The Energy Policy and Conservation Act, as amended (“EPCA”), 1 authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291-6317) Title III, Part C  2 of EPCA, added by Public Law 95-619, Title IV, section 441(a), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This covered equipment includes pumps, the subject of this document. (42 U.S.C. 6311(1)(A))

EPCA provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notification of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking (“NOPR”) including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(1)) Not later than three years after issuance of a final determination not to amend standards, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(3)(B))

Under EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))

DOE is publishing this NODA to collect data and information to inform its decision consistent with its obligations under EPCA.

In accordance with section 3(a) of 10 CFR part 430, subpart C, appendix A (“appendix A”), which applies to commercial and industrial pumps under 10 CFR 431.4, DOE notes that it is deviating from the provision in appendix A regarding the length of comment periods for the pre-NOPR stages for an energy conservation standards rulemaking. Section 6(d)(2) of appendix A specifies that the length of the public comment period for pre-NOPR rulemaking documents will not be less than 75 calendar days. For this NODA, DOE has opted instead to provide a 45-day comment period. DOE requested comment in an early assessment request for information published on August 9, 2021 (“August 2021 RFI”) on the analysis conducted in support of the previous energy conservation standard rulemaking for pumps. 86 FR 43430, 43431. The August 2021 RFI provided 30 days for submitting written comment, data, and information. In response to comment received from stakeholders, DOE extended the comment period for the August 2021 RFI another 30 days. Given that the analysis will largely remain the same, and in light of the 60-day comment associated with the August 2021 RFI, DOE has determined that a 45-day comment period is sufficient to enable interested parties to review the data and accompanying analysis and develop meaningful comments in response to the NODA.

In a final rule published on January 26, 2016 (“January 2016 Final Rule”), DOE prescribed the current energy conservation standards for pumps manufactured on and after January 27, 2020. 81 FR 4368. These standards are set forth in DOE's regulations at 10 CFR 431.465 and are reproduced in Table II.1. DOE set standards for equipment classes which were divided based on pump category, nominal speed of rotation (rpm), and load type (constant and variable). Equipment class labels are structured as pump category acronym, rpm, constant-load (“CL”) or variable-load (“VL”). CL and VL equipment classes were not analyzed separately in the January 2016 Final Rule and therefore were not assigned different standards.

In the August 2021 RFI, DOE sought data and information to evaluate whether amended energy conservation standards for pumps would result in a significant savings of energy; be technologically feasible; and be economically justified. 86 FR 43430. Comments received to date as part of the current process have helped DOE identify and resolve issues related to the preliminary analyses. Chapter 1 of the TSD accompanying this NODA summarizes and addresses the comments received.

The goal of this NODA is to provide an overview of potential design options and associated national energy savings (“NES”) and preliminary industry net present value (“INPV”) estimates for the various commercial and industrial pump equipment classes, as well as associated qualitative information. Following comments received on this NODA, DOE would determine how to proceed with the rulemaking.

The contents of this NODA are based on the scope proposed in a test procedure notice of proposed rulemaking for pumps published on April 11, 2022 (“April 2022 TP NOPR”). 87 FR 21268, 21273. DOE acknowledges that stakeholder comments in response to the April 2022 TP NOPR include scope-related comments, which DOE will consider in determining the scope of any final test procedure and any subsequent energy conservation standards analyses.

This NODA includes an abbreviated set of analyses as compared to a full preliminary analysis or notice of proposed rulemaking: market and technology assessment; screening analysis; engineering analysis; energy use analysis and shipments analysis to calculate national energy savings; and a preliminary manufacturer impact analysis.

This NODA does not include a life cycle cost analysis (“LCC”) or the national net present value portion of the national impact analysis (“NIA”). In the January 2016 Final Rule, all LCC results based on hydraulic redesign were positive since there was no increase in manufacturer production cost (“MPC”), and the energy cost savings significantly outweighed the increase in manufacturer selling price (“MSP”) that DOE calculated by assuming manufacturers recouped conversion costs. 81 FR 4368, 4406-4409. At this time, DOE does not have data that would indicate the results would be different from those presented in the January 2016 Final Rule, and as discussed in section III.B.1 of this document, manufacturers were unable to recoup any conversion costs resulting from the current standard. However, if updated data were provided, DOE could evaluate MPC increases for additional hydraulic redesign and these values could be incorporated into a future LCC or NIA analysis, along with MPC increases for other technology options as discussed in section III.C.2.c. of this document.

The analyses in this NODA are primarily based on data from the previous rulemaking, except for updated efficiency distributions, conversion costs, estimated motors and controls performances and costs, and performance data for pumps not currently subject to standards. In addition, due to limited data, the analysis for pumps not currently subject to standards is based largely on proxies from the current scope. Overviews of the analyses can be found in section III.C of this document, with detailed methodology available in the TSD accompanying this NODA.

In this NODA, DOE conducted analyses for pump categories currently subject to DOE standards, in addition to some pump categories that are not currently subject to standards, but were included in the April 2022 TP NOPR. 87 FR 21268. Pump categories currently subject to standards include end suction frame mounted (“ESFM”) pumps, end suction close-coupled (“ESCC”) pumps, in-line (“IL”) pumps, radially split, multi-stage, vertical, in-line diffuser casing (“RSV”) pumps, and submersible turbine (“ST”) pumps. Pump categories not currently subject to standards that were included in the April 2022 TP NOPR include between bearing (“BB”) pumps, vertical turbine (“VT”) pumps, small vertical in-line (“SVIL”) pumps, radially split horizontal (“RSH”) pumps, pumps with a nominal speed of rotation of 1,200 rpm, and ST pumps with bowl diameters greater than 6 inches. During the pumps negotiations in 2014, 3 DOE collected data on BB, VT, and SVIL pumps. DOE combined these data with data from a recent round of manufacturer interviews for this NODA analysis. DOE did not have sufficient data to evaluate RSH pumps and ST pumps with bowl diameters greater than 6 inches in this NODA. In addition, as there are so few models of ST.1800 pumps, DOE only evaluated ST.3600 pumps as part of this NODA, consistent with the January 2016 Final Rule.

Table III.1 compares shipments and average horsepower (“HP”) for pumps not currently, and currently, subject to standards based on available data. Based on stakeholder feedback through public comments and manufacturer interviews, DOE has tentatively determined that the pumps not currently subject to standards are, on average, rated at a higher HP than the pumps currently subject to DOE standards—and as a result, total shipments for these pumps within the scope limitations of 200 HP and 459 feet of head tend to be smaller than for the pump categories that DOE currently regulates. As noted, DOE will address stakeholder comments received on the April 2022 TP NOPR related to those pumps that are not currently subject to standards, including the application of the current scope limitations, in subsequent test procedure rulemaking documents.

Issue 1: DOE seeks individual model level data or industry aggregated data to update its shipment and average horsepower estimate for pump categories that are currently subject to standards and those pump categories that are currently not subject to standards.

As discussed previously, DOE intends to use this NODA as a step toward determining how to proceed with a rulemaking for pumps. DOE acknowledges that if pump classes that are not currently within scope of the test procedure were included in the scope of the test procedure final rule, but were not included in the scope of the energy conservation standard, these classes would not have assigned C-values. 4 In this case, the pump energy rating (“PER”) for a minimally compliant pump (“PER STD ”) could not be calculated, making it impossible to determine a pump energy index (“PEI”) rating for these classes. To address this issue, DOE could consider issuing a supplemental NOPR for the test procedure to establish C-values for the categories currently subject to standards at a baseline level that would enable calculation of PEI for these categories and facilitate rebate or other efficiency programs for pumps not currently subject to standards.

Issue 2: DOE requests comments on potential benefits or drawbacks of proposing a change to the test procedure to allow calculation of PEI for pumps not subject to energy conservation standards.

For this NODA analysis, DOE evaluated hydraulic redesign, advanced motors, and variable-speed drives (“VSDs”) as potential technologies for reducing pump energy consumption. These technologies are discussed in the following sections.

DOE evaluated five efficiency levels (“EL”) in the January 2016 Final Rule; each EL was developed according to efficiency percentiles (10th, 25th, 40th, 55th, and 70th percentile) and each percentile for each equipment class was assigned a C-value. 81 FR 4368, 4386. Ultimately, the pumps energy conservation standard was established at C-values corresponding to EL 2 for all equipment classes except for RSV pumps and ST pumps with a specific speed of 1,800 rpm. 81 FR 4368, 4369 and 4386 (see Table IV.2 of the January 2016 Final Rule detailing the adopted efficiency levels). Standards for these pump equipment classes were established at baseline, or EL 0. 5 Id.

During interviews, manufacturers stated that additional hydraulic redesign might be possible to reach EL 3 as presented in the January 2016 Final Rule; however, they pointed out that any such redesign would be as or more expensive than the previous redesign and energy savings would likely be minimal. In order to meet the standards set in the January 2016 Final Rule, many manufacturers redesigned their pumps to be as efficient as possible given pump family and certain technology limitations; most manufacturers did not redesign their pumps to just meet the standard. Therefore, for redesigned pumps that did not reach EL 4 or EL 5 as presented in the January 2016 Final Rule, manufacturers expressed concern that reaching these levels with a hydraulic redesign would be extremely difficult and costly. In particular, manufacturers commented that:

• MPC would begin to increase at EL 4 and EL 5 as presented in the January 2016 Final Rule due to finer part tolerances and manual surface finishing;

• Utility could be compromised. Some manufacturers stated that they had observed a warranty claim increase for redesigned pumps. Additionally, several manufacturers commented that they had to flatten the pump curve in order to achieve higher efficiency levels. A flatter pump curve can limit controllability and cause operational problems in some applications. 6

• In some cases, manufacturers were or would be unable to maintain flange positions on some models during redesign. This means that a new pump cannot easily replace an older pump without changing piping into and out of the pump, which in turn may result in loss of business for that manufacturer or increase installation costs for end users in replacement situations.

• Manufacturers may choose not to redesign to EL 4 and EL 5, resulting in gaps in a product family, and the possibility that a consumer would then purchase a pump that was less efficient for their application than they would have purchased without such a standard.

• Manufacturers reported that they did not recoup the conversion costs incurred due to the redesigns required by the current DOE standards due to market pressures. Manufacturers expect the same outcome if DOE were to set more stringent standards.

DOE acknowledges that there are many pumps already on the market that meet EL 4 and EL 5 as presented in the January 2016 Final Rule. There are several reasons why this may be possible, even with manufacturers stating that meeting these ELs are not feasible for all pumps:

• Choices to limit the impacts listed previously (increased MPC and labor/staffing needs, loss of utility for certain applications, potential loss of replacement business due to changed flange positions);

• Choosing to stay within the constraints of a product family in order to take advantage of shared common parts, as opposed to a substantially more expensive redesign of an entire product family or a redesign that would make a model(s) different from the rest of the family;

• Variability in designer skill and experience with computational fluid dynamics;

• Irregularities in the three-dimensional surface that sets the standard level as a function of flow and specific speed. To harmonize with the European Union (“EU”), the surface used to determine DOE energy conservation standards is based on EU data and not data specific to the U.S. market. ( See January 2016 Final Rule TSD Appendix 3B p. 5, EERE-2011-BT-STD-0031-0056) This means that there may be some points of flow or specific speed where EL 4 or EL 5, as presented in the January 2016 Final Rule, may be easier to achieve than at other points.

