I. Summary of Revisions

On November 28, 2018, FHFA published a final rule (2018 final rule) (83 FR 61186) that amended its regulation governing requirements for the Banks' AHP (12 CFR part 1291). Since publication of the 2018 final rule, FHFA has identified inadvertent omissions in the regulatory text, and opportunities for clarification and streamlining of the regulatory text and preamble language. This rule makes these technical revisions, which are summarized below and further described in Sections II. and III. below.

• Clarifies that the equation in the 2018 final rule preamble illustrating the pro rata AHP subsidy repayment calculation more accurately describes the calculation if the word “occupied” were replaced with the word “owned”;

• Clarifies in the regulatory text that amendments to Bank's annual Targeted Community Lending Plan (TCLP) that relate to its AHP must be published no later than the publication date of its AHP Implementation Plan, regardless of whether a Bank plans to establish any Targeted Funds, which was inadvertently omitted from the regulatory text;

• Reinserts the word “construction” inadvertently omitted from various places in the regulatory text related to owner-occupied units constructed with AHP subsidy, as they continue to be subject to the AHP retention agreement requirement;

• Clarifies in the regulatory text that the criteria in a Bank's scoring tie-breaker methodology for its General Fund and any Targeted Funds must be selected from the applicable Fund's scoring criteria, as in identical to the scoring criteria and not modified versions of them;

• Reinserts inadvertently omitted regulatory text exempting the Banks from the requirement to review annual certifications from owners or sponsors of Low-Income Housing Tax Credit (LIHTC) projects during the AHP long-term monitoring period;

• Clarifies in the regulatory text that a Bank must review all annual certifications from AHP project sponsors or owners during the AHP long-term monitoring period (subject to certain exceptions), i.e., a Bank may not use a risk-based sampling plan to select the certifications it will review;

• Clarifies the regulatory text governing a Bank's authority to establish various maximum AHP subsidy limits for its General Fund and any Targeted Funds; and

• Streamlines the regulatory text by eliminating a superfluous regulatory provision on non-delegation regarding adoption of Bank policies on re-use of repaid AHP direct subsidies.

Section 1291.15(a)(7)(v)(A) of the 2018 final rule revised the methodology for calculating the amount of AHP subsidy to be repaid by an AHP-assisted household in the event that the household's owner-occupied unit is sold or refinanced during the AHP five-year retention period. One component of this calculation, retained but modified from the predecessor AHP regulation, is a requirement that the amount of AHP subsidy to be repaid be “reduced on a pro rata basis per month until the unit is sold, transferred, or its title or deed transferred, or is refinanced, during the AHP five-year retention period.” Consistent with this requirement, the preamble of the 2018 final rule stated that the AHP subsidy amount is to be “reduced on a pro rata basis for the time that the household owned the unit until its sale or refinancing.” 83 FR 61203 (emphasis added). An equation in the preamble illustrating this pro rata calculation used the word “occupied” rather than “owned.” Id. While ownership and occupancy are typically coextensive for AHP-assisted households, this may not always be the case. Accordingly, the equation reads more accurately if the word “occupied” is replaced with the word “owned”, as follows:

The 2018 final rule requires that a Bank publish its current TCLP on its publicly available website, and publish any amendments to its TCLP on the website within 30 days after the date of their adoption by the Bank's board of directors. The final rule further states that if a Bank plans to establish any Targeted Funds under its AHP, the Bank must publish its TCLP (as amended) on its website on or before the date of publication of its annual AHP Implementation Plan, and at least 90 days before the first day that applications may be submitted to the Targeted Fund, unless the Targeted Fund is specifically targeted to address a Federal- or state-declared disaster. 12 CFR 1290.6(c), 1291.13(a)(2).

The preamble to the 2018 final rule stated that “. . . the final rule requires the Banks to publish their TCLPs no later than the publication date of their AHP Implementation Plans.” 83 FR 61197. The 2018 final rule's regulatory text inadvertently omitted this TCLP publication timing requirement when a Bank does not plan to establish any Targeted Funds. Accordingly, to align the regulatory text with FHFA's stated intent, FHFA is amending § 1290.6(c) of the Community Support Requirements regulation and § 1291.13(a)(2) of the AHP regulation to require that a Bank's TCLP (as amended) must be published no later than the date of publication of the Bank's AHP Implementation Plan (as amended), regardless of whether a Bank plans to establish any Targeted Funds. Because a Bank's TCLP also addresses Bank activity and plans not related to its AHP ( e.g., establishment of quantitative targeted community lending performance goals under § 1290.6(a)(5)(iv)), these amendments to the rule text specify that only those TCLP amendments related to the Bank's AHP must be published on or before publication of the annual AHP Implementation Plan.

In several places in the 2018 final rule's regulatory text, the rule requires or references a requirement that an AHP-assisted owner-occupied unit be subject to an AHP retention agreement if the AHP subsidy is used for the purchase, or purchase in conjunction with rehabilitation, of the unit, but inadvertently omits the word “construction” in these provisions. This omission would suggest that AHP retention agreements are not required where AHP subsidy is used for construction of the unit. Omission of the word “construction” is correct with respect to households that receive AHP subsidy under the Bank's homeownership set-aside programs, as AHP subsidy may not be used for construction under those programs. However, the omission is not correct where AHP subsidy is used for construction under the Banks' competitive application programs ( i.e., the General Fund and any Targeted Funds), a permissible use under those programs. As further discussed below, FHFA did not intend to eliminate this requirement for AHP retention agreements for the competitive application programs. In a July 2019 “Questions and Answers” document posted on FHFA's website and sent to the Banks, FHFA acknowledged this inadvertent omission and stated its intent to correct the error in a future rule. 1

The predecessor AHP regulation required retention agreements for all owner-occupied units for which AHP subsidy use was authorized— i.e., purchase, rehabilitation, or construction of units in projects awarded subsidies under a Bank's competitive application program, and purchase or rehabilitation of units by households funded under a Bank's homeownership set-aside program(s). 12 CFR 1291.9(a)(7) (Jan. 1, 2018 edition). In its proposed rule to amend the AHP regulation, FHFA proposed eliminating the requirement for retention agreements for all AHP-assisted owner-occupied units, regardless of how the AHP subsidy was used. 83 FR 11351. However, in the 2018 final rule, FHFA decided to eliminate the requirement for retention agreements only where the AHP subsidy is used solely for rehabilitation without an accompanying purchase. In reinserting the retention agreement language in the final rule, FHFA inadvertently omitted the existing regulatory references to “construction.”

FHFA's intent in this regard is clear in the preamble discussion in the 2018 final rule. Where the preamble first summarizes the effect of the final rule, it states that the rule's effect is to “remove the requirement for retention agreements for owner-occupied units where the AHP subsidy is used solely for rehabilitation,” and includes no indication of an intent to remove the requirement under any other circumstances. Id. at 61186. The preamble further states that “[i]n a change from the proposed rule, the final rule eliminates the current requirement for owner-occupied retention agreements where households use the AHP subsidy solely for rehabilitation of a unit, but retains it in other circumstances.” Id. at 61192 (emphases added). This is further indicated by the subsequent analysis in the preamble, which acknowledges commenters' claims about the benefits of owner-occupied retention agreements, but only includes a justification for eliminating the requirement where the subsidy is used solely for rehabilitation without an accompanying purchase. See id. at 61193 (concluding that abuse, in the form of “flipping,” is unlikely “where the AHP subsidy is used solely for rehabilitation of homes, with no accompanying purchase.”) Had FHFA intended to eliminate the requirement for retention agreements for owner-occupied units where the AHP subsidy is used for construction, the preamble would have included an acknowledgment of this change as well as a rationale, neither of which appears in the preamble.

Accordingly, to align the regulatory text with FHFA's intent, FHFA is amending § 1291.23(d)(1) to reinsert construction as a use of AHP subsidy in owner-occupied projects for which AHP retention agreements are required, and also making conforming revisions to §§ 1291.1 (definition of “retention period”) and 1291.15(a)(7) (introductory text).

The 2018 final rule requires a Bank to establish and implement a scoring tie-breaker policy for selecting between or among project applications receiving identical scores under its General Fund and any Targeted Funds in the same funding round when there is insufficient AHP subsidy to approve all of the tied applications but sufficient subsidy to approve one of them. The Bank is required to meet certain requirements specified in the final rule in establishing its scoring tie-breaker policy, including that the methodology used to break a scoring tie, which may differ for each Fund, must be “drawn from” the particular Fund's scoring criteria adopted in the Bank's AHP Implementation Plan. 12 CFR 1291.25(c)(3). The preamble to the 2018 final rule states that, with one limited exception, the scoring tie-breaker requirements are “consistent with guidance FHFA has provided to the Banks and with the proposed rule.” 83 FR 61212. That guidance, Advisory Bulletin 2013-06, provided examples of permitted scoring tie-breaker methodologies that a hypothetical Bank could adopt, each of which incorporated scoring criteria identical to those included in the hypothetical Bank's AHP Implementation Plan.

A question has arisen as to whether the scoring tie-breaker provision in the 2018 final rule permits a Bank to adopt a scoring tie-breaker methodology that incorporates scoring criteria similar, but not identical, to specific scoring criteria for the applicable Fund in the Bank's AHP Implementation Plan. As indicated in the preamble to the 2018 final rule, in light of the relevant guidance in Advisory Bulletin 2013-06, FHFA intended that a Bank's scoring tie-breaker methodology for a particular Fund be identical to one or more scoring criteria for that Fund in the Bank's AHP Implementation Plan. The phrase “drawn from” was intended to indicate that a Bank would select, from all of the existing scoring criteria in its AHP Implementation Plan, one or more of those scoring criteria to serve as the scoring tie-breaker(s). It was not intended that a Bank could use modified versions of its existing scoring criteria.

Accordingly, to more closely align the regulatory text with FHFA's intent, FHFA is amending § 1291.25(c)(3) by replacing the phrase “drawn from” with the phrase “selected from.”

Section 1291.50(c)(1) of the 2018 final rule requires generally that each Bank conduct long-term monitoring of AHP-assisted rental projects for the duration of the AHP 15-year retention period. This monitoring includes Bank review of annual certifications by project sponsors or owners of compliance with the AHP household income and rent requirements and ongoing project financial viability (paragraph (c)(1)(i)). The predecessor AHP regulation provided for an exception to this annual certification requirement where the project received LIHTCs under paragraph (a)(2), or where the project received funds from a Federal, state or local government entity under paragraph (a)(3). 12 CFR 1291.7(a)(2), (3) (Jan. 1, 2018 edition). The 2018 final rule retained the exception for projects receiving funds from such government entities in § 1291.50(b), but in reorganizing the various monitoring provisions, inadvertently omitted the exception for LIHTC projects from § 1291.50(c)(1)(i). FHFA's intent to retain this exception for LIHTC projects is clearly indicated in the preamble of the 2018 final rule, which states that: “[c]onsistent with the current regulation and proposed rule, the final rule does not require the Banks to conduct long-term monitoring of AHP projects that received LIHTCs during the AHP 15-year retention period.” 83 FR 61201. In the above-referenced “Questions and Answers” guidance document, FHFA acknowledged this inadvertent omission and stated its intent to correct it in a future rule. 2

Accordingly, to align the regulatory text with FHFA's stated intent, FHFA is amending § 1291.50(c)(1)(i) to provide that during long-term monitoring of AHP-assisted rental projects, a Bank is not required to review annual certifications by sponsors or owners of LIHTC projects.

Scope of risk-based sampling. Section 1291.50(c)(1)(ii) of the 2018 final rule requires that a Bank's written monitoring policies also include requirements for Bank review of back-up project documentation regarding household incomes and rents maintained by the project sponsor or owner, except for LIHTC projects and projects that received funds from a Federal, state or local government entity under § 1291.50(b)(1) and (2) as specified in separate FHFA guidance. Section 1291.50(c)(2)(ii) provides that a Bank may use a reasonable, risk-based sampling plan to select the rental projects “to be monitored under this paragraph (c),” and to review the back-up project documentation and any other project documentation. The corresponding provision in the predecessor AHP regulation included annual project sponsor or owner certifications as eligible for risk-based sampling, but this option was removed by the 2018 final rule because, in practice, as noted in the preamble to the 2018 AHP proposed rule, the Banks review all annual project sponsor or owner certifications (subject to the exceptions discussed above), consistent with FHFA's expectation. 83 FR 11364. However, the phrase “to be monitored under this paragraph (c)” in § 1291.50(c)(2)(ii) might be misread to suggest that a Bank may use a risk-based sampling plan to select the annual project sponsor or owner certifications it will review.

Accordingly, to better align the regulatory text with FHFA's intent, FHFA is amending § 1291.50(c)(1)(i) to provide that during AHP long-term monitoring, a Bank must review all annual project sponsor or owner certifications (subject to the exceptions discussed above), i.e., a Bank may not use a risk-based sampling plan under § 1291.50(c)(2)(ii) to select the annual project sponsor or owner certifications it will review.

Section 1291.24(c)(1) of the 2018 final rule authorizes a Bank to establish, in its discretion, a limit on the maximum amount of AHP subsidy available per member, per project sponsor, per project, or per project unit in a single AHP funding round under its General Fund and any Targeted Funds. The provision further states that a Bank may establish only one maximum subsidy limit per such entity for the General Fund and for each Targeted Fund, which must apply to all applicants to the specific Fund, but the maximum subsidy limit per project or per project unit may differ among the Funds.

The text of § 1291.24(c)(1) accurately reflects FHFA's intent, but prompted a request for clarification of the language, specifically, how many different AHP subsidy limits may a Bank establish within each General Fund and Targeted Fund, or across multiple Funds. FHFA's intent was not to prohibit a Bank from establishing more than one type of limit per Fund, but to require that for each type established, the quantitative subsidy limit be applied uniformly across such Fund. 3 Nor did the predecessor AHP regulatory text, which was located at § 1291.5(c)(15)(i), prohibit a Bank from applying more than one type of subsidy limit to its competitive application program, and FHFA did not propose such a prohibition in the 2018 proposed rule.

Accordingly, to provide greater clarity, FHFA is adding explanatory language in § 1291.24(c)(1) stating that each General Fund or Targeted Fund may contain up to all four of these optional AHP subsidy limits, each of which must apply to all applicants to the specific Fund. A Bank's AHP subsidy limit per member must be the same for each of its Funds and its AHP subsidy limit per project sponsor must be the same for each of its Funds, but a Bank's AHP subsidy limit per project and per project unit may differ among the Funds.

Section 1291.64(b)(2) of the 2018 final rule, which was retained from the predecessor AHP regulation (12 CFR 1291.8(f)(2)(ii) (Jan. 1, 2018 edition)), prohibits a Bank's board of directors from delegating to Bank officers or other Bank employees the responsibility to adopt any Bank policies on re-use of repaid AHP direct subsidies in the same project. Sections 1291.13(b)(12) and 1291.64(b)(1) of the 2018 final rule, also retained from the predecessor AHP regulation (12 CFR 1291.3(a)(7); 1291.8(f)(2)(i) (Jan. 1, 2018 edition)), require that these AHP subsidy re-use policies be included in the Bank's AHP Implementation Plan. Section 1291.13(b) of the 2018 final rule (introductory text) prohibits a Bank's board of directors from delegating to a committee of the board, Bank officers, or other Bank employees the responsibility for adopting or amending the Bank's AHP Implementation Plan, which, thus, includes adopting any AHP subsidy re-use policies in the Plan. The non-delegation provision for AHP subsidy re-use policies in § 1291.64(b)(2) is, therefore, superfluous.

Accordingly, to streamline the regulatory text, FHFA is removing the non-delegation provision in § 1291.64(b)(2), and making technical changes to the paragraph numbering in § 1291.64(b) to reflect this removal.

The Administrative Procedures Act provides that when an agency for good cause finds that public notice and comment on a rule are impracticable, unnecessary, or contrary to the public interest, the agency may publish the rule in final form without prior public notice and comment. 5 U.S.C. 553(b)(B). Because this rule makes technical revisions that do not reflect any changes in the policy intent of the 2018 final rule, publication of proposed amendments with an opportunity for public comment would serve no useful public purpose. Accordingly, FHFA finds that public notice and comment on this rule is unnecessary and is proceeding directly to a final rule.

Section 1313(f) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 requires the FHFA Director, when promulgating regulations “of general applicability and future effect” relating to the Banks, to consider the differences between the Banks and Fannie Mae and Freddie Mac (the Enterprises) as they may relate to the Banks' cooperative ownership structure, mission of providing liquidity to members, affordable housing and community development mission, capital structure, and joint and several liability. 12 U.S.C. 4513(f). This rule applies only to the Banks. It makes technical revisions to align the 2018 final rule with FHFA's policy intent in that rule. In preparing the 2018 final rule, the Director considered the differences between the Banks and the Enterprises as they relate to the above factors, and determined that the amendments in the 2018 final rule were positive for the affordable housing mission of the Banks and neutral regarding the other statutory factors. Because this rule makes only technical revisions, none of which involves policy changes, no further analysis is needed under section 1313(f).

This rule does not contain any information collection requirement that would require the approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ). Therefore, FHFA has not submitted any information to OMB for review for PRA purposes.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires that a regulation that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605(b). FHFA certified that the 2018 final rule was not likely to have a significant economic impact on a substantial number of small entities because it applied to the Banks, which are not small entities for purposes of the Regulatory Flexibility Act. 83 FR 61231. For these same reasons, and also because this rule makes only technical revisions to align the 2018 final rule with FHFA's policy intent in that rule, FHFA certifies that this rule is unlikely to have a significant economic impact on a substantial number of small entities.

In accordance with the Congressional Review Act (5 U.S.C. 801 et seq. ), FHFA has determined that this rule is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs of the OMB.

For the reasons stated in the preamble, FHFA amends parts 1290 and 1291 of title 12 of the Code of Federal Regulations as follows:

Background

EASA, which is the Technical Agent for the Member States of the European Union, issued EASA AD No. 2020-0156, dated July 14, 2020 (EASA AD 2020-0156), to correct an unsafe condition for all serial-numbered Airbus Helicopters (formerly Eurocopter, Eurocopter France, Aerospatiale) Model SA 365 C1, SA 365 C2, and SA365 C3 helicopters. EASA advised of an investigation that was conducted on the MGB's design following an EC 225 helicopter accident. EASA further advised that investigation results determined that the level of detectability of particles linked to a planet gear spalling needs improvement. EASA stated this condition, if not detected and corrected, could lead to a planet gear seizure possibly resulting in the loss of the MGB and subsequent reduced control of the helicopter.

Accordingly, EASA AD 2020-0156 required inspecting the MGB magnetic plug and MGB oil filter for particles and depending on the results of the inspection, conducting further inspections or removing certain parts from service. EASA AD 2020-0156 also required modification of certain helicopters by replacing certain part-numbered magnetic plugs with other part-numbered magnetic plugs and prohibited the installation of an affected magnetic plug on any helicopter. EASA considered EASA AD 2020-0156 to be an interim action and stated that further AD action may follow.

After EASA issued EASA AD 2020-0156, further investigation results determined the planet gears installed in the epicyclic module of the MGB are subject to higher outer race contact pressures, which may cause spalling and cracking. Accordingly, EASA issued EASA AD No. 2021-0016, dated January 13, 2021 (EASA AD 2021-0016), which superseded EASA AD 2020-0156. EASA AD 2021-0016 retains the requirements of EASA AD 2020-0156 and requires replacing the second stage planet gears at reduced intervals. EASA AD 2021-0016 also prohibits the installation of an affected MGB on any helicopter, unless the planetary gears are replaced as required by the EASA AD.

EASA AD 2021-0016 specifies procedures for inspecting the MGB magnetic plug and oil filter and depending on the results, corrective action. EASA AD 2021-0016 also specifies procedures for modifying the helicopter by replacing the non-electrical magnetic plug with an improved non-electrical magnetic plug. EASA AD 2021-0016 specifies procedures for replacing all second stage planet gears at specified intervals. EASA AD 2021-0016 also prohibits installing a certain part-numbered magnetic plug on any helicopter and permits the installation of an affected MGB provided that no planet gear installed has exceeded 300 flight hours since new and the planetary gears have been replaced as required following the installation of the MGB.

The FAA reviewed Airbus Helicopters Alert Service Bulletin (ASB) No. SA365-05.33, Revision 1, dated December 15, 2020, which establishes a new maintenance criterion following the detection of particles during the scheduled periodic check of the MGB magnetic plug.

The FAA also reviewed Airbus Helicopters ASB No. SA365-65.53, Revision 0, dated May 28, 2020. This service information specifies procedures for installing modification 0763B19 to improve the performance in collecting metal particles in the new non-electrical magnetic plug.

These helicopters have been approved by EASA and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA about the unsafe condition described in its AD. The FAA is issuing this AD after evaluating all known relevant information and determining that the unsafe condition described previously is likely to exist or develop on other products of the same type designs.

This AD requires accomplishing the actions specified in EASA AD 2021-0016, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD and except as discussed under “Differences Between this AD and the EASA AD.”

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has since coordinated with other manufacturers and civil aviation authorities to use this process. As a result, EASA AD 2021-0016 will be incorporated by reference in the FAA final rule. This AD would, therefore, require compliance with EASA AD 2021-0016 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in the EASA AD does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in the EASA AD. Service information specified in EASA AD 2021-0016 that is required for compliance with EASA AD 2021-0016 is available at https://www.regulations.gov by searching for and locating Docket No. FAA-2022-0517.

The EASA AD applies to Airbus Helicopters Model SA 365 C3 helicopters, whereas this AD does not because that model is not FAA type-certificated. The EASA AD requires sending oil samples to Airbus Helicopters, contacting Airbus Helicopters to determine the characterization of certain particles collected or for details on the MGB history, and reporting certain information to Airbus Helicopters, whereas this AD does not. The EASA AD 2021-0016 specifies to contact Airbus Helicopters if further particles are collected during close monitoring, whereas this AD requires, before further flight, accomplishing repair in accordance with a method approved by the Manager, General Aviation & Rotorcraft Section, International Validation Branch, FAA; or EASA; or Airbus Helicopters' EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature. The EASA AD requires inspections after the last flight of each day, whereas this AD requires those inspections prior to the first flight of each day. Where the service information referenced in EASA AD 2021-0016 specifies that certain requirements can be performed by a mechanical technician or pilot, this AD requires that the visual check of the MGB magnetic plugs be performed by a qualified mechanic.

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

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

There are no helicopters with this type certificate on the U.S. Registry. Accordingly, notice and opportunity for prior public comment are unnecessary, pursuant to 5 U.S.C. 553(b)(3)(B).

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

The FAA invites you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2022-0517; Project Identifier MCAI-2021-00356-R” at the beginning of your comments. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this AD because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Kristin Bradley, Aerospace Engineer, General Aviation & Rotorcraft Section, International Validation Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email Kristin.Bradley@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

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

Currently, there are no affected U.S.-registered helicopters. If an affected helicopter is imported and placed on the U.S. Register in the future and labor costs are estimated at $85 per work-hour, the FAA provides the following cost estimates to comply with this AD:

Inspecting the magnetic plugs and oil filter for particle deposits will take about 1 work-hour for an estimated cost of $85 per helicopter per inspection cycle.

Replacing the magnetic plugs will take about 5 hours and parts will cost about $1,877 for a total cost of $2,302 per helicopter.

Replacing the planetary gear assembly will take about 48 work-hours and parts will cost about $58,009 for a total cost of $62,089 per helicopter.

Replacing an MGB will take about 42 work-hours and parts will cost about $295,000 (overhauled) for a total cost of $298,570 per helicopter.

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

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

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

For the reasons discussed above, I certify this regulation:

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

(2) Will not affect intrastate aviation in Alaska.

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

Background

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2021-0255, dated November 15, 2021, and corrected November 24, 2021 (EASA AD 2021-0255), to correct an unsafe condition for Leonardo S.p.A. Helicopters Model A109S helicopters, serial number (S/N) 22735, 22736, and 22737, and equipped with Trekker Kit; and Model AW109SP helicopters, S/N 22407, 22408, 22409, 22412, 22414 to 22427 inclusive, and 22429.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Leonardo S.p.a. Model A109S helicopters, S/N 22735, 22736, and 22737, and equipped with Trekker Kit; and Model AW109SP helicopters S/N 22407, 22408, 22409, 22412, 22414 through 22427 inclusive, and 22429. The NPRM published in the Federal Register on March 22, 2022 (87 FR 16120). The NPRM was prompted by a report of a protective sheath, installed around a fixed flight control rod, which should have been removed during assembly. The NPRM proposed to require borescope inspecting certain parts, and removing any foreign object if detected, as specified in EASA AD 2021-0255.

The FAA is issuing this AD to detect any foreign object contamination, which if not addressed, could affect the free movement of the flight controls and result in subsequent reduced control of the helicopter. See EASA AD 2021-0255 for additional background information.

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

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

EASA AD 2021-0255 specifies procedures for borescope inspecting certain part-numbered parts installed on the control rods and levers of the rotors flight controls, and removing any foreign object if detected.

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

The FAA reviewed Leonardo Helicopters Alert Service Bulletin No. 109SP-148, dated October 26, 2021 (ASB 109SP-148). This service information specifies instructions for borescope inspecting certain part-numbered parts installed on the control rods and levers of the rotors flight controls of the left-hand and right-hand forward struts and removing foreign objects.

The FAA also reviewed Leonardo Helicopters Alert Service Bulletin No.109S-104, dated October 26, 2021, which specifies the same instructions as ASB 109SP-148 but only applies to Model A109S helicopters with certain Trekker Kits installed.

The FAA estimates that this AD affects 1 helicopter of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Borescope inspecting the control rods and levers of the rotor flight controls for any foreign object takes about 4 work-hours for an estimated cost of $340 per inspection and $340 for the U.S. fleet.

The FAA estimates the following costs to do any necessary on-condition corrective actions that are required based on the results of the inspection:

Removing any foreign object would take a minimal amount of time with a minimal parts cost.

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

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

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

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

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

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

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

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

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Viking Model DHC-6-1, DHC-6-100, DHC-6-200, DHC-6-300, and DHC-6-400 airplanes. The NPRM published in the Federal Register on January 21, 2022 (87 FR 3236). The NPRM was prompted by MCAI from Transport Canada, which is the aviation authority for Canada. Transport Canada issued AD CF-2020-05, dated March 13, 2020 (referred to after this as “the MCAI”), to correct an unsafe condition on Viking Model DHC-6 series 1, DHC-6 series 100, DHC-6 series 110, DHC-6 series 200, DHC-6 series 210, DHC-6 series 300, DHC-6 series 310, DHC-6 series 320, and DHC-6 series 400 airplanes. The MCAI states:

You may examine the MCAI in the AD docket at https:// www.regulations.gov by searching for and locating Docket No. FAA-2020-1003.

In the NPRM, the FAA proposed to require visually inspecting the entire aileron internal structure, correcting any damage found, and reporting the inspection results to Viking. The FAA is issuing this AD to prevent progressive looseness of the aileron at the hinge support rib push-pull rod attachment, flutter condition, and degraded or loss of aileron control, which could lead to loss of control of the airplane.

After the comment period closed, the FAA requested additional information from Transport Canada and Viking about the factory drilled drain holes in the ailerons. A summary of this discussion can be found in the rulemaking docket at https://www.regulations.gov in Docket No. FAA-2020-1003.

The FAA received a comment from one commenter, Mile-Hi Skydiving Center (Mile-Hi). The following presents the comment received on the NPRM and the FAA's response.

Mile-Hi requested that Viking revise DHC-6 Twin Otter Service Bulletin V6/0066, Revision A, dated December 9, 2019 (Viking SB V6/0066, Revision A), to provide instructions for enlarging the aileron drain holes. Mile-Hi stated that the existing factory-drilled aileron drain holes are 3/16 inch (0.1875 inch) in diameter and are too small to accommodate the borescope used at its facility, which has a diameter of 1/4 inch (0.232 inch). Mile-Hi concluded that the existing aileron drain holes will need to be enlarged to accommodate any borescope for the proposed inspection. Mile-Hi also requested follow-on actions such as reducing the enlarged holes to the original size to prevent ingress of nesting insects such as wasps or hornets and static balancing the ailerons. As, in the NPRM, the FAA proposed to require inspecting the aileron in accordance with steps in Viking SB V6/0066, Revision A, the FAA infers that Mile-Hi is requesting that the FAA revise the proposed AD to include these actions.

The FAA does not agree that this AD needs to mandate enlarging the aileron drain holes. The FAA contacted Transport Canada and Viking to obtain information on whether any other Model DHC-6 airplane operators have had similar issues regarding the diameter of the existing aileron drain holes. Viking advised that it has received approximately 170 service bulletin reply forms in response to Viking SB V6/0066, Revision A, and operators have successfully done the borescope inspection with no difficulty. In addition, Viking confirmed that the 0.1875-inch diameter aileron drain hole size is standard per the Model DHC-6 airplane type design, and that commercially available borescope heads fit into the standard-sized holes (as specified in the equipment list in Section II.A.1 of Viking SB V6/0066, Revision A). Based on this information, the FAA has determined that the borescope diameter is not a fleet-wide issue that needs further attention.

The FAA acknowledges field repairs to replace the aileron skins could have been completed on some airplanes where, during replacement, the drain holes were omitted or manufactured undersized. If field repairs have been done that prevent compliance with the inspection in this AD, then the operator will need approval of an alternative method of compliance. The FAA did not change this AD based on this comment.

These products have been approved by the aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data, considered the comment received, and determined that air safety requires adopting the AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. This AD is adopted as proposed in the NPRM.

The FAA reviewed Viking DHC-6 Twin Otter Service Bulletin V6/0066, Revision A, dated December 9, 2019. The service information specifies procedures for visually inspecting the entire aileron internal structure, including front and rear spars, all aileron ribs, and upper and lower skins; repairing or replacing any damaged part; and reporting inspection results to Viking Air Limited technical support. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA also reviewed Viking DHC-6 Twin Otter Service Bulletin V6/0066, Revision NC, dated August 29, 2019. The service information specifies procedures for visually inspecting the aileron ribs, including ribs and both sides of the hinge arm; repairing or replacing any damaged part; and reporting inspection results to Viking Air Limited technical support.

The FAA considers that this AD is an interim action. The inspection reports will provide the FAA and Viking additional data for determining the damage present in the fleet. After analyzing the data, the FAA may take further rulemaking action.

The MCAI applies to Viking Air Limited Model DHC-6 series 110, DHC-6 series 210, DHC-6 series 310, and DHC-6 series 320, and this AD does not because these models do not have an FAA type certificate. Model DHC-6 series 1, DHC-6 series 100, DHC-6 series 200, DHC-6 series 300, and DHC-6 series 400 airplanes specified in the MCAI correspond to FAA Model DHC-6-1, DHC-6-100, DHC-6-200, DHC-6-300, and DHC-6-400 airplanes, respectively.

The FAA estimates that this AD affects 33 airplanes of U.S. registry. The FAA also estimates that it would take about 3 work-hours per airplane to comply with the inspection and 1 work-hour to comply with the reporting requirement of this AD. The average labor rate is $85 per work-hour.

Based on these figures, the FAA estimates the cost of this AD on U.S. operators will be $11,220 or $340 per airplane.

In addition, the FAA estimates that any necessary follow-on actions to replace an aileron would take 6 work-hours and require parts costing $52,243, for a cost of $52,753 per airplane. The FAA has no way of determining the number of airplanes that may need these actions.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

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

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

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

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

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

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

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

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

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Bell Textron Inc. Model 212, 412, 412CF, and 412EP helicopters with an engine oil check valve part number (P/N) 209-062-520-001 or fuel check valve P/N 209-062-607-001 manufactured by Circor Aerospace that is marked “Circle Seal” and “CORONA CA,” except not a check valve marked with “TQL,” and has a manufacturing date code of, or prior to, “9/11” (September 2011), or does not have a manufacturing date code, installed. The NPRM published in the Federal Register on March 31, 2022 (87 FR 18747). The NPRM was prompted by report of a cracked check valve manufactured in 2009 by Circor Aerospace. An incorrect torque value applied on the threaded fitting at the check valve inlet end during the assembly process resulted in the crack. Indication of this condition may also include an enlarged outside diameter (O.D.) measurement of the check valve housing at the inlet end where the threaded fitting is installed or a leak. These check valves may be installed as engine oil check valve P/N 209-062-520-001 and fuel check valve P/N 209-062-607-001 on Bell Textron Inc. Model 212, 412, 412CF, and 412EP helicopters.

The FAA previously issued AD 2019-09-02, Amendment 39-19636 (84 FR 22695, May 20, 2019), which applies to the same model helicopters with the same part-numbered check valves installed, except it is only for check valves marked “Circle Seal” and with a manufacturing date code of “10/11” (October 2011) through “03/15” (March 2015).

In the NPRM, the FAA proposed to require measuring the O.D. of an affected (engine oil or fuel) check valve housing at the center and at the inlet end where the threaded fitting is installed. If the dimension measured at the inlet end is greater than 0.003 inch (0.0762 mm) compared to the measurement at the center, the NPRM proposed to require repetitively inspecting the check valve for a crack and leak, and depending on the results, removing the check valve from service. The NPRM also proposed to require removing the check valve from service at a longer compliance time, which would terminate the repetitive inspections. Lastly, the NPRM proposed to prohibit installing affected check valves on any helicopter.

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

The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM.

The FAA reviewed Bell Alert Service Bulletin (ASB) 212-20-163, Revision B, dated April 6, 2021 (ASB 212-20-163), Bell ASB 212-20-164, Revision B, dated April 6, 2021 (ASB 212-20-164), Bell ASB 412-20-182, Revision B, dated April 6, 2021 (ASB 412-20-182), and Bell ASB 412-20-183, Revision C, dated April 6, 2021 (ASB 412-20-183). ASB 212-20-163 and ASB 412-20-182 specify procedures for inspecting and replacing engine oil check valve P/N 209-062-520-001. ASB 212-20-164 and ASB 412-20-183 specify procedures for inspecting and replacing fuel check valve P/N 209-062-607-001.

The FAA estimates that this AD affects 169 helicopters of U.S. registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Measuring up to four check valves (two engine oil and two fuel) takes about 1 work-hour for an estimated cost of up to $85 per helicopter and $14,365 for the U.S. fleet. Inspecting up to four check valves (two engine oil and two fuel) takes about 2 work-hours for an estimated cost of up to $170 per helicopter and $28,730 for the U.S. fleet, per inspection cycle as applicable. Replacing up to four valves (two engine oil and two fuel) takes about 4 work-hours and parts cost up to about $340, for an estimated cost of up to $680 per helicopter and $114,920 for the U.S. fleet.

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

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

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

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

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

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

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

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at Owatonna Degner Regional Airport, Owatonna, MN, to support instrument flight rule operations at this airport and removing the Halfway VOR/DME from the header and legal description including associated extension, which are no longer required.

The FAA published a notice of proposed rulemaking in the Federal Register (87 FR 12898; March 8, 2022) for Docket No. FAA-2022-0161 to amend the Class E airspace at Owatonna, MN. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

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

This document amends 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.

This amendment to 14 CFR part 71 amends the Class E airspace extending upward from 700 feet above the surface to within 6.6-mile (decreased from a 6.7-mile) radius of Owatonna Degner Regional Airport, Owatonna, MN; removes the Halfway VOR/DME and associated extension from the airspace legal description as is no longer required; and updates the name (previously Owatonna Municipal Airport) and geographic coordinates of the airport to coincide with the FAA's aeronautical database.

