The CFPB has received a request to make a preemption determination involving certain disclosure provisions in TILA. Congress enacted TILA in 1968 because it found that “competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit.”  1 TILA is designed to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.”  2 TILA requires creditors to use specified formulas to determine credit costs and to provide cost disclosures to consumers before consummation of “consumer credit” transactions, 3 which is credit that is “offered or extended . . . primarily for personal, family, or household purposes.”  4 Regulation Z implements TILA. 5

TILA does not “annul, alter, or affect the laws of any State relating to the disclosure of information in connection with credit transactions, except to the extent that those laws are inconsistent with the provisions of [TILA], and then only to the extent of the inconsistency.”  6 TILA authorizes the CFPB to determine whether any inconsistency exists between chapters 1, 2, and 3 of TILA and State laws. 7 Regulation Z provides that “[a] State law is inconsistent if it requires a creditor to make disclosures or take actions that contradict the requirements of the Federal law.”  8

Accordingly, TILA does not preempt the field, and State disclosures are entirely compatible with Federal disclosures under TILA and Regulation Z, with the narrow exception of when they are “contradictory.” The Board of Governors of the Federal Reserve System (Board), which formerly administered Regulation Z, framed the standard as follows: “A state law is contradictory, and therefore preempted, if it significantly impedes the operation of the federal law or interferes with the purposes of the federal statute.”  9 The Board noted that Regulation Z articulated two categories of “contradictory” State laws: “A state law is contradictory if it requires the use of the same term to represent a different amount or a different meaning than the Federal law, or if it requires the use of a term different from that required in the Federal law to describe the same item.”  10 At the same time, the Board noted that these two categories were not entirely exhaustive, because they would not be apt in a context where the preemption issue at hand does not “deal with disclosures of terms and amounts.”  11 The CFPB is considering whether it should clarify the Board's articulation of the applicable preemption standard, and it requests comment on how the CFPB should articulate the standard for preemption in this and future determinations.

TILA authorizes the CFPB to make a determination of whether a State law requirement is preempted, upon its own motion or upon the request of a creditor, State, or other interested party. 12 Regulation Z implements this provision in TILA. 13 Requests for preemption determinations must be submitted in accordance with appendix A to Regulation Z. 14 Appendix A also sets forth processes the CFPB must follow in issuing preemption determinations, either on request or on its own motion. 15

In addition, section 554(e) of the Administrative Procedure Act authorizes any agency, in its sound discretion, to issue a declaratory order to terminate a controversy or remove uncertainty. 16 Section 554(e) of the Administrative Procedure Act provides an additional, independent source of authority for this proceeding.

The CFPB received a request from a business trade association asking it to determine that TILA preempts certain provisions in New York State's Commercial Financing Law, sec. 801 et seq. (the New York law). 17 The request is available as supporting and related material for this proceeding on Regulations.gov. Similar to TILA, the New York law requires financial disclosures before consummation of covered transactions, although it applies to “commercial financing” instead of consumer credit. It requires providers  18 to issue disclosures when “extending a specific offer” for various types of commercial financing. 19

The request asserted that TILA preempts the New York law with respect to its use of the terms “finance charge” and “annual percentage rate” (APR), notwithstanding that the statutes govern different categories of transactions. Both statutes require these disclosures: TILA requires creditors to disclose information about “finance charges” and “APRs” before consummation of open- and closed-end consumer credit transactions, 20 while the New York law requires providers to disclose information about “finance charges” and “APRs” or “estimated APRs” for various types of commercial financing. 21

In addition to acknowledging that, unlike TILA, the New York law governs commercial transactions, the request focused on what it alleged are material differences between how the State and Federal law use the terms “finance charge” and “APR,” and alleged that these differences make the New York law inconsistent with Federal law for purposes of preemption. 22 For example, the request noted that the New York law defines “finance charge” to include any charge imposed by a “provider,” which includes “a person who solicits and presents specific offers of commercial financing on behalf of a third party.”  23 The request stated that the definition is broader than the Federal definition, under which the requester asserted a “finance charge” for non-mortgage transactions includes certain broker fees only if the creditor requires the use of the broker.

Additionally, the request asserted that the “estimated APR” disclosure that the New York law requires for certain transactions is less precise than the APR calculation under TILA and Regulation Z, and that the New York law requires certain assumptions about payment amounts and payment frequencies in order to calculate APR and estimated APR, whereas TILA does not require similar assumptions. The request also asserted that the New York law requires providers to calculate APRs for open-end transactions using TILA's closed-end APR requirements instead of TILA's open-end APR requirements.

The request stated that these types of differences could lead to variances in the disclosures required under State and Federal law. The request asserted that the Federal law and regulation therefore preempt the New York law. The request pointed to administrative precedent  24 and Regulation Z commentary  25 to support this conclusion.

The request also asserted that the New York law impedes the operation of Federal law or interferes with the intent of the Federal scheme, even if it does not contradict TILA in the specific manner described in Regulation Z. The request asserted that failing to enforce TILA's definitions of “finance charge” and “APR,” even across different financing types, would impede and degrade the benefits of ensuring uniform disclosures, which aid consumer understanding and enable consumers to effectively compare financing options. The request asserted that the inconsistencies between TILA and the New York law could lead to confusion or misunderstanding among borrowers, including small business owners who may use both consumer credit and commercial financing to fund business expenses.

The CFPB has decided to initiate a proceeding to make a preemption determination regarding the New York law in response to the request. In evaluating the request concerning the New York law, the CFPB also became aware of similar laws in other States. The CFPB is, on its own motion, providing notice that it may make preemption determinations regarding potentially similar State laws in California, 26 Utah, 27 and Virginia  28 as part of this proceeding.

Beginning with the New York law, the CFPB's preliminary view is that TILA does not preempt the New York law on the grounds the request asserts. That is, the State and Federal laws do not appear “contradictory” for preemption purposes.

The Bureau notes that the statutes govern different transactions, so the New York law appears to be far afield of a law that contradicts TILA and Regulation Z. TILA requires creditors to disclose the finance charge and APR only for “consumer credit” transactions, which the statute defines as credit that is “primarily for personal, family, or household purposes.”  29 The New York law, on the other hand, requires the disclosures only for “commercial financing,” specifically defined as financing “the proceeds of which the recipient does not intend to use primarily for personal, family, or household purposes.”   30

The Bureau preliminarily disagrees with the request that the New York law significantly impedes the operation of TILA or interferes with the purposes of the Federal scheme. As relevant here, a primary purpose of TILA is to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to the consumer and avoid the uninformed use of credit. 31 The differences between the New York and Federal disclosure requirements do not frustrate these purposes because lenders are not required to provide the New York disclosures to consumers seeking consumer credit. Consumers applying for consumer credit should continue receiving only TILA disclosures, which, as normal, will assure meaningful disclosure of credit terms and allow the consumers to compare like products when shopping for financing options.

Based on the foregoing, the CFPB's preliminary interpretation is that TILA does not preempt the New York law's use of the terms “finance charge,” “APR,” or “estimated APR.”

As noted above, the CFPB is also considering making determinations regarding whether TILA preempts State laws in California, 32 Utah, 33 and Virginia  34 that prescribe disclosures in certain commercial transactions. The CFPB has conducted a preliminary review of these laws, which are similar in relevant respects to the New York law because they do not apply to consumer credit transactions that are within the scope of TILA. Accordingly, the CFPB's preliminary conclusion is that TILA does not preempt these State laws. As an additional potential basis—but not necessary to the Bureau's preliminary conclusion—the Bureau notes that several of these laws do not appear to require use the terms “finance charge” or “APR” in a manner that would be different than TILA and Regulation Z if they were applicable. The CFPB encourages commenters to provide information about any relevant differences in these State laws that would affect the CFPB's preemption analysis and final determination with respect to them. The Bureau's focus on and preliminary conclusion about these State laws is not intended to indicate or imply anything about the laws of any other States.

In light of the foregoing, the CFPB is publishing this notification of its intent to make a preemption determination and solicit comment from the public. After the comment period closes, the CFPB will consider any comments and publish a notification of final determination in the Federal Register .

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA Emergency AD 2022-0233-E, dated November 30, 2022 (EASA AD 2022-0233-E), to correct an unsafe condition for Leonardo S.p.A. Helicopters, formerly Finmeccanica S.p.A., AgustaWestland S.p.A., Model AW169 helicopters, all serial numbers.

This AD was prompted by a report of a protruding screw on the left-hand (LH) cockpit door internal handle resulting in an interference with the collective stick travel. The FAA is issuing this AD to address a discrepancy with the screw. The unsafe condition, if not addressed, could result in reduced collective stick authority and subsequent reduced control of the helicopter. See EASA AD 2022-0233-E for additional background information.

EASA AD 2022-0233-E requires a one-time inspection of the LH and right-hand (RH) pilot and co-pilot door handle assemblies having part number (P/N) 4F5211A02331 for marking of green paint on the screw. If no green paint is found during the inspection, EASA AD 2022-0233-E requires inspecting the condition and torque of the screw and modifying the cockpit door handle. Depending on the results of the inspection, EASA AD 2022-0233-E also requires reporting any discrepancy or loose screw to Leonardo Helicopters. Additionally, EASA AD 2022-0233-E prohibits installing a pilot and co-pilot door handle assembly P/N 4F5211A02331 unless certain requirements are met.

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

The FAA also reviewed Leonardo Helicopters Emergency Alert Service Bulletin No. 169-228, dated November 29, 2022. This service information specifies procedures for inspecting the screw head installed on the LH and RH door handle assemblies for green paint. If there is no green paint, this service information specifies procedures for inspecting the condition of the screw and inspecting the screw for proper tightening. If there are any anomalies or a loose screw, this service information specifies reporting the finding to Product Support Engineering. This service information also specifies procedures to modify the door handle assembly by applying a sealing compound, applying torque, and painting the screw head green.

These helicopters have been approved by the aviation authority of Italy and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with Italy, EASA, its technical representative, has notified the FAA of the unsafe condition described in its emergency AD. The FAA is issuing this AD after evaluating all pertinent information and determining that the unsafe condition exists and is likely to exist or develop on other helicopters of the same type design.

This AD requires accomplishing the actions specified in EASA AD 2022-0233-E, described previously, as IBRed, except for any differences identified as exceptions in the regulatory text of this AD and except as discussed under “Differences Between this AD and the EASA AD.”

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA AD 2022-0233-E is IBRed in this FAA final rule. This AD, therefore, requires compliance with EASA AD 2022-0233-E in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA AD 2022-0233-E does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2022-0233-E. Service information referenced in EASA AD 2022-0233-E for compliance will be available at regulations.gov under Docket No. FAA-2022-1584 after this final rule is published.

The service information referenced in EASA AD 2022-0233-E specifies checking the screw for condition and proper tightening, and if there are any anomalies or loose screws, reporting the finding to Product Support Engineering. This AD requires inspecting the screw for a discrepancy, which may be indicated by a protruding screw head, improper torque, or a loose screw. If there is any discrepancy, this AD requires replacing the screw with an airworthy screw.

EASA AD 2022-0233-E specifies reporting inspection results within 7 days after completing an inspection that detects any discrepancy or loose screw, whereas this AD requires reporting those inspection results within 10 days after completing the inspection, if the inspection was done on or after the effective date of this AD; or reporting those inspection results within 10 days after the effective date of this AD, if the inspection was done before the effective date of this AD. Additionally, for the purposes of this AD, a discrepancy may be indicated by a protruding screw head, improper torque, or loose screw.

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

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

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies foregoing notice and comment prior to adoption of this rule because when an affected component fails, the proximity of the affected component could create interference with part of an assembly that is critical to the control of a helicopter. This unsafe condition may currently exist in other helicopters and consequences of this unsafe condition could occur during any phase of flight without any previous indications. In addition, the compliance time for the initial inspection is within 13 hours time-in-service or 30 days, whichever occurs first after the effective date of this AD, which is shorter than the time necessary for the public to comment and for publication of the final rule. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).

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

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2022-1584; Project Identifier MCAI-2022-01522-R” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

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

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

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

The FAA estimates that this AD affects 11 helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Visually inspecting each screw head for green paint takes a minimal amount of time for a nominal cost.

If required, inspecting a non-painted screw and modifying the door handle assembly takes about 0.5 work-hour for an estimated cost of $43 per door handle assembly.

If required, replacing a screw with an airworthy screw takes a minimal amount of time and has a nominal parts cost.

If required, reporting information takes about 1 work-hour for an estimated cost of $85.

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

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

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

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

For the reasons discussed, I certify that this AD:

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

(2) Will not affect intrastate aviation in Alaska.

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

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

The FAA published a notice of proposed rulemaking for Docket No. FAA-2022-0940 in the Federal Register (87 FR 50019; August 15, 2022). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received.

Domestic VOR Federal airways are published in paragraph 6010(a) of FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document will be subsequently published in, and removed from FAA Order JO 7400.11.

The NPRM stated that the amended starting point for VOR Federal airway V-379 would be defined by an intersection of the Westminster, MD 167°(T)/175°(M) and the Smyrna, DE 242°(T)/251°(M) radials (the BUKYY, MD intersection). This was an error. The correct starting point is the intersection of the Westminster, MD 153°(T)/161°(M) and the Smyrna, DE 242°(T)/251°(M) radials (the DEALE, MD intersection). The new starting point is located along the current V-379 centerline, so it does not affect the alignment of the airway.

This document amends FAA Order JO 7400.11G, Airspace Designations and Reporting Points, dated August 19, 2022, and effective September 15, 2022. FAA Order JO 7400.11G is publicly available as listed in the ADDRESSES section of this document. FAA Order JO 7400.11F lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends 14 CFR part 71 by modifying VOR Federal airways V-67, V-159, V-185, V-209, and V-379; and removing airway V-541. The route changes are described below.

V-67: V-67 consists of two parts: From Choo Choo, TN, to Shelbyville, TN; and From the intersection of the Centralia, IL 010° and the Vandalia, IL 162° radials, to Rochester, MN. This rule removes the first part of the route. The second part of the route is unaffected.

V-159: V-159 consists of two parts: From Virginia Key, FL to Vulcan, AL; and From Holly Springs, MS to Omaha, IA. This change removes Tuskegee, AL from the first part of the route. In place of Tuskegee, the existing KENTT Intersection is added to the route description. The KENTT Intersection is defined by the intersection of the Eufaula, AL 320° and the Vulcan, AL 139° radials. This change does not affect the alignment of V-159. Existing United States Area Navigation (RNAV) route T-239 overlays V-159 from Vulcan, AL, to Pecan, GA. As amended, V-159 extends from Virginia Key, FL to Vulcan, AL; and From Holly Springs, MS to Omaha, IA.