Issue 3: DOE requests comment on the percentage of basic models that would be impacted by the following factors if manufacturers were to redesign their pumps to EL 4 and EL 5 (as presented in the January 2016 Final Rule): (1) need to flatten the pump curve beyond potentially acceptable levels for the existing market for a given model or any reported issues with controllability; (2) increased warranty claims; and (3) increased MPCs for pumps redesigned to higher efficiencies. Additionally, DOE requests comment on which EL (as presented in the January 2016 Final Rule) and for which pump classes (or hp ranges) these issues would first appear.

Issue 4: DOE also seeks comment on the availability of designers skilled enough to design a pump that can reach EL 4 and EL 5 and be readily manufactured.

Issue 5: Additionally, DOE requests comment on any other issues that may prevent manufacturers from redesigning pumps to reach higher efficiency levels, including other utility issues.

Issue 6: DOE requests comment on the fraction of installations in which consumers would have to make piping changes as a result of a change in flange position (as opposed to purchasing another model with the desired flange positions), and the cost of such piping changes.

Advanced motors were not considered as a technology option in support of the January 2016 Final Rule. However, based on feedback from stakeholders, DOE is including advanced motors as a technology option in this NODA analysis. In this NODA, advanced motors refer to any motor paired with a pump that has a greater efficiency than the default motor referenced in the pumps test procedure. If DOE were to set an energy conservation standard that is stringent enough to require more efficient motors, some pumps may need to be paired with a motor in order to be sold in the U.S. 7 DOE has identified several potential issues with this technology option, which are listed below:

• Replacement pumps. If all pumps must be paired with motor for distribution into commerce, it is not clear how the replacement market for bare pumps would work.

• Potential market disruption. The majority of sales for most manufacturers are from bare pumps; distributors may then pair the pump with a motor (and possibly controls). Requiring that pumps be sold with a motor (by the pump's original equipment manufacturer) would likely have a negative impact on pump distributors and result in substantial disruption to the pumps market.

• Potential consequences. Larger stock in the field of older, more inefficient pumps. Requiring pumps to be paired with a motor for distribution in commerce is expected to increase the cost of the pump. Some end users may opt to repair rather than replace older, inefficient pumps. Additionally, if a motor fails before the pump fails, end users may choose a less efficient motor as a replacement.

• Overlapping regulation. The vast majority of motors paired with pumps subject to this rulemaking are already covered equipment (as electric motors) within the DOE appliance standards program. (subpart B to 10 CFR part 431)  8 DOE is currently undertaking an energy conservation rulemaking to consider amended standards for electric motors ( see Docket No. EERE-2020-BT-STD-0007). This prevents DOE from determining how much energy savings would result from a pumps design option related to motor efficiency without potentially double-counting energy savings also accounted for in the electric motors rulemaking.

These issues (excluding overlapping regulation) are discussed in more detail in section III.B.3 of this document in the context of VSDs, but apply similarly to motors.

Issue 7: DOE requests comment on how a standard that requires an advanced motor to be paired with a bare pump would impact: (1) the bare pump replacement market; (2) the distributor market and business model; (3) the repair of pumps rather than their replacement and (4) the replacement of failed motors with less efficient motors. DOE also requests feedback on any potential consistency concerns with a standard that requires an advanced motor to be paired with a bare pump and current or future energy conservation standards for electric motors.

Variable-speed drives were considered as a technology option in the January 2016 Final Rule. ( See Chapter 3 of the January 2016 Final Rule TSD, EERE-2011-BT-STD-0031-0056, pp. 3-29 to 3-35) VSDs were screened out of the January 2016 Final Rule analysis because DOE determined the technology may not significantly improve efficiency for all pumps within each equipment class. ( See Chapter 4 of the January 2016 Final Rule TSD, EERE-2011-BT-STD-0031-0056, pp. 4-5) In fact, DOE determined that energy use would increase for many applications. Id.

As discussed in chapter 1 of the TSD accompanying this NODA, DOE received comments from stakeholders recommending that VSDs be considered as a technology option in the current pumps analysis. (CA IOUs, No. 10 at p. 12; ASAP and NRDC, No. 7 at p. 2; NEEA, No. 11 at p. 6) These stakeholders referenced a recent study by NEEA that reported significant savings for both constant-load and variable-load pump applications. 9 If DOE were to set an energy conservation standard that is stringent enough to require VSDs, all pumps would have to be paired with a motor and VSD in order to be sold in the U.S.

During interviews, manufacturers shared multiple concerns about requiring pumps to be sold with a VSD. However, many manufacturers also acknowledged that it would be ideal for DOE to incentivize applications to use controls with their pumps and suggested that a rebate program would be the best way to do this since it would limit all of the potential unintended consequences discussed. On April 27, 2022, DOE published a Notice of Availability and Solicitation of Public Comment on the Draft Implementation Guidance Pertaining to the Extended Product System Rebate Program and Energy Efficient Transformer Rebate Program. 87 FR 25006. This draft implementation guidance includes a rebate program for pumps designed to incentivize adding controls to existing facilities (by specifying a maximum qualifying variable-load PEI (“PEI VL ”)), with maximum rebate payments to a given entity of up to $25,000 per calendar year. For more information, refer to the guidance web page: www.energy.gov/eere/buildings/draft-implementation-guidance-pertaining-extended-product-system-rebate-program-and.

The primary concern shared by most manufacturers was how disruptive a requirement to sell pumps with controls would be for the overall pumps market. Manufacturers stated that end users typically have specific controller requirements, meaning they have one controller brand for their facility, primarily to simplify maintenance and operation. Because pump manufacturers typically stock one to two controller brands, distributors often buy the pump or pump and motor from the pump manufacturer but buy the controls from the controls manufacturer. Additionally, if pumps were required to be sold with motors and VSDs, pump manufacturers would have to greatly increase their floor space, inventory, and unique model numbers in order to satisfy end users who would currently work through a distributor. In this case, there could be significantly large impacts to distributors, who would provide less added value.

Manufacturers also commented that there are supply chain constraints. Specifically, pump manufacturers were skeptical about the ability of VSD manufacturers to be able to meet the increased demand that an energy conservation standard requiring VSDs would cause. Manufacturers also stated that the VSD technology for higher horsepower motors is not as mature as that for lower horsepower motors, and that, in some cases, they already had trouble obtaining VSDs of acceptable quality for higher horsepower motors.

Issue 8: DOE seeks comment on the frequency with which pump consumers specify only a single controller brand, as well as on the number of controller brands typically stocked by a pump manufacturer.

Issue 9: DOE seeks comment on how a VSD requirement for pumps would impact distributors.

Issue 10: DOE requests comment on whether there would be sufficient quantity and quality of VSDs available if there were a VSD requirement for pumps.

The EU is evaluating its current standard for pumps and issued a call of evidence on January 21, 2022, that included a recommendation for evaluating an extended product approach for pumps. 10 In its comments, EuroPump  11 supported the extended product approach as a means to capture savings that were not captured by the current EU regulation. However, while efficiency organizations provided general support for the extended product approach, they also stated that VSDs should only be required as needed to minimize material waste, while commenting that around 50 percent of pump systems benefit from a VSD. 12 During interviews, manufacturers also voiced concerns about how a replacement parts market would work if pumps were required to be sold with motors and controls. If a bare pump is sold as a replacement part, that practice would eliminate the waste associated with replacing an entire pump system. However, selling a bare pump as a replacement part without controls opens a loophole where end users could purchase the bare pump and operate it without controls. This is also an issue for advanced motors, although to a lesser degree since only the motor and bare pump would have to be replaced, not the controller.

Issue 11: DOE seeks comment on possible methods to retain a replacement market for bare pumps while preventing a loophole where bare pumps could be purchased for current and new installations.

Through interviews conducted with manufacturers, DOE has also identified several ways that VSDs may impact pump energy use (if pumps must be sold with advanced motors or VSDs) that are not accounted for in this NODA's energy use analysis but would need to be to justify new or amended standards that DOE may decide to adopt.

First, if a motor sold with a pump fails, the customer could replace the failed motor with a less efficient motor since current DOE standards for electric motors do not require advanced technology and/or controls. This issue is the reason why stakeholders requested that DOE conduct a rulemaking using its direct final rule authority to establish standards for dedicated-purpose pool pump (“DPPP”) motors. In their view, because the adopted DPPP standards require DPPPs (at least in certain cases) to be sold with a VSD. Establishing DPPP motor standards would ensure that the expected savings from the DPPP standards would occur. 83 FR 45851, 45853 (September 11, 2018). In the case of DPPPs, there are motors specific to DPPPs, such that adopting a motor standard specific to DPPPs would be feasible. In the case of pumps, the motors used with this equipment are used in multiple applications, so DOE cannot adopt motor standards, as it did for DPPPs, that are specific to pumps. This issue also applies to the advanced motors design option discussed previously.

Second, requiring all pumps to be sold with controls could cause an increase in repairs of inefficient pumps because replacement pumps would have the added cost of a VSD. This would delay the purchase of a new pump with motor and controls. This issue also applies to the advanced motors design option discussed previously, although to a lesser extent since a motor is less expensive than a motor-plus-VSD combination.

Third, pumps designed for integrated controls may have a lower efficiency if installed in properly-sized constant-load applications since there are additional electrical inefficiencies when a controller is added to a motor. If a system operates at a constant load with an appropriately-sized pump, these additional losses become greater than the benefits of a VSD.

Issue 12: DOE seeks comment on the frequency with which customers would replace an inverter-only motor and control with an induction motor upon the end of the lifetime of the motor originally purchased with the pump.

Issue 13: DOE seeks comment on how bare pump repair frequency may change if customers delay purchasing a more expensive pump with motor and controls. For example, in its DPPP motors analysis, DOE assumed that in the standards case, a greater percentage of consumers would repair their pump as compared to the no-new-standards case.

Issue 14: DOE seeks comment on the percentage of pump models that would be redesigned for controls if they were required to be sold with them, and of those, what percentage would have worse efficiency in constant-load applications than the current pump model, and by how much the efficiency or energy use would be impacted.

During interviews, manufacturers identified potential cost impacts that have not been accounted for in this analysis but would need to be in any analysis to justify new or amended standards. Specifically, there could be significant installation difficulties or costs for some applications in which electrical upgrades or filters may be required. In addition, there could be a need for re-piping since, in this scenario, pump manufacturers may not offer the same bare pumps. Re-piping is discussed previously in relation to hydraulic redesign. Finally, there could be downtime for facilities while they re-pipe or perform electrical upgrades.

Issue 15: DOE seeks comment on the frequency with which customers who would be required to buy a pump with a VSD would need to add filters or perform electrical upgrades, and the estimated cost of such equipment and installation.

Issue 16: DOE seeks comment on the frequency with which customers might need to re-pipe to accommodate a pump with motor and controls rather than a drop-in replacement pump, and the estimated cost of re-piping.

Issue 17: DOE seeks quantitative data on the overall installation costs of pumps with VSDs compared to bare pumps, as well as any differences in lifetime or repair and maintenance costs for pumps sold with VSDs as compared to bare pumps.

The following sections provide a brief overview of the results from the analyses DOE conducted for this NODA. Full details of the methodology can be found in chapters 2 through 6 of the TSD accompanying this NODA. Summaries of comments received from the August 2021 RFI responses related to analytical methodologies are included in chapter 1 of the TSD accompanying this NODA.

DOE uses the following five screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:

(1) Technological feasibility. Technologies that are not incorporated in commercial products or in working prototypes will not be considered further.

(2) Practicability to manufacture, install, and service. If it is determined that mass production and reliable installation and servicing of a technology in commercial products could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further.

(3) Impacts on product utility or product availability. If it is determined that a technology would have a significant adverse impact on the utility of the product for significant subgroups of consumers or would result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not be considered further.

(4) Adverse impacts on health or safety. If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further.