This action is the result of an airspace review due to the decommissioning of the Owatonna NDB and the Owatonna OM, which provided guidance to the instrument procedures at this airport.

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

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority, as it would modify Class E airspace to support instrument flight rules operations at Sitka Rocky Gutierrez Airport, AK.

The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register for FAA-2022-0030 to modify the Class E surface airspace (87 FR 6804; February 7, 2022), revoke an area that is designated as an extension to a Class D or Class E surface area, and modify the Class E airspace extending upward from 700 feet above the surface at Sitka Rocky Gutierrez Airport, AK. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. One comment was received in favor of the proposal.

Class E2, Class E4, and Class E5 airspace designations are published in paragraphs 6002, 6004, and 6005, respectively, of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.

This document amends 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 amending 14 CFR part 71 by modifying the Class E airspace at Sitka Rocky Gutierrez Airport, AK. The Class E airspace designated as surface area is modified, the Class E airspace area designated as an extension to a Class D or Class E surface area airspace is revoked, and the Class E airspace area extending upward from 700 feet or more above the surface is modified to contain instrument flight rules operations at airport.

The Class E airspace, designated as surface area, northwest of the airport is modified to contain instrument flight rules aircraft descending below 1,000 feet above the surface of the Earth, to contain departures until reaching the Class E airspace extending upward from 700 feet or more above the surface. Additionally the Class E airspace, designated as surface area, was reduced northeast of the airspace since it was no longer needed.

This action also removes the Class E airspace, designated as an extension to a Class D or Class E surface area. This airspace is no longer required due to the removal of the LDA/DME RWY 11 approach procedure turn.

Lastly, this action modifies the Class E airspace extending upward from 700 feet or more above the surface. The areas northwest and southwest of the airport are extended to contain arriving aircraft descending below 1,500 feet above the surface. The Class E airspace extending upward from 700 feet or more above the surface to the southwest of the airport is extended to contain departing instrument flight rules aircraft until reaching 1,200 feet above the surface of the Earth. The Class E airspace extending upward from 700 feet or more above the surface area northeast of the airport is removed because it is no longer needed.

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

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant the preparation of an environmental assessment.

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority, as it would establish Class E airspace to support instrument flight rule operations at Limon Municipal Airport, CO.

The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register for FAA-2022-0041 to establish Class E airspace extending upward from 700 feet above the surface at Limon Municipal Airport, CO (87 FR 8754; February 16, 2022). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. Three comments were received in favor of the proposal and one comment was not germane.

The Class E5 airspace designation is published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in FAA Order JO 7400.11.

This document amends 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 amending 14 CFR part 71 by establishing Class E airspace extending upward from 700 feet above the surface of the Earth at Limon Municipal Airport, Limon, CO. This airspace is designed to contain the new Area Navigation (RNAV) approaches into the airport and the instrument departures from the airport. The airspace supports the airport's transition from visual flight rules to instrument flight rule operations.

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

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant the preparation of an environmental assessment.

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

I. Background A. Introduction

In this final rule, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to add new § 743.6, Prior notifications to Congress of exports of semiautomatic firearms, to adopt a congressional notification requirement for certain license applications having semiautomatic firearms that are (i) classified under Export Control Classification Number (ECCN) 0A501.a and (ii) valued at $4 million or more. The congressional notification requirement will not apply if the total value of the application is valued at $4 million or more but contains 0A501.a semiautomatic firearms valued at less than $4 million. Further, the congressional notification requirement will not apply to license applications if the 0A501.a semiautomatic firearms are destined for countries in Country Group A:5 or A:6 (see supplement no.1 to part 740 of the EAR), with the exception of Mexico, South Africa, and Turkey. The congressional notification requirement will also not apply to exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR) or when for the official use by an agency of the North Atlantic Treaty Organization (NATO).

This congressional notification requirement is warranted because of the unique nature of 0A501.a semiautomatic firearms and their prior jurisdiction under the International Traffic in Arms Regulations (ITAR). While the Commerce Control List (CCL) has long controlled certain firearms, the firearms subject to this congressional notification requirement are often used by military and law enforcement personnel, as well as for recreational purposes. Those items were transferred to BIS's jurisdiction in a final rule published on January 23, 2020 (85 FR 4136) identifying firearms, guns, ammunition and related articles that no longer warranted control on the U.S. Munitions List and were transferred to the CCL. Prior to the March 9, 2020 effective date for that rule, 0A501.a semiautomatic firearms required congressional notification pursuant to § 123.15(a)(3) of the ITAR for licenses in the amount of $1 million or more. Through publication of this rule, BIS is adopting congressional notifications based on the criteria in the new § 743.6 of the EAR for certain export licenses of these items.

While the ITAR's congressional notification requirement is informative for developing new § 743.6 of the EAR, BIS is utilizing a different scope for this congressional notification requirement. Under the EAR, exporters can make a good faith estimate of the quantity and value of exports needed over the standard four-year validity period of a BIS license. This can include a license covering multiple purchase orders or anticipated purchase orders. Under the ITAR, DSP-5 licenses are generally tied to a single purchase order. To account for these differences, BIS is using $4 million as the value for the congressional notification requirement under § 743.6, which is an equivalent annual average of $1 million in potential exports per year during the validity period of the license. Essentially, the value threshold in § 743.6 will be four times the value of the ITAR's value threshold in § 123.15(a)(3) reflecting the difference in licensing requirements. Additionally, because these semiautomatic firearms are less sensitive than the fully-automatic firearms that continue to be controlled under USML Category I of the ITAR, the congressional notification requirement will not apply to a group of allied countries.

This rule does not change the interagency license review process for these firearms or how license applicants currently structure or generally apply for BIS licenses. License applicants may continue to apply for prospective sales, so long as they do not break-up contract values in order to come under the $4 million dollar threshold specified in § 743.6 and are able to identify the items to be exported, country where the items will be exported, parties to the transaction and end use of the items. This rule does not change how applicants apply for licenses, except for requiring new support documents for licenses that meet the criteria in § 743.6 and as described further below under new paragraph (bb) in supplement no. 2 to part 748.

The congressional notification will be submitted for those license applications for which the interagency review process has resulted in a recommendation to approve, which is consistent with how BIS has managed the process for “600 series Major Defense Equipment” congressional notification process. The new congressional notification requirement will complement the existing export control requirements for 0A501.a semiautomatic firearms, which are subject to a worldwide license requirement by BIS, import certificate requirements used by foreign countries to ensure that firearms to be exported are authorized by the respective foreign government of the recipient, interagency review process with the Departments of Defense and State, and as well as BIS's extensive enforcement and compliance efforts to ensure that exports are made in accordance with U.S. national security and foreign policy interests.

This rule makes the following changes to the EAR for the adoption of congressional notification requirement for certain semiautomatic firearms exports.

This rule adds § 743.6 Prior notifications to Congress of exports of certain firearms. This new section is modeled on the same type of congressional notification process as followed under § 743.5 for “600 Major Defense Equipment.” New § 743.6 consists of four paragraphs.

Paragraph (a) (General Requirement) specifies that any license application for the export of semiautomatic firearms controlled under ECCN 0A501.a (which includes semiautomatic rifles and semiautomatic pistols) will be notified to Congress as provided in § 743.6. Paragraph (a) includes two exclusions under paragraphs (a)(1) to (2) from the congressional notification requirement. Paragraph (a)(1) excludes exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR). Paragraph (a)(2) excludes applications for official use by an agency of NATO.

New paragraph (b) specifies the country scope for these congressional notifications. Paragraph (b) specifies that BIS will notify Congress prior to issuing a license authorizing the export of items to a country outside the countries listed in Country Group A:5 or A:6, with the exception of Mexico, South Africa, or Turkey. Paragraph (b) specifies that the congressional requirement will apply when the commodities are sold under a contract or are otherwise part of an export transaction that includes $4 million or more of semiautomatic firearms controlled by ECCN 0A501.a. For these reasons, BIS does not anticipate any change in the number of license applications received by BIS because license applicants are required to follow the same process they were previously in determining how to structure a license application for these semiautomatic firearms controlled under ECCN 0A501.a.

Paragraph (c) provides guidance on additional information that license applicants will need to provide as part of the license application process. Importantly, this rule does not require a purchase order to apply for a license. However, if the license application includes 0A501.a semiautomatic firearms subject to a signed contract (which may be a purchase order), paragraph (c) specifies the signed contract would need to be included as a support document for the license application. Paragraph (c) further specifies that a written explanation from the applicant will be required when the export does not include a contract and whether the application is supported by a signed contract or a written explanation by the applicant, an applicant will need to include a statement of the value of the semiautomatic firearms controlled by ECCN 0A501.a to be exported for any proposed export described in paragraph (b) of § 743.6.

This final rule also adds two anti-circumvention sentences to the end of paragraph (c) to make license applicants aware that they are prohibited from splitting license applications in order to try to circumvent the congressional notification process. This rule specifies that any activity intended to circumvent notification requirements is prohibited. The last sentence this rule adds to paragraph (c) provides illustrative examples of such prohibited activities, such as the splitting or structuring of contracts to avoid exceeding applicable notification dollar value limits.

The dollar value threshold of $4 million or more will only be based on the portion of the license application for semiautomatic firearms controlled by ECCN 0A501.a. Paragraph (c) specifies that license applications for semiautomatic firearms controlled by ECCN 0A501.a may include other nonautomatic firearms, shotguns, other 0x5zz items, or other items subject to the EAR. As noted above, BIS does not intend for license applicants to change their behavior for how they are currently structuring licenses, so this rule adds text to paragraph (c) to make it clear to license applicants that they may and are encouraged to continue with their current license application practices of including other firearms related items on license applications. However, to make this process more manageable for BIS, this rule specifies under paragraph (c) that the applicant must clearly identify the semiautomatic firearms controlled by ECCN 0A501.a. This requirement will assist BIS in identifying whether the license application requires congressional notification under § 743.6 and identifying the information that will need to be reported to Congress. As a conforming change to paragraph (c), this final rule also adds a new paragraph (bb) to supplement no. 2 to part 748—Unique Application and Submission Requirements of the EAR, so license applicants are aware of the additional support document requirements specified under § 743.6(c).

Finally, this final rule adds paragraph (d) (Additional information), to provide an email that license applicants may use to ask questions regarding new § 743.6. As noted above, this final rule adds a new paragraph (bb) (Semiautomatic firearms controlled under ECCN 0A501.a) to supplement no. 2 to part 746 to assist public understanding of the requirement in § 743.6(c). New paragraph (bb) specifies that for export license applications that require prior notifications to Congress of exports of semiautomatic firearms controlled under ECCN 0A501.a under the criteria of § 743.6, the license applicant must include the information specified in § 743.6(c) of the EAR. This rule includes a parenthetical phrase in new paragraph (bb) to cross reference applicants back to § 743.6(c).

This rule also adds a new general restriction on the use of EAR license exceptions under § 740.2 Restrictions on all license exceptions by adding paragraph (a)(23). New paragraph (a)(23) specifies exports of semiautomatic firearms controlled by ECCN 0A501.a sold under a contract that includes $4 million or more of such items are not eligible for any license exception other than exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR), for official use by an agency of NATO, or destined to a country listed in Country Groups A:5 or A:6 (see supplement no. 1 to part 740 of the EAR) except Mexico, South Africa, or Turkey. BIS added this restriction consistent with a similar license exception restriction that exists in § 740.2(a)(15) and (16) for “600 Series Major Defense Equipment” that requires congressional notification. New paragraph (a)(23) will ensure all exports that require a congressional notification under § 743.6 will require the submission of a BIS license with limited exceptions.

BIS notes that the vast majority of firearms exported require a BIS license to be obtained. The EAR license exceptions that are available for semiautomatic firearms (as well as other firearms under 0A501.a and .b) are limited and the terms of those license exceptions, such as License Exception BAG (limited to three individually owned firearms), License Exception TMP (exporting a firearm to a trade show or sending to servicing or repair under paragraphs (a)(5) or (a)(6) is limited to 75 firearms), or License Exception RPL, impose additional conditions on the use of license exceptions. In addition, the likelihood of a semiautomatic firearm controlled under 0A501.a being exported in the limited quantity required under the license exceptions described above and meeting or exceeding the $4 million threshold would be extremely unlikely, unless each firearm was valued at a very high rate or there was some type of unusual circumstance, such as where a U.S. firearms manufacture had a defective product line that was exported to a distributor and all the firearms needed to be returned for warranty work for subsequent export. The only EAR license exception where a high dollar value export is likely would be under License Exception GOV for the United States Government under paragraphs (b)(2)(ii), but that is already excluded from the congressional notification requirement because of the U.S, government end user.

This rule also adds a new paragraph (aa) ( “600 Series Major Defense Equipment”) to supplement no. 2 to part 748 to assist public understanding of the requirement in § 743.5(d). The longstanding requirement in § 743.5(d) was added to the EAR on April 16, 2013 (78 FR 22722), but BIS determined it would still be beneficial to license applicants to include a new paragraph (aa) in supplement no. 2 to part 748 to make it easier to find this requirement, similar to what is described above for new paragraph (bb). New paragraph (aa) specifies that for export license applications that require prior notifications to congress of exports of “600 series major defense equipment” under the criteria of § 743.5, the license applicant must include the information specified in § 743.5(d) of the EAR. This rule includes a parenthetical phrase to cross reference applicants back to § 743.5(d).

Lastly, as a clarification on the correct email address to use for “600 Series Major Defense Equipment,” this rule removes the email address of bis.compliance@bis.doc.gov in § 743.5(d) and adds a new email address of mcd_compliance@bis.doc.gov in its place.

For the changes being made in this final rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on July 18, 2022, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR).

Only license applications received on or after July 18, 2022 may be subject to congressional notification under § 743.6 of the EAR.

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (codified, as amended, at 50 U.S.C. Sections 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.

1. This final rule has been designated a “significant regulatory action”, under Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to or 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 regulation involves collections previously approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications and commodity classifications, and carries a burden estimate of 29.6 minutes for a manual or electronic submission for a total burden estimate of 33,133 hours. Total burden hours associated with the PRA and OMB control number 0694-0088 are expected to increase as a result of this rule because of the new support document requirement for license applications that require congressional notification pursuant to the § 743.6 that this rule adds to supplement no. 2 to part 748 under paragraph (bb) ( Semiautomatic firearms controlled under ECCN 0A501.a ). BIS estimates that sixty of the current license applications that are submitted to BIS annually will require the support documents specified in paragraph (bb). Specifically, for export license applications that require prior notifications to congress of exports of semiautomatic firearms controlled under ECCN 0A501.a under the criteria of § 743.6, the exporter must include a copy of the signed contract or, if there is no contract, a written explanation from the applicant (including a statement of the value of the firearms controlled by ECCN 0A501.a to be exported) for any proposed export described in § 743.6(b) of the EAR. License applications for semiautomatic firearms controlled by ECCN 0A501.a may include other nonautomatic firearms, shotguns, other 0x5zz items, or other items subject to the EAR, but the applicant must clearly identify the semiautomatic firearms controlled by ECCN 0A501.a. This support document requirement will make this process more manageable for BIS by having the applicant clearly identify the semiautomatic firearms controlled on a license application. BIS estimates the burden hours associated with this collection will increase by 20 hours ( i.e., 60 existing license applications that will now require these additional support documents × 20 minutes per response) for a total estimated cost increase of $1,800 ( i.e., 60 hours × $30 per hour). The $30 per hour cost estimate for OMB control number 0694-0088 is consistent with the salary data for export compliance specialists currently available through glassdoor.com ( glassdoor.com estimates that an export compliance specialist makes $55,280 annually, which computes to roughly $26.58 per hour).

Lastly, this rule also adds a new paragraph (aa) ( “600 Series Major Defense Equipment” ) to supplement no. 2 to part 748 to assist public understanding of the requirement in § 743.5(d). The requirement in § 743.5(d) was added to the EAR on April 16, 2013 (78 FR 22722), but BIS determined it would still be beneficial to license applicants to also include a new paragraph (aa) in supplement no. 2 to part 748 to make it easier to find this requirement. BIS does not anticipate this change will result in a change in the burden hours under this collection because BIS would estimate no more than one existing license application per year would require this support document.

BIS is in the process of updating this information collection to account for the increase in burden hours and costs posed by this rule. Any comments regarding this collection of information, including suggestions for reducing the burden, may be submitted online at https://www.reginfo.gov/public/do/PRAMain . Find this particular information collection by using the search function and entering the title of the collection or the OMB Control Number.

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

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

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

For the reasons stated in the preamble, parts 740, 743, and 748 of the Export Administration Regulations (15 CFR parts 730-774) are amended as follows:

I. Background

Upon request, FDA has classified the coronary artery disease risk indicator using acoustic heart signals as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by placing the device into a lower device class than the automatic class III assignment.

The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (FD&C Act).

FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act (see 21 U.S.C. 360c(i)) to a predicate device that does not require premarket approval. We determine whether a new device is substantially equivalent to a predicate device by means of the procedures for premarket notification under section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807).

FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act. Section 207 of the Food and Drug Administration Modernization Act of 1997 (Pub. L. 105-115) established the first procedure for De Novo classification. Section 607 of the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144) modified the De Novo application process by adding a second procedure. A device sponsor may utilize either procedure for De Novo classification.

Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).

Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.

Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Although the device was automatically placed within class III, the De Novo classification is considered to be the initial classification of the device.

When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see section 513(f)(2)(B)(i) of the FD&C Act). As a result, other device sponsors do not have to submit a De Novo request or premarket approval application to market a substantially equivalent device (see section 513(i) of the FD&C Act, defining “substantial equivalence”). Instead, sponsors can use the less-burdensome 510(k) process, when necessary, to market their device.

On November 4, 2019, FDA received Acarix A/S's request for De Novo classification of the CADScor System. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act.

We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to the general controls, will provide reasonable assurance of the safety and effectiveness of the device.

Therefore, on November 24, 2020, FDA issued an order to the requester classifying the device into class II. In this final order, FDA is codifying the classification of the device by adding 21 CFR 870.1420. 1 We have named the generic type of device coronary artery disease risk indicator using acoustic heart signals, and it is identified as a device that records heart sounds including murmurs and vibrations to calculate a patient-specific risk of presence of coronary artery disease, as an aid in cardiac analysis and diagnosis.

FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1.

FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness. For a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k) of the FD&C Act.

The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations and guidance. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in 21 CFR part 860, subpart D, regarding De Novo classification have been approved under OMB control number 0910-0844; the collections of information in 21 CFR part 814, subparts A through E, regarding premarket approval, have been approved under OMB control number 0910-0231; the collections of information in part 807, subpart E, regarding premarket notification submissions, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 820, regarding quality system regulation, have been approved under OMB control number 0910-0073; and the collections of information in 21 CFR part 801, regarding labeling, have been approved under OMB control number 0910-0485.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 870 is amended as follows:

In the Federal Register of March 18, 2020, the Food and Drug Administration (FDA or Agency) issued a final rule establishing new cigarette health warnings for cigarette packages and advertisements. The final rule implements a provision of the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) (Pub. L. 111-31) that requires FDA to issue regulations requiring color graphics depicting the negative health consequences of smoking to accompany new textual warning label statements. The Tobacco Control Act amends the Federal Cigarette Labeling and Advertising Act of 1965 (Pub. L. 89-92) to require each cigarette package and advertisement to bear one of the new required warnings. The final rule specifies the 11 new textual warning label statements and accompanying color graphics. Pursuant to section 201(b) of the Tobacco Control Act, the rule was published with an effective date of June 18, 2021, 15 months after the date of publication of the final rule.

On April 3, 2020, the final rule was challenged in the U.S. District Court for the Eastern District of Texas. 1 On May 8, 2020, the court granted a joint motion to govern proceedings in that case and postpone the effective date of the final rule by 120 days. 2 On December 2, 2020, the court granted a new motion by the plaintiffs to postpone the effective date of the final rule by an additional 90 days. 3 On March 2, 2021, the court granted another motion by the plaintiffs to postpone the effective date of the final rule by an additional 90 days. 4 On May 21, 2021, the court granted another motion by the plaintiffs to postpone the effective date of the final rule by an additional 90 days. 5 On August 18, 2021, the court issued an order to postpone the effective date of the final rule by an additional 90 days. 6 On November 12, 2021, the court issued another order to postpone the effective date of the final rule by an additional 90 days. 7 On February 10, 2022, the court issued another order to postpone the effective date of the final rule by an additional 90 days. 8 On May 10, 2022, the court issued another order to postpone the effective date of the final rule by an additional 90 days. 9 The court ordered that the new effective date of the final rule is July 8, 2023. Pursuant to the court order, any obligation to comply with a deadline tied to the effective date is similarly postponed, and those obligations and deadlines are now tied to the postponed effective date.

To the extent that 5 U.S.C. 553 applies to this action, the Agency's implementation of this action without opportunity for public comment, effective immediately upon publication today in the Federal Register , is based on the good cause exception in 5 U.S.C. 553(b)(B). Seeking public comment is impracticable, unnecessary, and contrary to the public interest. The 90-day postponement of the effective date, until July 8, 2023, is required by court order in accordance with the court's authority to postpone a rule's effective date pending judicial review (5 U.S.C. 705). Seeking prior public comment on this postponement would have been impracticable, as well as contrary to the public interest in the orderly issuance and implementation of regulations.

Posting of Public Comments

Please note, all comments received in response to this docket are considered part of the public record. The Drug Enforcement Administration (DEA) will make comments available, unless reasonable cause is given, for public inspection online at http://www.regulations.gov. Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter. The Freedom of Information Act applies to all comments received. If you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want DEA to make it publicly available, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You must also place all of the personal identifying information you do not want made publicly available in the first paragraph of your comment and identify what information you want redacted.

If you want to submit confidential business information as part of your comment, but do not want DEA to make it publicly available, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify the confidential business information to be redacted within the comment.

DEA will generally make available in publicly redacted form comments containing personal identifying information and confidential business information identified, as directed above. If a comment has so much confidential business information or personal identifying information that DEA cannot effectively redact it, DEA may not make available publicly all or part of that comment. Comments posted to http://www.regulations.gov may include any personal identifying information (such as name, address, and phone number) included in the text of your electronic submission that is not identified as confidential as directed above.

An electronic copy of this document and supplemental information to this interim final rule (IFR) are available at http://www.regulations.gov for easy reference.

Pursuant to 21 U.S.C. 811(a), this action is a formal rulemaking “on the record after opportunity for a hearing.” Such proceedings are conducted pursuant to the provisions of the Administrative Procedure Act (APA), 5 U.S.C. 551-559. 21 CFR 1308.41-1308.45; 21 CFR part 1316, subpart D. Interested persons may file requests for a hearing or notices of intent to participate in a hearing in conformity with the requirements of 21 CFR 1308.44(a) or (b), and such requests must include a statement of the person's interests in the proceeding and the objections or issues, if any, concerning which the person desires to be heard. 21 CFR 1316.47(a). Any interested person may file a waiver of an opportunity for a hearing or to participate in a hearing together with a written statement regarding the interested person's position on the matters of fact and law involved in any hearing as set forth in 21 CFR 1308.44(c).

All requests for hearings and waivers of participation, together with a written statement of position on the matters of fact and law involved in such hearing, must be sent to DEA using the address information provided above.

Under the Controlled Substances Act (CSA), as amended in 2015 by the Improving Regulatory Transparency for New Medical Therapies Act (section 2(b) of Publ. L. 114-89), DEA is required to commence an expedited scheduling action with respect to certain new drugs approved by the Food and Drug Administration (FDA). As provided in 21 U.S.C. 811(j), this expedited scheduling is required where both of the following conditions apply: (1) The Secretary of the Department of Health and Human Services (HHS) has advised DEA that a New Drug Application (NDA) has been submitted for a drug that has a stimulant, depressant, or hallucinogenic effect on the central nervous system (CNS), and that it appears that such drug has an abuse potential; and (2) the Secretary of HHS recommends that DEA control the drug in schedule II, III, IV, or V pursuant to 21 U.S.C. 811(a) and (b). In these circumstances, DEA is required to issue an interim final rule (IFR) controlling the drug within 90 days.

Subsection (j)(2) states that the 90-day timeframe starts the later of (1) the date DEA receives HHS' scientific and medical evaluation/scheduling recommendation, or (2) the date DEA receives notice of the NDA approval by HHS. Subsection (j)(3) specifies that the rulemaking shall become immediately effective as an IFR without requiring DEA to demonstrate good cause therefore. Thus, the purpose of subsection (j) is to speed the process by which DEA schedules newly approved drugs that are currently either in schedule I or not controlled (but which have sufficient abuse potential to warrant control) so that such drugs may be marketed without undue delay following FDA approval. 1

Subsection (j)(3) further provides that the IFR shall give interested persons the opportunity to comment and to request a hearing. After the conclusion of such proceedings, DEA must issue a final rule in accordance with the scheduling criteria of 21 U.S.C. 811(b) through (d) and 812(b).

Ganaxolone (3α-hydroxy-3β-methyl-5α-pregnan-20-one) is a new molecular entity (NME) with CNS activity. Ganaxolone is a neuroactive positive allosteric modulator of gamma-aminobutyric acid type-A (GABA-A) receptors and an inhibitory neurosteroidal substance that shares structural features and a pharmacological mechanism of action with progesterone and schedule IV depressants alfaxalone and brexanolone.

On July 20, 2021, Marinus Pharmaceuticals, Inc. (Sponsor) submitted an NDA for ganaxolone to FDA. On March 18, 2022, DEA received notification that FDA, on the same date, approved the NDA for ZTALMY (ganaxolone oral suspension), under section 505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), for the treatment of seizures associated with cyclin-dependent kinase-like 5 (CDKL5) deficiency disorder (CDD) in patients two years of age and older. Pursuant to its FDA-approved prescription drug labeling, ZTALMY is to be administered orally three times daily (TID) with food on a titration schedule through a dose-escalation protocol over the first 3 weeks of drug administration. Patients weighing 28 kg or less receive a final dose of 21 mg/kg TID (63 mg/kg/day) and patients weighing more than 28 kg receive a final dose of 600 mg TID (1800 mg/day). 2

On March 14, 2022, DEA received from HHS a scientific and medical evaluation entitled “Basis for the Recommendation to Control Ganaxolone and its Salts in Schedule V of the Controlled Substances Act” and a scheduling recommendation. Pursuant to 21 U.S.C. 811(b) and (c), this document contained an eight-factor analysis of the abuse potential, legitimate medical use, and dependence liability of ganaxolone, along with HHS's recommendation to control ganaxolone and its salts under schedule V of the CSA.

In response, DEA reviewed the scientific and medical evaluation and scheduling recommendation provided by HHS, along with all other relevant data, and completed its own eight-factor review pursuant to 21 U.S.C. 811(c). DEA concluded that ganaxolone meets the 21 U.S.C. 812(b)(5) criteria for placement in schedule V of the CSA.

Pursuant to subsection 811(j), and based on HHS' scheduling recommendation, the approval of the NDA by HHS/FDA, and DEA's determination, DEA is issuing this IFR to schedule ganaxolone as a schedule V controlled substance under the CSA.

Included below is a brief summary of each factor as analyzed by HHS and DEA, and as considered by DEA in its scheduling action. Please note that both DEA and HHS analyses are available in their entirety under “Supporting Documents” in the public docket for this IFR at http://www.regulations.gov, under Docket Number “DEA-990.” Full analysis of, and citations to, the information referenced in the summary may also be found in the supporting and related material.

Ganaxolone is an NME that has not been marketed in the United States or any country. Thus, evidence regarding its diversion, illicit manufacturing, or deliberate ingestion is currently lacking. DEA notes that there are no reports of law enforcement encounters of ganaxolone in the National Forensic Laboratory Information System (NFLIS) database, 3 which collects drug cases submitted to and analyzed by state and local forensic laboratories. Ganaxolone has sedative effects and is likely to have abuse potential, although less than that of schedule IV sedatives such as lorazepam. Thus, it is reasonable to assume that ganaxolone may be diverted from legitimate channels, used contrary to or without medical advice, and capable of creating hazards to the users and to the safety of the community. In preclinical and clinical studies, ganaxolone produced effects that are less than that of schedule IV sedative drugs such as methohexital and lorazepam. Ganaxolone produced positive subjective responses and euphoria-related adverse events (AEs) that were significantly greater than placebo, but statistically less than that of lorazepam (schedule IV) in healthy humans, nondependent with a history of recreational use of CNS depressants; thus, it is likely to be abused for its sedative effects contrary to medical advice.

Ganaxolone shares a pharmacological profile with other inhibitory neurosteroids such as alfaxalone and brexanolone, both schedule IV drugs. Ganaxolone acts on GABA-A receptors to enhance the effects of GABA, a major inhibitory neurotransmitter in the CNS. Data from in vitro binding studies showed that ganaxolone had significant affinity (greater than 96 percent) for the GABA-chloride channels. Ganaxolone did not show significant affinity (less than 50 percent) for 47 other receptor sites, ion channels, steroid sites, and enzymes. The sites tested included abuse-related sites such as dopamine (D 1 and D 2 ), serotonin (1a, 2a, and 2c), cannabinoid (CB 1 and CB 2 ), opioid (mu, kappa, delta), glutamate (NMDA/AMPA, phencyclidine, glycine, kainite), and monoamine transporters (dopamine, serotonin, or norepinephrine). Functional activity studies showed that ganaxolone potentiated GABA-evoked chloride currents in Xenopus oocytes expressing human GABA-A receptor subunits.

In animal studies, orally-administered ganaxolone's effect on general behavioral profile showed that it did not produce behavioral activity that differed significantly from the saline-treated group. However, ganaxolone elicited time-dependent (6-hour post treatment) behavior changes such as abnormal gait, grasping loss, abnormal righting reflex, and low carriage indicative of the sedative and muscle relaxation properties of the drug. Ganaxolone's effect on motor coordination was evaluated in three rotarod studies in rats. The studies showed that ganaxolone produced a dose-dependent increase in the number of rats that failed to maintain themselves on the rotarod, indicative of its interference on motor coordination. Ganaxolone produced a dose-dependent decrease in locomotor activity and loss of righting reflex.

In a drug discrimination study using rats trained to discriminate midazolam (schedule IV) and saline, oral doses of ganaxolone (10 and 30 mg/kg) produced full generalization to midazolam stimuli. Ganaxolone's reinforcing properties were assessed by determining whether self-administration behavior was maintained when the drug was substituted for heroin. Data from this study showed that ganaxolone self-administration was much less than that of methohexital (schedule IV) and heroin (schedule I) and was numerically similar to saline. However, ganaxolone at 0.10 mg/kg/injection dose produced self-administration that was statistically significantly greater than saline.

A randomized, double-blind, active- and placebo-controlled, cross-over study was conducted to determine the abuse potential for ganaxolone in healthy, nondependent, recreational CNS depressant users. Oral doses of ganaxolone were compared to an oral dose of lorazepam (schedule IV, served as the positive control). The lower and middle doses of ganaxolone (400 mg and 800 mg, respectively) produced responses within or just outside the acceptable placebo range and were statistically similar to placebo. However, the highest dose of ganaxolone (2000 mg) produced a drug liking score that was significantly different from placebo. The three doses of ganaxolone tested produced drug liking scores that were significantly lower than that of lorazepam. In addition, all three oral doses of ganaxolone (400, 800, and 2000 mg) produced responses on all other positive subjective measures (bipolar visual analog scale for Overall Drug Liking, High, Good Effects, and Take Drug Again) that were statistically less than those produced by 6 mg oral dose of lorazepam.

In 23 Phase 1 clinical safety studies that were conducted using healthy individuals, eight of the studies showed that ganaxolone produced euphoria-related AEs at all doses tested. Of the eight studies, three were repeat-dose studies and five were acute-dose studies. From the three repeat-dose studies, 24 of 64 subjects who received ganaxolone reported euphoria-related AEs at any dose tested, compared to 0 of 17 subjects who received placebo. Of the five acute-dose studies, euphoria-related AEs were reported by 8 of the 101 subjects who received ganaxolone at any dose tested, compared to 1 of 12 subjects who received placebo. Most of the euphoria-related AEs following ganaxolone administration were mild in severity. In Phase 2/3 clinical studies conducted with ganaxolone in either epilepsy patients or post-traumatic stress disorder patients, the degree of euphoria-related AEs could not be determined because all subjects in these studies were concurrently taking antiepileptic drugs (epilepsy patients) or benzodiazepines (post-traumatic stress disorder patients). Because many antiepileptic drugs and benzodiazepines are known to produce euphoria and sedation, and are often controlled in schedule IV of the CSA, their use in human subjects confounds interpreting any ganaxolone euphoria-related AEs that may be reported during these clinical studies. However, in one of the three clinical studies conducted in patients with migraine, euphoria was reported in 3 of the 163 subjects who received a single 750 mg oral dose of ganaxolone (1.8 percent, 2 moderate, 1 severe), compared to 1 of 164 subjects who received placebo (0.6 percent, 1 mild).

In summary, ganaxolone produced incidence of euphoria-related AEs supportive of its abuse potential. In animal studies, ganaxolone produced interoceptive cues that were similar to those of midazolam, a schedule IV depressant, and these data are consistent with the fact that both drugs share a common mechanism of action involving positive allosteric modulation of the GABA-A receptors. In self-administration studies conducted in animals, ganaxolone produced rewarding effects, but its self-administration was lower than methohexital (schedule IV) and heroin (schedule I) injections. As mentioned by HHS, in clinical studies, ganaxolone produced an 8.8 percent incidence of euphoria-like AEs, including euphoria, thinking abnormal, feeling drunk, and depersonalization, across acute doses of 300 to 1,500 mg/day and repeat doses of 400 to 2,250 mg/day, as compared to that of placebo (2.3 percent) in healthy individuals.

Ganaxolone, chemically known as 3α-hydroxy-3β-methyl-5α-pregnan-20-one, is an NME. It is a structural derivative of allopregnanolone (also known as brexanolone, schedule IV). Ganaxolone is structurally different from brexanolone by the presence of an extra methyl group at the 3β-position. It is insoluble in water, slightly soluble in methanol, ethanol, isopropanol, ethyl acetate, and toluene (5 to 25 mg/mL at 20 degrees Celsius), and soluble in N,N -dimethylacetamide. Ganaxolone is a drug product formulated as a 50 mg/mL white to off-white immediate release oral suspension in water and is administered by mouth TID with food. Ganaxolone is absorbed with a time to peak plasma concentration of 2.0 to 3.0 hours following oral administration. It undergoes first pass metabolism following oral administration with 10 percent bioavailability. It is approximately 99 percent protein bound in serum and has a terminal half-life at steady state of about 8-10 hours.

As discussed in the background section, ganaxolone has an accepted medical use in the United States.

There is no information on the history and current pattern of abuse for ganaxolone, since it has not been marketed, legally or illegally, in the United States or any other country. There is no evidence of diversion of ganaxolone that has been distributed for research, such as for clinical trials. Data from preclinical and clinical studies indicate that the abuse potential of ganaxolone is less than that of schedule IV CNS depressants such as methohexital and lorazepam. Consistent with the fact that ganaxolone is an NME, the NFLIS database had no records of encounters by law enforcement.

In summary, pharmacological data on ganaxolone show that it produces abuse-related AEs and has an abuse potential less than that of schedule IV CNS depressants.

Data from preclinical and clinical studies showed that ganaxolone has an abuse potential that is less than that of schedule IV depressants. Thus, ganaxolone has a low potential for abuse relative to substances in schedule IV. A search by DEA of the NFLIS database found no evidence of law enforcement encounters of ganaxolone in the United States. Because ganaxolone is a positive allosteric modulator of GABA-A receptors and has abuse potential, upon availability of ganaxolone in the market, it is likely to be abused.