V-185: V-185 extends from Savannah, GA, to Volunteer, TN. This action removes Greenwood, SC, and Sugarloaf Mountain, NC, from the route. As amended, V-185 consists of two parts: From Savannah, GA, to Colliers, SC; and From Snowbird, TN, to Volunteer, TN.

V-209: V-209 consists of two parts: From Semmes, AL, to the intersection of the of the Semmes 356° and the Eaton, MS 080° radials; and From the intersection of the Bigbee, MS 139° and the Brookwood, AL 230° radials, to Choo Choo, TN. This action terminates the second part of the route at Gadsden, AL, and removes the segment from Gadsden to Choo Choo, TN.

As amended, V-209 extends From Semmes, AL, to the intersection of the Semmes 356° and the Eaton, MS 080° radials; and From the intersection of the Bigbee, MS 139° and the Brookwood, AL 230° radials, to Gadsden, AL.

V-379: V-379 extends from Nottingham, MD, to Smyrna, DE. This action removes the Nottingham VHF Omnidirectional Range and Tactical Air Navigational System (VORTAC) from the route and sets the starting point of the route at an intersection defined by radials from the Westminster, MD (EMI), VORTAC, and the Smyrna, DE (ENO), VORTAC (the DEALE, MD intersection). As amended, V-379 extends from the intersection of the Westminster, MD 153°(T)/161°(M) and the Smyrna, DE 242°(T)/251°(M) radials; to Smyrna. This change does not affect the alignment of V-379.

V-541: V-541 extends from Gadsden, AL, to the intersection of the Gadsden 318° and the Vulcan, AL 029° radials. This route is only 28 nautical miles long and is not required by air traffic control. The FAA is removing the route in its entirety.

The full descriptions of the above routes are listed in the amendments to part 71 set forth below. FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

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

The FAA has determined that this action of amending five, and removing one VOR Federal airways in the eastern United States qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points); and paragraph 5-6.5b, which categorically excludes from further environmental impact review “Actions regarding establishment of jet routes and Federal airways (see 14 CFR 71.15, Designation of jet routes and VOR Federal airways ) . . .”. As such, this action is not expected to cause any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. The FAA has determined no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

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

Section 401 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 341) directs the Secretary of Health and Human Services (Secretary) to issue regulations fixing and establishing for any food a reasonable definition and standard of identity whenever, in the judgment of the Secretary, such action will promote honesty and fair dealing in the interest of consumers. Under section 701(e)(1) of the FD&C Act (21 U.S.C. 371(e)(1)), any action for the amendment or repeal of any definition and standard of identity under section 401 of the FD&C Act for any dairy product ( e.g., yogurt) must begin with a proposal made either by FDA under our own initiative or by petition of any interested persons.

In the Federal Register of June 11, 2021 (86 FR 31117), we issued a final rule amending the definition and standard of identity for yogurt ((§ 131.200) (21 CFR 131.200)) and revoking the definitions and standards of identity for lowfat yogurt (21 CFR 131.203) and nonfat yogurt (21 CFR 131.206). This action was in response, in part, to a citizen petition submitted by the National Yogurt Association (NYA). The final rule modernized the yogurt standard to allow for technological advances while promoting honesty and fair dealing in the interest of consumers.

The preamble to the final rule stated that the effective date of the final rule would be on July 12, 2021, except as to any provisions that may be stayed by the filing of proper objections (86 FR 31117 at 31136). Pursuant to section 701(e) of the FD&C Act, the final rule notified persons who would be adversely affected by the final rule that they could file objections, specifying with particularity the provisions of the final rule deemed objectionable, stating the grounds therefor, and requesting a public hearing upon such objections. We gave interested persons until July 12, 2021, to file objections and request a hearing on the final rule.

The IDFA and Chobani timely filed objections and requested a hearing with respect to several provisions in the final rule (see Objections and Request for Hearings submitted by Michael Dykes, President and Chief Executive Officer, International Dairy Foods Association, dated July 12, 2021, to the Dockets Management Staff, Food and Drug Administration (Comment ID FDA-2000-P-0126-0109) (IDFA objection) and Objection and Requests for Hearing submitted by Matthew Graziose, Director, Regulatory Affairs & Compliance, Chobani, dated July 12, 2021, to the Dockets Management Staff, Food and Drug Administration (Comment ID FDA-2000-P-0126-0108) (Chobani objection)). Section 701(e)(2) of the FD&C Act provides that, until final action is taken by the Secretary, the filing of objections operates to stay the effectiveness of those provisions to which the objections are made.

In the Federal Register of March 23, 2022 (87 FR 16394) we issued a notice providing clarification on which provisions of the final rule were stayed and which requirements of the previous final rule that we issued in 1981 (46 FR 9924) are in effect pending final action under section 701(e) of the FD&C Act.

Specific criteria for granting a hearing are set out in § 12.24(b) (21 CFR 12.24(b)). Under that regulation, a hearing will be granted if the material submitted by the requester shows that: (1) there is a genuine and substantial factual issue for resolution at a hearing (a hearing will not be granted on issues of policy or law); (2) the factual issue can be resolved by available and specifically identified reliable evidence (a hearing will not be granted on the basis of mere allegations or denials or general descriptions of positions and contentions); (3) the data and information submitted, if established at a hearing, would be adequate to justify resolution of the factual issue in the way sought by the requester (a hearing will be denied if the data and information submitted are insufficient to justify the factual determination urged, even if accurate); (4) resolution of the factual issue in the way sought by the person is adequate to justify the action requested (a hearing will not be granted on factual issues that are not determinative with respect to the action requested, e.g., if the action would be the same even if the factual issue were resolved in the way sought); (5) the action requested is not inconsistent with any provision in the FD&C Act or any regulation particularizing statutory standards (the proper procedure in those circumstances is for the person requesting the hearing to petition for an amendment or waiver of the regulation involved); and (6) the requirements in other applicable regulations, e.g., 21 CFR 10.20, 12.21, 12.22, 314.200, 514.200, and 601.7(a), and in the notice issuing the final regulation or the notice of opportunity for a hearing are met.

A party seeking a hearing must meet a “threshold burden of tendering evidence suggesting the need for a hearing” ( Costle v. Pacific Legal Foundation, 445 U.S. 198, 214-215 (1980), citing Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 620-621 (1973)). An allegation that a hearing is necessary to “sharpen the issues” or to “fully develop the facts” does not meet this test ( Georgia Pacific Corp. v. EPA, 671 F.2d 1235, 1241 (9th Cir. 1982)). If a hearing request fails to identify any or sufficient factual evidence that would be the subject of a hearing, there is no point in holding one. In judicial proceedings, a court is authorized to issue summary judgment without an evidentiary hearing whenever it finds that there are no genuine issues of material fact in dispute, and a party is entitled to judgement as a matter of law (see Rule 56, Federal Rules of Civil Procedure ). The same principle applies to administrative proceedings (21 CFR 12.28, see Vermont Dep't of Pub. Serv. v. FERC, 817 F.2d 127, 140 (D.C. Cir. 1987)).

A hearing request must not only contain evidence, but that evidence should raise a material issue of fact “concerning which a meaningful hearing might be held” ( Pineapple Growers Ass'n v. FDA, 673 F.2d 1083, 1085 (9th Cir. 1982) see also Cmty. Nutrition Inst. v. Young, 773 F.2d 1356, 1364 (D.C. Cir. 1985)). Where the issues raised in the objection are, even if true, legally insufficient to alter the decision, an agency need not grant a hearing (see Cmty. Nutrition Inst. v. Young, 773 F.2d 1356, 1364 (D.C. Cir. 1985); Dyestuffs and Chemicals, Inc. v. Flemming, 271 F.2d 281, 286 (8th Cir. 1959)). A hearing is justified only if the objections are made in good faith and if they raise “material’ issues of fact” ( Pineapple Growers Ass'n, 673 F.2d at 1085). A hearing need not be held to resolve questions of law and policy (see Kourouma v. FERC, 723 F.3d 274, 277-78 (D.C. Cir. 2013); Citizens for Allegan County, Inc. v. FPC, 414 F.2d 1125, 1128 (D.C. Cir. 1969); Sun Oil Co. v. FPC, 256 F.2d 233, 240 (5th Cir. 1958)).

Even if the objections raise material issues of fact, we need not grant a hearing if those same issues were adequately raised and considered in an earlier proceeding. Once an issue has been so raised and considered, a party is estopped from raising that same issue in a later proceeding without new evidence. The various judicial doctrines dealing with finality, such as collateral estoppel, can be validly applied to the administrative process (see Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 107-08 (1991); Pacific Seafarers, Inc. v. Pac. Far East Line, Inc., 404 F.2d 804, 809 (D.C. Cir. 1968), cert. denied, 393 U.S. 1093 (1969)). In explaining why these principles ought to apply to an agency proceeding, the U.S. Court of Appeals for the District of Columbia Circuit wrote: “The underlying concept is as simple as this: justice requires that a party have a fair chance to present his position. But overall interests of administration do not require or generally contemplate that he will be given more than a fair opportunity” ( Retail Clerks Union, Local 1401 v. NLRB, 463 F.2d 316, 322 (D.C. Cir. 1972); see also Costle v. Pacific Legal Foundation, 445 U.S. 198 at 215-17). In addition, under our regulations, we may determine upon review of an objection that the regulation should be modified or revoked (§ 12.26 (21 CFR 12.26)). If the modification or revocation is consistent with the objector's request, there is no genuine and substantial issue of fact for resolution at a hearing and the hearing may be denied (§ 12.24(b)(1)).

Under section 701(e) of the FD&C Act and 21 CFR part 12, subpart B, of our regulations, we have considered the objections and requests for a hearing and our conclusions are as follows:

The submission from IDFA contains five numbered objections, and IDFA requests a hearing on each of them. In addition, Chobani submitted one objection and request for a hearing. We address each objection below, as well as the evidence and information filed in support of each. For purposes of clarity, we have maintained the objection numbers assigned by IDFA and Chobani.

IDFA's objections were directed at several provisions in § 131.200(a) of the final rule: (1) the requirement to achieve either a titratable acidity of not less than 0.7 percent, expressed as lactic acid, or a pH of 4.6 or lower prior to the addition of bulky flavoring ingredients; (2) those portions of § 131.200(a), (b), and (c) that prohibit the addition of pasteurized cream after culturing; (3) the provision in § 131.200(d)(8)(ii) that would require a yogurt with added vitamin D to contain at least 25 percent Daily Value (DV) vitamin D per Reference Amount Customarily Consumed (RACC); (4) the requirement that yogurt contain not less than 3.25 percent milkfat; and (5) the exclusion of safe and suitable “non-nutritive sweeteners” from paragraph (d)(2) as an optional ingredient and the limitation of their use to only those instances where the product bears an expressed nutrient content claim as part of the product name, such as “reduced calorie yogurt” or “reduced sugar yogurt,” under § 130.10 (21 CFR 130.10).

In addition, Chobani objected to the provision in § 131.200(b) as it does not allow for ultrafiltered milk to be used as a basic dairy ingredient, and Chobani requested a hearing.

In this objection, IDFA asserted that the final rule's requirement that yogurt has either a titratable acidity of not less than 0.7 percent, expressed as lactic acid, or a pH of 4.6 or lower before the addition of bulky flavoring ingredients (such as fruits and fruit preparations), is not practical and does not reflect consumer taste preferences or current industry practice for yogurt manufacturing. IDFA stated that the requirement will not promote honesty and fair dealing in the interest of consumers. IDFA asserted that the requirement should be a titratable acidity of not less than 0.6 percent, expressed as lactic acid, measured in the white mass of the yogurt, or a pH of 4.6 or lower measured in the finished product within 24 hours after filling. IDFA requested a hearing on the following issues: (1) whether a requirement that titratable acidity or pH be reached prior to the addition of bulky flavors in the manufacturing process is consistent with the basic nature and essential characteristics of yogurt; (2) whether a requirement that prohibits yogurt from being filled at a pH of 4.8 or less and reaching a pH of 4.6 or below within 24 hours after filling is consistent with the basic nature and essential characteristics of yogurt; and (3) whether a minimum titratable acidity requirement of 0.7 percent is in the interest of consumers and necessary to maintaining the basic nature and essential characteristics of yogurt.

We have addressed this objection and request for a hearing in a letter and proposed order sent to IDFA pursuant to § 12.24(d). We are issuing the proposed order to deny IDFA's request for a hearing with respect to pH pursuant to § 12.24(b)(1), and also deny the request for a hearing with respect to titratable acidity pursuant to § 12.24(b)(1). A copy of the proposed order is available in Docket No. FDA-2000-P-0126 (formerly Docket No. 2000P-0658). (See instructions for accessing the docket.)

IDFA objected to § 131.200(a), (b), and (c) insofar as they prohibit the addition of pasteurized cream after culturing and asked FDA to stay such provisions. The final rule under § 131.200(a) requires that pasteurized cream, if used as a basic dairy ingredient under § 131.200(b) or an optional dairy ingredient under § 131.200(c), be added before culturing with a characterizing bacterial culture that contains the lactic acid-producing bacteria, Lactobacillus delbrueckii subsp. bulgaricus and Streptococcus thermophilus. IDFA requested that we revise the final rule to allow for pasteurized cream to be added after culturing.

IDFA contended that the addition of pasteurized cream after culturing is consistent with the basic nature and essential characteristics of yogurt and requested a hearing on this issue. IDFA explained that “milkfat is not critical to the basic nature and properties of yogurt, in large part because the yogurt cultures do not act on the milkfat during the culturing process, so the addition of a milk-derived ingredient like cream after culturing does not alter the key characteristics of the product” (IDFA objection at page 6). Even if milkfat is not acted upon during the culturing process, it does not follow that any milk-derived ingredient will not be acted upon during the culturing process and therefore will not change the characteristics of the end product depending on whether it is added before or after culturing. IDFA's argument appears to be based on the assumption that cream is comprised entirely of milkfat. We note that IDFA did not provide any evidence in its objection that cream is comprised entirely of milkfat and that other components are not present.

In fact, cream is comprised of several components other than milkfat. These components include lactose and protein (Refs. 1 to 3). Under 21 CFR 131.3(a), cream used in the manufacture of yogurt is only required to have a minimum of 18 percent milkfat. While the milkfat content of cream above this minimum may vary, lactose and protein are still present. For example, heavy whipping cream has been reported to have fat content of 36.8 percent, lactose content of 3.2 percent, and protein content of 2.2 percent (see Ref. 1). Whole milk—which IDFA does not dispute should be included in culturing (IDFA objection page 6)—has been reported to have fat content of 3.8 percent, lactose content of 4.9 percent, and protein content of 3.2 percent. While the milkfat content of these two dairy ingredients is very different, the lactose content and protein content are similar. The lactose in cream can be fermented and impact the characteristics of the end product (Ref. 3), as is the case in the production of sour cream (see 21 CFR 131.160(a)).

IDFA acknowledges that lactose and protein are subject to action by yogurt cultures during fermentation and impact the characteristics of yogurt. IDFA states, on page 6 of its objection, that “addition of milk and milk-derived ingredients that contain significant amounts of lactose, proteins and amino acid peptides, which are indeed subjected to action by yogurt cultures during fermentation, do play a role in providing the unique organoleptic characteristics of yogurt.” IDFA further states, on page 7, that “the main contribution to the unique flavor and aroma of plain, unflavored yogurt derives from the homofermentative metabolism of lactose in the milk and the lactose-containing milk-derived ingredients by the two defining thermophilic (or more accurately, “thermotolerant”) yogurt cultures L. bulgaricus and S. thermophilus.” Thus, by IDFA's own admission, the characteristics of yogurt are impacted by whether components of cream are added before or after culturing.

Since 1981, cream has not been permitted to be added after culturing in the manufacture of yogurt. None of the evidence provided by IDFA specifically examines the addition of cream after culturing in the manufacture of yogurt and compares the end product to yogurt manufactured with cream added before culturing. To justify a change in the production of yogurt from how it has been produced for 40 years, IDFA would have needed to provide evidence that the addition of cream—not merely the addition of milkfat—does not impact the characteristics of yogurt from how it has been produced and sold to consumers. The publications cited by IDFA (Refs. 4 to 7) do not address impacts on the characteristics of yogurt from the use of cream, and more specifically from the use of cream after culturing. Moreover, the expert witness testimony described in appendix 8 of IDFA's objection is specifically about the addition of milkfat to yogurt and not about the addition of cream to yogurt. We conclude that the data and information submitted, if established at a hearing, would not be adequate to justify resolution of the factual issue in the way sought by IDFA. The data and information submitted are insufficient to justify the factual determination urged, even if accurate. Therefore, under § 12.24(b)(3), we deny IDFA's request for a hearing on whether the addition of pasteurized cream after culturing is consistent with the basic nature and essential characteristics of yogurt.

Additionally, IDFA did not provide evidence to support its assertion that the addition of pasteurized cream after culturing does not affect the texture of yogurt. We are denying IDFA's request for a hearing with respect to this issue as it based on mere allegations or denials and not on any available and specifically identified reliable evidence (see § 12.24(b)(2)). We note that evidence (Ref. 8) gathered by FDA indicates that adding cream before culturing increases the yogurt's viscosity and firmness, and decreases the serum separation, contributing to the characteristic texture of yogurt. When cream is added after culturing, the fat globules do not serve a structure-building function but are only present in the structure as a filling substance (Refs. 8 and 9). The force that would be necessary to blend pasteurized cream homogeneously through the yogurt if it were added after culturing, as well as the additional moisture present in pasteurized cream, could affect the texture of the yogurt. Thus, given the absence of evidence to support IDFA's contention and available evidence to the contrary, the data and information submitted are inadequate to justify the resolution of the factual issue in the way sought by IDFA (see § 12.24(b)(3)).

We further note that adequacy of either factual issue ( i.e., impact of addition of cream after culturing on taste, aroma, and flavor and impact of addition of cream after culturing on texture) is not sufficient to justify amending the standard of identity to permit the addition of cream after culturing. Both factual issues must be resolved in the way sought by IDFA to justify such an amendment. Accordingly, we also deny IDFA's request for a hearing under § 12.24(b)(4).

IDFA stated that allowing the addition of pasteurized cream after culturing improves production efficiency and reduces manufacturing costs. While we recognize the importance of these issues for yogurt manufacturers, impacts on production efficiency and manufacturing costs do not present genuine and substantial issues of fact as they are not material to whether a food standard promotes honesty and fair dealing in the interest of consumers—which is the basis under the law for establishing food standards (21 U.S.C. 341). Historically, we have determined the requirements of food standards issued under section 401 of the FD&C Act based on whether the requirements would prevent economic adulteration, maintain the integrity of food ( i.e., basic nature and essential characteristics), or ensure that products meet consumer expectations about the food.

We note that interested parties can submit a Temporary Marketing Permit (TMP) application in accordance with 21 CFR 130.17 for the addition of pasteurized cream after culturing in yogurt and lower fat yogurt. As discussed above, given FDA regulations have required since 1981 that cream be added before and not after culturing when used in the manufacture of yogurt, a TMP would allow parties to gather appropriate supporting data to support that the addition of cream after culturing is consistent with the basic nature and essential characteristics of yogurt and lower fat yogurt.

IDFA objected to the provision in § 131.200(d)(8)(ii), which requires that, if added, vitamin D must be present in such quantity that the food contains not less than 25 percent DV per RACC within limits of current good manufacturing practices. IDFA requested that the provision be modified to lower the minimum added vitamin D level to 10 percent DV per RACC. Alternatively, IDFA requested a hearing on the amount of vitamin D in yogurt that would be consistent with consumer expectations and the basic nature and characteristics of yogurt that contains added vitamin D, and aligned with current regulatory limitations.

In support of its proposed modification, IDFA asserted that a minimum vitamin D threshold of 25 percent DV per RACC conflicts with the level authorized by our generally recognized as safe (GRAS) regulation for vitamin D, which sets the limit for vitamin D in milk products at 89 International Units (IU) per 100 grams (g) of food (21 CFR 184.1950(c)(1)), equivalent to 3.8 micrograms (mcg) per RACC. In addition, IDFA asserted that the required level of vitamin D provided for in the final rule is unreasonably high in light of the basic nature of yogurt and does not promote the interests of consumers.

We acknowledge that, under the minimum vitamin D threshold in the final rule, yogurt with added vitamin D must contain at least 5 mcg per RACC and therefore would be above the maximum threshold of 3.8 mcg per RACC permitted under our GRAS regulation. This effectively prevents manufacturers from fortifying their yogurt products with vitamin D and is not what we intended under the final rule. We note that vitamin D is identified as a nutrient of public health concern under the Dietary Guidelines for Americans, 2020-2025.

We agree with IDFA's proposal to modify § 131.200(d)(8)(ii) to set a minimum level of vitamin D at 10 percent DV per RACC. This level equates to a minimum of 2 mcg per RACC. Thus, there would be a range of 2 to 3.8 mcg per RACC within which manufacturers could comply with the GRAS regulation and also optionally fortify yogurt with vitamin D under the yogurt standard of identity. A minimum amount of 2 mcg per RACC is the minimum amount at which the Agency deems a food to be a “good source” of vitamin D (see our nutrient content claim regulation under 21 CFR 101.54(c)(1)). The minimum in § 131.200(d)(8)(ii) applies to nonfat yogurt, lowfat yogurt, and reduced fat yogurt under § 130.10. Consequently, yogurt and lower fat yogurt products containing added vitamin D under the modified final rule will continue to be a good source of vitamin D for consumers.

We note that a minimum of 10 percent DV per RACC, or 2 mcg per RACC, is similar to the minimum under the standard of identity before it was amended in 2021 by the final rule. From 1982 to 2021, vitamin D addition to yogurt was permitted at a level of 400 IU per quart (see 47 FR 41519 at 41520 and 41524, September 21, 1982). This amount equates to approximately 1.74 mcg per RACC. Thus, modifying the standard of identity to require a minimum vitamin D level of 10 percent DV per RACC, results in a similar amount of vitamin D as was previously permitted under the standard and does not alter the characteristics of yogurt with respect to fortification with this nutrient.

We find that our own analysis and the information provided by IDFA in their objection present sufficient grounds for amending the standard of identity under § 131.200(d)(8)(ii) such that yogurt is required to contain at least 10 percent DV per RACC of vitamin D, within limits of current good manufacturing practices, when vitamin D is added. This amendment is consistent with IDFA's proposed modification. Therefore, we are denying IDFA's request for a hearing regarding the amount of vitamin D in yogurt because there is not a genuine and substantial issue of fact for resolution at a hearing (§ 12.24(b)(1)).

IDFA also objected to the requirement in § 131.200(a) that yogurt contain not less than 3.25 percent milkfat. IDFA asserted that the 3.25 percent minimum milkfat requirement is not consistent with the basic nature and essential characteristics of yogurt, nor does it reflect current industry practices. IDFA further asserted that the requirement creates naming anomalies and restricts innovation and the use of flavoring ingredients. IDFA requested that we modify the final rule to include a minimum total fat content of >3.0 g per RACC instead of the 3.25 percent milkfat minimum (5.5 g per RACC). IDFA requested a hearing on whether “(1) a 3.25 percent milkfat minimum is critical to the basic nature and characteristics of yogurt; and (2) whether fat/oils from nondairy ingredients, particularly flavoring ingredients, could contribute to variances in the taste, texture, color, or aroma of yogurt and is inconsistent with the basic nature and essential characteristics of the food” (IDFA objection at page 15).

In support of its contention that milkfat does not contribute to the basic nature and essential characteristics of yogurt and that no minimum milkfat requirement is needed, IDFA relied on the discussion in its second objection ( i.e., the requirement that cream be added before culturing). IDFA stated that if a hearing were granted, it would provide evidence “demonstrating that milkfat is not critical to the basic nature and characteristics of yogurt, in large part because the yogurt cultures do not act on the milkfat during the culturing process” ( Id. ). IDFA further stated that it would present “testimony by experts in yogurt production and presentation of scientific publications by subject matter experts demonstrating the results of sensory and analytical chemistry research conducted that has identified the specific compounds that contribute most to the unique flavors and aromas of yogurt and how they are derived predominantly through lactose fermentation” ( Id. ).

The discussion in IDFA's second objection is about whether milkfat is fermented and whether the end product is impacted by the addition of milkfat after culturing rather than before culturing. The second objection does not address whether a reduction of milkfat in the end product changes the characteristics of yogurt. The evidence described by IDFA similarly focuses on whether milkfat is acted upon during the culturing process and not on whether the absence of milkfat from the end product affects the basic nature and essential characteristics of yogurt. Even if it is true that components other than milkfat contribute most to the flavor and aroma of yogurt, this does not preclude the possibility that milkfat also contributes to the flavor and aroma or other essential characteristics of yogurt. In this objection, the issue is whether a reduction of milkfat from the 3.25 percent minimum in the end product affects the basic nature and essential characteristics of yogurt, not whether milkfat is acted upon during culturing or whether other components affect the essential characteristics of yogurt.

The publications cited by IDFA do not support that a reduction in milkfat in the end product does not affect the basic nature and essential characteristics of yogurt. References 5, 6, and 7 speak solely to the metabolic activity of the fermentation organisms on the components of the yogurt base (carbohydrates, proteins, lipids). The impact of the microorganisms on the fat component appears to be measurable (see Ref. 7, Table 7.11 on Page 578) but potentially minimal in comparison to other components produced by the fermentation of lactose. The publications do not address the physical presence of fat on the characteristics of the end product. Routray and Mishra (Ref. 4) review the influence of fat content on the persistence of volatile flavor compounds, the distribution of flavor compounds throughout the yogurt matrix, and the necessity of fat replacers to achieve similar texture and flavor release. Additionally, they discuss the importance of fat as a structuring material in yogurt.

Moreover, statements made by IDFA in its objection support that milkfat contributes to the basic nature and essential characteristics of yogurt. In its second objection, IDFA states, “milkfat has an impact on the organoleptic characteristics of yogurt regardless of whether added before or after fermentation” ( Id. at page 7). In this objection IDFA asserts, “yogurt made with milkfat indeed has volatile fatty acids and other compounds that contribute to flavor and aroma” ( Id. at page 12) and “milkfat does not need to be present in the fermented dairy ingredients to contribute to the basic and essential characteristics of yogurt” ( Id. at page 13). Thus, by IDFA's own admissions, milkfat contributes to the characteristics of yogurt.

IDFA made additional arguments about consumer preferences for lower fat yogurt products and the absence of a milkfat requirement from the Codex Standard for Fermented Milks. The claim that most consumers prefer lower fat yogurt products to yogurt does not address the issues of whether consumers who purchase yogurt, rather than lower fat yogurt, expect it to contain milkfat or whether the 3.25 percent minimum milkfat requirement ensures that yogurt has the characteristics consumers expect and that distinguish it from lower fat yogurt. Even if most consumers prefer lower fat yogurt products, the 3.25 percent minimum milkfat requirement does not prohibit the marketing of these products when labeled with their respective nutrient content claims. Evidence demonstrating that total fat is of greater significance to consumers than milkfat also would not address these issues. Regarding the absence of a milkfat minimum from the Codex standard, the Codex standard is an international standard and does not reflect yogurt products sold in the United States or American consumers' expectations about yogurt.

Since the yogurt and lowfat yogurt standards of identity were established in 1981, yogurt and lowfat yogurt sold in the United States have been required to have a minimum of 3.25 percent and 0.5 to 2 percent milkfat, respectively. Reduced fat yogurt has been required to have milkfat content between the minimum for yogurt and the maximum for lowfat yogurt since the 1990s when the general definition and standard of identity under § 130.10 was established (see 58 FR 2431 at 2446, January 6, 1993). Thus, for 40 years, consumers have been accustomed to yogurt and lowfat yogurt containing milkfat; and for nearly 30 years, consumers have been accustomed to reduced fat yogurt containing milkfat. A review by FDA of products on the market sold as “yogurt” found that the vast majority contain at least 3.25 percent milkfat (Ref. 10). IDFA has not presented information that these products would retain the characteristics consumers expect and that distinguish the foods if they were changed to contain no milkfat or less milkfat than the amount required.

Because the data and information submitted by IDFA are insufficient to justify that a reduction of milkfat from the 3.25 percent minimum does not affect the basic nature and essential characteristics of yogurt, we deny IDFA's request for a hearing on whether the 3.25 percent milkfat minimum is critical to the basic nature and essential characteristics of yogurt under § 12.24(b)(3).

IDFA also requested a hearing on whether fat or oils from nondairy ingredients, particularly flavoring ingredients, could contribute to variances in the taste, texture, color, or aroma of yogurt and is inconsistent with the basic nature and essential characteristics of the food. In the preamble to the final rule, we explained that nondairy fats or oils can contribute to variances in the taste, texture, color, or aroma of yogurt if they replace the milkfat in yogurt (86 FR 31117 at 31121). IDFA responded in its objection that non-dairy fats and oils are not part of the allowed optional ingredients and that, if a fat source is not part of a flavoring ingredient ( e.g., coconut flakes, cacao), it may not be added. We agree with this interpretation and therefore interpret IDFA's request for a hearing to pertain to whether the addition of non-milkfat from flavoring ingredients is inconsistent with the basic nature and essential characteristics of yogurt and lower fat yogurt.

To the extent that the request pertains to the addition of non-milkfat from flavoring ingredients in addition to the milkfat required for yogurt under § 131.200 and lower fat yogurt under § 130.10, we agree that addition of non-milkfat from flavoring ingredients should be permitted and is consistent with the basic nature and essential characteristics. The final rule permits the addition of flavoring ingredients, including fat-containing flavoring ingredients under § 131.200(d)(3). However, as explained in IDFA's objection, the final rule does not permit the addition of fat-containing flavoring ingredients to lower fat yogurt under § 130.10 since the nutrient content claims for “nonfat,” “lowfat,” and “reduced fat” limit the amount of fat that products may contain and the limit has already been met by milkfat. IDFA explained that lowerfat yogurt products are consequently precluded from containing flavoring ingredients such as coconut and cacao.

We agree that this limitation may restrict innovation and prevent the manufacture and sale of lowerfat yogurt products that consumers expect. Accordingly, we are modifying § 130.10 to add new paragraph (e) to permit fat-containing flavoring ingredients in nonfat yogurt, lowfat yogurt, and reduced fat yogurt. These products are still required under § 130.10 (a) to contain milkfat in the amount corresponding to the nutrient content claims in their names; however, the modified rule permits fat from flavoring sources to be added above the fat content of the nutrient content claim. Such products must be labeled with the nutrient content claim corresponding to their milkfat content and a descriptor of the flavoring ingredient ( e.g., “lowfat yogurt with cashews”). The descriptor should describe in plain language the identity of the flavoring ingredient ( e.g., cashews, chocolate chips, coconut).

We are also modifying the final rule to permit yogurt with milkfat content between the upper limit for reduced fat yogurt (2.44 percent) and the minimum requirement for yogurt (3.25 percent). New paragraph (g) under § 131.200 specifies that yogurt may contain less than 3.25 percent milkfat but at least 2.44 percent milkfat and that such products must be labeled with a statement of the milkfat percentage rounded to the nearest half percent ( e.g., “2.5 percent milkfat”). Under § 131.200(d)(3), such products are permitted to contain flavoring ingredients that increase the total fat content. These modifications to § 131.200 address the gap in milkfat allowance identified by IDFA in its objection (IDFA objection at pages 13-14) and allow the manufacture and sale of yogurt products with milkfat not previously covered by the final rule or the 1981 final rule.

As a consequence of our modifications to § 130.10 and § 131.200, manufacturers may produce yogurt products with any amount of milkfat within the specified limits and with additional fat content from flavoring ingredients. This introduces flexibility into the standards of identity and provides new opportunities for innovation as requested by IDFA. An amendment to replace the 3.25 percent minimum milkfat requirement with >3.0 grams of fat per RACC requirement is not needed to accomplish these purposes. The modified final rule also allows manufacturers to produce yogurt products with less saturated fat, consistent with recommendations in the Dietary Guidelines for Americans 2020-2025, since the total fat content can exceed the limit for the nutrient content claim and milkfat need not be increased to 3.25 percent. Yogurt products will continue to be named according to the milkfat limits in the final rule ( i.e., “yogurt,” “reduced fat yogurt,” “lowfat yogurt,” and “nonfat yogurt”). These names have been in place for decades and have distinguished yogurt products from each other and are recognized by consumers. While the ingredient statement may indicate that dairy ingredients are present, it does not explicitly inform consumers that milkfat is present or in what quantity. Because we agree with IDFA that non-milkfat from flavoring ingredients should be permitted in yogurt and lower fat yogurt above the minimum milkfat requirements and have modified the final rule accordingly, IDFA's request for a hearing is denied under § 12.24(b)(1) as there is no genuine and substantial issue of fact for resolution at a hearing.

To the extent that IDFA's request for a hearing pertains to the addition of non-milkfat from flavoring ingredients as a replacement for milkfat in yogurt and lower fat yogurt, we deny IDFA's request for a hearing under § 12.24(b)(3) because the data and information submitted are insufficient to justify that use of fat and oils from nondairy flavoring ingredients to replace milkfat in yogurt is consistent with the basic nature and essential characteristics of yogurt. First, as explained above, IDFA has not submitted information sufficient to justify that a reduction in milkfat does not affect the basic nature and essential characteristics of yogurt. IDFA also has not presented evidence that consumers who purchase lower fat yogurt products (other than nonfat yogurt) do not expect them to contain milkfat or that their lower milkfat levels do not contribute to their characteristics. Second, IDFA stated in its objection that it would present examples and sales volumes demonstrating that fat from nondairy ingredients is consistent with the basic nature and essential characteristics of many flavored yogurts on the market today and accepted by consumers. It is unclear what examples IDFA would present and whether such examples would be representative of the market. It is also unclear what is meant by “sales volumes” and how sales of certain products would demonstrate consumer acceptance. Nevertheless, yogurt, lowfat yogurt, and nonfat yogurt prior to and after publication of the final rule have been required to contain certain milkfat content. Thus, examples and sales of products on the market would not pertain to products that contain fat or oils from non-dairy flavoring ingredients as a replacement for milkfat and would not be sufficient to justify the factual determination urged by IDFA.

IDFA objected to the exclusion of safe and suitable “non-nutritive sweeteners” from § 131.200(d)(2) as an optional ingredient and to the limitation of the use of non-nutritive sweeteners to products bearing a nutrient content claim as part of the name or statement of identity. IDFA asserted that “[t]he use of non-nutritive sweeteners is consistent with the basic nature of a sweetened yogurt” (IDFA objection at page 16) and requested a hearing on “whether the use of safe and suitable non-nutritive sweeteners is consistent with the basic nature or essential characteristics of sweetened `yogurt' ” ( Id. at page 20). IDFA requested that we modify § 131.200(d)(2) to replace “nutritive carbohydrate sweeteners” with “sweeteners,” thereby permitting both nutritive and non-nutritive sweeteners in the manufacture of yogurt ( Id. ).

In support of its contention that the use of non-nutritive sweeteners is consistent with the basic nature and essential characteristics of yogurt, IDFA referenced our conclusion in the 2009 proposed rule that yogurt could be sweetened with non-nutritive sweeteners “without adversely affecting the basic nature and essential characteristics of yogurt” ( Id. ). IDFA also pointed to our enforcement discretion policy since 2009 (74 FR 2443 at 2455) regarding the use of non-nutritive sweeteners in yogurt labeled without a nutrient content claim, such as “reduced calorie,” as part of the name of the food. IDFA explained that yogurt products containing non-nutritive sweeteners without a nutrient content claim as part of the name of the food have been sold during this period of enforcement discretion and are commonly found on the market today.

Our rationale in the final rule for permitting the use of non-nutritive sweeteners only when making a nutrient content claim was to be consistent with the intention of the regulatory framework of § 130.10 after the Nutritional Labeling and Education Act (NLEA). We explained in the final rule that non-nutritive sweeteners should only be permitted when making a nutrient content claim and therefore when the product is subject to the general definition and standard of identity in § 130.10 (86 FR 31117 at 31128). We believed that this approach would address the comments we received to the proposed rule (74 FR 2443) concerning the presence and disclosure of artificial sweeteners while also providing manufacturers flexibility to make modified yogurt products with non-nutritive sweeteners.

Upon consideration of IDFA's objection, we agree that non-nutritive sweeteners should be permitted in yogurt without being labeled with a nutrient content claim. We acknowledge that, since the publication of the proposed rule, we have exercised enforcement discretion for yogurt products containing non-nutritive sweeteners as an optional ingredient and that do not bear a nutrient content claim as part of the statement of identity. During this 12-year period, we did not encounter any consumer issues or receive information that the use of non-nutritive sweeteners was inconsistent with what consumers expect or that such use adversely impacted the characteristics of the food. Disclosure of non-nutritive sweeteners in the ingredient statement appears to have been adequate to notify consumers of their presence. We note that non-nutritive sweeteners are declared by their common or usual names and therefore their presence is explicitly stated. We further note that nutrient content claims such as “reduced calorie” or “reduced sugar” do not necessarily inform consumers that non-nutritive sweeteners are present and may indicate that other modifications to the food have been made ( e.g., a “reduced calorie” nutrient content claim could also be met by reducing fat or lactose). In light of this information, we conclude that the use of non-nutritive sweeteners in yogurt products that do not bear a nutrient content claim is consistent with the basic nature and essential characteristics of yogurt and promotes honesty and fair dealing in the interest of consumers.

Upon further consideration, we find the limitation on non-nutritive sweeteners to only those products labeled with nutrient content claims to be inconsistent with our public health goals and policies. The Dietary Guidelines for Americans 2020-2025 encourage consumers to limit their intake of added sugar. The sugar content of food, including yogurt, is often reduced by replacing sugar with non-nutritive sweeteners. Thus, the use of non-nutritive sweeteners in yogurt may help reduce added sugar intake. Although non-nutritive sweeteners are currently permitted in products with a nutrient content claim, such as “reduced calorie” or “reduced sugar,” the products must achieve a level of sugar reduction, e.g., 25 percent less calories or sugar, to qualify for the nutrient content claim (see § 101.60). Thus, if sugar reduction falls below this threshold ( e.g., 25 percent less calories or sugar), then the products are not permitted to contain non-nutritive sweeteners. We seek to encourage sugar reduction even at lower levels as cumulatively these changes can make a difference in public health. Permitting non-nutritive sweeteners in yogurt is also consistent with our public health goals and policies, which seek to improve nutrition and encourage the development of more healthful foods.

For the reasons explained above, we are modifying § 131.200(d)(2) to permit “sweeteners” as optional ingredients in yogurt, consistent with IDFA's request. Accordingly, IDFA's request for a hearing is denied under § 12.24(b)(1) as there is no genuine and substantial issue of fact for resolution at a hearing.

Chobani requested we permit the use of ultrafiltered (UF) milk as a basic dairy ingredient in yogurt. They objected to § 131.200(b) because it does not include UF milk as a basic dairy ingredient and therefore § 131.200(a) does not permit UF milk as a basic dairy ingredient in yogurt. Chobani provided several reasons for objecting to the exclusion of UF milk from § 131.200(b). We interpret these reasons as follows: (1) the use of UF milk as a basic dairy ingredient is consistent with the basic nature and essential characteristics of yogurt; (2) the use of UF milk as a basic dairy ingredient is safe; (3) the use of UF milk as a basic dairy ingredient will result in products with health benefits and that are as nutritious or more nutritious than yogurt produced without UF milk; (4) use of UF milk as a basic dairy ingredient will improve the efficiency of yogurt-making; (5) permitting use of UF milk would be consistent with other dairy standards of identity; and (6) permitting the use of UF milk would be consistent with international standards for yogurt. Despite these various reasons, Chobani requested a hearing on only two issues: (1) the minimum lactose content as a substrate for bacterial cultures to develop the characteristics of “yogurt;” and (2) nutritional comparisons of products made from UF milk to that of traditional “yogurt” and other dairy foods.

Related to its first request for a hearing, Chobani stated, “ultrafiltered milks can be used as the basic ingredient in yogurt making, with additional dairy ingredients added to reach a level of lactose that can be fermented to reach the titratable acidity/pH requirements for yogurt and result in the minimum level of characterizing bacterial cultures ( Lactobacillus delbrueckii ssp. Bulgaricus and Streptococcus thermophilus ) as specified by the standard” (Chobani objection at page 2). Chobani did not cite any evidence to support this contention. Furthermore, while the acidity of yogurt and characterizing bacterial culture content are important characteristics of yogurt, they are not the only essential characteristics of yogurt that should be maintained by the use of UF milk. The organoleptic characteristics and texture of yogurt should also be maintained. Chobani's objection referred to sensory quality, but did not provide any evidence to support that the sensory quality of yogurt is unaffected by the lactose content of UF milk or by the use of UF milk more generally. In sum, Chobani did not provide any evidence of the minimum lactose content, whether from UF milk or UF milk and other basic dairy ingredients combined, that would be necessary to maintain the characteristics of yogurt. We deny Chobani's first request for a hearing under § 12.24(b)(2) because the material submitted by Chobani does not show that this factual issue can be resolved by available and specifically identified reliable evidence.

Chobani did not present any information on the lactose content of UF milk that would be used as a basic dairy ingredient in yogurt making. As we noted in the final rule, fluid UF milk and its dried products are distinctly different from milk and dried milk, respectively (86 FR 31117 at 31125). The process of ultrafiltration selectively removes not only water, but also lactose, minerals, and water-soluble vitamins, resulting in a compositionally different ingredient (86 FR 31117 at 31125). Depending on the pore size of the membrane(s) used, ultrafiltration can be used to process milk to concentrate casein and whey proteins and to partially remove lactose and water-soluble minerals and vitamins. Milk may be UF until a desired protein concentration is reached and, depending on the processing conditions ( e.g., use of diafiltration), can result in removal of the majority of lactose and water-soluble minerals and vitamins. The amount of lactose is commonly and significantly reduced in UF milk (Ref. 11). We understand from this information that the final composition of UF milk, including the lactose content, can vary significantly and we cannot infer a certain composition and lactose content in UF milk in yogurt making. Thus, even if Chobani presented evidence of the minimum lactose content necessary to maintain the characteristics of yogurt, Chobani has not provided evidence that UF milk used in yogurt making would contain this level and therefore maintain the characteristics of yogurt. We deny Chobani's first request for a hearing under § 12.24(b)(4) because resolution of the factual issue in the way sought by Chobani is not adequate to justify amending the final rule to permit UF milk as a basic dairy ingredient.

UF milk has many constituents, only one of which is lactose. The other constituents—protein, minerals, vitamins, and water—vary in UF milk and are different than the levels in milk. Differences in these constituents may affect the basic nature and essential characteristics of yogurt when UF milk is used as a basic dairy ingredient in the manufacture of yogurt. Chobani has not provided any evidence that these differences will not change the basic nature and essential characteristics of yogurt. As such, we further deny Chobani's first request for a hearing under § 12.24(b)(4). Even if Chobani provided evidence sufficient to justify that the lactose content of UF milk that would be used in yogurt-making maintains the characteristics of yogurt, Chobani has not shown that the content of other components in UF milk used in yogurt making do not impact the basic nature and essential characteristics of yogurt.

To the extent the studies cited in references 1 and 2 of Chobani's objection (Refs. 12 and 13) are intended to support its first request for a hearing, we deny the request for a hearing under § 12.24(b)(3). Neither publication quantifies the amount of lactose necessary to produce products with the characteristics of yogurt. The publication by Uduwerella showed that it was possible to use UF milk to produce products with a pH less than 4.6 (without the addition of lactose), but stated that the physical characteristics (texture) of the yogurt were different than yogurt produced without UF milk. In the publication by Valencia, the use of UF milk resulted in a product with a higher pH than the maximum pH in the standard of identity ( i.e., pH of 4.6). We note also that the publications were limited in the characteristics of yogurt examined. The publication by Uduwerella did not examine the impact of UF milk on taste, and the publication by Valencia did not examine the impact of UF milk on taste or texture. Both publications were about the manufacture of Greek-style yogurt rather than the manufacture of yogurt in general. We conclude that these referenced articles are not adequate to determine the minimum lactose content to manufacture products with the characteristics of yogurt. They also are not adequate to determine whether UF milk used in yogurt making would have sufficient lactose or would otherwise be sufficient for use as a basic dairy ingredient such that products would have the characteristics of yogurt.

Chobani also requested a hearing on “nutritional comparisons of products made from UF milk to that of traditional `yogurt' and other foods in the Dairy group” ( Id. ). We interpret “traditional `yogurt' ” to mean yogurt that is produced without UF milk as a basic dairy ingredient. Chobani explained in its objection that “Products made from ultra-filtered milks can deliver the same type and amounts of essential vitamins and minerals that consumers have come to expect from yogurts—including a good source of calcium, a good source of phosphorous, excellent source of vitamin B12 and an excellent source of protein” ( Id. ). Chobani further explained that “Yogurts made from ultrafiltered milk can deliver levels of magnesium and potassium which are consistent with other foods which count towards Americans overall consumption of dairy for the purposes of dietary monitoring and guidelines development” ( Id. ). Chobani did not provide any evidence of the nutrient content of UF milk and therefore has not shown that the nutritional comparisons can be made by available and specifically identified reliable evidence (§ 12.24(b)(2)).

Even if we assume the truth of Chobani's statements ( i.e., that yogurt made with UF milk as a basic dairy ingredient has the same or better level of nutrients than yogurt made without UF milk as a basic dairy ingredient or has similar levels of nutrients as other dairy foods), such finding would not be a sufficient basis for modifying the final rule to permit UF milk as a basic dairy ingredient in yogurt. Chobani must demonstrate that the use of UF milk as a basic dairy ingredient is consistent with the basic nature and essential characteristics of yogurt. If we assume that some or all of these nutrients contribute to the basic nature and essential characteristics of yogurt, the other essential characteristics of yogurt ( e.g., taste and texture) must nevertheless be addressed. Hence, we also deny Chobani's second request for a hearing under § 12.24(b)(4) because resolution of the factual issue in the way sought by Chobani would not be adequate to justify amending § 131.200(b) to include UF milk as a basic dairy ingredient.

Chobani made additional arguments with respect to safety, efficiency, and consistency with other foods standards, but did not request a hearing on them. Nevertheless, we address these arguments here. With respect to safety, Chobani asserted that approaches to using UF milk in the manufacture of yogurt “result in no deleterious effects to safety” ( Id. ).

We agree that UF milk is safe for use in the manufacture of yogurt and note that the final rule permits UF milk in the manufacture of yogurt as an optional dairy ingredient to increase the milk solids, not fat content (§ 131.200(a) and (c)). There is no genuine and substantial issue of fact with respect to the safety of UF milk in yogurt.

Chobani also asserted that using UF milk can result in greater production efficiency. While we recognize that operational efficiency is beneficial to a manufacturer, is not material to whether a food standard promotes honesty and fair dealing in the interest of consumers under section 401 of the FD&C Act and therefore does not present a genuine and substantial issue of fact.

Chobani also stated that permitting UF milk in yogurt would create consistency with U.S. and international standards for dairy foods. Regarding U.S. standards, Chobani stated that use of UF milk is already permitted in cheesemaking. Although we issued a proposed rule in 2005 to permit the use of UF milk in standardized cheeses and related cheese products (70 FR 60751), we have not finalized the rule. However, cheese and yogurt are different foods. Assuming that the use of UF milk as an ingredient in cheese or certain cheeses is consistent with the basic nature and essential characteristics of cheese or certain cheeses, it does not follow that the use of UF milk as a basic dairy ingredient in yogurt is consistent with the basic nature and essential characteristics of yogurt.

Finally, Chobani asserted that permitting the use of UF milk in the yogurt standard of identity would be consistent with international standards for yogurt. It is unclear to which international standards Chobani is referring. International standards do not reflect yogurt products sold in the United States or reflect American consumers' expectations about yogurt and therefore their existence is not a sufficient basis for amending our standards. Chobani has not provided evidence that harmonization with international standards promotes honesty and fair dealing in the interest of American consumers.

Since the filing of their objection on July 22, 2022, Chobani submitted an application for a Temporary Marketing Permit (TMP) in accordance with § 130.17 to market test lower fat yogurt deviating from the general definition and standard of identity (§ 130.10) and yogurt deviating from the yogurt standard of identity (§ 131.200) by using UF milk as a basic dairy ingredient under § 131.200(b). This will allow Chobani to gather appropriate supporting data to present to us in the future. As of November 2022, we are continuing to consider Chobani's TMP application.

After evaluating the objections from IDFA, we are denying the requests for a hearing discussed in sections III.B-E. With respect to the request for a hearing on the provision in § 131.200(a) of the final rule requiring either a minimum titratable acidity or a maximum pH, we have issued a proposed order to IDFA under § 12.24(d) proposing to deny the request for a hearing under § 12.24(b)(1). We are denying the requests for a hearing with respect to vitamin D addition and the use of non-nutritive sweeteners because we agree with IDFA's proposed modifications and so there are no genuine and substantial issues of fact for resolution at a hearing (§ 12.24(b)(1)). We have modified § 131.200(d)(8) to permit vitamin D addition such that yogurt contains at least 10 percent DV per RACC of vitamin D, within limits of current good manufacturing practices. We have also modified § 131.200(d)(2) to permit both nutritive sweeteners and non-nutritive sweeteners, under the term “sweeteners,” as optional ingredients in yogurt.

We are denying IDFA's request for a hearing with respect to the addition of cream after culturing under § 12.24(b)(2), (3), and (4) due to insufficiency of the evidence submitted by IDFA. We also deny IDFA's requests for a hearing with respect to the 3.25 percent minimum milkfat requirement and the use of fat-containing flavoring ingredients to replace milkfat in yogurt and lower fat yogurt under § 12.24(b)(3) because the data and information submitted by IDFA are insufficient to justify that milkfat does not contribute to the basic nature and essential characteristics of yogurt and lower fat yogurt. However, we have modified the final rule to permit fat-containing flavoring ingredients in lower fat yogurt above the required minimum milkfat content and to permit the manufacture of yogurt with milkfat content less than 3.25 percent but at least 2.44 percent. These modifications are made to § 130.10(e) and § 131.200(g), respectively. Thus, insofar as IDFA's objection regarding the use of fat-containing flavoring ingredients pertains to increasing the fat content above the required minimum milkfat content of lower fat yogurt, we deny IDFA's objection under § 12.24(b)(1) as there is no genuine and substantial issue of fact for resolution at a hearing.

We are also denying Chobani's requests for a hearing with respect to the use of UF milk as a basic dairy ingredient in yogurt. The requests are denied under § 12.24(b)(2), (3), and (4) as explained above.

We have completed our evaluation of the objections in sections III.B-F and provided our bases under § 12.24(b) for denying the requests for a hearing stated therein. We conclude that this document constitutes final action on these objections under § 12.28(d). Therefore, notice is given that these objections and requests for a hearing do not form a basis for further stay of the effectiveness of the final rule announced in the Federal Register of March 23, 2022 (87 FR 16394). Accordingly, we are ending the stay of the final rule, except with respect to the provision of § 131.200(a) requiring a minimum titratable acidity or maximum pH, and amending certain portions of § 130.10 and § 131.200 as described. This final rule is effective as of [DATE OF PUBLICATION IN THE FEDERAL REGISTER ]. Objections to and requests for hearing on the amendments may be submitted under §§ 12.20 through 12.22 in accordance with § 12.26.

The following references marked with an asterisk (*) are on display at the Dockets Management Staff (see ADDRESSES ) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they also are available electronically at https://www.regulations.gov. References without asterisks are not on public display at https://www.regulations.gov because they have copyright restriction, or they are available as published articles and books. Please contact either person identified in the FOR FURTHER INFORMATION CONTACT section to schedule a date to inspect references without asterisks. Some may be available at the website address, if listed. FDA has verified the website addresses, as of the date this document publishes in the Federal Register , but websites are subject to change over time.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 130 and 131 are amended as follows:

This document contains amendments to the Income Tax Regulations (26 CFR part 1) under sections 5000A and 6055 of the Internal Revenue Code (Code) and to the Procedure and Administration Regulations (26 CFR part 301) under section 6056 of the Code.

On December 6, 2021, a notice of proposed rulemaking (REG-109128-21) was published in the Federal Register (86 FR 68939) (2021 proposed regulations). The 2021 proposed regulations proposed amendments to the regulations under:

• Section 5000A that would provide that Medicaid coverage limited to COVID-19 testing and diagnostic services under section 6004(a)(3) of the Families First Coronavirus Response Act, Public Law 116-127, 134 Stat. 178 (Mar. 18, 2020) is not minimum essential coverage.

• Section 6055 that would provide an automatic extension of time for furnishing statements to responsible individuals  1 and permit an alternative manner for timely furnishing statements.

• Section 6056 that would provide an automatic extension of time for furnishing statements to full-time employees.

The preamble to the 2021 proposed regulations also included a renewed request for comments on rules (REG-103058-16) that were proposed in the Federal Register (81 FR 50671) on August 2, 2016 (2016 proposed regulations) relating to information reporting of minimum essential coverage under section 6055.

Ten comments were received in response to the 2021 proposed regulations. No public hearing was requested or held. After consideration of the comments received, this Treasury decision adopts the 2021 proposed regulations with clarifying modifications as final regulations, as discussed in the Summary of Comments and Explanation of Revisions section of this preamble. The Department of the Treasury (Treasury Department) and the IRS continue to consider the 2016 proposed regulations in light of the public comments received both in 2016 and in response to the request in the 2021 proposed regulations. The Treasury Department and the IRS expect to finalize the 2016 proposed regulations separately.

Under the Patient Protection and Affordable Care Act, Public Law 111-148, 124 Stat. 119 (2010), and the Health Care and Education Reconciliation Act of 2010, Public Law 111-152, 124 Stat. 1029 (2010) (collectively the Affordable Care Act or ACA), eligible individuals who purchase coverage under a qualified health plan through a Health Insurance Exchange (Exchange) established under section 1311 of the ACA may claim a premium tax credit pursuant to section 36B. Section 36B and § 1.36B-3 of the Income Tax Regulations provide that a taxpayer is allowed a premium tax credit only for months that are coverage months for individuals in the taxpayer's family, as defined in § 1.36B-1(d). Under section 36B(c)(2)(B) and § 1.36B-3(c)(1)(iii), a “coverage month” for an individual includes only those months for which the individual is not eligible for minimum essential coverage other than coverage in the individual market.

Section 5000A(f)(1) defines “minimum essential coverage” to include various types of health plans and programs, including specified government-sponsored programs such as the Medicaid program under Title XIX of the Social Security Act. Section 1.5000A-2(b)(2) lists certain government-sponsored programs that do not constitute minimum essential coverage.

Notice 2020-66, 2020-40 I.R.B. 785, provides that Medicaid coverage that is limited to COVID-19 testing and diagnostic services under section 6004(a)(3) of the Families First Coronavirus Response Act is not minimum essential coverage under a government-sponsored program. Consequently, an individual's eligibility for such coverage for one or more months does not prevent those months from qualifying as coverage months for purposes of determining eligibility for the premium tax credit under section 36B.

Consistent with the guidance provided in Notice 2020-66, the 2021 proposed regulations would amend § 1.5000A-2 by adding Medicaid coverage for COVID-19 testing and diagnostic services to the enumerated health coverages under § 1.5000A-2(b)(2) that do not qualify as minimum essential coverage under a government-sponsored program. This amendment to § 1.5000A-2 would apply for months beginning after September 28, 2020. Under the 2021 proposed regulations, for months beginning on or after January 1, 2020, and before September 28, 2020, taxpayers could rely upon Notice 2020-66. No comments were received on this proposed change. Accordingly, the Treasury Department and the IRS are finalizing the proposed amendment to § 1.5000A-2 without change.

Section 6055 requires all persons who provide minimum essential coverage to an individual to report certain information to the IRS that identifies covered individuals and the period of coverage. See section 6055(a) and (b). Those persons are also required to furnish a statement to the covered individuals with the same information. See section 6055(c). These information returns and written statements were needed to administer the individual shared responsibility provisions under section 5000A until the individual shared responsibility payment amount was reduced to zero for months beginning after December 31, 2018 by Public Law 115-97, 131 Stat. 2054, 2092 (2017), commonly referred to as the Tax Cuts and Jobs Act (TCJA). As a result, covered individuals no longer needed the information on the written statements (Form 1095-B) to prepare and file their individual returns. However, the TCJA did not amend any of the reporting or furnishing requirements under section 6055.

Under section 6055 and § 1.6055-1(f) and (g), every person that provides minimum essential coverage to an individual during the calendar year is required to file with the IRS an information return and a transmittal on or before February 28 (March 31 if filed electronically) of the year following the calendar year to which it relates and to furnish to the responsible individual identified on the return a written statement on or before January 31 of the year following the calendar year to which the statement relates. The IRS generally has designated Form 1094-B, Transmittal of Health Coverage Information Returns, and Form 1095-B, Health Coverage, to meet the section 6055 requirements.

