.

North Carolina elected to adopt the NC BART Rule to establish BART requirements in response to federal requirements that states address BART in their initial regional haze SIPs. The CAA and RHR do not require states to develop state BART rules for incorporation into their SIPs. Thus, changes to the NC BART Rule are approvable as long as North Carolina continues to implement and enforce BART and the changes are otherwise consistent with federal BART requirements. EPA proposes to find that the rule changes are approvable for the reasons discussed below.

Regarding the removal of provisions under 15A NCAC 02D .0543, EPA preliminarily agrees that provisions (g) and (i) can be removed because the State-established due dates of September 1, 2006, and December 31, 2012, for submission of BART permit applications and installation and operation of BART, respectively, have since passed and all subject sources have met those requirements. Furthermore, the rule continues to require the owner or operator of a BART-subject emissions unit to install, operate, and maintain BART as approved by the State after BART is incorporated into the unit's permit under 15A NCAC 02Q. See 15A NCAC 02D .0543(f).

EPA preliminarily concurs with the removal of the reference to 15A NCAC 02D .2400, Clean Air Interstate Rules, as a means to satisfy BART for SO 2 and NO X for covered EGUs in North Carolina because EPA approved a SIP revision on October 31, 2014, allowing the State to rely on its Clean Smokestacks Act as an alternative to BART to satisfy BART requirements for BART-eligible EGUs formerly subject to CAIR. See 81 FR 32652 (May 24, 2016). 10

EPA preliminarily concurs with the remainder of the changes to the rule because they are editorial revisions that do not alter the substance of the NC BART Rule.

For the reasons described above, EPA preliminarily concludes that the NC BART Rule changes do not alter the State's authority and ability to continue to implement and enforce BART in North Carolina, are consistent with federal BART requirements, and do not interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable CAA requirement. 11

In accordance with 40 CFR 51.308(i)(4), Section 11 of the State's December 17, 2007, regional haze SIP contains procedures for continuing consultation between the State and FLMs on the implementation of the State's visibility protection program. North Carolina provided the SIP revision to the FLMs to review pursuant to the State's regional haze SIP and 40 CFR 51.308(i)(2), and the FLMs have not provided any comments.

In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with the requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference North Carolina rule 15A NCAC 02D .0543 entitled “ Best Available Retrofit Technology ,” state effective November 1, 2020, which removes outdated provisions and makes minor editorial changes. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

EPA proposes to approve the SIP revision containing changes to 15 NCAC 02D .0543 because they are consistent with the BART requirements set forth in the RHR and CAA and the applicable requirements in CAA section 110.

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

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

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

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

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

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

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

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

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

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

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.