Ganaxolone's abuse potential, although less than that of schedule IV depressants, is an indication of its public health risk. As such, upon availability for marketing, it is likely to pose risk to public health comparable to drugs in schedule V. According to information mentioned in the prescription product label for ZTALMY (ganaxolone), concomitant use of opioids, antidepressants, or other CNS depressants such as alcohol may potentiate incidence of somnolence and sedation in patients receiving ganaxolone. The abuse of ganaxolone may present risks to the public health at a level similar to those associated with the abuse of CNS depressants.

Ganaxolone's psychic and physiological dependence liability was assessed using data from a rat physical dependence study and human data. A physical dependence study was not conducted in clinical studies because abrupt discontinuation of an antiepileptic drug in epileptic patients presents serious safety concerns. As described by HHS, data from a physiologic dependence study conducted in rats demonstrated that chronic administration of ganaxolone produced a decrease in body weight and changes in behavior that included ataxia, rearing, escape attempts from the cage, increased body tone, increased locomotor activity, increased reaction to sound, explosive movements, and piloerection. Decreases in body weight, food and water intake, and increased body temperature were observed upon discontinuation of ganaxolone. During ganaxolone discontinuation, 5 of 10 rats showed behaviors that included increased locomotor activity, increased reaction to sound, hunched posture, and piloerection. Further, since ganaxolone produced positive subjective responses and euphoria-related AEs in human subjects, it is likely that it may produce psychic dependence.

In summary, data from animal studies demonstrate that chronic administration of ganaxolone produces signs or symptoms of withdrawal upon discontinuation. Ganaxolone produces physical dependence.

Ganaxolone is not an immediate precursor of any controlled substance, as defined by 21 U.S.C. 802(23).

Conclusion: After considering the scientific and medical evaluation and scheduling recommendation provided by HHS, and its own eight-factor analysis, DEA has determined that these facts and all relevant data constitute substantial evidence of potential for abuse of ganaxolone. As such, DEA hereby schedules ganaxolone as a controlled substance under the CSA.

The CSA lists the findings required to place a drug or other substance in any particular schedule (I, II, III, IV, or V). 21 U.S.C. 812(b). After consideration of the analysis and recommendation of the Assistant Secretary for Health of HHS and review of all available data, the Administrator of DEA (Administrator), pursuant to 21 U.S.C. 812(b)(5), finds that:

(1) Ganaxolone has a low potential for abuse relative to the drugs or other substances in schedule IV.

Ganaxolone, a neuroactive steroid, is a positive allosteric modulator of GABA-A receptors and produces sedation in general behavioral studies including rotarod and locomotion studies. In a drug discrimination study in animals, ganaxolone generalized to midazolam (schedule IV), demonstrating it has GABA-A receptor agonist properties. In a self-administration study in animals, ganaxolone self-administration was significantly different from saline, but was less than that of methohexital (schedule IV) and heroin (schedule I). Ganaxolone produced positive subjective responses and euphoria-related AEs less than that of lorazepam (schedule IV), but greater than that of placebo in a human abuse potential study. Furthermore, data from pharmacokinetic clinical studies show that ganaxolone produced incidence of euphoria in 8.8 percent of healthy individuals as compared to 2.3 percent incidence following placebo. Therefore, ganaxolone has some potential for abuse, but it is low relative to lorazepam, methohexital and other substances in schedule IV.

(2) Ganaxolone has a currently accepted medical use in treatment in the United States.

FDA recently approved the NDA for ZTALMY (ganaxolone) as an oral adjunctive therapy for the treatment of an epilepsy condition, cyclin-dependent, kinase-like 5 deficiency disorder, in patients aged two years and older. Thus, ganaxolone has a currently accepted medical use in treatment in the United States.

(3) Abuse of ganaxolone may lead to limited physical dependence or psychological dependence relative to the drugs or other substances in schedule IV.

Ganaxolone shares a similar pharmacology profile with brexanolone (schedule IV). Data from a rat physical dependence study demonstrated that discontinuation of chronic administration of ganaxolone produced withdrawal syndrome. Thus, abuse of ganaxolone may lead to limited physical dependence. Further, because ganaxolone produced positive subjective responses and euphoria-related AEs, it may produce psychic dependence. However, there were fewer reports of euphoria-related AEs associated with ganaxolone than lorazepam (schedule IV). Ganaxolone may lead to limited physical or psychological dependence relative to other substances in schedule IV.

Based on these findings, the Administrator concludes that ganaxolone warrants control in schedule V of the CSA. 21 U.S.C. 812(b)(5).

Ganaxolone is subject to the CSA's schedule V regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, dispensing, importing, exporting, research, and conduct of instructional activities and chemical analysis with, and possession involving schedule V substances, including the following:

1. Registration. Any person who handles (manufactures, distributes, reverse distributes, dispenses, imports, exports, engages in research, or conducts instructional activities or chemical analysis with, or possesses), or who desires to handle, ganaxolone must be registered with DEA to conduct such activities pursuant to 21 U.S.C. 822, 823, 957, and 958 and in accordance with 21 CFR parts 1301 and 1312. Any person who currently handles or intends to handle ganaxolone and is not registered with DEA must submit an application for registration and may not continue to handle ganaxolone unless DEA has approved that application, pursuant to 21 U.S.C. 822, 823, 957, and 958, and in accordance with 21 CFR parts 1301 and 1312. These registration requirements, however, are not applicable to patients (end users) who possess ganaxolone pursuant to a lawful prescription.

2. Disposal of stocks. Any person unwilling or unable to obtain a schedule V registration to handle ganaxolone, but who subsequently does not desire or is not able to maintain such registration must surrender all quantities of currently held ganaxolone, or may transfer all quantities of currently held ganaxolone to a person registered with DEA. Ganaxolone is required to be disposed of in accordance with 21 CFR part 1317, in addition to all other applicable Federal, state, local, and tribal laws.

3. Security. Ganaxolone is subject to schedule III-V security requirements for DEA registrants, and it must be handled and stored in accordance with 21 CFR 1301.71-1301.77. Non-practitioners handling ganaxolone must also comply with the employee screening requirements of 21 CFR 1301.90-1301.93. These requirements, however, are not applicable to patients (end users) who possess ganaxolone pursuant to a lawful prescription.

4. Labeling and Packaging. All labels, labeling, and packaging for commercial containers of ganaxolone must comply with 21 U.S.C. 825 and 958(e), and be in accordance with 21 CFR part 1302.

5. Inventory. Every DEA registrant who possesses any quantity of ganaxolone must take an inventory of ganaxolone on hand, pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11(a) and (d).

Any person who registers with DEA to handle ganaxolone must take an initial inventory of all stocks of controlled substances (including ganaxolone) on hand on the date the registrant first engages in the handling of controlled substances, pursuant to 21 U.S.C. 827 and 958(e), and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11(a) and (b).

After the initial inventory, every DEA registrant must take an inventory of all stocks of controlled substances (including ganaxolone) on hand every two years, pursuant to 21 U.S.C. 827 and 958(e), and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11. These requirements, however, are not applicable to patients (end users) who possess ganaxolone pursuant to a lawful prescription.

6. Records and Reports. DEA registrants must maintain records and submit reports for ganaxolone, pursuant to 21 U.S.C. 827, 832(a), and 958(e), and in accordance with 21 CFR 1301.74(b) and (c) and parts 1304, 1312, and 1317.

7. Prescriptions. All prescriptions for ganaxolone, or products containing ganaxolone, must comply with 21 U.S.C. 829, and be issued in accordance with 21 CFR parts 1306 and 1311, subpart C.

8. Manufacturing and Distributing. In addition to the general requirements of the CSA and DEA regulations that are applicable to manufacturers and distributors of schedule V controlled substances, such registrants should be advised that (consistent with the foregoing considerations) any manufacturing or distribution of ganaxolone may only be for the legitimate purposes consistent with the drug's labeling, or for research activities authorized by the FDCA, as applicable, and the CSA.

9. Importation and Exportation. All importation and exportation of ganaxolone must comply with 21 U.S.C. 952, 953, 957, and 958, and be in accordance with 21 CFR part 1312.

10. Liability. Any activity involving ganaxolone not authorized by, or in violation of, the CSA or its implementing regulations, is unlawful, and may subject the person to administrative, civil, and/or criminal sanctions.

Section 553 of the APA (5 U.S.C. 553) generally requires notice and comment for rulemakings. However, 21 U.S.C. 811(j) provides that in cases where a certain new drug is (1) approved by HHS, under section 505(c) of the FDCA and (2) HHS recommends control in CSA schedule II-V, DEA shall issue an IFR scheduling the drug within 90 days. As stated in the legal authority section, the 90-day time frame is the later of: (1) The date DEA receives HHS's scientific and medical evaluation/scheduling recommendation, or (2) the date DEA receives notice of the NDA approval by HHS. Additionally, subsection (j) specifies that the rulemaking shall become immediately effective as an IFR without requiring DEA to demonstrate good cause.

In accordance with 21 U.S.C. 811(a) and (j), this scheduling action is subject to formal rulemaking procedures performed “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the procedures and criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget (OMB) pursuant to section 3(d)(1) of Executive Order (E.O.) 12866 and the principles reaffirmed in E.O. 13563.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This rulemaking does not have federalism implications warranting the application of E.O. 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule does not have tribal implications warranting the application of E.O. 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) applies to rules that are subject to notice and comment under section 553(b) of the APA. As noted in the above discussion regarding the applicability of the APA, DEA is not required to publish a general notice of proposed rulemaking. Consequently, the RFA does not apply to this IFR.

In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501 et seq., DEA has determined that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year.” Therefore, neither a Small Government Agency Plan nor any other action is required under UMRA of 1995.

This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

This rule is not a major rule as defined by the Congressional Review Act (CRA), 5 U.S.C. 804. However, pursuant to the CRA, DEA is submitting a copy of this IFR to both Houses of Congress and to the Comptroller General.

For the reasons set out above, DEA amends 21 CFR part 1308 as follows:

In this rule, the Drug Enforcement Administration (DEA) is permanently scheduling the following six controlled substances, including their optical, positional, and geometric isomers, salts, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation, in schedule I of the Controlled Substances Act (CSA):

• N -ethylhexedrone (other names: α-ethylaminohexanophenone, 2-(ethylamino)-1-phenylhexan-1-one),

• alpha -pyrrolidinohexanophenone (other names: α-PHP, α-pyrrolidinohexanophenone, 1-phenyl-2-(pyrrolidin-1-yl)hexan-1-one),

• 4-methyl- alpha -ethylaminopentiophenone (other names: 4-MEAP, 2-(ethylamino)-1-(4-methylphenyl)pentan-1-one),

• 4′-methyl- alpha -pyrrolidinohexiophenone (other names: MPHP, 4′-methyl- alpha -pyrrolidinohexanophenone, 1-(4-methylphenyl)-2-(pyrrolidin-1-yl)hexan-1-one),

• alpha -pyrrolidinoheptaphenone (other names: PV8, 1-phenyl-2-(pyrrolidin-1-yl)heptan-1-one), and

• 4′-chloro- alpha -pyrrolidinovalerophenone (other names: 4-chloro-α-PVP, 4′-chloro-α-pyrrolidinopentiophenone, 1-(4-chlorophenyl)-2-(pyrrolidin-1-yl)pentan-1-one).

The CSA provides that proceedings for the issuance, amendment, or repeal of the scheduling of any drug or other substance may be initiated by the Attorney General: (1) On his own motion; (2) at the request of the Secretary of the Department of Health and Human Services (HHS);  1 or (3) on the petition of any interested party. 21 U.S.C. 811(a). This action was initiated on the Attorney General's own motion, as delegated to the Administrator of the Drug Enforcement Administration (DEA), and is supported by, inter alia, a recommendation from the Assistant Secretary for Health of HHS (Assistant Secretary) and an evaluation of all other relevant data by DEA. The regulatory controls and administrative, civil, and criminal sanctions for schedule I controlled substances on any person who handles or proposes to handle N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP will continue to apply as a result of this action.

The subject substances of this final rule are currently controlled in schedule I of the CSA by virtue of a temporary scheduling order (84 FR 34291, July 18, 2019) and an extension of that order (86 FR 37672, July 16, 2021). On July 16, 2021, pursuant to 21 U.S.C. 811(a), DEA published a notice of proposed rulemaking (NPRM) to permanently control these six synthetic cathinones in schedule I of the CSA. 86 FR 37719.

DEA's July 2021 rule proposed to permanently control N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP, and their optical, positional, and geometric isomers, salts, and salts of isomers in schedule I of the CSA. Specifically, DEA proposed to add these six synthetic cathinones to the hallucinogenic substances list under 21 CFR 1308.11(d)(94) through (99), respectively. The proposed regulatory text provided name(s) for these six substances as follows:

• N -ethylhexedrone (other name: α-ethylaminohexanophenone),

• alpha -pyrrolidinohexanophenone (other names: α-PHP, α-pyrrolidino-hexanophenone, 1-phenyl-2-(pyrrolidin-1-yl)hexan-1-one),

• 4-methyl- alpha -ethylaminopentiophenone (other names: 4-MEAP, 2-(ethylamino)-1-(4-methylphenyl)pentan-1-one),

• 4′-methyl- alpha -pyrrolidinohexiophenone (other names: MPHP, 4-methyl- alpha -pyrrolidino hexanophenone,, 1-(4-methylphenyl)-2-(pyrrolidin-1-yl)hexan-1-one),

• alpha -pyrrolidinoheptaphenone (other names: PV8, 1-phenyl-2-(pyrrolidin-1-yl)heptan-1-one), and

• 4′-chloro- alpha -pyrrolidinovalerophenone (other names: 4-chloro-α-PVP, 4-chloro-α-pyrrolidinopentiophenone, 1-(4-chlorophenyl)-2-(pyrrolidin-1-yl)pentan-1-one).

Regarding the substance N -ethylhexedrone, the preamble (Supplementary Information section) for the NPRM provided α-ethylaminohexanophenone as well as multiple other names, including 2-(ethylamino)-1-phenylhexan-1-one. 2

The NPRM provided an opportunity for interested persons to file a request for hearing in accordance with DEA regulations on or before August 16, 2021. No requests for such a hearing were received by DEA. The NPRM also provided an opportunity for interested persons to submit comments on the proposed rule on or before August 16, 2021. DEA did not receive any comments.

Based on the rationale set forth in the NPRM, the Administrator makes the findings, required under 21 U.S.C. 811(a) and 812(b)(1), for permanent placement of N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP, including their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation, in schedule I of the CSA. This final rule adds the six substances to the hallucinogenic substances list under 21 CFR 1308.11(d), and maintains their placement in schedule I. This final rule provides the same other names for all six specific substances, used in the regulatory text of the NPRM. In addition, this rule adds one other name, 2-(ethylamino)-1-phenylhexan-1-one, for the substance N -ethylhexedrone. As discussed above, this additional other name was provided in the preamble for the NPRM.

N -Ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP will continue  3 to be subject to the CSA's schedule I regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, importation, exportation, research, and conduct of instructional activities involving the handling of schedule I controlled substances including the following:

1. Registration. Any person who handles (manufactures, distributes, reverse distributes, imports, exports, engages in research, or conducts instructional activities or chemical analysis with, or possesses) or who desires to handle N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP must be registered with DEA to conduct such activities pursuant to 21 U.S.C. 822, 823, 957, and 958, and in accordance with 21 CFR parts 1301 and 1312.

2. Security. N -Ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP are subject to schedule I security requirements and must be handled and stored pursuant to 21 U.S.C. 823 and in accordance with 21 CFR 1301.71-1301.76. Non-practitioners handling N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP must also comply with the employee screening requirements of 21 CFR 1301.90-1301.93.

3. Labeling and Packaging. All labels, labeling, and packaging for commercial containers of N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP must be in compliance with 21 U.S.C. 825, and be in accordance with 21 CFR part 1302.

4. Quota. Only registered manufacturers are permitted to manufacture N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP in accordance with a quota assigned pursuant to 21 U.S.C. 826 and in accordance with 21 CFR part 1303.

5. Inventory. Every DEA registrant who possesses any quantity of N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP was required to keep an inventory of all stocks of these substances on hand as of July 18, 2019, pursuant to 21 U.S.C. 827 and 958 and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11(a) and (d).

6. Records and Reports. DEA registrants must maintain records and submit reports with respect to N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP pursuant to 21 U.S.C. 827 and 958(e), and in accordance with 21 CFR 1301.74(b) and (c) and parts 1304, 1312, and 1317. Manufacturers and distributors must submit reports regarding these substances to the Automation of Reports and Consolidated Order System pursuant to 21 U.S.C. 827 and in accordance with 21 CFR parts 1304 and 1312.

7. Order Forms. Every DEA registrant who distributes N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP must continue to comply with the order form requirements, pursuant to 21 U.S.C. 828 and in accordance with 21 CFR part 1305.

8. Importation and Exportation. All importation and exportation of N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP must continue to be in compliance with 21 U.S.C. 952, 953, 957, and 958, and in accordance with 21 CFR part 1312.

9. Liability. Any activity involving N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP not authorized by, or in violation of the CSA or its implementing regulations, is unlawful, and may subject the person to administrative, civil, and/or criminal sanctions.

In accordance with 21 U.S.C. 811(a), this scheduling action is subject to formal rulemaking procedures performed “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget (OMB) pursuant to section 3(d)(1) of Executive Order (E.O.) 12866 and the principles reaffirmed in E.O. 13563.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This rulemaking does not have federalism implications warranting the application of E.O. 13132. The final rule does not have substantial direct effects on the states, on the relationship between the national government and the states, or the distribution of power and responsibilities among the various levels of government.

This final rule does not have tribal implications warranting the application of E.O. 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

The Administrator, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-612, has reviewed this final rule and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. On July 18, 2019, DEA published an order to temporarily place N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP in schedule I of the CSA pursuant to the temporary scheduling provisions of 21 U.S.C. 811(h). 84 FR 34291. DEA estimates that all entities handling or planning to handle these substances have already established and implemented the systems and processes required to handle N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP. There are currently 34 unique registrations authorized to handle N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP specifically, as well as a number of registered analytical labs that are authorized to handle schedule I controlled substances generally. From review of entity names, DEA estimates these 34 registrations represent 29 entities. Some of these entities are likely to be large entities. However, since DEA does not have information of registrant size and the majority of DEA registrants are small entities or are employed by small entities, DEA estimates a maximum of 29 entities are small entities. Therefore, DEA conservatively estimates as many as 29 small entities are affected by this proposed rule.

A review of the 34 registrations indicates that all entities that currently handle N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, or 4-chloro-α-PVP also handle other schedule I controlled substances, and thus they have established and implemented (or maintain) the systems and processes required to handle N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP as a schedule I substance. Therefore, DEA anticipates that this final rule will impose minimal or no economic impact on any affected entities, and, thus, will not have a significant economic impact on any of the 29 affected small entities. Therefore, DEA has concluded that this final rule will not have a significant economic impact on a substantial number of small entities.

In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501 et seq., DEA has determined and certifies that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year * * * .” Therefore, neither a Small Government Agency Plan nor any other action is required under UMRA of 1995.

This rule is not a major rule as defined by the Congressional Review Act (CRA), 5 U.S.C. 804. However, pursuant to the CRA, DEA is submitting a copy of the final rule to both Houses of Congress and to the Comptroller General.

This action does not impose a new collection of information under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

As indicated above, this rule finalizes the schedule I control status of N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP that has already been in effect for over two years by virtue of the temporary scheduling order (84 FR 34291, July 18, 2019) and the subsequent one year extension of that order (86 FR 37672, July 16, 2021). The July 2019 order was effective on the date of publication, and was based on findings by the then-Acting Administrator that the temporary scheduling of these substances was necessary to avoid an imminent hazard to the public safety pursuant to 21 U.S.C. 811(h)(1).

Because this rule finalizes the control status of N -ethylhexedrone, α-PHP, 4-MEAP, MPHP, PV8, and 4-chloro-α-PVP that has already been in effect for over two years, it does not alter the legal obligations of any person who handles these substances. Rather, it merely makes permanent the current scheduling status and corresponding legal obligations. Therefore, DEA is making the rule effective on the date of publication in the Federal Register , as any delay in the effective date is unnecessary and would be contrary to the public interest. See 5 U.S.C. 553(d).

For the reasons set out above, DEA amends 21 CFR part 1308 as follows:

Electronic Availability

This document and additional information concerning OFAC are available on OFAC's website: www.treas.gov/ofac.

On May 5, 2022, OFAC, in consultation with the Department of State, issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (the “Regulations”), GL 7A, GL 26A, GL 31, and GL 32, each of which authorize certain transactions prohibited by the Regulations. GL 7A and GL 31 do not contain expiration dates. GL 26A and GL 32 each expire at 12:01 a.m. eastern daylight time, July 12, 2022. The texts of GLs 7A, 26A, 31, and 32 are provided below.

(a) Except as provided in paragraph (c) of this general license, all transactions ordinarily incident and necessary to the receipt of, and payment of charges for, services rendered in connection with overflights of the Russian Federation or emergency landings in the Russian Federation by aircraft registered in the United States or owned or controlled by, or chartered to, U.S. persons that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized.

(b) Except as provided in paragraph (c) of this general license, all transactions ordinarily incident and necessary to provide air ambulance and related medical services, including medical evacuation, to individuals in the Russian Federation that are prohibited by the RuHSR are authorized.

(c) This general license does not authorize:

(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under Executive Order 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions; or

(2) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.

(d) Effective May 5, 2022, General License No. 7, dated February 24, 2022, is replaced and superseded in its entirety by this General License No. 7A.

(a) Except as provided in paragraph (b) of this general license, all transactions ordinarily incident and necessary to the wind down of transactions involving Joint Stock Company SB Sberbank Kazakhstan, Sberbank Europe AG, or Sberbank (Switzerland) AG (collectively, “the blocked Sberbank subsidiaries”), or any entity in which the blocked Sberbank subsidiaries own, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

(b) This general license does not authorize:

(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

(2) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or

(3) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

(c) Effective May 5, 2022, General License No. 26, dated April 12, 2022, is replaced and superseded in its entirety by this General License No. 26A.

(a) Except as provided in paragraph (b) of this general license, the following transactions in connection with a patent, trademark, copyright, or other form of intellectual property protection in the United States or the Russian Federation that would be prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized:

(1) The filing and prosecution of any application to obtain a patent, trademark, copyright, or other form of intellectual property protection;

(2) The receipt of a patent, trademark, copyright, or other form of intellectual property protection;

(3) The renewal or maintenance of a patent, trademark, copyright, or other form of intellectual property protection; and

(4) The filing and prosecution of any opposition or infringement proceeding with respect to a patent, trademark, copyright, or other form of intellectual property protection, or the entrance of a defense to any such proceeding.

(b) This general license does not authorize:

(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of foreign financial institutions determined to be subject to the prohibitions of Directive 2 under Executive Order (E.O.) 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

(2) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or

(3) Any transactions prohibited by E.O. 14066 or E.O. 14068.

I. Executive Summary A. Purpose of the Rule

In response to the novel coronavirus (SARS-CoV-2), which causes COVID-19, and the President's declared national emergency for the resulting pandemic (Proclamation 9994, 85 FR 15337 (March 18, 2020)), the ASD(HA) issued three IFRs in 2020 to make temporary modifications to TRICARE regulations in order to better respond to the pandemic. The first IFR, published in the FR on May 12, 2020 (85 FR 27921), temporarily: (1) Modified the TRICARE regulations to allow for coverage of medically necessary telephonic (audio-only) office visits; (2) permitted interstate and international practice by TRICARE providers when such practice was permitted by state, federal, or host-nation law; and (3) waived cost-shares and copayments for covered telehealth services for the duration of the COVID-19 pandemic.

The second IFR, published in the FR on September 3, 2020 (85 FR 54914) temporarily: (1) Waived the three-day prior hospital qualifying stay requirement for skilled nursing facilities (SNFs); (2) added coverage for the treatment use of investigational drugs under expanded access authorized by the U.S. Food and Drug Administration (FDA) when indicated for the treatment of COVID-19; (3) waived certain provisions for acute care hospitals in order to permit TRICARE authorization of temporary hospital facilities and freestanding ambulatory surgical centers (ASCs) providing inpatient and outpatient services to be reimbursed; (4) revised the diagnosis related group reimbursement (DRG) at a 20 percent higher rate for COVID-19 patients; and (5) waived certain requirements for long term care hospitals (LTCHs). The second IFR also included two permanent provisions adopting Medicare's NTAPs adjustment to DRGs for new medical services and technologies and adopting Medicare's Hospital Value Based Purchasing (HVBP) Program.

The third IFR, published in the FR on October 30, 2020 (85 FR 68753) added coverage of National Institute of Allergy and Infectious Disease (NIAID)-sponsored clinical trials when for the prevention or treatment of COVID-19 or its associated sequelae.

After publication of each IFR, DoD evaluated the appropriateness of each temporary measure for continued use throughout the national emergency for COVID-19, as well as to determine if it would be appropriate to make any of the provisions permanent within the TRICARE program. After analysis of the risks, benefits, and costs of each provision, as well as a review of comments, the ASD(HA) issues this final rule to make the following changes:

a. 32 CFR 199.4(g)(52) Telephone Services: The IFR temporarily modified this regulation provision which excluded telephone services (audio-only) except for biotelemetry. This final rule revises this regulatory exclusion and permanently modifies 32 CFR 199.4(c)(1)(iii) Telehealth Services to add coverage for medically necessary telephonic office visits, in all geographic areas where TRICARE beneficiaries reside. A telephonic office visit is a reimbursable telephone call between a beneficiary, who is an established patient, and a TRICARE-authorized provider. This is considered a type of telehealth modality under the TRICARE program. Specifically, this change will allow providers to be reimbursed for medically necessary care and treatment provided to beneficiaries over the telephone, when a face-to-face, hands-on visit is not required, and a two-way audio and video telehealth visit is not possible. The telephonic office visit should be a valid medical visit in that there is an examination of the patient's history and chief complaint along with clinical decision making performed by a provider. Telephonic provider-to-provider consults which are audio-only, but otherwise meet the definition of a covered consultation service are also covered under this final rule. Telephone calls of an administrative nature ( e.g., appointment scheduling), routine answering of questions, prescription refills, or obtaining test results are not medical services and are not reimbursable.

DoD implemented temporary coverage of telephonic office visits effective May 12, 2020, in order to provide beneficiaries the option to obtain some medical services safely from home, reducing their exposure to COVID-19 and to minimize potential spread of the illness. In order to determine if telephonic office visits should be converted to a permanent telehealth benefit, DoD analyzed claims data from TRICARE private sector care and reviewed published industry information from: Medicare; health insurance plans; and physicians' professional organizations regarding telephonic office visits. The TRICARE claims data between mid-March and mid-September 2020 indicates beneficiary utilization of telephonic office visits is a small portion of all telehealth claims. Medicare and health insurance plans reported data indicating substantial utilization of telephonic office visits. Physicians' professional organizations including the American College of Physicians (ACP) and the American Medical Association (AMA) issued statements reporting physicians' favorable experiences with telephonic office visits. Furthermore, the DoD received positive public comments regarding telephonic office visits including multiple requests for the agency to consider it as a permanent benefit. After thoughtful consideration of these facts, and through this final rule revising the regulatory exclusion prohibiting reimbursement of telephonic (audio-only) office visits, the DoD will revise the exclusion of audio-only telephonic services and add medically necessary telephonic office visits as a covered telehealth service under the TRICARE Basic Benefit. In addition, 32 CFR 199.2 Definitions will be amended by this final rule to include definitions of “Biotelemetry,” “Telephonic consultations,” and “Telephonic office visits” as related to the modified telehealth service regulation provision.

b. 32 CFR 199.6(b)(4)(i)(I): The temporary waiver of certain acute care hospital requirements for temporary hospitals and freestanding ambulatory surgery centers during the COVID-19 pandemic from the second COVID IFR remains in effect, with modifications. The modification temporarily allows any entity that enrolled with Medicare as a hospital through Medicare's Hospitals Without Walls initiative to become a TRICARE-authorized hospital that may be considered to meet the requirements for an acute care hospital listed under paragraph 199.6(b)(4)(i). These entities may provide any inpatient or outpatient hospital services, when consistent with the State's emergency preparedness or COVID-19 pandemic plan and when they meet the Medicare hospital Conditions of Participation (CoP), to the extent not waived. Under Medicare's Hospitals Without Walls initiative, Centers for Medicaid and Medicare Services (CMS) relaxed certain requirements to allow ASCs and other interested entities, such as licensed independent emergency departments, to temporarily enroll as Medicare-certified hospitals and receive reimbursement for hospital inpatient and outpatient services. Although CMS ceased accepting new enrollments into the Hospitals Without Walls initiative, effective December 1, 2021, those entities that were previously enrolled under the initiative continue to be enrolled and receive reimbursement for hospital inpatient and outpatient services. The CMS memorandum eliminating future enrollments into the Hospitals Without Walls initiative, does not impact any of the changes from the initial IFR or in this final rule, as both require a provider to first be enrolled with CMS as a hospital under the initiative to register with TRICARE as a hospital and receive reimbursement as a hospital.

The ASD(HA) also recognizes the need for increased access to inpatient and outpatient care during the COVID-19 pandemic. In the IFR, we temporarily permitted temporary hospitals and freestanding ASCs that registered with Medicare as hospitals to be reimbursed as acute care hospitals (85 FR 54914). We are modifying this expanded coverage of inpatient and outpatient care by allowing any entity enrolled with Medicare as a hospital on a temporary basis to also be considered a TRICARE-authorized hospital and receive reimbursement for inpatient and outpatient institutional charges under the TRICARE DRG payment system, Outpatient Prospective Payment System (OPPS), or other applicable hospital payment system allowed under Medicare's Hospitals Without Walls initiative, to the extent practicable. In order to reduce burden on these providers during the pandemic, we are not developing any regulatory requirements for participation in TRICARE and will instead permit any entity that registers with Medicare as a hospital under their Hospitals Without Walls initiative to be considered a TRICARE-authorized hospital. To further reduce the burden on providers and the TRICARE program, this final rule will allow the Defense Health Agency (DHA) to adopt any requirement related to Medicare's Hospital without Walls initiative through administrative policy, when determined practicable, without going through the lengthy regulatory process. This provision will be effective the date published in the FR through the expiration of Medicare's Hospitals Without Walls initiative. Upon conclusion of Medicare's initiative or when a facility loses its hospital status with Medicare, whichever occurs earlier, the entity will no longer be considered an authorized hospital under TRICARE and will not be reimbursed for institutional charges unless it otherwise qualifies as an authorized institutional provider under paragraph 199.6(b)(4). While vaccination has slowed the spread of COVID-19 in many areas of the U.S., the virus remains a deadly threat for those patients who do contract it and require acute care treatment. Additionally, access to acute care treatment for other injury and illnesses in areas where there is a COVID-19 resurgence remains essential. The ASD(HA) finds it necessary to make this provision of the final rule effective upon publication of the final rule.

c. 32 CFR 199.14(a)(1)(iv): Special Programs and Incentive Payments. This final rule creates new paragraph 199.14(a)(1)(iv) to more appropriately categorize the NTAP and HVBP payments. It moves the NTAP provisions from paragraph 199.14(a)(1)(iii)(E)( 5 ) to 199.14(a)(1)(iv)(A), and moves the HVBP provision from paragraph 199.14(a)(iii)(E)( 6 ) to 199.14(a)(1)(iv)(B). For the NTAP provisions, TRICARE: (1) Shall apply Medicare NTAP adjustments to TRICARE covered services and supplies, except for pediatric (defined for NTAPs as pertaining to patients under the age of 18, or who are treated in a children's hospital or in a pediatric ward) services and supplies; (2) shall modify NTAP reimbursement adjustment rates for NTAPs at 100 percent of the average cost of the technology or 100 percent of the costs in excess of the Medicare Severity-Diagnosis Related Group (MS-DRG) payment for the case for pediatric beneficiaries; and (3) may create a reimbursement adjustment for TRICARE NTAPs, specific to the TRICARE beneficiary population under age 65 in the absence of a Medicare NTAP adjustment, using criteria similar to Medicare criteria for eligible new technologies outlined in 42 CFR 412.87 and the Medicare reimbursement criteria outlined in 42 CFR 412.88. Under the statutory authority to pay like Medicare for like services and items when practicable in 10 U.S.C. 1079(i)(2), the ASD(HA) has determined that, generally, the NTAP reimbursement methodology is practicable for TRICARE to adopt for any otherwise covered services and supplies with a Medicare NTAP, under the same conditions as approved by Medicare. However, the ASD(HA) finds it impracticable to use Medicare's NTAPs for TRICARE's pediatric patients due to the lack of a significant pediatric population within Medicare. To address the unique TRICARE beneficiary population of pediatric patients, this rule establishes reimbursement of pediatric NTAPs at 100 percent of the costs in excess of the MS-DRG payment. Lastly, when TRICARE covers new technologies that are not covered by Medicare or do not have a Medicare NTAP due to differing populations ( e.g., biologics used solely by pediatric patients), the ASD(HA) finds it practicable to establish a TRICARE NTAP category and methodology whenever necessary. In these instances, the Director, DHA, may issue implementation instructions listing the specific TRICARE NTAPs on the website: www.health.mil/ntap.

d. 32 CFR 199.17(l)(3): The cost-share and copayment waiver for telehealth services during the COVID-19 pandemic was implemented in TRICARE's first COVID-19 IFR in response to efforts by federal, state, and local governments to encourage individuals to stay at home, avoid exposure, and to reduce possible transmission of the virus. When the rule was published, there was a high degree of uncertainty surrounding the potential availability of a vaccine. With the approval or emergency use authorization of several vaccines by the U.S. Food and Drug Administration, the widespread availability of such vaccines throughout the United States, and the elimination of stay-at-home orders by most States and localities, this provision is no longer necessary. As such, the ASD(HA) is terminating the waiver of cost-shares and copayments for telehealth services on the effective date of this final rule, or upon expiration of the President's national emergency for COVID-19, whichever occurs earlier.

e. The DoD continues to evaluate potential permanent adoption of the treatment use of investigational drugs under expanded access and NIAID-sponsored clinical trials and will publish a final rule at a future date; until such publication, the two benefits remain in effect without modification as temporarily implemented in the second and third IFRs. These two benefits remain in effect through the end of the President's national emergency for COVID-19, unless modified by future rulemaking. Comments received on those two provisions during the IFR comment periods will be addressed in that final rule.

f. All temporary regulation changes made by the three COVID-19-related IFRs not otherwise addressed in this final rule remain in effect as stated in the IFR under which they were implemented until such time as the conditions for their expiration are met.

g. The HVBP Program is permanently adopted and is moved from 32 CFR 199.14(a)(1)(iii)(E)( 6 ) to 32 CFR 199.14(a)(1)(iv)(B); there are otherwise no modifications from the second IFR.

A telephonic office visit is an easy-to-use telehealth modality that has many benefits. A telephonic office visit consists of a beneficiary, who is an established patient, calling his/her provider to discuss an illness (including mental illness), injury, or medical condition. During the conversation the provider will ask questions regarding the symptoms and determine if they can proceed with the telephonic office visit or if based on the information he/she reported, a face-to-face, hands-on visit is in fact medically necessary. If they proceed with the telephonic office visit, typically the provider will have the beneficiary's medical record open for review during the call, offer medical advice, and may place an order for a prescription or lab tests. During the COVID-19 pandemic, telephonic office visits have been instrumental in keeping beneficiaries safer at home with less risk of exposure to COVID-19 for conditions which a face-to-face and hands-on visit is not medically necessary. Telephonic office visits are also highly desirable for beneficiaries who reside in rural areas and/or areas where health care services are scarce. Likewise, beneficiaries without access to the internet and/or computers, smartphones, or tablets to conduct two-way audio-video telehealth visits also greatly benefit from coverage of telephonic office visits. DoD will continue to offer coverage of telephonic office visits through the end of the pandemic and with this final rule DoD will revise the telephone services (audio-only) regulatory exclusion in order to make this a permanent telehealth benefit available to beneficiaries in all geographic locations, when such care is medically necessary and appropriate.

To understand the use of telephonic office visits during the COVID-19 pandemic, the DoD analyzed claims data from TRICARE private sector care and reviewed published industry information from: Medicare; health insurance plans; and physicians' professional organizations regarding telephonic office visits. TRICARE private sector claims data from mid-March 2020 through mid-September 2020 indicates there were a total of 80,541 telephonic office visits conducted. Telephonic office visits were an average 2.1 percent of all telehealth services provided. Telehealth services were 5.7 percent of all outpatient professional visits. In August 2020, a Medicare Advantage Issue Brief reported, “Three million telehealth visits with Medicare beneficiaries between mid-March and mid-June were conducted via telephone indicating the preference for [telephonic office visits].”  1 Health insurance plans including Security Health Plan and Kaiser Permanente reported 75 percent and 85 percent respectively of their telehealth visits as telephonic office visits. 2 The AMA stated, “Doctors have reported that they have been able to conduct successful [telephonic office visits] with patients, in lieu of in-person or telehealth visits, obtaining about 90 percent of the information they would collect using audio and video capable equipment.”  3 In March 2020, the ACP began writing letters to CMS requesting pay parity for telephonic office visits. On April 30, 2020, CMS responded to the ACP's requests announcing that it was increasing payments for telephonic office visits to match payments of similar office and outpatient visits. 4 TRICARE routinely updates its reimbursement rates in accordance with CMS updates, consistent with existing statutory requirements, when practicable. Note that CMS intends to only temporarily offer coverage for telephonic office visits for certain services during the public health emergency. However, although TRICARE is required to reimburse like Medicare to the extent practicable under the statute, TRICARE is not required to provide the exact same benefits as Medicare given the differences in populations served. Prior to the pandemic, DoD had a telehealth benefit that was more generous than what was offered under Medicare. Considering all of the data and industry information discussed, the DoD is finalizing its approach to permanently revise the telephone services (audio-only) regulatory exclusion and allow coverage of medically necessary and appropriate telephonic office visits for beneficiaries in all geographic locations.

In converting medically necessary telephonic office visits to a permanent benefit, the DoD will issue policy guidance describing coverage of medically necessary and appropriate telephonic office visits to ensure best practices and protect against fraud.

This final rule modifies the temporary waiver of certain acute care hospital requirements for TRICARE authorized hospitals in the IFR to allow any entity that has temporarily enrolled with Medicare as a hospital through their Hospitals Without Walls initiative (or enrolls in the future, should Medicare resume such enrollments) to temporarily become a TRICARE-authorized hospital under paragraph 199.6(b)(4)(i). These entities may provide any inpatient or outpatient hospital services, when consistent with the State's emergency preparedness or COVID-19 pandemic plan and when they meet the Medicare hospital CoP, to the extent not waived. While there are no direct corollaries in TRICARE regulation to the CoP being waived under Medicare, there do exist in TRICARE regulation certain requirements that would prevent allowing some facilities to be considered as acute care hospitals for the purposes of payment. Title 32 CFR 199.6(b)(3) and (4) list the requirements for providers to be considered TRICARE-authorized hospitals. It may not be possible for some entities to meet all of these requirements, such as providing primarily inpatient care or having Joint Commission (previously known as the Joint Commission on Accreditation of Hospitals) accreditation status or surveying of new facilities.

We continue to assert, as we did in the IFR, that these institutional requirements are necessary for TRICARE-authorized acute care hospitals. We also note there is no requirement to have a TRICARE benefit that matches Medicare's benefit, or for TRICARE to authorize all providers that are providers under Medicare. Both TRICARE's statutory authority and population differ from Medicare's, so it is appropriate for TRICARE to continue to manage its authorized provider program separately from Medicare's. During the COVID-19 pandemic, however, it is important for TRICARE to ensure swift access to inpatient and outpatient care, to include leveraging Medicare's flexibilities for acute care facilities. Under Medicare's Hospitals Without Walls initiative, CMS relaxed certain requirements to allow ASCs and other interested entities, such as licensed independent freestanding emergency departments, to temporarily enroll as Medicare-certified hospitals and to receive reimbursement for hospital inpatient and outpatient services. In the previously-published IFR, we extended coverage of acute care hospitals to include temporary hospitals and freestanding ASCs that registered with Medicare as hospitals to be reimbursed as hospitals under TRICARE. This final rule expands the original temporary hospital waiver by temporarily permitting any entity to qualify as an acute care hospital under TRICARE so long as it had enrolled with Medicare as a hospital under the Hospitals Without Walls initiative prior to the December 1, 2021 memorandum by which CMS terminated further enrollments (or enrolls in the future, should CMS resume enrollments).

In the IFR, it was not our intent to maintain a regulatory list of qualifying providers in § 199.6 that are eligible to enroll with Medicare under their Hospitals Without Walls initiative or to adopt such changes through the regulatory process, which imposes an unnecessary administrative burden on the DHA and delays coverage for providers and patients, as paragraph 199.6(b)(4)(i) may need to be continually updated to keep current with Medicare changes during the pandemic. Therefore, this final rule modifies the temporary regulation change from the IFR at paragraph 199.6(b)(4)(i) to allow any entity enrolled with Medicare as a hospital to temporarily become a TRICARE-authorized acute care hospital, and receive reimbursement for inpatient and outpatient institutional charges under the TRICARE DRG payment system, OPPS, or other applicable hospital payment system allowed under Medicare's Hospitals Without Walls initiative (when determined practicable). The ASD(HA) will implement Medicare's requirements for such entities through administrative guidance ( e.g., the TRICARE manuals) to ensure TRICARE requirements for such facilities are consistent with the most current Medicare requirements under the Hospitals Without Walls initiative.

Under this provision, facilities that convert into hospitals and are Medicare-certified hospitals through an emergency waiver authority under Section 1135 of the Social Security Act and are operating in a manner consistent with their State's emergency plan in effect during the COVID-19 pandemic will be eligible for reimbursement by TRICARE for covered inpatient and outpatient services under the applicable hospital payment system. Once an entity ends, terminates, or loses its hospital status under Medicare, the facility will no longer be considered a TRICARE-authorized acute care hospital effective the date when Medicare deactivated the entity's hospital billing privileges. While we are temporarily amending the institutional provider requirements under paragraph 199.6(b)(4)(i), we are still requiring that these facilities meet Medicare's CoP (to the extent not waived) established for this Presidential national emergency. This change will improve beneficiary access to medically necessary care and may mitigate hospitals' lack of capacity and shortages of resources during the pandemic. This change is temporary for the duration of Medicare's “Hospitals Without Walls” initiative.

As stated in the second IFR (85 FR 54914), for care rendered in an inpatient setting, TRICARE shall reimburse services and supplies with Medicare NTAPs using Medicare's NTAP payment adjustments for only those services and supplies that are an approved benefit under the TRICARE Program. Title 10 U.S.C. 1079(i)(2) requires TRICARE to reimburse covered services and supplies using the same reimbursement rules as Medicare, when practicable. However, this provision is not self-executing, so this FR permanently adopts the Medicare NTAP methodology. TRICARE shall also adopt future NTAP modifications published by CMS, including modifications to the NTAP methodology and the list of new technologies to which NTAPs are applied.

Per the authority provided in 10 U.S.C. 1079(i)(2), the ASD(HA) may determine that the Medicare NTAP methodology is not practicable for certain populations. One such population is TRICARE's pediatric population, which, as used in relation to the NTAP provisions in this final rule, is defined as individuals under the age of 18, or who are being treated in a children's hospital or in a pediatric ward. Since Medicare does not have a pediatric population to consider when establishing alternative reimbursements for new high-dollar technologies, the ASD(HA) has therefore determined it is not practicable to use Medicare's NTAPs for pediatric patients; instead, the NTAP adjustment should be modified to address the unique TRICARE beneficiary population of pediatric patients. Under this modification, TRICARE shall reimburse pediatric NTAP claims at 100 percent of the costs in excess of the MS-DRG. Paying these claims at 100 percent of the costs in excess of the MS-DRG increases the likelihood that all pediatric beneficiaries will receive medically necessary and appropriate treatment, especially pediatric beneficiaries with serious, life-threatening, and costly diseases.

Some new, high-cost treatments are not identified as requiring an NTAP by CMS. This primarily occurs when a treatment for a rare, fatal disease may be appropriate for a beneficiary in TRICARE's population but is not appropriate for Medicare's population, which is typically age 65 and above. For example, Spinraza is a treatment for Spinal Muscular Atrophy, a rare genetic neuromuscular disease that primarily impacts infants and young children. Spinraza has a high-cost per treatment, but is reimbursed at substantially lower cost when administered in a hospital because it is included in the DRG reimbursement. CMS does not include Spinraza in its list of new technologies receiving an NTAP.

The ASD(HA) therefore finds it impracticable to reimburse such technologies using existing reimbursement methodologies, which do not allow sufficient rates for new, high-cost technologies during the first two or three years following FDA approval, after which, they are absorbed into the core DRG through the annual DRG update and calibration process. The ASD(HA) finds it practicable to establish a category of TRICARE NTAPs. This category may include services and supplies that are otherwise covered by TRICARE and that meet certain CMS eligibility criteria under 42 CFR 412.87. These eligibility criteria will ensure that DHA consistently and comprehensively evaluates new treatments when selecting which treatments may be approved for a TRICARE NTAP. Likewise, the reimbursement methodology for these TRICARE NTAPs shall follow the CMS reimbursement methodologies for Medicare NTAPs outlined in 42 CFR 412.88.

For these high-cost, new, life-saving treatments that do not qualify or otherwise have an NTAP designation from CMS but for which the existing Medicare reimbursement is not practicable for the TRICARE population, the Director, DHA, shall establish internal guidelines and policy for approving TRICARE NTAPs and adopting such adjustments together with any variations deemed necessary to address unique issues involving the beneficiary population or program administration. These include, but are not limited to the exact reimbursement methodology, the eligibility criteria, and the method for approving or denying a TRICARE specific NTAP. The approved TRICARE NTAPs shall be published at least annually on the website: www.health.mil/ntap.

The first IFR implemented a waiver of cost-shares and copayments (including deductibles) for all in-network authorized telehealth services for the duration of the COVID-19 pandemic (ending when the President's national emergency for COVID-19 is suspended or terminated, in accordance with applicable law and regulation). The purpose was to incentivize TRICARE beneficiaries to use telehealth services and avoid unnecessary in-person TRICARE-authorized provider visits, which could potentially bring them into contact with or aid the spread of COVID-19. The implementation of this provision was highly successful, with a significant number of beneficiaries shifting to the use of telehealth visits. Since this provision was enacted, however, several vaccines have been approved or granted emergency use authorization by the FDA and are now widely available throughout the United States. While concerns remain surrounding variants of the SARS-CoV-2 virus and herd immunity may not yet have been reached, states and localities are no longer enacting strict stay-at-home orders.

TRICARE spent approximately $20.6M on waived telehealth cost-shares and copayments in FY20 and another $71.4M through the end of September 2021. Due in part to flexibilities introduced in the IFRs discussed in this rule, and other program changes implemented via policy, the Defense Health Plan faces significant budget shortfalls. Termination of this provision will save the DoD $4.8M for every month it expires prior to the end of the national emergency, allowing DoD to focus resources on testing, vaccination efforts, and treatment for COVID-19-positive patients. We do not expect termination of this provision to have any impact on access to care, as beneficiaries will continue to have access to telehealth services and will be able to choose to continue using such services, or to visit their provider in-person, with the same cost-share applied to the service regardless of the modality through which it was delivered.

Given the availability of vaccines, the reduction of stay-at-home orders, and the cost of waiving telehealth cost-sharing, the ASD(HA) finds it appropriate to expire the waiver on the effective date of this rule or the date of expiration of the President's national emergency for COVID-19, whichever is earlier. Telehealth services remain a covered benefit for TRICARE beneficiaries after the expiration of the cost-share/copayment waiver.

This rule is issued under 10 U.S.C. 1073(a)(2) giving authority and responsibility to the Secretary of Defense to administer the TRICARE program. The text of 10 U.S.C. chapter 55 can be found at https://manuals.health.mil/.

Each of the sections under which TRICARE is administered are revised every few years to ensure requirements continue to align with the evolving health care field. Title 32 CFR 199.4 was most recently updated on November 17, 2020 (85 FR 73193) by a final rule that added coverage of physical therapy and occupational services prescribed by a podiatrist.

The telephone services paragraph being modified by this final rule, paragraph 199.4(g)(52), was last temporarily modified with publication of the COVID-19-related IFR published on May 12, 2020 (85 FR 27921-27927), which temporarily permitted coverage of telephonic office visits for the duration of the President's national emergency for the COVID-19 pandemic. The telephone services regulatory exclusion was first published in the FR on April 4, 1977, with the comprehensive regulations implementing the “Civilian Health and Medical Program of the Uniformed Services” (42 FR 17972). Then, in 1984, the final rule, “Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Cardiac Pacemaker Telephonic Monitoring” (49 FR 35934) revised the exclusion to allow coverage of transtelephonic monitoring (a type of biotelemetry) of cardiac pacemakers. No other permanent revisions have been made to the telephone services paragraph.

Title 32 CFR 199.6 was last modified November 17, 2020 (85 FR 73196). This change updated terminology from doctors of podiatry or surgical chiropody to doctors of podiatric medicine or podiatrists and added podiatrists to the list of providers authorized to prescribe and refer beneficiaries to physical therapists and occupational therapists.

Title 32 CFR 199.14 was last permanently revised on September 3, 2020 (85 FR 54914-54924) with the addition of NTAPs and the HVBP Program under paragraph 199.14(a)(1)(iii)(E), which are being modified by this final rule.

Title 32 CFR 199.17 was last temporarily modified on May 12, 2020 (85 FR 27921-27927), with publication of the telehealth cost-share and copayment waiver being terminated by this final rule. This section was last permanently modified on February 15, 2019 (84 FR 4333), as part of the final rule implementing the TRICARE Select benefit plan. The revisions to § 199.17 included adding high-value services as a benefit under the TRICARE program, as well as copayment requirements for Group B beneficiaries. The 32 CFR 199.17(l) paragraph being modified by this IFR was created as part of the IFR that established the TRICARE Select benefit (82 FR 45438) during which a comprehensive revision of § 199.17 occurred. This paragraph did not exist prior to that revision and has only been modified once, with the addition of temporary telehealth cost-shares and copayment waivers.

DoD sincerely appreciates all comments received on the IFRs published in response to the COVID-19 pandemic. We respond to comments for two of the IFRs below, separated by rule and impacted provision, except for comments on the treatment use of investigational new drugs, which will be discussed in a future final rule. We will also respond to comments related to TRICARE's third IFR published in 2020 in a future final rule. Except where otherwise modified in this final rule, we reaffirm the policies and procedures incorporated in the IFRs and incorporate the rationale presented in the preambles of the IFRs into this final rule.

This IFR was published in the FR (85 FR 27921) on May 12, 2020. Comments were accepted for 30 days until June 11, 2020. A total of 16 comments were received. Below is a summary of the comments and the Department's responses. Some commenters provided detailed feedback concerning the overall telehealth program, including its applicability to autism services, partial hospitalization programs, and behavioral health services, or regarding benefits outside of the scope of this rule, such as care provided in patients' homes. We thank the commenters for their feedback however, because these comments did not relate to telephonic office visits, provider licensing, or telehealth copays, we are unable to respond in detail to these comments. One commenter expressed concern about the use of nine months in the cost estimate and that provisions would expire after nine months. We note that the timeframe used for the cost estimates was based on early estimates for the pandemic and that each provision of the IFR only expires when the President's national emergency expires, except where modified by this final rule. There was no automatic expiration at nine months.

The IFR allowed TRICARE beneficiaries to obtain telephonic office visits with providers for otherwise-covered, medically necessary care and treatment and allowed reimbursement to those providers during the COVID-19 pandemic. It provided a temporary exception to the regulatory exclusion prohibiting telephone services.

The public comments regarding the temporary exception to the regulatory exclusion prohibiting telephone services were minimal. Commenters requested that DoD continue coverage of telephonic office visits after the COVID-19 pandemic and commenters requested telephonic office visits be expanded to a range of providers. This final rule includes regulatory text revising the prohibition on telephone services thereby allowing coverage of telephonic office visits permanently. This will include mental health and addiction treatment services when medically necessary and appropriate. Regarding the request to expand the range of providers who can provide telephonic office visits, there is nothing in TRICARE regulation or policy excluding specific provider types such as physical therapists, occupational therapists, registered dieticians, or diabetes counselors (note: Diabetes counselors must be registered dieticians to be TRICARE-authorized providers) from providing their services via telehealth, including telephonic office visits, so long as they otherwise meet program requirements, including that all care be medically necessary and appropriate.

Two commenters requested DoD make implementation of the telephonic office visits retroactive, to either January 1, 2020, or March 1, 2020. The commenters noted that CMS adopted their allowance of telephonic office visits with a retroactive date. While DoD acknowledges that some providers may have provided telephonic office visits prior to the effective date of the IFR, DoD lacks the statutory authority to make the implementation retroactive. One commenter suggested DoD evaluate provider and patient satisfaction and health outcomes in determining whether to permanently adopt telephonic office visits. We agree that this information would be valuable but ultimately determined there was sufficient information from other sources to make a decision without it.

No changes were made in response to public comments; however, this provision has been revised for the final rule (see next section for details).

The IFR allowed providers to be reimbursed for interstate practice, both in person and via telehealth, during the global pandemic so long as the provider met the requirements for practicing in that State or under Federal law. It removed the requirement that the provider must be licensed in the state where practicing, even if that license is optional. For providers overseas, this allowed providers, both in person and via telehealth, to practice outside of the nation where licensed when permitted by the host nation.

Comments received on the relaxation of licensing requirements for providers during the pandemic were generally supportive, with no comments received opposed. Several commenters suggested implementing the relaxed licensing requirement permanently for telehealth. DoD notes that licensing remains the purview of the States and that States generally require licensure in each State where practicing. DoD will continue to evaluate trends in licensing requirements for telehealth following the COVID-19 pandemic but will not be permanently adopting this provision at this time. We note that we continue to recognize (and recognized prior to the COVID-19 pandemic) interstate licensing agreements and reciprocal license agreements between states where a state considers a provider to be licensed at the full clinical practice level based on such an agreement.

The final rule is consistent with the IFR.

The IFR waived cost-shares and copayments for telehealth services for TRICARE Prime and Select beneficiaries utilizing telehealth services with an in-network, TRICARE-authorized provider during the President's declared national emergency for COVID-19.

We received four comments regarding the waiving of telehealth cost-shares and copays, all of them supportive of the waiver, with one commenter also noting the negative effect of loss copay revenue for the DoD. Of the comments we received, three of them encouraged the DoD to continue to evaluate cost-sharing policies, and one comment also encouraged the DoD to make the telehealth copay and cost-share waiver permanent. One commenter recommended we apply the waiver of telehealth copays to copays associated with remote physiologic monitoring (RPM). RPM services of physiologic parameters including, but not limited to, monitoring of weight, blood pressure, pulse oximetry and respiratory flow rate shall be covered. RPM is considered an ancillary service and therefore ancillary copays and cost-shares shall apply.

We thank all the commenters for their support and feedback. TRICARE's temporary waiving of cost-shares and copays for all telehealth services was in line with initiatives by commercial insurers to incentivize telehealth care to help prevent the spread of COVID-19 and to reduce financial burdens on patients. TRICARE's cost-shares and copayments are set by law and require copayments and cost-sharing for telehealth services to be the same as if the service was provided in person. Section 718(d) of the National Defense Authorization Act of 2017 authorized the Secretary of Defense to reduce or eliminate copayments or cost-shares when deemed appropriate for covered beneficiaries in connection with the receipt of telehealth services under TRICARE. Given the national emergency caused by the COVID-19 pandemic, it was deemed appropriate to remove cost-shares and copayments for telehealth services during the pandemic, until there was no longer an urgent need to incentivize telehealth visits.

The final rule is consistent with the IFR, except that this provision may terminate early. This provision of the final rule is being terminated early due to both the cost of waiving cost-shares and because there remain few, if any, stay-at-home orders for this provision to support. Defense Health Program dollars are better spent on testing, vaccination, and treatment for COVID-19, including a waiver of cost-shares for medically necessary COVID-19 testing, which remains in effect as a result of the CARES Act.

This IFR was published in the FR on September 3, 2020 (85 FR 54914). Comments were accepted for 60 days until November 2, 2020. A total of four comments were received. Two were generally supportive of the provisions implemented in the IFR; we are grateful to the public for their support. Please see a summary of the comments and the DoD's responses below. Comments related to the treatment use of investigational drugs under expanded access will be discussed in a future final rule.

The IFR temporarily waived the regulatory requirement that an individual be an inpatient of a hospital for not less than three consecutive calendar days before discharge from the hospital (three-day prior hospital stay) for coverage of a SNF admission for the duration of the COVID-19 public health emergency, consistent with a similar waiver under Medicare and TRICARE's statutory requirement to have a SNF benefit like Medicare's. The waiver will terminate when the Health and Human Services (HHS) PHE terminates.

We received one comment on this provision of the IFR that was supportive of the waiver, but requested the DoD adopt another Medicare waiver; that is, the waiver of a 60-day wellness period.

We thank the commenter for their support and feedback. TRICARE is primary payer for Medicare/TRICARE dual eligible beneficiaries that have exhausted the Medicare 100-day SNF benefit (meeting TRICARE coverage requirements without any other forms of other health insurance (OHI)), and TRICARE is also primary payer for non-Medicare TRICARE beneficiaries who have no OHI and who meet the TRICARE SNF coverage requirements. Because TRICARE covers patients immediately after benefits are exhausted, there is no current requirement for a 60-day wellness period under TRICARE.

The final rule is consistent with the IFR.

The IFR temporarily exempted temporary hospital facilities and freestanding ASCs that enrolled as hospitals with Medicare from the institutional provider requirements for acute care hospitals described in paragraph 199.6(b)(4)(i). This allowed these facilities to provide inpatient and outpatient hospital services to improve the access of beneficiaries to medically necessary care. This change was consistent with 10 U.S.C. 1079(i)(2) to reimburse hospitals and other institutional providers in accordance with the same reimbursement methodology as Medicare, when practicable. This waiver remains in effect through the end of Medicare's “Hospitals Without Walls” initiative.

No public comments were received on this provision.

No changes were made in response to public comments; however, this provision has been modified for the final rule (see next section for details).

The IFR temporarily adopted the Medicare Hospital Inpatient Prospective Payment Add-On Payment for COVID-19 patients during the COVID-19 PHE period. The add-on payment for COVID-19 patients increased the weighting factor that would otherwise apply to the DRG to which the discharge is assigned by 20 percent.

We received one comment regarding this provision of the IFR. The commenter noted that sole community hospitals (SCHs) are not subject to reimbursement under the DRG system and, as such, would not be eligible for the 20 percent increased reimbursement rate in the IFR. The commenter requested TRICARE modify reimbursement for SCHs to make them eligible for the 20 percent increased payment.

We appreciate the feedback from the commenter regarding a 20 percent increase for acute inpatient reimbursement for SCHs treating COVID-19 patients. We would note that while SCHs are not eligible for the 20 percent increased DRG reimbursement, we do an aggregate comparison of SCH claims paid with what we would have paid under the DRG methodology (which would include the 20 percent DRG increase) and if the SCH payments are lower than what would have been paid under the DRG methodology, we then pay the SCH the difference. So, while we are not adding 20 percent to the SCH calculation, it is added to the DRG and then used in the annual adjustment payment calculation.

The final rule is consistent with the IFR.

The IFR adopted the Medicare waiver of site neutral payment provisions for LTCHs during the COVID-19 PHE period, waiving the site neutral payment provisions and reimbursing all LTCH cases at the LTCH PPS standard Federal rate for claims within the COVID-19 PHE period.

No public comments were received on this provision.

The final rule is consistent with the IFR.

The IFR permanently added coverage of Medicare's NTAP payments for new medical services, adding an additional payment to the DRG payment for new and emerging technologies approved by Medicare.

No public comments were received on this provision.

No changes were made in response to public comments; however, this provision has been revised in the final rule (see next section for details).

The IFR permanently added coverage of Medicare's HVBP Program. The HVBP Program provides incentives to hospitals that show improvement in areas of health care delivery, process improvement, and increased patient satisfaction.

No comments were received on this provision.

The final rule content is consistent with the IFR content; however the HVBP provision has been moved from 199.14(a)(1)(iii)(E)( 6 ) to 199.14(a)(1)(iv)(B) to account for the changes to the NTAP provisions.

Telephonic office visits temporarily adopted in the IFR are permanently adopted in this final rule. The Director, DHA shall issue subsequent policy guidance of medically necessary and appropriate telephonic office visits to ensure best practices and protect against fraud.

The final rule modifies the waiver of acute care hospital requirements at paragraph 199.6(b)(4)(i) by expanding the waiver to include any facility registered with Medicare under its Hospitals Without Walls initiative, not just temporary hospitals and freestanding ASCs as were authorized by the IFR.

This final rule permanently adopts the Medicare NTAP methodology and future NTAP modifications published by CMS, for those otherwise approved benefits under the TRICARE Program. This rule also creates a pediatric NTAP reimbursement methodology based on 100 percent of the costs in excess of the MS-DRG. Finally, this rule provides a mechanism to establish a TRICARE-specific NTAP for those high-cost treatments that do not have an NTAP designation because the population affected and treated by these new technologies are outside of Medicare's beneficiary population.

This final rule moves the HVBP provision from 32 CFR 199.14(a)(1)(iii)(E)( 6 ) to 32 CFR 199.14(a)(1)(iv)(B) to account for the changes to the NTAP provisions; there are no changes to the content of the HVBP provision.

This final rule finalizes the cost-share/copayment waiver provision as written in the IFR, except that it now terminates on the effective date of this rule, or the date of termination of the President's national emergency for COVID-19, whichever is earlier.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute 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. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB) under the requirements of these Executive Orders. This rule has been designated a significant regulatory action, although, not determined to be economically significant, under section 3(f) of Executive Order 12866.

The modifications to paragraph 199.4(g)(52) in this FR will revise the regulatory exclusion prohibiting coverage of telephone services and thereby allow permanent coverage of medical necessary and appropriate telephonic office visits for all TRICARE beneficiaries in all geographic locations.

The modification to paragraph 199.6(b)(4)(i) in this FR will allow any entity that temporarily enrolled with Medicare as a hospital through the Hospitals Without Walls initiative to be deemed to meet the requirements for acute care hospitals established under TRICARE for the duration of the COVID-19 pandemic. This will allow more entities to provide inpatient and outpatient hospital services, increasing access to medically necessary care for beneficiaries.

The modifications to paragraph 199.14(a)(1)(iv)(A) (previously 199.14(a)(1)(iii)(E)( 5 ) in the IFR and re-designated in this final rule) will: (1) Adopt the Medicare NTAP methodology and future NTAP modifications published by CMS, (2) create a pediatric NTAP reimbursement methodology based on 100 percent of the costs in excess of the MS-DRG, and (3) provide a mechanism to reimburse high-cost treatments that do not have a Medicare NTAP designation (due to beneficiary population differences).

The modifications to paragraph 199.17(l)(3) in this rule will provide for an earlier termination of the temporary waiver of cost-sharing and copayments for telehealth.

The modifications in this rule impact all TRICARE beneficiaries, TRICARE-authorized providers, the TRICARE program staff and contractors. Beneficiaries will be impacted by the permanent addition of telephonic office visits, the elimination of the telehealth cost-share/copayment waivers, increased access to new technologies afforded by the pediatric NTAPs reimbursement methodology, and increased access to acute care in temporary hospitals. TRICARE-authorized providers will be minimally impacted in that telephonic office visit will give them a new means to provide care and treatment to beneficiaries and generate revenue. TRICARE-authorized providers who administer Medicare approved NTAPs to pediatric patients will be reimbursed at a higher rate. Acute care facilities that qualify under Medicare's Hospitals Without Walls initiative will benefit by automatically qualifying as a TRICARE-authorized provider for the duration of the pandemic. TRICARE program staff and contractors who administer the TRICARE benefit will be minimally impacted as this change will require them to update their systems to accommodate the change.

The new incremental costs associated with this final rule are $20.88M through FY24, not including savings resulting from early termination of the telehealth cost-share/copayment waiver (approximately $4.8M savings per month). For context, this section also provides updated cost estimates for temporary benefit and reimbursement changes implemented in prior IFRs that are finalized in this FR ($278.0M through September 30, 2022), including the telehealth cost-share/copayment waiver being terminated by the FR (estimated cost $149.7M through September 30, 2022), and updated cost estimates associated with permanent reimbursement changes implemented in prior IFRs that are finalized in this FR ($13.0M through FY24). Administrative costs to implement all provisions are $0.67M in one-time costs for both previously implemented provisions and modifications in this final rule.

This estimate assumes the President's national emergency for COVID-19 would expire by September 2022. The number and severity of COVID-19 cases for TRICARE patients, along with the length of the President's declared national emergency for COVID-19 and the associated HHS PHE would impact the estimates provided in this section.

The incremental health care impact of new permanent benefit and reimbursement changes implemented in the final rule is $20.88M through FY24, and includes coverage of telephonic office visits, expanded coverage of temporary hospitals, the reimbursement methodology for pediatric NTAP cases, and the addition of TRICARE NTAPs. These amounts are the only new costs associated with the FR ( i.e., costs for benefits and reimbursement changes that have not already been implemented).

Telephonic Office Visits. Government expenditures for TRICARE first-pay and second pay claims for identifiable telephonic office visits amounted to approximately $7.6 million in Fiscal Year (FY) 2020 and $15.4 million in FY21. Also, the average government cost per service for telephonic office visits was $56, which is 19 percent less than the overall telehealth average of $81. This estimate assumes telephonic office visits will decrease after the pandemic, as beneficiaries become more comfortable or even prefer in-person visits. Additionally, the elimination of the telehealth cost-share/copayment waiver may shift some visits that could have been performed virtually to in-person as there will no longer be a financial incentive to obtain services virtually. After the drop in visits following the pandemic, we assume a modest (5 percent) increase in cost for telephonic office visits each subsequent FY. Lastly, as this provision was originally set to expire upon the expiration of the national emergency, and this estimate assumes that the national emergency declaration will terminate September 30, 2022, the incremental costs of this provision include only the costs in FY23 and FY24.

Expanded Coverage of Temporary Hospitals. This estimate assumes that care received at facilities that register with Medicare as hospitals would have been provided in other TRICARE-authorized hospitals but for the regulation change. We do not anticipate any induced demand for hospital care due to the authorization of new facilities. As such, there are no incremental costs associated with expanding coverage of temporary hospitals.

NTAP Pediatric Reimbursement Methodology. An analysis of claims data for FY20 and FY21 found 23 pediatric cases which would have qualified under this methodology. This estimate is based on an average of what would have been paid for those cases, along with calculations for increases in health care costs each year. This estimate includes only the difference between the standard NTAP rate (65 percent of the cost of treatment) and the NTAP Pediatric reimbursement rate (100 percent). This estimate is highly uncertain as the number of pediatric patients receiving an NTAP each year will vary (we assumed 15 cases or fewer per year), the costs of those NTAPs are unknown, and because the number of NTAPs approved by Medicare increases each year.

TRICARE NTAP Approval Process and Reimbursement Methodology. The costs of this provision were estimated by identifying one drug without a Medicare NTAP due to their use by the 64 and younger population, calculating the treatment costs for that drug, applying the TRICARE NTAP adjustment methodology, and identifying how many TRICARE beneficiaries were treated with that drug each year. This estimate is highly uncertain and is dependent on the number of TRICARE NTAPs approved each year by the Director, DHA, the cost of each of those technologies, and the number of TRICARE beneficiaries receiving each technology.

Provisions under this portion of the estimate have already been implemented; cost estimates provided here are updates from estimates published in the associated IFR under which they were implemented. These amounts are estimated through the end of September 2022, when we assume the President's national emergency and the HHS PHE will end. An earlier or later termination of the national emergency or HHS PHE will impact the estimates for this portion of the final rule.

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

On March 29, 2022, the Coast Guard published a notice of proposed rulemaking (NPRM) in the Federal Register titled, “Special Local Regulations; Recurring Marine Events, Sector St. Petersburg.”  1 In the NPRM we stated the purpose of the rulemaking was to remove one existing recurring marine event that is no longer held and to change the location and date of an existing recurring marine event within the Seventh Coast Guard District Captain of the Port (COTP) St. Petersburg Zone that are listed in 33 CFR 100.703, Table 1 to § 100.703. With the postponement of one event for the forseeable future, and the change in date and location of another, the changes proposed in the NPRM were necessary to ensure that Table 1 to § 100.703 accurately reflected the events taking place within the COTP St. Petersburg Zone, and in the order the events occur. The NPRM invited comments on the proposed changes to Table 1 to § 100.703. During the comment period that ended April 28, 2022, we received no comments.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70041. The COTP St. Petersburg has determined it necessary to revise the existing regulations in order to avoid confusion regarding the special local regulations (SLR) in the COTP St. Petersburg Zone.

As noted above, we received no comments on our NPRM published April 1, 2022.

This rule makes the following changes in 33 CFR 100.703:

1. Move the event listed in Table 1 to § 100.703, Line No. 5, “Sarasota Powerboat Grand Prix/Powerboat P-1 USA, LLC to Line No. 4. We are not making any other changes to this event.

2. Move Table 1 to §  100.703, Line No. 4, to Line No. 5, and revise the event to reflect a name change, course location, and date and time for the event.

3. Delete the event listed in Table 1 to §  100.703, Line No. 6, “Battle of the Bridges/Sarasota Scullers Youth Rowing Program.”

Marine events listed in Table 1 to §  100.703 are listed as recurring over a particular time, during each month and each year. Exact dates are intentionally omitted since calendar dates for specific events change from year to year. Once dates for a marine event are known, the Coast Guard notifies the public it intends to enforce the special local regulation through various means including a notice of enforcement published in the Federal Register , Local Notice to Mariners, and Broadcast Notice to Mariners.

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

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

This regulatory action determination is based on the size, location, and duration of the special local regulations. These areas are limited in size and duration, and usually do not affect high vessel traffic areas. Moreover, the Coast Guard will provide advance notice of the regulated areas to the local maritime community via Notice of Enforcement published in the Federal Register , by Local Notice to Mariners, Broadcast to Mariners via VHF-FM marine channel 16, and the rule will allow vessels to seek permission to enter the regulated area.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received 0 comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

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

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

Also, this rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it 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.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves removing one event from the list of recurring marine events in the COTP St. Petersburg Zone, and revising an existing recurring event to reflect a name change, course location, and date and time for the event. Normally such actions are categorically excluded from further review under paragraphs L61 in Table 3-1 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1, because it involves a revised special local regulation related to a marine event permit for marine parades, regattas, and other marine events.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

The Coast Guard will enforce the safety zone in 33 CFR 165.943 on all waters of Superior Bay in Superior, WI bounded by the arc of a circle with a 1120-foot radius from the fireworks launch site with its center in position 46°43′28″ N, 092°03′38″ W from 10 p.m. through 10:30 p.m. on July 4, 2022. This action is necessary to protect participants and spectators during the City of Superior 4th of July Fireworks.

Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Duluth or their designated on-scene representative. The Captain of the Port's designated on-scene representative may be contacted via VHF Channel 16.

This document is issued under authority of 33 CFR 165.943 and 5 U.S.C. 552 (a). In addition to this publication in the Federal Register , the Coast Guard will provide the maritime community with advance notification of the enforcement of this safety zone via Broadcast Notice to Mariners.

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the event was made with short notice to USCG.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable because immediate action is needed to respond to the potential safety hazards associated with a triggering event from the water ski show and boat parade.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.2. The Captain of the Port Duluth (COTP) has determined that potential hazards associated with this ski and boat parade event on June 18, 2022, will be a safety concern for anyone within the safety zone. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the event occurs.

This rule establishes a safety zone from 2 p.m. through 10 p.m. on June 18, 2022. All waters of the Keweenaw Waterway in Hancock, MI and Houghton, MI within the enforcement area that starts at 47°07′23.5″ N 88°35′21.7″ W stretches east to 47°07′28.3″ N 88°33′31.7″ W, goes south to 47°07′23.1″ N 88°33′32.6″ W, then west 47°07′16.8″ N 88°35′18.4″ W and finally up north back to 47°07′23.5″ N 88°35′21.7″ W. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the fact that there is little commercial traffic on the Portage Canal and all commercial traffic has been in contact with the event coordinator stating they will not be getting underway that day. Coast Guard can be contacted VHF Channel 16 for any discrepencies or hazards found during the event.

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting only 8 hours that will prohibit entry of non-event vessels within the enforcement area that starts at 47°07′23.5″ N 88°35′21.7″ W stretches east to 47°07′28.3″ N 88°33′31.7″ W, goes south to 47°07′23.1″ N 88°33′32.6″ W, then west 47°07′16.8″ N 88°35′18.4″ W and finally up north back to 47°07′23.5″ N 88°35′21.7″ W. There is no fauna, flora, or ecosystem of concern that is in the vicinity of the display that will be catastrophically effected during a 30 minute firework show. It is categorically excluded from further review under paragraph L[60(a)] of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.

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

The Coast Guard will enforce the safety zone for the annual City of Bayfield 4th of July Fireworks Display in 33 CFR 165.943 from 9 p.m. through 10:30 p.m. on July 4, 2022. All waters of the Lake Superior North Channel in Bayfield, WI within the arc of a circle with a radius of no more than 1,120 feet from the launch site at position 46°48′40″ N, 090°48′32″ W.

Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Duluth or their designated on-scene representative. The Captain of the Port's designated on-scene representative may be contacted via VHF Channel 16.

This document is issued under authority of 33 CFR 165.943 and 5 U.S.C. 552 (a). In addition to this publication in the Federal Register , the Coast Guard will provide the maritime community with advance notification of the enforcement of this safety zone via Broadcast Notice to Mariners.

The Coast Guard will enforce the safety zone in 33 CFR 165.943(a)(5) on all waters of Duluth Harbor bounded by the arc of a circle with a 1120-foot radius from the fireworks launch site with its center in position 46°46′14″ N, 092°06′16″ W from 9:30 p.m. through 11:00 p.m. on July 4, 2022. This action is necessary to protect participants and spectators during the Duluth Fourth Fest Fireworks. Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Duluth or their designated on-scene representative.

This notice of enforcement is issued under authority of 33 CFR 165.943 and 5 U.S.C. 552 (a). In addition to this publication in the Federal Register , the Coast Guard will provide the maritime community with advance notification of the enforcement of this safety zone via Broadcast Notice to Mariners. The Captain of the Port Duluth or their on-scene representative may be contacted via VHF Channel 16.

In a document published in the Federal Register (FR) on March 24, 2021, (86 FR 15628), VA proposed to amend its medical regulations to implement its authority to provide procedures to remove a solid organ or bone marrow from a live donor for transplantation into a veteran and to furnish the live donor care or services before and after the procedure. VA provided a 60-day comment period, which ended on May 24, 2021. Six comments were received.

The six comments were generally supportive of the proposed rule, and we thank the commenters for their comments. Of those six comments, four included substantive feedback, which is discussed below.

One commenter opined that live donors should be further compensated. This commenter suggested VA cover additional expenses that are deemed necessary and for which live donors submit documentation, as there are “other factors such as emotional effects that donors sometime[s] experience” due to the transplant procedure. However, this commenter did not specify the types of additional expenses VA should cover.

As explained in the proposed rule, VA will cover for the live donor hospital care and medical services prior to the surgical removal of the solid organ, part of a solid organ, or bone marrow; the surgical procedure to remove a solid organ, part of a solid organ, or bone marrow, and related care; and follow-up care which varies based on the type of donation. Additionally, VA will cover travel costs, including temporary lodging as VA determines to be needed. While VA acknowledges that live donors may incur additional expenses, VA believes the services and expenses covered under this rulemaking are reasonable under section 1788 of title 38, United States (U.S.C.), are consistent with how VA has administered the transplant program to date, and recognize the sacrifices that live donors make. While VA understands the commenter's support and rationale for expanding upon the additional expenses covered by VA, VA is not making any changes based on this comment.

To the extent that this commenter further suggested that live donors should be compensated for their donation, by law, VA may not knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce. 42 U.S.C. 274e(a). For purposes of this statute, the term “valuable consideration” “does not include the reasonable payments associated with the removal, transportation, implantation, processing, preservation, quality control, and storage of a human organ or the expenses of travel, housing, and lost wages incurred by the donor of a human organ in connection with the donation of the organ.” Section 274e(c)(2). Although this prohibition does not apply to a “human organ paired donation,” (see last sentence of section 274e(a)), that is not to say that compensation is available in these cases, because the term “human organ paired donation,” as defined in section 274e(c)(4), clearly bars valuable consideration from being provided for the organ in subparagraph (c)(4)(F). Thus, furnishing compensation for a human organ is legally barred. In addition, a host of ethical questions are raised by such a proposal. Transplant programs participating in the Organ Procurement Transplantation Network (OPTN) are authorized, however, to provide reimbursement for incidental non-medical expenses of donors. See 42 U.S.C. 274f, as implemented by § 121.14 of title 42, Code of Federal Regulations (CFR). This authority is discretionary, and while VA voluntarily participates and complies with OPTN requirements and is an OPTN-designated transplant program, VA will cover only the non-medical costs we have identified, as these types of non-medical costs are directly integral to the donor's transplant episode. In addition, this aligns with how very limited non-medical care benefits, or financial incentives, exist for other VA beneficiaries. Nonetheless, VA will undertake additional review and analysis to determine whether non-medical expenses other than those already covered under this rulemaking should be covered to encourage greater donor participation. If VA determines additional non-medical expenses such as incidental non-medical costs described in 42 CFR 121.14 should also be covered, it will propose to do so in a separate future rulemaking.

VA therefore makes no changes based on this comment.

Another commenter stated that it was unclear whether the definition of kidney paired donation, in 38 CFR 17.395(b), included living donor chains, and suggested VA modify this definition to explicitly cover living donor chains. As explained in OPTN policies, a living (or live) donor chain is an approach in which a live donor without an intended recipient donates an organ, which is matched with a recipient. See OPTN, Policy 1: Administrations Rules and Definitions, and Policy 13: Kidney Paired Donation. U.S. Department of Health and Human Services, Health Resources and Services Administration. Retrieved from: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/optn_policies.pdf (Accessed: 25 October 2021). That recipient's prospective live donor then donates an organ that can be matched with another recipient. Id. A chain of donations then occurs that allows for the donation and receipt of compatible organs. Id. Currently, live donor chains are widely used for the donation and receipt of kidneys.

The definition of kidney paired donation in § 17.395(b) is consistent with OPTN's definition of kidney paired donation. However, it does not specifically address live donor chains nor does it prohibit live donor chains. For the purposes of this rulemaking, VA clarifies that live donor chains are permitted, and interpreted to be included, under VA's definition of kidney paired donation. Based on this comment, VA is adding a note to the definition of kidney paired donation to state that for purposes of this section, kidney paired donation includes live donor chains. VA is also adding a definition for live donor chain to mean a set of kidney paired donation matches that begins with a donation of a kidney from a live donor without an intended recipient. Such live donor donates a kidney for transplantation into the intended recipient of a prospective live donor. The prospective live donor then donates a kidney for transplantation into a recipient other than the intended recipient. A chain continues to allow donation and receipt of compatible kidneys. VA makes no further changes based on this comment.

One commenter suggested that VA revise its rule to specify that VA bone marrow programs follow standards of care and patient safety issued by the nation's bone marrow registry, as they opined that it is critical VA and non-VA bone marrow programs align. This commenter noted that National Marrow Donor Program (NMDP) network members are held to standards of care and safety for bone marrow transplant similar to OPTN members.

As an initial matter, NMDP manages a bone marrow registry in which donors unrelated to the transplant recipient can voluntarily register to donate their bone marrow (including stem cells). These donations are then stored and managed by NMDP. While medical hospitals and facilities can become NMDP-contracted bone marrow donor centers, which are subject to NMDP Donor Center participation standards, VA does not have any such bone marrow donor centers as part of its bone marrow transplantation program. Instead, VA contracts with NMDP to obtain bone marrow for transplantation when a bone marrow match is identified (through NMDP's registry) for a veteran recipient. VA also may obtain bone marrow directly from live donors who are identified by VA as a match for the veteran recipient.

To the extent that this commenter is suggesting VA revise the rule to specify that VA's bone marrow program follows standards of care and patient safety issued by NMDP for live donors of bone marrow, NMDP maintains standards for bone marrow donor centers, specifically related to the bone marrow donor. Because VA does not operate NMDP-contracted bone marrow donor centers, related NMDP standards do not apply to VA. When VA procures bone marrow including stem cells from NMDP for transplantation into a veteran recipient, VA does not directly interact with the bone marrow donor and thus any standards about donor care would be inapplicable, particularly as VA would not know the identity of the live donor. Therefore, NDMP donor center participation standards do not apply to VA's bone marrow transplantation program because VA does not operate such donor centers. As noted earlier, VA may obtain bone marrow directly from live donors (for example, family members of the veteran) who are identified by VA as a match for the veteran recipient; however, such donations do not fall under NMDP standards for donor centers. VA believes the current language in the regulation regarding care for bone marrow donors is sufficient, particularly as it is consistent with VA current policy and practices. VA does not make any changes to the regulation based on this comment.

NMDP also maintains standards, including data reporting, relating to the unrelated allogeneic bone marrow transplant procedure. VA voluntarily complies with such standards. To the extent that this commenter is suggesting VA revise the rule to specify that VA's bone marrow program follows standards of care and patient safety issued by NMDP for transplant recipients, VA considers this outside the scope of the rulemaking as this relates to transplant recipients, not live donors. VA makes no changes to the regulation based on this comment.

That same commenter also suggested the rule be revised to specify that data reporting requirements for bone marrow transplant be submitted to the Stem Cell Therapeutic Outcomes Database (SCTOD), as that “database allows analysis of program use, center-specific outcomes, size of donor registry and cord blood inventory, and patient access to hematopoietic cell transplantations, and per the Stem Cell Therapeutic and Research Act of 2005, VA would share outcomes data with the SCTOD.”

VA voluntarily complies with the Foundation for the Accreditation of Cellular Therapy (FACT) standards for direct allogeneic live donor care and data reporting requirements. These include submission of direct allogeneic stem cell transplant data to the SCTOD. However, VA considers this part of the comment beyond the scope of the rulemaking as these reporting requirements for bone marrow transplant mainly concern the engraftment and recipient, and not the live donor, and this comment does not pertain to the care and services available to live donors under VA's transplant program. VA believes that this is more appropriate for internal VA policy than regulation since it concerns internal VA requirements. To the extent that this commenter is suggesting non-VA providers performing bone marrow transplants under VA's transplant program comply with these same data reporting requirements, this is beyond the scope of this rulemaking and would be more appropriate for inclusion in agreements VA enters into with these non-VA providers. VA is making no changes based on this comment.

One commenter stated that OPTN requires that transplant programs only use living donor organs recovered from OPTN approved living donor recovery hospitals and noted that when VA enters into agreements with non-VA facilities for organ transplants, it should ensure that these non-VA facilities are approved for recovery of organs from living donors if the recovery will occur in such facilities. This commenter suggested VA consider clarifying in the final rule the minimum requirements for these non-VA facilities that recover organs from living donors. Relatedly, this commenter recommended the rule be “explicit about requirements for outcomes reporting, compliance monitoring, and other considerations between bone marrow and solid organ transplant, given their distinct contractual relationships with the federal government.”

With regards to the comment that VA should ensure that non-VA facilities with which VA enters into agreements for bone marrow or solid organ transplants are approved by OPTN, VA considers this part of the comment beyond the scope of the rulemaking since it does not pertain to the care and services available to live donors under VA's transplant program. The qualifications that VA requires non-VA facilities providing such services to possess is a separate matter that will be addressed by VA in the context of its acquisitions.

In the agreements VA would enter into with non-VA facilities for organ transplants, VA would ensure that the appropriate requirements, such as those requirements for outcomes reporting, compliance monitoring, and other requirements or considerations, are included in such agreements. This information is commonly set forth in agreements rather than regulations, especially to permit flexibility, as requirements are subject to change. Additionally, the purpose of this rulemaking is to regulate the care and services available to living donors before and after the procedure required in connection with a veteran's transplantation procedure; not to regulate the requirements for reporting, monitoring, or other similar requirements with which non-VA providers must comply.

VA is making no changes based on this comment.

VA makes two technical changes not based on comments. Both technical changes are made to 38 CFR 17.395(g), which states the limitations on VA obligations in kidney paired donations. The first change is to replace the term, care, with the term, hospital care, in the introductory paragraph of § 17.395(g). The second change is to replace the term, services, with the term, medical services, in the introductory paragraph of § 17.395(g). These technical changes clarify the specific type of care and services referenced in § 17.395(g) and are consistent with how these terms are used in paragraph (c) of § 17.395. These technical changes will also avoid potential confusion with the terms, non-hospital care and non-medical services, which appear in paragraph (d) of § 17.395.

Based on the rationale set forth in the proposed rule and in this final rule, VA is adopting the proposed rule with changes as noted.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Information and Regulatory Affairs has determined that this rule is not a significant regulatory action under Executive Order 12866. The Regulatory Impact Analysis associated with this rulemaking can be found as a supporting document at www.regulations.gov.

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). VA has determined that this rule will not have a significant impact on a substantial number of small entities because the final rule does not directly regulate or impose costs on small entities and any effects would be indirect. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.

This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

The Assistance Listing numbers and titles for the programs affected by this document are 64.009, Veterans Medical Care Benefits; 64.029, Purchased Care Program; 64.047, VHA Primary Care; 64.042, 64. 045, VHA Ancillary Outpatient Services; 64.042, VHA Inpatient Surgery; 64.040, VHA Inpatient Medicine; 64.041,VHA Outpatient Specialty Care; 64.035, Veterans Transportation Program.

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

Denis McDonough, Secretary of Veterans Affairs, approved this document on March 7, 2022, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.

For the reasons stated in the preamble, the Department of Veterans Affairs amends 38 CFR part 17 as set forth below:

Background on Governing Statute and Public Input

On January 5, 2021, the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, Public Law 116-315 (the Act) was enacted in law to improve the lives of veterans during the COVID-19 pandemic and beyond. Several sections, including section 4202, of the Act were created to better serve veterans who are struggling with homelessness or housing insecurity. Id. Section 4202 of the Act, codified at section 2022A of title 38, United States Code (U.S.C.), directs the Secretary of Veterans Affairs (Secretary) to award grants to eligible entities to provide legal services to homeless veterans and veterans at risk for homelessness.

The Act requires that VA, in establishing criteria and requirements for grants under section 4202 of the Act, consult with organizations that have experience in providing services to homeless veterans. Therefore, in March 2021, we solicited feedback from selected veteran service organizations, Equal Justice Works (EJW), and other legal services organizations with experience in providing services to homeless veterans via email. VA requested information in five areas: (1) Criteria and requirements necessary to carry out this grant program in rural communities, on trust lands, or in territories and possessions of the United States; (2) types of legal services VA should consider authorizing as part of this grant program; (3) evaluation criteria VA should consider using to assess the operational effectiveness and cost effectiveness of this grant program; (4) general criteria and requirements that VA should have for this grant program; and (5) criteria that VA require for eligible entities to receive grants under this grant program. We received input from 13 organizations. The majority of the comments centered on: (1) Definitions that should be included in the regulation (§ 79.5) and/or Notice of Funding Opportunity (NOFO); (2) the types of legal services that should be provided to eligible veterans to include an expanded view of issues impacting the veteran population that may not be seen as directly tied to housing instability, such as consumer debt issues and income support services (§ 79.20); (3) scoring criteria considerations, which focused on an applicant's connections to a community, ability to work with other organizations, and cultural competence with the affected population being served (§ 79.35); and (4) metrics the legal services programs could use for VA to determine their cost and operational effectiveness. The feedback received is publicly available online at www.regulations.gov.

Through this interim final rule, VA establishes and implements, in new part 79 of title 38, Code of Federal Regulations (CFR), the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program (hereinafter referred to as the “Grant Program”). Establishment of this new part ensures organization and clarity for implementation of this new grant program. By issuance of the regulations in this new part, VA implements the Grant Program to award grants to eligible entities who will provide legal services to eligible veterans. The content of this new part is described in detail below.

Consistent with section 4202 of the Act, part 79 is titled the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program.

Section 79.0 explains the purpose and scope of part 79. Paragraph (a) states that the purpose of this part is to implement the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program. This Grant Program authorizes VA to award legal services grants to eligible entities to provide legal services to eligible veterans. This is consistent with the intent and purpose of section 4202 of the Act.

Paragraph (b) states that legal services covered by this part are those services that address the needs of eligible veterans who are homeless or at risk for homelessness. This is consistent with the intent and purpose of the Grant Program described in section 4202 of the Act.

Section 79.5 contains the definitions for key terms that apply to the new part 79 and to any Notice of Funding Opportunity (NOFO) for this Grant Program. The definitions are listed in alphabetical order, beginning with the definition of applicant.

VA defines applicant to mean an eligible entity that submits an application for a legal services grant announced in a NOFO. VA is defining applicant in this manner since only an eligible entity, as specified in § 79.10, may submit an application for a legal services grant under this part in accordance with § 79.25. This definition is based also on a plain language understanding of this term and is consistent with other grant programs that VA administers, such the Supportive Services for Veteran Families (SSVF) Program. See 38 CFR 62.2. As explained in § 79.25, VA will require submission of an application similar to other grant programs that VA administers.

VA defines at risk for homelessness to mean an individual who meets the criteria identified in § 79.15(b).

VA defines direct Federal financial assistance to mean Federal financial assistance received by an entity selected by the Government or a pass-through entity as defined in 38 CFR 50.1(d) to provide or carry out a service ( e.g., by contract, grant, or cooperative agreement). This term is used for purposes of § 79.80 pertaining to faith-based organizations and is consistent with how VA defines this in the SSVF Program. See 38 CFR 62.62.

VA defines disallowed costs as costs charged by a grantee that VA determines to be unallowable based on applicable Federal cost principles or based on this part or the legal services grant agreement. This is consistent with how VA defines this term in the SSVF Program. See 38 CFR 62.2. This term is used for purpose of grant closeout procedures in § 79.115.

VA defines eligible entity to mean an entity who meets the requirements of § 79.10.

VA defines eligible veteran as a veteran that meets the requirements of § 79.15(a) or (b). As discussed later in this rulemaking, § 79.15 describes the eligibility criteria to be an eligible veteran under part 79.

VA defines grantee as an eligible entity that is awarded a legal services grant under this part. This is consistent with how VA defines grantee for other VA grant programs and is consistent with the plain meaning of this term.

Consistent with 38 U.S.C. 2002(a)(1), VA defines homeless veteran to mean a veteran who is homeless as that term is defined in subsection (a) or (b) of section 103 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302).

For the purposes of this part, Indian tribe means an Indian tribe as defined in 25 U.S.C. 4103. Section 4103(13)(A) of title 25, U.S.C., defines Indian tribe in general to mean a tribe that is a Federally or a State recognized tribe. Section 4103(13)(B) of title 25, U.S.C., further defines Federally recognized tribe to mean any Indian tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq. ), that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians pursuant to the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450 et seq. ). Section 4103(13)(C) of title 25, U.S.C., also defines State recognized tribe to mean any tribe, band, nation, pueblo, village, or community—(1) that has been recognized as an Indian tribe by any State; and (2) for which an Indian Housing Authority has, before the effective date under section 705, entered into a contract with the Secretary of Housing and Urban Development pursuant to the United States Housing Act of 1937 (42 U.S.C. 1437 et seq. ) for housing for Indian families and has received funding pursuant to such contract within the 5-year period ending upon such effective date. This definition also includes certain conditions set forth in 25 U.S.C. 4103(13)(C)(ii).

VA defines indirect Federal financial assistance to mean Federal financial assistance in which a service provider receives program funds through a voucher, certificate, agreement or other form of disbursement, as a result of the genuine, independent choice of a participant. This term is used for purposes of § 79.80 and is consistent with how VA defines this in the SSVF Program. See 38 CFR 62.62.

VA defines legal services as those services listed in § 79.20. This is consistent with 38 U.S.C. 2022A(d) regarding the use of funds under section 4202 of the Act.

VA defines legal services grant as a grant awarded under this part. This definition is based on the plain language understanding of this term.

VA defines legal services grant agreement as the agreement executed between VA and a grantee as specified under § 79.70. This definition is based on the plain language understanding of this term and is consistent with the definition of similar terms in other VA regulations. See § 62.2.

VA defines a non-profit private entity as an entity that meets the criteria in § 79.10(c).

VA defines notice of funding opportunity (NOFO) using the meaning given to this term in 2 CFR 200.1. Section 200.1 defines NOFO to mean a formal announcement of the availability of Federal funding through a financial assistance program from a Federal awarding agency. The NOFO provides information on the award, who is eligible to apply, the evaluation criteria for selection of an awardee, required components of an application, and how to submit the application. The NOFO is any paper or electronic issuance that an agency uses to announce a funding opportunity, whether it is called a “program announcement,” “notice of funding availability,” “broad agency announcement,” “research announcement,” “solicitation,” or some other term. Part 200 of 2 CFR establishes the uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities. This grant program would be subject to the requirements of 2 CFR part 200.

VA defines participant to mean an eligible veteran who is receiving legal services from a grantee under this part. This definition is necessary for purposes of understanding part 79 and the Grant Program.

VA defines public entity to mean an entity that meets the criteria in § 79.10(b).

VA defines rural communities to mean those communities considered rural according to the Rural-Urban Commuting Area (RUCA) system as determined by the United States Department of Agriculture (USDA). VA will use this term and its definition for purposes of prioritizing the distribution of grants to rural communities pursuant to section 4202 of the Act. For more information on RUCA, please refer to https://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes/.

VA defines State to mean any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State exclusive of local governments. This is consistent with the definition of State as used in 38 U.S.C. 101(20) and in the SSVF Program (see § 62.2). This is also consistent with the definition of State as used in 2 CFR 200.1.

VA defines subcontractor to mean any third-party contractor, of any tier, working directly for an eligible entity.

VA defines suspension to mean an action by VA that temporarily withdraws VA funding under a legal services grant, pending corrective action by the grantee or pending a decision to terminate the legal services grant by VA. Suspension of a legal services grant is a separate action from suspension under VA regulations or guidance implementing Executive Orders 12549 and 12689, “Debarment and Suspension.” This definition is consistent with the SSVF Program's definition for this term. See § 62.2. However, with regards to implementing Executive Orders 12549 and 12689, VA has added the word guidance, as not all of VA's implementations of Executive Orders are regulatory.

Tribal organization has the meaning given that term in 25 U.S.C. 5304. Section 5304 defines a tribal organization as the recognized governing body of any Indian tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities: Provided, that in any case where a contract is let or grant is made to an organization to perform services benefiting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the letting or making of such contract or grant. This definition is consistent with the reference to tribal organizations in section 4202 of the Act.

Trust land has the meaning given that term in 38 U.S.C. 3765. Section 3765 defines trust land to mean any land that (A) is held in trust by the United States for Native Americans; (B) is subject to restrictions on alienation imposed by the United States on Indian lands (including native Hawaiian homelands); (C) is owned by a Regional Corporation or a Village Corporation, as such terms are defined in section 3(g) and 3(j) of the Alaska Native Claims Settlement Act, respectively (43 U.S.C. 1602(g), (j)); or (D) is on any island in the Pacific Ocean if such land is, by cultural tradition, communally-owned land, as determined by the Secretary.

VA defines very low income to mean a veteran's income is 50 percent or less of the median income for an area or community. This is consistent with the definition of very low-income veteran family used for purposes of the SSVF Program but tailored to individuals for purposes of this program. See 38 U.S.C. 2044(f)(6). VA believes that incorporating an eligible entity's experience with low-income populations as an alternative criterion will be helpful in determining organizations' familiarity with populations similar to those targeted by the Grant Program, homeless veterans and veterans who are at risk for homelessness. We note that this term is used throughout part 79, including § 79.35 regarding scoring criteria for legal services grant applicants and § 79.40 regarding preferences for selection of grantees. We note that an individual is not required to be considered very low income to be eligible for receive legal services provided pursuant this Grant Program. See § 79.15 for eligibility criteria.

Veteran has the same meaning given that term under 38 U.S.C. 101(2). Section 101 of title 38, U.S.C., defines veteran as a person who served in the active military, naval, air, or space service, and who was discharged or released therefrom under conditions other than dishonorable. This term is used for purposes of identifying eligible veterans as defined in § 79.15 in this part.

VA defines withholding to mean that payment of a legal services grant will not be paid until such time as VA determines that the grantee provides sufficiently adequate documentation and/or actions to correct a deficiency for the legal services grant. This term is defined in this manner as it is intended to provide a general description of how this term is used in 2 CFR part 200, which governs VA grant programs including the legal services grant program. This term relates to withholding payment of a legal services grant pursuant to § 79.110, described later in this rulemaking.

Consistent with 38 U.S.C. 2022A(c), § 79.10 provides the criteria for an entity to be considered an eligible entity. Paragraph (a) provides that, in order to be an eligible entity under this part, the entity must (1) be a public or nonprofit private entity with the capacity to effectively administer a grant under this part; (2) demonstrate that adequate financial support will be available to carry out the services for which the grant is sought consistent with the legal services grant application; and (3) agree to meet the applicable criteria and requirements of this part.

Paragraph (b) provides that a public entity must be a local government, State government, or federally recognized Indian tribal government. Paragraph (b)(1) states that local government consists of either a county, municipality, city, town, township, local public authority (including any public and Indian housing agency under the United States Housing Act of 1937), school district, special district, intrastate district, council of governments (whether or not incorporated as a nonprofit corporation under state law), any other regional or interstate government entity, or any agency or instrumentality of a local government. Paragraph (b)(2) states that a public entity can be a State government. Paragraph (b)(3) states that federally recognized Indian tribal government means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat. 688) certified by the Secretary of the Interior as eligible for the special programs and services provided by him through the Bureau of Indian Affairs. Using these definitions establishes consistency and uniformity among Federal agencies in the administration of grants and cooperative agreements to State, local, and federally recognized Indian tribal governments.

Paragraph (c) states that a non-profit private entity is an entity that meets the requirements of 26 U.S.C. 501(c)(3) or (19). We would reference 26 U.S.C. 501(c)(3) or (19) as the Internal Revenue Service determines non-profit designation for purposes of tax exemptions pursuant to such statute. Subsection 501(c)(3) includes corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation (except as otherwise provided in 26 U.S.C. 501(h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

Subsection 501(c)(19) of title 26 includes a post or organization of past or present members of the Armed Forces of the United States, or an auxiliary unit or society of, or a trust or foundation for, any such post or organization—(A) organized in the United States or any of its possessions, (B) at least 75 percent of the members of which are past or present members of the Armed Forces of the United States and substantially all of the other members of which are individuals who are cadets or are spouses, widows, widowers, ancestors, or lineal descendants of past or present members of the Armed Forces of the United States or of cadets, and (C) no part of the net earnings of which inures to the benefit of any private shareholder or individual.

Section 79.15 describes the criteria for individuals to receive legal services under this Grant Program. Pursuant to paragraph (a) of this section, to be eligible for legal services under this part, an individual must be a homeless veteran or a veteran at risk for homelessness.

Under paragraph (b), VA provides the criteria to be considered at risk for homelessness. At risk for homelessness in this part means an individual who does not have sufficient resources or support networks, e.g., family, friends, faith-based or other social networks, immediately available to prevent them from moving to an emergency shelter or another place described in paragraph (1) in the definition of “homeless” found in 24 CFR 576.2 and meets one or more of the following conditions: (1) Has moved because of economic reasons two or more times during the 60 days immediately preceding the application for assistance; (2) is living in the home of another because of economic hardship; (3) has been notified in writing that their right to occupy their current housing or living situation will be terminated within 21 days after the date of application for assistance; (4) is constructively evicted from their current housing because of untenable conditions created by the landlord such as shutting off electricity and water or discriminatory acts; (5) lives in a hotel or motel and the cost of the hotel or motel stay is not paid by charitable organizations or by Federal, State, or local government programs for low-income individuals; (6) lives in a single-room occupancy or efficiency apartment unit in which there reside more than two persons or lives in a larger housing unit in which there reside more than 1.5 persons reside per room, as defined by the U.S. Census Bureau; (7) is exiting a publicly funded institution, or system of care (such as a health-care facility, a mental health facility, foster care or other youth facility, or correction program or institution); (8) is fleeing, or is attempting to flee domestic violence, dating violence, sexual assault, stalking, or other dangerous or life-threatening conditions that relate to violence against the individual, including a child, that has either taken place within the individual's primary nighttime residence or has made the individual afraid to return to their primary nighttime residence; or (9) otherwise lives in housing that has characteristics associated with instability and an increased risk for homelessness.

As section 4202 of the Act did not define the term “at risk of homelessness,” we researched how VA has defined this term for other programs, such as SSVF Program. In such programs, VA has used the definition used by HUD in implementing emergency solutions grants pursuant to the McKinney-Vento Homeless Assistance Act. See 24 CFR 576.2. Thus, for purposes of this Grant Program, we are using the definition of at risk of homelessness as defined in § 576.2. However, we have made minor changes to the definition to better reflect the purpose of this Grant Program. First, we removed the criterion that the individual has an annual income below 30 percent of the median family income for the area, as determined by HUD. We do not want veterans to be unable to receive services due to income limitations. VA recognizes that there may be situations where a veteran earns an income beyond the HUD limitation in 24 CFR 576.2(i) but is still unable to maintain housing because of a high cost of living where they reside. We also did not include homelessness prevention as a qualifier for assistance found in 24 CFR 576.2(iii)(A). VA recognizes that other types of assistance exist that that may not fall specifically under homelessness prevention assistance but have the impact of preventing homelessness. We also added two new possible criteria for eligibility in § 79.15(b)(4) and (8): Constructive eviction due to untenable conditions created by the landlord; and situations involving intimate partner violence. These criteria were added in response to recommendations from legal service organizations during the consultation in March 2021. Commenters made these suggestions based on their experience providing legal services to homeless and at-risk veterans. Thus, we believe that these additional criteria would ensure legal services provided pursuant to these grants would be more responsive to the needs of these veterans. Finally, we removed the provisions related to children and family members because this Grant Program is designed to assist individual veterans. Although the ultimate outcome of the legal service provided to a veteran may positively impact that veteran's children or family, the direct impact of this grant was designed to assist individual veterans.

Consistent with 38 U.S.C. 2022A(d), 38 CFR 79.20 enumerates allowable legal services covered under this Grant Program. These include (a) legal services related to housing, including eviction defense, representation in landlord-tenant cases, and representation in foreclosure cases; (b) legal services related to family law, including assistance in court proceedings for child support and custody, divorce, estate planning, and family reconciliation; (c) legal services related to income support, including assistance in obtaining public benefits; (d) legal services related to criminal defense, including defense in matters symptomatic of homelessness, such as outstanding warrants, fines, and driver's license revocation, and citations (to reduce recidivism and facilitate the overcoming of reentry obstacles in employment or housing, covered legal services relating to criminal defense also include legal assistance with request to expunge or seal a criminal record); (e) legal services relating to requests to upgrade the characterization of discharge or dismissal of a former member of the Armed Forces under 10 U.S.C. 1553; and (f) other covered legal services as the Secretary determines appropriate.

Those other legal services include: Legal assistance with protective orders and other matters related to domestic or intimate partner violence; access to health care; consumer law matters, such as debt collection, garnishments, usury, fraud, deceit, and financial exploitation; employment law matters; and unmet legal needs of male and female veterans enumerated in VA's annual Community Homelessness Assessment, Local Education and Networking Groups (CHALENG) survey for the grant award year. We intentionally left the legal services categories broad enough to provide grantees with flexibility to determine the types of legal services that an organization could provide within each category. In addition, VA may periodically review the legal services enumerated above and make modifications as necessary through the rulemaking process to meet the needs of eligible veterans.

Section 79.25 sets forth the criteria for a complete application for a legal services grant under this part.

Paragraph (a) explains that applicants must submit a complete application package for a legal services grant, as described in the NOFO, and enumerates the necessary information for VA to consider the application package complete. This list of items described in paragraph (a) ensures that VA can adequately evaluate applicants for the purposes of this Grant Program.

A complete legal services grant application package includes: (1) A description of the legal services to be provided by the applicant and the identified need for such legal services among eligible veterans; (2) a description of how the applicant will ensure that services are provided to eligible veterans, including women veterans; (3) a description of the characteristics of eligible veterans who will receive legal services provided by the applicant; (4) an estimate with supporting documentation of the number of eligible veterans who will receive legal services provided by the applicant, including an estimate of the number of eligible women veterans, who will receive legal services provided by the applicant; (5) a plan for how the applicant will use at least ten percent of the grant funds to serve eligible women veterans; (6) documentation describing the experience of the applicant and any identified subcontractors in providing legal services to eligible veterans; (7) documentation relating to the applicant's ability to coordinate with any identified subcontractors; (8) documentation of the applicant's capacity to effectively administer a grant under this section that describes the applicant's: (i) Accounting practices and financial controls; (ii) capacity for data collection and reporting required under this part; and (iii) experience administering other Federal, State, or county grants similar to the Grant Program under this part; (9) documentation of the managerial capacity of the applicant to: (i) Coordinate the provision of legal services by the applicant or by other organizations on a referral basis; (ii) assess continuously the needs of eligible veterans for legal services; (iii) coordinate the provision of legal services with services provided by VA; (iv) customize legal services to the needs of eligible veterans; and (v) comply with and implement the requirements of this part throughout the term of the legal services grant; (10) documentation that demonstrates that adequate financial support will be available to carry out the legal services for which the grant is sought consistent with the application; and (11) any additional information as deemed appropriate by VA. VA plans to offer technical assistance to help prospective applicants clarify any aspects of the application package.

We note that the requirement in § 79.25(a)(5) that applicants provide in their application a plan for how they will use at least ten percent of the grant funds to serve eligible women veterans is included in order to meet the requirement in 38 U.S.C. 2022A(e). Subsection (e) requires that for any fiscal year, not less than ten percent of the amount authorized to be appropriated for grants under section 2022A be used to provide legal services under this part to women veterans.

Paragraph (b) states that subject to funding availability, grantees may submit an application for renewal of a legal services grant if the grantee's program will remain substantially the same. To apply for renewal of a legal services grant, a grantee must submit to VA a complete legal services grant renewal application package, as described in the NOFO. This is consistent with how VA administers other VA grant programs, such as the SSVF Program under part 62 and will allow VA to renew grants in an efficient and timely manner so that there will be no lapse in the provision of legal services by grantees to participants from year to year.

Paragraph (c) establishes that VA may request, in writing, that an applicant or grantee, as applicable, submit other information or documentation relevant to the legal services grant application. Consistent with 38 U.S.C. 2022A(b)(1)(A), VA may then request additional information that may not be in the initial or renewal application but will be necessary for VA to properly evaluate the applicant or grantee for a legal services grant.

Section 79.30 sets forth the threshold requirements for further scoring applicants pursuant to § 79.35. This section explains that VA will only score applicants for the Grant Program if they meet certain threshold requirements as set forth in paragraphs (a) through (g).

These threshold requirements in paragraphs (a) through (g) include that the application is filed within the time period established in the NOFO, and any additional information or documentation requested by VA under § 79.25(c) is provided within the time frame established by VA; the application is completed in all parts; the activities for which the legal services grant is requested are eligible for funding under part 79; the applicant's prospective participants are eligible to receive legal services under that part; the applicant agrees to comply with the requirements of that part; the applicant does not have an outstanding obligation to the Federal Government that is in arrears and does not have an overdue or unsatisfactory response to an audit; and the applicant is not in default by failing to meet the requirements for any previous Federal assistance.

These requirements are minimum requirements that must be met before VA will score applications, and applicants will be able to understand whether they meet these threshold requirements in advance of application submission. The threshold requirements are intended to be an administrative checklist with which applicants would confirm compliance prior to submitting a legal services grant application. VA anticipates this will reduce the amount of time and resources that VA will dedicate to evaluating and scoring applicants. These threshold requirements are consistent with other VA grant programs, such as the SSVF Program. See 38 CFR 62.21.

Section 79.35 sets forth the criteria to be used to score applicants who are applying for a legal services grant. Since VA has a limited amount of funds available to distribute through the Grant Program and the number of qualified applicants may exceed available funds, VA is establishing scoring criteria for awarding legal services grants. Utilization of these scoring criteria will allow VA to distribute these grants consistent with section 4202 of the Act and VA's goals and objectives for the Grant Program which will be detailed in the NOFO. The categories are weighted differently according to their likelihood of impacting a grantee's successful development and operation of a grant program. These criteria are consistent with feedback received from commenters during our consultation with legal service providers. The criteria, which are discussed in depth below, are enumerated in paragraphs (a) through (e).

While this section does not include specific point values for each criterion, the regulation provides that such point values will be set forth in the NOFO. This will allow VA to retain flexibility in determining those point values each year of the Grant Program in the event that such point values need to change.

Paragraph (a) explains that VA will award points based on the background, qualifications, experience, and past performance, of the applicant and any subcontractors identified by the applicant in the legal services grant application, as demonstrated by the following: (1) Background and organizational history; and (2) organization and staff qualifications. These scoring criteria are important to determine whether applicants have the necessary and relevant background and experience to provide legal services consistent with this part and section 4202 of the Act.

In scoring an applicant's background and organizational history under paragraph (a)(1), VA will consider the applicant's, and any identified subcontractors', background and organizational history relevant to providing legal services; whether the applicant, and any identified subcontractors, maintain organizational structures with clear lines of reporting and defined responsibilities; and whether the applicant, and any identified subcontractors, have a history of complying with agreements and not defaulting on financial obligations.

In scoring an applicant's staff qualifications under paragraph (a)(2), VA will score applications based on the experience of the applicant and any identified subcontractors working with veterans or individuals who are homeless, at risk for homelessness, or who have very low income, as defined under part 79. Having experience and understanding of the veteran population would bring a military and veteran cultural competency that is critical for ensuring that the needs of eligible veterans are met through the Grant Program. This is consistent with the feedback received through consultation. The mix of general and specific criteria with respect to experience with veterans allows VA flexibility to award points at various levels (local, regional, State) since the types of experience entities at those levels may have can vary. Thus, pursuant to paragraph (a), VA will score applicants not only based on their experience administering programs similar to a legal services grant program and providing services to those who are homeless, at risk for homelessness, or very low-income, but also based on the applicant's experience working with veterans.

VA notes that while not required by the statute, it believes including an applicant's experience with very low-income populations as an alternative criterion will be useful to determine organizations' familiarity with populations similar to the target populations in the Grant Program, homeless veterans and veterans who are at risk for homelessness. By having low income as an option for applicants to demonstrate past experience, qualified applicants may be able to present experience administering a program similar in type and scale to the legal services contemplated by the Grant Program, if not specifically with individuals who are homeless, at risk for homelessness, or veterans. Accordingly, VA will score applications based on the experience of the applicant and identified subcontractors providing legal services, including providing such services to veterans, or individuals who are homeless, at risk for homelessness or who have very low income.

Relatedly, VA will score applicants also based on the qualifications of the applicant's staff and any identified subcontractors' staff to administer legal services. This would include, as applicable, confirmation that the applicant, and any identified subcontractor, has barred attorneys on staff or a plan to hire such attorneys who are in good standing as a member of the applicable State bar. It would also consider the experience that applicants' staff administering programs similar to this Grant Program.

Paragraph (b) explains that VA will award points based on the applicant's program concept and legal services plan. The scoring criteria under this paragraph are important for VA to use to determine whether the applicant has a fully developed program concept and plan that will meet the intent of this part and section 4202 of the Act. Points awarded in accordance with this paragraph may be demonstrated by the following: (1) Need for the program, (2) outreach and screening plan, (3) program concept, (4) program implementation timeline, (5) collaboration and communication with VA, (6) ability to meet VA's requirements, goals, and objectives for the Grant Program, and (7) capacity to undertake the program.

VA will score the need for the program under paragraph (b)(1) based on whether the applicant has shown a need amongst eligible veterans in the area or community where the program will be based and whether the applicant understands the legal service needs unique to eligible veterans in the area or community where the program will be based.

VA will score the outreach and screening plan under paragraph (b)(2) based on whether the applicant has a feasible outreach and referral plan to identify and assist eligible veterans in need of legal services, has a plan to process and receive legal services referrals for eligible veterans, and has a plan to assess and accommodate the needs of referred eligible veterans.

VA will score the applicant's program concept under paragraph (b)(3) based on whether the applicant's program concept, size, scope, and staffing plan are feasible, and the applicant's program is designed to meet the needs of eligible veterans in the area or community where the program will be based.

VA will score the program implementation timeline under paragraph (b)(4) based on whether the applicant's program will be implemented in a timely manner and legal services will be delivered to eligible veterans as quickly as possible and within a specified timeline. VA will also score this based on whether the applicant has a hiring plan in place to meet the applicant's program timeline or has existing staff to meet such timeline.

VA will score the ability of an applicant to collaborate and communicate with VA under paragraph (b)(5) based on the strength of the applicant's plan to coordinate outreach and services with local VA facilities.

VA will score the applicant's ability to meet VA's requirements, goals and objectives for the Grant Program under paragraph (b)(6) based on whether the applicant is committed to ensuring that its program meets VA's requirements, goals, and objectives for the Grant Program as identified in the NOFO.

Lastly, VA will score the applicant's capacity to undertake its proposed legal services program under paragraph (b)(7) based on whether the applicant has sufficient capacity, including staff resources, to undertake the program.

Paragraph (c) explains that VA will award points based on the applicant's quality assurance and evaluation plan, as demonstrated by (1) program evaluation, (2) monitoring, (3) remediation, and (4) management and reporting. This scoring criterion is important to ensure that applicants can meet any requirements for evaluation, monitoring, and reporting contained in this part and will help VA ensure that grant funds are being used appropriately and will assist in the overall assessment of the program.

Under paragraph (c)(1), VA will evaluate whether the applicant has demonstrated an ability to evaluate its program through the presence of clear, realistic, and measurable metrics that align with the Grant Program's aim of addressing the legal needs of eligible veterans and through which the applicant's program performance can be continually evaluated.

Under paragraph (c)(2), VA will score the applicant's ability to monitor its proposed legal services program based on whether the applicant has adequate controls in place to regularly monitor the program, including any subcontractors, for compliance with all applicable laws, regulations, and guidelines; whether the applicant has adequate financial and operational controls in place to ensure the proper use of legal services grant funds; and the applicant has a plan for ensuring that the applicant's staff and any identified subcontractors are appropriately trained and comply with the requirements of part 79.

VA will score applicants' ability to remediate program issues under paragraph (c)(3) based on the applicant's plan or established system for remediating non-compliant aspects of the program if and when they are identified.

VA will score an applicant's ability to conduct management and reporting functions in its proposed legal services program under paragraph (c)(4) based on whether the applicant's program management team has the capability and a system in place to provide to VA timely and accurate reports at the frequency set by VA.

Paragraph (d) explains that VA will award points based on the applicant's financial capability and plan, as demonstrated by: (1) Organizational finances (based on whether applicant, and any identified subcontractors, are financially stable); and (2) financial feasibility of program (based on whether the applicant has a realistic plan for obtaining all funding required to operate the program for the period of the legal services grant; and whether applicant's program is cost-effective and can be effectively implemented on-budget). These are important to ensure that funds are not provided to an applicant that has not considered the costs and has not developed a plan to ensure they have the necessary funding for administering a legal services program.

Paragraph (e) explains that VA will award points based on the applicant's area or community linkages and relations, as demonstrated by the (1) area or community linkages, (2) past working relationships, (3) local presence and knowledge, and (4) integration of linkages and program concept. This is important for ensuring success of the applicant's proposed legal services program. VA acknowledges that applicants may not have these existing linkages and relationships but may develop them over time. VA also acknowledges that certain applicants without these existing linkages and relationships may obtain them through community partners. Area or community linkages under paragraph (e)(1) will include whether the applicant has a plan for developing or has existing linkages with Federal (including VA), State, local, and tribal governments, agencies, and private entities for the purposes of providing additional legal services to eligible veterans. Past working relationships under paragraph (e)(2) will include whether the applicant (or applicant's staff), and any identified subcontractors (or subcontractors' staff), have fostered successful working relationships and linkages with public and private organizations providing legal and non-legal supportive services to veterans who are also in need of legal services similar to those covered under the Grant Program. Local presence and knowledge under paragraph (e)(3) will be based on whether the applicant has a presence in the area or community to be served by the applicant and understands the dynamics of the area or community to be served by the applicant. Integration of linkages and program concept under paragraph (e)(4) will be based on whether the applicant's linkages to the area or community to be served by the applicant enhance the effectiveness of the applicant's program.

In accordance with the Act, § 79.40 sets forth the process for selecting applicants for legal services grants, including distribution requirements from section 4202 of the Act. The scoring criteria are enumerated in paragraphs (a) through (f).

Paragraph (a) explains that VA will score all applicants that meet the threshold requirements set forth in § 79.30 using the scoring criteria set forth in § 79.35.

Paragraph (b) explains that VA will group applicants within the applicable funding priorities if funding priorities are set forth in the NOFO. As funding priorities can change annually, VA will set forth any funding priorities in the NOFO, which will allow VA flexibility in updating priorities in a quick and efficient manner every year that funds are available under this Grant Program.

Paragraph (c) sets forth how applicants are ranked. VA will rank those applicants that receive at least the minimum amount of total points and points per category set forth in the NOFO, within their respective funding priority group, if any. VA will set forth the minimum amount of total points and points per category in the NOFO as these can change annually. Setting forth these points in the NOFO will provide VA flexibility in updating the minimum amount of points in an efficient and quick manner. The applicants will be ranked in order from highest to lowest scores, within their respective funding priority group, if any.

Paragraph (d) explains that VA will use the applicant's ranking as the primary basis for selection for funding. However, consistent with section 4202 of the Act, paragraph (d) further explains VA preferences. In paragraph (d)(1), VA will give preference to applicants that have the demonstrated ability to provide legal services to eligible veterans who are homeless, at risk for homelessness or have very low income, as defined by this part.

In paragraph (d)(2), to the extent practicable, VA will ensure that legal services grants are equitably distributed across geographic regions, including rural communities, trust lands, Native Americans, and tribal organizations, consistent with 38 U.S.C. 2022A(f).

Lastly, in paragraph (d)(3), VA will give preference to applicants with a demonstrated focus on women veterans as set forth in the NOFO. VA will set forth information in the NOFO that will explain to applicants how this preference may be met with their application.

VA notes that legal services grant applications must include applicants' identification of the target populations and the area or community the applicant proposes to serve. VA will use this information in determining the distribution of legal services grants consistent with paragraph (d).

Paragraph (e) explains that subject to paragraph (d) of this section which sets forth the preference and distribution requirements and considerations, VA will fund the highest-ranked applicants for which funding is available, within the highest funding priority group, if any.

Similar to existing processes in other VA grant programs, such as the SSVF Program (38 CFR 62.61), paragraph (f) authorizes VA to still select an applicant for funding if that applicant is not initially selected because of a procedural error by VA. An applicant would not be required to submit a new application in this situation. This will ease any administrative burden on applications and could be used in situations where there is no material change in the information that would have resulted in the applicant's selection for a grant under this part.

Section 79.45 describes the criteria that VA will use to score grantees under part 79 that are applying for renewal of a grant. Such criteria will assist with VA's review and evaluation of grantees to ensure that those grantees have successful existing programs using the previously awarded grant funds and that they have complied with the requirements of part 79 and of section 4202 of the Act. Applicants applying for renewal of a legal services grant will receive a score based on the scoring criteria enumerated in paragraphs (a) through (c).

While this section does not include specific point values for the criteria, such point values will be set forth in the NOFO. This will allow VA to retain flexibility in determining those point values each year of the Grant Program.

Under paragraph (a), VA will award points based on the success of the grantee's program, as demonstrated by the following: (1) Participants were satisfied with the legal services provided by the grantee; (2) the grantee delivered legal services to participants in a timely manner; (3) the grantee implemented the program by developing and sustaining relationships with community partners to refer veterans in need of legal services; and (4) the grantee was effective in conducting outreach to eligible veterans, including to women veterans, and increased engagement of eligible veterans seeking legal services provided by the grantee.

Paragraph (b) explains that points will be awarded based on the cost-effectiveness of the grantee's program, as demonstrated by the following: (1) The cost per participant was reasonable, and (2) the grantee's program was effectively implemented within budget.

Paragraph (c) explains that VA will award points based on the extent to which the grantee complied with the Grant Program's goals and requirements, as demonstrated by the following: (1) The grantee's program was administered in accordance with VA's goals for the Grant Program as described in the NOFO; (2) the grantee's program was administered in accordance with all applicable laws, regulations, and guidelines; and (3) the grantee's program was administered in accordance with the grantee's legal services grant agreement.

These criteria in paragraphs (a) through (c) ensure that renewal of grants is awarded based on the grantee's program's success, cost-effectiveness, and compliance with VA goals and requirements for this Grant Program. This is consistent with how VA awards renewals of grants in other programs, such as the SSVF Program. See 38 CFR 62.24.

Section 79.50 describes the process for selecting grantees that are applying for renewal of such grants. VA scores renewal applicants under a simplified process based on the success and cost effectiveness of their legal services program and their program's compliance with VA requirements and programmatic goals. The scoring criteria is enumerated in paragraphs (a) through (e).

Paragraph (a) explains that so long as grantees continue to meet the threshold requirements in § 79.30, VA will score the grantee using the scoring criteria set forth in § 79.45.

Under paragraph (b), VA will rank those grantees who receive at least the minimum amount of total points and points per category set forth in the NOFO, and such grantees will be ranked in order from highest to lowest scores.

Paragraph (c) explains that VA will use the grantee's ranking as the basis for selection for funding and that VA will fund the highest-ranked grantees for which funding is available.

Paragraph (d) explains that, at its discretion, VA may award any non-renewed funds to an applicant or existing grantee. If VA chooses to award non-renewed funds to an applicant or existing grantee, VA will first offer to award the non-renewed funds to the applicant or grantee with the highest grant score under the relevant NOFO that applies for, or is awarded a renewal grant in, the same community as, or a proximate community to, the affected community. Such applicant or grantee will be required to have the capacity and agree to provide prompt services to the affected community. Under this section, the relevant NOFO means the most recently published NOFO which will cover the geographic area that includes the affected community, or for multi-year grant awards, the NOFO for which the grantee, who is offered the additional funds, received the multi-year award. If the first such applicant or grantee offered the non-renewed funds refuses the funds, VA will then offer to award the funds to the next highest-ranked such applicant or grantee, per the criteria in paragraph (d)(1) of this section, and continue on in rank order until the non-renewed funds are awarded.

Paragraph (e) authorizes VA to select an existing grantee for available funding, based on the grantee's previously submitted renewal application, if that grantee is not initially selected for renewal because of a procedural error by VA. A grantee would not be required to submit a new renewal application in this situation. This will ease any administrative burden on grantees and could be used in situations where there is no material change in the renewal application that would have resulted in the grantee's selection for renewal of a grant under part 79.

Section 79.55 establishes requirements for the general operation of legal services programs provided for under part 79. These requirements are enumerated in paragraphs (a) through (f).

Paragraph (a) address eligibility documentation. Paragraph(a)(1) explains that prior to providing legal services, grantees must verify, document, and classify each participant's eligibility for legal services. This ensures that grantees are providing services and using grant funds for those who are eligible for such services under this Grant Program and consistent with section 4202 of the Act. In paragraph (a)(2), once the grantee initiates legal services, the grantee will continue to provide legal services to the participant through completion of the legal services so long as the participant continues to meet the eligibility criteria set forth in § 79.15. In paragraph (a)(3), if a grantee finds at any point in the grant award period that a participant is ineligible to receive legal services under part 79, or that the provider is unable to meet the legal needs of that participant, the grantee must document the reason for the participant's ineligibility or the grantee's inability to provide legal services. Then, the grantee must provide the veteran information on other available programs or resources or provide a referral to another legal services organization that is able to meet that veteran's needs.

Under paragraph (b), for each participant who receives services from the grantee, the grantee must document the legal services provided, how such services were provided, the duration of the services provided, any goals for the provision of such services, and measurable outcomes of the legal services provided as determined by the Secretary, such as whether the participant's legal issue was resolved. This is information that grantees typically maintain regarding the provision of these or similar services. Additionally, this information may be requested by VA for purposes of monitoring the grantee's operation and compliance with part 79 and will be collected as part of the grantee's reporting requirements in § 79.95 and will be required to be maintained for at least three years (consistent with the recordkeeping requirements in § 79.100), of which VA may request for auditing and evaluation purposes.

Under paragraph (c), grantees would be required to maintain the confidentiality of records kept in connection to legal services provided to participants. Grantees that provide legal services would be required to establish and implement procedures to ensure the confidentiality of records pertaining to any participant and the address or location where the legal services are provided. The confidentiality maintained should be consistent with the grantee's State bar rules of confidentiality in an attorney-client relationship.

Under paragraph (d), prior to initially providing legal services to a participant, the grantee is required to notify each participant of the following: (1) That the legal services are being paid for, in whole or in part, by VA; (2) the legal services which are available to the participant through the grantee's program; and, (3) any conditions or restrictions on the receipt of legal services by the participant.

Under paragraph (e), VA requires that grantees regularly assess how legal services grant funds can be used in conjunction with other available funds and services to ensure continuity of program operations and to assist participants. This encourages grantees to leverage other financial resources to ensure continuity of program operations and assistance to participants.

Lastly, under paragraph (f), VA requires that grantees ensure that legal services grants are administered in accordance with the requirements of part 79, the legal services grant agreement, and other applicable laws and regulations. Grantees must ensure that any subcontractors carry out activities in compliance with part 79.

Section 79.60 prohibits grantees from charging a fee to participants for providing legal services that are funded with amounts from a legal services grant under part 79. VA believes this prohibition is appropriate, as similar prohibitions have been implemented for other similar grant programs, such as the SSVF Program, and is consistent with the intent of Section 4202 of the Act. See 38 CFR 62.37.

Section 79.65 discusses the contents of the Notice of Funding Opportunity (NOFO). The NOFO is a notice published in the Federal Register and on grants.gov that communicates to the public when funds are available for legal services grants. As enumerated in paragraphs (a) through (j), the NOFO will identify items such as the location for obtaining legal services grant applications; the date, time, and place for submitting completed legal services grant applications; the estimated amount and type of legal services grant funding available, including the maximum grant funding available per award; any priorities for or exclusions from funding to meet the statutory mandates of 38 U.S.C. 2022A and VA goals for the Grant Program; the length of term for the legal services grant award; specific point values to be awarded for each criterion listed in §§ 79.35 and 79.45; the minimum number of total points and points per category that an applicant or grantee, as applicable, must receive in order for a legal services grant to be funded; any maximum uses of legal services grant funds for specific legal services; the timeframes and manner for payments under the legal services grant; and other information necessary for the legal services grant application process as determined by VA, including the requirements, goals, and objectives of the Grant Program, and how the preference under § 79.40(d)(3) may be met. This is consistent with how VA administers similar grant programs, such as the SSVF Program (see 38 CFR 62.40).

Section 79.70 discusses legal services grant agreements and the requirements that will be included in each agreement prior to VA obligating funds, as enumerated in paragraphs (a) through (c). This agreement will be enforceable against the grantee and provides VA assurance that the grantee will use the legal services grant funds in the manner described in the application and in accordance with the requirements of part 79.

Under paragraph (a), after an applicant is selected for a legal services grant in accordance with § 79.40, VA will draft a legal services grant agreement to be executed by VA and the grantee. Upon execution of the legal services grant agreement, VA will obligate legal services grant funds to cover the amount of the approved legal services grant, subject to the availability of funding. Such agreement will provide that the grantee agrees, and will ensure that each subcontractor agrees, to operate the program in accordance with the provisions of part 79 and the grantee's legal services grant application; comply with such other terms and conditions, including recordkeeping and reports for program monitoring and evaluation purposes, as VA may establish for purposes of carrying out the Grant Program, in an effective and efficient manner; and provide such additional information as deemed appropriate by VA.

Paragraph (b) explains the requirements to execute a legal services agreement for grant renewal grant in accordance with § 79.50. The requirements and grant agreement provisions are the same as for initial grant awards as discussed in paragraph (a) of this section.

Paragraph (c) explains that no funds provided under part 79 may be used to replace Federal, State, tribal, or local funds previously used, or designated for use, to assist eligible veterans.

Section 79.75 sets forth the required process grantees must use if there are changes to the program or budget that alter the grantee's legal services grant program. These requirements allow VA to ensure that grant funds are used appropriately and to maintain control over the quality of legal services provided by the grantee under this part. These requirements are enumerated in paragraphs (a) through (c).

Paragraph (a) states that a grantee must submit to VA a written request to modify a legal services grant program for any proposed significant change that will alter the grantee's legal services grant program. It further explains that if VA approves such change, it will issue a written amendment to the legal services grant agreement. A grantee must receive VA's approval prior to implementing a significant change. Significant changes include, but are not limited to, a change in the grantee or any subcontractors identified in the grant agreement; a change in the area or community served by the grantee; additions or deletions of legal services provided by the grantee; a change in category of participants to be served; and a change in budget line items that are more than 10 percent of the total legal services grant award.

VA's approval of changes will be contingent upon the grantee's amended application retaining a sufficient rank to have been competitively selected for funding in the year that the application was granted; and each legal services grant modification request will be required to contain a description of the revised proposed use of grant funds.

Under paragraph (b), VA may require that the grantee initiate, develop, and submit to VA for approval a Corrective Action Plan (CAP) if, on a quarterly basis, actual legal services grant expenditures vary from the amount disbursed to a grantee for that same quarter or actual legal services grant activities vary from the grantee's program description provided in the legal grant agreement. Paragraph (b) also sets forth specific requirements related to the CAP. These include that the CAP must identify the expenditure or activity source that has caused the deviation, describe the reason(s) for the variance, provide specific proposed corrective action(s), and provide a timetable for accomplishment of the corrective action. After receipt of the CAP, VA will send a letter to the grantee indicating that the CAP is approved or disapproved. If disapproved, VA will make beneficial suggestions to improve the proposed CAP and request resubmission or take other actions in accordance with this part.

Paragraph (c) explains that grantees are required to inform VA in writing of any key personnel changes ( e.g., new executive director, legal services grant program director, or chief financial officer) and grantee address changes within 30 days of the change.

As VA anticipates that religious or faith-based organizations may apply for grants under this part, § 79.80 describes the conditions for use of legal services grants provided under this part as they relate to religious activities. The conditions are enumerated in paragraphs (a) through (g). This is similar to the language used for the Homeless Providers Grant and Per Diem Program (38 CFR 61.64) and the SSVF Program (38 CFR 62.62).

Under paragraph (a), faith-based organizations are eligible, on the same basis as any other organization, to participate in the Grant Program under this part. Decisions about awards of Federal financial assistance must be free from political interference or even the appearance of such interference and must be made on the basis of merit, not on the basis of religion or religious belief or lack thereof.

Under paragraph (b)(1), no organization may use direct financial assistance from VA under this part to pay for explicitly religious activities such as religious worship, instruction, or proselytization; or equipment or supplies to be used for any of those activities. Paragraph (b)(2) states that references to financial assistance are deemed to be references to direct Federal financial assistance, unless the referenced assistance meets the definition of indirect Federal financial assistance in part 79.

Under paragraph (c), organizations that engage in explicitly religious activities, such as worship, religious instruction, or proselytization, must offer those services separately, in time or location, from any programs or services funded with direct financial assistance from VA under part 79. Furthermore, participation in any of the organization's explicitly religious activities must be voluntary for the participants of a program or service funded by direct financial assistance from VA under that part.

Under paragraph (d), a faith-based organization that participates in the Grant Program will retain its independence from Federal, State, or local governments, including the definition, practice and expression of its religious beliefs. However, organizations may not use direct financial assistance from VA under this part to support any explicitly religious activities, such as worship, religious instruction, or proselytization. Faith-based organizations may use space in their facilities to provide VA-funded services under this part, without concealing, removing, or altering religious art, icons, scripture, or other religious symbols. Additionally, a VA-funded faith-based organization retains its authority over its internal governance, and it may retain religious terms in its organization's name, select its board members and otherwise govern itself on a religious basis, and include religious reference in its organization's mission statements and other governing documents.

Under paragraph (e), an organization that participates in the Grant Program shall not, in providing legal services, discriminate against a participant or prospective participant regarding legal services on the basis of religion or religious belief.

Under paragraph (f), if a State or local government voluntarily contributes its own funds to supplement federally funded activities, the State or local government has the option to segregate the Federal funds or commingle them. However, if the funds are commingled, this provision applies to all of the commingled funds.

Paragraph (g) states that to the extent otherwise permitted by Federal law, the restrictions on explicitly religious activities set forth in this section do not apply where VA funds are provided to faith-based organizations through indirect assistance as a result of a genuine and independent private choice of a participant, provided the faith-based organizations otherwise satisfy the requirements of this part. A faith-based organization may receive such funds as the result of a participant's genuine and independent choice if, for example, a participant redeems a voucher, coupon, or certificate, allowing the participant to direct where funds are to be paid, or a similar funding mechanism provided to that participant and designed to give that participant a choice among providers.

Section 79.85 governs VA's authority to conduct onsite inspections to monitor grantee operations and compliance with the Grant Program. The ability for VA to conduct inspections and monitor operations is critical for VA oversight over the grants and is set forth in paragraphs (a) and (b).

Paragraph (a) authorizes VA to make visits to all grantee locations, at all reasonable times, where a grantee is using legal services grant funds to review grantee accomplishments and management control systems and to provide such technical assistance, as required. VA may also conduct inspections of all program locations and records of a grantee at such times as are deemed necessary to determine compliance with the provisions of this part. If a grantee delivers services in a participant's home, or at a location away from the grantee's place of business, VA may accompany the grantee. If the grantee's visit is to the participant's home, VA will only accompany the grantee with the consent of the participant. If any visit is made by VA on the premises of the grantee or a subcontractor under the legal services grant, the grantee must provide, and must require its subcontractors provide VA access to all reasonable facilities and assistance for the safety and convenience of the VA representatives in the performance of their duties. All visits and evaluations will be performed in such a manner as will not unduly delay services.

These provisions are critical for VA oversight over legal services grants and are consistent with how VA administers other grant programs. See 38 CFR 61.65 and 62.63.

Paragraph (b) clarifies that VA's authority to inspect does not provide VA with authority over the management or control of any applicant or grantee under part 79.

Section 79.90 sets forth requirements with which grantees must comply regarding the financial management of approved grant funds. This provision is included in this interim final rule to ensure grantees are aware of additional requirements with which they must comply. These requirements are outlined in paragraphs (a) through (d).

Paragraph (a) requires grantees comply with applicable requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards under 2 CFR part 200. Part 200 of 2 CFR establishes the uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities.

Paragraph (b) requires grantees use a financial management system that provides adequate fiscal control and accounting records and meets the requirements in 2 CFR part 200.

Paragraph (c) requires payment up to the amount specified in the legal services grant must be made only for allowable, allocable, and reasonable costs in conducting the work under the grant, and the determination of allowable costs must be made in accordance with the applicable Federal Cost Principles in 2 CFR part 200. Paragraph (d) prohibits costs for administration by a grantee from exceeding 10 percent of the total amount of the legal services grant. Administrative costs include all costs associated with the management of the program and include the administrative costs of subcontractors.

VA has determined this limitation on administrative costs to be reasonable and consistent with the purpose of the Grant Program to provide legal services to eligible veterans. This requirement ensures most of the grant funds (at least 90 percent) are used to provide legal services to participants, consistent with the purpose of the Grant Program. These requirements are also consistent with the SSVF Program, which allows only 10 percent of the grant funds to be used for specified administrative costs. See 38 CFR 62.10. VA has not identified any issues with this limitation in the context of the SSVF Program. VA believes that 10 percent is a reasonable maximum for administrative costs, and any additional funds needed by grantees to administer this Grant Program should be provided by non-VA funds.

Section 79.95 sets forth reporting requirements regarding the legal services carried out using grant funds provided under this part in paragraphs (a) through (f). Under section 4202 of the Act, VA is required to submit biennial reports to Congress about (1) the number of homeless veterans and veterans at risk for homelessness assisted; (2) a description of the legal services provided; (3) a description of the legal matters addressed; and (4) an analysis of the operational effectiveness and cost-effectiveness of the services provided. See 38 U.S.C. 2022A(g). In furtherance of VA's congressionally mandated reporting requirements, we require all grantees to submit reports to VA describing the legal services provided with the approved grant funds. Such reporting requirements ensure that grants funds are being properly used consistent with section 4202 of the Act and this part. These reporting requirements also ensure that VA is being a good fiscal steward of the taxpayer dollar.

In paragraph (a), VA reserves the right to require grantees to provide, in any form as may be prescribed, such reports or answers in writing to specific questions, surveys, or questionnaires as VA determines necessary to carry out the Grant Program.

In paragraph (b), at least once a year or at another frequency set by VA, each grantee must submit to VA a report containing information relating to operational effectiveness; fiscal responsibility; legal services grant agreement compliance; and legal and regulatory compliance, including a description of how the grantee used the grant funds, the number of participants assisted; information on each participant's gender, age, race, and service era; a description of the legal services provided to each participant; and any other information that VA requests. VA deems this information necessary to analyze and monitor the grantee's performance.

In paragraph (c), VA retains the discretion to request additional reports to be able to fully assess the provision of legal services under part 79. This catch-all provision allows VA to request additional reports that it may need to further assess the project and the program. These will vary on a case-by-case basis dependent on the legal services project and its progression. Additionally, if VA is required to submit additional reports to Congress on this program, VA reserves the right to obtain necessary information under this paragraph. This also provides a safeguard in instances where there may be confusing, misleading, inconsistent, or unclear statements in submitted reports. VA reserves the right to request additional reports to clarify information VA receives in other reports submitted by a grantee.

In paragraph (d), VA requires that grantees relate financial data to performance data and develop unit cost information whenever practical. This is another metric to help VA assess the strength of the grantee's legal services program.

In paragraph (e), VA requires that all pages of the reports must cite the assigned legal services grant number and be submitted in a timely manner as set forth in the grant agreement.

In paragraph (f), VA further requires that grantees provide VA with consent to post information from reports on the internet and use such information in other ways deemed appropriate by VA. Grantees must clearly redact information that is confidential based on attorney-client privilege, unless that privilege has been waived by the client. VA may post portions of the reports on the internet so that the public has a greater understanding of the Grant Program. Additionally, VA may use the information for promotional or evaluation purposes.

Section 79.100 establishes a recordkeeping requirement on all grantees. Grantees are required to keep and maintain records for at least a 3-year period that document compliance with the Grant Program requirements in part 79. Grantees will need to produce these records at VA's request. This will assist VA in providing oversight over grantees. This provision is consistent with section 4202(a) of the Act requiring VA to analyze the operational effectiveness and cost effectiveness of the legal services provided by the grantees. This provision is also consistent with 2 CFR 200.334 requiring Federal award recipients to keep financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award for a 3-year period.

Under § 79.105, VA will provide technical assistance to applicants and grantees, as necessary, to meet the requirements of part 79. Such technical assistance will be provided either directly by VA or through contracts with appropriate public or non-profit private entities. The technical assistance may provide applicants and grantees with resources for planning, development, and provision of legal services to homeless veterans or veterans at risk for homelessness. As part of this technical assistance, VA may offer training sessions for applicants and grantees to assist with understanding and implementing the Grant Program.

Section 79.110 explains that VA will enforce this part through such actions as may be appropriate. Appropriate actions include withholding, suspension, deobligation, termination, recovery of funds by VA, and actions in accordance with 2 CFR part 200.

Part 200 describes such actions as withholding, suspension, deobligation, termination, and recovery of funds. See 2 CFR 200.208, 200.305, and 200.339 through 200.343, and 200.346. As legal services grants are subject to the requirements of 2 CFR part 200, VA explicitly references 2 CFR part 200 in § 79.110 to ensure that grantees understand and know where to locate these requirements related to withholding, suspension, deobligation, termination, and recovery of funds. VA refers to 2 CFR part 200 rather than include those requirements in this section as those requirements in 2 CFR part 200 may change. Referencing 2 CFR part 200 provides VA the ability to implement those changes without having to conduct further rulemaking.

VA acknowledges that when certain actions (such as suspension and termination) are taken against grantees pursuant to this section and 2 CFR part 200, a disruption in services to participants may occur. While VA is not regulating responsibilities for grantees to continue to provide services or to coordinate the transfer of participants to other sources of legal support, VA will include such requirements and responsibilities in the grant agreement that VA and the grantee enter into pursuant to part 79. This will ensure that the disruption and impact upon participants is minimized as much as possible.

Section 79.115 explains that legal services grants will be closed out in accordance with 2 CFR part 200. Procedures for closing out Federal awards are currently located at 2 CFR 200.344 and 200.345. As legal services grants are subject to the requirements of 2 CFR part 200, VA explicitly references 2 CFR part 200 in § 79.115 to ensure that grantees understand and know where to locate these requirements. VA refers to 2 CFR part 200 rather than include those requirements in this section as those requirements in 2 CFR part 200 may change, and referencing 2 CFR part 200 provides VA the ability to implement those changes without having to conduct further rulemaking.

The Administrative Procedure Act (APA), codified in part at 5 U.S.C. 553, generally requires agencies to publish substantive rules in the Federal Register for notice and comment. These notice and comment requirements generally do not apply to “a matter relating to agency management or personnel or to public property, loans, grants, benefits or contracts.” 5 U.S.C. 553(a)(2). However, 38 U.S.C. 501(d) requires VA to comply with the notice and comment requirements in 5 U.S.C. 553 for matters relating to grants, notwithstanding section 553(a)(2). Thus, as this rulemaking relates to the Grant Program required by section 4202 of the Act, VA is required to comply with the notice and comment requirements of 5 U.S.C. 553.

However, pursuant to 5 U.S.C. 553(b)(B) general notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

In accordance with 5 U.S.C. 553(b)(B), the Secretary has concluded that there is good cause to publish this rule without prior opportunity for public comment. This rule implements the Act's mandate to establish a new grant program that will allow VA to make grants to eligible entities that provide certain legal services to homeless veterans and veterans at risk for homelessness, with at least 10 percent of funding being utilized to provide legal services to women veterans. This is the first Grant Program of this kind, as there is currently no other active Federal source of funding focused on providing legal services to veterans.

Homelessness is a national crisis, especially among the veteran population. On a single night in January 2021, there were 19,750 veterans experiencing sheltered homelessness in the United States. See, HUD, The 2021 Annual Homeless Assessment Report (AHAR) to Congress: Part 1: Point-in-Time Estimates of Homelessness (2022), https://www.huduser.gov/portal/sites/default/files/pdf/2021-AHAR-Part-1.pdf. Many of these veterans have unmet legal needs that impact their ability to maintain housing. These unmet legal needs are in the areas of family law, court fees/court fines, credit issues/debt collection, expungement of a criminal record, child support issues, and tax issues. See VA Fact Sheet: Community Homelessness Assessment, Local Education and Networking Groups (CHALENG), April 2021, https://www.va.gov/HOMELESS/docs/CHALENG-2020-508.pdf. Without the support provided by consistent legal services, individuals may not be able to find or maintain housing. It is critical that this rulemaking publish without delay, as the Grant Program will seek to help prevent and eliminate homelessness among the veteran population by distributing grants for the provision of legal services that will address barriers to housing stability, especially during the Coronavirus Disease-2019 (COVID-19) pandemic.

VA believes that the number of veterans who are homeless is likely significantly higher than HUD's recent estimates, and that more veterans are and will be at risk for homelessness due to the sustained adverse economic consequences of the COVID-19 pandemic on veterans in particular.

Recent available data focused on veteran homelessness is difficult to interpret, with varied information over the last two years of the COVID-19 pandemic that does not accurately reflect the current picture of veterans who are homeless and at risk for homelessness. After nearly a decade of steady decline, HUD's 2020 point-in-time estimate indicated an increase in veteran homelessness by 0.5 percent from 2019. See, HUD, The 2020 AHAR to Congress: Part 1: Point-in-Time Estimates of Homelessness (2021), https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf. However, in HUD's most recent AHAR, the number of veterans experiencing sheltered homelessness in 2021 decreased by ten percent from 2020. See, HUD, The 2021 AHAR to Congress: Part 1: Point-in-Time Estimates of Homelessness (2022), https://www.huduser.gov/portal/sites/default/files/pdf/2021-AHAR-Part-1.pdf. A comparison of the most recent AHAR to previous AHARs must take into account a complete picture of homelessness in the United States, including protective measures put in place during the COVID-19 pandemic, such as eviction moratoriums, social distancing, and space limits in homeless shelters, which have recently evaporated. This is why the 2021 AHAR is uniquely limited in scope, particularly as it lacks a full unsheltered count of people living in tents, cars, or streets throughout the country. See “Findings—and Limitations—of the 2021 Point-in-Time Count | United States Interagency Council on Homelessness (USICH), https://www.usich.gov/news/findingsand-limitationsof-the-2021-point-in-time-count/ (Citing COVID-19 concerns, 40 percent of communities—including the places with the highest levels of homelessness and almost the entire state of California—did not conduct a full unsheltered count of people living in tents, cars, or streets. Of the 20 communities with the highest unsheltered numbers in 2020, only one completed a full unsheltered count in 2021). It is worth noting that the 2021 AHAR report also found that sheltered chronic homelessness appears to have increased by 20 percent. This is why the actual number of homeless veterans is likely significantly higher than estimated by HUD, since the HUD point-in-time (PIT) estimate also excludes individuals staying in supportive housing paid for by Federal funds, and those moving from place-to-place among friends or family. Id. As stated by the United States Interagency Council on Homelessness, “[a]ny comparison between this year's PIT findings and previous findings are complicated by the incompleteness of data for the 2021 count.” Id.

Incomplete data is one of several potential reasons for HUD's 2021 finding of a ten percent decline in overall sheltered homelessness. In addition, congregate shelters limited their occupancy to comply with Centers for Disease Control and Prevention (CDC) COVID-19 recommendations and pandemic policies. This necessarily resulted in fewer veterans being counted as homeless and the exclusion of veterans who needed such sheltering but could not obtain a space. Moreover, eviction moratoriums, stimulus payments, and expanded unemployment benefits, likely also reduced the number of people counted among the sheltered homeless. Id. Given such limitations on the available data, the true number of veterans who are homeless or at risk for homelessness remains quite unclear.

Notwithstanding things like stimulus payments and expanded unemployment benefits, stay-at-home orders and reduced working hours during the COVID-19 pandemic had a profound economic effect on individuals, including members of the veteran population. U.S. Bureau of Labor Statistics, Employment Situation of Veterans Summary (March 18, 2021), https://www.bls.gov/news.release/archives/vet_03182021.htm; see also, Legal Services Corporation, Appropriations Supplemental Request for Legal Services Corporation Nationwide Grantee Assistance for Coronavirus Emergency Response (2021), https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/lsc-covid-supp-request.pdf. The veteran population experienced increased unemployment rates during the COVID-19 pandemic. See, Armstrong, N. (October 25, 2020), Understanding the economic impacts of COVID-19 on veterans and military families, Military Times, https://www.militarytimes.com/opinion/commentary/2020/10/25/understanding-the-economic-impacts-of-covid-19-on-veterans-and-military-families/. In fact, in 2020, veteran unemployment rates increased by more than twice the rates in 2019. U.S. Bureau of Labor Statistics, Employment Situation of Veterans Summary (March 18, 2021), www.bls.gov/news.release/archives/vet_03182021.htm.

Job loss and economic hardship due to the COVID-19 pandemic has led to increased housing precarity and risk of eviction. Eviction can have long-term, negative effects as it creates a permanent legal record that can allow landlords to screen tenants with a history of eviction and ultimately preclude them from future rental opportunities. See Benfer, A. et al (2021), Eviction, Health Inequity, and the Spread of COVID-19: Housing Policy as a Primary Pandemic Mitigation Strategy, Journal of Urban Health, 98, 1-12. Evictions can therefore lead to homelessness, which is connected to poverty and higher rates of arrest. Access to Justice in the Age of COVID-19: A Roundtable Report (2021), https://www.justice.gov/ag/page/file/1445356/download. Legal assistance to prevent eviction can eliminate potential barriers that preclude veterans at risk for homelessness from maintaining housing. See, Access to Justice in the Age of COVID-19: A Roundtable Report (2021), https://www.justice.gov/ag/page/file/1445356/download, (“As the pandemic continues, the need for legal services to combat evictions is ongoing.”)

To the extent that actions such as increased unemployment benefits and moratoriums against eviction, foreclosure, and utility shut-offs, helped mitigate the effects of the COVID-19 pandemic, many of these mitigation actions have recently ceased. VA is concerned that the disappearance of such protections will seriously impact the ability of some veterans to maintain stable housing or recover economically. Unemployment and loss of income are major predictors of homelessness. Trott, J., Lattimore, K., Teitelbaum, J., (2020), Veterans Face Mounting Legal Needs Amidst the COVID-19 Pandemic, National Center for Medical Legal Partnership. For this reason, maintaining stable housing is expected to be increasingly difficult and challenging for veterans during and in the aftermath of the COVID-19 pandemic. Id. Additionally, widespread reports of soaring rental prices (see Arnold, C. (February 14, 2022), It's not just home prices. Rents rise sharply across the U.S. NPR. https://www.npr.org/2022/02/14/1080145270/its-not-just-home-prices-rents-rise-sharply-across-the-u-s ) may leave many veterans at risk for homelessness, especially in light of the economic impact of the COVID-19 pandemic on veterans.

The legal services to be provided under this Grant Program will provide direct economic support for veterans who are homeless or at-risk of becoming so as COVID-19 pandemic mitigation policies evaporate. Historically, half of homeless veterans' unmet needs consist of legal needs, specifically in the areas of family law, court fees/court fines, credit issues/debt collection, expungement of a criminal record, child support issues, and tax issues. See, Fact Sheet, U.S. Dep't of Veterans Aff., CHALENG (April 2021), https://www.va.gov/HOMELESS/docs/CHALENG-2020-508.pdf. In both the 2017 and 2018 CHALENG survey responses, legal assistance with evictions/foreclosures were specifically among the top ten unmet needs of homeless veterans.

Time and time again, legal services organizations provide VA with examples of veterans they have assisted with a uniquely legal issue—such as expunging a prior conviction on one's criminal record, achieving a successful complex application for public benefits or modifying a child support order—which changed the course of the veteran's life by providing desperately needed income and stability. For many veterans, legal assistance to obtain reliable income support or to remove obstacles to income results in a critical source of income for rent for stable housing or an anchor from which the veteran can then pursue employment or VA treatment services. Without the legal assistance provided by this Grant Program, veterans who are homeless or at risk of homelessness may be unable to access compensation benefits from Veterans Benefits Administration or health care benefits from Veterans Health Administration. During the consultation in March 2021, Equal Justice Works reported that between 2018 and 2019, its Veterans Legal Corps attorneys helped obtain economic benefits of over $11.6 million for veterans by securing public benefits through the provision of legal services. The legal services covered under this Grant Program will result in veterans' ability to sustain housing and avoid homelessness, and therefore must be effective as soon as possible.

As mentioned above, we are approaching a critical point when pandemic protections are disappearing, which presents a larger risk of homelessness and legal issues for which this Grant Program will immediately be needed. There is no other current Federal source of funding that is focused on providing such legal services to veterans. It is therefore of utmost importance to have this regulation effective prior to notice and comment so that legal services can be provided to veterans who are homeless and at risk for homelessness immediately to support housing stability among this population. During the COVID-19 pandemic, legal aid funding has been limited. See, Kaplan, A. (2021), More people than ever need legal aid services. But the pandemic has hit legal aid funding hard, NBC News, https://www.nbcnews.com/business/personal-finance/more-people-ever-need-legal-aid-services-pandemic-has-hit-n1264989. Thus, there are limited legal resources available to address the needs of individuals, including veterans, that may be facing negative economic consequences from the COVID-19 pandemic. According to the Access to Justice in the Age of COVID-19: A Roundtable Report, the COVID-19 pandemic also drastically exacerbated the need for legal help and strained the resources that did exist. See, https://www.justice.gov/ag/page/file/1445356/download. The pandemic generated an unprecedented need for government assistance, including rental and mortgage assistance, child tax credits, unemployment benefits, and utilities payments. At the same time, applying for benefits became even more challenging in the expanded virtual environment. Id.

Through this Grant Program, those veterans who may be hit hardest by the pandemic (that is, homeless veterans and veterans at risk for homelessness) may receive critical legal services related to unemployment benefits, eviction, and those unmet legal needs as discussed earlier. During the COVID-19 pandemic, legal needs in such areas as evictions, unemployment assistance, and income maintenance have increased throughout the country. See, Legal Services Corporation (July 24, 2020), Legal Services Corporation Survey Finds Major Impact of COVID-19 Pandemic on Legal Aid, https://www.lsc.gov/press-release/lsc-survey-finds-major-impact-covid-19-pandemic-legal-aid; See also, Legal Services Corporation (February 9, 2021), LSC Requests Funding to Address Surge in Demand for Legal Aid Amid COVID-19, https://www.lsc.gov/press-release/lsc-requests-funding-address-surge-demand-legal-aid-amid-covid-19; See also, Access to Justice in the Age of COVID-19: A Roundtable Report (2021), https://www.justice.gov/ag/page/file/1445356/download.

Additionally, the legal services that may be provided pursuant to this Grant Program are critical to this population's health and well-being. Those who have legal problems are more likely to experience suicidal ideation and attempt suicide than those without legal problems. Pre-pandemic, veterans facing legal challenges were 86 percent more likely to have suicidal ideation, and 57 percent more likely to attempt suicide, even after adjusting for mental health conditions that are as relevant as other medical factors like depression for suicide prevention and treatment. Blosnich, J., et al. (2019), Social Determinants and Military Veterans' Suicide Ideation and Attempt: A Cross-sectional Analysis of Electronic Health Record Data, 35 J. General Internal Med. 1759-1767. Veterans with housing instability—whom this Grant Program would directly focus on—were 200 percent more likely to have suicidal ideation, and 118 percent more likely to attempt suicide, also after adjusting for mental health diagnoses. Id. It is therefore critical that the legal services provided by this Grant Program to assist this population are made available as soon as possible. Veterans with legal problems and housing issues alike also experience other co-occurring adverse social determinants of health including financial/employment problems, and nonspecific psychosocial needs, among others, that may contribute to suicidality. Id.

Additionally, many veterans are diagnosed with mental illnesses associated with active-duty service. In 2017, GAO reported that 62 percent of servicemembers separated for misconduct during fiscal years 2011-2015 had been diagnosed with post-traumatic stress disorder (PTSD), traumatic brain injury, or certain other conditions that could be associated with misconduct within the two years before their date of separation. U.S. Government Accountability Office (2017), GAO-17-260, DOD Health: Actions Needed to Ensure Post-Traumatic Stress Disorder and Traumatic Brain Injury Are Considered in Misconduct Separations, https://www.gao.gov/assets/690/685052.pdf. Without the legal assistance to be provided through this Grant Program, these veterans may be unable to properly file the complete paperwork to have their discharge upgraded. Moreover, when provided in conjunction with VA healthcare, legal services for veterans have been found to decrease veterans' PTSD symptoms, reduce veteran spending on substance abuse, and improve mental health and housing stability. Tsai, J. et al. (2017), Medical-Legal Partnerships At Veterans Affairs Medical Centers Improved Housing and Psychosocial Outcomes For Vets, 36 Health Aff. no.12, 2195-2203.

As the White House-Department of Justice Legal Aid Interagency Roundtable found, when someone faces a civil legal problem, such as eviction, the denial of healthcare benefits, or unemployment, it can interact with other factors and affect an individual's long-term health. Access to Justice in the Age of COVID-19: A Roundtable Report (2021), https://www.justice.gov/ag/page/file/1445356/download. The Attorney General's memorandum issued on Veterans Day 2021 also noted that “leaving [Veterans'] legal needs unaddressed exacerbates the risks [they] already face—from housing instability to homelessness and from joblessness to suicide,” and called for ways to better meet veterans' legal needs which “may [ ] utilize new grant authorities that provide legal services for veterans”. Attorney General Memorandum—Guarding the Rights of and Improving Access to Justice for Veterans Servicemembers and Military Families (November 10, 2021), https://justice.gov/opa/page/file/1447636/download.

Through programs that expand and fund veterans' legal services, such as this Grant Program, VA and other organizations may be able to address destabilizing economic, social, and health inequities among this vulnerable population. See, Key Studies and Data about How Legal Aid Helps Veterans (March 23, 2021), The Justice in Government Project, https://legalaidresourcesdotorg.files.wordpress.com/2021/04/veterans.pdf. Legal services provided under this Grant Program will assist a veteran in obtaining and maintaining housing, obtaining and sustaining gainful and satisfying employment, and obtaining crucial medical care and compensation benefits, which have both indirect and direct impacts on housing stability, and overall health and well-being. Thus, it is critical that this Grant Program be implemented prior to notice and comment so that VA can provide funding to those entities that can assist homeless veterans and those veterans at risk for homelessness who have unaddressed needs for legal services, which may create barriers to housing stability, especially during the COVID-19 pandemic. Any additional delay in implementation caused by seeking and responding to public comments prior to implementation delays VA's ability to provide direct grant funding for critical legal services specifically for homeless veterans and veterans at risk for homelessness who may be especially vulnerable and in need of these legal services during, and as a result of, the COVID-19 pandemic. Providing notice and obtaining comment in advance of implementation would add a significant delay to an already lengthy implementation process and would exacerbate a growing and increasingly urgent problem.

Additionally, this rulemaking has not been without public input. VA reiterates that as described earlier in this document, VA sought and obtained such input through a consultation with several legal services organizations experienced in aiding homeless veterans and those at risk for homelessness, as required by the Act. These organizations provided information on the types of legal services to be covered, additional considerations in dealing with rural and tribal communities, and how to determine the effectiveness of the organizations once competitively selected, among other information. This input has been reviewed and incorporated, as appropriate, in this rulemaking.

For these reasons, the Secretary has concluded that ordinary notice and comment procedures would be contrary to the public interest and is accordingly issuing this rule as an interim final rule effective. The Secretary will consider and address comments that are received within 60 days after the date that this interim final rule is published in the Federal Register and address them in a subsequent Federal Register document announcing a final rule incorporating any changes made in response to the public comments.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Information and Regulatory Affairs has determined that this rule is not a significant regulatory action under Executive Order 12866. The Regulatory Impact Analysis associated with this rulemaking can be found as a supporting document at www.regulations.gov.

The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable to this rulemaking because notice of proposed rulemaking is not required. 5 U.S.C. 601(2), 603(a), 604(a).

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This interim final rule will have no such effect on State, local, and tribal governments, or on the private sector.

This interim final rule includes provisions constituting collections of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that require approval by the Office of Management and Budget (OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking action to OMB for review.

OMB assigns control numbers to collections of information it approves. VA may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Section 79.25 contains application provisions for legal services grants, including renewals. Section 79.75 contains provisions for program or budget changes and submission of corrective action plans. Section 79.95 contains grantee reporting requirements. These sections are collections of information under the Paperwork Reduction Act of 1995. If OMB does not approve the collections of information as requested, VA will immediately remove the provisions containing a collection of information or take such other action as is directed by OMB.

Comments on the new collection of information contained in this rulemaking should be submitted through www.regulations.gov. Comments should indicate that they are submitted in response to “RIN 2900-AR33—Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program” and should be sent within 30 days of publication of this rulemaking. The collection of information associated with this rulemaking can be viewed at: www.reginfo.gov/public/do/PRAMain.

A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication. This does not affect the deadline for the public to comment on the interim final rule.

The Department considers comments by the public on collections of information in—

• Evaluating whether the collections of information are necessary for the proper performance of the functions of the Department, including whether the information will have practical utility;

• Evaluating the accuracy of the Department's estimate of the burden of the collections of information, including the validity of the methodology and assumptions used;

• Enhancing the quality, usefulness, and clarity of the information to be collected; and

• Minimizing the burden of the collections of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

The collections of information contained in 38 CFR 79.25, 79.75, and 79.95 are described immediately following this paragraph, under their respective titles.

Title: Initial Applications for the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program.

OMB Control No: 2900-xxxx (New/TBD).

CFR Provision: 38 CFR Section 79.25.

• Summary of collection of information: The new collection of information in 38 CFR 79.25 contains application provisions for the Grant Program.

• Description of need for information and proposed use of information: This information is needed to award legal services grants to eligible entities.

• Description of likely respondents: Non-profit private and public legal service entities applying for grants.

• Estimated number of respondents per year: 100.

• Estimated frequency of responses: Once annually.

• Estimated average burden per response: 1,440 minutes.

• Estimated total annual reporting and recordkeeping burden: 2,400 hours.

• Estimated cost to respondents per year: VA estimates the annual cost to respondents to be $133,104.00. Using VA's average annual number of respondents, VA estimates the application information collection burden cost to be $133,104.00 per year*. (2,400 burden hours for respondents × $55.46 per hour).

Title: Grant Renewal Applications for the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program.

OMB Control No: 2900-xxxx (New/TBD).

CFR Provision: 38 CFR Section 79.25.

• Summary of collection of information: The new collection of information in 38 CFR 79.25 requires grantees who want renew their grant to file a renewal application.

• Description of need for information and proposed use of information: VA needs this information to renew legal services grants previously awarded.

• Description of likely respondents: Grant Program grantees seeking a renewal of funds.

• Estimated number of respondents: 75.

• Estimated frequency of responses: Once annually.

• Estimated average burden per response: 1,200 minutes.

• Estimated total annual reporting and recordkeeping burden: 1,500 hours.

• Estimated cost to respondents per year: VA estimates the annual cost to respondents to be $83,190.00. Using VA's average annual number of respondents, VA estimates the total information collection burden cost to be $83,109.00 per year*. (1500 burden hours for respondents × $55.46 per hour).

Title: Program or Budget Changes and Corrective Action Plans for the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program.

OMB Control No: 2900-xxxx (New/TBD).

CFR Provision: 38 CFR Section 79.75.

• Summary of collection of information: The new collection of information in 38 CFR 79.75 would require grantees to inform VA of changes to their approved program through an amendment process.

• Description of need for information and proposed use of information: This information is needed for a grantee to inform VA of significant changes that will alter a grant program approved by VA. In addition, VA may require grantees to initiate, develop and submit to VA for approval corrective action plans if, on a quarterly basis, actual legal services grant expenditures vary from the amount disbursed to a grantee for that same quarter or actual legal services grant activities vary from the grantee's program description provided in the grant agreement.

• Description of likely respondents: Grantees who desire to modify their approved grant program.

• Estimated number of respondents: 10.

• Estimated frequency of responses: Once annually.

• Estimated average burden per response: 120 minutes.

• Estimated total annual reporting and recordkeeping burden: 20 hours.

• Estimated cost to respondents per year: VA estimates the annual cost to respondents to be $1,109.20. Using VA's average annual number of respondents, VA estimates the total information collection burden cost to be $1,109.20 per year*. (20 burden hours for respondents × $55.46 per hour).

Title: Reporting Requirements for the Legal Services for Homeless Veterans and Veterans At-Risk for Homelessness Grant Program.

OMB Control No: 2900-xxxx (New/TBD).

CFR Provision: 38 CFR Section 79.95.

• Summary of collection of information: The new collection of information in 38 CFR 79.95 would require the grantee to submit reports pertaining to operational and cost effectiveness, fiscal responsibility, legal services grant agreement compliance, and legal and regulatory compliance.

• Description of need for information and proposed use of information: VA will use this information to determine grantee program effectiveness and compliance with the requirements for the Grant Program.

• Description of likely respondents: Program grantees for the current grant award year.

• Estimated number of respondents: 75.

• Estimated frequency of responses: Quarterly = 4 times per year.

• Estimated average burden per response: 30 minutes.

• Estimated total annual reporting and recordkeeping burden: 150 hours.

• Estimated cost to respondents per year: VA estimates the annual cost to respondents to be $8,319.00. Using VA's average annual number of respondents, VA estimates the total information collection burden cost to be $8,319.00 per year*. (150 burden hours for respondents × $55.46 per hour).

* The total information collection burden cost associated with this regulation is estimated to be $225,722.20.

The Assistance Listing number and title for the program affected by this document is 64.009, Veterans Medical Care Benefits.

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

Denis McDonough, Secretary of Veterans Affairs, approved this document on May 2, 2022, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.

On April 20, 2022, the Postal Service published a notice of proposed rulemaking (87 FR 23480-23482) to discontinue the Special Handling—Fragile extra service. The Postal Service did not receive any formal responses.

The Postal Service is discontinuing the Special Handling—Fragile extra service. An investigation revealed that operational procedures do not support the preferential handling of Special Handling—Fragile items.

The Postal Service continues to strive to build and maintain a loyal relationship with its customers and provide products and services with integrity. However, with the execution gaps that currently exist with Special Handling—Fragile, the Postal Service believes it is in the best interest to discontinue the Special Handling—Fragile extra service.

The decision to discontinue Special Handling—Fragile will not affect live animals tendered to the Postal Service as provided in Publication 52— Hazardous, Restricted, and Perishable Mail.

In addition, the Postal Service is revising the applicable Quick Service Guides (QSG), Price List (Notice 123), and Publication 52, to reflect this DMM revision.

We will publish an appropriate amendment to 39 CFR part 111 to reflect these changes.

Accordingly, 39 CFR part 111 is amended as follows:

Atlantic tunas fisheries are managed under the authority of ATCA (16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Act (16 U.S.C. 1801 et seq. ). The 2006 Consolidated Atlantic HMS Fishery Management Plan (2006 Consolidated HMS FMP) and its amendments are implemented by regulations at 50 CFR part 635. Section 635.27(a) divides the U.S. bluefin tuna quota recommended by ICCAT and as implemented by the United States among domestic fishing categories and provides the annual bluefin tuna quota adjustment process. Section 635.27(e) implements the ICCAT-recommended U.S. northern albacore quota and provides the annual northern albacore quota adjustment process.

Background information about the need to modify the baseline annual U.S. quota and subquotas for Atlantic bluefin tuna and the baseline annual U.S. northern albacore quota was provided in the preamble to the proposed rule (87 FR 12648, March 7, 2022) and most of that background information is not repeated here. The comment period for the proposed rule closed on April 6, 2022. NMFS received one written comment and did not receive any oral comments at a public webinar. The comment received, and the response to that comment, is summarized below in the Response to Comments section.

Consistent with the regulations regarding annual bluefin tuna and northern albacore quota adjustment, NMFS annually announces the addition of available underharvest, if any, to the bluefin tuna Reserve category and to the northern albacore quota in a Federal Register notice once catch (landings and dead discards) information is available. Preliminary data have become available to NMFS since publication of the proposed rule. These preliminary data do not necessarily represent the complete and quality-controlled catch data that will become available later in the year and that will be submitted to ICCAT for 2021. However, NMFS anticipates that any changes in the data as a result of this additional analysis would be minor and would not change the amount of allowable carryover into 2022 for either bluefin tuna or northern albacore. Notice of the quota adjustment for 2021 underharvest is included in this final rule to provide the regulated community with information about the adjusted quota balances.

NMFS has prepared an Environmental Assessment (EA), Regulatory Impact Review (RIR), and Final Regulatory Flexibility Analysis (FRFA), which analyze the anticipated environmental, social, and economic impacts of several alternatives for each of the major issues contained in this final rule. A summary of the analyses is provided below. The full list of alternatives and their analyses are provided in the final EA/RIR/FRFA and are not repeated here.

A copy of the final EA/RIR/FRFA prepared for this final rule is available from NMFS (see ADDRESSES ).

Under ICCAT Recommendation 21-07, adopted at the November 2021 ICCAT meeting, the annual U.S. bluefin tuna quota is 1,316.14 mt, plus 25 mt to account for bycatch related to pelagic longline fisheries in the Northeast Distant gear restricted area (NED), resulting in a total of 1,341.14 mt. The 1,316.14-mt quota is an increase of 68.28 mt (5.5 percent) from the 1,247.86-mt level established in the 2018 quota rule (83 FR 51391, October 11, 2018). All total allowable catch (TAC), quota, and weight information provided in this action are whole weight (ww) amounts.

This action implements the ICCAT-recommended quota of 1,341.14 mt, which would remain in effect until changed (for instance as a result of a new ICCAT bluefin tuna TAC and U.S. quota recommendation). The ICCAT-recommended bluefin tuna quota is divided among the established regulatory domestic bluefin tuna subquota categories. To calculate the subquotas under the existing regulations, 68 mt first is subtracted from the baseline annual U.S. bluefin tuna quota and allocated to the Longline category quota. This amount was first provided through Amendment 7 to the 2006 Consolidated HMS FMP to facilitate the category's ability to account for both landings and dead discards within the quota, consistent with the historical separate dead discard allocation. Second, the remaining quota is divided among the categories according to the following percentages: General—47.1 percent; Angling—19.7 percent; Harpoon—3.9 percent; Purse Seine—18.6 percent; Longline—8.1 percent (plus the 68-mt initial allocation); Trap—0.1 percent; and Reserve—2.5 percent. The resulting subquotas will be codified at § 635.27(a) when this final rule becomes effective and will remain in effect until changed. Within the bluefin tuna quota implemented in this action and consistent with the ICCAT-recommended limit on the harvest of school bluefin tuna (measuring 27 to less than 47 inches curved fork length), the school bluefin tuna subquota is 134.1 mt. The 25-mt NED allocation is in addition to these subquotas.

The table below shows the quotas and subquotas that result from applying this process, using the current subquota formula and regulations. In May 2021, NMFS published a proposed rule for Draft Amendment 13 to the 2006 Consolidated HMS FMP (86 FR 27686, May 21, 2021) that proposed modifications to the category quotas. At the time of this rulemaking, NMFS has not yet issued a final rule for Amendment 13, and the quotas and subquotas in Table 1 are not affected by Amendment 13 at this time.

In addition to the final measures, in the EA for this action, NMFS analyzed a no action alternative that would maintain the current U.S. annual bluefin tuna quota of 1,247.86 mt and the current subquotas. The EA for this action describes the impacts of the no action alternative and the preferred alternative finalized here.

Pursuant to §  635.27(a)(4), NMFS annually determines the amount of quota available to the Atlantic Tunas Purse Seine category participants, based on their bluefin tuna catch (landings and dead discards) in the prior year, and reallocates the remainder to the Reserve category. Because this action increases the U.S. baseline quota and subquotas, NMFS also recalculates the 2022 Purse Seine and Reserve category quotas in this final rule. NMFS previously announced that 55 mt were available to the Purse Seine category for 2022, and the amount of Purse Seine category quota to be reallocated to the Reserve category was 164.5 mt (219.5 mt less 55 mt available to the Purse Seine category) (87 FR 5737, February 2, 2022). To account for the ICCAT quota increase addressed in this rule, NMFS first adjusts the 2022 Purse Seine category quota to reflect the ICCAT quota increase. As a result, the baseline Purse Seine category quota initially increases by 12.7 mt to 232.2 mt. NMFS then recalculates the amounts of quota available to individual Purse Seine category participants for 2022 using the revised baseline Purse Seine category quota (232.2 mt). As a result of this recalculation, 58 mt are available overall for Purse Seine category participants in 2022, based on the cumulative amounts available to individual participants under the regulations at §  635.27(a)(4)(v). NMFS will notify Purse Seine category participants of the adjusted amount of quota available for their use in 2022 through the Individual Bluefin Quota (IBQ) electronic system and in writing.

The remaining 174.2 mt (232.2 mt less 58 mt available to the Purse Seine category) is added to the 2022 Reserve category quota. This final rule also increases the baseline annual Reserve category quota by 1.7 mt from 29.5 mt to 31.2 mt based on the ICCAT baseline quota increase and the existing Reserve category quota percentage. Thus, the recalculated 2022 Reserve category quota is: 29.5 mt (current baseline) + 1.7 mt (reflecting ICCAT baseline quota increase) + 174.2 mt (transfer to Reserve following Purse Seine adjustments reflecting ICCAT baseline quota increase), for a total of 205.4 mt. The 2022 Reserve category quota is further adjusted from this recalculated total as described below.

Consistent with the regulations regarding annual bluefin tuna quota adjustment at §  635.27(a), NMFS annually announces the addition of available underharvest, if any, to the bluefin tuna Reserve category, after catch information is available. Under ICCAT Recommendation 17-06, as implemented in the U.S. quota adjustment regulations at § 635.27(a)(10), the maximum underharvest that a Contracting Party may carry forward from one year to the next is 10 percent of its initial catch quota, which, for the United States, was 127.29 mt for 2021 (10 percent of 1,272.86 mt).

For 2022, NMFS is carrying forward the full, allowable 127.29 mt. In 2021, the adjusted bluefin tuna quota was 1,400.15 mt (baseline quota of 1,272.86 mt + 127.29 mt of 2020 underharvest carried over to 2021 (86 FR 54659, October 4, 2021)). The total 2021 bluefin tuna catch, including landings and dead discards, was 1,184.5 mt, which is an underharvest of 215.65 mt from the 2021 adjusted quota and which exceeds the allowable carryover of 127.29 mt. When carrying over underharvest from one year to the next, NMFS uses the underharvest to augment the bluefin tuna Reserve category quota. Thus, for 2022, NMFS augments the Reserve category quota with the allowable carryover of 127.29 mt.

Effective January 28, 2022, NMFS transferred 26 mt of Reserve category quota to the General category (87 FR 5737, February 2, 2022). Thus, the adjusted 2022 Reserve category quota as of the effective date of this action is: 29.5 mt (current baseline) + 1.7 mt (reflecting ICCAT baseline quota increase) + 174.2 mt (transfer to Reserve following Purse Seine adjustments reflecting ICCAT baseline quota increase)−26 mt (January quota transfer) + 127.29 mt (underharvest carryover in this action), for a total of 306.69 mt.

Although an increase in the U.S. northern albacore quota to 711.5 mt was recommended for 2021 in ICCAT Recommendation 20-04, NMFS did not codify the quota increase at that time due to the low level of northern albacore landings compared to the baseline quota, as described in the rule to adjust the 2021 northern albacore, swordfish, and bluefin tuna Reserve category quotas (86 FR 54659, October 4, 2021).

At its 2021 annual meeting, under Recommendation 21-04, ICCAT adopted a management procedure for northern albacore and maintained the 711.5-mt U.S. northern albacore quota for 2022 and 2023. Accordingly, this action modifies the baseline annual U.S. northern albacore quota from 632.4 mt, as established in the 2018 quota rule, to 711.5 mt. The associated EA for this action also analyzes the effects of three-year annual quotas of up to 950 mt, where the quota is set through application of the harvest control rule within Recommendation 21-04's northern albacore management procedure. This level of 950 mt is derived from the maximum allowable catch limit recommended in the northern albacore management procedure. The maximum catch limit of 50,000 mt represents an increase of approximately 32 percent over the current TAC of 37,801 mt. Assuming the portion of the overall quota allocated to the United States remains the same in future years under the management procedure, such an increase would result in a maximum annual baseline U.S. quota of 950 mt. This analysis anticipates that NMFS would implement U.S. northern albacore quotas as recommended by ICCAT in accordance with the management procedure, up to the analyzed maximum baseline quota of 950 mt. The baseline quota would remain at 711.5 mt annually until changed by ICCAT. NMFS anticipates implementing any new baseline quotas through final rulemaking, assuming no new management measures are adopted or other relevant changes in circumstances occur. Additionally, consistent with current practice, NMFS annually would provide notice to the public in the Federal Register of the baseline northern albacore quota with any annual adjustments as allowable for over- and underharvest, as appropriate. NMFS would evaluate the need for any additional environmental analyses or for proposed and final rulemaking when a new quota is adopted by ICCAT and implemented by NMFS.

In addition to the final measures, in the EA for this action, NMFS analyzed a no action alternative that would maintain the current U.S. annual northern albacore quota of 632.4 mt, as well as an alternative that would implement the ICCAT-recommended 711.5-mt U.S. annual northern albacore quota without considering a maximum quota under the northern albacore management procedure. The EA for this action describes the impacts of these two alternatives and the preferred alternative finalized here.

Consistent with regulations at §  635.27(e), NMFS adjusts the U.S. annual northern albacore quota for allowable underharvest, if any, in the previous year. NMFS makes such adjustments consistent with ICCAT carryover limits when catch information for the prior year is available. Under ICCAT Recommendation 21-04, the maximum underharvest that a Contracting Party may carry forward from one year to the next is 25 percent of its initial catch quota, which, relevant to 2022, would be 177.9 mt for the United States (25 percent of 711.5 mt under Recommendation 20-04).

In 2021, the adjusted northern albacore quota was 790.5 mt (baseline quota of 632.4 mt plus 158.1 mt of 2020 underharvest carried forward to 2021, based on 25 percent of the 632.4-mt quota in place for 2020) (86 FR 54659, October 4, 2021). The total 2021 northern albacore landings were 272 mt, which is an underharvest of 518.5 mt of the 2021 adjusted quota. Of this underharvest, 177.9 mt may be carried forward to the 2022 fishing year. Thus, the adjusted 2022 northern albacore quota is 711.5 mt plus 177.9 mt, for a total of 889.4 mt.

Written comments can be found at www.regulations.gov by searching for NOAA-NMFS-2022-0024. Below, NMFS summarizes and responds to the comment made specifically on the proposed rule during the comment period.

Comment 1: A commenter suggested that, for conservation reasons, NMFS should reduce rather than increase the northern albacore and bluefin tuna overall quotas.

Response: The western Atlantic bluefin tuna TAC adopted by ICCAT is consistent with the advice of ICCAT's scientific body, the Standing Committee on Research and Statistics (SCRS). For management in 2022 under an interim conservation and management plan, ICCAT identified the selected TAC as precautionary, based on the results of the 2021 stock assessment, and as one that prevents overfishing with a high probability, prioritizes continued stock growth, including into the long-term, and ensures relative stability by avoiding a large fluctuation in catches. The northern albacore TAC resulted from the harvest control rule and management procedure adopted by ICCAT. The harvest control rule, management procedure, and resultant TAC support ICCAT's management objectives for the northern albacore stock, including to maintain the stock in the green quadrant of the Kobe plot ( i.e., not overfished and not undergoing overfishing), with at least a 60-percent probability, while maximizing long-term yield from the fishery. NMFS has determined that implementing the U.S. bluefin tuna and northern albacore baseline quotas is consistent with the ICCAT recommendations and NMFS' conservation and management obligations under the Magnuson-Stevens Act and ATCA to provide a reasonable opportunity to harvest the ICCAT-recommended quotas. Furthermore, ATCA prohibits NMFS from taking an action that “may have the effect of increasing or decreasing any allocation or quota of fish or fishing mortality level” set by ICCAT. 16 U.S.C. 971d(c)(3). NMFS is committed to the sustainable, science-based management of bluefin tuna and northern albacore, and is supportive of ICCAT's work toward adopting stock management recommendations using a management procedure for bluefin tuna, which ICCAT has recommended and has been adopted for northern albacore, to manage fisheries more effectively in the face of identified uncertainties. Reducing the quotas for either stock is not warranted from a conservation and management perspective.

NMFS is issuing this rule pursuant to section 305(d) of the Magnuson-Stevens Act. The NMFS Assistant Administrator has determined that the final rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, ATCA, and other applicable law.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

This final rule contains no information collection requirements under the Paperwork Reduction Act of 1995.

A Final Regulatory Flexibility Analysis (FRFA) was prepared for this rule. The FRFA incorporates the initial regulatory flexibility analysis (IRFA), a summary of the significant issues raised by the public comments in response to the IRFA, NMFS' responses to those comments, and a summary of the analyses completed to support the action. The full FRFA is available from NMFS (see ADDRESSES ). A summary is provided below.

Section 604(a)(1) of the Regulatory Flexibility Act (RFA) requires Agencies to state the need for, and objective of, the final action. The purpose of this rulemaking is, consistent with the 2006 Consolidated HMS FMP objectives, the Magnuson-Stevens Act, ATCA, and other applicable laws, to analyze the impacts of the alternatives for implementing the ICCAT-recommended U.S. bluefin tuna and northern albacore quotas and allocating the bluefin tuna quota per the codified quota regulations. The objective of this rulemaking is to implement ICCAT recommendations consistent with ATCA and achieve domestic management objectives under the Magnuson-Stevens Act. See Section 1 of the EA for a full description of the need for and objectives of the final rule.

Section 604(a)(2) of the RFA requires a summary of significant issues raised by the public in response to the IRFA, a summary of the agency's assessment of such issues, and a statement of any changes made as a result of the comments. NMFS received one comment on the proposed rule during the comment period. A summary of that comment and the Agency's response are described above. That comment did not refer to the IRFA or the economic impacts of the rule.

Section 604(a)(3) of the RFA requires the response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the SBA comments. NMFS did not receive comments from the Chief Counsel for Advocacy of the SBA in response to the proposed rule.

Section 604(a)(4) of the RFA requires Agencies to provide descriptions of, and where feasible, an estimate of the number of small entities to which the rule would apply. NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (NAICS 11411) for RFA compliance purposes. The Small Business Administration (SBA) has established size standards for all other major industry sectors in the United States, including the scenic and sightseeing transportation (water) sector (NAICS code 487210), which includes for-hire (charter/party boat) fishing entities. The SBA has defined a small entity under the scenic and sightseeing transportation (water) sector as one with average annual receipts (revenue) of less than $8.0 million.

NMFS considers all HMS permit holders, both commercial and for-hire, to be small entities because they had average annual receipts of less than their respective sector's standard of $11 million and $8 million. Regarding those entities that would be directly affected by the preferred alternatives, the average annual revenue per active pelagic longline vessel is estimated to be $202,000, based on approximately 90 active vessels that in total produced an estimated $18.2 million in revenue in 2020, well below the NMFS small business size standard for commercial fishing businesses of $11 million. No single pelagic longline vessel has exceeded $11 million in revenue in recent years.

Other non-longline HMS commercial fishing vessels typically earn less revenue than pelagic longline vessels and, thus, would also be considered small entities. Based on 2021 permit information, NMFS predicts that the preferred alternatives would apply to the following numbers of non-pelagic longline permit holders that fish commercially or engage in commercial activities: 2,730 General category, 4,055 Charter/Headboat, 35 Harpoon category, and 34 seafood dealers that purchase bluefin tuna and northern albacore. There are no Purse Seine category permits issued currently; however there are five historical participants in the purse seine fishery that are allocated some portion of the category's available bluefin tuna quota under regulations adopted in 2015. These participants may lease that quota to other category participants or pelagic longline vessels through the Individual Bluefin Quota (IBQ) leasing program.

NMFS has determined that the preferred alternatives would not likely directly affect any small organizations or small government jurisdictions defined under RFA, nor would there be disproportionate economic impacts between large and small entities.

This action would apply to all participants in the Atlantic tuna fisheries, i.e., to the over 7,000 permit holders that held an Atlantic HMS Charter/Headboat or an Atlantic Tunas permit as of October 2021. This final rule is expected to directly affect commercial and for-hire fishing vessels that possess an Atlantic Tunas permit or Atlantic HMS Charter/Headboat permit. It is unknown what portion of HMS Charter/Headboat permit holders actively participate in the bluefin tuna and northern albacore fisheries or provide fishing services for recreational anglers. As summarized in the 2021 SAFE Report for Atlantic HMS, there were 7,104 commercial Atlantic tunas or Atlantic HMS permits in 2021, categorized as follows: 2,730 in the Atlantic Tunas General category; 35 in the Atlantic Tunas Harpoon category; 284 in the Atlantic Tunas Longline category; 2 in the Atlantic Tunas Trap category; and 4,055 in the HMS Charter/Headboat category. The 90 active pelagic longline vessels described above are a subset of the 284 Atlantic Tunas Longline permits issued, 136 of which received IBQ shares. This constitutes the best available information regarding the universe of permits and permit holders recently analyzed. NMFS has determined that this action would not likely directly affect any small government jurisdictions defined under the RFA.

Section 604(a)(5) of the RFA requires agencies to describe any new reporting, record-keeping, and other compliance requirements. This action does not contain any new collection of information, reporting, or record-keeping requirements.

Section 604(a)(6) of the RFA requires Agencies to describe the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

This rulemaking implements the recently adopted ICCAT-recommended U.S. bluefin tuna and northern albacore quotas and, for bluefin tuna, applies the allocations for each quota category per the codified quota regulations. This action would be consistent with ATCA, under which the Secretary promulgates regulations as necessary to implement binding ICCAT recommendations.

As described below, NMFS analyzed several different alternatives in this rulemaking and provides rationales for identifying the preferred alternatives to achieve the desired objectives. The FRFA assumes that each permit holder will have similar catch and gross revenues to show the relative impact of the final action on permit holders.

For bluefin tuna, NMFS analyzed a no action alternative, Alternative A1, which would maintain the current U.S. annual bluefin tuna quota of 1,247.86 mt and the current subquotas. NMFS also analyzed Alternative A2, the preferred alternative, which would increase the U.S. annual bluefin tuna quota, as described below.

NMFS has estimated the average impact of establishing the increased annual U.S. baseline bluefin tuna quota for all domestic quota categories under the preferred alternative on individual categories and the permit holders within those categories. As mentioned above, the 2021 bluefin tuna ICCAT recommendation increased the annual U.S. baseline bluefin tuna quota for 1,316.14 mt and continues to provide 25 mt annually for incidental catch of bluefin tuna related to directed longline fisheries in the NED. The annual U.S. baseline bluefin tuna subquotas would be adjusted consistent with the process ( i.e., the formulas) established in Amendment 7 and as codified in the quota regulations (as shown in Table 1), and these amounts (in mt) would be codified. In May 2021, NMFS published a proposed rule for Draft Amendment 13 to the 2006 Consolidated HMS FMP (86 FR 27686, May 21, 2021) that proposed modifications to the category quotas. At the time of this rulemaking, NMFS has not yet issued a final rule for Amendment 13, and Amendment 13 does not affect the measures in this action.

To calculate the average ex-vessel bluefin tuna revenues under this action, NMFS first estimated potential category-wide revenues. The most recent ex-vessel average price per pound information for each commercial quota category is used to estimate potential ex-vessel gross revenues under the subquotas in this action ( i.e., 2021 prices for the General, Harpoon, Longline/Trap categories, and 2015 prices for the Purse Seine category). The baseline subquotas in this action could result in estimated gross revenues of $12.3 million annually, if fully utilized. Note that in recent years, the Purse Seine category has not landed any bluefin tuna and has therefore been distributed 25 percent of the Purse Seine category quota. The remaining 75 percent of the Purse Seine category quota has been transferred to the Reserve category, which typically is then transferred to the General category. (This is a simplification for the purposes of this analysis. Reserve category quota can be transferred to any other category after consideration of regulatory criteria). The Purse Seine category quota distributed to participants is available for leasing to Atlantic Tunas Longline permit holders under the IBQ Program. The following quota category amounts assume the 174.2 mt is transferred to the General category (75 percent of the purse seine quota) and 58.1 mt is leased to the pelagic longline fishery (25 percent of the purse seine quota). Potential revenues for each category are as follows: General category: $9.3 million (762.1 mt multiplied by $5.55/lb); Harpoon category: $660,289 (48.7 mt multiplied by $6.15/lb); Purse Seine category: $0 million (0 mt multiplied by $3.21/lb); Longline category: $2.3 million (227.2 mt multiplied by $4.52/lb); and Trap category: $10,556 (1.2 mt multiplied by $3.99/lb).

Using the above methodology, the current baseline subquotas under Alternative A1 could result in estimated gross revenues of $11.6 million annually, if fully utilized. The following quota category amounts assume the 164.5 mt is transferred to the General category (75 percent of the purse seine quota) and 55 mt is leased to the pelagic longline fishery (25 percent of the purse seine quota). Potential revenues for each category are as follows: General category: $8.8 million (720.2 mt multiplied by $5.55/lb); Harpoon category: $623,690 (46 mt multiplied by $6.15/lb); Purse Seine category: $0 (0 mt multiplied by $3.21/lb); Longline category: $2.2 million (218.6 mt multiplied by $4.52/lb); and Trap category: $10,556 (1.2 mt multiplied by $3.99/lb). Note that these revenues are likely an underestimation for the General and Harpoon categories, which typically receive additional quota from the Reserve category ( i.e., from the baseline Reserve subquota, and from the up to 10 percent of the U.S. baseline quota that could be carried forward from the previous year's underharvest). These revenues are likely an overestimation for the Longline and Trap categories, which do not typically land their entire quotas allocated for incidental bluefin tuna catch. For comparison to these revenue estimations, in 2021, gross revenues were approximately $12.0 million, broken out by category as follows: $10.5 million for the General category, $755,924 for the Harpoon category, $0 for the Purse Seine category, $753,067 for the Longline category, and $0 for the Trap category.

No affected entities would be expected to experience negative economic impacts as a result of this action. On the contrary, each of the bluefin tuna quota categories would increase relative to the baseline quotas that applied in prior years, and thus economic impacts would be expected to be positive.

To estimate the potential average ex-vessel revenues for each permit holder that could result from this action for bluefin tuna, NMFS divided the potential annual gross revenues for the General, Harpoon, Purse Seine, and Trap categories by the number of permit holders. For the Longline category, NMFS divided the potential annual gross revenues by the number of permit holders that are IBQ share recipients. This is an appropriate approach for bluefin tuna fisheries, in particular, because available landings data (weight and ex-vessel value of the fish in price-per-pound) allow NMFS to calculate the gross revenue earned by a permit holder on a successful trip. The available data (particularly from non-Longline permit holders) do not, however, allow NMFS to calculate the effort and cost associated with each successful trip ( e.g., the cost of gas, bait, ice, etc.), so net revenue for each permit holder cannot be calculated. As a result, NMFS analyzes the average impact of the alternatives among all permit holders in each category using gross revenues. The potential annual gross revenues reflect the analysis above, in which the Purse Seine category quota was divided among the General and Longline categories.

Success rates for catching and landing bluefin tuna vary widely across permit holders in each category (due to extent of vessel effort and availability of commercial-sized bluefin tuna to permit holders where they fish), but for the sake of estimating potential revenues per permit holder, category-wide revenues can be divided by the number of permits in each category. For the Longline fishery, category-wide revenue is divided by the number of permits that received IBQ shares to determine potential revenue per the 136 permit holders that are IBQ share recipients, as indicated below, and actual revenues would depend, in part, on each permit holder's IBQ in 2022. It is unknown what portion of HMS Charter/Headboat permit holders actively participate in the bluefin tuna fishery. HMS Charter/Headboat vessels may fish commercially under the General category quota and retention limits. Therefore, NMFS is estimating potential General category ex-vessel revenue changes using the number of General category permit holders only.

Considering the number of permit holders and estimated gross revenues listed above, under the current subquotas, estimated potential 2022 bluefin tuna revenues on a per permit holder basis under Alternative A1, the no action alternative, could be $3,228 for the General category permit holders; $17,819 for the Harpoon category permit holders; $0 for the Purse Seine category (no active vessels); $16,010 for the Longline category (using 136 IBQ share recipients); and $5,279 for the Trap category permit holders. Considering the number of permit holders and estimated gross revenues listed above and the subquotas in this action, estimated potential 2022 bluefin tuna revenues on a per permit holder basis under the preferred alternative could be $3,407 for the General category permit holders; $18,865 for the Harpoon category permit holders; $0 for the Purse Seine category (no active vessels); $16,912 for the Longline category (using 136 IBQ share recipients); and $5,279 for the Trap category permit holders.

As noted above, there are no active purse seine vessels landing bluefin tuna, but Purse Seine category participants do lease bluefin tuna quota to Atlantic Tunas Longline permit holders through the IBQ Program system. As described in the FEIS for Amendment 13, the recent lease price for Purse Seine category quota is $1.08-$1.25/lb. Under Alternative A1, if the full 55 mt of Purse Seine quota were leased to the Longline category at $1.25/lb, revenue for Purse Seine category participants would be $151,568, or $30,314 per participant ($151,568 divided by 5 participants). Under Alternative A2, if the full 58.1 mt of Purse Seine quota were leased to the Longline category, revenue for Purse Seine category participants would be $160,111, or $32,022 per participant.

Because the directed commercial categories have underharvested their subquotas in recent years, the potential increases in ex-vessel revenues under both alternatives likely overestimate the probable economic impacts to permit holders in those categories relative to recent conditions. Additionally, there has been substantial interannual variability in ex-vessel revenues in each category in recent years, due to recent changes in bluefin tuna availability and other factors. Overall, because the U.S. quota has not been fully harvested in recent years and because the increase in quota under Alternative A2 is relatively minor, the expected economic impacts on individual permit holders as a result of this action is minor.

For northern albacore, NMFS analyzed three alternatives. Alternative B1, the no action alternative, would maintain the current U.S. baseline northern albacore quota of 632.4 mt. Alternative B2 would implement the 2021 northern albacore ICCAT recommendation that increased the annual U.S. baseline northern albacore quota to 711.5 mt. Alternative B3 would implement the 2021 ICCAT recommendation for northern albacore by establishing an annual baseline quota of 711.5 mt (the same level as in Alternative B2 for 2022) and would analyze and anticipate implementation of subsequent annual quotas set consistent with the management procedure's harvest control rule, with a maximum of 950 mt, consistent with the process set out in Recommendation 21-04. This quota would be adjusted annually for overharvest and underharvest consistent with existing regulations and ICCAT recommendations.

NMFS does not subdivide the U.S. northern albacore quota into category subquotas. The most recent ex-vessel average price per pound information is used to estimate potential ex-vessel gross revenues. Potential annual gross revenues are divided by the total number of Atlantic tunas or Atlantic HMS permit holders that are authorized to retain and sell northern albacore, however, note that not all permit holders will sell northern albacore each year. As described for bluefin tuna, this analysis excludes HMS Charter/Headboat permit holders and includes the 136 Atlantic Tunas Longline permit holders that received IBQ shares. In addition, Trap category permit holders cannot retain northern albacore. The total number of permit holders that would potentially land northern albacore is 2,901 (2,730 in the Atlantic Tunas General category; 35 in the Atlantic Tunas Harpoon category; 136 in the Atlantic Tunas Longline category (IBQ share recipients)). If the entire quota is harvested under Alternative B1, the no action alternative, estimated annual gross revenues would be $1.75 million (632.4 mt ww/1.25 multiplied by $1.57/lb dressed weight (dw)) and average annual revenue across all permit holders would be $604 ($1.75 million divided by 2,901 permit holders). If the entire quota is harvested under Alternative B2, estimated annual gross revenues would be $1.97 million (711.5 mt ww/1.25 multiplied by $1.57/lb dw) and average annual revenue across all permit holders would be $679 ($1.97 million divided by 2,901 permit holders). If the entire maximum quota is harvested under Alternative B3, the preferred alternative, estimated annual gross revenues would be $2.63 million (950 mt ww/1.25 multiplied by $1.57/lb dw) and average annual revenue across all permit holders would be $907 ($2.63 million divided by 2,901 permit holders). In the short-term, Alternative B3 would set the same quota and produce the same estimated revenue as Alternative B2.

Because the directed commercial fishery has underharvested the quota in recent years, the potential increases in ex-vessel revenues under the three analyzed alternatives likely overestimate the probable economic impacts relative to recent conditions. Additionally, there has been substantial interannual variability in ex-vessel revenues in recent years, due to recent changes in northern albacore availability and other factors. Overall, because the U.S. quota has not been fully harvested in recent years and because the increase in quota under Alternative B3 is relatively minor, the expected economic impacts on individual permit holders as a result of this action is minor.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a web page that also serves as small entity compliance guide (the guide) was prepared. This final rule and the guide are available on the HMS Management Division website at https://www.fisheries.noaa.gov/action/changes-atlantic-bluefin-tuna-and-north-atlantic-albacore-quotas-proposed or by contacting Carrie Soltanoff at carrie.soltanoff@noaa.gov or 301-427-8503.

For the reasons set out in the preamble, 50 CFR part 635 is amended as follows:

Atlantic HMS fisheries, including BFT fisheries, are managed under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ). The 2006 Consolidated Atlantic HMS Fishery Management Plan (2006 Consolidated HMS FMP) and its amendments are implemented by regulations at 50 CFR part 635. Section 635.27 divides the U.S. BFT quota, recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) and as implemented by the United States, among the various domestic fishing categories per the allocations established in the 2006 Consolidated HMS FMP and its amendments. Section 635.23 specifies the retention limit provisions for Atlantic Tunas General category permitted vessels and HMS Charter/Headboat permitted vessels, including regarding RFDs.

Specific information regarding RFDs, request for comments, and the current U.S. quota and General category subquotas, was provided in the preamble to the proposed rule (87 FR 12643, March 7, 2022) and is not repeated here.

As described in the proposed rule, NMFS is undertaking this rulemaking to address and avoid repetition of certain issues that affected the General category BFT fishery in 2020 and earlier and could recur without additional action. Those issues include the shortened time to fish under the General category subquotas that occurs when the quota is filled quickly, increasing numbers of BFT that are landed but not sold to dealers because of market gluts, and the resulting decreased price of BFT. Because the use of RFDs in 2021 succeeded in extending fishing opportunities through a greater portion of the relevant subquota periods and the fishing season overall, consistent with management objectives for the fishery, NMFS proposed an RFD schedule for the 2022 fishing year.

The comment period for the proposed rule closed on April 6, 2022. NMFS received 19 written comments, including comments from commercial and recreational fishermen, Atlantic tuna dealers, and the general public, as well as oral comments at a public hearing held by webinar. The comments received, and responses to those comments, are summarized below in the Response to Comments section.

After considering public comments on the proposed rule in light of the management goals of this action, NMFS is finalizing the 2022 RFD schedule as proposed. As described below, no changes are made from the proposed rule. Implementing this RFD schedule, with the ability to waive scheduled RFDs, should slow the rate of landings and provide available quota throughout a longer duration of the General category subquota periods while providing reasonable fishing opportunities, including some fishing tournament opportunities, for all General category participants.

Specifically, NMFS sets RFDs for the 2022 fishing year on the following days: All Tuesdays, Fridays, and Saturdays from July 1 through November 30, 2022. On an RFD, vessels permitted in the Atlantic Tunas General category are prohibited from fishing for (including catch-and-release and tag-and-release fishing), possessing, retaining, landing, or selling BFT (§ 635.23(a)(2)). RFDs also apply to HMS Charter/Headboat permitted vessels to preclude fishing commercially under General category restrictions and retention limits on those days, but do not preclude such vessels from recreational fishing activity under applicable Angling category regulations and size classes, and they may participate in including catch-and-release and tag-and-release fishing (§ 635.23(c)(3)).

NMFS may waive previously scheduled RFDs under certain circumstances. Consistent with § 635.23(a)(4), NMFS may waive an RFD by adjusting the daily BFT retention limit from zero up to five on specified RFDs, after considering the inseason adjustment determination criteria at § 635.27(a)(8). Considerations include, among other things, review of dealer reports, daily landing trends, and the availability of BFT on fishing grounds. NMFS will announce any such waiver by filing a retention limit adjustment with the Office of the Federal Register for publication. Such adjustments will be effective no less than 3 calendar days after the date of filing for public inspection with the Office of the Federal Register. NMFS also may waive previously designated RFDs effective upon closure of the General category fishery so that persons aboard vessels permitted in the General category may conduct only catch-and-release or tag-and-release fishing for BFT under § 635.26(a). NMFS will not modify the previously scheduled RFDs during the fishing year in other ways (such as changing an RFD from one date to another, or adding RFDs) other than waiving designated RFDs based on the circumstances described above.

All written comments can be found at www.regulations.gov by searching for NOAA-NMFS-2022-0025. NMFS received approximately 19 comments orally at public hearings and in writing from General category fishermen, charter/headboat fishermen, tournament operators, and others from the public. Commenters both supported and opposed General category RFDs for the 2022 fishing year. Below, NMFS summarizes and responds to all comments made specifically on the proposed rule during the comment period.

Comment 1: Most commenters supporting RFDs noted that RFDs should lengthen the General category season within the subquota periods and the season overall.

Response: NMFS agrees that RFDs should lengthen the General category season within the subquota periods and the season overall. The primary objective of this action is to slow the harvest rate of BFT in order to extend the period of time that the fishery remains open, allowing fishing opportunities later in the season.

Comment 2: Some commenters supporting RFDs noted that there may be more reliance on domestic markets this year given that global markets and economies are still stabilizing, as well as due to the anticipated increase in shipping costs due to fuel prices. Other commenters expressed that RFDs were unnecessary given the impacts of COVID-19 on the recovery of domestic and international markets.

Response: NMFS considered economic factors and past and present market conditions and economies in the proposed rule. NMFS acknowledges the unique global impacts of COVID-19 and the challenges that could be experienced as domestic and international markets recover and given higher fuel prices; however, NMFS observed the issues that contributed to the need for this action for several years, and those issues were exacerbated in both 2019 and 2020. Specifically, over the past several years, landings have been highest from mid-August through November, contributing to derby-like conditions and market gluts, shortening the time it takes to fill relevant subquotas, and resulting in inseason closures earlier than desired. In 2021, NMFS established a schedule of RFDs from September through November. Because the use of RFDs in 2021 succeeded in extending fishing opportunities through a greater portion of the relevant subquota periods and the fishing season overall, consistent with management objectives for the fishery, NMFS proposed an RFD schedule for the 2022 fishing year.

Comment 3: Some commenters expressed concern that the proposed rule seemed to be economic in nature and would negatively impact General category participants.

Response: As discussed in response to Comment 2, above, NMFS considered economic factors in developing the proposed rule for this action, but the primary purpose of the action is not solely economic in nature. Rather, the rule is designed to lengthen the General category season within the subquota periods and the season overall. Considering all relevant information, NMFS concluded that RFDs should help prevent large numbers of BFT from entering the market at the same time, which could potentially alleviate some negative economic impacts experienced by General category and Charter/Headboat permitted fishermen who could not find buyers for their BFT (as did the 2021 RFD rule).

NMFS acknowledges the unique global impacts of COVID-19 and the challenges that could be experienced due to rising fuel prices and recovering domestic and international markets. The issues that contributed to the need for this action were occurring for several years, however, not only as a result of COVID-19 market effects, although those issues were exacerbated in both 2019 and 2020. Specifically, over the past several years, landings have been highest from mid-August through November, contributing to derby-like conditions and market gluts, shortening the time it takes to fill relevant subquotas, and resulting in inseason closures earlier than desired. In 2021, NMFS established a schedule of RFDs from September through November. Because the use of RFDs in 2021 succeeded in extending fishing opportunities through a greater portion of the relevant subquota periods and the fishing season overall, consistent with management objectives for the fishery, NMFS proposed an RFD schedule for the 2022 fishing year.

Comment 4: Some commenters opposing RFDs expressed concerns that RFDs could result in safety-at-sea concerns and could have negative impacts given fuel prices.

Response: Overall, NMFS believes that by spreading out fishing effort over a longer period of time, safety-at-sea issues should decrease, as the conditions that encourage derby-like behavior would be diminished. NMFS recognizes that the weather is unpredictable, particularly in the second half of October and early November, and that poor weather may limit participation without the need for additional RFDs during this part of the season. Should BFT landings and catch rates merit waiving RFDs, NMFS could adjust the daily retention limit on waived days with a minimum 3-day notification to fishermen, by filing such an adjustment in the Federal Register , under § 635.23(a)(4).

Comment 5: NMFS received comments both supporting the proposed Tuesday, Friday, and Saturday schedule of RFDs, and opposing the proposed schedule. Some commenters suggested modifications to the proposed schedule, including implementing RFDs starting June 1, 2022, and/or avoiding weekends. One commenter objected to the proposed RFD schedule while also suggesting a weekly RFD schedule of Tuesday, Friday, and Sunday. Some commenters supported the proposed schedule of RFDs starting on July 1, 2022.

Response: NMFS' proposed schedule of RFDs was based on a review of average daily catch rate data for recent years, a review of past years' RFD schedules (including the 2021 RFD schedule) and how they worked to extend the use of the General category quota, and input from General category participants, Atlantic tuna dealers, and members of the HMS Advisory Panel. The Tuesday, Friday, and Saturday RFD schedule allows for two-consecutive-day periods twice each week (Sunday-Monday; Wednesday-Thursday) for General category and Charter/Headboat permitted vessels with a commercial sale endorsement to fish for and sell BFT. NMFS believes that two-consecutive-day periods twice each week would allow BFT products to move through the market while also allowing some commercial fishing activity to occur each weekend ( i.e., Sundays). NMFS acknowledges that Sunday (similar to Friday and Saturday) is a high catch and landing day. However, NMFS believes that setting Sunday as an RFD instead of Saturday would not meet the objective of this rulemaking as it would not allow adequate time for fish products to move through the market and would continue the increasing trend of BFT landed by General category participants that could not be sold, as occurred from 2018 through 2020.

NMFS disagrees that RFDs should start on June 1, 2022, as catch and landings rates are generally slow at the beginning of the June. NMFS is setting RFDs starting on July 1, 2022, as proposed, when catch and landing rates begin to substantially increase, resulting in General category subquotas being met and closures of applicable General category subquota periods. NMFS believes that this schedule of RFDs should increase the likelihood of pacing General category landings to extend fishing opportunities through a greater portion of the subquota periods (similar to the 2021 RFD schedule).

Comment 6: NMFS received comments, from both those in support of and opposed to RFDs, regarding the potential negative impacts of RFDs on BFT fishing tournaments. These commenters noted the economic importance of fishing tournaments on local economies. One commenter noted the negative impact that RFDs would have on fishing tournaments but suggested that NMFS maintain the proposed RFD schedule, i.e., Tuesday, Friday, and Saturday RFDs beginning July 1, 2022, noting that many fishing tournaments have established their dates based around the proposed schedule. One commenter noted that RFDs did not negatively impact their fishing tournament in 2021.

Response: NMFS acknowledges that RFDs that occur on a tournament date may affect BFT fishing at those tournaments, since some tournament participants are General category permit holders and are prohibited from fishing for BFT on RFDs. However, on an RFD, General category permit holders may still participate in non-BFT fishing during the tournament, and may land sharks, swordfish, billfish, and/or bigeye, albacore, yellowfin, and skipjack tunas recreationally as otherwise allowed. Additionally, on an RFD, Charter/Headboat-permitted vessels may participate recreationally in HMS fishing tournaments, including for BFT, under the applicable Angling category restrictions and size class limits. Under the current regulations, tournament operators are required to register their tournament with NMFS at least four weeks prior to the start of the tournament. Given past scheduled tournaments from July through November and the tournaments that have registered already for this year, NMFS anticipates or has been notified of several fishing tournaments that will likely include BFT. Should a tournament change its dates of operation, NMFS encourages tournament operators to contact NMFS to update the dates for which their tournament is registered. NMFS does not plan to waive RFDs specifically and solely to accommodate tournaments as doing so could eliminate the benefits of RFDs by allowing General category and Charter/Headboat permitted vessels with a commercial sale endorsement the opportunity to land and sell commercial size BFT on those scheduled RFD dates. NMFS will closely monitor BFT landings and catch rates and, based on that information, NMFS will consider waiving RFDs if BFT landings and catches indicate that such action is warranted, after taking into consideration the inseason adjustment determination criteria at § 635.27(a)(8). This would include, among other things, review of dealer reports, daily landing trends, and the availability of BFT on fishing grounds. NMFS could waive an RFD by adjusting the daily retention limits with a minimum 3-day notification to fishermen, by filing such an adjustment in the Federal Register , under § 635.23(a)(4).

Comment 7: NMFS received comments expressing concern that increasing the General category retention limit from the default of one fish to three fish to begin the June through August subquota period is counterproductive to the goal of setting RFDs. Some commenters requested the use of mechanisms other than RFDs to extend the fishery, such as maintaining the default retention limit throughout the season. One commenter suggested NMFS modify existing subquota allocations.

Response: This action focuses on implementing RFDs, as currently authorized in the regulations, to slow the rate of General category landings, prevent early closures, and extend fishing opportunities through a greater portion of the General category time-period subquotas for the 2022 fishing year. NMFS will continue to use retention limits, RFDs, and other available management tools to manage the BFT fisheries, within the available BFT quota and established subquotas. In recent years, because the rate of landings and overall fishing effort in the General category is typically slow in early June, NMFS has regularly set the daily retention limit for the beginning of the June through August period at three fish, following consideration of the relevant criteria provided under § 635.27(a)(8), including supporting scientific data collection. NMFS monitors the landings closely, and, as appropriate, NMFS then typically reduces the limit to the one-fish default level to ensure fishing opportunities in all respective time-period subquotas and to ensure that the available quota is not exceeded. Any change in the retention limit considers the relevant criteria and includes consideration of the catch rates associated with the various authorized gear types ( e.g., harpoon, rod and reel).

As with other mechanisms mentioned above, RFDs are an available effort control mechanism that can be used to extend time-period subquotas and provide additional inseason management flexibility regarding quota use and distribution and season length. Unlike other mechanisms, in the current regulations, RFDs may only be used to assist with the management of the BFT General category fishery ( i.e., permit categories that fish against the General category quota). Throughout the season, NMFS monitors landings and catch rates and will close the fishery or modify retention limits as appropriate to ensure the quotas are not exceeded. NMFS will continue to monitor and evaluate the effectiveness of all these management measures in the context of current conditions to determine whether other actions are necessary.

NMFS is not considering modifications of the General category subquotas in this action. The proposed rule for Amendment 13 to the 2006 Consolidated HMS FMP (86 FR 27686, May 21, 2021) proposed modifications to the BFT category quotas which were further detailed in the Amendment 13 Final Environmental Impact Statement published on May 13, 2022 (87 FR 29310). The final rule for Amendment 13 has not been completed, and the BFT quotas and subquotas therefore are not affected by Amendment 13 at this time. NMFS also recently published a final rule which would increase the U.S. baseline BFT quota to reflect a binding 2021 ICCAT binding and to adjust the subquotas accordingly.

Comment 8: NMFS received comments noting issues with dealer practices and requesting NMFS not to use RFDs. Several individuals noted that dealers could limit their own purchases in order to control supply and demand related to domestic and international markets.

Response: NMFS requires that dealers obtain a Federal dealer permit to purchase, trade, or barter any HMS and abide by the regulations under both § 635.4 and § 635.5. As described in the proposed rule, NMFS received communications from dealers and fishermen regarding the self-imposed no-purchase (or limited-purchase) days in 2019 and 2020. While these actions by dealers may have prevented an oversupply of BFT on the market and may have lengthened the duration of some subquota periods, these actions were not pre-scheduled or consistently implemented across the fishery. Some General category and Charter/Headboat permitted fishermen may have experienced negative impacts in this context, and opportunities may not have been equitably distributed among all permitted vessels. Thus, NMFS is finalizing a schedule of RFDs for 2022.

Comment 9: NMFS received some comments noting that the BFT stock has rebounded and is healthy, and that, therefore, this action is not necessary. Additionally, one commenter noted that NMFS is overly restrictive to BFT fishermen in New England.

Response: NMFS disagrees that this action is “unwarranted.” The purpose of this action, consistent with the objectives of the 2006 Consolidated HMS FMP and its amendments and other applicable laws, is to set a schedule of RFDs for the 2022 fishing year as an effort control for the General category quota, and to extend General category fishing opportunities through a greater portion of the General category time-period subquotas than have been available in recent years, as intended when the time-period subquotas were adopted. NMFS does not manage the General category fishery by region. Instead, these regulations are applicable to all General category permit holders and Charter/Headboat permitted vessels that fish commercially for BFT.