Section 6056 requires an applicable large employer (ALE), as defined in section 4980H(c)(2) of the Code, that is subject to the requirements of section 4980H to file information returns annually and furnish written statements with respect to the health insurance, if any, that the employer offers to its full-time employees. The information returns are used by the IRS to administer the employer shared responsibility provisions of section 4980H, and by certain full-time employees to help determine if they are eligible for the premium tax credit under section 36B.

Under section 6056 and § 301.6056-1(e) and (g), every ALE and member of an aggregated group that is determined to be an ALE (collectively, ALE member) is required to file with the IRS an information return and a transmittal on or before February 28 (March 31 if filed electronically) of the year following the calendar year to which it relates and to furnish to full-time employees a written statement on or before January 31 of the year following the calendar year to which the statement relates. The IRS generally has designated Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to meet the section 6056 requirements.

In addition, an ALE member that offers coverage through a self-insured health plan must complete the reporting required under section 6055, specifically, the information regarding each individual enrolled in the self-insured health plan, using Form 1095-C, Part III, rather than Form 1095-B.

The current regulations under sections 6055 and 6056 allow the IRS to grant an extension of time of up to 30 days to furnish statements to individuals for good cause shown. See §§ 1.6055-1(g)(4)(i)(B)( 1 ) and 301.6056-1(g)(1)(ii)(A). Additionally, under the current regulations the Commissioner may prescribe guidance or procedures for automatic extensions of time for furnishing statements to individuals. See §§ 1.6055-1(g)(4)(i)(B)( 2 ) and 301.6056-1(g)(1)(ii)(B). Through a series of notices, the Treasury Department and the IRS extended the due date for furnishing statements to individuals under sections 6055 and 6056 for calendar years 2015 through 2020. 2

Section 6721 imposes a penalty for failing to timely file an information return or for filing an incorrect or incomplete information return. Section 6722 imposes a penalty for failing to timely furnish an information statement or furnishing an incorrect or incomplete information statement. The section 6721 and 6722 penalties are imposed regarding information returns and statements listed in section 6724(d), which include those required by sections 6055 and 6056. Section 6724 provides that no penalty will be imposed under section 6721 or 6722 with respect to any failure if it is shown that the failure is due to reasonable cause and not to willful neglect.

To reduce administrative burdens for reporting entities and the IRS, the 2021 proposed regulations provided that reporting entities would be granted an automatic extension of time, not to exceed 30 days after January 31, in which to furnish the written statements required by § 1.6055-1(g)(1). The 2021 proposed regulations also provided that if the extended furnishing date falls on a weekend or legal holiday, statements would be timely if furnished on the next business day.

Because this extension would be automatic, the 2021 proposed regulations would eliminate § 1.6055-1(g)(4)(i)(B)( 1 ), which allows a reporting entity to make a written application to the IRS to request an extension of time to furnish the statement. The 2021 proposed regulations also would eliminate § 1.6055-1(g)(4)(i)(B)( 2 ), under which the Commissioner may prescribe guidance or procedures for automatic extensions of time for furnishing written statements pursuant to section 6055.

Commenters expressed strong support for the proposal to amend § 1.6055-1(g)(4) to provide a permanent, automatic extension of time during which a provider of minimum essential coverage must furnish written statements to individuals. One commenter acknowledged that the addition of the permanent, automatic extension of time for reporting entities to furnish statements obviates the need for the IRS to provide other extensions of time to furnish statements in most circumstances. The commenter nonetheless requested that the final regulations retain the provisions in § 1.6055-1(g)(4)(i)(B)( 2 ) allowing the Commissioner, in appropriate cases, to prescribe additional guidance or procedures for automatic extensions of time for furnishing written statements.

After consideration of the comments received, the Treasury Department and the IRS are adopting with one clarifying change the proposal for a permanent, automatic extension of time for furnishing written statements to individuals pursuant to § 1.6055-1(g). The 2021 proposed regulations provided that reporting entities would be granted an automatic extension of time not exceeding 30 days in which to furnish required statements. To provide a clear, definite rule, these final regulations expressly provide a 30-day, automatic extension of time. The permanent, 30-day automatic extension of time to furnish written statements replaces § 1.6055-1(g)(4)(i) and provides adequate time for furnishing in most situations. Additionally, because a reporting entity may qualify for penalty relief pursuant to section 6724 by showing that a failure was due to reasonable cause and not to willful neglect, the request that § 1.6055-1(g)(4)(i)(B)( 2 ) be retained is not adopted.

While expressing support for the proposed rule, one commenter requested that the IRS communicate the automatic extension clearly and directly to state governmental bodies that have their own individual health insurance mandates and reporting requirements. According to the commenter, some states impose requirements similar to the reporting and furnishing requirements of section 6055. In these cases, the commenter suggested that the deadlines should be coordinated or made the same.

The Treasury Department and the IRS intend to revise the instructions for Form 1094-B and Form 1095-B to communicate the final rule's permanent, 30-day automatic extension of time for furnishing the required statements. However, the Treasury Department and the IRS have no authority over state reporting and furnishing requirements. Whether state deadlines for filing returns or other documents relating to health coverage will align with the regulations is a question of state law. Accordingly, the Treasury Department and the IRS are not revising the regulations to coordinate with state reporting and furnishing requirements.

To reduce administrative burdens for ALE members and the IRS, the 2021 proposed regulations provided that ALE members would be granted an automatic extension of time, not to exceed 30 days after January 31, in which to furnish written statements to full-time employees. The 2021 proposed regulations also provided that if the extended furnishing date falls on a weekend or legal holiday, statements would be timely if furnished on the next business day.

Because this extension would be automatic, the 2021 proposed regulations would eliminate § 301.6056-1(g)(1)(ii)(A), which allows an ALE member to make a written application to the IRS to request an extension of time to furnish the statement. The 2021 proposed regulations also would eliminate § 1.6056-1(g)(1)(ii)(B), under which the Commissioner may prescribe guidance or procedures for automatic extensions of time for furnishing written statements pursuant to section 6056.

Commenters expressed strong support for the proposal to amend § 301.6056-1(g)(1) by providing a permanent automatic extension of time during which an ALE must furnish written statements to full-time employees. One commenter acknowledged that the addition of a permanent, automatic extension of time for reporting entities to furnish statements obviates the need for the IRS to provide other extensions of time to furnish statements in most circumstances. The commenter nonetheless requested that the final regulations retain the provisions in § 301.6056-1(g)(1)(ii)(B) allowing the Commissioner, in appropriate cases, to prescribe additional guidance or procedures for automatic extensions of time for furnishing written statements pursuant to section 6056.

After consideration of the comments received, the Treasury Department and the IRS are adopting with one clarifying change the proposal for a permanent, automatic extension of time for furnishing written statements to individuals pursuant to § 301.6056-1(g)(1). The 2021 proposed regulations provided that ALEs would be granted an automatic extension of time not exceeding 30 days in which to furnish required statements. To provide a clear, definite rule, these final regulations expressly provide a 30-day, automatic extension of time. The permanent, 30-day automatic extension of time to furnish written statements replaces § 301.6056-1(g)(1) and provides adequate time for furnishing in most situations. Additionally, because a reporting entity may qualify for penalty relief pursuant to section 6724 by showing that a failure was due to reasonable cause and not to willful neglect, the request that § 1.6056-1(g)(1)(ii)(B) be retained is not adopted.

The 2021 proposed regulations provided an alternative manner for a reporting entity to timely furnish Forms 1095-B to responsible individuals. 3 Under proposed § 1.6055-1(g)(4)(ii)(B), the reporting entity first would be required to post a clear and conspicuous notice on the entity's website stating that responsible individuals may receive a copy of their statement upon request. The notice would have to include an email address, a physical address to which a request may be sent, and a telephone number responsible individuals may use to contact a reporting entity with any questions. Additionally, the 2021 proposed regulations provided that the notice would satisfy the requirements for the alternative manner of furnishing if it were written in plain, non-technical terms and with letters of a font size large enough, including any visual clues or graphical figures, to call to a viewer's attention that the information pertains to tax statements reporting that individuals had health coverage. Under the 2021 proposed regulations, a reporting entity would be required to retain the notice in the same location on its website until October 15 of the year following the calendar year to which the statement relates. The reporting entity would have to provide a Form 1095-B to a responsible individual within 30 days of the date of receipt of the individual's request. The proposed alternative manner of furnishing would apply only to taxable years when the individual shared responsibility payment amount under section 5000A(b) is zero.

Commenters generally supported the proposed amendments to § 1.6055-1(g) allowing reporting entities to satisfy the furnishing requirements for Form 1095-B by using the alternative manner of furnishing. One commenter requested that the regulations under section 6056 also be amended to extend the alternative manner of furnishing rule to ALEs. The commenter asserted that the information included on Form 1095-C has limited utility because it only helps full-time employees determine if they are eligible for the premium tax credit. The commenter noted the potential environmental benefits, specifically the reduced use of paper and resources, that would result by allowing for the furnishing of forms only upon request.

As noted in Notice 2020-76, the preamble to the 2021 proposed regulations, and earlier in this Summary of Comments and Explanation of Revisions, individuals no longer need Form 1095-B because the TCJA reduced the amount of the individual shared responsibility payment to zero. This change in Federal law caused the Treasury Department and the IRS to consider whether it was possible to amend the section 6055 regulations to reduce burdens on providers of minimum essential coverage, while providing for continued compliance with the unchanged statutory requirements of section 6055. Thus, the Treasury Department and the IRS proposed the alternative manner of furnishing Form 1095-B in recognition that the TCJA mooted the primary purpose for which individuals would need Form 1095-B.

However, as noted earlier, Form 1095-C serves a different purpose than Form 1095-B. Form 1095-C is used to administer the employer shared responsibility provisions of section 4980H and by certain full-time employees to help determine eligibility for the premium tax credit under section 36B. Neither the TCJA nor any other change in Federal law affects the employer shared responsibility provisions of section 4980H or the need for certain full-time employees to have information about their coverage offer to help determine eligibility for the premium tax credit under section 36B. Because the primary purpose for furnishing Form 1095-C is distinct from the primary purpose for furnishing Form 1095-B and was not affected by the changes made by the TCJA, the Treasury Department and the IRS conclude that it is not appropriate to amend the regulations under section 6056 to extend the alternative manner of furnishing rule to ALEs with regard to their full-time employees. However, the 2021 proposed regulations permitted, and these final regulations permit, ALEs to use the alternative manner of furnishing for non-employees and non-full-time employees for whom furnishing is required under § 1.6055-1.

The commenter that requested the alternative manner of furnishing for Form 1095-C also expressed concern about the environmental impact of providing Forms 1095-C on paper, but that concern does not take into account the potential mitigation of providing the information electronically.

One commenter requested that the Treasury Department and the IRS eliminate the section 6055 reporting requirement for years when the individual shared responsibility payment amount is zero. According to the commenter, under the proposed alternative manner of furnishing statements, health insurance issuers and plan sponsors must continue to maintain record-keeping systems to complete Forms 1095-B that must be provided upon request. The continued requirement to maintain records, according to the commenter, imposes burdens and costs. Thus, the commenter requested that the regulations be revised to eliminate the requirement to furnish Form 1095-B even upon request.

As noted, the TCJA reduced the individual shared responsibility payment amount to zero for months beginning after December 31, 2018; however, the TCJA did not amend any of the reporting or furnishing requirements under section 6055. Because Congress did not repeal or otherwise modify the reporting and furnishing requirements in section 6055, the Treasury Department and the IRS have determined that there is insufficient statutory authority to eliminate the Form 1095-B requirement. Accordingly, the commenter's suggestion is not adopted.

The final regulations include clarifying, non-substantive changes to the language in proposed § 1.6055-1(g)(4)(ii)(B) describing the alternative manner of furnishing. The final regulations also modify proposed § 1.6055-1(g)(4)(ii)(B)( 2 ) to provide that a reporting entity using the alternative manner of furnishing must post a notice on its website by the date specified in § 1.6055-1(g)(4)(i) of these final regulations.

After consideration of the comments received, the Treasury Department and the IRS are adopting the proposed alternative manner of furnishing written statements to individuals under section 6055 with these clarifying changes.

The preamble to the 2021 proposed regulations described the genesis of the transitional good faith relief from penalties under sections 6721 and 6722, which the Treasury Department and the IRS provided to reporting entities in the preambles to the regulations under sections 6055 and 6056  4 for calendar year 2015 and in IRS notices for calendar years 2016-2020. 5 Under the transitional good faith relief, the IRS did not impose penalties under sections 6721 and 6722 on reporting entities if the entities could show that they made good faith efforts to comply with the information reporting requirements. In Notice 2020-76, the Treasury Department and the IRS stated that 2020 was the last year that transitional good faith relief would be provided. Consistent with Notice 2020-76, the Treasury Department and the IRS reiterated in the preamble to the 2021 proposed regulations that the transitional good faith relief would be discontinued after 2020.

Two commenters requested that the Treasury Department and the IRS reconsider terminating the transitional good faith relief, with one of the commenters suggesting that the relief be retained at least for calendar years 2022, 2023, and 2024. Specifically, one commenter advocated for continuation of the relief because health coverage information reporting, especially for ALEs, is complicated, and many employers continue to make unintentional mistakes. The commenter asserted that the reasonable cause standard would be insufficient to relieve employers from significant penalties. The commenter requested, at a minimum, good faith penalty relief for small employers (as defined under applicable state law) that are ALEs.

The other commenter asked that the transitional good faith relief be retained because, although the individual shared responsibility payment amount is zero, several states have imposed individual mandates regarding health insurance that require reporting; instructions for IRS forms respecting reporting are modified annually; and plans have faced compliance problems caused by the COVID-19 pandemic.

As discussed in the preamble to the 2021 proposed regulations, the good faith relief offered beginning in calendar year 2015 was intended to be transitional to accommodate public concerns with implementing the new reporting requirements under the ACA. These reporting requirements have now been in place for seven years, and transitional relief is no longer appropriate. Also, the Treasury Department and the IRS are of the view that additional good faith relief is not necessary to address the commenters' concerns. The reasonable cause exception under section 6724 already provides adequate relief from penalties under sections 6721 and 6722 for filers who have reasonable cause for failing to timely or accurately complete their reporting requirements.

The regulations under § 1.5000A-2 apply for months beginning after September 28, 2020. For months beginning on or after January 1, 2020, and before September 28, 2020, taxpayers may continue to rely on Notice 2020-66.

The regulations under §§ 1.6055-1 and 301.6056-1 apply for calendar years beginning after December 31, 2021. As discussed in the Proposed Applicability Date section of the 2021 proposed regulations, taxpayers may rely on §§ 1.6055-1 and 301.6056-1 of the 2021 proposed regulations for calendar years beginning after December 31, 2020, and before December 15, 2022.

IRS revenue procedures, revenue rulings, notices, and other guidance cited in this preamble are published in the Internal Revenue Bulletin and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

These final regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the Office of Management and Budget (OMB) regarding review of tax regulations. It has been determined that a final regulatory flexibility analysis under 5 U.S.C. 604 is required for this final rule. The analysis is set forth under the heading “Final Regulatory Flexibility Analysis.”

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

There is no collection of information contained in these final regulations. The collections of information contained in §§ 1.6055-1 and 301.6056-1 were previously reviewed and approved by OMB in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and are associated with control numbers 1545-2251 (associated with Form 1095-C) and 1545-2252 (associated with Form 1095-B).

The Paperwork Reduction Act (44 U.S.C. 3501-3520) relates to information collection requests by any Government agency. A collection of information generally means the obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public, of facts or opinions by or for an agency, regardless of form or format, calling for either (1) answers to identical questions posted to, or identical reporting or recordkeeping requirements imposed on ten or more persons, other than agencies, instrumentalities, or employees of the United States, or (2) answers to questions posed to agencies, instrumentalities, or employees of the United States which are to be used for general statistical purposes. 44 U.S.C. 3502(3). A collection of information is commonly referred to as a reporting, recordkeeping, or disclosure requirement.

These final regulations do not require a reporting entity to provide any information to the Federal Government, to maintain specific records, or to disclose any additional information that the reporting entity did not already have a requirement to disclose.

When an agency either issues a final rule that follows a required notice of proposed rulemaking or issues a final interpretative rule involving the internal revenue laws that imposes a collection of information requirement on small entities as described in 5 U.S.C. 603(a), the Regulatory Flexibility Act (5 U.S.C. chapter 6) (Act) requires the agency to “prepare a final regulatory flexibility analysis.” A final regulatory flexibility analysis must, pursuant to 5 U.S.C. 604(a), include the five elements listed in this final regulatory flexibility analysis. For purposes of this final regulatory flexibility analysis, a small entity is defined as a small business, small nonprofit organization, or small governmental jurisdiction. See 5 U.S.C. 601(3)-(6). Small business size standards define whether a business is “small” and have been established for types of economic activities, or industry, generally under the North American Industry Classification System (NAICS). See title 13, part 121 of the Code of Federal Regulations (Small Business Size Regulations). The size standards look at various factors, including annual receipts, number of employees, and amount of assets, to determine whether the business is small. See title 13, § 121.201 of the Code of Federal Regulations for the Small Business Size Standards by NAICS Industry.

The Treasury Department and the IRS conclude that, although the overall impact of these final regulations will reduce the burden on small entities, these final regulations will impact a substantial number of small entities and the economic impact on those small entities may be significant. As a result, although the impact of these final regulations is positive for small entities, a final regulatory flexibility analysis is required.

The final regulations under § 1.5000A-2 make permanent the guidance in Notice 2020-66 regarding whether certain Medicaid coverage of COVID-19 testing and diagnostic services is minimum essential coverage. These final regulations will ensure that taxpayers have accurate guidance when determining whether they have minimum essential coverage, which in turn will assist taxpayers in determining whether they qualify for the premium tax credit.

The principal objective of the final regulations under section 5000A is to provide certainty that Medicaid coverage limited to certain COVID-19 testing and diagnostic services is not minimum essential coverage. Minimum essential coverage is defined in section 5000A(f)(1) and generally includes coverage under the Medicaid program under title XIX of the Social Security Act. However, § 1.5000A-2(b)(2) lists certain types of services that are excluded from the definition of minimum essential coverage and these final regulations will add Medicaid coverage of certain COVID-19 testing and diagnostic services to that list. Thus, eligibility for this coverage will not preclude an individual from qualifying for the premium tax credit.

The final regulations under §§ 1.6055-1 and 301.6056-1 make permanent the extension of time to furnish Forms 1095-B and 1095-C to responsible individuals and employees that has been provided every calendar year since 2015. These final regulations will reduce the burden on reporting entities by extending the time to satisfy their furnishing obligations for certain health care coverage without the penalty under section 6722 being imposed. This extension should result in an increase in the timeliness and accuracy of the reporting.

The final regulations under § 1.6055-1 also allow reporting entities to furnish the statement required by section 6055 by providing notice on their website and by providing the statement to the responsible individual upon request. These final regulations will reduce the burden on reporting entities by providing a less costly option to satisfy the furnishing obligation under section 6055 for tax years when individuals do not need to report health coverage information on their Federal income tax returns.

The principal objectives of the final regulations under section 6055 are to (1) provide reporting entities under section 6055 and section 6056 with additional time to complete and furnish accurate statements to responsible individuals and full-time employees; and (2) to offer reporting entities a minimally burdensome option by which to furnish the statement required by section 6055. The legal basis for the extended due date for statements required under section 6055 and section 6056 was originally set forth in the series of notices referenced in the Summary of Comments and Explanation of Revisions section of this preamble. In those notices, the Treasury Department and the IRS extended the dates for furnishing statements to responsible individuals and full-time employees and provided that reporting entities that satisfy the furnishing requirement by the extended due date will not be subject to penalties under sections 6721 and 6722. Section 6724(a) provides that no penalty is imposed under section 6721 or 6722 if it is shown that the failure is due to reasonable cause and not to willful neglect. The legal basis for the alternative manner of furnishing statements under section 6055 is in section 6055(b)(1)(A), which authorizes the Secretary to prescribe the form of the return that is required to be furnished under section 6055(c).

No comments were received in response to the IRFA in the proposed regulations.

Pursuant to section 7805(f) of the Code, the proposed regulations were submitted to the Chief Counsel of the Office of Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.

These final regulations apply to health insurance issuers, self-insured employers, government agencies, and other providers of minimum essential coverage required to furnish individual statements regarding such coverage under section 6055, and to ALE members that are required by section 6056 to furnish information relating to health insurance that the ALE offers to its full-time employees. An estimate of the number of small entities subject to these final regulations is not feasible because a correlation between small entities and this type of reporting cannot be made. These final regulations affect entities in all industries using any NAICS code.

As discussed in the Paperwork Reduction Act section earlier in this preamble, these final regulations do not impose any reporting, recordkeeping, or similar requirements on any small entities that did not already apply to small entities.

The Treasury Department and the IRS are not aware of any steps that could be taken to minimize the economic impact on small entities that would also be consistent with the objectives of these final regulations and have determined that, without a legislative change, there are no viable alternatives to the provisions in the final regulations that would enable reporting entities to continue to satisfy their reporting obligations with a lesser burden. These final regulations do not impose any more requirements on small entities than are necessary to effectively administer the internal revenue laws. Further, these final regulations do not subject small entities to any requirements that are not also applicable to larger entities covered by the regulations.

Accordingly, the Treasury Department and the IRS conclude that the provisions of these final regulations will effectively promote sound tax administration. The additional exclusion from the definition of minimum essential coverage in § 1.5000A-2 will provide guidance to ensure that taxpayers can adequately determine whether they have minimum essential coverage that would preclude them from qualifying for a premium tax credit. An automatic extension of time to furnish statements under §§ 1.6055-1(g)(4)(i) and 301.6056-1(g)(1) will assist reporting entities to timely and accurately satisfy their statutory reporting obligations, while also reducing the cost and burden of having to request an extension. Last, the alternative manner of furnishing a statement in § 1.6055-1(g)(4)(ii)(B), at a time when the individual shared responsibility payment amount is zero, will also help reporting entities reduce costs. Accordingly, implementation of these final regulations will increase tax compliance by providing definitive guidance to individuals, will allow reporting entities the time needed to furnish timely and accurate statements under sections 6055 and 6056, and will allow reporting entities an alternative method of furnishing statements under section 6055 to minimize their production and distribution costs.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a state, local, or tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). This final rule does not include any Federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on state and local governments, and is not required by statute, or preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This final rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive order.

The principal author of these final regulations is Gerald Semasek of the Office of Associate Chief Counsel (Income Tax and Accounting). Other personnel from the Treasury Department and the IRS participated in the development of these regulations.

Accordingly, the Treasury Department and the IRS amend 26 CFR parts 1 and 301 as follows:

PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) prescribes actuarial assumptions—including interest assumptions—for valuing benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974 (ERISA). The interest assumptions in the regulation are also published on PBGC's website ( https://www.pbgc.gov ).

PBGC uses the interest assumptions in appendix B to part 4044 (“Interest Rates Used to Value Benefits”) to determine the present value of annuities in an involuntary or distress termination of a single-employer plan under the asset allocation regulation. The assumptions are also used to determine the value of multiemployer plan benefits and certain assets when a plan terminates by mass withdrawal in accordance with PBGC's regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281).

The first quarter 2023 interest assumptions will be 4.86 percent for the first 20 years following the valuation date and 4.70 percent thereafter. In comparison with the interest assumptions in effect for the fourth quarter of 2022, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.96 percent in the select rate, and an increase of 1.05 percent in the ultimate rate (the final rate).

PBGC has determined that notice of, and public comment on, this rule are impracticable, unnecessary, and contrary to the public interest. PBGC routinely updates the interest assumptions in appendix B of the asset allocation regulation each quarter so that they are available to value benefits. Accordingly, PBGC finds that the public interest is best served by issuing this rule expeditiously, without an opportunity for notice and comment, and that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication to allow the use of the proper assumptions to estimate the value of plan benefits for plans with valuation dates early in the first quarter of 2023.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

In consideration of the foregoing, 29 CFR part 4044 is amended as follows:

On November 28, 2022, the PRC favorably reviewed the price adjustments proposed by the Postal Service. The price adjustments and DMM revisions are scheduled to become effective on January 22, 2023. Final prices are available under Docket No. R2023-1 (Order No. 6341) on the Postal Regulatory Commission's website at www.prc.gov.

Currently, the Postal Service offers discounts for Carrier Route, High Density, High Density Plus, and Saturation Flats on 5-Digit or 5-Digit Scheme (direct) containers. Similar discounts would now be offered to flat-shaped Marketing Mail pieces on SCF Pallets. This proposed discount will be applicable to Automation and Nonautomation (3-Digit and 5-Digit Presort) Flats, Carrier Route Flats, High Density Flats, High Density Plus Flats and Saturation Flats on SCF Pallets regardless of the entry (None, DNDC, and DSCF). This preparation assures that no bundle sorting is required prior to the final processing plant.

Currently, the Postal Service offers mailing list services for manual correction of name and address on occupant lists and manual sorting of mailing lists on cards by 5-digit ZIP Code.

The Postal Service is proposing to discontinue these two services due to low volume usage and the availability of other Address Management products that allows more efficient access to the same information in an electronic format.

In an attempt to reduce duplicate labels, the Postal Service is eliminating the following legacy labels: PS 153 Signature Confirmation, PS 3800 Certified Mail, PS 3813 Insured Mail $500 and under, and PS 3813-P Insured Mail over $500. These labels will be replaced with IMpb compliant versions. Mailers that continue to use the eliminated labels will be subject to the IMpb Noncompliance Fee.

The Postal Service has been incenting mailers to integrate mobile technology and use innovative print techniques in commercial mail since 2012. These promotions have become an integral way for industry to try new things and innovate their mail campaigns. A 2023 Promotions Calendar is planned with opportunities for mailers to receive a postage discount by applying treatments or integrating technology in their mail campaigns.

Market Dominant comments on Proposed changes and USPS responses.

The Postal Service did not receive any formal comments on the October 2022 proposed rule (87 FR 63741-63743).

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

This action offers certain parties the option of using an available industry standard to conduct all appropriate inquiries. Parties purchasing potentially contaminated properties may use the ASTM E1527-21 standard practice to comply with the all appropriate inquiries requirements of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This rule does not require any entity to use this standard. Any party who wants to claim protection from liability under one of CERCLA's landowner liability protections may follow the regulatory requirements of the All Appropriate Inquiries Rule at 40 CFR part 312, use the ASTM E1527-13 “Standard Practice for Phase I Environmental Site Assessments” for up to one year after this rule becomes effective, use the ASTM E2247-16 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property,” or use the standard recognized in this final rule, the ASTM E1527-21 standard, to comply with the all appropriate inquiries provision of CERCLA.

Entities potentially affected by this action, or who may choose to use the newly referenced ASTM standard to perform all appropriate inquiries, include public and private parties who, as bona fide prospective purchasers, contiguous property owners, or innocent landowners, are purchasing potentially contaminated properties and wish to establish a limitation on CERCLA liability in conjunction with the property purchase. In addition, any entity conducting a site characterization or assessment on a property with funding from a brownfields grant awarded under CERCLA Section 104(k)(2)(B)(ii) may be affected by this action. This includes State, local, and Tribal governments that receive brownfields site assessment grants. A summary of the potentially affected industry sectors (by North American Industry Classification System (NAICS) codes) is displayed in the table below.

The list of potentially affected entities in the above table may not be exhaustive. Our aim is to provide a guide for readers regarding those entities that EPA is aware potentially could be affected by this action. However, this action may affect other entities not listed in the table. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding section entitled FOR FURTHER INFORMATION CONTACT .

This rule amends the All Appropriate Inquiries Rule setting Federal standards for the conduct of “all appropriate inquiries” at 40 CFR part 312. The All Appropriate Inquiries Rule sets forth standards and practices necessary for fulfilling the requirements of CERCLA section 101(35)(B) to obtain CERCLA liability protection and for conducting site characterizations and assessments with the use of brownfields grants per CERCLA section 104(k)(2)(B)(ii).

On January 11, 2002, President Bush signed the Small Business Liability Relief and Brownfields Revitalization Act (“the Brownfields Amendments”). In general, the Brownfields Amendments to CERCLA provide funds to assess and clean up brownfield sites; clarify existing and establish new CERCLA liability provisions related to certain types of owners of contaminated properties; and provide funding to establish or enhance State and Tribal cleanup programs. The Brownfields Amendments revised some of the provisions of CERCLA Section 101(35) and limited liability under Section 107 for bona fide prospective purchasers and contiguous property owners, in addition to clarifying the requirements necessary to establish the innocent landowner liability protection under CERCLA Sections 107 and 101(35). The Brownfields Amendments clarified the requirement that parties purchasing potentially contaminated property undertake “all appropriate inquiries” into prior ownership and use of property before purchasing the property to qualify for protection from CERCLA liability.

The Brownfields Amendments of 2002 required EPA to develop regulations establishing standards and practices for how to conduct all appropriate inquiries. EPA promulgated regulations that set standards and practices for all appropriate inquiries on November 1, 2005 (70 FR 66070). In the final regulation, EPA referenced, and recognized as compliant with the rule, the ASTM E1527-05 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” In December 2008, EPA amended the All Appropriate Inquiries Rule to recognize another ASTM standard as compliant with the rule, ASTM E2247-08 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property.” Both standards, the ASTM E1527-05 and the ASTM E2247-08, were subsequently revised by ASTM International. EPA referenced the revised ASTM E1527-13 standard on August 15, 2013 (78 FR 49690), and referenced the revised ASTM E2247-16 Standard on September 15, 2017 (82 FR 43310), as compliant with the All Appropriate Inquiries Rule. Currently, the All Appropriate Inquiries Rule (40 CFR part 312) allows for the use of the ASTM E1527-13 standard or the ASTM E2247-16 standard to conduct all appropriate inquiries, in lieu of following the requirements included in the rule. Once this action is final, the All Appropriate Inquiries Rule will allow for the use of the ASTM E1527-21 standard and will phase out use of the ASTM E1527-13 standard.

Recently, ASTM International published a revised standard for conducting Phase I environmental site assessments. This standard, ASTM E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” was reviewed by EPA, and determined by EPA to be compliant with the requirements of the All Appropriate Inquiries Rule.

On March 14, 2022, EPA published a direct final rule (87 FR 14174) to amend the All Appropriate Inquiries Rule to reference ASTM E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” and allow for its use to satisfy the requirements of the All Appropriate Inquiries Rule. A companion proposed rule, also published on March 14, 2022, invited comment on the direct final rule and stated that if EPA received adverse comment on the proposal to reference the ASTM E1527-21 standard, the Agency would withdraw the direct final rule. EPA received adverse comments on that action and published a notification of withdrawal of the direct final rule on May 2, 2022 (87 FR 25572). In this document, EPA is finalizing the amendment to the All Appropriate Inquiries Rule referencing the ASTM E1527-21 standard practice and addressing the comments received in response to the March 14, 2022 proposed rule.

EPA received thirteen comments on the proposed rule published March 14, 2022. EPA developed a Response to Comments document and placed it in the docket for this action. The comments and EPA's responses are summarized here. Most commenters supported the Agency's proposed action to amend the All Appropriate Inquiries Rule to add a reference to ASTM International's E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” and allow for its use to satisfy the requirements for conducting all appropriate inquiries under the Comprehensive Environmental Response, Compensation and Liability Act. Several commenters raised concerns related to the Agency's decision to continue to recognize a previous ASTM standard, ASTM E1527-13, as compliant with the All Appropriate Inquiries Rule. Commenters pointed out that the previous version of the ASTM standard, ASTM E1527-13, will sunset and will no longer be available from ASTM International. Commenters pointed out that the revised standard, ASTM E1527-21, was developed with input from industry professionals, users, and regulators and its updated provisions offer positive benefits to stakeholders. In addition, commenters asserted that the updated standard now represents “good commercial and customary business practice,” and therefore should replace the current ASTM E1527-13 Phase I Environmental Site Assessment standard referenced by EPA, rather than merely being added as an additionally referenced standard. Other commenters stated that EPA's continued acceptance of the 2013 version of the ASTM E1527 standard will create confusion within the marketplace because users will need to unnecessarily compare the costs and benefits of the use of the two standards when receiving multiple bids from potential contractors before environmental site assessment. EPA recognizes the commenters' concerns.

In response to concerns raised by commenters regarding the potential confusion associated with the Agency's recognition of a historical standard no longer recognized by ASTM International as current, or no longer reflecting its current consensus-based, or customary business standard, the Agency will remove its reference to the ASTM E1527-13 Standard Practice for Environmental Site Assessments. To provide parties with an adequate opportunity to complete AAI investigations that may be on-going and to allow all parties sufficient notice to become familiar with the updated industry standard (ASTM E1527-21), the Agency is providing for a sunset period for the removal of its recognition of the historic standard (ASTM E1527-13) as compliant with all appropriate inquiries. The sunset period for removal of the reference to the ASTM E1527-13 Standard Practice for Environmental Site Assessments is one year from publication of this final rule. A Phase 1 Environmental Site Assessment completed before that date using ASTM E1527-13 will be recognized as compliant with the All Appropriate Inquiries Rule.

One commenter requested that EPA provide a formal notice and comment opportunity on the ASTM E1527-21 Phase I Environmental Site Assessment Process. The commenter also stated that the reference to “emerging contaminants” in the ASTM E1527-21 standard is an “out of scope” consideration that may lead to additional potential CERCLA liability prematurely for landowners and potential buyers. In the March 14 direct final rule and the accompanying proposed rule, EPA clearly stated that it was not requesting comment on the ASTM standard. The ASTM standard is not an EPA regulation, and its use is not required to comply with the All Appropriate Inquiries Rule or any other EPA regulations.

Industry standards may include elements that are not within the scope of the All Appropriate Inquiries Rule. Use of the ASTM E1527-21 standard is not required for compliance with the All Appropriate Inquiries Rule. Therefore, EPA does not consider these additional elements as a reason to avoid recognition of the revised E1527-21 standard as compliant with the All Appropriate Inquiries Rule.

Two commenters submitted requests for modifications to the ASTM E1527-21 standard. One commenter requested changes to the standard's requirements for environmental lien searches and to the definitions of “recognized environmental conditions.” Another commenter requested a modification to the definition of “property use limitation” as it is used in the ASTM E1527-21 standard. The ASTM E1527-21 is not an EPA standard and the Agency stated in the proposed rule that it was not requesting comments on the ASTM standard. Requests to modify the ASTM standard should be directed to ASTM. Use of the ASTM standard is not required to comply with the All Appropriate Inquiries Rule.

This rule amends the All Appropriate Inquiries Rule to allow for the use of the recently revised ASTM International standard ASTM E1527-21 to satisfy the all appropriate inquiries requirements under CERCLA for establishing the bona fide prospective purchaser, contiguous property owner, and innocent landowner liability protections.

With this action, parties seeking liability relief under CERCLA's landowner liability protections, as well as recipients of brownfields grants for conducting site assessments, will be considered in compliance with the requirements for all appropriate inquiries, if such parties comply with the procedures provided in the ASTM E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.”

The Agency notes that this action does not require any party to use the ASTM E1527-21 standard. Any party conducting all appropriate inquiries to comply with CERCLA's bona fide prospective purchaser, contiguous property owner, and innocent landowner liability protections, or a brownfields site assessment under CERCLA Section 104(k), may follow the provisions of the All Appropriate Inquiries Rule at 40 CFR part 312. This action merely allows for the option of using ASTM International's E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” by those parties purchasing potentially contaminated properties in lieu of following the specific requirements of the All Appropriate Inquiries Rule.

The Agency notes that there are no legally significant differences between the regulatory requirements and the ASTM E1527-21 standard. To facilitate an understanding of the slight differences between the All Appropriate Inquiries Rule and the revised ASTM E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” as well as the applicability of the E1527-21 standard to certain types of properties, EPA developed, and placed in the docket for this action, the document “Comparison of All Appropriate Inquiries Regulation, the ASTM E1527-13 Phase I Environmental Site Assessment Process, and ASTM E1527-21 Phase I Environmental Site Assessment Process.” The document also provides a comparison of the two ASTM E1527 standards.

This action also includes the removal of the current reference in the All Appropriate Inquiries Rule to the ASTM E1527-13 Standard Practice for Environmental Site Assessments as compliant with all appropriate inquiries. The removal of the reference to the historic standard as compliant with the all appropriate inquiries requirements will take effect one year following publication of this final rule.

This action includes no changes to the All Appropriate Inquiries Rule other than to add a reference to the new ASTM E1527-21 standard and remove the current reference to the historic ASTM E1527-13 standard as compliant with all appropriate inquiries. With this final rule, EPA is recognizing the ASTM E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” as compliant with the all appropriate inquiries requirements. The reference to the ASTM E1527-13 standard as compliant with the all appropriate inquiries requirements will be removed from the reference section of the AAI (40 CFR 312.11) one year following publication of this final rule.

Under Executive Order 12866 (58 FR 51735, October 4, 1993) and Executive Order 13563 (76 FR 3821, January 21, 2011), this action is not a “significant regulatory action” and is therefore not subject to OMB review. This action merely amends the All Appropriate Inquiries Rule to reference ASTM International's E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” and allow for its use to satisfy the requirements for conducting all appropriate inquiries under CERCLA. This action does not impose any requirements on any entity, including small entities. Therefore, pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), after considering the economic impacts of this action on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This action does not contain any unfunded mandates or significantly or uniquely affect small governments as described in sections 202 and 205 of the Unfunded Mandates Reform Act of 1999 (UMRA) (Pub. L. 104-4). This action does not create new binding legal requirements that substantially and directly affect Tribes under Executive Order 13175 (63 FR 67249, November 9, 2000). This action does not have significant federalism implications under Executive Order 13132 (64 FR 43255, August 10, 1999). Because this action is exempt from review under Executive Order 12866, this rule is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

This action does involve technical standards. Therefore, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113; 15 U.S.C. 272) (NTTAA) apply. The NTTAA was signed into law on March 7, 1996, and, among other things, directs the National Institute of Standards and Technology (NIST) to bring together Federal agencies as well as state and local governments to achieve greater reliance on voluntary consensus standards and decrease dependence on in-house standards. It states that use of such standards, whenever practicable and appropriate, is intended to achieve the following goals: (a) Eliminate the cost to the government of developing its own standards and decrease the cost of goods procured and the burden of complying with agency regulations; (b) provide incentives and opportunities to establish standards that serve national needs; (c) encourage long-term growth for U.S. enterprises and promote efficiency and economic competition through harmonization of standards; and (d) further the policy of reliance upon the private sector to supply government needs for goods and services. The Act requires that Federal agencies adopt private sector standards, particularly those developed by standards developing organizations (SDOs), whenever possible in lieu of creating proprietary, non-consensus standards.

This action is compliant with the spirit and requirements of the NTTAA. This action allows for the use of the ASTM International standard known as Standard E1527-21 and entitled “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” By taking this action, EPA is fulfilling the intent and requirements of NTTAA.

The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before certain actions may take effect, the agency promulgating the action must submit a report, which includes a copy of the action, to each House of the Congress and to the Comptroller General of the United States. EPA submitted a report containing this rule 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 . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

For the reasons set out in the preamble, 40 CFR part 312 is amended as follows:

The proposed rule was published at 87 FR 16157 on March 22, 2022. The Petitioner filed comments in support of the petition reaffirming its commitment to apply for channel 15. No other comments were filed. We believe the public interest would be served by substituting channel 15 for channel 5 at Butte, Montana. According to the Petitioner, it has received many complaints from viewers unable to receive a reliable signal on VHF channel 5, and the Commission has recognized that VHF channels have certain characteristics that pose challenges for their use in providing digital television service. The Engineering Statement provided with the Petition confirmed that the proposed channel 15 contour would continue to reach virtually all of the population within the Station's current service area and fully cover the city of Butte. An analysis using the Commission's TVStudy software tool indicates that KXLF-TV's move from channel 5 to channel 15 is predicted to create an area where approximately 3,000 persons are predicted to lose service. The loss area, however, is partially overlapped by the noise limited contour of Scripps' owned CBS affiliate KPAX-TV, Missoula, Montana; KBZK(TV), Bozeman, Montana; and KRTV(TV), Great Falls, Montana. Once those other sources of CBS programming are factored into the loss analysis, the new loss area that would be created by the proposed channel substitution would contain less than 500 persons, a level of service loss the Commission considers to be de minimis.

This is a synopsis of the Commission's Report and Order, MB Docket No. 22-115; RM-11921; DA 22-1232, adopted November 29, 2022, and released November 29, 2022. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

The proposed rule was published at 87 FR 16156 on March 22, 2022. The Petitioner filed comments in support of the petition reaffirming its commitment to apply for channel 25. No other comments were filed.

The Report and Order substitutes channel 25 for channel 7 at Missoula, Montana. According to the Petitioner, it has received many complaints from viewers unable to receive a reliable signal on VHF channel 7, and the Commission has recognized that VHF channels have certain characteristics that pose challenges for their use in providing digital television service. The Engineering Statement provided with the Petition confirmed that the proposed channel 25 contour would continue to reach virtually all of the population within the Station's current service area and fully cover the city of Missoula. An analysis using the Commission's TVStudy software tool indicates that KPAX-TV's move from channel 7 to channel 25 is predicted to create a small area where 444 persons are predicted to lose service. The loss area, however, is partially overlapped by the noise limited contour of Scripps' owned television station KXLF-TV, Butte, Montana, which is also a CBS affiliate, and reduces the number who are predicted to lose CBS service to only 121 persons, which is a level of service loss the Commission considers to be de minimis. Concurrence from the Canadian government was required and has been obtained. This is a synopsis of the Commission's Report and Order, MB Docket No. 22-116; RM-11922; DA 22-1233, adopted November 29, 2022, and released November 29, 2022. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

The Commission will send a copy of the Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

This final rule amends the GSAR to make editorial corrections. As part of GSA's regulatory reform efforts, GSA made updates to the GSAM Matrix of Provisions and Clauses. During this process, designation and prescription errors connected to these GSAR clauses and provisions were found. This technical amendment corrects these designations and prescription errors and revises language regarding the incorporation of these provisions and clauses. There are no significant content changes to the GSAR as a result of this technical amendment.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993.

Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (codified at 5 U.S.C. 801-808), also known as the Congressional Review Act or CRA, generally provides that before a major 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 General Services Administration will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the CRA cannot take effect until 60 days after it is published in the Federal Register . This rule is not a major rule under 5 U.S.C. 804(2).

The statute that applies to the publication of the GSAR is the Office of Federal Procurement Policy statute (codified at title 41 of the United States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This rule is not required to be published for public comment, because it is a technical amendment that does not have a significant effect or impose any new requirements on contractors or offerors. This rule simply makes editorial changes.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) does not apply to this rule, because an opportunity for public comment is not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see Section IV. of this preamble). Accordingly, no regulatory flexibility analysis is required and none has been prepared.

This final rule does not contain any information collection requirements under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, GSA amends 48 CFR parts 515, 516, and 552 as set forth below: