On December 21, 2000, the Secretary established the Agricultural Marketing Service's (AMS) National Organic Program (NOP) and the USDA organic regulations (65 FR 80547, December 21, 2000). Within the USDA organic regulations (7 CFR part 205) is the National List of Allowed and Prohibited Substances (or “National List”). The National List identifies the synthetic substances that may be used and the nonsynthetic (natural) substances that may not be used in organic crop and livestock production. It also identifies the nonorganic substances that may be used in or on processed organic products.

AMS is finalizing three amendments to the National List in accordance with the procedures detailed in the Organic Foods Production Act of 1990 (OFPA) (7 U.S.C. 6501-6524). OFPA establishes what may be included on the National List and the procedures that the USDA must follow to amend the National List (7 U.S.C. 6517). OFPA also describes the NOSB's responsibilities in proposing amendments to the National List, including the criteria for evaluating amendments to the National List (7 U.S.C. 6518).

According to OFPA's requirements, substances on the National List must be: (1) reviewed every five years by the NOSB, a 15-member Federal advisory committee; and (2) renewed by the Secretary to remain on the National List (7 U.S.C. 6517(e)). This action of NOSB review and USDA renewal is commonly referred to as the “sunset review” or “sunset process.” AMS published information about this process in the Federal Register on September 16, 2013 (78 FR 56811). The sunset date ( i.e., the date by which the Secretary must renew a substance for the listing to remain valid on the National List) for each substance is included in the NOP Program Handbook (document NOP 5611). The sunset date for the two substances added to the National List by this rule will be five years after the effective date noted in the DATES section above. The sunset date for wood rosin is unchanged by this rule and remains March 15, 2027 (86 FR 41699, August 3, 2021).

This rule adds low-acyl gellan gum and paper-based crop planting aids to the National List. This rule also adds a definition for “paper-based crop planting aids” to 7 CFR 205.2. Once this rule becomes effective, organic crop producers and organic handlers will be allowed to use these substances in organic crop production and handling, as applicable. The permitted use of each substance is discussed in detail below. This rule also replaces the term “wood resin” at 7 CFR 205.605(a) with the term “wood rosin” to reflect the popular spelling of the substance. Additional background on the petitions and on the NOSB's review of these substances may be found in the proposed rule (87 FR 5424, February 1, 2022).

During a 60-day comment period that closed on April 4, 2022, AMS received 45 comments on the proposed rule. See below for a discussion of the comments received and AMS's responses to comments. Comments can be viewed at Regulations.gov. Use the search area on the homepage at https://www.regulations.gov to enter a keyword, title, or docket ID (the docket ID for this rule is AMS-NOP-21-0060).

Section 205.605(b) Nonagricultural synthetic substances allowed as ingredients in or on processed products labeled as “organic” or “made with organic (specified ingredients or food group(s)).”

This rule amends the National List to add low-acyl gellan gum to 7 CFR 205.605(b) as a nonagricultural, synthetic substance allowed for use in organic handling as an ingredient in or on processed products labeled as “organic” or “made with organic (specified ingredients or food group(s)).” Low-acyl gellan gum is a polysaccharide (type of carbohydrate) produced through fermentation (from the microorganism Sphingomonas elodea). It is manufactured from high-acyl gellan gum, a substance allowed in organic production, which is isolated from microbial fermentation. Low-acyl gellan gum is used in a wide variety of food products that require gelling, texturizing, stabilizing, suspending, film-forming, and structuring such as ready-to-eat dessert gels, icings, and beverages.

AMS is finalizing this amendment to the National List, as recommended by the NOSB after its October 2020 public meeting, 1 to provide organic handlers an ingredient for thickening, gelling, and stabilizing. Synthetic low-acyl gellan gum is made from natural high-acyl gellan gum, which is already allowed as an ingredient in or on processed products labeled as “organic” or “made with organic (specified ingredients or food group(s))” (§ 205.605(a)).

Low-acyl gellan gum holds unique qualities not found in other thickener substances on the National List ( e.g., high-acyl gellan gum, carrageenan). While high-acyl gellan gum produces gels that are soft, elastic, and non-brittle, low-acyl gellan gum can be used to create a firmer, harder, and non-elastic gel. Food producers can vary the ratios of both high- and low-acyl gellan gums to produce different textures. Low-acyl gellan gum can also be used to increase viscosity of beverages or be used to suspend matter in beverages, such as those containing fruit pulp or jelly pieces. Additionally, low-acyl gellan gums can be clarified to create a gel with better clarity than other gums—important for certain confectionary applications such as icings and fillings. Gellan gums can better withstand higher temperatures while maintaining their gel form than other gelling agents, such as gelatin, can. Additionally, low-acyl gellan gum can be used in standard processing without additional steps ( e.g., compared to pectin, which requires special handling in gelled confections). Finally, low-acyl gellan gum provides a vegetarian alternative to gelatin in hard and soft capsules used for products such as dietary supplements.

Following review of an August 2019 petition, 2 3 the NOSB recommended that low-acyl gellan gum be added to the National List. 1 The NOSB's evaluation of low-acyl gellan gum considered comments from the public, a previously commissioned third-party technical report on gums, 4 and the petition itself. The NOSB discussed this petition in subcommittee calls and at its public meeting in October 2020. 5

After their evaluation, the NOSB concluded that adding low-acyl gellan gum to the National List is consistent with the evaluation criteria in OFPA (7 U.S.C. 6518(m)). The NOSB concluded that low-acyl gellan gum has minimal adverse effects on the environment and human health. Additionally, the NOSB acknowledged the distinct properties of low-acyl gellan gum and noted that it can be used to manufacture hard, non-elastic, brittle gels (unlike high-acyl gellan gum). This property allows it to be used in the production of capsules used for dietary supplements. Notably, its allowance by this rule will give organic handlers an alternative to gelatin to produce vegetarian and vegan products—an important attribute for a segment of consumers.

The NOSB recommended that low-acyl gellan gum be classified as “synthetic”. As defined by OFPA and the USDA organic regulations, a synthetic substance is produced by a chemical process, or by a process that chemically changes a natural substance (7 U.S.C. 6502(22) and 7 CFR 205.2). As the manufacturing process for low-acyl gellan gum includes the deacetylation of high-acyl gellan gum (reducing the number of acetyl groups  6 by adding potassium, magnesium, calcium, and/or sodium salts), which is considered a chemical change, the NOSB determined this is a synthetic substance.

AMS received 16 comments in response to the proposed listing of low-acyl gellan gum from a diverse audience, including: certified operations, certifying agents, trade groups, substance manufacturers, and the public. The subjects of these comments and responses from AMS are covered in this section. AMS is finalizing the addition of low-acyl gellan gum as drafted in the proposed rule.

The majority of commenters were in favor of adding low-acyl gellan gum to the National List and agreed with the NOSB's recommendation. Commenters supported the addition based on the absence of evidence that low-acyl gellan gum is harmful to human health or the environment and based on the FDA allowance of low-acyl gellan gum as a food additive. Additionally, commenters stated this substance is necessary and would support market development of organic products, due to the lack of wholly natural thickeners with similar properties.

A few comments were opposed to the addition of the substance to the National List. Two commenters expressed concern that a manufacturer of low-acyl gellan gum petitioned for the addition to the National List and stood to benefit from inclusion of the substance. Another commenter was opposed due to the processed nature of the substance.

AMS notes that the National List is an optional list of generic substances that an operation may use in their products. Petitions to amend the National List may be submitted by any person, and substances on the National List may be produced by any manufacturer. Furthermore, OFPA expressly permits nonorganic ingredients in organic handling, including synthetic ingredients included on the National List for use in organic processed products. These individual synthetic ingredients must meet the criteria in OFPA ( e.g., not harmful to human health and the environment), as evaluated by the NOSB and AMS, and undergo rulemaking to add them to the National List. The NOSB and AMS evaluated low-acyl gellan gum and determined that it met the statutory requirements for addition to the National List.

Some commenters misperceived the proposed rule as allowing low-acyl gellan gum for use by farmers in organic crop production. AMS does not respond to these comments, as the rule does not allow low-acyl gellan gum in crop production. The rule allows use of low-acyl gellan gum in organic handling ( i.e., processing). One of these commenters expressed concern with negative health effects associated with overconsumption of gellan gum and mentioned an unnamed animal study.

After review of the comment, AMS concluded that allowance of low-acyl gellan gum is not likely to be harmful to human health. First, gellan gum is listed by the Food & Drug Administration (FDA) as a safe food additive permitted for direct addition to food for human consumption at 21 CFR 172.665. The FDA requires prescribed conditions for its safe use, including following good manufacturing practices (21 CFR 172.665(e)). Additionally, the rule only allows limited use of low-acyl gellan gum, as allowed synthetic substances cannot be used at levels greater than 5 percent (by weight or fluid volume, excluding water and salt) in products labeled “organic” (§ 205.301(b)). As a food additive, low-acyl gellan gum will be used to thicken, gel, and stabilize processed organic products.

As described in the BACKGROUND section, OFPA establishes what may be included on the National List and the procedures that AMS must follow to amend the National List. As directed by OFPA, AMS must show that a substance: is not harmful to human health or the environment; is necessary for handling because of the unavailability of wholly natural substitute products; and is consistent with organic handling. OFPA also describes the NOSB's responsibilities in recommending amendments to the National List, including evaluation criteria.

First, AMS agrees with the classification of low-acyl gellan gum as a “synthetic” substance, as the process of removing acetyl groups by deacetylation fits the definition of “synthetic” at 7 CFR 205.2 and 7 U.S.C. 6502 and as described in AMS published guidance on the classification of materials. 7

AMS also concludes that the addition of low-acyl gellan gum to the National List is consistent with the requirements of OFPA (7 U.S.C. 6517(c)(1)(A)). While NOSB determined that low-acyl gellan gum had minimal adverse effects on the environment and human health, AMS determined there is no impact. First, low-acyl gellan gum is not harmful to human health or the environment, as gellan gum is listed by the Food & Drug Administration (FDA) as a food additive permitted for direct addition to food for human consumption at 21 CFR 172.665. Additionally, gellan gum is allowed as an inert ingredient in minimum risk pesticides ( i.e., pesticide products exempt from the requirements of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)) by the U.S. Environmental Protection Agency (EPA) at 40 CFR 152.25(f)(2)(iv)). Second, low-acyl gellan gum is necessary because of the absence of wholly natural substitute products, as evidenced by public comment submitted to the NOSB and as reported in the 2018 technical report. Finally, the use of low-acyl gellan gum is consistent with organic handling. This amendment follows the NOSB recommendation according to the procedures established in OFPA (7 U.S.C. 6517(d)).

Section 205.601(o) Synthetic production aids allowed for use in organic crop production

This rule amends the National List to add paper-based crop planting aids to 7 CFR 205.601 as a synthetic substance allowed for use in organic crop production. This rule also adds a definition for paper-based crop planting aids to the USDA organic regulations (§ 205.2, Terms defined ). Together, these amendments allow use of paper-based crop planting aids, including those that are placed in or on the soil and later incorporated into the soil.

AMS is finalizing this amendment to the National List, as recommended by the NOSB after its April 2021 meeting, 8 to provide certified operations an additional tool for planting or transplanting crops. Paper-based crop planting aids ( e.g., individual pots, chain pots, seed tape, collars) provide an alternative to the slower and more costly method of planting or transplanting individual crops by hand.

Following review of a petition submitted in August 2018,  9 10 the NOSB recommended adding paper-based crop planting aids to the National List and recommended a regulatory definition of these products. In their evaluation of paper-based crop planting aids, the NOSB considered comments from the public, a commissioned technical report on paper-pots and containers, 11 previously commissioned technical reports on newspaper, 12 13 and the petition itself. The NOSB discussed the petition to amend the National List in subcommittee calls and at its public meetings in October 2018, 14 April and October 2019,  15 16 April and October 2020, 17 and April 2021. 18

After their evaluation, the NOSB concluded that adding paper-based crop planting aids to the National List is consistent with evaluation criteria in OFPA (7 U.S.C. 6518(m)). The NOSB found that the use of paper-based crop planting aids is compatible with organic crop production and provides benefits compared to planting or transplanting crops by hand. The NOSB recommended classifying paper-based crop planting aids as “synthetic” due to the manufacturing process. As defined by OFPA and the USDA organic regulations, a synthetic substance is produced by a chemical process or by a process that chemically changes a natural substance (7 U.S.C. 6502(22) and 7 CFR 205.2). Manufacturing paper includes breaking down wood chips into paper pulp through either acidic or alkaline chemical reactions, so it meets this definition of “synthetic”. Additionally, paper is classified as synthetic for other uses on the National List (§ 205.601).

AMS received 38 comments in response to the proposed listing of paper-based crop planting aids. Most comments supported the addition of paper-based crop planting aids for organic crop production to the National List. Many comments were from certified organic operations. Commenters supported the use of paper-based crop planting aids on account of improved efficiency in transplanting crops. Commenters indicated that these products would allow smaller operations to exponentially increase planting efficiency and save money on labor while retaining organic certification. Many commenters also cited the environmental benefit of reduced plastic waste, as paper-based crop planting aids could replace plastic seedling trays and pots.

The subjects of public comments and responses from AMS are described below. The rule makes minor modifications to the definition of “paper-based crop planting aids” (§ 205.2) and to introductory language in the National List (§ 205.601) to clarify the intent and meaning of the amendments. These comments and changes are discussed below.

Several commenters, including certifying agents, material review organizations, and trade groups, recommended removal of the last sentence in the proposed definition for “paper-based crop planting aids”: “Added nutrients must comply with §§ 205.105, 205.203, and 205.206”. The commenters indicated that the statement was unclear, inaccurate, and/or unnecessary. They indicated that certified organic crop operations are already required to comply with overarching requirements in the USDA organic regulations related to allowed and prohibited substances, methods, and ingredients (§ 205.105) as well as requirements related to soil fertility and crop nutrient management (§ 205.203). They argued that references to these sections of the USDA organic regulations would therefore be redundant. Commenters also indicated that the reference to crop pest, weed, and disease management practice standards (§ 205.206) would be inappropriate because that section of the regulations does not relate to “nutrients”.

AMS agrees with the commenters that the references to §§ 205.105, 205.203 and 205.206 within the definition of “paper-based crop planting aid” are unnecessary. Sections 205.105 and 205.203 apply to all certified organic crop operations, and reference to the crop pest, weed, and disease management practice standards (§ 205.206) is not relevant or necessary to the definition. AMS has modified the definition of “paper-based crop planting aid” in this rule to remove these references from the definition.

One commenter suggested an update to the regulatory text found in the introduction to the crop substances section of the National List (§ 205.601). The current language here exempts certain categories of synthetic substances on the National List from certain provisions of the USDA organic regulations, specifically, the requirements to first use crop pest, weed, and disease preventive practices and nonsynthetic substances prior to the use of synthetic substances on the National List. For example, synthetic compost feedstocks, plant and soil amendments, plant growth regulators, and floating agents used in postharvest handling, are currently allowed in organic crop production without regard to these preventive practices. The commenter suggested that AMS update the language to clarify that crop production aids, including paper-based crop planting aids, may also be used without regard to those preventive practices. A commenter also suggested that AMS should clarify that fatty alcohols containing allowed synthetic inert ingredients (§ 205.601(m)) are similarly exempt.

AMS agrees that the introductory text at § 205.601 should be updated to include crop production aids as exempt from the provisions set forth in § 205.206(a) through (d). Crop production aids specifically included at § 205.601(o) may be used by producers without first considering other alternative practices or nonsynthetic substances for preventing crop pests, weeds, and diseases. For example, paper-based chain pots are used to transplant seedlings into a field. It would be confusing and impractical for the USDA organic regulations to first require the use of transplanting by hand, or first require the use of nonsynthetic substances, prior to allowing use of paper-based chain pots. The rule updates the introductory text for this section of the National List (the specific modifications to the regulatory text can be found at the bottom of this document). AMS is not updating the text to address the comment related to fatty alcohols containing inert ingredients, as the substance was not included or discussed as part of the proposed rule. AMS may consider additional changes to the introductory text for this section of the National List in a future proposed rule.

In the proposed rule, AMS specifically requested public comment on the interpretation of the wording in the proposed definition that references the qualifications of people tasked with determining the biobased content of these products. As discussed in the proposed rule, AMS interprets “qualified personnel” to be a third-party ( i.e., certifying agent or material review organization, see NOP Program Handbook NOP 3012 “Material Review—Interim Instruction” )  19 capable and qualified to make limited biobased determinations. AMS stated that if the biobased nature of the ingredients were clear ( e.g., a product composed entirely of paper and coconut coir), then the review of the product could be performed by qualified personnel without a laboratory test (ASTM D6866). A discussion of comments received on this topic follows. The rule makes no changes related to “qualified personnel”.

Several commenters, including certifying agents, material review organizations, and trade groups, agreed that “qualified personnel” would include certifying agents and material review organizations. Of these commenters, a certifying agent and material review organization expressed confidence in their ability to evaluate the biobased content of some paper-based crop planting aids outside of an ASTM D6866 laboratory result. Several paper-based crop planting aid manufacturers also submitted comments. These manufacturers indicated that they currently produce products that meet the composition requirements. Some stated that they plan to work with a material review organization to verify compliance with the USDA organic regulations following publication of this rule.

One commenter, a certifying agent, expressed concern that the definition lacked clarification on what constitutes “qualified personnel”. This commenter also expressed overall concerns with the composition requirements. The commenter stated that they deviate significantly from current industry standards and practices, as no products currently available cite third-party standards or provide detailed information on the percentage of biobased or cellulose content. This commenter indicated that the detailed requirements regarding cellulose and biobased content would require both product manufacturers and certifying agents to perform multiple calculations, demanding more time and expense of certifying agents without affording significant tangible benefits to organic integrity. This commenter requested that AMS clearly set out minimum qualifications to meet the definition of “qualified personnel” and specify methods to be used to determine biobased content outside of an ASTM D6866 laboratory result.

AMS appreciates the public comments in response to AMS's questions set forth in the proposed rule. AMS is not making additional changes from the proposed rule in this rule regarding “qualified personnel”. Formulation review of products composed of allowed substances is a common practice among certifiers and material review organizations to ensure that products are compliant with the USDA organic regulations. If the biobased nature of the ingredients is unclear, then the composition of the product should be determined by a laboratory test (ASTM D6866). AMS expects much of the paper-based crop planting aids review process to fit into current product formulation evaluation processes and via the ASTM D6866 standard. AMS encourages certifying agents and material review organizations and other qualified third parties to consult guidance previously set forth by AMS, which encourages certifying agents to consult with each other regarding material review. 19

One commenter expressed concern with specific reference to only synthetic substances allowed as plant or soil amendments—on the National List at § 205.601(j))—in the definition of “paper-based crop planting aids.” This commenter suggested that it is not necessary to refer to these substances because material reviewers should review added ingredients against the relevant subsection of the National List.

AMS disagrees with the suggestion to remove reference to synthetic substances allowed as plant and soil amendments (§ 205.601(j)) from the definition, thereby allowing the inclusion of any synthetic substances on the National List for organic crop production. The rule aligns with the NOSB's recommendation on this topic. During the development of their recommendation, the NOSB considered whether the non-cellulose content of these products could include synthetic pest and disease control substances from the National List. The NOSB discarded this option, stating, for example, that pesticides embedded in these products could have adverse impacts on biodiversity.

AMS agrees that organic producers may only use synthetic substances on the National List for crop pest, weed, and disease control when other practices (see § 205.206) are insufficient to prevent or control crop pests, weeds, and diseases. The rule does not allow synthetic pesticides in paper-based crop planting aids, as inclusion of these substances would likely lead to prophylactic use of synthetic substance(s). The use of synthetic substances in this manner is not permitted by the USDA organic regulations (§ 205.206(e)).

In accordance with the NOSB recommendation, the rule only permits the addition of the following synthetic substances in paper-based crop planting aids: substances on the National List in § 205.601(j) as plant and soil amendments; and ingredients used in strengthening fibers, adhesives, or resins.

One commenter opposed the allowance of synthetic strengthening fibers, adhesives, and resins in the definition of paper-based crop planting aids. The commenter indicated that the synthetic allowances are unnecessary and that the proposed composition requirements would not drive manufacturers to develop products with fewer synthetic ingredients. They indicated that a pot, made from only paper, could be dipped in natural rubber and yield the same labor-saving advantages as the proposed paper-based crop planting aids.

AMS disagrees with prohibiting synthetic strengthening fibers, adhesives, and resins. First, as outlined in the OVERVIEW section, paper-based crop planting aids include not only individual pots but also products such as chain pots, seed tape, and collars. Second, paper-based crop planting aids require strengthening additives to increase “wet strength” so that they will not breakdown prior to transplanting. These additional synthetic substances allow paper-based crop planting aids to hold their structure and resist breakdown in the presence of water, soil media, and plant roots. 11

One commenter urged AMS to update the reference to the ASTM standard ASTM D6866 in future rulemaking, as incorporated into the USDA organic regulations by reference (see § 205.3, Incorporation by reference ). They also urged AMS to include regular review of the incorporated references listed in § 205.3, such as when National List substances go through the sunset review process.

AMS recognizes that the standards incorporated into the USDA organic regulations by reference are subject to change over time, and AMS understands a newer version of the ASTM D6866 standard has been adopted by ASTM (currently ASTM D6866-22, adopted in 2022 compared to ASTM D6866-12 referenced in the USDA organic regulations and adopted in 2012). AMS intends to update the reference to ASTM D6866-12 and to other references (§ 205.3) in future rulemaking.

AMS concludes that adding paper-based crop planting aids to the National List is consistent with the requirements of OFPA (7 U.S.C. 6517(c)(1)(A)), and this amendment adopts the NOSB recommendation according to OFPA procedures (7 U.S.C. 6517(d)). Paper-based crop planting aids appear to be necessary due to the lack of wholly nonsynthetic (natural) substitute products. Additionally, paper-based crop planting aids are expected to readily break down in the soil and do not appear to be harmful to human health or the environment when used for crop planting or transplanting purposes. This conclusion is supported by the presence of paper on EPA's list of “inert ingredients permitted in minimum risk pesticide products” at 40 CFR 152.25(f)(2)(iv). Furthermore, the addition of paper for these uses is consistent with the other allowed uses of paper under the USDA organic regulations, namely, as a mulch (7 CFR 205.601(b)(2)(i)) and compost feedstock (§ 205.601(c)). AMS also notes and agrees with comments that allowance of paper-based crop planting aids could reduce use of plastic, thereby providing an environmental benefit.

Finally, AMS agrees with the NOSB's classification of paper-based crop planting aids as a “synthetic” substance, as the acid-base reactions included in the kraft process of manufacturing paper, as well as the inclusion of additional synthetic substances to improve performance, fit the definition of “synthetic” as described in the USDA organic regulations (7 CFR 205.2) and AMS published guidance on the classification of materials. 7

Section 205.605(a) Nonagricultural nonsynthetic substances allowed as ingredients in or on processed products labeled as “organic” or “made with organic (specified ingredients or food group(s)).”

This rule amends the National List to update the spelling of “wood resin” to “wood rosin” in the definition of “waxes” at 7 CFR 205.605(a).

Following the 2022 sunset review for wood resin, the NOSB recommended a correction to the spelling of “wood resin” (to “wood rosin”) on the National List. “Wood resin” is currently included on the National List as an allowed nonorganic substance in or on processed products labeled as “organic” or “made with organic (specified ingredients or food group(s)).”  20 The NOSB stated in this recommendation that “wood rosin” is the more accurate and current spelling and that AMS should replace the word “resin” with “rosin”. The NOSB discussed the recommendation for this technical correction in subcommittee calls and at its public meeting in October 2020. 5

AMS concludes that “resin” can also refer to “rosin”—as noted by AMS in a 1997 proposed rule (62 FR 65850, December 16, 1997)—but AMS agrees “rosin” is the preferred term because it is more specific to the wood product and aligns more closely with the use of the term in the market. Additionally, the spelling “rosin” more closely aligns with FDA (21 CFR 178.3870, Rosins and rosin derivatives ) and World Health Organization definitions for food-grade rosin. 21 AMS does not expect this spelling modification to have any impact on organic handlers.

AMS received six comments in response to the proposed technical correction of “wood resin” to “wood rosin”. All public submissions supported the correction. The rule replaces the term “Wood resin” with “Wood rosin” at 7 CFR 205.605(a).

AMS published notices in the Federal Register announcing the Fall 2020 NOSB Meeting (85 FR 54343, September 1, 2020) and announcing the Spring 2021 NOSB meeting (86 FR 10161, February 18, 2021). These notices invited public comments on the NOSB recommendations addressed in this rule. The AMS proposed rule, which preceded this rule, was published on February 1, 2022 (87 FR 5424).

OFPA authorizes the Secretary to make amendments to the National List based on recommendations developed by the NOSB. OFPA authorizes the NOSB to develop recommendations for submission to the Secretary to amend the National List and to establish a process by which persons may petition the NOSB for the purpose of having substances evaluated for inclusion on or deletion from the National List (7 U.S.C. 6518(k) and (n)). Section 205.607 of the USDA organic regulations permits any person to petition to add or remove a substance from the National List and directs petitioners to obtain the petition procedures from USDA (7 CFR 205.607). The current petition procedures published in the Federal Register (81 FR 12680, March 10, 2016) for amending the National List can be accessed through the NOP Program Handbook on the AMS website at https://www.ams.usda.gov/rules-regulations/organic/handbook.

This rule does not meet the criteria of a significant regulatory action under Executive Order 12866 as supplemented by Executive Order 13563. Therefore, the Office of Management and Budget (OMB) has not reviewed this rule under those orders.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires agencies to consider the economic impact of each rule on small entities and evaluate alternatives that would accomplish the objectives of the rule without unduly burdening small entities or erecting barriers that would restrict their ability to compete in the market. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to the action. Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

The Small Business Administration (SBA) sets size criteria for each industry described in the North American Industry Classification System (NAICS) to delineate which operations qualify as small businesses. 22 The SBA classifies small agricultural producers that engage in crop and animal production as those with average annual receipts of less than $2 million (13 CFR 121.201). Handlers are involved in a broad spectrum of food production activities and fall into various categories in the NAICS Food Manufacturing sector. The small business thresholds for food manufacturing operations are based on the number of employees and range from 500 to 1,250 employees, depending on the specific type of manufacturing. Certifying agents fall under the NAICS subsector “all other professional, scientific and technical services.” For this category, the small business threshold is average annual receipts of less than $17 million.

Producers. AMS has considered the economic impact of this rulemaking on small agricultural entities. Data collected by the USDA National Agricultural Statistics Service (NASS) and the NOP indicate most of the certified organic production operations in the United States would be considered small entities. According to the 2019 Certified Organic Survey, 16,524 organic farms in the United States reported total sales of organic products and total farmgate sales more than $9.9 billion. 23 Based on that data, organic sales average $601,000 per farm. Assuming a normal distribution of producers, we expect that most of these producers would fall under the $2 million sales threshold to qualify as a small business.

Handlers. According to the NOP's Organic Integrity Database (OID), there are 10,896 U.S.-based organic handlers that are certified under the USDA organic regulations. 24 The Organic Trade Association's 2021 Organic Industry Survey has information about employment trends among organic manufacturers. 25 The reported data are stratified into three groups by the number of employees per company: fewer than 5; 5 to 49; and 50 plus. These data are representative of the organic manufacturing sector, and the lower bound (50) of the range for the larger manufacturers is notably smaller than the SBA's small business thresholds (500 to 1,250). Therefore, AMS expects that most organic handlers would qualify as small businesses.

Certifying agents. The SBA defines “all other professional, scientific, and technical services,” which include certifying agents, as those having annual receipts of less than $17 million (13 CFR 121.201). There are currently 75 USDA-accredited certifying agents, 24 based on a query of the OID database, who provide organic certification services to producers and handlers. While many certifying agents are small entities that would be affected by this rule, we do not expect that these certifying agents would incur significant costs as a result of this action, as certifying agents already must comply with the current regulations ( e.g., maintaining certification records for organic operations).

AMS concludes that this rule will not have any significant economic impact on small entities or affect a substantial number of small entities. The effect of this rule is that additional substances will be allowed in organic handling and organic crop production (low-acyl gellan gum and paper-based crop planting aids). The allowance of these substances will provide entities, including small entities, with more options in their day-to-day operations.

Executive Order 12988 instructs each executive agency to adhere to certain requirements in the development of new and revised regulations in order to avoid unduly burdening the court system. This rule is not intended to have a retroactive effect. Accordingly, to prevent duplicative regulation, states and local jurisdictions are preempted under OFPA from creating programs of accreditation for private persons or state officials who want to become certifying agents of organic farms or handling operations. A governing state official would have to apply to the USDA to be accredited as a certifying agent, as described in OFPA (7 U.S.C. 6514(b)). States are also preempted from creating certification programs to certify organic farms or handling operations unless the state programs have been submitted to, and approved by, the Secretary as meeting the requirements of OFPA (7 U.S.C. 6503-6507).

Pursuant to OFPA (7 U.S.C. 6507(b)(2)), a state organic certification program that has been approved by the Secretary may, under certain circumstances, contain additional requirements for the production and handling of agricultural products organically produced in the state and for the certification of organic farm and handling operations located within the state. Such additional requirements must (a) further the purposes of OFPA, (b) not be inconsistent with OFPA, (c) not be discriminatory toward agricultural commodities organically produced in other States, and (d) not be effective until approved by the Secretary.

In addition, pursuant to 7 U.S.C. 6519(c)(6), this rule does not supersede or alter the authority of the Secretary under the Federal Meat Inspection Act (21 U.S.C. 601-624), the Poultry Products Inspection Act (21 U.S.C. 451-471), or the Egg Products Inspection Act (21 U.S.C. 1031-1056) concerning meat, poultry, and egg products, respectively, nor any of the authorities of the Secretary of Health and Human Services under the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301 et seq. ), nor the authority of the Administrator of the EPA under the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 et seq. ).

Routine collection, reporting, and recordkeeping related to the use of substances on the National List is included in NOP's approved information collection request (OMB control number 0581-0191). No additional collection or recordkeeping requirements are imposed on the public by this rule. Accordingly, OMB clearance is not required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, Chapter 35.

This rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments. Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments, or proposed legislation. Additionally, other policy statements or actions that have substantial direct effects on one or more Indian Tribes, the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes also require consultation.

After reviewing this rule, the Office of Tribal Relations (OTR) has determined that tribal consultation is not required. If a tribe requests consultation in the future, AMS will work with OTR to ensure meaningful consultation is provided.

Executive Order 13132 mandates that Federal agencies consider how their policymaking and regulatory activities impact the policymaking discretion of States and local officials and how well such efforts conform to the principles of federalism defined in said order. This Executive order only pertains to regulations with clear federalism implications.

AMS has determined that this rule conforms with the principles of federalism described in Executive Order 13132. The rule does not impose substantial direct costs or effects on States, does not alter the relationship between States and the Federal Government, and it does not alter the distribution of powers and responsibilities among the various levels of government. States had the opportunity to comment on the proposed rule. No States provided public comment on the federalism implications of this rule. Therefore, AMS has concluded that this rule does not have federalism implications.

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

This rule reflects recommendations submitted by the NOSB to the Secretary to add two substances to the National List and updates the spelling of one substance on the National List.

For the reasons set forth in the preamble, AMS amends 7 CFR part 205 as follows:

The NRC is amending its regulations in parts 20, 35, 50, 51, 52, 72, 73, 110, and 150 of title 10 of the Code of Federal Regulations (10 CFR). The NRC is making these amendments to correct typographical errors, remove obsolete language, insert missing language, and update the telephone number for the NRC's Region IV office.

Update Telephone Number. This final rule revises appendix D to 10 CFR part 20 and appendix A to 10 CFR part 73 to update the telephone number for the NRC's Region IV office.

Insert Missing Language. This final rule amends § 35.13 by restoring paragraphs (b)(4)(i) through (iv), which were incorrectly removed by the 2018 final rule “Medical Event Definitions, Training and Experience, and Clarifying Amendments” (83 FR 33046; July 16, 2018).

Correct Typographical Error. This final rule amends the second sentence in § 50.75(e)(1)(ii)(A) to remove the text “foregoing,that” and add in its place the text “foregoing, that”.

Remove Obsolete Language. This final rule amends the definition of “NRC staff director” in § 51.4 to update the title “Director, Office of Governmental and Public Affairs” to “Director, Office of Public Affairs” to align with the current organization, and to update the definition to an inline format.

Correct Typographical Error. This final rule amends footnote 2 to § 52.17 by correcting “an accidents” to read “an accident.” This correction aligns footnote 2 with footnotes 4, 6, 10, and 12 to other sections within the part.

Correct Typographical Error. This final rule revises Certificate No. 1029 at § 72.214 by removing extra periods and aligning the text with other renewed certificates in this section.

Insert Missing Language. This final rule amends § 110.22 by restoring the uranium heels provision that was incorrectly removed by the 2010 final rule “Export and Import of Nuclear Equipment and Material; Updates and Clarifications” (75 FR 44072; July 28, 2010). Uranium heels were added as a provision under the general license by the final rule “Export and Import of Nuclear Equipment and Materials” (65 FR 70287; November 22, 2000). This final rule also amends the provision by adding the United Kingdom to reflect the changes that resulted from the United Kingdom's withdrawal from the European Union.

Insert Missing Language. This final rule amends § 150.15 by adding “or part 52 of this chapter” to paragraphs (a)(7)(iii) and (a)(8) to reference licensees under 10 CFR part 52.

Insert Missing Language. This final rule amends § 150.15 by restoring paragraph (a)(9), which was incorrectly removed by the 2014 final rule “Safeguards Information-Modified Handling Categorization; Change for Materials Facilities” (79 FR 58664; September 30, 2014).

Under section 553(b) of the Administrative Procedure Act (5 U.S.C. 553(b)), an agency may waive publication in the Federal Register of a notice of proposed rulemaking and opportunity for comment requirements if it finds, for good cause, that it is impracticable, unnecessary, or contrary to the public interest. As authorized by 5 U.S.C. 553(b)(3)(B), the NRC finds good cause to waive notice and opportunity for comment on these amendments, because notice and opportunity for comment is unnecessary. The amendments will have no substantive impact and are of a minor and administrative nature dealing with corrections to certain CFR sections or are related only to management, organization, procedure, and practice. Specifically, the revisions correct typographical errors, remove obsolete language, insert missing language, and update the telephone number for the NRC's Region IV office. The Commission is exercising its authority under 5 U.S.C. 553(b) to publish these amendments as a final rule. The amendments are effective December 14, 2022. These amendments do not require action by any person or entity regulated by the NRC and do not change the substantive responsibilities of any person or entity regulated by the NRC.

The NRC has determined that the corrections in this final rule would not constitute backfitting as defined in § 50.109, “Backfitting,” and as described in NRC Management Directive (MD) 8.4, “Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests.” These corrections also would not constitute forward fitting as that term is defined and described in MD 8.4 or affect the issue finality of any approval issued under 10 CFR part 52. The amendments are non-substantive in nature, including correcting typographical errors, removing obsolete language, inserting missing language, and updating the telephone number for the NRC's Region IV office. They impose no new requirements and make no substantive changes to the regulations. The corrections do not involve any provisions that would impose backfits as defined in 10 CFR chapter I, or that would be inconsistent with the issue finality provisions in 10 CFR part 52. For these reasons, the issuance of this final rule would not constitute backfitting or be inconsistent with any of the issue finality provisions in 10 CFR part 52. Therefore, the NRC has not prepared any additional documentation for this correction rulemaking addressing backfitting or issue finality.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31885).

The NRC has determined that this final rule is the type of action described in § 51.22(c)(2), which categorically excludes from environmental review rules that are corrective or of a minor, nonpolicy nature and do not substantially modify existing regulations. Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this rule.

This final rule does not contain a collection of information as defined in the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) and, therefore, is not subject to the requirements of the Paperwork Reduction Act of 1995.

This final rule is not a rule as defined in the Congressional Review Act (5 U.S.C. 801-808).

Under the “Agreement State Program Policy Statement,” approved by the Commission on October 2, 2017, and published in the Federal Register on October 18, 2017 (82 FR 48535), NRC program elements (including regulations) are placed into compatibility categories A, B, C, D, NRC, or adequacy category Health and Safety (H&S). Compatibility Category A program elements are those program elements that are basic radiation protection standards and scientific terms and definitions that are necessary to understand radiation protection concepts. An Agreement State should adopt Category A program elements in an essentially identical manner in order to provide uniformity in the regulation of agreement material on a nationwide basis. Compatibility Category B program elements are those program elements that apply to activities that have direct and significant effects in multiple jurisdictions. An Agreement State should adopt Category B program elements in an essentially identical manner. Compatibility Category C program elements are those program elements that do not meet the criteria of Category A or B but contain the essential objectives that an Agreement State should adopt to avoid conflict, duplication, gaps, or other conditions that would jeopardize an orderly pattern in the regulation of agreement material on a national basis. An Agreement State should adopt the essential objectives of the Category C program elements. Compatibility Category D program elements are those program elements that do not meet any of the criteria of Category A, B, or C and, therefore, do not need to be adopted by Agreement States for purposes of compatibility. Compatibility Category NRC program elements are those program elements that address areas of regulation that cannot be relinquished to the Agreement States under the Atomic Energy Act of 1954, as amended, or provisions of 10 CFR. These program elements should not be adopted by the Agreement States. Compatibility Category H&S program elements are program elements that are required because of a particular health and safety role in the regulation of agreement material within the State and should be adopted in a manner that embodies the essential objectives of the NRC program. The portions of this final rule that amend 10 CFR parts 20, 35, and 150 are a matter of compatibility between the NRC and the Agreement States, thereby providing consistency among Agreement State and NRC requirements, and are listed in the following table. The changes to 10 CFR parts 50, 51, 52, 72, 73, and 110 categories are not subject to Agreement State jurisdiction and consequently are not required for compatibility.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR parts 20, 35, 50, 51, 52, 72, 73, 110, and 150:

A. Background 1. Statutory Authority

Section 104(b)(1) of the CPSIA requires the Commission to assess the effectiveness of voluntary standards for durable infant or toddler products and to adopt mandatory standards for these products. 15 U.S.C. 2056a(b)(1). A mandatory standard must be “substantially the same as” the corresponding voluntary standard, or it may be “more stringent than” the voluntary standard, if the Commission determines that more stringent requirements would further reduce the risk of injury associated with the product. Id.

Section 104(b)(4)(B) of the CPSIA specifies a process for updating the Commission's rules when a voluntary standards organization revises a standard that the Commission previously incorporated by reference under section 104(b)(1). First, the voluntary standards organization must notify the Commission of the revision. Once the Commission receives this notification, the Commission may reject or accept the revised standard. The Commission may reject the revised standard by notifying the voluntary standards organization, within 90 days of receiving notice of the revision, that it has determined that the revised standard does not improve the safety of the consumer product and that it is retaining the existing standard. If the Commission does not take this action to reject the revised standard, the revised voluntary standard will be considered a consumer product safety standard issued under section 9 of the Consumer Product Safety Act (15 U.S.C. 2058), effective 180 days after the Commission received notification of the revision or on a later date specified by the Commission in the Federal Register . 15 U.S.C. 2056a(b)(4)(B).

Under section 104(b)(1) of the CPSIA, the Commission adopted a mandatory rule for gates and enclosures, codified in 16 CFR part 1239. The rule incorporated by reference ASTM F1004-19, Standard Consumer Safety Specification for Expansion Gates and Expandable Enclosures, with two modifications. 85 FR 40100 (July 6, 2020). The standard is intended to address head and neck entrapment in children's expansion gates and expandable enclosures, and the ability of pressure gates to resist a push-out force.

In 2021, ASTM revised the voluntary standard to align with the two modifications contained in 16 CFR part 1239, by adding the following requirements for pressure-mounted gates:

• For pressure-mounted gates that rely on wall cups to meet the 30-lb push-out force test, the gates must include a separate warning label (regarding correct installation) in a conspicuous location on the top rail; or

• For pressure-mounted gates that do not use wall cups, the gates must use visual side-pressure indicators to provide feedback on whether the gate is installed correctly.

Because the revised voluntary standard aligned with the mandatory standard, the Commission published a direct final rule on September 28, 2021, to update 16 CFR part 1239 to reflect incorporation by reference of ASTM F1004-21, with no modifications (86 FR 53535).

On June 1, 2022, ASTM approved and published a further revision, ASTM F1004-22. ASTM notified CPSC of the revision on July 25, 2022. On August 4, 2022, the Commission published a Notice of Availability in the Federal Register , requesting comment on whether the revision improves the safety of gates and expandable enclosures (87 FR 47729). Public comment closed on August 18, 2022, and CPSC did not receive any comments.

As discussed in section B. Revisions to ASTM F1004, based on CPSC staff's review of ASTM F1004-22, 1 the Commission will allow the revised voluntary standard to become the mandatory standard. 2 Accordingly, by operation of law under section 104(b)(4)(B) of the CPSIA, ASTM F1004-22 will become the mandatory consumer product safety standard for gates and enclosures on January 21, 2023. 15 U.S.C. 2056a(b)(4)(B). This direct final rule updates 16 CFR part 1239 to incorporate by reference the revised voluntary standard, ASTM F1004-22.

The ASTM standard for gates and enclosures includes performance requirements, test methods, and requirements for marking, labeling, and instructional literature, to address hazards to children associated with expandable gates and enclosures. The CPSC's current mandatory standard Safety Standards for Gates and Enclosures in 16 CFR part 1239 incorporates by reference ASTM F1004-21, with no modifications.

The revision to ASTM F1004-22 consists of changes to the illustrated examples of warning labels referenced as Figures in Section 8.4.7. The warning statement: “You MUST install wall cups to keep the gate in place. Without wall cups, child can push out and escape” was removed from Figures 8 through 10, and the same warning statement is shown as a standalone label in a new Figure 11. This change reflects the requirement in Section 8.5.7 for pressure-mounted gates to have a separate warning, specific to installation of wall cups, if the design of that gate relies on the wall cups to meet the push-out force requirements.

Under section 104(b)(4)(B) of the CPSIA, unless the Commission notifies ASTM that it's revision to a voluntary standard that is referenced in a mandatory standard “does not improve the safety of the consumer product covered by the standard,” the revised voluntary standard becomes the new mandatory standard. The Commission determines that the substantive change in the latest revision to ASTM F1004 is an improvement to safety of the product.

When ASTM F1004 was updated in 2021 to align with CPSC's mandatory standard for gates and enclosures, the standard added the following requirement, specific to pressure-mounted gates:

• 8.5.7 Pressure-mounted gates that provide wall cups or other mounting hardware to meet the requirements of 6.3 shall have the following warning in the location specified: You MUST install [wall cups] to keep gate in place. Without [wall cups], child can push out and escape.

• 8.5.7.1 This warning shall be separate from all other warnings required on the product and shall not include any additional language.

However, the illustrated examples of warnings shown in Figures 8 through 10 were not updated to reflect that a separate warning label specific to installing wall cups is required for pressure-mounted gates that rely on such hardware to withstand push-out forces. The examples of warning labels in ASTM F1004-21 continue to show the statements to install wall cups (“You MUST install wall cups to keep the gate in place. Without wall cups, child can push out and escape.”) alongside other warning statements. The revised standard corrects the illustrated examples to reflect that specific requirement in Section 8.5.7 that warnings to install wall cups must be conveyed in a separate, standalone warning label.

This change aligns the exemplar warning labels with language in the standard emphasizing that pressure-mounted gates that rely on wall cups to meet the horizontal push-out requirements must clearly warn the consumer that the wall cups must be installed for the product to function properly. The standard requires a separate, standalone statement, and the examples of illustrated warning labels now reflect that standalone warning. The Commission concludes the change is an improvement to safety because it reinforces a message that is critical to the safe use of the product and provides an example that firms could use to meet the standard that is consistent with the requirement in the standard.

Section 1239.2 of the direct final rule incorporates by reference ASTM F1004-22. The Office of the Federal Register (OFR) has regulations regarding incorporation by reference. 1 CFR part 51. Under these regulations, agencies must discuss, in the preamble to a final rule, ways in which the material the agency incorporates by reference is reasonably available to interested parties, and how interested parties can obtain the material. In addition, the preamble to the final rule must summarize the material. 1 CFR 51.5(b).

In accordance with the OFR regulations, section B. Revisions to ASTM F1004 of this preamble summarizes the major provisions of ASTM F1004-22 that the Commission incorporates by reference into 16 CFR part 1239. The standard itself is reasonably available to interested parties. Until the direct final rule takes effect, a read-only copy of ASTM F1004-22 is available for viewing, at no cost, on ASTM's website at: https://www.astm.org/CPSC.htm. Once the rule takes effect, a read-only copy of the standard will be available for viewing, at no cost, on the ASTM website at: https://www.astm.org/READINGLIBRARY/. Interested parties can also schedule an appointment to inspect a copy of the standard at CPSC's Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, telephone: (301) 504-7479; email: cpsc-os@cpsc.gov. Interested parties can purchase a copy of ASTM F2088-22 from ASTM International, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959 USA; telephone: (610) 832-9585; www.astm.org.

Section 14(a) of the Consumer Product Safety Act (CPSA; 15 U.S.C. 2051-2089) requires manufacturers of products subject to a consumer product safety rule under the CPSA, or to a similar rule, ban, standard, or regulation under any other act enforced by the Commission, to certify that the products comply with all applicable CPSC requirements. 15 U.S.C. 2063(a). Such certification must be based on a test of each product, or on a reasonable testing program, or for children's products, on tests of a sufficient number of samples by a third party conformity assessment body accredited by CPSC to test according to the applicable requirements. As noted, standards issued under section 104(b)(1)(B) of the CPSIA are “consumer product safety standards.” Thus, they are subject to the testing and certification requirements of section 14 of the CPSA.

Because expandable gates and enclosures are children's products, a CPSC-accepted third party conformity assessment body must test samples of the products. Products subject to part 1239 also must comply with all other applicable CPSC requirements, such as the lead content requirements in section 101 of the CPSIA, 3 the tracking label requirements in section 14(a)(5) of the CPSA, 4 and the consumer registration form requirements in section 104(d) of the CPSIA. 5 ASTM F1004-22 makes no changes that would impact any of these existing requirements.

In accordance with section 14(a)(3)(B)(vi) of the CPSA, the Commission previously published a notice of requirements (NOR) for accreditation of third party conformity assessment bodies for testing gates and enclosures. 85 FR 40100 (July 6, 2020). The NOR provided the criteria and process for CPSC to accept accreditation of third party conformity assessment bodies for testing gates and enclosures to 16 CFR part 1239. The NORs for all mandatory standards for durable infant or toddler products are listed in the Commission's rule, “Requirements Pertaining to Third Party Conformity Assessment Bodies,” codified in 16 CFR part 1112. Id.

ASTM F1004-22 did not change the testing requirements, testing equipment, or testing protocols for gates and enclosures. Accordingly, the revisions do not change the way that third party conformity assessment bodies test these products for compliance with the safety standard for gates and enclosures. Testing laboratories that have demonstrated competence for testing in accordance with ASTM F1004-21 are competent to test in accordance with the revised standard ASTM F1004-22. Laboratories will begin testing to the new standard when ASTM F1004-22 goes into effect, and the existing accreditations that the Commission has accepted for testing to this standard will cover testing to the revised standard. Therefore, the Commission considers the existing CPSC-accepted laboratories for testing to ASTM F1004-21 to be capable of testing to ASTM F1004-22 as well. Accordingly, the existing NOR for this standard will remain in place, and CPSC-accepted third party conformity assessment bodies are expected to update the scope of the testing laboratories' accreditations to reflect the revised standard in the normal course of renewing their accreditations.

On August 4, 2022, the Commission provided notice in the Federal Register of the revision to the standard and requested comment on whether the revision improves the safety of gates and enclosures covered by the standard. 87 FR 47729. No comments were submitted. Now, the Commission is issuing this rule as a direct final rule. Although the Administrative Procedure Act (APA; 5 U.S.C. 551-559) generally requires agencies to provide notice of a rule and an opportunity for interested parties to comment on it, section 553 of the APA provides an exception when the agency “for good cause finds” that notice and comment are “impracticable, unnecessary, or contrary to the public interest.” Id. 553(b)(B). The Commission concludes that when it updates a reference to an ASTM standard that the Commission incorporated by reference under section 104(b) of the CPSIA, further notice and comment are unnecessary.

Specifically, under the process set out in section 104(b)(4)(B) of the CPSIA, when ASTM notifies CPSC that it has revised a standard that the Commission has previously incorporated by reference under section 104(b)(1)(B) of the CPSIA, that revision will become the new CPSC standard, unless the Commission determines that ASTM's revision does not improve the safety of the product. Thus, unless the Commission makes such a determination, the ASTM revision becomes CPSC's standard by operation of law. The Commission is allowing ASTM F1004-22 to become CPSC's new standard because its provisions improve the safety of the product. The purpose of this direct final rule is to update the Code of Federal Regulations (CFR) so that it reflects the version of the standard that takes effect by statute. This rule updates the reference in the CFR, but under the CPSIA, ASTM F1004-22 takes effect as the new CPSC standard for gates and enclosures, even if the Commission does not issue this rule. Thus, public comments would not alter substantive changes to the standard or the effect of the revised standard as a consumer product safety standard under section 104(b) of the CPSIA. Under these circumstances, further notice and comment are unnecessary.

In Recommendation 95-4, the Administrative Conference of the United States (ACUS) endorses direct final rulemaking as an appropriate procedure to expedite rules that are noncontroversial and not expected to generate significant adverse comments. See 60 FR 43108 (Aug. 18, 1995). ACUS recommends that agencies use the direct final rule process when they act under the “unnecessary” prong of the good cause exemption in 5 U.S.C. 553(b)(B). Consistent with the ACUS recommendation, the Commission is publishing this rule as a direct final rule, because CPSC does not expect any significant adverse comments.

Unless CPSC receives a significant adverse comment within 30 days of this notification, the rule will become effective on January 21, 2023. In accordance with ACUS's recommendation, the Commission considers a significant adverse comment to be “one where the commenter explains why the rule would be inappropriate,” including an assertion challenging “the rule's underlying premise or approach,” or a claim that the rule “would be ineffective or unacceptable without a change.” 60 FR 43108, 43111 (Aug. 18, 1995). As noted, this rule merely updates a reference in the CFR to reflect a change that occurs by statute, and public comments should address this specific action.

If the Commission receives a significant adverse comment, the Commission will withdraw this direct final rule. Depending on the comment and other circumstances, the Commission may then incorporate the adverse comment into a subsequent direct final rule or publish a notice of proposed rulemaking, providing an opportunity for public comment.

The Regulatory Flexibility Act (RFA; 5 U.S.C. 601-612) generally requires agencies to review proposed and final rules for their potential economic impact on small entities, including small businesses, and prepare regulatory flexibility analyses. 5 U.S.C. 603, 604. The RFA applies to any rule that is subject to notice and comment procedures under section 553 of the APA. Id. As discussed in section F. Direct Final Rule Process of this preamble, the Commission has determined that further notice and the opportunity to comment are unnecessary for this rule. Therefore, the RFA does not apply. CPSC also notes the limited nature of this document, which merely updates the incorporation by reference to reflect the mandatory CPSC standard that takes effect under section 104 of the CPSIA.

The current mandatory standard for gates and enclosures includes requirements for marking, labeling, and instructional literature that constitute a “collection of information,” as defined in the Paperwork Reduction Act (PRA; 44 U.S.C. 3501-3521). While the revised mandatory standard revises the labeling language for gates and enclosures, the revised language would not add to the burden hours because the products already require marking, labeling, and instructional literature under the current standard. The revised labeling provisions merely require different language to that already required by the standard, which would impose minimal if any additional burden because the firm is already required to put labels on the product. The Commission took the steps required by the PRA for information collections when it promulgated 16 CFR part 1223, and the marking, labeling, and instructional literature for gates and enclosures are currently approved under OMB Control Number 3041-0159. Because the information collection burden is unchanged, the revision does not affect the information collection requirements or approval related to the standard.

The Commission's regulations provide a categorical exclusion for the Commission's rules from any requirement to prepare an environmental assessment or an environmental impact statement where they “have little or no potential for affecting the human environment.” 16 CFR 1021.5(c)(2). This rule falls within the categorical exclusion, so no environmental assessment or environmental impact statement is required.

Section 26(a) of the CPSA provides that where a consumer product safety standard is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury unless the state requirement is identical to the federal standard. 15 U.S.C. 2075(a). Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to CPSC for an exemption from this preemption under certain circumstances. Section 104(b) of the CPSIA deems rules issued under that provision “consumer product safety standards.” Therefore, once a rule issued under section 104 of the CPSIA takes effect, it will preempt in accordance with section 26(a) of the CPSA.

Under the procedure set forth in section 104(b)(4)(B) of the CPSIA, when a voluntary standards organization revises a standard that the Commission adopted as a mandatory standard, the revision becomes the CPSC standard within 180 days of notification to the Commission, unless the Commission timely notifies the standards organization that it has determined that the revision does not improve the safety of the product, or the Commission sets a later date in the Federal Register . 15 U.S.C. 2056a(b)(4)(B). The Commission is taking neither of those actions with respect to the standard for gates and enclosures. Therefore, ASTM F1004-22 will take effect as the new mandatory standard for gates and enclosures on January 21, 2023, 180 days after July 25, 2022, when the Commission received notice of the revision.

The Congressional Review Act (CRA; 5 U.S.C. 801-808) states that before a rule may take effect, the agency issuing the rule must submit the rule, and certain related information, to each House of Congress and the Comptroller General. 5 U.S.C. 801(a)(1). The CRA submission must indicate whether the rule is a “major rule.” The CRA states that the Office of Information and Regulatory Affairs determines whether a rule qualifies as a “major rule.”

Pursuant to the CRA, this rule does not qualify as a “major rule,” as defined in 5 U.S.C. 804(2). To comply with the CRA, CPSC will submit the required information to each House of Congress and the Comptroller General.

For the reasons discussed in the preamble, the Commission amends 16 CFR chapter II as follows:

DEA implements and enforces Titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970 and the Controlled Substances Import and Export Act (21 U.S.C. 801-971), as amended, and referred to as the Controlled Substances Act (CSA). 1 The CSA is designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while providing for a sufficient supply of controlled substances and listed chemicals for legitimate medical, scientific, research, and industrial purposes. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety. To this end, controlled substances are classified into one of five schedules based upon: the potential for abuse, currently accepted medical use, and the degree of dependence if abused. 21 U.S.C. 812. Listed chemicals are separately classified based on their use in and importance to the manufacture of controlled substances (list I or list II chemicals). 21 U.S.C. 802(33)-(35).

In accordance with the Attorney General's authority to “promulgate and enforce any rules, regulations, and procedures which he may deem necessary and appropriate for the efficient execution of his functions” under the Act, 21 U.S.C. 871(b), DEA's predecessor agency, the Department of Justice's Bureau of Narcotics and Dangerous Drugs, first issued regulations in 1971 to implement the Comprehensive Drug Abuse Prevention and Control Act of 1970, which included administrative hearing provisions. 2 With a few exceptions, the administrative hearing provisions of those 1971 regulations are virtually identical to the ones in place today.

The changes in this action apply only to hearings relating to the denial, revocation, or suspension of a DEA registration pursuant to 21 U.S.C. 823, 824, and 958. This rule does not implement changes for any other type of hearings that DEA may conduct, including hearings relating to quota issuance, revision, or denial, or those relating to the scheduling of controlled substances.

The general administrative hearing provisions which apply to all hearings brought pursuant to 21 U.S.C. 823, 824 and 958 are found at 21 CFR part 1316, subpart D. Specific administrative hearing provisions relating to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances are in 21 CFR 1301.32, 1301.34-37, and 1301.41-46, as well as 21 CFR 1316.41-68. Administrative hearing provisions relating to the registration of manufacturers, distributors, importers, and exporters of list I chemicals are in 21 CFR 1309.42, 1309.43, 1309.46, 1309.51-55, and 21 CFR 1316.41-68.

In contrast to the hearing regulations of many other federal agencies, current DEA regulations contained in 21 CFR parts 1301, 1309, and 1316 relating to actions to deny, suspend, or revoke a DEA registration do not contain a responsive pleading to an OTSC ( i.e., an answer provision) or a default provision. The changes in this final rule apply only to hearings relating to the denial, revocation, or suspension of a DEA registration pursuant to 21 U.S.C. 823, 824, and 958. This rulemaking does not amend any other type of hearings regulations that DEA may conduct, including hearings relating to quota issuance, scheduling of controlled substances, etc.

DEA is revising its regulations by adding new provisions to increase the efficiency of, and facilitate the processing of, its administrative hearings. In the current practice, the lack of an answer provision or default provision resulted in agency inefficiencies where litigants waive their right to a hearing or otherwise fail to participate in the administrative hearing process. DEA is promulgating several new provisions for the purpose of mitigating the issues of litigants failing to participate generally in the administrative process.

DEA needs to revise its regulations in order to expedite the administrative hearing process as the current provisions may cause administrative waste for DEA and potential delays for registrants. First, the lack of a default provision has led to excessive extension requests in circumstances where the registrant eventually decides to not request a hearing. Additionally, the lack of clear provisions regarding responsive pleadings has led to confusion and inefficiency, and it unnecessarily slowed down the administrative hearing process.

The absence of a default provision has led to inefficiencies in circumstances where DEA prepared extensively for hearings that never occurred, or occurred later than they should due to respondents not complying with orders in the case. Respondents presently are permitted 30 days to request a hearing upon receipt of an OTSC. If a request for an extension was granted by the presiding officer, this gives respondents up to an additional 30 to 60 days to respond. DEA could thus be preparing for litigation for up to 90 days under some circumstances, which is excessively long for the filing of a request for hearing. This problem is exacerbated in light of the absence of any default provision, as DEA could be preparing for litigation for 90 days in cases where no hearing is actually requested.

Furthermore, as noted, DEA regulations currently have no default provision which permits the government's (or respondent's) entry of default upon a litigant's failure to participate. Additionally, if respondents fail to otherwise participate in the hearing process, DEA must submit an entry for final order to the Administrator. This final order requires a voluminous record providing evidence in support of every factual allegation that was included in the OTSC. This results in a very large time and resource investment for DEA to review the record and draft the final order.

Last, DEA lacks a comprehensive set of rules for responsive pleadings, or the answer. The existing rules are unclear what the answer should contain, thus resulting in ambiguity for the general public (pro se litigants in particular). As a result, DEA occasionally receives responsive pleadings that were incomplete or insufficient, thus leading to an unnecessary delay of the administrative process. Furthermore, the regulations lack a provision dictating what happens procedurally should the respondent fail to file an answer. Thus, DEA needs amendments to its administrative hearing regulations in the form of adding default provisions and updating responsive pleading rules.

DEA is amending its administrative hearing regulations by adding certain provisions and revising other provisions to increase the efficiency of the administrative hearing process. As stated above, these changes are necessary to prevent the unnecessary expenditure of agency resources, to clarify obligations, and to expedite the hearing process for both parties. The changes in this action apply only to hearings relating to the denial, revocation, or suspension of a DEA registration pursuant to 21 U.S.C. 823, 824, and 958. Again, this rulemaking does not contemplate changes for any other types of hearings that DEA may conduct, such as hearings relating to the scheduling of controlled substances, quota issuance, etc.

In the Notice of Proposed Rulemaking (NPRM), DEA had proposed to revise the existing regulations to decrease the deadline for submitting a request for a hearing from the current 30 days to 15 days. In light of the public comments and upon further consideration of the issues, DEA has decided to maintain the current deadline for requesting a hearing and the final rule retains the 30-day deadline after receipt of the OTSC for submitting a request for a hearing.

As a result of this decision, DEA is thus revising the provisions pertaining to this deadline as follows: 21 CFR 1301.37(d) by adding paragraph (1);  3 § 1309.46(d) by adding paragraph (1); and § 1316.47 by amending paragraphs (a) and (b). These changes reflect the requirement of respondents, should they desire to contest the OTSC, to file a request for a hearing in response to an OTSC within 30 days of receipt of the OTSC. 4 DEA believes these changes will achieve the desired ends of administrative efficiency while not materially changing the burden of respondents as the time in which to request a hearing is not changed. Allowing 30 days for requesting a hearing is consistent with the 30-day time period for respondents to file an answer.

DEA is amending the following provisions, which require that respondents who request a hearing will file an answer to the OTSC within 30 days of the receipt of the OTSC: § 1301.37(d) by adding paragraph (2); § 1309.46(d) by adding paragraph (2); and § 1316.47 by revising paragraph (b).

First, § 1301.37(d)(2) permits the presiding officer, the Administrative Law Judge, to consider an answer that was filed after the deadline upon a showing of good cause. DEA anticipates that, in contrast to simply requesting a hearing, preparing an answer will take more time and effort than simply requesting a hearing. Thus, DEA believes the 30-day requirement to file an answer, with a good cause provision in the event of delay, is sufficiently tailored to balance the needs of the public with the interest in administrative efficiency.

Next, DEA is amending § 1301.37(d) by adding paragraph (3), and § 1309.46(d) by adding paragraph (3). These provisions require respondents to admit, deny, or state they are unable to answer each factual allegation contained in the OTSC. It also provides that any allegation not denied shall be deemed admitted. This addition is necessary to clarify the requirements of an answer to the general public, in order to limit the scope of the proceeding to issues which are genuinely in dispute. Last, DEA is amending § 1301.37(d) by adding paragraph (4), and § 1309.46(d) by adding paragraph (4), which state that a party may amend its answer as a matter of right once before the prehearing ruling. These provisions also grant the presiding officer leave to permit amendments to the answer as justice so requires.

The changes to these provisions are needed to clarify, to the general public, when and under what circumstances an answer is required. As stated, prior to adopting this rule it has been unclear to respondents when and under what circumstances an answer must be filed, and what must be contained in the answer. These changes elucidate exactly when an answer is required and what must be contained, and grant authority to the presiding officer to make exceptions when merited.

DEA is amending its regulations to permit the entry of default where a party fails to timely request a hearing, or fails to participate in the administrative hearing process. DEA is amending its regulations by revising § 1301.43(c)(1) and § 1309.53(b)(1), 5 to permit DEA's entry of default where the respondent fails to timely request a hearing in response to an OTSC. Respondents who fail to request a hearing are nevertheless able to waive the default by filing a motion with the Office of Administrative Law Judges within 45 days after the date of receipt of the OTSC. The presiding officer may rule on the motion timely filed within 45 days, and may waive the default after the 45-day period lapsed. The presiding officer is authorized to grant the motion. DEA believes this rule is necessary to prevent administrative waste while also providing sufficient discretion for the presiding officer to nevertheless permit a hearing in circumstances which merit excuse.

Under this rule, once a registrant is in default for failure to timely file a request for a hearing or file an answer, this means that the respondent is deemed to agree to all of the factual allegations in the OTSC. 6 Without this provision, DEA would be required to prepare an administrative record providing evidence sufficient to support every factual allegation in the OTSC, regardless of whether the respondent wishes to contest those allegations or whether, had he so contested, he would have challenged every factual allegation.

Next, DEA is amending its regulations by adding several instances where a party can be held in default for generally failing to participate in the administrative hearing process. First, DEA is adding § 1301.43(c)(2), as well as § 1309.53(b)(2), which state that respondents who request a hearing, but fail to timely file an answer (and fail to demonstrate good cause) are considered to have waived their opportunity for a hearing and are in default. Once a party is held in default for failing to timely file an answer and fails to establish good cause, the presiding officer is required to enter an order terminating the proceedings once DEA files a motion. Moreover, DEA is adding § 1301.43(c)(3), as well as § 1309.53(b)(3), which states a party shall also be in default for failing to plead or otherwise defend. Upon motion, the presiding officer must enter an order terminating the proceeding unless the party can demonstrate good cause to stay the order. After termination of the proceeding, a party may also file a motion to excuse default with the Office of the Administrator.

DEA is amending its regulations by revising § 1301.43(e) and 1309.53(d) to state that in all instances of default, the party's default shall be deemed to constitute a waiver of their right to a hearing, and an admission of the factual allegations of the order to show cause. Moreover, DEA is amending its regulations by adding § 1301.43(f)(1)-(3) and § 1309.53(e)(1)-(3), which specify the required procedure to follow once a respondent is in default. Once a respondent is in default, and the presiding officer has issued an order terminating the proceedings, DEA may file a request for a final agency action with the Administrator. Respondents have the right to appeal either the termination of proceeding or the final order by following the procedures contained therein.

The aforementioned provisions allow the entry of default in circumstances in which the respondent essentially waives their right and opportunity to participate in the hearing process by failing to request a hearing, failing to respond, or otherwise failing to participate. These provisions are necessary, as DEA is needlessly expending significant resources in common circumstances where the respondent fails to litigate. Under the default provisions in this final rule, this admission of the factual allegations of the OTSC in the event of default facilitates the enforcement process by eliminating the need for DEA to provide evidentiary support for every factual allegation. DEA believes these provisions will preserve scarce agency resources by eliminating excess time and resources spent on cases where respondents fail to contest the allegations of the OTSC on the merits. Additionally, DEA believes that the procedures in place grant sufficient ability for respondents to appeal the actions of the presiding officer and the Administrator. Thus, DEA believes these provisions will substantially expedite the administrative hearing process while preserving respondents' due process rights.

DEA is also amending its regulations by revising § 1316.49 to exclude respondents engaged in proceedings held under parts 1301 or 1309 from the ability to file a waiver of a hearing and a statement in lieu of a hearing. DEA believes that matters litigated under parts 1301 and 1309 are uniquely enhanced by the hearing setting, namely credibility determinations and resolutions of factual disputes. Thus, DEA is limiting this exception to only matters adjudicated under § 1301 or § 1309, and other proceedings continue to be eligible for the waiver.

These regulatory changes and this rulemaking generally apply only to OTSCs and associated hearings issued on or subsequent to the effective date listed above.

DEA received four comments during the 60-day comment period. All four commenters referenced § 1301.37(d)(1), stating that the 15-day time limit to request a hearing was too short. Two commenters referenced § 1301.37(2), arguing the 30-day time limit to file an answer was too short. One commenter referenced § 1309.46, arguing registrants should have up to three times to amend an answer as a matter of right. Last, one commenter argued that respondents engaged in proceedings under parts 1301 or 1309 should be permitted to submit a written statement in lieu of requesting a hearing.

DEA has closely reviewed and considered every comment and has decided for the following reasons to promulgate the regulations as drafted, with one change regarding the time limit for requesting a hearing.

The proposed rule would have required registrants to request a hearing within 15 days of receipt of an OTSC, instead of the 30 days allowed under the current regulations. This proposal received the most criticism during the comment period, as all commenters believe the 15-day requirement would generally be too prohibitive for registrants. Based on the comments from the public, DEA has decided not to adopt this provision from the proposed rule. The final rule permits registrants 30 days to request a hearing, rather than 15 days.

First, commenters generally stated the 15-day period is too short as it would not leave sufficient time to complete typical prehearing tasks. Specifically, commenters noted this was insufficient time to contact an attorney, contact and gather information from parties who may be involved, as well as investigate. Alternatively, the commenters proposed allowing 30-60 days to request a hearing because, according to their view, this would be sufficient time to prepare for a hearing. Moreover, one commenter argued that this short time period would lead to multiple requests for an extension, thereby contradicting the purpose of the new rule by further delaying the administrative process.

DEA Response: DEA has examined all comments related to this provision, and has decided to retain the existing 30-day period in this final rule to request a hearing, instead of shortening that period to 15 days. First, DEA believes this time period is reasonable, namely that this 30-day period provides sufficient time for the respondent to request a hearing. DEA understands and appreciates that the decision to request a hearing is often done after consulting with counsel to deliberate on the merits of the case; therefore, it makes sense to set the same 30-day deadline for requesting a hearing and for submission of an answer to the OTSC.

When drafting this rule, and after consideration of all the comments, DEA considered the option of providing registrants/applicants up to 60 days to request a hearing. Although this would provide the registrant/applicant maximum opportunity to evaluate all contingencies related to the hearing, DEA does not consider this necessary. This 30-day period should allow sufficient time for registrants/applicants to contact parties, conduct factual investigations, and otherwise prepare for the hearing should they choose to do so.

Requesting a hearing within this time period would eliminate a substantial amount of administrative waste, as most registrants who are served with an OTSC do not request a hearing. The provisions of this rule requiring the request for a hearing and the answer on the merits to both be filed within 30 days of the receipt of the OTSC will provide DEA a means of quickly and efficiently processing cases, as the majority will then be processed at an expedited pace. One commenter noted, and DEA agrees, that some cases will result in a request for an extension. DEA anticipates that this provision will, on balance, save more time by facilitating cases than will be lost by considering extension requests.

Last, DEA finds this provision reasonable and preserves the registrants' due process rights as it creates a means for registrants to file a motion to set aside default when good cause is shown within 45 days of the receipt of the OTSC. Thus, even in those circumstances where registrants are in default, they would be able to still request a hearing when good cause is shown.

DEA has closely reviewed all the comments relating to the requirement to file an answer in 30 days under § 1301.37(2) and has decided to promulgate the section as written. One commenter argued the requirement for a registrant to file an answer within 30 days of receipt of the OTSC is arbitrary, and does not permit sufficient time to contact parties involved or conduct factual investigations. Moreover, another commenter argued that 30 days is insufficient time to adequately respond to the OTSC, favoring 60 days instead.

DEA acknowledges that filing an answer will likely require more time and effort than simply requesting a hearing. DEA believes, however, the requirement to file an answer within 30 days is reasonable and sufficient time to adequately prepare a response to the OTSC.

First, requiring a response within such a time frame is commonplace among other administrative regulations as well as other state and federal level courts. 7 Although there are important differences between administrative hearings and federal court cases, it is telling that the Federal Rules of Civil Procedure require a responsive pleading within 21 days of being served, which is 9 days less than what DEA rules require. 8 Thus, even though the answer will likely require more time and effort than simply requesting a hearing, the time allotted is generous when compared to federal civil practice.

Moreover, as stated in the NPRM, this requirement will significantly improve efficiency by narrowing the scope of the factual issues to only that which is in genuine dispute. This efficiency will result in expediting cases significantly, benefitting both DEA and registrants.

Last, registrants are permitted to amend their answer should they choose, which cures many of the concerns raised by comments. DEA grants leave to amend the answer once as a matter of right under § 1309.46(d)(4), and permits the presiding offer to grant leave to amend. Thus, on balance, this provision allows DEA to process cases quickly and efficiently while enabling the registrants to adequately prepare for hearings.

DEA has closely reviewed all other comments and has decided to promulgate these regulations as written. First, one commenter stated the 30-day limit to file a motion to set aside default was too short, and should be 90 days. Another commenter stated that registrants should be able to amend their answer as a matter of right up to three times. Additionally, one commenter stated that requiring a hearing, rather than accepting a statement in lieu of requesting a hearing, creates administrative waste. Last, one commenter requested DEA to stay the proposed 15-day period to request a hearing until the COVID-19 pandemic is over.

First, as stated above, DEA believes the 45-day period to file motion to set aside default is reasonable and preserves the due process rights of registrants. In circumstances where registrants fail to request a hearing, they will then have 30 days from the entry of default to provide the presiding officer with an explanation as to why the request could not be filed. This safe harbor provision will enable registrants to set aside default where good cause is shown, and provide yet another opportunity for the registrant to present their case. Permitting 90 days to set aside default is unnecessary as this task only requires the filing of one motion. Moreover, this extended period would likely result in prolonging cases, contradicting the purpose and goal of default rules.

Next, DEA believes that granting leave to amend as a matter of right once, and subsequently granting the presiding officer the ability to amend when justice so requires, provides registrants sufficient opportunity to be heard. Granting leave to amend as a matter of right multiple times will likely result in a significant delay of processing cases. Registrants would then have no incentive to gather evidence, contact parties, prepare written statements, or otherwise respond to DEA in a comprehensive manner the first time. Moreover, DEA creates a safe harbor by granting authority to the presiding officer to grant leave to amend in circumstances which are justified, such as when evidence was recently discovered and could not have been discovered prior to filing the original answer. Thus, DEA believes this provision is reasonable and preserves the registrant's due process rights.

DEA closely reviewed the comment regarding statements in lieu of hearings and has decided to promulgate the regulations as written. This commenter argues that the elimination of a statement in lieu of requesting a hearing would be wasteful for both DEA and the registrant in circumstances where the registrant has clearly exculpatory information. This, in theory, would remove the requirement for a hearing and would allow the expedited processing of that case. As stated previously, these hearings deal specifically with the revocation, suspension, or denial of a registration which is substantially benefitted by the presiding officer being able to resolve factual disputes and make credibility determinations. DEA believes that simply permitting a statement in lieu of this hearing would be a detriment to both DEA and respondents, and requiring a hearing would be optimal for both parties.

Last, DEA has closely reviewed the statements regarding the COVID-19 pandemic. As noted above, the final rule does not adopt the 15-day time limit proposed in the NPRM, and this final rule retains the existing 30-day deadline for filing a request for hearing. Although DEA is sympathetic to the difficulties that are associated with this global change, DEA believes that the 30-day deadline will allow sufficient flexibility under the circumstances, because the filing of a request for a hearing is a routine action. Since this final rule is not making any change in the current 30-day deadline, there is no reason to consider “staying” the effective date of this regulation.

In sum, DEA has reviewed all comments extensively and has taken them in full consideration when drafting these regulations. Accordingly, DEA is promulgating these regulations as written, with the exception of the 15-day period to request a hearing, as they create reasonable obligations which promote administrative efficiency while maintaining the due process rights of registrants.

DEA received, and closely reviewed, all four comments that were submitted regarding this rulemaking. None of the comments raised issues that would require amendment of the analysis contained in the NPRM, with the exception of maintaining the 30-day deadline to request a hearing. Thus, the regulatory analyses here closely mirror the data and conclusions contained in the NPRM, and are repeated here for convenience.

This rule was developed in accordance with the principles of Executive Orders (E.O.) 12866 and 13563. E.O. 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). E.O. 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in E.O. 12866. E.O. 12866 classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O. The Office of Management and Budget (OMB) has determined that this rule is not a “significant regulatory action” under E.O. 12866, section 3(f), and it has not been reviewed by OMB.

DEA estimates that there are both costs and cost savings associated with this rule. The provisions of this rule apply only to the small minority of applicants and registrants who are issued an OTSC. Therefore, a very small minority of registrants will be economically impacted. From 2016 to 2018, there were on average 81 OTSCs issued annually. These 81 OTSCs fall into one of three categories: (1) an average of 29 cases in which the registrant/applicant surrendered and/or withdrew their application, thus mooting the case; (2) an average of 11 cases in which the registrant/applicant properly requested a hearing; and (3) the remaining 41 registrants/applicants per year who failed to timely file a request for a hearing and were deemed to have waived their right to a hearing and who would be in default under this rule. The 11 registrants/applicants per year who properly requested a hearing are estimated to incur costs while the registrants/applicants in the remaining two categories do not.

This rulemaking requires that a registrant/applicant must file an answer responding to every factual allegation in the OTSC. The average of 29 cases in which the registrant/applicant surrenders or withdraws their application, thus mooting the case, will not result in the registrant/applicant filing an answer to the OTSC. Therefore, these registrants/applicants will not incur any costs. The average of 11 cases per year where a registrant/applicant requests a hearing may incur a cost associated with answering the factual allegation(s) of the OTSC. To estimate the cost of this change, DEA estimates that, on average, it will take five hours for a registrant's/applicant's attorney to review the OTSC and prepare an answer to all allegations. Thus, the total estimated cost of this change is $36,190 per year. 9

The remaining 41 cases, where there was neither a registration surrendered nor a hearing conducted, would be differently impacted by this rule. This rule provides that where a party defaults, the factual allegations of the OTSC are deemed admitted. For these 41 cases, where there was registrant/applicant inaction, the registrant's/applicant's cost of inaction is the same under current rules. There is no additional cost to registrants/applicants. This rule provides that a default may only be set aside upon a party establishing good cause to excuse its default. DEA has no basis to estimate the number of affected parties who may seek to establish good cause to set aside a default and any costs associated with such activities. However, under Kamir Garces Mejias, 72 FR 54931 (2007), a party seeking to be excused from an Administrative Law Judge (ALJ) order terminating a proceeding for failing to comply with the ALJ's orders is required to show good cause to excuse its default. Thus, because this requirement of the rule simply codifies case law, it imposes no additional cost to registrants.

Finally, this rulemaking will result in cost savings for DEA by streamlining the Administrator's review process using the default determination. The rule provides that when a registrant/applicant is deemed to be in default, DEA may then file a request for final agency action along with a record to support its request with the Administrator who may enter a default. This record should include, for instance, documents demonstrating adequate service of process and, where a party held to be in default asserted that the default should be excused, any pleadings filed by both the parties addressing this issue. A registrant/applicant who has defaulted under this rule is deemed to admit all of the factual allegations in the OTSC.

In contrast, under the current rules, in cases where the registrant/applicant waives their right to a hearing, DEA counsel must provide the Administrator with a much more voluminous record, including evidence to support each factual allegation which DEA seeks to establish. Because DEA's current rules do not provide that a registrant's/applicant's waiver of their right to a hearing constitutes an admission of the factual allegations of the OTSC, both the preparation of the record by DEA counsel for submission to the Administrator and the process of reviewing the record and drafting the Administrator's final order require a significant investment of agency resources. The changes implemented here would thus save these resources, which can then be devoted to other pending matters in which the registrant/applicant does contest the allegations in the OTSC, and reduce the time it takes for the Administrator's final order to issue in those cases where registrants/applicants choose not to challenge the proceeding or fail to properly participate in the proceeding.

To estimate the cost savings of this rule, DEA first estimates the amount of time and resources that would be saved for cases that would be resolved via entry of a default. The complexity of a given case would impact both how much time it would take to prepare the request for final agency action and for the Administrator's Office to draft the final order based on that final agency action request, which cumulatively would represent the amount of resources saved in a given case. For a case based solely on allegations related to a lack of state authority, or an exclusion from federal health care programs, the gathering of the evidence, including declarations, and preparation of the final agency action motion take, on average, approximately 10-15 hours. For cases with substantive allegations (most commonly, improper prescribing or filling of prescriptions), the preparation of the final agency action materials is considerably longer—approximately 30-40 hours per case. It is estimated that of the cases in which there was neither a hearing request nor a registration surrender, roughly 30-40 percent are No State License (NSL) cases, and 60-70 percent of cases would be considered other non-NSL cases. For the purpose of this analysis, DEA estimates that of the 41 cases this rule would impact on average each year, 65 percent would be considered non-NSL cases and take 35 hours per case to prepare a final agency action, while 35 percent would be considered NSL cases and take 13 hours per case to prepare a final agency action. Applying the loaded wage  10 for GS-15 Step 5 employees, 11 DEA estimates the cost savings of this rule for the time it would take to prepare the final agency action request is around $134,065 per year. 12

Additionally, there are cost savings from the time it would take the Administrator's Office to draft the final order based on that final agency action request. The cost savings for the Administrator's review process would be the most significant for all substantive cases that would be subject to the rule. The Administrator's review process consists of the time to review the final agency action request, evaluate the evidence submitted by DEA counsel, draft a decision, and the time the Administrator must spend reviewing the proposed decision. On average, there are four substantive cases per year that would be subject to the rule. Currently, the estimated time it takes for the substantive cases is 30 days or 240 hours per case. With the rule promulgated, the estimated time it will take for these substantive cases will be between one day and two weeks depending on the complexity of the case. For the purpose of this analysis, DEA estimates it will take seven days or 56 hours per case. Using the loaded hourly wage of a GS-15 Step 5 employee, the estimated cost savings for substantive cases is $88,155 per year. 13 There is also cost savings for non-substantive cases, but DEA believes this cost savings to be minimal for the Administrator's review process. Also, while there is a difference in the legal definition of “deemed to have waived” versus “deemed to be in default,” there is no enhancement of potential savings. The Administrator will continue to issue the final order based on the same set of circumstances regarding the OTSC and the default determination, versus the current “deemed to have waived” determination with the additional voluminous record provided. Therefore, the cost savings due to the Administrator's review process is estimated to be around $88,155 per year.

In sum, there are both costs and cost savings associated with this rule. DEA has no basis to estimate the additional litigation costs for registrants who are “deemed to be in default” as a result of their failure to comply with the requirements of the rule as compared to registrants who are “deemed to have waived” under the prior regulations, but believes this additional litigation cost to be minimal due to the small number of these cases occurring each year. The total cost to registrants due to the requirement that a registrant/applicant must file an answer to an OTSC is $36,190 per year. This rule has an estimated cost savings of $222,220 ($134,065 + $88,155) per year for DEA by streamlining the Administrator's review process using the default determination. The estimated net cost savings of this rule is $186,030 ($222,220−$36,190) per year.

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

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with E.O. 13132, the DEA has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment.

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

The Paperwork Reduction Act of 1995 (PRA) requirements do not apply to “the collection of information . . . during the conduct of . . . an administrative action or investigation involving an agency against specific individuals or entities.”  14 These rules involve the collection of information pursuant to administrative actions, orders to show cause specifically, against specific registrants. Thus, this rulemaking is exempted from the requirements under PRA.

The Administrator, in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-12) (RFA), has reviewed this rule and by approving it certifies that this rule will not have a significant economic impact on a substantial number of small entities.

In accordance with the RFA, DEA evaluated the impact of this rule on small entities. This rule adds provisions allowing the entry of a default where a party served with an OTSC fails to request a hearing, fails to file an answer to the OTSC, or otherwise fails to defend against the OTSC. Cf. Fed. R. Civ. P. 55(a). The rule provides that where a party defaults, the factual allegations of the OTSC are deemed admitted. Further, the rule removes the current provisions allowing a recipient of an OTSC to file a written statement while waiving their right to an administrative hearing.

As all DEA registrants are subject to the amended administrative enforcement procedures, the rule could potentially affect any person holding or planning to hold a DEA registration to handle controlled substances and those manufactures, distributors, importers, and exporters of list I chemicals. As of March 2019, there were approximately 1.8 million DEA registrations for controlled substances and list I chemicals. Registrants include individual practitioners (such as physicians, dentists, mid-level practitioners, etc.), business entities (such as offices of physicians, pharmacies, hospitals, pharmaceutical manufacturers, distributors, importers, exporters, etc.), and governmental or tribal agencies that handle controlled substances or list I chemicals.

In practice, a very small minority of DEA registrants are served with OTSCs in connection with the denial or cancellation of registration, and thus a very small minority of DEA registrants would be impacted by the rule. Over the three-year period 2016-2018, there was an average of 81 OTSCs served per year. These 81 OTSCs fall into one of three categories: (1) an average of 29 cases in which the registrant/applicant surrendered the registration and/or withdrew their application, thus mooting the case; (2) an average of 11 cases in which the registrant/applicant properly requested a hearing; and (3) the remaining 41 registrants/applicants per year who failed to timely file a request for a hearing and were deemed to have waived their right to a hearing (and would be in default under this rule). The 11 registrants per year who properly requested a hearing are estimated to incur costs while the registrants in the remaining two categories do not.

This rulemaking requires that a registrant/applicant must file an answer responding to every allegation in the OTSC. The average of 29 cases in which the registrant/applicant surrenders or withdraws their application, thus mooting the case, would not result in the registrant/applicant filing an answer to the allegations in the OTSC. Therefore, these registrants/applicants would not incur any costs. The average of 11 cases per year where a registrant/applicant requests a hearing may incur a cost associated with answering the allegation(s) of the OTSC. To estimate the cost of this change, DEA estimates that, on average, it will take five hours for a registrant/applicant's attorney to review the OTSC and prepare an answer to all allegations, or an average of $3,290 per registrant. 15

The remaining 41 cases, where there was neither a registration surrendered nor a hearing conducted, would be differently impacted by this rule. This rulemaking provides that where a party defaults, the factual allegations of the OTSC are deemed admitted. This rulemaking also provides that a default may only be set aside upon a party establishing good cause to excuse its default. DEA has no basis to estimate the number of affected parties who will seek to establish good cause to set aside a default and any costs associated with such activities. However, under Kamir Garces Mejias, a party seeking to be excused from an ALJ order terminating a proceeding for failing to comply with the ALJ's orders is required to show good cause to excuse its default. 72 FR 54931 (2007). Thus, because this requirement of the rule simply codifies case law, it imposes no additional cost to registrants.

In summary, it is estimated that there will be an average of 11 cases per year, in which the registrant/applicant properly requests a hearing and will incur an economic impact of $3,290. Because the subject of the 11 cases can be an individual or entity ( i.e., offices of physicians, pharmacies, hospitals, pharmaceutical manufacturers, distributors, importers, exporters, governmental or tribal agencies, etc.), DEA compared the estimated cost of $3,290 to the average revenue of the smallest entities for some representative North American Industry Classification System (NAICS) codes for DEA registrants using data from U.S. Census Bureau, Statistics of U.S. Businesses (SUSB).

For example, there are a total of 174,901 entities in NAICS code, 621111-Office of Physicians (Except Mental Health Specialists). Of the 174,901 total entities, DEA estimates that 97.6% are small entities. DEA compared the estimated cost of $3,290 to the revenue of the smallest of small entities, those with 0-4 employees. There are 95,494 entities in the 0-4 employee category with a combined total annual revenue of $42,823,012,000, or an average of $448,000 per entity (rounded to nearest thousand). 16 The estimated cost of $3,290 is 0.73% the average annual revenue of $448,000. The same analysis was conducted for each representative NAICS code. The cost as percent of average revenue for the smallest of small entities ranges from 0.24% to 1.30%. The table below summarizes the analysis and results.

In conclusion, this rulemaking will have an estimated cost of $3,290 on an average of 11 small entities per year. The $3,290 is estimated to represent 0.24%-1.30% of annual revenue for the smallest of small entities, entities with 0-4 employees. Therefore, DEA estimates this rulemaking will not have a significant economic impact on a substantial number of small entities.

DEA has determined that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted for inflation) in any 1 year.”  17 Therefore, neither a Small Government Agency Plan nor any other action is required under the UMRA.

This rulemaking is not a “major rule” under the Congressional Review Act, 5 U.S.C. 801 et seq. 18 DEA has submitted a copy of this final rule to both Houses of Congress and to the Comptroller General.

For the reasons stated in the preamble, DEA amends 21 CFR parts 1301, 1309, and 1316 as follows:

The undersigned ___ (Name of the Person) hereby requests a hearing in the matter of: ___ (Identification of the proceeding).

(State with particularity the interest of the person in the proceeding.)

All notices to be sent pursuant to the proceeding should be addressed to:

(b) A party shall file an answer as required under §§ 1301.37(d) or 1309.46(d) of this chapter, as applicable. The presiding officer, upon request and a showing of good cause, may grant a reasonable extension of the time allowed for filing the answer.

The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The Act establishes the NIGC and sets out a comprehensive framework for the regulation of gaming on Indian lands. On January 22, 1993, the NIGC published a final rule in the Federal Register called Background Investigations for Person or Entities with a Financial Interest in a Management Contract (58 FR 5831). The rule added a new part to the Commission's regulations implementing the mandates of the Indian Gaming Regulatory Act of 1988 by establishing the requirements and procedures for the approval of management contracts concerning Indian gaming operations and the conduct of related background investigations. The Commission has substantively amended them numerous times, most recently in 2012 (August 9, 2012; 77 FR 47514). On December 2, 2021, the NIGC published a notice of proposed rulemaking in the Federal Register called Background Investigations for Persons or Entities With a Financial Interest in or Having a Management Responsibility for a Management Contract (86 FR 68446).

On June 9, 2021, the Commission issued a Dear Tribal Leader Letter announcing the beginning of tribal consultations on 25 CFR 537.1(a)(3), among other regulations. On July 12, 2021, the Commission issued a second Dear Tribal Leader Letter announcing the dates of virtual consultations and seeking written comments on the proposed changes to part 537. On July 27, 2021, and July 28, 2021, the Commission held virtual consultations and accepted comments from Tribes on those changes.

Upon reviewing the comments received during the consultation period from July 12—August 12, 2021, the Commission published a Notice of Proposed Rulemaking (NPRM) on December 2, 2021 (86 FR 68446). The NPRM invited interested parties to participate in the rulemaking process by submitting comments and any supporting data to the NIGC by January 3, 2022. The consultation and the written comments have proven invaluable to the Commission in making amendments to the Management Contract regulations.

Comment: One commenter suggested that the term “Chairman” be changed to “Chair” throughout the regulation.

Response: The Commission agrees with the recommendation and has made that change.

Comment: One commenter suggested that the term “indirect financial interest” was too vague and possibly too broad and should be deleted or defined.

Response: Under IGRA, the NIGC has broad authority to ensure compliance with IGRA. Individuals or entities can have an “indirect financial interest” in innumerable ways. Any effort to define this term to specific types of relationships would improperly and unnecessarily limit the Commission's authority to regulate financial interests in Indian gaming.

Comment: Several commenters suggest that the NIGC include information as to how and when the Commission will notify a TGRA of a unilateral decision by the Chair to reduce the scope of required information or, alternatively, what would need to be included in a request submitted by TGRAs for the same.

Response: The Commission appreciates the comments and clarifies that background investigations and suitability determinations discussed in this part pertain to management companies wishing to enter into an agreement with a tribe, not the tribe itself. As such, a request for a reduced scope background investigation would typically be made by, and granted to, a management company, individual or entity with management responsibility for the contract, or individual or entity with a direct or indirect financial interest. If a tribe or wholly owned tribal entity is proposing to manage another Tribe's gaming operation, they may request a reduced background investigation or the Chair may elect to perform one unilaterally. In either case, the NIGC will notify the requester of a decision. As to how to make a request, the Commission responds that it will set forth any process in a bulletin. If a potential management company has questions as to how to request a reduced scope background investigation prior to the issuance of that bulletin, the Commission invites them to contact the NIGC for further information.

Comment: Another commenter supports the change to clarify the reduced scope background investigation, but suggests the NIGC add examples of “approaches the Chair may take to reduce the scope of information to be furnished. The commenter included suggested language to include in the regulation, including accepting “substantively current background information submitted previously to the Commission or other jurisdictions and providing reciprocity for background investigation results to reduce the burden of submitting duplicative information and reduce delay in background investigations.”

Response: The Commission appreciates the commenter's support for the changes to clarify the reduced scope background investigation, and agrees that the examples suggested are a reasonable and sensible way to reduce the scope of the investigation. Ultimately, though, the Commission declines to include the suggested language. The scope of the background investigation, though reduced, is still at the discretion of the Chair, who must ultimately make the suitability determination for all entities and individuals backgrounded. The Commission does not intend through this amendment to prescribe what information the Chair must or may require as part of a reduced scope investigation.

Comment: One commenter suggested that the NIGC consider adding a standard for when the Chair exercises his or her discretion to approve a request for a reduced background investigation, e.g. what constitutes a “national bank” and to provide additional detail regarding what supporting documents tribes would be required to submit as well as timelines associated with such requests. Response: The Commission declines to define “National Bank” or “institutional investor” in its regulations, as these are terms commonly understood in the Banking and Finance industries. A National Bank is widely understood to mean a Commercial Bank formed under the National Bank Act, 12 U.S.C. 38, chartered by the Comptroller of the Currency, and a member of the Federal Deposit Insurance Company. The term “institutional investor” is defined by and must be registered with, the Securities and Exchange Commission.

Comment: One commenter objected to the NIGC changing its regulation to initially require background checks and suitability determination on entities and individuals that have 10 percent or more direct or indirect financial interest in a management contract. The Commenter believes that imposing a 10 percent interest threshold is “an arbitrary approach that will encourage `bad actors' to structure their deals below the 10 percent threshold to avoid NIGC scrutiny. The Commenter further asserts that the change will improve efficiency at “the expense of tribes who rely on the NIGC to keep `bad actors' out of Indian gaming and that the amendment “conflicts with the requirements of the IGRA.”

Response: The Commission thanks the Commenter for its input on this topic. It has determined to finalize the Change, however, and responds that the change will not negatively impact the agency's ability to protect the interests of Tribes. At the outset, it is important to note that the NIGC is not changing the requirement to submit any individual or entity that has management responsibility for the contract. Accordingly, the NIGC will still require background investigations and suitability determinations for all individuals and entities that may have any decision-making authority or influence over the contract or the Tribe's gaming operation.

Rather, the purpose of the change is to reduce the time and expense of background investigations by no longer requiring the initial submission of those with minor financial interests in, but no control over, the management contract or the gaming operation. Moreover, the regulation includes a provision requiring a background investigation and suitability determination for “any other person or entity with a direct or indirect financial interest in a management contract otherwise designated by the Commission.” When a management contract is submitted, the NIGC's background investigators ensure that the list that was submitted is accurate. As part of that review, they will ask for a full list of all the entities and individuals involved in, and with a financial interest in, the contract, even if not all of those entities and individuals will be subject to a background investigation. If, however, investigators identify an entity or individual that should be subject to further review, the Commission may order such pursuant to § 537.1(a)(3). For these reasons, the Commission does not believe the amendment creates any additional risk to Tribes, does not permit a bad actor to structure its management contract in a way that allows them to escape review from the NIGC, and meets IGRA's purpose of “shielding tribes from organized crime and other corrupting influences.”

The proposed rule will not have a significant impact on a substantial number of small entities as defined under the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Moreover, Indian Tribes are not considered to be small entities for the purposes of the Regulatory Flexibility Act.

The proposed rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule does not have an effect on the economy of $100 million or more. The rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, local government agencies, or geographic regions, nor will the proposed rule have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of the enterprises, to compete with foreign based enterprises.

The Commission, as an independent regulatory agency, is exempt from compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2 U.S.C. 658(1).

In accordance with Executive Order 12630, the Commission has determined that the proposed rule does not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 12988, the Commission has determined that the rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

The Commission has determined that the rule does not constitute a major federal action significantly affecting the quality of the human environment and that no detailed statement is required pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 4321, et seq.

The information collection requirements contained in this rule were previously approved by the Office of Management and Budget (OMB) as required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number 3141- 0007.

The National Indian Gaming Commission is committed to fulfilling its tribal consultation obligations—whether directed by statute or administrative action such as Executive Order (E.O.) 13175 (Consultation and Coordination with Indian Tribal Governments)—by adhering to the consultation framework described in its Consultation Policy published July 15, 2013. The NIGC's consultation policy specifies that it will consult with tribes on Commission Action with Tribal Implications, which is defined as: Any Commission regulation, rulemaking, policy, guidance, legislative proposal, or operational activity that may have a substantial direct effect on an Indian tribe on matters including, but not limited to, the ability of an Indian tribe to regulate its Indian gaming; an Indian Tribe's formal relationship with the Commission; or the consideration of the Commission's trust responsibilities to Indian tribes.

Pursuant to this policy, on June 9, 2021, the National Indian Gaming Commission sent a Notice of Consultation announcing that the Agency intended to consult on a number of topics, including proposed changes to the management contract process. On July 27, 2021, and July 28, 2021, the Commission held two virtual consultations on the proposed changes to the management contract process.

For the reasons set forth in the preamble, the Commission amends 25 CFR part 537 as follows:

The final regulations (TD 9967) subject to this correction are issued under section 42 of the Internal Revenue Code.

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

The final regulations (TD 9967) subject to this correction are issued under section 42 of the Internal Revenue Code.

Accordingly, the final regulations (TD 9967) that are the subject of FR Doc. 2022-22070, appearing on page 61489 in the Federal Register on October 12, 2022, are corrected to read as follows:

1. On page 61489, in the third column, in the thirteenth line from the top of the column, the language “142(d)(6))” is corrected to read “142(d)(6)”.

2. On page 61490, in the third column, in the fourth and fifth lines from the bottom of the column, the language “market rate” is corrected to read “market-rate”.

3. On page 61492, in the first column, the last line from the bottom of the column, the language “IRS” is corrected to read “the IRS”.

4. On page 61492, in the third column, in the last paragraph, the seventh line from the top of the paragraph, the language “appliable” is corrected to read “applicable”.

5. On page 61494, in the second column, in the last paragraph, the twelfth line from the bottom, the language “42(c)(1)(c)(i)” is corrected to read “42(c)(1)(i)(C)”.

6. On page 61495, in the third column, in the first full paragraph, in the third line, the language “proposal rule” is corrected to read “proposed rule”.

7. On page 61497, in the third column, in the third full paragraph, in the tenth line from the top of the paragraph, the language “makes” is corrected to read “make”.

8. On page 61498, in the second column, in the first full paragraph, in the second and ninth lines from the top of the paragraph, the language “IRS” is corrected to read “the IRS”.

9. On page 61500, in the second column, under the caption “III. Regulatory Flexibility Act”, in the first full paragraph, in the tenth line from the bottom of the paragraph, the language “test)” is corrected to read “test”.

10. On page 61500, in the second column, under the caption “III. Regulatory Flexibility Act”, in the second full paragraph, the third line from the bottom of the paragraph, the language “(v)” is corrected to read “(vi)”.

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

On March 24, 2022, the Coast Guard issued a General Deviation for 180 days which allowed the bridge owner to deviate from the current operating schedule in 33 CFR 117.732(b) to repair the bridge. This deviation letter can be found in this Docket as supporting documentation. Due to delays in procuring materials for replacement of the bridge control system the project ran past the allotted 180 days. The work cannot stop and needs to continue in order to bring the bridge back to normal operation. Therefore, there is lack of sufficient time to provide a reasonable comment period and then consider those comments before issuing the modification.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective in less than 30 days after publication in the Federal Register . For reasons presented above, delaying the effective date of this rule would be impracticable and contrary to the public interest given the need to complete repairs to the bridge which are already underway and preventing full operation.

The Coast Guard is issuing this rule under authority 33 U.S.C. 499. The Coast Guard is modifying the operating schedule that governs the PATH Bridge across Hackensack River, mile 3.0, at Jersey City, New Jersey. The PATH Bridge is a vertical lift bridge offering mariners a vertical clearance of 40 feet at mean high water and 45 feet at mean low water in the closed position.

The existing drawbridge regulations are listed at 33 CFR 117.723(b). The Port Authority Trans-Hudson Corporation, the bridge owner, has requested this modification as additional time is required to complete replacement of control system as described above.

The waterway is transited by seasonal recreational traffic as well as commercial vessels, largely tug and barge combinations. The 40-foot vertical clearance while the bridge is in the closed position offers the bulk of commercial traffic sufficient room to transit under the bridge. Coordination with known waterway users has indicated no objection to the proposed schedule of the draw. Vessels that can pass under the bridge without an opening may do so at all times. The bridge will be able to open for emergencies. There is no immediate alternate route for vessels unable to pass through the bridge when in the closed position.

The Coast Guard is issuing this rule, which permits a temporary deviation from the operating schedule that governs the PATH Bridge across Hackensack River, mile 3.0, at Jersey City, New Jersey. The rule is necessary to accommodate the completion of replacement of control system. This rule allows the bridge to open on signal provided a minimum of twenty-four (24) hours advance notice is given, and need not open for the passage of vessel traffic on weekdays Monday through Friday from 6 a.m. to 10 a.m. and from 3 p.m. to 7 p.m. from November 6, 2022, to March 22, 2023.

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

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

This regulatory action determination is based on the ability that vessels can still transit the bridge given advanced notice.

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

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

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

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series) which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges and is categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.

Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. We must establish this security zone by November 14, 2022, to ensure security of this vessel and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be contrary to the public interest because immediate action is needed to provide for the security of the vessel.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Corpus Christi (COTP) has determined that potential hazards associated with the transit of the Motor Vessel (M/V) TENERGY when loaded will be a security concern within a 500-yard radius of the vessel. This rule is needed to provide for the safety and security of the vessels, their cargo, and surrounding waterway from terrorist acts, sabotage or other subversive acts, accidents, or other events of a similar nature while they are transiting within Corpus Christi, TX, from November 14, 2022, through November 17, 2022.

The Coast Guard is establishing four 500-yard radius temporary moving security zones around M/V TENERGY. The zone for the vessel will be enforced from November 14, 2022, until November 17, 2022. The duration of the zone is intended to protect the vessel and cargo and surrounding waterway from terrorist acts, sabotage or other subversive acts, accidents, or other events of a similar nature. No vessel or person will be permitted to enter the security zone without obtaining permission from the COTP or a designated representative.

Entry into the security zone is prohibited unless authorized by the COTP or a designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard (USCG) assigned to units under the operational control of USCG Sector Corpus Christi. Persons or vessels desiring to enter or pass through each zone must request permission from the COTP or a designated representative on VHF-FM channel 16 or by telephone at 361-939-0450. If permission is granted, all persons and vessels shall comply with the instructions of the COTP or designated representative. The COTP or a designated representative will inform the public through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate for the enforcement times and dates for each security zone.

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

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

This regulatory action determination is based on the size, duration, and location of the security zone. This rule will impact a small designated area of 500-yards around the moving vessel in the Corpus Christi Ship Channel and La Quinta Channel as the vessel transit the channel over a four day period. Moreover, the rule allows vessels to seek permission to enter the zones.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a moving security zone lasting for the duration of time that the M/V TENERGY is within the Corpus Christi Ship Channel and La Quinta Channel while loaded with cargo. It will prohibit entry within a 500 yard radius of M/V TENERGY while the vessel is transiting loaded within Corpus Christi Ship Channel and La Quinta Channel. It is categorically excluded from further review under L60 in Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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

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

On November 15, 2022, the Coast guard will be working in conjunction with the California Department of Fish and Wildlife and local Oil Spill Response Organization ito conduct boom deployment exercises from 9 a.m. to noon. Contractors will bring up to 12000-feet of floating oil boom aboard a workboat and deploy Area Contingency Plan (ACP)-6 Geographic Response Strategies (GRS). The Captain of the Port Sector San Diego (COTP) has determined that potential hazards associated with the boom deployment exercise would be a safety concern for anyone within a 100-yard radius of the boom. The COTP is establishing a safety zone from 9 a.m. to noon on November 15, 2022.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within a 100-yard radius of the boom before, during, and after the scheduled event. The Coast Guard has rulemaking authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Coast Guard published a notice of proposed rulemaking (NPRM) titled “Safety Zone; Mission Bay Closure, San Diego, CA” at 87 FR 55974 (September 13, 2022). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this safety zone. During the comment period that ended October 13, 2022, we received zero comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be contrary to public interest because immediate action is needed to respond to the potential safety hazards associated with the pipeline repair operations for the damaged pipeline.

The COTP is establishing a safety zone from 9 a.m. until noon on November 15, 2022. The safety zone covers all navigable waters within 100 yards of a boom in Mission Bay located across the entrance channel from the shoreline north of Mariners Cove inlet to a point south of Mission Bay Drive bridge on the Quivira Basin shoreline. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 9 a.m. until noon boom deployment exercise. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. A designated representative means a a Coast Guard coxswain, petty officer, or other officer operating a Coast Guard vessel designated by or assisting the Captain of the Port Sector San Diego (COTP) in the enforcement of the safety zone.

To seek permission to enter, contact the COTP or the COTP's representative by VHF Channel 16. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.

The COTP or a designated representative will inform the public through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate of the enforcement times and dates for the safety zone.

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

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

This regulatory action determination is based on safety zone being of a limited three hour duration, limited to a relatively small geographic area, and the presence of safety hazards in the area encompassing the Mission Bay Entrance.

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a 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 rule involves a safety zone lasting 3 hours that prohibits entry within 100 yards of the boom. Normally, such actions are categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.

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

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

The USPTO amends 37 CFR 11.11(a)(1) and (3) to eliminate provisions concerning the voluntary CLE certification for registered patent practitioners and persons granted limited recognition to practice in patent matters before the USPTO under 37 CFR 11.9.

On August 3, 2020, the USPTO published a final rule providing that registered patent practitioners and persons granted limited recognition to practice in patent matters before the USPTO would be permitted to voluntarily certify completion of CLE to the OED Director (Setting and Adjusting Patent Fees During Fiscal Year 2020, 85 FR 46932). 37 CFR 11.11(a)(3). The final rule also provided that the OED Director may publish whether each registered patent practitioner or person granted limited recognition under 37 CFR 11.9 has voluntarily certified that they completed the specified amount of CLE in the preceding 24 months. 37 CFR 11.11(a)(1).

On October 9, 2020, the USPTO published proposed CLE guidelines with a request for comments (Proposed Continuing Legal Education Guidelines, 85 FR 64128). The USPTO received public comments through January 7, 2021. On June 10, 2021, the USPTO published a Federal Register Notice providing, inter alia, that the USPTO would proceed with the voluntary CLE certification in the spring of 2022 (New Implementation Date for Patent Practitioner Registration Statement and Continuing Legal Education Certification, 86 FR 30920). On December 16, 2021, after considering public comments received regarding the proposed CLE guidelines, the USPTO published another Federal Register Notice indefinitely delaying implementation of the voluntary CLE certification (New Implementation Date for Voluntary Continuing Legal Education Certification, 86 FR 71453).

After considering public comments, the USPTO has determined that the voluntary CLE certification and recognition for patent practitioners will not be implemented. The USPTO's decision is intended to reflect the Office's focus on the most impactful ways to positively affect the issuance of robust and reliable patents. The USPTO is advancing numerous measures, including working on additional training opportunities for both those at the USPTO and those who practice before the USPTO. The Office has also released detailed guidance, both for those within the USPTO and those who practice before the USPTO, and intends to release more. In addition, the Office hosts video sessions and provides written and other materials to educate those who practice before the USPTO on applicable cases and guidance and on any updates to USPTO practice. Many reputable organizations also provide CLE related to practice before the USPTO and the relevant case law. Much of that CLE is monitored and approved by state bars. The USPTO encourages practitioners to avail themselves of all materials relevant to their practice and add themselves to the relevant USPTO email lists. It is incumbent on all those who practice before the USPTO to do what is necessary to maintain professional competency. Indeed, “patent prosecutors need to stay abreast of Office policy and procedures, court decisions, and changes in laws to comply with the Office's regulatory requirements under at least 37 CFR 11.5, 6, and 101.” AIPLA Letter to USPTO on Proposed CLE Guidelines, January 7, 2021, at 5 (available at www.uspto.gov/sites/default/files/documents/AIPLA_Letter_to_USPTO_on_CLE_Guidance_010721_FINAL.pdf ).

As to the prior USPTO proposal that pro bono work may substitute for legal training, the USPTO actively encourages practitioners to engage in both. Pro bono participation does not substitute for any education necessary for practitioners to maintain professional competency or for patent prosecutors to comply with the Office's regulatory requirements under at least 37 CFR 11.5, 11.6, and 11.101. That said, active participation in patent, trademark, Patent Trial and Appeal Board, and Trademark Trial and Appeal Board pro bono programs is essential for ensuring that all those who can contribute to job creation, economic prosperity, and world problem-solving have access to the innovation ecosystem and have the ability to protect their intellectual property for their benefit and for the good of the country. The USPTO has worked with partners to expand pro bono programs and pro bono opportunities for those who practice before the USPTO, and encourages all such persons to actively engage.

In the future, the Office may reconsider CLE reporting for patent practitioners, and nothing in this rule is intended to restrict or prohibit such action in the future. Accordingly, the USPTO amends 37 CFR 11.11(a)(1) and (3) to eliminate provisions related to the voluntary CLE certification and recognition.

The USPTO amends § 11.11 to remove the last sentence in paragraph (a)(1) to reflect the elimination of the voluntary CLE certification for registered patent practitioners and individuals granted limited recognition to practice in patent matters before the USPTO under 37 CFR 11.9, and to remove the entirety of paragraph (a)(3).

A. Administrative Procedure Act: This interim final rule removes the provisions that apply to voluntary CLE certification for registered patent practitioners and individuals granted limited recognition to practice in patent matters before the USPTO under 37 CFR 11.9. The changes in this rulemaking involve rules of agency practice and procedure, and/or interpretive rules. See Perez v. Mortgage Bankers Ass'n, 135 S. Ct. 1199, 1204 (2015) (interpretive rules “advise the public of the agency's construction of the statutes and rules which it administers”) (citations and internal quotation marks omitted); Nat'l Org. of Veterans' Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (rule that clarifies interpretation of a statute is interpretive); Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690 (D.C. Cir. 2001) (rules governing an application process are procedural under the Administrative Procedure Act); Inova Alexandria Hosp. v. Shalala, 244 F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals are procedural where they do not change the substantive standard for reviewing claims).

Accordingly, prior notice and opportunity for public comment for the changes in this rulemaking are not required pursuant to 5 U.S.C. 553(b) or (c), or any other law. See Perez, 135 S. Ct. at 1206 (notice-and-comment procedures are not required when an agency “issue[s] an initial interpretive rule” or when it amends or repeals that interpretive rule); Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), do not require notice-and-comment rulemaking for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” (quoting 5 U.S.C. 553(b)(A))).

Moreover, the Office, pursuant to the authority at 5 U.S.C. 553(b)(B), finds good cause to adopt the changes in this interim final rule without prior notice and an opportunity for public comment, as such procedures would be contrary to the public interest. This interim final rule will remove the provisions related to voluntary CLE certification from the regulations at 37 CFR 11.11(a) to avoid any confusion as to the status of the program. Although the voluntary CLE certification program was codified in the regulations, it was never implemented, and no patent practitioner participated in the program. Implementing this interim rule without prior notice and an opportunity for public comment is in the public interest because the time needed to do so would further delay the removal of the regulations and could lead to confusion as to the current status of the program among practitioners who practice before the USPTO.

In addition, pursuant to the authority at 5 U.S.C. 553(d)(3), the Office finds good cause to adopt the changes in this interim final rule without the 30-day delay in effectiveness, as such delay would be contrary to the public interest. Immediate implementation of the changes in this interim final rule is in the public interest because the time needed to provide the 30-day delay in effectiveness would further postpone the removal of the regulations and could lead to confusion among patent practitioners as to the current status of the program.

B. Regulatory Flexibility Act: For the reasons set forth in this rule, the Senior Counsel for Regulatory and Legislative Affairs, Office of General Law, of the USPTO has certified to the Chief Counsel for Advocacy of the Small Business Administration that the changes in this rule will not have a significant economic impact on a substantial number of small entities. See 5 U.S.C. 605(b).

This interim final rule will eliminate the provisions related to voluntary CLE certification. Because the voluntary CLE certification program was never implemented, no registered patent practitioners or persons granted limited recognition to practice in patent matters before the USPTO will be affected. Accordingly, the changes are expected to be of minimal or no additional burden to those practicing before the Office, and this rulemaking will not have a significant economic impact on a substantial number of small entities.

C. Executive Order 12866 (Regulatory Planning and Review): This rulemaking has been determined to be not significant for purposes of E.O. 12866 (Sept. 30, 1993).

D. Executive Order 13563 (Improving Regulation and Regulatory Review): The USPTO has complied with E.O. 13563 (Jan. 18, 2011). Specifically, the Office has, to the extent feasible and applicable: (1) made a reasoned determination that the benefits justify the costs of the rule; (2) tailored the rule to impose the least burden on society consistent with obtaining the regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) involved the public in an open exchange of information and perspectives among experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole, and provided online access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across Government agencies and identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes.

E. Executive Order 13132 (Federalism): This rulemaking does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under E.O. 13132 (Aug. 4, 1999).

F. Executive Order 13175 (Tribal Consultation): This rulemaking will not: (1) have substantial direct effects on one or more Indian tribes, (2) impose substantial direct compliance costs on Indian tribal governments, or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under E.O. 13175 (Nov. 6, 2000).

G. Executive Order 13211 (Energy Effects): This rulemaking is not a significant energy action under E.O. 13211 because this rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under E.O. 13211 (May 18, 2001).

H. Executive Order 12988 (Civil Justice Reform): This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden, as set forth in sections 3(a) and 3(b)(2) of E.O. 12988 (Feb. 5, 1996).

I. Executive Order 13045 (Protection of Children): This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under E.O. 13045 (Apr. 21, 1997).

J. Executive Order 12630 (Taking of Private Property): This rulemaking will not effect a taking of private property or otherwise have taking implications under E.O. 12630 (Mar. 15, 1988).

K. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), the USPTO will submit a report containing the interim final rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the Government Accountability Office. The changes in this rulemaking are not expected to result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this rulemaking is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

L. Unfunded Mandates Reform Act of 1995: The changes in this rulemaking do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of $100 million (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of $100 million (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

M. National Environmental Policy Act of 1969: This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

N. National Technology Transfer and Advancement Act of 1995: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions that involve the use of technical standards.

O. Paperwork Reduction Act of 1995: The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) requires that the Office consider the impact of paperwork and other information collection burdens imposed on the public. This rulemaking does not involve information collection requirements that are subject to review and approval by the Office of Management and Budget under the Paperwork Reduction Act.

P. E-Government Act Compliance: The USPTO is committed to compliance with the E-Government Act to promote the use of the internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes.

For the reasons set forth in the preamble, the USPTO amends 37 CFR part 11 as follows:

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

On October 15, 2020, the Nevada Department of Environmental Protection (NDEP) submitted a revision to the Nevada SIP titled, “Revision to the Nevada State Implementation Plan for the 2015 Ozone NAAQS: Emissions Inventory and Emissions Statement Requirements” (“2020 Clark County EI”). The 2020 Clark County EI submittal includes a 2017 base year emissions inventory for the Las Vegas Valley nonattainment area and supporting documentation regarding the development of the inventory, developed by the Clark County Department of Environment and Sustainability (CCDES). CCDES provided supplementary information to the 2020 Clark County EI on February 10, 2022, February 14, 2022, and March 30, 2022, to address comments and questions raised by the EPA on receipt of CCDES's prior submittal. Together these three supplementary exchanges are known as the “2020 Clark County SI.”

On June 13, 2022, the EPA proposed to approve the 2020 Clark County EI and the 2020 Clark County SI as meeting the ozone-related base year emissions inventory requirement for the Las Vegas Valley ozone nonattainment area for the 2015 ozone NAAQS. 1 Our June 13, 2022 proposed rule also discussed the following: background on the 2015 ozone NAAQS; an overview of the base year emissions inventory requirements for the 2015 ozone NAAQS under sections 172(c)(3) and 182(a)(1) of the CAA and under the EPA's implementing regulations for the 2015 ozone NAAQS at 40 CFR 51.1315; an overview of NDEP's SIP revisions submitted to meet the ozone base year emissions inventory requirement for the Las Vegas Valley nonattainment area; a discussion of the public notice and hearing procedures conducted by NDEP to meet the requirements of CAA sections 110(a)(1) and 110(l) and 40 CFR 51.102; and our evaluation of NDEP's SIP submittals.

The EPA's proposed action provided a 30-day public comment period that ended on July 13, 2022. During this period, we received one comment on our proposed rulemaking submitted from a private individual. 2 This comment is available in the docket for this rulemaking. 3

The comment letter from a private individual expresses concern that increased combustion of fossil fuels in Clark County is largely responsible for the area's worsening air quality in recent years. The commentor also expresses concern that Congressional legislation may result in the sale of federal lands in Clark County, promoting urban sprawl, and thus increased combustion of fossil fuels. The commentor emphasizes a need for this additional sprawl to be factored into Nevada's calculations of a “safe level of ozone emissions” and “believe(s) that the likelihood of continued urban sprawl in the county should be relevant to the accuracy and credibility of these calculations.”  4 Finally, the commenter states their belief that this urban sprawl will slow the transition away from fossil fuels and towards clean renewable energy sources.

The EPA appreciates the commenter's concern about how potential changes in the Las Vegas Valley nonattainment area (NAA) may lead to increased combustion of fossil fuels in the NAA. As discussed in the proposed notice, emissions inventories are an estimation of actual emissions of air pollutants within the NAA that are currently typical of an ozone season day. 5 Base year emissions inventories, such as the 2020 Clark County EI are, “the starting point from which other SIP-related inventories are derived” and “provides a way for decision makers to consider the sources of emissions that contribute to relevant pollutants and consider emission reduction strategies needed for the SIP.”  6 As such, emissions inventories provide emissions data that inform a variety of a state's air quality planning tasks, and represent a required element under the CAA for areas that are not attaining the NAAQS established by the EPA. The 2020 Clark County EI was submitted to comply with the emissions inventory requirements for “Marginal” nonattainment areas for the 2015 ozone standard. 7 Thus this emissions inventory is not intended for use in developing a “safe level of emissions” but rather to characterize emissions in the base year as required under the CAA. 8 The base year emissions inventory is for a year in the recent past; it does not include the effects of future growth. Instead, it represents emissions at a snapshot in time. The emissions inventory in the 2020 Clark County EI represents the typical ozone season day emissions from 2017 within the existing nonattainment area boundary and does not consider future urban growth nor future emissions.

The commentor seems to suggest that air quality in the Las Vegas Valley NAA has worsened in recent years. Although not directly relevant to whether it is appropriate for EPA to approve the SIP revision at issue in this action, we note that although the 2018 design value (DV) was higher than the 2017 DV, the 2019, 2020, and 2021 DVs remained at or below the 2017 DV of 0.074 ppm. 9 While some fluctuations in DVs have occurred, the last 5 years of DVs do not indicate a trend of worsening ozone air quality in the NAA.

As noted, this action only concerns approval of the emissions inventory submitted for the Las Vegas Valley NAA for the 2015 ozone NAAQS. Although not directly relevant to whether such a SIP revision is appropriately approved by the EPA, the Agency notes that on July 22, 2022, the EPA proposed to reclassify the Las Vegas Valley NAA as “Moderate” for the 2015 ozone NAAQS. 10 If finalized, Clark County will be required to submit a Moderate plan which provides for, “such specific annual reductions in emissions . . . . as necessary to attain the primary NAAQS by the attainment date applicable under this act.”  11 Future growth within the NAA and potential growth of emissions will be projected and accounted for in this demonstration of attainment. The demonstration of attainment will include motor vehicle emissions budgets (“budgets”), which represent the levels of nitrogen oxides (NO X ) and volatile organic compound (VOC) emissions from motor vehicles in the 2023 attainment year that are consistent with attaining the 2015 ozone NAAQS. After the budgets are either found adequate or are approved by the EPA, they will be used by the metropolitan planning organization (MPO) for the Las Vegas Valley NAA in future transportation conformity determinations. When the MPO makes transportation conformity determinations, it must project on-road emissions of NO X and VOCs through the last year of the MPO's transportation plan, which is at least 20 years into the future, and demonstrate that the projected emissions are less than or equal to the budgets. 12 This will show that even if there is increased travel within the Las Vegas Valley NAA in the future, emissions of NO X and VOCs will not increase above levels that are consistent with attaining the 2015 ozone NAAQS.

Based on our review of the 2020 Clark County EI, we have determined that the submitted emissions inventory adequately addresses all emission sources within the Las Vegas Valley NAA as of the submission date of October 15, 2020. Any future new or expanded emissions source within the NAA will be subject to control mandates as outlined in the CAA. 13 For example, as a Marginal nonattainment area, the New Source Review Program will ensure all new and modified major sources in the NAA will offset emissions at a ratio of 1 to 1.1. 14 Additionally, all major sources within the NAA will be required to report annual emissions, and these emissions will be included in future modeling and attainment calculations related to the Las Vegas Valley NAA. 15

For these reasons, we have determined that the 2020 Clark County EI meets the statutory and regulatory requirements for emission inventories. Control mandates and planning requirements for Marginal areas are adequate to ensure that any new sources within the NAA are accounted for in future emissions estimates and modeling. 16

For the reasons described in our June 13, 2022 proposed action, we are taking final action to approve the 2020 Clark County EI as meeting the base year emissions inventory requirement for the Las Vegas Valley ozone nonattainment areas for the 2015 ozone NAAQS. The emissions inventory in the 2020 Clark County EI submittal and additional information collected in the 2020 Clark County SI contains comprehensive, accurate, and current inventories of actual emissions for all relevant sources in accordance with CAA sections 172(c)(3) and 182(a).

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

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

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

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

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

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

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

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

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

The state did not evaluate environmental justice considerations as part of its SIP submittal. There is no information in the record inconsistent with the stated goals of Executive Order 12898 of achieving environmental justice for people of color, low-income populations, and indigenous peoples.

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. The Las Vegas Tribe of Paiute Indians of the Las Vegas Indian Colony have areas of Indian country located within the Las Vegas Valley nonattainment area for the 2015 ozone NAAQS. In those areas of Indian country, this final rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 13, 2023. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, the EPA amends chapter I, title 40 of the Code of Federal Regulations as follows:

Interested persons are invited to participate in this rulemaking by submitting comments and related materials. We will consider all comments and material received during the comment period.

If you submit a comment, include the Docket ID FEMA-2022-0037, indicate the specific section of this document to which each comment applies, and give the reason for each comment. All submissions may be posted, without change, to the Federal e-Rulemaking Portal at http://www.regulations.gov, and will include any personal information you provide. Therefore, submitting this information makes it public.

Viewing comments and documents: For access to the docket, to read background documents or comments received, go to the Federal e-Rulemaking Portal at http://www.regulations.gov.

FEMA will hold four in-person public meetings to solicit public feedback about this Interim Final Rule. FEMA is announcing these public meetings to give the public as much notice as possible regarding their dates. FEMA will hold meetings on the below dates. If the locations and times of these meetings change, FEMA will announce the specific times and locations in a separate Federal Register document.

November 17, 2022 from 5:00 p.m. to 7:00 p.m. MT at Old Memorial Middle School, 947 Legion Drive, Las Vegas, NM 87701;

December 1, 2022 from 5:00 p.m. to 7:00 p.m. MT at the Mora High School, 10 Ranger Road, Mora, NM 87732;

December 15, 2022 from 5:00 p.m. to 7:00 p.m. MT at Old Memorial Middle School, 947 Legion Drive, Las Vegas, NM 87701; and

January 5, 2023 from 5:00 p.m. to 7:00 p.m. MT at the Mora High School, 10 Ranger Road, Mora, NM 87732.

Depending on the number of speakers, the meetings may end before their announced end time, following the last call for comments. Reasonable accommodations are available for people with disabilities. To request a reasonable accommodation, contact the person listed in the FOR FURTHER INFORMATION CONTACT section as soon as possible. Last minute requests will be accepted but may not be possible to fulfill. All comments on this IFR made during the meetings will be posted to https://www.regulations.gov, Docket ID FEMA-2022-0037. Please review http://www.fema.gov/hermits-peak for more information and any updates on these public meetings.

On September 30, 2022, President Biden signed into law the Hermit's Peak/Calf Canyon Fire Assistance Act (“Act”) as part of the Continuing Appropriations and Ukraine Supplemental Appropriations Act, 2023, Public Law 117-180, 136 Stat. 2114 (2022). The Congress passed the Act to compensate those parties who suffered injury and loss of property from the Hermit's Peak/Calf Canyon Fire (“Fire”).

On April 6, 2022, the U.S. Forest Service initiated the Las Dispensas-Gallinas prescribed burn on Federal land in the Santa Fe National Forest in San Miguel County, New Mexico. That same day the prescribed burn, which became known as the “Hermit's Peak Fire,” exceeded the containment capabilities of the U.S. Forest Service and was declared a wildfire, spreading to other Federal and non-Federal lands. 1 On April 19, 2022, the Calf Canyon Fire, also in San Miguel County, New Mexico, began burning on Federal land and was later identified as the result of a pile burn in January 2022 that remained dormant under the surface before reemerging. 2 The Hermit's Peak and Calf Canyon Fires merged on April 27, 2022, and both fires were reported as the Hermit's Peak Fire or the Hermit's Peak/Calf Canyon Fire. By May 2, 2022, the fire had grown, causing evacuations in multiple villages and communities in San Miguel County and Mora County, including the San Miguel County jail, the State's psychiatric hospital, the United World College, and New Mexico Highlands University. 3 At the request of New Mexico Governor Lujan Grisham, President Biden issued a major disaster declaration on May 4, 2022. 4 The Hermit's Peak/Calf Canyon Fire was not 100 percent contained until August 21, 2022. 5

The Act provides compensation to injured persons impacted by the Fire. It requires FEMA to design and administer a claims program to compensate victims of the Fire, for injuries resulting from the fire and to provide for the expeditious consideration and settlement for those claims and injuries. The Act further directs FEMA to establish an arbitration process for disputes regarding claims.

This interim final rule establishes the procedures for the processing and payment of claims to those injured by the Fire sustaining property, business, and/or financial losses. FEMA's procedures in this interim final rule are generally consistent with prior processes established for claims associated with the Cerro Grande Fire Assistance Act. 6 Specific discussion and request for comment is provided where FEMA seeks to revise and/or modernize that process. As referenced above, FEMA plans to hold in-person public meetings during the 60-day comment period.

The first step in the claims process under this part is for the Claimant to file a Notice of Loss with the Office of Hermit's Peak/Calf Canyon Fire Claims (“Claims Office”). After receipt and acknowledgement by the Claims Office, a Claims Reviewer will contact the claimant to review the claim and help the claimant formulate a strategy for obtaining any necessary supporting documentation to complete the Proof of Loss. After discussion of the claim with the Claims Reviewer, the claimant will review and sign a Proof of Loss and submit it to the Claims Office. The Claims Reviewer will submit a report to the Authorized Official for review to determine whether compensation is due to the claimant. The Authorized Official's written decision will be provided to the claimant. If satisfied with the decision, the claimant will receive payment after returning a completed Release and Certification Form. If the claimant is not satisfied with the decision, an Administrative Appeal may be filed with the Director of the Claims Office. If the claimant is not satisfied after appeal, the dispute may be resolved through binding arbitration or heard in the United States District Court for the District of New Mexico. The specific proposals in this rule are more fully described below.

This interim final rule adds 44 CFR part 296 to establish the procedures for processing and payment of claims to those injured by the Fire sustaining property, business, and/or financial losses.

Subpart A provides a general introduction and overview of the process.

This section provides for the purpose of the regulation, which is to establish the Office of Hermit's Peak/Calf Canyon Fire Claims to evaluate, process, and pay actual compensatory damages for injuries suffered from the Fire.

This section explains FEMA's policy to provide expeditious resolution of damage claims for those injured by the Fire. The policy requires sensitivity to claimants' situations in administering the process.

This section provides information on the Claims Office and general information about assistance available as a result of the Fire.

This section provides definitions for the relevant regulatory terms, consistent with the Act and terms defined in the Cerro Grande Fire Assistance process found at 44 CFR part 295. FEMA is adding definitions for “Administrator,” “Claims Office,” and “Hermit's Peak/Calf Canyon Fire” consistent with the Act's definition of these terms. FEMA is including a definition of “Director” to mean the Independent Claims Manager appointed by the Administrator who will lead the Claims Office. FEMA is adding a definition of “Good Cause” to further explain when FEMA will allow claimants to extend the deadline for filing, supplementing claims, or reopening a claim for good cause. FEMA is incorporating a definition for “Injury” similar to the definition of “Loss” found in the Cerro Grande Fire Assistance process to reflect the terminology of the Act, and an updated definition of “Indian Tribe,” “Notice of Loss,” and “Proof of Loss” to reflect the definitions and updated requirements found in the Act. FEMA is also including a definition for “Individual Assistance” consistent with the definition found at 44 CFR 206.2. Finally, FEMA is including a definition for “Subrogee” to mean an insurer or other third party that has paid compensation to a claimant for injury and subrogated to any right the claimant has to receive payment under the Act.

The claims process is generally described in this section and is generally consistent with the process established in the Cerro Grande Fire Assistance process at 44 CFR part 295. The claimant must first file a Notice of Loss with the Claims Office. A Claims Reviewer will then contact the claimant to review the claim and help the claimant formulate a strategy for obtaining any necessary supporting documentation. After discussion of the claim with the Claims Reviewer, the claimant will review and sign a Proof of Loss. The Proof of Loss will document all injuries and loss of property, business losses, and financial losses pursuant to the Act. The Claims Reviewer will fully evaluate the claim and submit a report to the Authorized Official for review to determine whether compensation is due to the claimant. The Authorized Official's written decision will be provided to the claimant. If the claimant is satisfied with the decision, payment will be received upon return of a completed Release and Certification Form. If the claimant is not satisfied with the decision, an Administrative Appeal may be filed with the Director of the Claims Office. If the claimant is not satisfied after appeal, the dispute may be resolved through binding arbitration or heard in the United States District Court for the District of New Mexico.

Consistent with the Cerro Grande Fire Assistance claims process, subpart B explains the procedure for filing a claim under the Act.

Any Injured Person can file a Notice of Loss to bring a claim under the Act which must include a brief description of each injury. FEMA will only accept a Notice of Loss form to bring a claim to ensure efficient and consistent processing of all claims associated with the Fire. FEMA reminds claimants in paragraph (a) that the Notice of Loss must contain a brief description of each injury, as defined in section 296.4. For the convenience of claimants, FEMA is offering the option for a single Notice of Loss submission for a household so long as all those injured are identified. Paragraph (c) explains the signature process for the Notice of Loss. If the claimant is an entity or individual who lacks the legal capacity to sign the Notice of Loss, then and only then can a duly authorized legal representative of the claimant sign the Notice of Loss. The same principle applies to affidavits submitted in support of claims, the Proof of Loss, and the Release and Certification Form. Public adjusters and attorneys may not sign documents filed under the Act on behalf of individual claimants who have the legal capacity to execute these documents.

Paragraph (e) modernizes the process by providing options to file the Notice of Loss by mail, electronically, or in person. Details regarding the filing process can be found at http://www.fema.gov/hermits-peak. FEMA seeks comment on whether this update will improve the overall claims process. Paragraph (f) clarifies that the Notice of Loss is deemed to be filed on the date received and acknowledged by the Claims Office if completed and properly signed.

Pursuant to the Act, the deadline to file a Notice of Loss is two years after the date the interim final rule is promulgated or November 14, 2022. There is no ability to extend this deadline under the Act and section 296.11 provides clear instructions regarding the deadline to ensure claimants are informed of the timeline by which to submit their Notice of Loss. FEMA cannot provide compensatory damages for an injury unless the claimant has reported it to FEMA by November 14, 2024. Sections 296.34 and 296.35 below establish a process for notifying FEMA of injuries that are not referenced in the initial Notice of Loss. Whether a claimant tells FEMA about an injury in the initial Notice of Loss or an amendment under section 296.34, FEMA must know about the injury by November 14, 2024.

The Act permits an Injured Person to seek compensation through one of three mechanisms: (1) the Act; or (2) the Federal Tort Claims Act; or (3) a civil lawsuit against the United States (if authorized by another law). The Act further provides that a claimant's choice of one of these three mechanisms becomes “final and conclusive on the Claimant . . . upon acceptance of an award.” Therefore, in paragraph (a), FEMA clarifies that Injured Persons who accept an award under the Act waive the right to pursue any claims arising out of or relating to the same subject matter, whether through the Federal Tort Claims Act or a civil lawsuit. Under paragraph (b), any person or entity who accepts an award on a claim under the Federal Tort Claims Act or a civil action against the United States, or any employee, officer, or agency of the United States for fire-related claims waives the right to pursue any claims for injuries arising out of or relating to the same subject matter. FEMA seeks comment on the best means of implementing the Act's election of remedies provision.

Section 296.13 describes the procedures to be used by insurers (or other third parties with the rights of a Subrogee) for submitting subrogation claims. This section is generally consistent with the Cerro Grande Fire Assistance process. The procedures described in paragraphs (c) through (f) of section 295.10 apply with equal vigor to subrogation claims, including the requirement that the Notice of Loss be received by November 14, 2024. No subrogation claim will be considered unless the Subrogee elects the Act as its exclusive mechanism for seeking compensation from the United States for all Hermit's Peak/Calf Canyon Fire-related subrogation claims and any other Hermit's Peak/Calf Canyon Fire-related injuries. FEMA will reject a subrogation claim to recover payments until the Subrogee has paid the insured everything that the Subrogee believes that the Injured Person is entitled to receive under the policy. A Notice of Loss may be filed if there is a dispute between the Injured Person and the Subrogee, which is pending before a third party ( e.g., appraiser, arbitrator, or court), provided that the insurer has made the final payment that it believes that the insured is entitled to receive under the policy.

Consistent with the Cerro Grande Fire Assistance process, this section prohibits assignment of claims. It also prohibits assignment of the right to receive payment for claims. FEMA intends to make the Act's compensation payments only to the injured claimant.

Subpart C describes the compensation available under the Act. Section 104(c)(3) of the Act limits payments under the Act to “actual compensatory damages measured by injuries suffered” and shall not include “interest before settlement or payment of a claim; or punitive damages.” Consistent with the Cerro Grande Fire Assistance process, FEMA views the terms “compensation,” “damages,” and “compensatory damages” under the Act as synonyms and uses them interchangeably in this interim final rule. FEMA may only compensate claimants for damages that resulted from the Fire. Each claim will be reviewed on its unique facts and merits. Claimants should not assume that an injury resulting from the Fire is not compensable simply because the regulation fails to address it specifically. Claimants should include all injuries resulting from the Fire on the Notice of Loss. Generally speaking, FEMA will determine compensatory damages in accordance with the laws of the State of New Mexico, except where the Act is more generous. If FEMA denies a claim, an explanation of the reasons for doing so will be provided.

Consistent with the Cerro Grande Fire Assistance process, a claimant must be an Injured Person who suffered an injury as a result of the Fire and sustained damages to receive compensation under the Act.

As required by the Act, FEMA will provide for payment of actual compensatory damages under paragraph (a). Consistent with the Act  7 and Cerro Grande Fire Assistance process, FEMA will apply the laws of the State of New Mexico to the calculation of damages. Damages must be reasonable in amount. To reduce complexity in the process, FEMA has eliminated language referencing reasonable steps to reduce damages.

Consistent with the Act and the Cerro Grande Fire Assistance process, paragraph (b) provides that FEMA will not reimburse claimants for attorneys' fees or agents' fees. Our treatment of attorney and agent fees is consistent with the Act. Section 104(j) of the Act limits the fees that an attorney or agent may charge a client. It does not provide that FEMA will reimburse claimants for attorneys' or agents' fees and this exclusion applies to attorney and agent fees incurred in the prosecution of a claim under the Act. FEMA also notes that the Act does not regard attorneys' fees as compensatory damages. Attorneys' fees are not considered compensatory damages in tort actions under New Mexico law. 8 Further, the statutory damages under New Mexico law  9 may not be recovered as Congress did not authorize FEMA to pay statutory damages in the Act.

Paragraphs (c) through (e) explain how FEMA plans to approach the types of claims the agency expects to encounter most frequently. FEMA addressed all three categories of damages allowed under the Act—property, business, and/or financial losses—but made a deliberate choice not to address all the examples of such categories enumerated under the Act. There is no intention to limit the right of claimants in this section. Claimants may recover all damages allowable under section 104(d)(4) of the Act.

Consistent with the approach taken in the Act, paragraph (c) sets out FEMA's approach to compensating for property losses. Paragraph (c)(1) explains FEMA's approach to loss of real property and contents. FEMA will provide compensatory damages for the damage or destruction of a property and its contents, including the reasonable cost of reconstruction of a structure comparable in design, construction materials, size, and improvements. FEMA will calculate these costs using post-fire construction costs in the locality that a damaged or destroyed structure existed before the Fire. FEMA will compensate property owners to rebuild their structures in accordance with the building codes and standards applicable at the time that their claim is processed, regardless of whether the destroyed structure complied with codes and standards before the Fire. To process claims within a timely manner, FEMA may be required to estimate a property owner's costs well before construction is completed. Property owners who decide to rebuild and later find that their actual costs exceeded FEMA's estimate may supplement or reopen their claims under Sections 296.34 and 296.35 of this interim final rule.

In paragraph (c)(2), FEMA is limiting compensation for trees and other landscaping to 25 percent of the pre-fire value of the structure and lot. This approach is generally consistent with the approach taken in the Cerro Grande Fire Assistance process. Under New Mexico tort law, damages are awarded for destroyed or damaged trees based on the value of the trees destroyed or the difference in value of the real estate with and without the trees. 10 This 25 percent limitation does not apply to business losses for timber, crops, and other natural resources under section 296.21(d). The New Mexico tort law formula is a less generous formula than the replacement cost calculation FEMA implemented in the Cerro Grande Fire Assistance process. FEMA is implementing the same formula as the Cerro Grande Fire Assistance process now.

Paragraph (c)(3) is intended to implement section 104(d)(4)(A)(ii) of the Act, which authorizes FEMA to pay “otherwise uncompensated damages resulting from the Hermit's Peak/Calf Canyon Fire for . . . a decrease in the value of real property.” Consistent with the Cerro Grande Fire Assistance process, paragraph (c)(3) allows FEMA to compensate for realized losses in the value of real property, i.e., land and structure, to the extent that such losses have not been fully compensated either through compensation under paragraph (c)(1) or otherwise. To be awarded compensatory damages, paragraph (c)(3) requires the claimant to either sell the real property in a good faith arm's length transaction that closes no later than November 14, 2024 and the claimant realizes a loss in the pre-fire value (see paragraph (c)(1)); or the claimant can establish that the real property value was permanently diminished as a result of the Fire (see paragraph (c)(2)). Losses involving the value of commercial real estate will be evaluated on a case-by-case basis.

Paragraph (c)(4) addresses compensation to Injured Persons for Subsistence Resources losses. FEMA is generally mirroring the Cerro Grande Fire Assistance process for subsistence in this section, but consistent with section 104(d)(4)(A)(iv) of the Act, FEMA is not limiting compensation to Indian Tribes, Tribal entities, Tribal Members, or Households including Tribal Members but rather allowing this compensation for all Injured Persons that have sustained Subsistence Resource losses. Reimbursement is available for the reasonable cost of replacing Subsistence Resources used by a claimant prior to the start of the Fire, but that are no longer available to the claimant as a result of the Fire. Claimants may receive either compensatory damages for the increased cost of obtaining subsistence resources from lands not damaged by the Fire or for the cost of procuring substitute Subsistence Resources in the cash economy. Compensatory damages will be paid for the period between April 6, 2022, and the date when subsistence resources can reasonably be expected to return to the level of availability that existed before the Fire. Long-term damages for subsistence resources will be made in the form of lump sum cash payments to eligible claimants.

In paragraph (d), FEMA addresses business losses. Consistent with the Act, FEMA will award compensatory damages for damage to tangible assets or inventory, including timber, crops, and other natural resources; business interruption losses; overhead costs; employee wages for work not performed; loss of business net income; and any other loss that the Administrator determines to be appropriate for inclusion as a business loss.

Paragraph (e) discusses financial losses. Consistent with the Act, these losses include increased mortgage interest costs, insurance deductibles, temporary or relocation expenses, lost wages or personal income, emergency staffing expenses, debris removal and other cleanup costs, costs of reasonable heightened risk reduction, premiums for flood insurance, and any other loss that the Administrator determines to be appropriate for inclusion as a financial loss. Paragraph (e)(1) addresses recovery loans and provides for reimbursement of loans, including Small Business Administration (SBA) disaster loans obtained after April 6, 2022, for damages resulting from the Fire. Consistent with the Cerro Grande Fire Assistance process, FEMA will reimburse interest for the period beginning on the date the loan was taken out and ending on the date when the claimant receives a compensation award (other than partial payment). Claimants are required to use the proceeds of their compensation awards to repay the SBA disaster loans and FEMA will coordinate with the SBA to formulate procedures for assuring repayment contemporaneously with the compensation award receipt.

Paragraph (e)(2) addresses the requirement from the Act that claimants be eligible for compensation for flood insurance premiums. Consistent with the Act, claimants that were not required by law to maintain flood insurance before the Fire and did not have such insurance before the Fire may receive reimbursement for the cost of reasonable flood insurance premiums for a two-year period for their owned or leased real property if required to purchase flood insurance. Because there has not been sufficient time to revise flood zone maps since the Fire, some claimants who may have legitimate reasons for concern may not be required to maintain flood insurance. FEMA is exercising the discretion in section 104(d)(4)(C)(x) to allow compensation for flood insurance premiums if the claimant purchased flood insurance after the Fire due to the fear of heightened flood risk. FEMA may also provide flood insurance directly through a group or blanket policy.

Consistent with the Cerro Grande Fire Assistance process, paragraph (e)(3) states that FEMA may reimburse claimants for reasonable out of pocket treatment costs for mental health conditions resulting from the Fire. FEMA is offering reimbursement for treatment received between April 6, 2022 and April 6, 2024. Damages for mental health conditions are not recoverable under New Mexico law, except in a very limited class of cases. While FEMA will reimburse claimants for these expenses, given the limitation of New Mexico law FEMA will not entertain subrogation claims for mental health treatment unless those expenses could be recovered in a tort action under New Mexico law.

During the fire and its immediate aftermath, many individuals, charitable organizations, businesses, and other entities made voluntary donations of cash, goods, and services to assist the fire fighting and fire recovery effort and to help those affected by the Fire. Consistent with the Cerro Grande Fire Assistance process, in paragraph (e)(4) FEMA will compensate claimants for the cost of merchandise, use of equipment, or other non-personal services, directly or indirectly donated to survivors of the Fire, if donated no later than September 20, 2022. Given the scope of the Fire, FEMA believes a 30-day period after containment of the Fire constitutes an appropriate time frame for these donations to be reimbursable; however, the agency seeks comment on whether this time period is sufficient. Donations will be valued at cost. FEMA is removing compensation for discounts as provided in the Cerro Grande Fire Assistance process, as the agency currently lacks information about whether such discounts were provided in the wake of the Fire. However, FEMA seeks comment on whether claimants should be able to seek compensation for discounts on goods and services offered to fire survivors as well as on the method for calculating such compensation should FEMA amend its regulations to authorize compensation for discounts on goods or services offered to fire survivors.

Section 104(d)(4)(C)(vii) of the Act grants FEMA the authority to compensate claimants for reasonable efforts to reduce an increased risk to their property from wildfires, floods, or other natural disasters. Consistent with the Act and with the Cerro Grande Fire Assistance process, paragraph (e)(5) provides that FEMA will reimburse claimants for reasonable efforts to reduce risk back to levels prevailing before the Fire. Such measures may include, for example, risk reduction projects that reduce an increased risk from flooding, mudslides, and landslides in and around burn scars in an amount not to exceed 25 percent of the higher of compensation from all sources, ( i.e., the Act, insurance, and FEMA assistance under the Stafford Act), for damage to the structure and lot, or the pre-fire value of the structure and lot. Claimants seeking compensation under paragraph (e)(5) must include the claim in a Notice of Loss filed not later than November 14, 2024 or an amended Notice of Loss filed not later than November 14, 2025. This is the deadline provided by section 104(d)(4)(C)(vii) of the Act. Claimants should take into account current building codes and standards and consider nature-based solutions  11 to reduce their heightened risk. Claimants must complete the risk reduction project for which they receive compensation. FEMA believes paragraph (e)(5) clarifies the process for obtaining compensation for heightened risk reduction losses, regardless of the type of structure the claimant owns. FEMA is increasing the total compensation available for risk reduction projects given the general increase in costs of such projects since the Cerro Grande Fire Assistance process was implemented and to encourage claimants to consider implementing nature-based solutions to reduce the heightened risks to their property as a result of the Fire. 12 FEMA seeks comment on whether the compensation is sufficient to reduce the heightened risk and whether nature-based solutions should be considered in risk reduction projects.

Paragraph (f) addresses insurance and other benefits. The Act allows FEMA to provide compensation only if damages have not been paid or will not be paid by insurance, a third party, or through another FEMA program. Claimants are not required to submit their claims to their insurance company nor are they required to pursue a settlement from their insurance company after filing a claim under the Act. FEMA encourages claimants to continue to pursue their insurance claims because this may expedite the process of reconstructing documentation that will be helpful to the claims process under the Act. If a claimant has received or expects to receive a payment from an insurance company, the actual or anticipated payment must be disclosed. If a claimant has not settled with the insurance company by the time FEMA is prepared to make a partial payment on the claim, FEMA will examine the insurance policy and determine what the agency reasonably expects the insurance company to pay. FEMA will review the issues again in the Authorized Official's determination. If the insurance company has not paid all that FEMA anticipated, FEMA can award the difference at the time that the Authorized Official's determination is made. FEMA notes that the State of New Mexico generally requires insurance companies to settle catastrophic claims brought by policyholders within 90 days of the date that the claim was reported to the insurer. 13 FEMA expects that most, if not all, insurance claims will be paid before the Authorized Official's determination is issued. However, in the event that the insurance claim is resolved after the Authorized Official's determination is issued and as a result the claimant is due additional compensation under the Act, the claimant should ask the Claims Office to reconsider the matter under sections 296.34 or 296.35.

Those Injured Persons eligible for disaster assistance under the Public Assistance Program are expected to apply for all available assistance, and compensation will not be awarded for specific costs or losses that are eligible under that program. Consistent with the Act, FEMA clarifies that the Federal share of costs for Public Assistance projects is 100 percent. Similarly, compensation under the Act will not be awarded for losses or costs that have been reimbursed under the Federal Assistance to Individual and Households Program. Those individuals that obtain assistance under the Individuals and Households Program are not precluded from filing a claim under the Act. Claimants may seek compensation for losses or costs that exceed the amount provided under the Individuals and Households Program. FEMA encourages all Injured Persons to seek assistance under the FEMA programs for which they are eligible. Those individuals suffering injuries that are compensable under State or Federal worker's compensation laws must apply for all benefits under such laws. Note that gifts or donations made to claimants by non-governmental organizations and individuals, other than wages paid by the claimant's employer or insurance payments, will be disregarded in evaluating claims and need not be disclosed by claimants.

Subpart D explains the process after the claim is filed, including how claims are documented and how claimants can obtain payment if they agree with FEMA's evaluation.

Section 296.30 explains FEMA's approach to documentation of injuries which is generally consistent with the Cerro Grande Fire Assistance process. This section explains who has the burden of proof, the forms needed when going through the claims process and who has the authority to settle claims. FEMA expects that claimants will provide whatever documentation is reasonably available to support their claim.

Once a claimant has begun the process set out in section 296.30, the claims office assigns a Claims Reviewer to the claim. The Claims Reviewer will review, investigate, and objectively evaluate the claim for the Claims Office. Claims Reviewers cannot function as agents or representatives of the claimant. Claims Reviewers will be proactive in helping claimants identify injuries and in formulating a strategy for proving them and in assisting claimants in locating documentation that may be available from third-party sources. Claimants may be asked to sign release forms authorizing FEMA's Claims Reviewers to obtain information and documentation from third-party sources.

Section 295.30(a) states that the claimant bears the burden of proof for establishing all elements of the injury and compensatory damages. This paragraph also provides claimants the opportunity to make a record supporting the claim by submitting any information or documentation that they deem relevant. The responsibility for making this record rests with the claimant, not the Claims Reviewer. As FEMA must support compensation decisions with evidence, the agency expects claimants will provide whatever evidence is reasonably available to corroborate the nature, extent, and value of their losses. If documentation or substantiating evidence of an injury or damage is not reasonably available ( e.g., it burned in the fire), the Claims Office may determine that the claimant's statement alone will be sufficient to substantiate the injury or damage based on the unique circumstances presented by each case, taking into consideration potential alternative sources of substantiation and documentation. Paragraph (a) authorizes the Claims Office to ask claimants to provide affidavits to support the claim. FEMA is, however, sensitive to privacy concerns of claimants. Where FEMA believes an affidavit from a close associate of the claimant will strengthen the claim, the agency may suggest that the claimant obtain one. FEMA will not automatically reject the claim if the claimant declines to provide the affidavit. FEMA will consider all evidence in the record, including an alternative substantiation offered by the claimant, in making a decision. Paragraph (a) also reminds claimants that FEMA may require an inspection of real property as part of the claims process and their establishment of injuries and damages. FEMA is advising claimants who have suffered business losses that they may expedite resolution of their claim if they voluntarily provide copies of their income tax returns. Claimants who decline to submit their income tax return voluntarily during the claims review process must sign an affidavit agreeing to produce the returns if requested by the Department of Homeland Security's Office of the Inspector General (DHS OIG) or the General Accounting Office (GAO) in the course of an audit.

Under paragraph (b), claimants are required to attest to the nature and extent of each injury of which compensation is sought in the Proof of Loss. Before the Authorized Official's determination can be issued, the claimant must sign the Proof of Loss. This Proof of Loss must be signed under penalty of perjury by the claimant or the claimant's legal representative in specific circumstances. Paragraph (b) also sets forth the deadline by which a Proof of Loss must be submitted after a Notice of Loss and allows discretion for good cause to extend that deadline. For example, a claimant, through no fault of their own, may not be able to access needed documentation in time to submit a claim and the Director of the Claims Office may consider those circumstances as good cause to extend the deadline. It is in both the claimant's interest and FEMA's interest that claims be expeditiously resolved. The intent of the Act is to compensate fire survivors as quickly as possible. Congress entrusted FEMA with administering an orderly compensation process. Section 104(d)(1)(A)(i) of the Act states that FEMA must determine the compensation due to a claimant within 180 days of the date upon which the Notice of Loss is filed. It is impossible for FEMA to fulfill this mandate if claimants are unwilling to provide specific details about their injuries by signing the Proof of Loss. While FEMA believes that Congress intended for the agency to have the flexibility to provide claimants with extra time document their injuries in appropriate cases, nothing in the Act suggests that claimants should be able to keep their claims open for an extended period of time. Claimants who submit their Notice of Loss should submit a signed Proof of Loss to the Claims Office not later than 150 days after the initial Notice of Loss was submitted. Adherence to this deadline will leave FEMA with 30 days to determine the compensation due to the claimant and enable the agency to meet the 180-day timeframe required by Congress. To provide a claims process that is orderly for all and to meet the agency's obligation to be good stewards of the Federal funds provided by Congress for administration of the program, Claimants must comply with the timeframes for signing a Proof of Loss set forth in this paragraph. Section 104(d)(1)(A)(i) of the Act assumes that the claimant will fully cooperate with FEMA in the adjudication of the claim to ensure a timely determination. FEMA will try to process claims in less than 180 days but may require the full 180-day period in many cases. Partial payments are intended to ease the burden on the claimant during this period.

There is flexibility built into the process for claimants to tell FEMA about injuries and damages that they could not have discovered or did not remember when they signed the Proof of Loss. Sections 296.34 and 296.35 explain this flexibility. If a claimant is not prepared to sign a Proof of Loss, for good cause, an extension may be requested from the Director of the Claims Office. Extensions will not be granted automatically, but only on consideration of the equities in the request. Alternatively, the claimant may withdraw the claim and re-file the claim once before November 14, 2024, when the injuries are better defined. If a claimant does not complete the Proof of Loss within the timeframes specified in this paragraph or fails to obtain an extension, the Claims Office may administratively close the claim.

Paragraph (c) requires claimants who receive compensation to sign and return a Release and Certification Form, including for partial payments under section 296.33. The Release and Certification Form must be received before the Claims Office provides payment on the claim. FEMA is simplifying the process from the Cerro Grande Fire Assistance process to eliminate specific timelines and would rather tie the return of the form to payment. Section 104(e) of the Act provides that at the end of the process, the United States and all employees, officers, and agencies of the United States are released from all claims related to the Fire and the compensation settlement is conclusive for the claimant. The Act does not bar the United States from recovering payments made to the claimant after the return of the Release and Certification Form. The Act was intended to provide a more expeditious and less adversarial process for compensation than is available under the Federal Tort Claims Act. Paragraph (c) provides that the United States will not attempt to recover monies paid to claimants completing this process, except in the case of fraud or misrepresentation by the claimant or the claimant's representative, failure of the claimant to cooperate with an audit as required by section 296.36, or a material mistake by FEMA. The Act generally obligates FEMA to attempt to recover payments where there is evidence of civil or criminal fraud, misrepresentation, presentation of a false claim or where a claimant was not eligible for a partial payment received pursuant to the Act. 14 FEMA may also recover overpayments where the agency made a material mistake in calculation of the damages owed to the claimant and in other appropriate cases.

Paragraph (d) authorizes the Director of the Claims Office to offer claimants an opportunity to settle or compromise a claim in whole or in part at any time during the process. This authority allows flexibility in the process to help claimants recover more efficiently and is consistent with the Cerro Grande Fire Assistance process.

Early in the process, claimants should also discuss with the Claims Reviewer whether FEMA will require an appraisal or other third-party opinion of value to evaluate a claim. FEMA may order appraisals and third-party opinions directly or request the claimant to obtain them. Section 296.31 provides that if FEMA requests the claimant provide an appraisal or other third-party opinion, FEMA will reimburse the claimant for the reasonable cost of obtaining it. Paragraph (a) addresses the circumstances in which FEMA will reimburse a claimant for reasonable costs of third-party opinions obtained by the claimant. It provides that FEMA will do so only if the agency requests that the claimant procure the opinion. It is the claimant's responsibility to develop and submit whatever evidence they think is appropriate to support the claim. Claims preparation expenses are not regarded as compensatory damages under New Mexico law or under the Federal Tort Claims Act. Similarly, they are not recoverable under the Act. If FEMA requests that a claimant obtain a third-party opinion and the expert selected by the claimant believes they must consult with other experts to render the opinion, the claimant should notify the Claims Reviewer and provide an estimate of the total cost. FEMA will not reimburse the claimant for the cost of these other experts unless the Claims Office has expressly approved their use.

Compensatory damages for time spent in claims preparation are not available under New Mexico law or the Federal Tort Claims Act. Moreover, there is no evidence Congress intended that claimants be compensated for the value of their time in preparing a claim. Providing compensation for a claimant's time would be difficult to administer, as FEMA would have to determine equitably the value of a claimant's time and to verify that claimants have expended the number of hours that are claimed. FEMA's payments under the Act are subject to independent audit by the GAO and the DHS OIG and claimants would likely find attempts by auditors to verify the payment for hours spent in the claims process highly intrusive. However, as with the Cerro Grande Fire Assistance process, FEMA is choosing to exercise discretion to provide a lump sum payment to claimants for miscellaneous and incidental expenses incurred in the claims process. Subrogation claimants and claimants whose only Fire-related loss is the cost of a flood insurance premium are not eligible for the lump sum payment. FEMA will provide a lump sum payment of five percent of the insured and uninsured loss (excluding flood insurance premiums), not to exceed $25,000. The minimum lump sum payment is $150. 15 The payment amounts for these miscellaneous and incidental expenses are based upon the Cerro Grande Fire Assistance process and have been updated to reflect inflationary increases since that rule was published. 16 FEMA believes that paragraph (b) represents a fair and reasonable accommodation between the agency's responsibility to spend Federal funds wisely and the desire to compensate claimants as fully as possible. The lump sum payment under paragraph (b) will be made after a properly executed Release and Certification Form is returned to the Claims Office and cannot be obtained through partial payment.

Section 296.32 explains how FEMA will evaluate claims. Claims Reviewers do not have the authority to determine whether a claim is eligible for compensation or how much compensation will be paid. Their role is to work with the claimant to obtain relevant evidence, analyze the evidence, and make a recommendation to an Authorized Official. Each claim will be assigned to an Authorized Official, and only Authorized Officials have the authority to decide claims.

When the Authorized Official has decided a claim, they will send a written notification to the claimant's address as it appears in the Claims Office records. The date that appears on this notification starts a 120-day clock during which a claimant must either accept the finding or appeal it. The procedure for appealing an Authorized Official's determination is explained in section 295.41. If the claimant has not acted at the end of this period, they may forfeit further rights to an Administrative Appeal. The Director of the Claims Office may modify the 120-day deadline if good cause exists.

This section explains the partial payment process. Section 104(d)(2) of the Act authorizes FEMA to make partial payments at the request of the claimant. As in the Cerro Grande Fire Assistance process, the Claims Office may make one or more partial payments to the claimant if there is a reasonable basis to estimate the claimant's damages. FEMA believes this section offers sufficient discretion to the agency to make partial payments of any amount and to expedite payments where it is appropriate to do so. The amount of a partial payment in any particular case will depend on the nature of the claim and in some cases, how well the claim is supported. FEMA encourages claimants who require expedited payments to discuss the matter with a Claims Reviewer. FEMA is updating the Cerro Grande Fire Assistance process by requiring claimants to sign a Release and Certification Form as part of the partial payment process. This change simplifies the requirement that the Form be submitted to receive any payment. While the Claims Office's decision to provide a partial payment cannot be appealed, acceptance of a partial payment does not affect the claimant's ability to pursue an appeal, arbitration, or other options under the Act with respect to any portion of a claim for which a Release and Certification Form is not executed.

Section 104(d)(1)(A)(i) of the Act requires FEMA to determine and fix the amount to be paid for a claim within 180 days after the claim is submitted. To meet this deadline, FEMA may ask claimants to sign the Proof of Loss and require that the Authorized Officials render a definitive determination more expeditiously than some claimants would prefer. Section 296.34 provides claimants with the flexibility to make additional claims after submitting a Proof of Loss and before submission of the Release and Certification Form. Before signing the Proof of Loss, the claimant may amend the Notice of Loss to seek compensation for injuries not referenced in the Notice of Loss. claimants who wish to amend the Notice of Loss should contact the Claims Reviewer. The additional injuries will be noted on the Proof of Loss and will be adjudicated in the Authorized Official's determination. Once the claimant has signed the Proof of Loss, they may request permission from the Director of the Claims Office to amend the Notice of Loss for consideration of one or more injuries not addressed in the Proof of Loss. The claimant should consult with the Claims Reviewer about the procedure for obtaining permission of the Director of the Claims Office. The Director of the Claims Office will grant the request if it is supported by good cause. If the request is granted, the Director will determine whether compensation is due for the additional injury under the Administrative Appeal procedures described in subpart E of part 296. The additional injury will not be considered until after the Authorized Official's determination is issued on the remainder of the claim. If the claimant decides to appeal the Authorized Official's determination on other injuries, the Director of the Claims Office will decide both matters in a single appeal proceeding. Claimants are reminded that they must put the Claims Office on notice of any injury not mentioned in the initial Notice of Loss not later than the deadline for filing an Administrative Appeal under section 296.41 or November 14, 2024, whichever is earlier. A written request for permission to amend a Notice of Loss after the Proof of Loss is signed must be on file with the Director of the Claims Office no later than the deadline for filing an Administrative Appeal under section 296.41 or November 14, 2024, whichever is earlier.

Section 296.35 provides for reopening a claim after the claimant has submitted a Release and Certification Form again with the goal to allow claimants an opportunity to request damages in excess of those previously awarded. In appropriate cases, the claimant can use the reopening provision of this section to seek compensation for an injury not previously reported to FEMA. Specifically, claimants may request to reopen if, not later than November 14, 2025, the claimant desires heightened risk reduction compensation under section 296.21(e)(5); the claimant closed the sale of a home and wishes to present a claim for a decrease in the value of the real property under section 296.21(c)(3); or the claimant has incurred additional losses under section 296.21(c)(1) as part of a reconstruction in excess of those previously awarded. Requests to reopen for good cause will only be granted in the Director's discretion. The Director's decision to reopen or not reopen a claim is not subject to review under the arbitration provisions of Subpart E of this part. Reopened claims will not be decided by the Director of the Claims Office but by an Authorized Official, after considering the recommendation of the Claims Reviewer. Claimants who are dissatisfied with the Authorized Official's determination on the reopened claim may appeal to the Director of the Claims Office pursuant to subpart E of part 296.

Claimants are required to grant the DHS OIG and the Comptroller General of the United States access to the subject property and to records and information in their control that are relevant to their claims for purposes of audit and investigation. These records include, but are not limited to, any relevant tax records. The Act requires that the GAO, a legislative branch agency, audit claims and payments made under the Act. The DHS OIG is responsible for investigating charges of fraud and abuse and auditing FEMA's programs.

The Privacy Act protects the confidentiality of information provided by individual claimants. This information may only be disclosed with the consent of the claimant or pursuant to a routine use, which has been disclosed to the public. Confidential, proprietary, and trade secret information provided by entities, such as business, Indian Tribes, Tribal entities, and government agencies, are not eligible for Privacy Act protection, but may be exempt from disclosure under the Freedom of Information Act. Non-individual claimants are encouraged to discuss the need to protect confidential information from disclosure with FEMA before the information is submitted. FEMA may not be able to prevent the disclosure of this information without awareness of its confidential nature.

Subpart E discusses a claimant's rights if they disagree with FEMA's evaluation of the claim.

Claimants are afforded a right to appeal the initial determination to the Director of the Claims Office. This is referred to as an Administrative Appeal. If the claimant is dissatisfied with the Administrative Appeal decision, they may put the matter to binding arbitration or seek judicial review in federal court.

Section 296.41 describes the Administrative Appeal process. Consistent with the Cerro Grande Fire Assistance process, claimants disagreeing with the conclusions of FEMA's Authorized Official under section 296.32 must pursue an Administrative Appeal before initiating arbitration or seeking judicial review in federal court. An Administrative Appeal decision constitutes the final decision of the Director of the Claims Office. Pursuant to paragraph (a), a written request for an Administrative Appeal must be postmarked or electronically stamped within 120 days after the date of the Authorized Official's determination.

FEMA requests that claimants provide the Claims Reviewer with all relevant evidence supporting the claim. The goal of the process is to render equitable compensation decisions the first time, not to encourage Administrative Appeals or further proceedings. However, paragraphs (c) and (d) allow for the claimant to submit supplemental filings and to present any relevant factual evidence concerning the issues under appeal, even if it was not presented earlier in the process to ensure claimants are fully heard. Claimants who wish to raise new claims or damage theories after submitting a Proof of Loss should ask the Director of the Claims Office to supplement their claim under section 296.34 of this part.

Under section 296.41, the Director of the Claims Office may request additional information, may schedule a conference, or may convene a hearing under paragraphs (e), (f), and (g) respectively. To ensure effective, efficient resolution of claims, FEMA is updating the process to allow claimants to request a mediator to facilitate a conference during the Administrative Appeal. This allows claimants to request a facilitator earlier in the process as part of the Administrative Appeal at a conference in paragraph (f) instead of at the later arbitration stage of the process. FEMA believes this change will resolve claims faster consistent with the Act's purpose to expeditiously consider and settle claims. FEMA seeks comment on this update. Following the Administrative Appeal decision, if the claimant does not initiate arbitration or seek judicial review in the prescribed timelines, their concurrence with the decision will be conclusively presumed under paragraph (i). If the claimant concurs with the Director's decision, any additional damages will be paid upon receipt of a properly executed Release and Certification Form.

Section 104(h)(3)(A) of the Act requires FEMA establish procedures under which a dispute regarding a claim may be settled by arbitration. Section 296.42 establishes these procedures. Consistent with the Cerro Grande Fire Assistance arbitration process, any issue decided in an Administrative Appeal may be referred to binding arbitration. Paragraph (a) requires the written request for arbitration be electronically stamped or postmarked no later than 60 days after the Administrative Appeal decision date. FEMA is updating the process to allow for electronic submission of arbitration requests and seeks comment on this update. Evidence not previously entered into the Administrative Record will not be considered during arbitration under paragraph (b). A claimant cannot arbitrate an issue unless it was raised and decided in the Administrative Appeal.

As explained above, FEMA is updating the process to allow claimants to request a mediator to facilitate a conference during the Administrative Appeal in 296.41(f). FEMA believes this change will resolve claims faster consistent with the Act's purpose to expeditiously consider and settle claims. FEMA seeks comment on this update.

Based on FEMA's experience with the arbitration process for the Cerro Grande Fire Assistance, the agency is updating paragraph (c) regarding arbitrator selection. Specifically, FEMA is changing the arbitrator selection process to a random drawing from a list of qualified arbitrators who have agreed to serve, rather than allowing the claimant to select an arbitrator from such a list for claims at or below a certain amount. This change would improve efficiency in the process and would not result in any inequity to claimants, as the selection would be from a random drawing. FEMA believes this change will result in a faster assignment of arbitrator to resolve the claim more efficiently consistent with the Act's goal to expeditiously consider and settle claims for injuries resulting from the Fire. FEMA seeks comment on this process. FEMA is also increasing the thresholds associated with the assignment of either one arbitrator or a panel of three arbitrators to reflect inflationary increases since the Cerro Grande regulation was published. 17 Amounts in dispute of $500,000 or less will be decided by one arbitrator while a panel of three arbitrators will decide amounts in dispute exceeding $500,000. 18 FEMA seeks comment on the increased thresholds.

In paragraph (d), FEMA seeks to modernize the arbitration process by generally offering virtual arbitration hearings to promote efficiency in the process. Additionally, given the scope of the Fire, FEMA is not providing a specific location for any in-person hearing, but rather allowing the Arbitration Administrator the flexibility to select a location in New Mexico for those limited circumstances in which an in-person hearing is held. Decisions will be in writing and provided to the Arbitration Administrator, the claimant, and the Director of the Claims Office under paragraph (e). FEMA seeks comment on these provisions.

Consistent with the Cerro Grande Fire Assistance process, decisions will be rendered no later than 10 days after a hearing is concluded, although the Arbitration Administrator may extend the decision timeline with notice to both the claimant and the Director of the Claims Office. Written arbitration decisions will establish the compensation due to a claimant, if any, and the corresponding rationale. Consistent with the Cerro Grande Fire Assistance arbitration process, the Arbitration Administrator will forward a Release and Certification Form to the claimant with the written decision. Any additional compensation that is awarded as a result of the arbitration will be paid after the signed Release and Certification Form is received.

Paragraphs (f) and (g) are generally consistent with the Cerro Grande Fire Assistance process. If additional compensation is awarded at arbitration, the Arbitration Administrator will forward the decision to the claimant with a Release and Certification Form. Such compensation will be paid to the claimant after the signed Form is received by the Arbitration Administrator. FEMA reiterates in paragraph (g) that arbitration decisions are not subject to any further appeal or review and are binding on the claimant and on FEMA. Paragraph (i) includes a provision that while the Arbitration Administrator will pay all fees and expenses of the arbitrator or arbitrators assigned, claimants are responsible for any expenses they incur as a result of the arbitration, including travel costs. This update to the Cerro Grande Fire Assistance process ensures fairness by eliminating the provision to allow the parties to jointly agree to pay such fees. FEMA seeks comment on this provision.

Section 296.43 discusses judicial review of the Administrative Appeal decision, which remains consistent with the Cerro Grande Fire Assistance process and the provisions of the Act. Claimants may seek judicial review in lieu of arbitration if dissatisfied with the outcome of the Administrative Appeal decision. The suit must be filed in the United States District Court for the District of New Mexico within 60 days of a final decision of the Administrator under the Act. Only evidence in the administrative record will be considered by the court. Claimants should be aware that section 104(i)(3) of the Act requires that the court uphold the Administrative Appeals decision if it is supported by substantial evidence on the record considered as a whole.

For the reasons that follow, FEMA is issuing this rule as an interim final rule pursuant to statutory authority under the Act. Specifically, section 104(f)(1) requires FEMA to publish “interim final regulations for the processing and payment of claims under this Act.” Further, these regulations must be published “not later than 45 days after the date of enactment.” Given Congress' specific authority to issue an interim final rule, the agency is proceeding without advance notice and comment as required under the APA. See 5 U.S.C. 553(b) and (c).

The APA also provides an exception to prior notice and comment for rules of agency organization, procedures, or practice. 5 U.S.C. 553(b)(A). This interim final rule implements the Hermit's Peak/Calf Canyon Fire Assistance Act by detailing how FEMA will process and pay claims under the Act. The majority of the provisions in this interim final rule are procedural because they create the procedural framework through which FEMA is able to efficiently implement a claims process to compensate victims of the Fire. The rule details how a claimant may seek compensation through a claims process with the Office of Hermit's Peak/Calf Canyon Fire Claims (“Claims Office”) from initiating a claim with a Notice of Loss through appeal and arbitration or judicial review of an Authorized Official's determination of the claim. This interim final rule provides the voluntary process by which an Injured Party may file a claim under the Act. Injured Persons may seek compensation through the Federal Tort Claims Act or a civil action in lieu of filing a claim under the Act. This interim final rule sets out the agency's procedure for how to voluntarily file a claim. Since this rule is procedural in nature, it is excepted from the notice and comment requirements under 5 U.S.C. 553(b)(A).

Consistent with Congress' direction in section 104(f)(1) of the Act that FEMA publish “interim final regulations for the processing and payment of claims under [the] Act,” good cause exists pursuant to 5 U.S.C. 553(b)(B) as it would be impracticable and contrary to the public interest to require notice and comment rulemaking in this instance. Potential claimants are currently without (and awaiting) compensation for injuries they suffered due to a massive wildfire. They need to rebuild as soon as possible to regain normalcy, reduce erosion, and restore land health. 19 The sooner the federal government can compensate them, the sooner they can begin the process of rebuilding and recovery. And so FEMA must establish the relevant regulatory framework without delay, so as to be able to respond expeditiously and without unnecessary confusion regarding the applicable procedures for claimants under the Act. Section 102(b)(2) lists as one of the two purposes of the Act to “provide for the expeditious consideration and settlement of claims” for the injuries suffered as a result of the Fire. The Fire constitutes the largest wildfire in New Mexico history. 20 Over 340,000 acres of forest burned during the Fire and over half of the land impacted by the Fire consisted of privately-owned land, with just under 200,000 total acres burned. 21 At least 160 homes and a total of over 900 structures were destroyed during the Fire. 22 Despite containment, the impact of the Fire continues to be felt in the impacted areas, causing flooding and setting off a drinking water crisis. 23 The higher burn severity of soil on private lands increases the likelihood of flooding and mudslide impacts on those areas. Residents in the areas of the Fire have already suffered significant damage from flooding, including washed out roads and buildings, drowned pastures, and burned debris moved downstream. 24 In addition, as noted above, Congress explicitly mandated in section 104(f)(1) of the Act that FEMA promulgate these regulations expeditiously as interim final regulations, a factor that supports a finding of “good cause.” Pursuant to section 104(f)(1) of the Act, consistent with 5 U.S.C. 553(b)(B), and for the reasons stated above, FEMA therefore will dispense with prior public notice and the opportunity to comment on this rule before finalizing this rule and to make this interim final rule effective immediately upon publication.

Based on the discussion above, FEMA further finds there is good cause, under 5 U.S.C. 553(d)(3), not to require a 30-day delayed effective date for this rulemaking because delaying implementation of the rule by 30 days is contrary to the goal of the statutory requirement to issue an interim final rule within 45 days after the Act's enactment, and delay would further negatively impact claimants seeking compensation through the Act. While FEMA believes the agency has the statutory authority pursuant to section 104(f)(1) of the Act and 5 U.S.C. 553 (b)(A), 553(b)(B), and 553(d)(3) to issue the rule without advance notice and comment and with an immediate effective date, FEMA is interested in the views of the public and requests comment on all aspects of the interim final rule.

Executive Order 12866 (Regulatory Planning and Review) and Executive Order 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” that is economically significant, under section 3(f)(1) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

In this rule, FEMA is establishing the process by which claimants who were injured as a result of the Fire may apply for compensation under the Act. Affected State, local, and Tribal governments, private sector businesses, not-for-profit organizations, and individuals and households will be eligible to apply for compensation. This rule will result in costs to claimants for time to apply for and substantiate a claim, and for FEMA to process and adjudicate claims. Claimants will submit a Notice of Loss to FEMA, meet with a FEMA Claims Reviewer, obtain the documentation needed to substantiate claims, sign a Proof of Loss, and complete and return a Release and Certification Form. Additionally, affected insurance companies can submit a subrogation notice of loss for possible compensation under the Act. Claimants who disagree with FEMA's evaluation of the claim may also incur costs to appeal the determination. FEMA estimates over 57,000 claimants will seek compensation under the Act, totaling between 1.3 and 1.6 million burden hours over the two-year period, depending on if all applicants submit all forms. 25

The rule will result in additional transfer payments from FEMA to victims for the settlement of claims for injuries resulting from the Fire. Injuries may include property, business and/or financial losses. Congress appropriated $2.5 billion to provide for the expeditious consideration and settlement of these claims. 26 The maximum total economic impact of this rule, therefore, is $2.5 billion (assuming that all funds awarded will be expended). These funds are for the settlement of actual compensatory damages measured by injuries suffered, FEMA's administration of the program, and DHS OIG oversight. 27 However, without knowing the dollar amount of claims that will be filed for these injuries, it is impossible to predict the amount of the economic impact of this rule with any precision.

The Act requires claims must be submitted no later than two years after publication of this interim final rule or November 14, 2024. 28 The Act requires that FEMA determine and fix the amount to be paid for a claim within 180 days after a claim is submitted. 29 Although the impact of the rule could be spread over multiple years as claims are received, processed, and paid, the total economic effects of a specific payment would only occur once, rather than annually.

This rule will provide distributional benefits to victims of the Fire. FEMA has provided immediate assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act to those eligible for public and individual assistance pursuant to the President's declaration of a major disaster on May 4, 2022. The additional compensation from the Act will more fully compensate victims and allow affected State, local and Tribal governments, businesses, organizations, and individuals to rebuild.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)) applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, FEMA is not issuing a notice of proposed rulemaking. Accordingly, the RFA's requirements do not apply.

FEMA has not issued a notice of proposed rulemaking for this regulatory action; therefore, the written statement provisions of the Unfunded Mandates Reform Act of 1995, as amended, do not apply to this regulatory action.

This rule contains information collections necessary to support FEMA's implementation of the Act. The Notice of Loss and Proof of Loss forms are a new collection (OMB Control Number 1660-NW162) submitted under OMB's emergency clearance procedures to allow FEMA to begin accepting claims immediately after publication of this interim final rule. Additionally, FEMA will seek public comments on the collection through the normal clearance process.

Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a regulation will result in a system of records. A “record” is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. See 5 U.S.C. 552a(a)(4). A “system of records” is a group of records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures.

In accordance with DHS policy, FEMA has completed a Privacy Threshold Analysis (PTA) for this rule. DHS has determined that this rulemaking does not affect the 1660-NW162 OMB Control Number's compliance with the E-Government Act of 2002 or the Privacy Act of 1974, as amended. Specifically, DHS has concluded that the 1660-NW162 OMB Control Number is covered by the DHS/FEMA/PIA-044 National Fire Incident Reporting Systems (NFIRS) Privacy Impact Assessment (PIA) and the DHS/FEMA/PIA-049 Individual Assistance (IA) Program PIA. Additionally, DHS has decided that the 1660-NW162 OMB Control Number is covered by DHS/FEMA-008 Disaster Recovery Assistance Files, 87 FR 7852 (Feb. 10, 2022), DHS/ALL-004 General Information Technology Access Account Records System, 77 FR 70792 (Nov. 27, 2012), and DHS/ALL-013 Department of Homeland Security Claims Records, 73 FR 63987 (Oct. 28, 2008) System of Records Notices (SORNs).

Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive Order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials.

FEMA has reviewed this interim final rule under Executive Order 13175 and has determined that this interim final rule may 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. FEMA will enter into consultation with the Indian Tribes that have been impacted by the Fire and whose Tribal entities or Tribal members have been impacted by the Fire during the public comment period of this rulemaking.

Executive Order 13132, “Federalism,” 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action.

FEMA has determined that this rulemaking does 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, and therefore does not have federalism implications as defined by the Executive Order. FEMA, however, seeks comment on this determination from any States that have been impacted by the Fire and who seek assistance pursuant to the Act.

Under the National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. 4321 et seq., an agency must prepare an environmental assessment or environmental impact statement for any rulemaking that significantly affects the quality of the human environment. FEMA has determined that this rulemaking does not significantly affect the quality of the human environment and consequently has not prepared an environmental assessment or environmental impact statement.

Rulemaking is a major Federal action subject to NEPA. Categorical exclusion A3 included in the list of exclusion categories at Department of Homeland Security Instruction Manual 023-01-001-01, Revision 01, Implementation of the National Environmental Policy Act, Appendix A, issued November 6, 2014, covers the promulgation of rules, issuance of rulings or interpretations, and the development and publication of policies, orders, directives, notices, procedures, manuals, and advisory circulars if they meet certain criteria provided in A3(a)-(f). This interim final rule meets Categorical Exclusion A3(a), “[t]hose of a strictly administrative or procedural nature,” and A3(b), “[t]hose that implement, without substantive change, statutory or regulatory requirements.” FEMA has determined that there are no extraordinary circumstances that prevent the use of this categorical exclusion for this rulemaking action.

Under Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations,” 59 FR 7629 (Feb. 16, 1994), as amended by Executive Order 12948, 60 FR 6381, (Feb. 1, 1995), FEMA incorporates environmental justice into its policies and programs. The Executive Order requires each Federal agency to conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures that those programs, policies, and activities do not have the effect of excluding persons from participation in programs, denying persons the benefits of programs, or subjecting persons to discrimination because of race, color, or national origin.

This rulemaking would not have a disproportionately high or adverse effect on human health or the environment, nor would it exclude persons from participation in FEMA programs, deny persons the benefits of FEMA programs, or subject persons to discrimination because of race, color, or national origin.

Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801-808, before a rule can take effect, the Federal agency promulgating the rule must: submit to Congress and to the Government Accountability Office (GAO) a copy of the rule; a concise general statement relating to the rule, including whether it is a major rule; the proposed effective date of the rule; a copy of any cost-benefit analysis; descriptions of the agency's actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act; and any other information or statements required by relevant executive orders.

FEMA has submitted this rule to the Congress and to GAO pursuant to the CRA. The Office of Management and Budget has determined that this rule is “economically significant,” but FEMA believes this rule is not a “major rule” within the meaning of the CRA. FEMA believes this interim final rule is not subject to the additional review requirements under the CRA given the statutory mandate to issue this interim final rule within 45 days of the Act's enactment under section 104(f) of the Act. This interim final rule is a procedural rule and does not confer any substantive rights, benefits, or obligations but rather only sets out the agency's procedure for how to voluntarily file a claim under the Act. As such, this interim final rule is a “rule of agency organization, procedure, or practice that does not substantially affect the rights or obligation of non-agency parties” pursuant to 5 U.S.C. 804(3)(C). Finally, even if this interim final rule is considered a “rule” under the CRA, FEMA finds there is good cause to dispense with notice and public comment under 5 U.S.C. 808(2). Notice and public comment are impracticable and contrary to public interest given the Act's requirement for the agency to publish an interim final rule within 45 days of enactment and the Act's purpose to provide expeditious consideration and settlement of claims for victims of the Fire as explained above. Therefore, there is no delay in its effective date under the CRA.

For the reasons discussed in the preamble, the Federal Emergency Management Agency (FEMA) amends subchapter E of title 44 of the Code of Federal Regulations by revising the subchapter heading and adding part 296 to read as follows:

Atlantic shark fisheries are managed primarily under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ) and the Atlantic Tunas Convention Act (16 U.S.C. 971 et seq. ). The 2006 Consolidated Atlantic HMS Fishery Management Plan (2006 Consolidated HMS FMP) and its amendments are implemented by regulations at 50 CFR part 635.

For the Atlantic commercial shark fisheries, the 2006 Consolidated HMS FMP and its amendments established default commercial shark retention limits, quotas for species and management groups, and accountability measures for underharvests and overharvests. The retention limits, commercial quotas, and accountability measures can be found at 50 CFR 635.24(a), 635.27(b), and 635.28(b). Regulations also include provisions allowing flexible opening dates for the fishing year (§  635.27(b)(3)) and inseason adjustments to shark trip limits (§  635.24(a)(8)), which provide management flexibility in furtherance of equitable fishing opportunities, to the extent practicable, for commercial shark fishermen in all regions and areas. In addition, §  635.28(b)(4) lists species and management groups with quotas that are linked. If quotas are linked, when the specified quota threshold for one management group or species is reached and that management group or species is closed, the linked management group or species closes at the same time (§  635.28(b)(3)). Lastly, pursuant to §  635.27(b)(2), any annual or inseason adjustments to the base annual commercial overall, regional, or sub-regional quotas will be published in the Federal Register .

Background information about the need to adjust the quotas and retention limits and establish the opening date for the 2023 fishing year for the Atlantic commercial shark fisheries was provided in the proposed rule (87 FR 55379, September 9, 2022) and is not repeated here. The comment period for the proposed rule closed on October 11, 2022. NMFS received 99 written comments, the majority of which were form letter submissions. Summaries of the comments received, and our responses to those comments, are in the Response to Comments section. Similar comments are combined, where appropriate. After reviewing and considering all the public comments received on the proposed rule, NMFS is finalizing the rule as proposed.

In this final rule, NMFS adjusts the quota levels for the various shark stocks and management groups for the 2023 Atlantic commercial shark fishing year ( i.e., January 1 through December 31, 2023) based on underharvests that occurred during the 2022 fishing year, consistent with existing regulations at § 635.27(b). Unharvested quota may be added to the quota for the next fishing year, but only for shark management groups that have shark stocks that are declared not overfished and not experiencing overfishing. No more than 50 percent of a base annual quota may be carried over from a previous fishing year.

Based on 2022 harvests that were reported by September 30, 2022, and after considering catch rates and landings from previous years, with this final rule, NMFS adjusts the 2023 quotas for certain management groups as shown in Table 1. NMFS anticipates that dealer reports received after that time will be used to adjust 2024 quotas, as appropriate, noting that, in some circumstances, NMFS re-adjusts quotas during the subject year. A description of the calculations for each stock and management group is provided in the proposed rule and is not repeated here.

After considering the “Opening Commercial Fishing Season Criteria” listed at § 635.27(b)(3), and “Inseason Trip Limit Adjustment Criteria” listed at § 635.24(a)(8), NMFS is opening the 2023 Atlantic commercial shark fishing season for all shark management groups in the northwestern Atlantic Ocean, including the Gulf of Mexico and Caribbean Sea, on January 1, 2023 (Table 2). NMFS is also starting the 2023 commercial shark fishing season with the commercial retention limit of 55 large coastal sharks (LCS) other than sandbar sharks per vessel per trip in both the eastern and western Gulf of Mexico sub-regions as well as in the Atlantic region (Table 2). As needed, NMFS may adjust the retention limit throughout the year to ensure equitable fishing opportunities throughout the region and ensure the quota is not exceeded (see the criteria at § 635.24(a)(8)).

All of the regional or sub-regional commercial fisheries for shark management groups would remain open until December 31, 2023, or until NMFS determines that the landings for any shark management group are projected to reach 80 percent of the quota given the realized catch rates and are projected to reach 100 percent of the quota before the end of the fishing season, or until a quota-linked species or management group is closed. For the regional or sub-regional Gulf of Mexico blacktip shark management group(s), regulations at § 635.28(b)(5)(i) through (v) authorize NMFS to close the management group(s) before landings have reached, or are projected to reach, 80 percent of the quota after considering the criteria and other relevant factors. NMFS manages each Atlantic shark management group by using a specific commercial annual catch limit, with some linkages among shark management groups whose species are often caught together. The linked and non-linked quotas are shown in Table 2.

If NMFS determines that a shark species or management group fishery must be closed, then NMFS will publish in the Federal Register a notice of closure for that shark species, shark management group, region, and/or sub-region. The closure will be effective no fewer than 4 days from the date of filing for public inspection with the Office of the Federal Register. The fisheries for the shark species or management group would be closed (even across fishing years) from the effective date and time of the closure until NMFS publishes in the Federal Register a notice that additional quota is available and the season is reopened.

Written comments can be found at https://www.regulations.gov/ by searching “NOAA-NMFS-2022-0064.” Below, NMFS summarizes and responds to the 99 written comments received on the proposed rule during the comment period. The majority of written comments were form letter submissions and are covered by Comment 1. Similar comments are combined, where appropriate.

Comment 1: NMFS received numerous comments regarding the proposed quotas and retention limits. Several commenters opposed the carry-over of quota underharvests to the next fishing year because they believed that shark species must recover from a global increase in fishing pressure and that the carry-over would lead to population decline. Other commenters recommended that the base quotas and retention limits be reduced. Many of these commenters stated that quotas are not fully harvested because there are not enough sharks. Some commenters requested a prohibition on all shark fishing.

Response: The purpose of this action is to adjust the quotas and retention limits and establish the opening date for the 2023 fishing year for Atlantic shark commercial fisheries. This action does not change the regulations and management measures currently in place that govern commercial shark fishing in Federal waters of the northwestern Atlantic Ocean, Gulf of Mexico, and Caribbean Sea.

Consistent with existing regulations at § 635.27(b), unharvested quota may be added to the quota for the next fishing year for shark management groups that have shark stocks that are declared not overfished and not experiencing overfishing. Because the Gulf of Mexico blacktip shark management group and smoothhound shark management groups in the Gulf of Mexico and Atlantic regions are not overfished, and overfishing is not occurring, available underharvest (up to 50 percent of the base annual quota) from the 2022 fishing year for these management groups may be added to their respective 2023 base quotas. NMFS previously determined that the carry-over of quota underharvests (up to 50 percent of the base annual quota) for stocks that are not overfished with no overfishing occurring would not impact the health of the stock (see Amendment 6 and Amendment 9 to the 2006 Consolidated HMS FMP (80 FR 50073, August 18, 2015; 80 FR 73128, November 24, 2015)). NMFS is not carrying forward quota underharvests for any other shark species or management group. Additionally, NMFS is not changing the base quotas or retention limits in this rule.

Furthermore, NMFS is required, under the Magnuson-Stevens Act, to foster the long-term biological and economic sustainability of shark fisheries. The majority of sharks harvested in the United States are species with above-target population levels, and rebuilding plans are in place for all overfished species. While there are several shark species that cannot be retained, the primary objective of this final rule is to adjust the base quotas and retention limits as necessary and consistent with existing regulations at §§ 635.24(a) and 635.27(b). Prohibiting all shark fishing is contrary to that objective and to the requirements of the Magnuson-Stevens Act.

Comment 2: NMFS received a few comments regarding the data used to adjust the quotas and set the retention limits for the 2023 Atlantic shark commercial fishing year. One commenter generically challenged the accuracy of the data. Another commenter urged NMFS to continue research on shark stocks for improved data and informed management measures.

Response: NMFS uses the best scientific information available (BSIA) to effectively manage the Atlantic shark stocks (§ 600.315). In May 2022, NMFS announced the availability of the BSIA Regional Framework (see ADDRESSES ). As described in the BSIA Regional Framework, NMFS may consider as BSIA the stock assessments resulting from the processes undertaken by the International Commission for the Conservation of Atlantic Tunas and the SouthEast Data Assessment and Review, as well as third-party external stock assessments that are approved for use in management by NMFS. The BSIA Regional Framework also clarifies roles and responsibilities of NMFS and collaborative bodies, and increases transparency in how BSIA determinations are made as part of the management process. All the data and stock assessments referenced in establishing the base quotas and retention limits for this rule are consistent with the BSIA Regional Framework and the Magnuson-Stevens Act.

Furthermore, commercial fishermen with a shark permit must report fishing activities in an approved logbook (§ 635.5(a)(1)). Logbook entries must be species-specific and include weighout slips, among other requirements. Through improved commercial quota monitoring technology and the requirement that Atlantic HMS dealers submit weekly electronic reports on commercial-harvested Atlantic sharks, NMFS actively monitors commercial landings of all shark species and ensures that any necessary inseason management measures, such as fishery closures, occur in an efficient and timely manner. Fishermen or dealers who do not follow the regulations regarding reporting are subject to enforcement action.

Regarding research on shark stocks, NMFS uses recent research in all shark stock assessments. Additionally, NMFS works in conjunction with partners to collect scientific and biological data regarding sharks from a variety of sources, including fishery observers, fishery surveys, and the shark research fishery (§ 635.32(f)). More information on the research and data that are collected every year can be found in the annual Atlantic HMS Stock Assessment and Fishery Evaluation Report (see ADDRESSES ).

Comment 3: Several commenters stated that this rulemaking is equivalent to a shark cull.

Response: The term “shark cull” refers to efforts that are made to deliberately decimate shark populations. Such efforts are contrary to NMFS' mission and the objectives of this rulemaking. NMFS is responsible for managing sustainable commercial and recreational Atlantic shark fisheries consistent with the Magnuson-Stevens Act and other applicable laws. To that end, NMFS established baseline quotas for various Atlantic shark management groups in the 2006 Consolidated HMS FMP and its amendments. These baseline quotas were established to achieve optimum yield and also to prevent overfishing and ensure rebuilding of overfished stocks (§ 600.310). NMFS adjusts these baseline quotas, as needed and as consistent with the regulations, on an annual basis as a result of overharvest or underharvests in previous years. Because these quotas are based on BSIA, NMFS is confident that allowing commercial and recreational shark fishing in 2023 will not cause shark populations to be decimated.

Comment 4: One commenter stated that the quotas do not account for illegal shark harvest.

Response: As described in the BSIA Regional Framework, NMFS continues to use the best scientific information available to manage the shark stocks. This includes the stock assessment review process, which ensures that analyses and data used in the assessments are based on BSIA, scientifically valid and reflective of the current state of each stock or stock complex, and appropriately take into account the HMS risk policy to ensure a 70-percent likelihood of success in ending and preventing overfishing, rebuilding overfished stocks, and maintaining healthy stocks. The likelihood of success within the existing HMS risk policy considers the shark stock and relevant circumstances ( e.g., data, unreported landings, fishery changes, and extenuating circumstances). Overall, the HMS risk policy is intended to ensure that the overfishing limit, allowable biological catch, and annual catch limit have buffers and are not exceeded.

NOAA's Office of Law Enforcement is responsible for investigating violations of Federal fishing regulations. Any fisherman or dealer who does not abide by the regulations is subject to potential enforcement action. As noted above, all Federal commercial shark fishermen and shark dealers are required to have permits (§ 635.4(e)), report landings (§ 635.5), and follow other requirements related to shark fishing, as specified in 50 CFR part 635. NMFS closely monitors landing reports on a weekly basis, and communicates frequently with the Office of Law Enforcement to share information about illegal shark fishing. In some instances, NMFS seizes illegally harvested shark product, pursuant to NMFS' authority under the Magnuson-Stevens Act. In those cases, the shark product is reported and counted toward the shark landings for quota monitoring purposes.

Comment 5: NMFS received numerous comments regarding concern for sharks in general. Some commenters expressed concern for what they believe are endangered and threatened shark species or incorrectly stated that endangered species in general were not considered when establishing the quotas. Other commenters noted the negative impacts of shark finning on global shark populations. Some commenters highlighted the importance of sharks to eco-tourism, particularly for snorkeling and diving, and one commenter specifically requested stricter management measures in foreign countries to better support eco-tourism efforts. One commenter stressed the need for marine protected areas while other commenters were concerned about climate change impacts on sharks. A few commenters advocated for improved educational outreach regarding shark species and fisheries, and one commenter requested better fishing regulations. One commenter was concerned about the health risks of consuming shark meat. One commenter incorrectly stated that NMFS supports shark culls through fishing tournaments.

Response: All of these comments are beyond the scope of this rulemaking. The purpose of this action is to adjust the quotas and retention limits and establish the opening date for the 2023 fishing year for Atlantic shark commercial fisheries. This action does not change the base quotas or retention limits, which were established while considering the status of shark stocks and the requirements of the Magnuson-Stevens Act, as described in the proposed rule for this action (87 FR 55379, September 9, 2022). Information about the issues raised in these public comments can be found in the 2006 Consolidated HMS FMP and its amendments, and the annual Stock Assessment and Fishery Evaluation Report (see ADDRESSESS ).

NMFS is issuing this rule pursuant to 305(d) of the Magnuson-Stevens Act. Pursuant to Magnuson-Stevens Act section 305(d), this action is necessary to carry out the 2006 Consolidated HMS FMP and its amendments in order to achieve domestic management objectives under the Magnuson-Stevens Act. The NMFS Assistant Administrator has determined that this final rule is consistent with the 2006 Consolidated HMS FMP and its amendments and other applicable law.

This action is exempt from review under Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified for the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a final regulatory flexibility analysis was not required and none was prepared.

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