(5) Unique-pathway proprietary technologies. If a design option utilizes proprietary technology that represents a unique pathway to achieving a given efficiency level, that technology will not be considered further due to the potential for monopolistic concerns.

10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).

If DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis.

DOE did not conduct a screening analysis for this NODA and instead is presenting analyses for the three technologies discussed in section III.B of this document ( i.e., hydraulic redesign, advanced motors, and VSDs) in order to receive stakeholder feedback. In a future analysis to support this rulemaking, based on many of the issues listed in section III.B of this document, DOE may screen out some or all of the listed technologies based on one or more of the screening criteria.

Issue 18: DOE requests comment on if or how the five screening criteria may limit application of hydraulic redesign, advanced motors, or VSDs as design options in the current rulemaking analysis.

The purpose of the engineering analysis is to determine the incremental manufacturing cost associated with producing products at higher efficiency levels. The primary considerations in the engineering analysis are the selection of efficiency levels to analyze ( i.e., the “efficiency analysis”) and the determination of product cost at each efficiency level ( i.e., the “cost analysis”).

DOE conducts the efficiency analysis using either an efficiency-level approach, a design-option approach, or a combination of both. Under the efficiency-level approach, the efficiency levels to be considered in the analysis are determined based on the market distribution of existing products (in other words, observing the range of efficiency and efficiency level “clusters” that already exist on the market). This approach typically starts with compiling a comprehensive list of products available on the market, such as from DOE's product certification database. Next, the list of models is ranked by efficiency level from lowest to highest, and DOE typically creates a scatter plot to visualize the distribution of efficiency levels. From these rankings and visual plots, efficiency levels can be identified by examining clusters of models around common efficiency levels. The maximum efficiency level currently available on the market can also be identified.

Under the design option approach, the efficiency levels to be considered in the analysis are determined through detailed engineering calculations and/or computer simulations of the efficiency improvements from implementing specific design options that have been identified in the technology assessment. In an iterative fashion, design options can also be identified during product teardowns as described. The design option approach is typically used when a comprehensive database of certified models is unavailable (for example, if a product is not yet regulated)—making the efficiency-level approach unusable.

In certain rulemakings, the efficiency-level approach (based on actual products on the market) will be extended using the design option approach to interpolate between levels to define “gap fill” levels (to bridge large gaps between other identified efficiency levels) and/or to extrapolate to the “max tech” level (the level that DOE determines is the maximum achievable efficiency level), particularly in cases where the “max tech” level exceeds the maximum efficiency level currently available on the market.

The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of the cost approach depends on a variety of factors such as the availability and reliability of information on product features and pricing, the physical characteristics of the regulated product, and the practicability of purchasing the product on the market. DOE generally uses the following cost approaches:

• Physical teardown: Under this approach, DOE physically dismantles a commercially available product, component-by-component, to develop a detailed bill of materials (“BOM”) for the product.

• Catalog teardown: In lieu of physically deconstructing a product, DOE identifies each component using parts diagrams (available from manufacturer websites or appliance repair websites, for example) to develop the BOM for the product.

• Price surveys: If neither a physical nor catalog teardown is feasible (for example, for tightly-integrated products that are infeasible to disassemble and for which parts diagrams are unavailable), DOE conducts retail price surveys by scanning retailer websites and other marketing materials. This approach must be coupled with assumptions regarding distributor markups and retailer markups in order to estimate the actual manufacturing cost of the product.

The engineering analysis conducted for this NODA used an efficiency level approach consistent with that used in the January 2016 Final Rule analysis along with a new design option approach. The cost analysis relied on physical and catalog tear downs and confidential information provided by manufacturers.

DOE conducted two engineering analyses for this NODA. The first analysis is consistent with that performed to support the January 2016 Final Rule in which only hydraulic redesign was considered as a design option. 81 FR 4368, 4384. This approach developed conversion costs that DOE expected industry to incur when redesigning non-compliant pumps to meet a potential new standard. Discussions with manufacturers indicated that MPC would not increase as efficiency increases.

The second analysis examined the possibility of motors and controls as technologies to improve pump efficiency. This analysis developed MPC versus efficiency ( i.e., PEI) curves. DOE assumed the motors and controls approach would not result in conversion costs for manufacturers. DOE separated these analyses into a “branched” approach that assumes that no hydraulic redesign would occur relative to the current baseline if a motors or controls standard were adopted, and no pumps would shift towards only being sold with motors or controls in a hydraulic redesign scenario. This assumption allowed DOE to separate conversion costs from increases in MPC. DOE performed both of these analyses for pumps larger than 1 horsepower and for SVILs. Details of these analyses are discussed in sections III.C.2.b and III.C.2.c of this document.

Since DOE had limited data for pumps that are not currently subject to standards, the Department used similar pump categories that are currently subject to standards as a proxy to estimate costs and performance metrics for pumps that are not currently subject to standards. Table III.2 summarizes the pump categories used as proxies for the pump categories where DOE had insufficient data to conduct an analysis. The specific instances where DOE used these proxies are discussed in more detail in Chapter 2 of this TSD accompanying this NODA.

Additionally, to make use of older performance data, DOE assumed that for pumps that are not currently subject to standards, performance data obtained during the 2014 pumps negotiations would provide an accurate summary of the performance of these pump models on the market today.

Issue 19: If DOE's assumptions are not appropriate, DOE requests updated shipments and performance data for BB, SVIL, RSH, and VT pumps. DOE also requests updated shipments and performance data for pumps sold at a specific speed of 1,200 rpm and for ST pumps with a bowl diameter greater than 6 inches.

In the analysis for the January 2016 Final Rule, DOE conducted one analysis to encompass both CL and VL equipment classes. 81 FR 4368, 4382. Constant-load pumps are sold without controls and variable-load pumps are sold with controls. 10 CFR 431.466. Since only one analysis was performed for both constant- and variable-load pump classes, the standards for these classes are the same. Setting the PEI metric in this way was intended to incentivize manufacturers to sell pumps with controls as an alternative to hydraulic redesign. As discussed in chapter 1 of the TSD accompanying this NODA, some stakeholders requested that DOE establish a separate set of C-values for VL pumps so that standards for VL pumps could be raised to require that any bare pumps sold with controls would also meet the PEI CL for bare pump efficiency before adding controls. During manufacturer interviews, some manufacturers observed that some companies were selling pumps with controls that do not meet the bare pump standard; however, DOE notes the current standard is silent as to how a pump distributed into commerce can meet the energy conservation standard.

DOE is concerned that increasing the standard for VL classes may increase their cost relative to CL classes. This may result in equipment class switching, where consumers who would have purchased a pump with a motor and control may purchase a bare pump or a bare pump with only a motor in order to reduce their first costs. However, DOE also acknowledges that sales of pumps with motors and controls do not seem to have been driven by the option for manufacturers to sell only into the VL class and instead is limited by market demand.

Issue 20: DOE seeks comment on the likelihood of equipment class switching or other unintended consequences if DOE were to set a higher standard for VL equipment classes.

For this NODA, DOE's analysis is consistent with its approach supporting the January 2016 Final Rule. However, DOE did evaluate VSDs as a potential technology for reducing energy consumption in this NODA. This analysis could be applied differently to CL and VL classes in future rulemaking analyses.

As discussed in the April 2022 TP NOPR, stakeholders universally supported addressing SVILs as part of the commercial and industrial pump rulemaking. 87 FR 21268, 21275. This support aligns with recommendations from the Circulators Working group. 13 (Docket No. EERE-2016-BT-STD-0004, No. 58, Recommendation #1B at pp. 1-2) However, during interviews, manufacturers provided conflicting suggestions for how DOE should conduct its SVIL analysis. One group of manufacturers suggested evaluating hydraulic redesign only for SVILs, similar to the approach taken in the January 2016 Final Rule for IL pumps. In this case, any new SVIL standards would be consistent with IL pump standards. A subset of manufacturers viewed this approach as appropriate since many SVILs are a 4-pole version of a 2-pole IL pump. Another group of manufacturers suggested that potential SVIL standards should be equivalent to any future standards for circulator pumps. Manufacturers expect that the circulators analysis will be based on motor and controls design options, consistent with recommendations by the Circulators Working Group to set a standard at EL 2 that would essentially require a single-speed electronically commutated motor. (Docket No. EERE-2016-BT-STD-0004, No. 98 Recommendation #1 at p. 1 and No. 97 at p. 2). In this case, SVILs would be a potentially less efficient and less costly substitute for circulators. Additionally, DOE received conflicting feedback on whether circulators and SVILs would compete with, or act as substitutes for, each other. Some manufacturers stated that an SVIL would never be substituted for a circulator, while others said that it was possible.

Issue 21: DOE requests comment on specific applications for which SVILs could be used instead of circulators and how an SVIL would need to be modified for use in these applications.

Issue 22: DOE requests comment on the portion of the SVIL market whose bare pumps are already subject to DOE's IL pump standards. Specifically, what portion of SVIL bare pumps are a different pole version of IL pumps, and what portion of SVIL pumps are a separate product family?

Issue 23: DOE requests comment on the potential benefits and drawbacks of setting standards for SVILs that align with circulator pumps versus setting standards for SVILs that align with IL pumps.

In this NODA, DOE evaluated hydraulic redesign using the same approach that it used in the January 2016 Final Rule. 81 FR 4368. In the January 2016 Final Rule, DOE assumed that hydraulic redesign would be the only design option used by manufacturers to meet the energy conservation standard. 14 81 FR 4368, 4416. Conversations with manufacturers indicated that this assumption was appropriate in order for most pump families to meet the current energy conservation standard. The conversion costs presented in the January 2016 Final Rule assumed that every pump not meeting the energy conservation standard would either be redesigned to just meet the prescribed standard or removed from the market. However, during interviews, many manufacturers stated that they redesigned their pumps to be as efficient as possible with the technology and resources available at the time. DOE analyzed its Compliance Certification Database (“CCD”) to confirm this assertion. Table III.3 summarizes the estimated distribution, by equipment class, over the ELs 2, 3, 4, and 5, as defined in the January 2016 Final Rule. Table III.4 shows the current distribution efficiency distribution from the CCD, by pump equipment class, over ELs 0, 1, 2 and 3.

The hydraulic redesign approach was conducted in the same manner as the January 2016 Final Rule's analysis. 81 FR 4368, 4387. ( See also Chapter 5 of the January 2016 Final Rule TSD, EERE-2011-BT-STD-0031-0056, pp. 5-30 to 5-42)

For currently regulated pumps, DOE set the baseline efficiency at the standard. In the January 2016 Final Rule, the pumps energy conservation standard was set at EL 2 for all equipment classes except for RSV pumps and ST pumps with a specific speed of 1,800 rpm. 81 FR 4368, 4369 and 4386. Standards for RSV pumps and ST pumps with a specific speed of 1,000 rpm were set at baseline, or EL 0. Id. DOE did not redefine efficiency levels for those pumps whose standard was set at EL 2 for this NODA; instead, DOE shifted ELs 2 through 5 so that EL 2 became EL 0 (or baseline) in this NODA analysis. The new nomenclature is summarized in Table III.5 and is used in the rest of this NODA and in the TSD accompanying this NODA. EL 1, EL 2, and EL 3 have the same C-values as EL 3, EL 4, and EL 5, respectively, as presented in the January 2016 Final Rule.

For pumps that were not analyzed in the January 2016 Final Rule, DOE defined new efficiency levels based on C-values from pump performance data. DOE had model level performance data available for some BB, VT, and SVIL pumps. DOE did not have data available for pumps with nominal speeds of rotation at 1,200 rpm, RSH pumps, or ST pumps with bowl diameters greater than 6 inches. For this reason, DOE did not develop C-values for these pump categories in this analysis.

DOE developed preliminary C-values for BB and VT pumps using the same procedure used in the January 2016 Final Rule. ( See Chapter 5 of the January 2016 Final Rule TSD, EERE-2011-BT-STD-0031-0056, pp. 5-15 to 5-16) Each efficiency level corresponded to a percentile of pump performance. The C-value calculated for the efficiency level was the C-value for the minimally compliant pump at the prescribed performance percentile.

DOE set the baseline for pumps not currently subject to standards at the 5th percentile of pump performance, just as was done for pumps in the January 2016 Final Rule. ( See Chapter 5 of the January 2016 Final Rule TSD, EERE-2011-BT-STD-0031-0056, pp. 5-16 to 5-19) The reasons for using the 5th instead of the 0th percentile are discussed in Chapter 5, section 5.8.6 of the January 2016 Final Rule TSD. (EERE-2011-BT-STD-0031-0056)

Conversion costs are based on those used in the January 2016 Final Rule, manufacturer interviews, data from the DOE CCD, and data collected during the 2014 pump negotiations. 15 81 FR 4368, 4388. A more detailed description of the development of these costs is included in chapter 2 of the TSD accompanying this NODA. As stated previously, DOE assumed that hydraulic redesign did not increase the MPC of pumps but may consider MPC increases in future analyses. The estimated total conversion costs and estimated per model conversion costs for pumps currently subject to standards are summarized in Table III.6 and Table III.7, respectively. Estimated total conversion costs and estimated per model conversion costs for pumps not currently subject to standards are summarized in Table III.8 and Table III.9, respectively. Based on conversations with manufacturers, the per model costs are higher than those estimated in the January 2016 Final Rule. The conversion costs are used as inputs to the manufacturer impact analysis, presented in section III.C.4 of this document. As previously discussed, DOE accounted for conversion costs in the LCC in the January 2016 Final Rule but DOE has not conducted an LCC for this NODA.

Due to a lack of performance data for the pumps that were not analyzed in the January 2016 Final Rule, DOE was unable to conduct the national energy savings analysis using the C-values developed for this NODA and relied instead on the proxy equipment classes that were analyzed in the January 2016 Final Rule discussed in section III.C.3 of this document. As a result, the national energy savings associated with each EL analyzed may not directly correspond to the manufacturer impacts associated with each EL. DOE would address this inconsistency in any future analyses.

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2022-0881; Project Identifier MCAI-2022-00424-R” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Kristi Bradley, Program Manager, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, 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.

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2022-0056, dated March 24, 2022 (EASA AD 2022-0056), to correct an unsafe condition for all serial-numbered Airbus (Eurocopter, Eurocopter France, Aérospatiale, and Sud Aviation) Model SA 330 J helicopters, except those having Airbus modification (mod) 07 27362 embodied in production.

This proposed AD was prompted by a report of restricted movement of the collective lever during take-off. After an investigation, it was determined that the movement of the collective lever was restricted due to simultaneous movement of the collective secondary stop cover due to a loosened rivet. This investigation also determined that the loosened rivet securing the covering plate had come into contact with the collective flying control fulcrum, leading to the restricted movement of the collective lever. The FAA is proposing this AD to address the restricted movement of the collective lever. This unsafe condition, if not addressed, could result in reduced control of the helicopter, potentially resulting in damage to the helicopter and injury to occupants. See EASA AD 2022-0056 for additional background information.

EASA AD 2022-0056 requires modification of the helicopter by removing and replacing the covering plate of the collective lever secondary stop with self-adhesive tape to decrease the risk of resistance on the rotor flight controls.

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

The FAA reviewed Airbus Alert Service Bulletin No. SA330-67.27, Revision 0, dated February 2, 2022, for Model SA330J helicopters. This service information specifies modification procedures for removal of the covering plate and installation of the self-adhesive tape.

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 proposing this AD after evaluating all known relevant information and determining that the unsafe condition described previously is likely to exist or develop on other helicopters of these same type designs.

This proposed AD would require accomplishing the actions specified in EASA AD 2022-0056, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this proposed AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2022-0056 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2022-0056 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2022-0056 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 EASA AD 2022-0056. Service information referenced in EASA AD 2022-0056 for compliance will be available at www.regulations.gov by searching for and locating Docket No. FAA-2022-0881 after the FAA final rule is published.

The FAA estimates that this AD, if adopted as proposed, would affect 14 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 proposed AD.

Removing the covering plate of the collective lever secondary stop and replacing it with self-adhesive tape would take about 1 work-hour and parts would cost up to $100 for an estimated cost of up to $185 per helicopter and $2,590 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.

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

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

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

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

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

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

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2022-0991; Project Identifier AD-2022-00155-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Adam Hein, Aerospace Engineer, Mechanical Systems and Propulsion Section, FAA, Wichita ACO Branch, 1801 S Airport Road, Wichita, KS 67209; telephone (316) 946-4116; email: adam.hein@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 FAA issued AD 2001-03-05, Amendment 39-12109 (66 FR 10353, February 15, 2001) (AD 2001-03-05), for certain Learjet Model 45 airplanes. AD 2001-03-05 requires, among other actions, revising the existing Learjet 45 maintenance program to incorporate additional inspections and maintenance practices for the anti-ice manifold assembly. AD 2001-03-05 resulted from anti-ice system difficulties on a Learjet Model 45 airplane, generating a warning to the flightcrew of an overheat condition of the horizontal stabilizer. The FAA issued AD 2001-03-05 to address metal fragments breaking off the anti-ice manifold assembly due to fatigue, which could block a duct in the anti-ice system and result in an unannunciated loss of ice protection.

AD 2001-03-05 mandates a 600-hour repetitive inspection interval of an earlier design/part number of the anti-ice manifold as specified in the Learjet 45 maintenance program revision. The part was subsequently redesigned outside the scope of AD 2001-03-05, and the inspection interval for airplanes with the redesigned part was extended to 1,200 flight hours by Learjet.

Since the FAA issued AD 2001-03-05, the design approval holder determined that the design improvements made to the anti-ice manifold assembly did not fully address the original issue of vane cracking, so the 1,200-hour inspection on the redesigned part is insufficient. However, the FAA determined that a repetitive inspection interval of 600 flight hours is sufficient to address the unsafe condition. Therefore, this proposed AD would require revising the existing inspection program to incorporate a reduced 600-hour inspection interval for the redesigned part. Accomplishing the proposed actions would terminate the requirements of paragraph (c) of AD 2001-03-05.

The FAA is proposing this AD to address metal fragments breaking off the anti-ice manifold assembly due to fatigue, which could block a duct in the anti-ice system and result in an unannunciated loss of ice protection and subsequent loss of control of the airplane.

The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

The FAA reviewed Learjet 40 Maintenance Manual Temporary Revision (TR) 04-33 and Learjet 45 Maintenance Manual TR 04-48, both dated January 18, 2022. This service information specifies reduced inspection intervals for the anti-ice manifold assembly.

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 ADDRESSES .

This proposed AD would require revising the existing inspection program to incorporate reduced inspection intervals for the anti-ice manifold assembly.

This proposed AD would require revisions to certain operator maintenance documents to include new actions ( e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph (k) of this proposed AD.

The FAA estimates that this AD, if adopted as proposed, would affect 443 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

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

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

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

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

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

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

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

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

The Market Risk Advisory Committee (MRAC) is a discretionary advisory committee established by the authority of the Commission in accordance with the Federal Advisory Committee Act, as amended. 2 The MRAC advises the Commission on matters related to evolving market structures and movement of risk across clearinghouses, exchanges, intermediaries, market makers and end-users. 3 MRAC subcommittees are organized by topic to produce reports and recommendations to the full MRAC that, if approved, are submitted to the Commission for its consideration.

On February 23, 2021, the MRAC approved a report from its Central Counterparty (CCP) Risk and Governance Subcommittee (Subcommittee) that provided several recommendations on DCO risk governance. 4 For each topic considered in the report, the (1) DCOs and (2) clearing members and end-users (CM/EU) represented on the Subcommittee each provided separate recommendations, and in some instances proposed rule text. On some topics, the two groups reached a general agreement on how DCO governance might be improved, but there were also areas of disagreement.

The Commission is proposing several amendments to § 39.24 that are consistent with the Subcommittee's recommendations to enhance the Commission's DCO governance standards. First, the Commission proposes to require each DCO to establish and consult with one or more RMCs comprised of clearing members and customers of clearing members prior to making decisions that could materially affect the risk profile of the DCO, and proposes requirements related to the composition and activities of RMCs. Second, the Commission proposes to require each DCO to establish one or more RWGs in order to seek risk-based input (as opposed to commercially-driven input) from a broader array of market participants. The Commission also requests comment below on several other topics discussed in the Subcommittee report on which the DCO and CM/EU members of the Subcommittee did not reach clear agreement.

Section 5b(c)(2) of the Commodity Exchange Act (CEA) sets forth core principles with which a DCO must comply in order to be registered and to maintain registration as a DCO (DCO Core Principles), 5 and part 39 of the Commission's regulations implement the DCO Core Principles. DCO Core Principle O requires a DCO to establish governance arrangements that are transparent, fulfill public interest requirements, and permit the consideration of the views of owners and participants. 6 Paragraphs (a) and (b) of § 39.24 implement this aspect of Core Principle O by providing minimum requirements regarding the substance and form of a DCO's governance arrangements. The Commission proposes to enhance these requirements by requiring a DCO to: (1) establish and consult with one or more RMCs on matters that could materially affect the risk profile of the DCO; (2) appoint clearing members and customers of clearing members to the RMC; (3) rotate RMC membership on a regular basis; (4) establish one or more RWGs; and (5) establish written policies and procedures regarding the RMC consultation process and the formation and role of each RWG.

Commission regulations require a DCO to consider the views of clearing members and customers of clearing members as part of the DCO's governance process. Most notably, § 39.24(a)(1)(iv) requires a DCO to have governance arrangements that support the relevant public interest considerations of clearing members, customers of clearing members, and other relevant stakeholders. Regulation 39.24(a)(2) requires a DCO's board of directors to make certain that the DCO's design, rules, overall strategy, and major decisions appropriately reflect the legitimate interests of clearing members, customers of clearing members, and other relevant stakeholders.

While not required by Commission regulations, many DCOs have addressed the above requirements by establishing advisory RMCs comprised of clearing members that provide expert opinion on key risk management issues. 7 Codifying this best practice furthers the purpose of Core Principle O by providing a consistent, formalized process across all DCOs to solicit, consider, and address input from clearing members and end-users before making decisions that could materially affect the risk profile of the DCO. Moreover, while serving on an RMC, clearing members and end-users would be able to use their risk management expertise to promote the safety and efficiency of the DCO and foster the stability of the broader financial markets. Finally, codifying a market participant consultation requirement formally enhances the role of market participants in the DCO risk governance process across DCOs.

Therefore, the Commission is proposing new § 39.24(b)(11), which would require a DCO to maintain governance arrangements that establish one or more RMCs, 8 and require a DCO's board of directors to consult with, and consider and respond to input from, its RMC(s) on all matters that could materially affect the risk profile of the DCO. 9 While the Commission is not proposing to prescribe exactly how a board of directors should respond to RMC input, the board of directors must respond to the substance of the input it receives rather than merely acknowledging that the input was received. Proposed § 39.24(b)(11) would identify a non-exhaustive list of matters that could materially affect the risk profile of the DCO, including any material change to the DCO's margin model, default procedures, participation requirements, and risk monitoring practices, as well as the clearing of new products.

Clearing members have a significant interest in the clearing of new products, especially at DCOs with mutualized default funds. The fact that new products typically have low open interest upon launch does not prevent them from potentially materially affecting the risk profile of the DCO. When determining whether a new product could materially affect its risk profile, a DCO should consider the product's potential impact as the product matures, and not only at the onset of trading, when risks may be less pronounced.

The Commission requests comment on whether a DCO's proposal to clear a new product should be categorically treated as a matter that could materially affect the DCO's risk profile for purposes of the proposed RMC consultation requirement given the heightened potential for novel and complex risks associated with clearing new products. If so, should the Commission define what constitutes a new product for this purpose, and how should it do so? For example, should the Commission define new products to include those that have margining, liquidity, default management, pricing, or other risk characteristics that differ from those currently cleared by the DCO? In the alternative, should the Commission require DCOs to adopt policies defining what constitutes a new product?

Finally, for the avoidance of doubt, the Commission notes that while it believes that codifying an RMC consultation requirement will significantly enhance overall DCO risk management, a DCO's board of directors has the ultimate responsibility to make major decisions with respect to the DCO. 10

The Commission is proposing new § 39.24(b)(11)(i), which would require a DCO to maintain written policies and procedures to make certain that the RMC consultation process is described in detail, and includes requirements for the DCO to document the board's consideration of and response to RMC input. The Commission believes that explicitly requiring DCOs to develop and maintain policies and procedures governing DCO consultation with its RMC(s), and to document the activities of its RMC(s), will promote transparency, accountability, and predictability, and facilitate effective oversight by the Commission in this area. The Commission requests comment on whether DCOs should be required to create and maintain minutes or other documentation of RMC meetings.

As discussed above, Core Principle O and § 39.24 require DCOs to consider the views and legitimate interests of clearing members and customers of clearing members in their decision-making process. This principle is rooted in the need to ensure that these parties have an opportunity to express their concerns, and in recognition of the stake that clearing members and their customers have in the financial integrity of the DCO, as well as the fact that DCOs benefit from their unique perspective and expertise on risk management issues. Accordingly, the Commission is proposing new § 39.24(b)(11)(ii), which would require a DCO to maintain policies to make certain that an RMC includes representatives from clearing members and customers of clearing members.

With respect to RMC composition, the Commission proposes to adopt the Subcommittee's recommendation that an RMC include “representatives” from both clearing members and customers of clearing members. The Commission believes that requiring more than one clearing member and more than one customer of a clearing member ensures a minimum level of market participant participation on RMCs while providing DCOs with appropriate flexibility to account for differences among DCOs in terms of size, business models, resources, and governance structure. However, the Commission requests comment on whether it should adopt additional specific composition requirements, and if so, what those requirements should be.

The Commission believes that requiring DCOs to regularly rotate their RMC membership will promote the ability of clearing members and customers of clearing members from a broad array of market segments to provide their expertise, and will ensure that the RMC provides the DCO with fresh perspectives on risk management matters. Accordingly, the Commission is proposing new § 39.24(b)(11)(iii), which would require a DCO to maintain policies to make certain that membership of an RMC is rotated on a regular basis. The Commission requests comment on whether it should set a minimum frequency for RMC membership rotation, what are the advantages and disadvantages of doing so, and, if it does, what that frequency should be.

As noted above, the Commission's proposal to require a DCO to establish and consult with an RMC that includes clearing member and customer representatives who are rotated on a regular basis would further implement the Core Principle O requirement that a DCO establish governance arrangements that permit the consideration of the views of owners and participants. However, the Commission recognizes that practical considerations, most notably the size of a typical RMC and the significant time commitment that an RMC would require of its members, will limit the number of representatives that can serve on a DCO's RMC at any given time. Many DCOs have dozens of clearing members, each of which can have a large number of customers. Moreover, as proposed, an RMC's duties would involve formal consultation with a DCO's board of directors on all matters that could materially affect the risk profile of the DCO. Thus, RMC membership may constitute a significant time commitment. As an advisory working group, an RWG would require a smaller time commitment from its participants. Therefore, in order to further expand and diversify the information available to a DCO while making material risk decisions, and to expand opportunities for those with a stake in DCO risk management to provide input, the Commission is proposing new § 39.24(b)(12) to require a DCO to establish one or more RWGs, and to maintain policies and procedures regarding the formation and role of each RWG. Having an RWG would allow a DCO to seek risk-based input (as opposed to commercially-driven input) from a broader array of market participants, such that a diverse cross-section of the DCO's clearing members and customers of its clearing members are represented, regarding all matters that could materially affect the risk profile of the DCO. Requiring policies and procedures regarding the role of each RWG will promote transparency, accountability, and predictability and facilitate effective oversight by the Commission. Finally, the Commission proposes to require each RWG to convene at least quarterly, with the goal of ensuring that each RWG is able to discuss and provide input on material risk matters in a timely manner.

The Commission requests comment on whether the proposed requirement that each RWG convene quarterly is the appropriate frequency. The Commission also requests comment on whether it should require DCOs to document the proceedings of RWG meetings, considering both the transparency and accountability benefits of such a requirement and the potential impact of a documentation requirement on free and open dialogue.

Regulation 39.24(c) implements subsection (ii) of DCO Core Principle O, which requires a DCO to establish and enforce appropriate fitness standards for directors, members of any disciplinary committee, members of the DCO, any other individual or entity with direct access to the settlement or clearing activities of the DCO, and any other party affiliated with any of the foregoing individuals or entities. 11 If a DCO is required to establish and consult with its RMC on all matters that could materially affect the risk profile of the DCO as proposed, the Commission believes a DCO also would need to consider the fitness of individual members for RMC participation, recognizing that fitness standards may vary across DCOs. Therefore, the Commission proposes to amend § 39.24(c) by adding new paragraph (c)(1)(iv) (and renumbering current paragraphs (c)(1)(iv) and (v) accordingly) to require a DCO to establish and enforce appropriate fitness standards for its RMC members.

As discussed above, the Commission's proposal to require a DCO's board of directors to consult with its RMC(s), comprised of clearing member and customer representatives, is intended to benefit the DCO risk management process by engaging a broad array of backgrounds and expertise. The Commission believes that in order to ensure that RMC members feel empowered to provide objective input during this process, they must be able to serve as independent experts, neither beholden to their employers' particular interests nor acting as fiduciaries of the DCO. Therefore, the Commission is proposing new § 39.24(c)(3) to require a DCO to maintain policies designed to enable its RMC members to provide independent, expert opinions in the form of risk-based input on all matters presented to the RMC for consideration, and perform their duties in a manner that supports the safety and efficiency of the DCO and the stability of the broader financial system. The Commission requests comment on whether requiring RMC members to act as independent experts, neither beholden to their employers' commercial interests nor acting as fiduciaries of the DCO raises any potential legal issues for those members. Specifically, as a matter of corporate law, would RMC members be forced to contend with competing duties or obligations to the DCO and their employer, including any duties or obligations that would foreclose RMC participation? If so, how may the goal of receiving independent, expert opinions be achieved? Should DCOs be required to have policies specific to RMC members for managing conflicts of interest?

The Commission generally requests comment on all aspects of the proposed rules. Additionally, the Commission requests comments on the following specific items, which the Commission might address in a future rulemaking:

Commission regulations require a DCO to include in its rule submissions under §§ 40.5, 40.6, and 40.10 a brief explanation of any substantive opposing views expressed to the DCO by governing board or committee members, members of the DCO, or market participants that were not incorporated into the rule, or a statement that no such opposing views were expressed. 12

The proposed amendments to § 39.24 would require a DCO's board of directors to consult with its RMC, which must contain representatives from clearing members and customers of clearing members, on all matters that could materially affect the risk profile of the DCO, including matters that would be captured in DCO rule submissions. In addition, a DCO would be required to establish one or more RWGs as a forum to seek risk-based input from a broad array of market participants, such that a diverse cross-section of the DCO's clearing members and customers of clearing members are represented, regarding all matters that could materially affect the risk profile of the DCO.

The Commission requests comment on whether it should also require a DCO to consult with a broad spectrum of market participants prior to submitting any rule change pursuant to §§ 40.5, 40.6, or 40.10. If so, what constitutes a sufficiently broad spectrum of market participants, and how should the DCO engage that group? Should a DCO be required to consult only on those rule changes that could materially affect the DCO's risk profile?

In accomplishing effective consultation, is there value to requiring a DCO to respond to market participant feedback? Specifically, where specific risk-based feedback from market participants has not been incorporated in the DCO's decision, should the DCO be required to respond to market participants informing them of the decision and outlining the rationale behind their action? How could such a requirement be tailored to avoid forcing a DCO to respond to excessively detailed or irrelevant comments?

As noted above, Commission regulations currently require a DCO to provide to the Commission a “brief explanation of any substantive opposing views.” Should the Commission further clarify the meaning of “substantive” in the context of this requirement? Should a DCO be required to provide the Commission with a report of all opposing views expressed to the DCO? Rather than expecting the DCO to accurately describe opposing views, should the Commission only require a DCO to pass on to the Commission any opposing views expressed to the DCO in writing? Should a DCO be required in its submission to the Commission to respond to opposing views expressed to the DCO? Finally, should the Commission consider additional rules to address a DCO's failure to comply with the full submission requirements of part 40, such as the imposition of an automatic stay?

The Commission believes that the proposed RMC requirements will greatly improve the level of market participant input during the DCO risk governance process for those DCOs that do not currently have an RMC. However, the Commission recognizes that an RMC member's employer may have subject matter experts other than the RMC member who could provide additional expertise that could improve the RMC's ability to make informed recommendations to the DCO. The information provided to a DCO's RMC is often confidential, however, and the value of the enhanced input must be weighed against the increased risk of disclosure in allowing confidential information to be shared outside of the RMC. Moreover, different types of information may require different levels of confidentiality. For example, information concerning prospective changes to aspects of the DCO's risk management framework may have a different level of confidentiality than information concerning an action against a member due to financial responsibility concerns.

The Commission requests comment on whether DCOs should be required to maintain policies and procedures designed to enable an RMC member to share certain types of information it learns in its capacity as an RMC member with fellow employees in order to obtain additional expert opinion. If so, what types of information should be eligible to be shared? What measures should be taken to ensure that confidential information is appropriately protected?

The Regulatory Flexibility Act (RFA) requires that agencies consider whether the regulations they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis on the impact. 13 The amendments proposed by the Commission will affect only DCOs. The Commission has previously established certain definitions of “small entities” to be used by the Commission in evaluating the impact of its regulations on small entities in accordance with the RFA. 14 The Commission has previously determined that DCOs are not small entities for the purpose of the RFA. 15 Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that the proposed regulations will not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act (PRA)  16 provides that Federal agencies, including the Commission, may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number from the Office of Management and Budget (OMB). This proposed rulemaking contains reporting and recordkeeping requirements that are collections of information within the meaning of the PRA. This section addresses the impact that the proposal will have on existing information collection requirements associated with part 39 of the Commission's regulations.

The Commission is proposing to add new § 39.24(b)(11) to require a DCO to establish one or more RMC(s) and require its board of directors to consult with the relevant RMC on all matters that could materially affect the DCO's risk profile. The Commission also is proposing to add new § 39.24(b)(11)(i), which would require a DCO to maintain policies to ensure that the RMC consultation process is described in detail, including the documentation and consideration of input; new § 39.24(b)(11)(ii), which would require a DCO to maintain policies to ensure each RMC includes representatives from clearing members and customers of clearing members; new § 39.24(b)(11)(iii) to require a DCO to maintain policies that make certain membership of each RMC is rotated on a regular basis; new § 39.24(b)(12) to require a DCO to establish one or more RWG(s) and to maintain policies and procedures regarding the formation and role of each RWG; and new § 39.24(c)(1)(iv), which would require a DCO to establish fitness standards for RMC members. Finally, the Commission is proposing new § 39.24(c)(3), which would require a DCO to maintain policies enabling its RMC members to provide independent, expert opinions in the form of risk-based input to the RMC, and to perform their duties in a manner that supports the DCO's safety and efficiency and the stability of the broader financial system.

The proposed regulations require a DCO to develop governance arrangements for its RMC(s) and RWG(s), to the extent it does not already have governance arrangements meeting the requirements. Existing regulations require a DCO to disclose new governance arrangements to the extent permitted under applicable statutory and regulatory requirements on confidentiality to the Commission, other relevant authorities, clearing members and their customers, owners of the DCO, and the public. 17 Because this disclosure requirement stems from existing regulations, it is already included in the reporting burden estimate for § 39.24 and currently covered by the collection of information titled “Requirements for Derivatives Clearing Organizations, OMB control number 3038-0076.” The proposed regulations will not impose a new reporting burden and will not increase the reporting burden estimate.

The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. The Commission will consider public comments on this proposed collection of information in:

(1) Evaluating whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;

(2) Evaluating the accuracy of the estimated burden of the proposed collection of information, including the degree to which the methodology and the assumptions that the Commission employed were valid;

(3) Enhancing the quality, utility, and clarity of the information proposed to be collected; and

(4) Minimizing the burden of the proposed information collection requirements on registered entities, including through the use of appropriate automated, electronic, mechanical, or other technological information collection techniques, e.g., permitting electronic submission of responses.

The Commission specifically invites public comment on the accuracy of its estimates that the proposed regulations will not impose a new reporting burden and will not increase the reporting burden estimate.

Copies of the submission from the Commission to OMB are available from the CFTC Clearance Officer, 1155 21st Street NW, Washington, DC 20581, (202) 418-5160 or from https://RegInfo.gov. Organizations and individuals desiring to submit comments on the proposed information collection requirements should send those comments to:

• The Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Desk Officer of the Commodity Futures Trading Commission;

• (202) 395-6566 (fax); or

• OIRAsubmissions@omb.eop.gov (email).

Please provide the Commission with a copy of submitted comments so that all comments can be summarized and addressed in the final rulemaking, and please refer to the ADDRESSES section of this proposed rule for instructions on submitting comments to the Commission. OMB is required to make a decision concerning the proposed information collection requirements between 30 and 60 days after publication of this proposed rule in the Federal Register . Therefore, a comment to OMB is best assured of receiving full consideration if OMB receives it within 30 calendar days of publication of this proposed rule. Nothing in the foregoing affects the deadline enumerated above for public comment to the Commission on the proposed rule.

Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA or issuing certain orders. 18 Section 15(a) further specifies that the costs and benefits shall be evaluated in light of five specific considerations identified in Section 15(a) of the CEA (collectively referred to herein as Section 15(a) factors) addressed below.

The Commission recognizes that the proposed amendments may impose costs. The Commission has endeavored to assess the expected costs and benefits of the proposed amendments in quantitative terms, including PRA-related costs, where possible. In situations where the Commission is unable to quantify the costs and benefits, the Commission identifies and considers the costs and benefits of the applicable proposed amendments in qualitative terms. The lack of data and information to estimate those costs is attributable in part to the nature of the proposed amendments. Additionally, any initial and recurring compliance costs for any particular DCO will depend on the size, existing infrastructure, practices, and cost structure of the DCO.

The Commission generally requests comment on all aspects of its cost-benefit considerations, including the identification and assessment of any costs and benefits not discussed herein; data and any other information to assist or otherwise inform the Commission's ability to quantify or qualitatively describe the costs and benefits of the proposed amendments; and substantiating data, statistics, and any other information to support positions posited by commenters with respect to the Commission's discussion. The Commission welcomes comment on such costs, particularly from existing DCOs that can provide quantitative cost data based on their respective experiences. Commenters may also suggest other alternatives to the proposed approach.

The baseline for the Commission's consideration of the costs and benefits of this proposed rulemaking are: (1) the DCO Core Principles set forth in Section 5b(c)(2) of the CEA; and (2) § 39.24. Specifically, DCO Core Principle O requires a DCO to establish governance arrangements that are transparent, to fulfill public interest requirements and to permit the consideration of the views of owners and participants, and § 39.24 implements DCO Core Principle O. Of the fifteen DCOs currently registered with the Commission, twelve already have some form of an RMC, which may have been intended, in part, to fulfill the DCO's compliance obligations under DCO Core Principle O and § 39.24. Of the fifteen DCOs currently registered with the Commission, six already have some form of an RWG, which may have been intended, in part, to fulfill the DCO's compliance obligations under DCO Core Principle O and § 39.24.

The Commission is proposing regulations that require each DCO to establish an RMC and require each DCO's board of directors to consult with, and consider and respond to input from, the RMC on all matters that could materially affect the DCO's risk profile. The Commission also proposes to require DCOs to: establish fitness standards for RMC members; maintain policies to ensure each RMC includes representatives from clearing members and customers of clearing members; maintain policies that require rotation of the membership of each RMC on a regular basis, and maintain written policies and procedures regarding the RMC consultation process. The Commission also proposes to require each DCO to maintain policies enabling RMC members to provide independent, expert opinions in the form of risk-based input to the RMC, and to perform their duties in a manner that supports the DCO's safety and efficiency and the stability of the broader financial system. Finally, the Commission proposes to require each DCO to establish one or more RWGs as a forum to seek risk-based input from a broad array of market participants, such that a diverse cross-section of the DCO's clearing members and customers of clearing members are represented, regarding all matters that could materially affect the risk profile of the DCO. RWGs would be required to convene at least quarterly. In addition, each DCO would be required to adopt written policies and procedures related to the formation and role of the RWG.

The proposed additions to § 39.24 would promote more efficient, effective, and reliable DCO risk management, benefitting DCOs, clearing members, market participants, and the financial system more broadly. RMCs would provide a formal mechanism for DCOs to receive valuable expert input from market participants on critical issues including the DCO's margin model, default procedures, participation requirements, and risk monitoring practices, as well as the clearing of new products that could materially impact the DCO's risk profile. Moreover, codifying the requirement that a DCO's board of directors consult with, and consider and respond to input from, market participants on an RMC will formalize a widely-used method for engaging market participants in the risk governance process. This would allow DCOs to more effectively consider and address risks impacting DCO stability, market participant stability, and market resilience.

To the extent that some DCOs already have RMCs that are compliant or partially compliant with the proposed rules, the benefits of the proposed regulations are currently being realized to some degree.

The proposed regulations would help RMCs to be well positioned to provide effective risk management opinions to the DCO's board of directors by requiring DCOs to establish RMC membership fitness standards. These standards would help to ensure that individual RMC members are well qualified to perform the RMCs' duties. Ensuring that RMCs include representatives from clearing members and customers of clearing members would give DCOs the benefit of these stakeholders' perspectives on risk management issues, and gives market participants the benefit of a forum for conveying their input on risk management issues. Rotating the membership of the RMCs on a regular basis would promote a diversity of perspectives. In addition, requiring DCOs to implement policies enabling RMC members to provide independent, expert opinions in the form of risk-based input, and to perform their duties in a manner that supports the DCO's safety and efficiency, would help ensure that RMC members feel empowered to provide objective input during this process by serving as independent experts that are neither beholden to their employers' commercial interests nor acting as fiduciaries of the DCO. These requirements for RMCs and their members collectively increase the likelihood of effective DCO risk management. Finally, requiring DCOs to develop and maintain policies and procedures governing DCO board of directors consultation with its RMC(s), and to document the activities of its RMC(s), will promote transparency, accountability, and predictability, and facilitate effective oversight by the Commission in this area.

Similarly, the requirement that each DCO establish one or more RWGs will further increase the likelihood of effective DCO risk management by providing each DCO with an expanded pool of clearing member and customer of clearing member representatives to consult when considering matters that could materially affect the risk profile of the DCO. Requiring DCOs to maintain written policies and procedures related to the formation and role of each risk advisory working group will promote transparency, accountability, and predictability and facilitate effective oversight by the Commission in this area.

As discussed above, the Commission requests comments on the potential benefits of the proposed changes to § 39.24, including benefits that would be realized by DCOs, other market participants (including clearing members and their customers), or the financial system more broadly.

To the extent that some DCOs do not already have RMCs or would need to adjust the policies and procedures of their existing RMCs to comply with the proposed rules, the proposed regulations would impose some costs on DCOs. Costs could arise from additional hours a DCO's employees might need to spend analyzing the compliance of the DCO's rules and procedures with these requirements, designing and drafting new or amended rules and procedures when necessary, and implementing these new or amended rules and procedures. Specifically, DCOs would need to draft governance arrangements providing for RMCs and RWGs with the membership requirements and policies stated in the proposed amendments to § 39.24 if compliant arrangements are not already in place.

Drafting new governance arrangements would cost DCOs administrative time. The amount of time required for each DCO to initially implement the proposed requirement would vary based on a number of factors, including whether the DCO already has policies complying with the proposed regulations and the amount of time needed for each DCO to design and draft new or amended policies where necessary. As noted above, twelve of the fifteen DCOs currently registered with the Commission already have RMCs in place in some form, which may lower the cost of implementing the proposed regulations. Further, the DCOs' policies implementing the proposed regulations would likely not change significantly from year to year, so after the initial creation of the policies, the time required to create rules and procedures would be minimal.

Ongoing implementation of the proposed regulations would also impose costs. Establishing and operating an RMC would cost a DCO time to identify potential RMC members that meet the fitness standards when the RMC is initially formed, as well as each time the RMC membership is rotated. Operation of the RMC would require a DCO to provide information to the RMC as needed for its consideration, and time for the DCO's board to consult with the RMC and consider and respond to its input. An RMC's operation would also require time from its members to consider relevant information regarding the DCO's risk practices, and to form and deliver its views. These costs would, however, be dispersed among different participants over time due to the proposed requirement that DCOs rotate their RMC members regularly.

As discussed above, the Commission requests comments on the potential costs of the proposed amendments to § 39.24, including any costs that would be imposed on DCOs, other market participants, or the financial system more broadly. In particular, for those DCOs that already have RMCs and RWGs in place, the Commission requests comment on the extent to which the proposed regulations would require changes to the DCO's existing policies and procedures regarding its RMC(s) and RWG(s).

In addition to the discussion above, the Commission has evaluated the costs and benefits of the proposed amendments to § 39.24 in light of the following five broad areas of market and public concern identified in Section 15(a) of the CEA: (1) protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Commission believes that the proposed amendments would have a beneficial effect on sound risk management practices and on the protection of market participants and the public.

(1) Protection of market participants and the public: The proposed regulations also would protect market participants and the public by improving DCOs' identification and handling of risk, reducing the likelihood that market participants and the public face unexpected costs resulting from deficient DCO risk management. The proposed amendments to § 39.24 also give market participants a voice in DCO risk management matters through their participation in RMCs and RWGs, increasing the likelihood that risks to market participants are adequately considered and minimized.

(2) Efficiency, competitiveness, and financial integrity of futures markets: The improvements to DCO risk management practices that the proposed regulations are designed to encourage also would benefit the financial integrity of futures and cleared swap markets. The Commission has not identified any other effect of the proposed rules on efficiency, competitiveness, and financial integrity.

(3) Price discovery: The Commission has not identified any effect of the proposed regulations on price discovery.

(4) Sound risk management practices: The proposed regulations are designed to support sound risk management practices at DCOs by providing a forum for independent, expert risk-based input to a DCO's board of directors from clearing members and customers of clearing members. Proposed requirements regarding RMC composition, fitness standards for RMC members, and RMC membership rotation all support RMCs' purpose of promoting sound risk management practices. In addition, the proposed requirement that a DCO establish one or more RWGs is designed to further expand and diversify the information available to a DCO while making material risk decisions, and to expand opportunities for those with a stake in DCO risk management to provide input, which further promotes sound risk management.

(5) Other public interest considerations: The Commission has not identified any effect of the proposed regulations on other public interest considerations.

Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the CEA, in issuing any order or adopting any Commission rule or regulation. 19

The Commission believes that the public interest to be protected by the antitrust laws is the promotion of competition. The Commission requests comment on whether the proposed amendments implicate any other specific public interest to be protected by the antitrust laws. The Commission has considered the proposed rulemaking to determine whether it is anticompetitive and has identified no anticompetitive effects. The Commission requests comment on whether the proposed rulemaking is anticompetitive and, if it is, what the anticompetitive effects are.

Because the Commission has preliminarily determined that the proposed rule amendments are not anticompetitive and have no anticompetitive effects, the Commission has not identified any less anticompetitive means of achieving the purposes of the CEA. The Commission requests comment on whether there are less anticompetitive means of achieving the relevant purposes of the CEA that would otherwise be served by adopting the proposed rule amendments.

For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR part 39 as follows:

The revisions and additions read as follows:

On June 14, 2022, the Oaks Park Association notified the Coast Guard that it will be conducting a fireworks display from 7 to 7:30 p.m. on October 31, 2022. The fireworks are to be launched from a barge in the Willamette River offshore of Oaks Park, Portland, Oregon. Hazards from firework displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port Sector Columbia River (COTP) has determined that potential hazards associated with the fireworks to be used in this display would be a safety concern for anyone within a 1,000 ft. radius of the barge.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within a 1,000 ft. radius of the fireworks barge before, during, and after the scheduled event. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).

The COTP is proposing to establish a safety zone from 6:30 to 8 p.m. on October 31, 2022. The safety zone would cover navigable waters within 1,000 ft radius of a barge in the Willamette River located offshore of Oaks Park, Portland, OR. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 7 to 7:30 p.m. fireworks display. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.

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

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

This regulatory action determination is based on the size, location, and duration of the safety zone. The safety zone created by this proposed rule is designed to minimize its impact on navigable waters. This proposed rule will prohibit entry into certain navigable waters of the Willamette River and is not anticipated to exceed two hours in duration. Thus, restrictions on vessel movement within that particular area are expected to be minimal. Moreover, under certain conditions, vessels may still transit through the safety zone when permitted by the COTP. The Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

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

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

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

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

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

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

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting 1.5 hours that would prohibit entry within 1,000 feet of a fireworks barge. Normally, such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

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

Submitting comments. We encourage you to submit comments through the Federal Decision Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2022-0626 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

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

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

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

Table of Contents I. Background II. What was included in New York's submissions for part 205? III. What is the EPA's evaluation of part 205? IV. What is the EPA's evaluation of part 200? V. The EPA's Proposed Action VI. Incorporation by Reference VII. Statutory and Executive Order Reviews I. Background Ozone Requirements

In March 2008, the EPA revised the health-based National Ambient Air Quality Standard (NAAQS) for ozone to 0.075 parts per million (ppm) averaged over an 8-hour time frame (2008 8-hour Ozone Standard). See 73 FR 16435 (March 27, 2008). In October 2015, the EPA revised this standard to 0.070 ppm averaged over an 8-hour time frame (2015 8-hour Ozone Standard). See 80 FR 65291 (October 26, 2015).

On May 21, 2012, the EPA finalized its attainment/nonattainment designations for areas across the country with respect to the 2008 8-hour Ozone Standard, which became effective on July 20, 2012. See 77 FR 30160 (May 21, 2012). The New York-Northern New Jersey-Long Island-Connecticut metropolitan area (NYMA) was designated by the EPA as a “marginal” nonattainment area for the 2008 ozone NAAQS. 1 In 2016, the EPA determined that the NYMA did not attain the 2008 ozone standard by the July 20, 2015 attainment date and was reclassified from a “marginal” to a “moderate” nonattainment area. See 81 FR 26697 (May 4, 2016). SIPs for “moderate” nonattainment areas were due by January 1, 2017. See id. On April 30, 2018, the EPA finalized its attainment/nonattainment designations for most areas across the country as to the 2015 8-hour Ozone Standard, in which the NYMA was designated by the EPA as a “moderate” nonattainment area. See 83 FR 25776 (June 4, 2018). On September 23, 2019, the EPA reclassified the NYMA to “serious” nonattainment as to the 2008 8-hour Ozone Standard. See 84 FR 44238 (August 23, 2019). The serious area attainment date and the deadline for Reasonably Available Control Technology measures not tied to attainment was July 20, 2021. See id.

On October 15, 2020, New York submitted a proposed SIP revision to title 6 of the New York Codes, Rules, and Regulations (6 NYCRR), part 205, “Architectural and Industrial Maintenance Coatings.” New York also submitted attendant revisions to Part 200, Section 200.9, “General Provisions, Reference materials.” The State's submission is complete. The proposed rulemaking applies statewide to any person who supplies, sells, offers for sale, or manufacturers any architectural coating for use within the State of New York, and any person who applies or solicits the application of any architectural coating within the State of New York.

The most recent federally approved revision of 6 NYCRR part 205, “Architectural and Industrial Maintenance coatings” regulations was published in the Federal Register on March 8, 2012, as an attendant revision to avoid redundancy and conflict of the asphalt paving and coating provisions included in the new part 241, “Asphalt Pavement and Asphalt Based Surface Coating.” See 70 FR 13974 (March 8, 2012). The current proposed rulemaking submitted by the State on October 15, 2020, is intended to be consistent with the Ozone Transport Region (OTR) Model Rule for Architectural and Industrial Maintenance (AIM) coatings (OTR Model Rule for AIM)  2 by reducing the VOC limit for 12 coating categories, creating VOC limits for 12 additional coating categories, eliminating 15 coating categories without relaxation of the regulation, and narrowing the exemption previously provided to coatings sold in one-liter (or quart-size) containers, referred to the as the “quart exemption.” See “Revisions to the quart exemption for bundling of quart-sized containers,” below, for further details.

The OTC Model Rule for AIM was developed by the Ozone Transport Commission through stakeholder involvement to address the needs of ozone transport states. The OTR Model Rule for AIM was amended in 2011 to address VOC content limits based on the California Air Resource Board's (CARB) Suggested Control Measures (SCM) for architectural coatings. The EPA reviewed New York State's October 15, 2020, SIP submission and confirms its consistency with the OTR Model Rule for AIM. Furthermore, neighboring states Connecticut (CT), New Jersey (NJ), and Pennsylvania (PA), also followed the OTC Model Rule for AIM and have equivalent provisions, VOC limits, and measures. For example, the NJ, PA, and CT floor coating category content limit is 250 grams of VOC/liter, compared to the New York State Department of Environmental Law and Conservation's (NYSDEC) floor coatings category of 100 grams of VOC/liter; NJ's exemptions apply to contact adhesives in containers with a net volume of one gallon or less, compared to New York's retention of the one-liter-or-less exemption except for floor coatings, along with PA and CT.

The proposed revision includes reduced VOC limits on the following coating categories: (1) Flat coatings, whose limit was reduced from 100 to 50 grams of VOC/liter; (2) non-flat coatings, whose limit was reduced from 150 to 100 grams of VOC/liter; (3) non-flat high gloss coatings, whose limit was reduced from 250 to 150 grams of VOC/liter; (4) bituminous roof coatings, whose limit was reduced from 300 to 270 grams of VOC/liter; (5) dry fog coatings, whose limit was reduced from 400 to 150 grams of VOC/liter; (6) floor coatings, whose limit was reduced from 250 to 100 grams of VOC/liter; (7) industrial maintenance coatings, whose limit was reduced from 340 to 250 grams of VOC/liter; (8) mastic texture coatings, whose limit was reduced from 300 to 100 grams of VOC/liter; (9) primers, sealers, and undercoaters, whose limit was reduced from 200 to 100 grams of VOC/liter; (10) rust preventative coatings, whose limit was reduced from 400 to 250 grams of VOC/liter; (11) specialty primers, sealers, and undercoaters, whose limit was reduced from 350 to 100 grams of VOC/liter; and (12) traffic marking coatings, whose limit was reduced from 150 to 100 grams of VOC/liter.

The proposed revision includes the following new coating categories: (1) aluminum roof coating, with a limit of 450 grams of VOC/liter; (2) basement specialty coating, with a limit of 400 grams of VOC/liter; (3) concrete/masonry sealer, with a limit of 100 grams of VOC/liter; (4) conjugated oil varnish, with a limit of 450 grams of VOC/liter; (5) driveway sealers, with a limit of 50 grams of VOC/liter; (6) reactive penetrating sealer, with a limit of 350 grams of VOC/liter; (7) reactive penetrating carbonate stone sealer, with a limit of 500 grams of VOC/liter; (8) stone consolidate, with a limit of 450 grams of VOC/liter; (9) tub and tile refinish, with a limit of 420 grams of VOC/liter; (10) waterproofing membranes, with a limit of 250 grams of VOC/liter; (11) wood coatings, with a limit of 275 grams of VOC/liter; and (12) Zinc-Rich Primer, with a limit of 340 grams of VOC/liter.

The proposed revision eliminates 15 coating categories without relaxation of the regulation because the VOC limit associated with the eliminated category is being absorbed by either a new or existing coating category: (1) antenna coatings (absorbed by industrial maintenance); (2) antifouling coatings (absorbed by industrial maintenance); (3) clear wood coatings/clear brushing lacquers (absorbed by wood coatings); (4) clear wood coatings/lacquers, including lacquer sanding sealers (absorbed by wood coatings); (5) clear wood coatings/sanding sealers, other than lacquer sanding sealers (absorbed by wood coatings); (6) clear wood coatings/varnishes (absorbed by wood coatings); (7) fire-retardant coatings/clear (absorbed by industrial maintenance); (8) fire-retardant coatings/opaque (absorbed by industrial maintenance); (9) flow coatings (absorbed by industrial maintenance); (10) quick-dry enamels (absorbed by flat, non-flat, and non-flat high gloss); (11) quick-dry primers, sealers, and undercoaters (absorbed by specialty primers, sealers, and undercoaters); (12) swimming pool repair and maintenance coatings (absorbed by swimming pool coatings); (13) temperature-indicator safety coatings (absorbed by industrial maintenance and concrete masonry sealer); (14) waterproofing sealers (absorbed by waterproofing membrane and basement specialty); and (15) waterproofing concrete/masonry sealers (absorbed by concrete masonry sealer and waterproofing membrane).

In the revised proposed part 205.1(b)(3), singular quart-sized containers continue to be exempt, but applicability of the regulation is expanded to include quart-sized containers that are packaged together in a bundle. Under part 205.1(b)(3)(i), the bundling of coating kits is addressed. The purpose of a coating kit is to be sold and marketed as a unit, which implies that multiple containers with a volume of one liter or less will be combined into one container; as such, the bundling of quart-sized containers for the purpose of a coating kit is not exempt and will need to comply with part 205. Accordingly, the proposed regulation addresses the concern that manufacturers and suppliers may circumvent the VOC limits in part 205 by selling the coatings in bundles of quart-sized containers inside a larger pail. The requirements for bundling quart-sized containers are expanded under part 205.1(b)(3)(i-iii), as follows: (1) under subpart (i), coating kits that typically are composed of multiple small containers, but are marketed as a single coating kit, must comply with part 205; (2) under subpart (ii), the use of a container that is not intended to hold a coating product is not allowed; and (3) under subpart (iii), floor coatings can be sold in any sized container and must comply with part 205. 3 Part 205 contains a few examples where bundling is permitted, as follows: (1) shipping pallets containing multiple quart-sized containers that are not sold as one unit; (2) multiple quart-sized containers that are shipped together and then placed on the retail shelf to be sold separately; (3) instances in which the quart-sized containers are bundled into a unified package that is marketed as a coating kit and sold and used as a coating kit. Part 205 contains at least one example where bundling is not allowed, as follows: packaging coating ( e.g., paint) in small disposable juice-like containers and placing them inside a larger pail to be sold as one unit. This scenario is specifically addressed by part 205.1(b)(3)(ii), “packaging from which the coating cannot be applied,” because juice-like containers are not designed to hold coatings, since it is difficult, if not impossible, to dip a paint brush into the container. Thus, excluding products contained in “packaging from which the coating cannot be applied” is intended to address potential circumvention of the regulation, which was raised as a concern in the public comments.

The State conducted public outreach and worked with AIM stakeholders for over two years prior to the part 205 proposed rulemaking amendment. The leading public concerns covered the sell-through provisions and clarification on bundling of quart-sized containers. The sell-through provisions are in place for part 205 to help minimize the potential impact on small businesses and allow manufacturers to sell products compliant with the current standard through May 1, 2023. Sell-through of AIM coatings refers to a coating that was manufactured prior to the effective date specified for that coating category and may be sold, supplied, or offered for sale until May 1, 2023, so long as the coating complies with standards in effect at the time the coating was manufactured. The State extended the sell-through date of AIM coatings to May 1, 2023, as recommended by commenters, to allow for the sell-through of AIM products for two years and four months from the compliance date for the revised VOC content limits under part 205.3(a). The AIM sell-through provision will also help minimize the environmental and economic impact of disposing potentially usable products on the shelves sooner than they may need to be disposed of if not sold. Regarding the concern around bundling of quart-sized containers, see above section titled, “Revisions to the quart exemption for bundling of quart-sized containers” for a complete explanation. The EPA reviewed the public comments and is satisfied with the State's responses thereto.

The current proposed rulemaking includes attendant revisions to 6 NYCRR part 200, Subpart 200.9, “General Provisions,” Table 1, “Referenced material,” which include the American Society for Testing Materials procedures, the South Coast Air Quality Management District methods, the Bay Area Air Quality Management District method, and other updated references to part 205. The EPA is satisfied that the revisions to section 200.9 are appropriate.

The EPA has evaluated New York's proposed submittal for consistency with the Clean Air Act, the EPA regulations, and policy. The EPA is proposing to approve revisions to the New York State Implementation Plan (SIP) to include amendment to 6 NYCRR part 205, “Architectural and Industrial Maintenance Coatings,” and attendant revisions to 6 NYCRR part 200, “General Provisions,” with a state effective date of January 11, 2020. 4 Specifically, this rulemaking proposes to reduce the VOC limit for 12 coating categories, create VOC limits for 12 additional coating categories, eliminate 15 coating categories, and eliminate the quart exemption and bundling of small containers.

The proposed revisions will help the State to comply with federal requirements pertaining to attainment and maintenance of the ozone NAAQS. The EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

In this document, the EPA is proposing to include regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference revisions to 6 NYCRR part 205, “Architectural and Industrial Maintenance coatings” and 6 NYCRR part 200, subpart 200.9 “General Provisions,” Table 1, “Referenced Materials,” as described in paragraphs III through IV of this preamble. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 2 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

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

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

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

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

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

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

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

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because this action does not involve technical standards; and

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

In addition, this proposed rulemaking, addressing New York's 6 NYCRR part 205, “Architectural and Industrial Maintenance coatings,” is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

The Mid-Atlantic Fishery Management Council (Council) and the Atlantic States Marine Fisheries Commission (Commission) cooperatively manage the summer flounder, scup, and black sea bass fisheries. The Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan (FMP) outlines the allocation of quota, for each species, between the commercial and recreational fisheries. This joint amendment reevaluates and proposes to revise the commercial and recreational sector allocations in the Summer Flounder, Scup, and Black Sea Bass FMP. This action was initiated in part to address the allocation-related impacts of the revised recreational catch and landings data provided by the Marine Recreational Information Program (MRIP). Specifically, this amendment considers:

1. Changing the current allocations between the commercial and recreational sectors for summer flounder, scup, and black sea bass;

2. Adding an option to transfer a portion of the allowable landings each year between the commercial and recreational sectors, in either direction, based on the needs of each sector; and

3. Adding the option for future additional changes to the commercial/recreational allocation and transfer provisions to be considered through an FMP addendum/framework action, as opposed to an amendment.

This action proposes to change the commercial and recreational allocations for summer flounder, scup, and black sea bass. The current commercial and recreational allocations for all three species were established in the mid-1990s. The allocations are based on historical proportions of landings (for summer flounder and black sea bass) and catch (for scup) from each sector. The current commercial/recreational allocations, and the years used to determine the allocation percentages (base years) are shown in Table 1.

In July 2018, MRIP released revised time series of catch and harvest estimates based on adjustments to its angler intercept methodology, which is used to estimate recreational catch rates, as well as changes to its effort estimation methodology, namely, a transition from a telephone-based effort survey to a mail-based effort survey for the private/rental boat and shore-based fishing modes. These revisions collectively resulted in higher recreational catch estimates compared to previous estimates, affecting the entire time series of data going back to 1981. The revised MRIP estimates were incorporated into the stock assessments for summer flounder in 2018 and for scup and black sea bass in 2019. This impacted the estimated stock biomass and resulting catch limits for these species.

The revised MRIP time series created a mismatch between the data that were used to set the allocations and the data currently used in management for setting catch limits. Changes to commercial catch data have also been made since the allocations were established. The allocation changes proposed in this amendment seek to ensure that the best available data is used to determine commercial and recreational sector allocations.

Amendment 22 includes a range of allocation alternatives, with options that would have maintained the current allocations and a variety of options to revise the allocations based on updated data using the same or modified “base years” (the time periods used to set the current allocations). The Council and Board ultimately voted to revise the allocations using the original base years updated with new data. This approach allows for consideration of fishery characteristics in years prior to influence by the commercial/recreational allocations, while also using the best scientific information available to understand the fisheries in those base years.

For all three species, these changes result in a shift in allocation from the commercial to recreational sector. However, because the summer flounder and black sea bass fisheries will be transitioning from landings-based to catch-based allocations, the current and revised allocations for those species are not directly comparable. The proposed commercial and recreational sector allocations are shown in Table 2.

The Council and Board considered but did not recommend an option to “phase in” the allocation changes over a period of time. A phase-in period was deemed unnecessary given the relatively small magnitude of allocation changes.

The Council and Board also approved an option to allow future changes to commercial/recreational allocations, annual quota transfers between sectors, and other measures addressed in the amendment to be made through framework actions.

They also considered, but did not recommend, an option to allow transfers of annual quota between the commercial and recreational sectors at this time.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), the Assistant Administrator has determined that this proposed rule is consistent with the Summer Flounder, Scup, and Black Sea Bass FMP, other provisions of the MSA, and other applicable law, subject to further consideration after public comment.

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

An initial regulatory flexibility analysis (IRFA) was prepared, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities, and also determines ways to minimize these impacts. The IRFA incorporates sections of the preamble to this rule and analyses contained in Amendment 22 and its accompanying EA/RIR/IRFA. A copy of the complete analysis is available from the Council (see ADDRESSES ). A summary of the IRFA follows.

This action proposes management measures for the commercial and recreational summer flounder, scup and black sea bass fisheries. This action is taken under the authority of the MSA and regulations at 50 CFR part 648. A complete description of the reasons why this action is being considered, and the objectives of and legal basis for this action, are contained in the preamble to this proposed rule and are not repeated here.

The entities ( i.e., the small and large businesses) that may be affected by this action include fishing operations with federal moratorium (commercial) permits and/or federal party/charter permits for summer flounder, scup, and/or black sea bass. Private recreational anglers are not considered “entities” under the RFA. For RFA purposes only, NMFS established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (50 CFR 200.2). A business primarily engaged in commercial fishing is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11 million, for all its affiliated operations worldwide.

Vessel ownership data were used to identify all individuals who own fishing vessels. Vessels were then grouped according to common owners. The resulting groupings were then treated as entities, or affiliates, for purposes of identifying small and large businesses which may be affected by this action.

Commercial and recreational for-hire affiliates potentially regulated by this action include all those with valid commercial fishery permits for summer flounder, scup and back sea bass and any for-hire affiliates that reported landing summer flounder, scup or black sea bass in any year between 2018-2020, which is the most recent complete calendar year data. A total of 1,522 affiliates were identified as being potentially regulated by this action, 1,513 (99 percent) of which were identified as small businesses and 9 (1 percent) were identified as large businesses based on their average revenues in 2018-2020.

Of the total affiliates potentially regulated by this action, 455 affiliates reported that the majority of their revenues in 2020 came from for-hire fishing. Some of these affiliates may have also participated in commercial fishing. All 455 of these for-hire affiliates were categorized as small businesses based on their average 2018-2020 revenues. It is not possible to determine what proportion of their revenues came from fishing for an individual species. Nevertheless, given the popularity of summer flounder, scup, and black sea bass as recreational species, revenues generated from these species are likely important for many of these affiliates at certain times of the year.

There are no proposed reporting, recordkeeping, or other compliance requirements.

The proposed action does not duplicate, overlap, or conflict with other Federal rules.

The proposed action ( i.e., the suite of preferred alternatives) includes implementation of revised commercial/recreational quota allocation system for the summer flounder, scup, and black sea bass fisheries.

When considering the economic impacts of the alternatives under the Regulatory Flexibility Act, consideration should also be given to those non-preferred alternatives which would result in higher net benefits or lower costs to small entities while still achieving the stated objective of the action.

For summer flounder and scup, only the no action alternatives (alternatives 1a-4 and 1b-1, respectively) had greater positive expected impacts for the commercial sector than the preferred alternatives; however, those alternatives had greater negative impacts for the recreational sector than the preferred alternatives. For black sea bass, both the no action alternative (alternative 1c-4) and alternative 1c-5 were expected to have greater positive impacts for the commercial sector than the preferred alternative. However, as with summer flounder and scup, those alternatives had greater negative impacts for the recreational sector than the preferred alternative. In addition, alternative 1c-5 would have maintained a landings-based allocation for black sea bass, and the Council and Board supported switching to a catch-based allocation. Catch-based allocations were supported because they include both landings and discards, eliminate the current discard apportionment process, and hold each sector accountable to their own discards.

All alternatives that had a greater potential for positive impacts or a lesser potential for negative impacts to the recreational sector than the preferred alternatives had a greater magnitude of negative expected impacts for the commercial sector. The no action alternative, for all three species, did not meet the stated objectives given the notable changes in data that have occurred since these allocations were first established, and that leaving the allocations unchanged would not be based on the best scientific information available.

The non-preferred alternatives for phase-in, transfers, and frameworks/addenda are not expected to have notably different socioeconomic impacts than the preferred alternatives.

For the reasons set out in the preamble, 50 CFR part 648 is proposed to be amended as follows: