The final rule that appeared in the Federal Register on September 19, 2022 (87 FR 57304), included non-substantive revisions to the introductory text of 7 CFR 225.16(d) that made the text consistent with other reverences in part 225 and used plain language. In making this change, paragraphs (d)(1) through (3) of § 225.16 were inadvertently removed leaving only the introductory text of § 225.16(d). This document corrects that error and restores the entirety of § 225.16(d). To conform with current Federal Register requirements, tables found in these restored paragraphs are revised to include headings that note their citation in 7 CFR part 225.

In addition, the definition of “documentation” in § 225.2 is renumbered to reflect the correct paragraph structure requirements for the Code of Federal Regulations. Finally, a separate, special memorandum will be issued in the future to correct a formatting error in table 1 to paragraph (e)(6)(iv) of § 225.7.

Accordingly, for reasons stated in the preamble, FNS amends 7 CFR part 225 by making the following technical corrections:

On November 4, 2022 (87 FR 66539), the NRC published a direct final rule amending its regulations in part 72 of title 10 of the Code of Federal Regulations to revise the NAC International, Inc. MAGNASTOR® Storage System listing in the “List of approved spent fuel storage casks” by adding Amendment No. 10 to Certificate of Compliance No. 1031. Amendment No. 10 incorporates a new metal storage overpack. In the direct final rule, the NRC stated that if no significant adverse comments were received, the direct final rule would become effective on January 18, 2023. The NRC did not receive any comments on the direct final rule. Therefore, this direct final rule will become effective as scheduled.

I. Introduction A. Statutory Background

In recognition of the significant impact that the activities of the Enterprises have on the U.S. housing finance system, market participants, and the broader economy, section 1321 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (12 U.S.C. 4501 et seq. ) (the Safety and Soundness Act or Act) requires the FHFA Director to review new Enterprise activities and to approve new Enterprise products before these activities and products can be offered to the market.

Specifically, the Act requires an Enterprise to provide “written notice” to the Director for a determination of whether a new activity is a new product subject to prior approval under section 1321. See section 1321(e)(2) of the Safety and Soundness Act (12 U.S.C. 4541(e)(2)). If the Director determines that the new activity is a new product, the Enterprise shall “obtain the approval of the Director . . . before initially offering the product.” See section 1321(a) of the Safety and Soundness Act (12 U.S.C. 4541(a)). In considering any request for approval of a new product, the Director shall determine whether the proposed new product is authorized pursuant to certain sections of the Enterprises' authorizing statutes, 1 in the public interest, and consistent with the safety and soundness of the Enterprise or the mortgage finance system. See section 1321(b) of the Safety and Soundness Act (12 U.S.C. 4541(b)).

Certain activities are excluded from the review and approval requirements under the Act, including: (1) the Enterprises' automated loan underwriting systems as in existence on July 30, 2008 (AUS), and any upgrades to the technology, operating systems, or software to operate the underwriting systems; (2) any modifications to mortgage terms and conditions or underwriting criteria relating to mortgages that are purchased or guaranteed by an Enterprise but that do not alter the nature of the underlying transaction as residential mortgage financing; and (3) activities that are substantially similar to the activities in (1) and (2) and to new products that have been approved by the Director (substantially similar activities). See section 1321(e) of the Safety and Soundness Act (12 U.S.C. 4541(e)). The Act prescribes timeframes for FHFA to complete its review and to provide the public with notice and an opportunity to comment on a proposed new product. See sections 1321(c) and (e) of the Safety and Soundness Act (12 U.S.C. 4541(c) and (e)).

FHFA adopted an interim final rule for Prior Approval for Enterprise Products which became effective on July 2, 2009, and which remains in effect until the effective date of this final rule. See interim final rule, 12 CFR part 1253. 2 On November 9, 2020, FHFA published in the Federal Register a Notice of Proposed Rulemaking on Prior Approval for Enterprise Products (Proposed Rule) that, if finalized, would replace the interim final rule. See Proposed Rule, 85 FR 71276. FHFA requested public comment on all aspects of the Proposed Rule. The final rule reflects adoption, clarifications, or changes based on the comments received, as well as other technical and conforming changes. A full discussion of the comments received, the Agency's responses, and a section-by-section analysis of the final rule are included in the subsequent sections.

FHFA received 17 comments on the Proposed Rule. Commenters included the Enterprises, National Association of Home Builders, National Taxpayer Union, American Enterprise Institute, Community Home Lenders Association, National Association of Federal Credit Unions, American Bankers Association, Mortgage Bankers Association, Center for Responsible Lending, Independent Community Bankers of America, Housing Policy Council, U.S. Mortgage Insurers, National Association of Realtors, Manufactured Housing Institute, Consumer Federation of America, and one lender. Most commenters were generally supportive of the Proposed Rule and many suggested areas where it could be improved or clarified.

Comments received and FHFA's responses are summarized by topic below. In general, commenters raised concerns with the proposed submission process for a new activity, one aspect of which provided that the determination of whether a new activity was a new product would be subject to Agency discretion. Some commenters praised the explicit inclusion of pilots in the scope of a new activity while also sharing their concerns about how pilots are conducted by the Enterprises. Other commenters preferred that pilots be excluded from the requirements of the final rule. Several commenters suggested further changes to the descriptions of a new activity and a new product, including an expansion of the exclusions to reference technology that assists the Enterprises in performing their core functions. Commenters also suggested additional public interest factors that should be considered when evaluating a new product, particularly within the context of the impact of a proposed new product on competition. Many commenters also noted that the Proposed Rule, unlike the interim final rule, did not include a provision for requesting confidential treatment of information submitted to FHFA. Lastly, commenters recommended that the final rule impose on FHFA a requirement to report on the Enterprises' new activity submissions and FHFA's decisions on those submissions.

Submission Process. FHFA proposed a notice process that would have required an Enterprise to make a single submission for a new activity and a new product (notice of new activity). FHFA would evaluate the notice and determine whether the new activity was subject to prior approval as a new product. The Director would make the new product determination based on whether the new activity merited public notice and comment on matters of compliance with the Enterprise's authorizing statute, safety and soundness of the Enterprise or the mortgage finance system, or serving the public interest. FHFA also proposed streamlined and simplified content for the notice of new activity that consolidated interrelated content from the sets of instructions in the interim final rule but would still be sufficient to conduct a complete assessment of associated risks and to weigh those risks against the benefits to public interest.

Commenters had varying views on the submission process. Two commenters supported the proposed submission process, with one noting that the scope of information was sufficient and guidelines for submission were appropriate “and should help FHFA develop public notices that provide potential commenters with relevant information about future Enterprise activities.” However, other commenters expressed concerns with and/or provided recommendations for the submission process. First, many found the breadth of information requested for a new activity disproportionately burdensome since only advance notice to FHFA is required by statute. These commenters instead viewed the scope of information as more appropriate for a request for prior approval of a new product. One commenter observed that the Proposed Rule requires the same information, at the same level of detail, for a new activity and for a new product. Another commenter urged FHFA to develop a streamlined process to permit the Enterprises to submit new activities to FHFA without the extensive detail required for new products. Commenters also believed that the valuable time and resources used to prepare detailed notices for new activities would inhibit the Enterprises' ability to pursue initiatives. In addition, the Enterprises believed that requiring an executive officer to certify that the notice of new activity did not contain material misrepresentations or omissions was unduly burdensome for a new activity (but not a new product) because it would entail establishing processes and dedicating resources to support such a certification. One Enterprise asserted that “robust internal controls are sufficient to ensure quality submissions [for a new activity] without the need for an accuracy and completeness certification to FHFA.”

Next, commenters recommended that the Enterprises, not FHFA, should make the initial determination on whether a new activity is a new product. Under that approach, the Enterprise would need to determine whether to submit either a notice of new activity or a request for prior approval of a new product. One commenter believed that the “. . . enhanced definitions of a new activity and a new product in the proposed rule are sufficient for an Enterprise to make that determination.” The commenter recommended that FHFA re-introduce from the interim final rule the concept of an Enterprise consulting with FHFA prior to submitting a notice of new activity to determine whether a new activity is a new product. Another commenter stated that “. . . whether FHFA ultimately adopts a one- or two-step submission process, the final rule should make clear that an Enterprise may withdraw a submission at any time.”

Lastly, some commenters expressed concerns about the level of discretion that the Director would have in determining whether a new activity was a new product. One commenter argued that the discretionary authority granted to the Director in the Proposed Rule appeared to circumvent Congress's requirement that all Enterprise offerings classified as new products be subject to public notice and comment. Other commenters were concerned that the discretion granted under the final rule could result in opaque decision-making.

After careful consideration, FHFA is modifying the submission process to address commenters' concerns about burden. FHFA agrees with commenters that the information required for FHFA to review a new activity (versus a new product) can be distinguished without compromising FHFA's ability to complete its assessment. FHFA also agrees that even for the review of a new product the information requirements could be further streamlined. The final rule reflects changes accordingly. These changes should alleviate some of the burden associated with the submission process and conserve valuable resources at the Enterprises, as well as FHFA. However, FHFA disagrees with the Enterprises' assertion that requiring an executive officer to certify to the accuracy of a new activity submission is unduly burdensome and will retain that requirement in the final rule. As stated by one Enterprise, it already has robust internal controls and governance processes for developing and offering a new activity, and these controls and processes invariably involve an executive officer's judgement, expertise, and approval. Therefore, FHFA does not believe it is an undue burden to require an executive officer to certify to the accuracy of the information contained in a notice of new activity.

In terms of allowing an Enterprise to make the initial determination whether to provide prior notice of a new activity or request prior approval for a new product, FHFA still believes that it is not practical to require an Enterprise to identify in advance a new product—as distinct from a new activity that is not a new product—for purposes of determining which type of submission to make to the Agency. The Act does not provide definitions for a product or an activity. As a result, the Proposed Rule provided distinguishing characteristics to implement the statutory mandate for the Director to approve a new product prior to an Enterprise offering that product. The statutory standard for approving a new product includes determinations that the product complies with an Enterprise's authorizing statute, is in the public interest, and is consistent with the safety and soundness of the Enterprise or the mortgage finance system. See section 1321(b) of the Safety and Soundness Act (12 U.S.C. 4541(b)). Because of the lack of statutory definitions, and the breadth of the statutory considerations relevant to approval, FHFA concludes that a more precise definition of a new product is not feasible, and that the Director must be able to consider each new activity, and whether that new activity should be deemed a new product, based on a broad consideration of all the facts and circumstances it presents. 3

However, FHFA agrees that the final rule should have an explicit provision that allows an Enterprise to consult with FHFA prior to submitting a notice of new activity. If, based on that consultation, the Director determines that a new activity is a new product, then the review process could be expedited. FHFA believes that including a consultation provision and pairing it with abbreviated submission requirements for new activities and more detailed information requirements for new products (that still reflect streamlining of the information requirements from the Proposed Rule) should facilitate the Enterprises' compliance with the final rule. Further, even though the Proposed Rule implicitly permitted an Enterprise to withdraw a submission at any time, FHFA has also included language in the final rule that explicitly permits an Enterprise to discontinue its efforts to pursue a new activity once the Director has determined it to be a new product.

Timeframes for FHFA Review and Public Comment Period. FHFA proposed that before commencing any new activity, an Enterprise must submit a notice of new activity, which would not be considered complete and received for processing until the information required by the Proposed Rule had been submitted, including any follow-up information requested by FHFA. After FHFA deemed the submission complete and received, the Director would have 15 days to determine whether the new activity was a new product. If the Director determined that the new activity was a new product, FHFA would publish a public notice soliciting comments on the new product for a 30-day period. The Director would approve or disapprove the proposed new product no later than 30 days after the close of the public comment period. The Proposed Rule defined “days” as calendar days. The 15 days for FHFA to review a new activity and make a new product determination, the 30-day public comment period, and the 30 days for FHFA to complete its review of a proposed new product following the close of the public comment period are established by statute. The Act also provides that the Enterprise may offer the new activity or new product to the market if FHFA does not render a decision within the statutory timeframes for review.

Several commenters noted that the Proposed Rule did not provide specific timeframes for FHFA to deem a submission complete or publish a notice for public comment once the Director determined that a new activity was a new product and recommended that the final rule include such timeframes. One commenter stated that “[a]llowing FHFA unlimited time to notify the Enterprises that a submission is complete and received practically renders moot the expedited 15-day review,” and that this unlimited time period should be reconsidered. Another commenter argued that the 15-day period for a new activity review should start the day that FHFA receives the notice and that “the period should be tolled . . . any time FHFA determines a submission to be incomplete . . . resuming only when the Enterprise delivers the information requested.” Another commenter believed that the final rule should establish a specific timeframe for FHFA to prepare a public notice, stating that “at most, a five business-day deadline for FHFA to publish the public notice should provide FHFA with a reasonable period to prepare the notice based on the information provided by the Enterprise.” A few commenters also recommended that the final rule have a comment period longer than 30 days. One commenter recommended that FHFA “provide, within the statutory constraints, the public with more time to provide comments on new products” by excluding “all weekends and holidays (as is the current practice under the interim final rule).”

After considering these comments, FHFA is not including in the final rule specific timeframes for deeming a submission complete and received or for publishing a public notice. However, FHFA will act expeditiously in its review of a submission, and the final rule states that FHFA will publish a public notice “without delay.” FHFA recognizes that the Act is designed to ensure that FHFA moves quickly in its review. However, the Agency also recognizes that it has a responsibility to conduct due diligence and review a submission to ensure that the Enterprise has provided the required information for the Director to make the determination of whether a new activity is a new product. Similarly, FHFA believes that it has a responsibility to carefully prepare a notice for public comment that accurately reflects the Enterprise's proposed new product and provides the public with enough information to provide meaningful comments. Regarding comments to extend the public notice and comment period, FHFA will apply the practice it uses when publishing proposed and final regulations, which is to publish the public notice on the Agency's website the same day that it submits it to the Federal Register . Given that the Federal Register is unlikely to publish the public notice for a new product immediately, the public will have the opportunity to preview the notice on FHFA's website before the comment period officially begins.

Standards for Approval. In line with the Act, FHFA proposed that the Director may approve a new product if the Director determined that it was authorized under the relevant sections of the Enterprise's charter, in the public interest, and consistent with the safety and soundness of the Enterprise or the mortgage finance system. Two commenters recommended enhancements to the final rule that would also create explicit review standards for a new activity. One commenter suggested that a new activity should be subject to review under four standards: (1) any applicable law; (2) the Director's safety and soundness authority; (3) an Enterprise's authorizing statute; and (4) the public interest, and that the final rule should give equal weight to safety and soundness and the public interest. Another commenter recommended that FHFA establish “a list of questions to evaluate the product or activity[, which] would provide a baseline that would ensure more consistent and objective evaluation of the public interest . . .”

After considering these comments, FHFA is not changing the standards for approval. The standards for approval of a new product are established by statute. These standards are not weighted, as suggested by one commenter, and are considered comprehensively. The Act does not establish standards for approval for a new activity because unlike a new product, a new activity need not be approved by the Director but instead is reviewed to determine whether it is a new product. As noted by commenters, FHFA has the authority to review new activities and new products under any applicable regulation or statute, as part of FHFA's authority to review for safety and soundness and for consistency with an Enterprise's statutory mission. Also, FHFA believes that establishing a list of questions to review a new activity or approve a new product is duplicative of the public interest factors that are to be considered by the Director in determining whether a new activity is a new product and in determining whether to approve a proposed new product. The public interest factors are discussed in more detail in Section D below.

Scope of New Activity. FHFA proposed that an “activity” is a business line, business practice, offering or service, including a guarantee, a financial instrument, consulting, or marketing, that the Enterprise provides to the market, and defined it as a “new” activity if the Enterprise is not engaged in the activity as of the effective date of the final rule or if the Enterprise enhances, alters, or modifies an existing activity. In addition, the Proposed Rule required that a new activity must be described by one or more of the following criteria: (1) requires a new type of resource, type of data, policy, or modification to an existing policy, process, or infrastructure; (2) expands the scope or increases the level of credit risk, market risk, or operational risk to the Enterprise; (3) involves a new category of borrowers, investors, counterparties, or collateral; (4) substantially impacts the mortgage finance system, the Enterprise's safety and soundness, compliance with the Enterprise's authorizing statute, or the public interest; (5) is a pilot; or (6) results from a pilot. FHFA specifically requested comment on whether the criteria were unambiguous, transparent, and sufficient for identifying a new activity, and if not, how they could be improved.

When responding to FHFA's questions, commenters fell into two distinct groups. Some commenters believed the criteria to be unambiguous and sufficient for identifying a new activity, while other commenters did not. Among the former, one commenter viewed the criteria as “inclusive of most scenarios that [an Enterprise] could possibly face when adding a new activity or product.” Another commenter supported the more objective approach to identifying new activities as contained in the Proposed Rule rather than relying solely on exclusions as had been done in the interim final rule. However, other commenters viewed the criteria as overly broad and in need of clarification. One commenter stated that the “definition of new activity should not be so broad that it includes every minor deviation of an existing program or small process/policy changes.” Other commenters, including the Enterprises, were concerned that the criteria could capture a large volume of routine activities, including revisions and updates to internal risk management policies and selling and servicing guides. Some commenters recommended that FHFA clarify the criteria by including a materiality standard or re-introducing qualifiers from the interim final rule, such as “significantly,” “ de minimis,” or numerical thresholds, to ensure that immaterial increases in risk do not trigger notification under the final rule.

FHFA purposely designed the criteria to be broad because, as recognized by a few commenters, the Agency's review of new activities functions as a screening process for identifying new products. While FHFA is not changing the criteria to narrow their scope, FHFA agrees that certain changes to improve clarity are appropriate and would enhance Enterprise compliance with the final rule.

FHFA is not adopting the commenters' suggestions to add qualifying language or numerical thresholds to the criteria because the suggestions do not resolve the issues that FHFA identified with the interim final rule. In the Proposed Rule, FHFA sought not only to describe what is a new activity (rather than what is not a new activity as was the case in the interim final rule) but also to establish objective criteria that distinguish a new activity from an on-going activity. Furthermore, FHFA believes that it is difficult to measure and consistently apply numerical thresholds or other qualifiers such as “ de minimis,” across all Enterprise business lines, business practices, offerings, and services.

Exclusions. In conjunction with the proposed criteria for identifying a new activity, the Proposed Rule incorporated the statutory exclusions from the review and approval requirements of the Act. The Proposed Rule described the statutory exclusions, which are either the specific activities or substantially similar activities as described in Section I.A above. The specific activities excluded from the scope of the Proposed Rule were: (1) the Enterprises' AUS (Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Product Advisor) and upgrades to the technology, operating system or software to operate an AUS; and (2) any modifications to mortgage terms and conditions or underwriting criteria relating to mortgages that are purchased or guaranteed by an Enterprise but that do not alter the nature of the underlying transaction as residential mortgage financing. The Proposed Rule also made explicit that business practices, transactions, or services performed or conducted solely to facilitate the administration of an Enterprise's internal affairs would be excluded as well. FHFA requested comment on how the exclusion for the AUS should apply to existing technology systems that are related but independent from the AUS, as well as to future technology systems, and whether the exclusions overall should be narrowed or expanded. Comments and questions related to the exclusions for substantially similar activities are addressed in a separate discussion below under the heading “ Exclusions for Substantially Similar Activities.”

In responding to the questions about the AUS exclusion and whether the exclusions overall should be expanded, one commenter was supportive of the proposed exclusions, believing them to be appropriate and consistent with the “need for a rigorous review process that is not unduly time-consuming or stifling.” Another commenter stated that the exclusion for activities involving the AUS should be narrowed and apply only to the capabilities of the AUS as of the effective date of the final rule. The commenter further argued that “any new benefit, protection, right, relief, or change to the origination process—as well as activities traditionally associated with the primary mortgage market—should be considered new activities and outside the scope of the proposed exclusion.” However, several commenters recommended that the exclusions be expanded to include technology systems that are related but independent from an AUS, such as the models and applications that assist an AUS in assessing the risk of a mortgage. One Enterprise asserted that an AUS is not a single technology system but is a collection of interrelated and integrated technology systems that embody the mortgage terms and conditions or underwriting criteria that are published in the Enterprises' respective selling and servicing guides, and therefore should be excluded, as was intended by the statute. The commenters who favored expanding the exclusion believe that subjecting these technology systems to the requirements of this final rule could unduly delay updates that incorporate new types of data or resources, potentially rendering the AUS obsolete over time because the market is moving or shifting faster than an Enterprise can update it through the new activity or new product process, and consequently exposing the Enterprise to increased risk. Two commenters and the Enterprises requested that the exclusions be expanded to name the actual integrated or interrelated technologies, such as Collateral Underwriter and Loan Collateral Advisor, among others. One commenter also suggested that technology innovations that merely enhance ease of access to housing data should also be excluded from the requirements of the final rule.

FHFA has carefully considered the commenters' suggestions for expanding the exclusion related to the AUS and believes it should remain as proposed. In retaining the exclusion as proposed, FHFA is striking a balance between excluding an activity that is part of an Enterprise's core business from prior notice requirements and including an activity that introduces new technology to the mortgage industry that may serve a primary market function. However, FHFA recognizes that some technologies perform functions similar to the AUS because they assist in applying the Enterprise's underwriting criteria and assessing the credit risk of the mortgage and that other technologies mirror the mortgage terms and conditions and underwriting criteria that are reflected in an Enterprise's selling and servicing guide. As a result, FHFA is revising the exclusion for substantially similar activities to include the technologies (other than the AUS) that apply underwriting criteria or mortgage terms and conditions to residential mortgages purchased or guaranteed by the Enterprises so that changes to systems such as Fannie Mae's Collateral Underwriter or Loan Delivery and Freddie Mac's Loan Collateral Advisor or Loan Selling Advisor do not require a notice of new activity. By revising the exclusions for substantially similar activities rather than the exclusions for an Enterprise AUS, FHFA achieves the balance it is seeking. In contrast to activities that fall under the AUS exclusion, an Enterprise must submit advance notice to FHFA before engaging in a substantially similar activity (notice of substantially similar activity). By reviewing a notice of substantially similar activity, the Agency can assess technological enhancements to ensure that they are substantially similar to the AUS or mortgage terms and conditions or underwriting criteria and are not a new activity or a new product.

As discussed previously, some commenters feared that the final rule could capture a large volume of routine activities, including revisions and updates to the Enterprises' internal risk management policies and selling and servicing guides. Conversely, another commenter felt that the public and FHFA should have the opportunity to assess potential changes to an Enterprise's underwriting criteria that would materially impact its credit box or consumer access to credit because the Enterprises “essentially set the rules for the market.” Commenters were also concerned that the underwriting and servicing policy changes put in place in response to the COVID-19 pandemic could have been treated as new activities under the Proposed Rule even though the changes did not result in a new product offering to the market. In a related comment, both Enterprises mentioned the significant number of lender letters and bulletins issued that addressed housing issues related to the pandemic, which kept borrowers and renters in their homes and made closings possible under social distancing requirements and shutdowns. Other commenters mentioned new loss mitigation activities made available during the pandemic that should be explicitly excluded, such as the introduction of the Enterprises' new home retention repayment option that allows borrowers to defer unpaid mortgage payments and turn them into a noninterest-bearing balance due when the mortgage is paid off.

FHFA disagrees that routine activities, updates to the Enterprises' respective selling and servicing guides, or changes to underwriting criteria or mortgage terms and conditions are captured or should be captured under the final rule. In reviewing the comments, FHFA noted that many commenters did not seem to understand the scope of the exclusions, which, in keeping with the Act, are designed to exclude changes to mortgage terms and conditions or underwriting criteria relating to residential mortgages purchased or guaranteed by an Enterprise, such as an Enterprise's core activities involving its Single-Family and Multifamily business lines. For example, changes to an Enterprise's underwriting criteria or servicing and loss mitigation policies in response to the COVID-19 pandemic would not require an Enterprise to submit a notice of new activity to FHFA. However, several commenters seemed to believe that such changes, though specifically excluded by the Act, could and would be considered a new activity and require the Enterprise to submit a notice of new activity. FHFA believes the Act and the Proposed Rule clearly exclude activities that involve any modification to the mortgage terms and conditions or underwriting criteria for residential mortgage financing, such as those activities that resulted in temporary loss mitigation policies or underwriting flexibilities or restrictions in response to the pandemic. However, given that commenters had difficulty understanding the exclusions, FHFA is making changes to enhance clarity but retain the scope of the exclusions as proposed.

The Enterprises requested that the exclusions in the final rule be expanded to exclude activities under the Duty to Serve Regulation (12 CFR part 1282, subpart C). The Enterprises argued that those activities have already undergone a review by FHFA and were made available for public notice and comment, and therefore it would be a duplicative regulatory burden to make them subject to the final rule. The Enterprises also requested that the exclusion for any Enterprise business practice performed solely to facilitate the administration of an Enterprise's internal affairs be revised to make clear that the activities performed to mitigate their risk on mortgages that they purchase or guarantee are also excluded from the definition of a new activity.

FHFA is not adopting the Enterprises' requested changes to the exclusions in the final rule. An FHFA non-objection to an Enterprise's Duty to Serve plan—or an Equitable Housing Finance Plan, for that matter—applies only to the plan itself and not to the underlying activities. Therefore, it is not a duplicative regulatory burden but rather completely appropriate for such activities to be subject to the final rule if they meet one or more of the new activity criteria. Regarding the exclusion for business practices internal to the Enterprises, FHFA is not revising this exclusion because, as proposed, the exclusion already captures those risk mitigation activities that are internal to an Enterprise such as those mentioned by Freddie Mac in its comment letter (“establishing internal controls, updating obsolete systems and technologies, and improving efficiencies related to analyzing, processing, and documenting internal information”). However, if an Enterprise's risk mitigation activities are ultimately provided to the market in the form of an offering or service, they are no longer exclusively internal to the Enterprise and will be subject to the final rule if the activity meets one or more of the new activity criteria and is otherwise not excluded.

Exclusions for Substantially Similar Activities. As mentioned previously, FHFA proposed an exclusion for substantially similar activities as described in Section I.A. above. Several commenters found this exclusion confusing, with one stating that the Proposed Rule “provides no clarity or definition as to what `substantially similar' means for purposes of [the] exclusion.” Another commenter recommended the removal of the provision in the final rule that stated that if an activity met one or more of the new activity criteria, it could not be considered substantially similar. A few commenters requested that the final rule clarify that the exclusion for an activity that is substantially similar to an approved new product is available to “either” Enterprise and not only to the Enterprise that did not obtain the original new product approval. Lastly, one Enterprise suggested that existing and future technology systems that are integral to an Enterprise's mortgage terms, conditions, and underwriting and have functions similar to the AUS could be considered “substantially similar” to the AUS system or to modifications to mortgage terms, conditions and underwriting criteria.

In response to these comments, FHFA is changing this section in the final rule to make it clear that this exclusion applies to “either” Enterprise. FHFA is also revising the final rule to adjust and clarify the scope of the exclusion in two principal ways. First, the final rule distinguishes the criteria used for determining whether an activity is substantially similar to activities that are otherwise excluded from the review and approval requirements under the Safety and Soundness Act ( i.e., changes to the AUS, mortgage terms and conditions, and underwriting criteria) from the criteria used for determining whether an activity is substantially similar to a new product that an Enterprise is authorized to offer to the market. The criteria for determining whether an activity is substantially similar to a new product are more rigorous than for determining whether an activity is substantially similar to an excluded activity. For example, activities like modifying the Enterprises' loan delivery systems or other technology systems to apply updated Qualified Mortgage criteria are not likely to merit public notice and comment because—like updates to the statutorily excluded AUS—they tend to be routine activities. However, under the Proposed Rule, this type of update to a technology system would require a notice of new activity. Similarly, simple changes to the risk scores provided by Collateral Underwriter or Loan Collateral Advisor may not satisfy the criteria for substantially similar and could require a notice of new activity each time a modification is made. Treating these types of modifications as new activities would be unduly burdensome on the Agency and on the Enterprises. To mitigate this burden, FHFA is revising the final rule so that the Director may determine that any technology that applies mortgage terms and conditions or underwriting criteria relating to residential mortgages that are purchased or guaranteed by an Enterprise or any modifications to those technologies ( e.g., modifications to Collateral Underwriter and Loan Collateral Advisor) are substantially similar to the statutorily excluded AUS, mortgage terms and conditions, or underwriting criteria.

Second, with respect to activities that are substantially similar to new products, FHFA recognizes that describing what are not substantially similar activities for purposes of the exclusion is potentially confusing and is revising this section to affirmatively describe what are substantially similar activities. Additionally, FHFA is slightly expanding the scope of the exclusion in the final rule in a manner that is consistent with the goal of screening to confirm that the activity is not a new activity. For example, where the Proposed Rule provided that an activity would not be substantially similar to an approved new product if the activity required a new resource, type of data, policy, process, or infrastructure, the final rule provides that the Director may determine that an activity is substantially similar to an approved new product if the activity requires the same or similar resource, type of data, policy, process, or infrastructure as the approved new product. These changes should provide the clarity that commenters and the Enterprises are seeking for this exclusion.

Treatment of Pilots. As part of the new activity description and exclusions, FHFA proposed to include activities that are pilots or that result from a pilot as among the criteria that would identify a new activity. Under the Proposed Rule, a pilot was defined as an activity that had a defined term and scope for the purposes of understanding the viability of a new offering, and FHFA recognized that pilots are referred to in different ways, such as a testing initiative, test and learn, or temporary authorization.

FHFA received a wide range of comments about including pilots as one of the criteria for identifying a new activity. Several commenters supported their explicit inclusion in the scope of a new activity to help minimize “pilot creep.” Some commenters suggested that the final rule should have formal constraints on the duration and volume for pilots that would require the Enterprise to submit a new notice when the pilot reached those limits. Other commenters and the Enterprises took the opposite position and stated that including pilots in the scope of a new activity is too broad and would stifle innovation. One commenter argued that the word “pilot” should be removed from the definition of a new activity “. . . as the word has never been clearly defined or consistently applied throughout the industry.” The same commenter also suggested that pilots should be excluded from the new activity description. Finally, several commenters stressed that there is a lack of transparency and inclusivity for pilots, giving some market participants an advantage over others, which they believe FHFA should address through the final rule.

FHFA disagrees with the commenters who suggested that pilots should be excluded from the scope of a new activity. As noted by several other commenters, a pilot is how an Enterprise typically determines the viability of a future offering. In general, Enterprise products and activities have significant effects on the market and market participants. Regardless of the size of a pilot, it could have a significant effect on the public interest. Therefore, it is critical for FHFA to review pilots as new activities to determine whether they are indeed new products that merit public notice and comment.

FHFA agrees with commenters that there should be process requirements for reviewing pilots beyond what was proposed, and has added language to the final rule that requires an Enterprise to submit a notice of new activity both when a pilot is initiated and when modifications to the volume and duration of the pilot are made after it commences. FHFA recognizes that pilots can extend for lengthy periods of time or change form as a natural consequence of conducting exploratory business, which is why the notice of new activity, as proposed, required the Enterprise to establish the parameters, such as the duration and volume of the pilot. FHFA also believes that requiring a subsequent notice of new activity for a pilot when there are changes to the duration and volume would help manage “pilot creep” and facilitate a determination of whether the activity is a new product that merits public notice and comment.

While several commenters recommended that the final rule should require an Enterprise to be inclusive when selecting participants for a pilot, FHFA believes that such requirements are not within the scope of this final rule and are already in place in the broader regulatory framework governing an Enterprise's activities. FHFA's Minority and Women Inclusion and Diversity Regulation at 12 CFR 1223.2 requires the Enterprises “to promote diversity and ensure . . . the inclusion and utilization of minorities, women, individuals with disabilities, and minority—, women—, and disabled-owned businesses at all levels, in management and employment, in all business and activities, and in all contracts for services of any kind.” That Regulation governs not just an Enterprise's new activities as described in the final rule, but all Enterprise activities.

FHFA proposed eight factors that the Director may consider when determining whether a new product is in the public interest. These are the same factors on which the Director would seek public comment to inform the decision as to whether to approve or disapprove a new product. The public interest factors fall into three broad categories: (1) the impact of the new product on the Enterprise's public mission; (2) the impact of the new product in terms of risk to the mortgage finance or financial system; and (3) the impact of the new product on the competitiveness of the market. In addition, the Director retained the discretion to seek public comment on and consider any other public interest factors determined to be appropriate to consider during the approval process.

More than half of the commenters, including both Enterprises, provided comments on factors that FHFA should or should not include in the consideration of whether a new product is in the public interest. Several commenters suggested additional factors that, if incorporated, would inform the degree to which the new product would promote competition in the marketplace, or to the contrary would result in less competition. One commenter suggested that FHFA include a factor focused on the degree to which a new product would enable the Enterprise to “compete against market participants that they effectively regulate.” Several commenters requested that the public interest factors make explicit reference to the degree to which the new product would have a disruptive or inequitable impact on different types or sizes of lenders. While most commenters sought the inclusion of factors that would contribute to an evaluation of whether the new product would harm competition, other commenters (including the Enterprises) viewed the public interest factors as overly protective of competition, with one Enterprise arguing that the public interest analysis “should focus on protecting competition, not competitors.” These commenters requested the removal of the public interest factor that prompts an evaluation of the degree to which the new product is being or could be supplied by other market participants.

FHFA has considered the feedback from commenters and has determined that the public interest factors, as proposed, enable FHFA to conduct a holistic evaluation of the impact of a new product on competition. There are numerous ways that a new product could help or hinder competition. The Proposed Rule specifically enumerated two such factors for evaluation—the degree to which the new product would overcome natural market barriers or inefficiencies and the degree to which the new product could be supplied by other market participants. These factors are in addition to a catchall provision that prompts the evaluation of the degree to which the new product would promote competition in the marketplace, or to the contrary would result in less competition. Together, these factors will enable FHFA to seek public comment and form a holistic and balanced view of the impact of the new product on competition.

In addition to the comments related to competition, commenters suggested a variety of public interest factors that should be included in FHFA's evaluation. For example, one commenter wanted the public interest factors to prompt an evaluation of the impact of the new product on housing costs for low- and moderate-income borrowers, while another commenter indicated that the public interest factors should include the degree to which the new product would aid in addressing natural disasters. FHFA has considered these comments and determined that the concerns are adequately addressed by specific public interest factors (such as the degree to which the new product serves underserved markets and housing goals) or through the discretion retained by the Director to seek public comment and evaluate any other appropriate factor. The discretion retained by the Director provides an avenue to address considerations that may not be relevant for all new products at all times, such as the degree to which the new product would aid in addressing natural disasters.

Confidential Treatment of Enterprise Submissions; Public notices. FHFA did not propose explicit protections for confidential information provided to FHFA by an Enterprise in connection with a notice of new activity. Several commenters, including both Enterprises, recommended that the final rule include such protections. Reasons cited included the need to avoid discouraging innovation, the need to protect an Enterprise's ability to comply with contractual obligations to third parties, and the need to protect an Enterprise from competitive harm. One commenter noted that “this is one of the trickiest elements of the entire Proposed Rule,” acknowledging that it is “challenging to provide sufficient details to elicit meaningful public commentary without requiring an Enterprise to disclose key business details” which might “discourage future innovations.” The Enterprises also commented that the treatment of confidential information in the Proposed Rule was inconsistent with FHFA's treatment of confidential information in other contexts, such as its rules on application of the Freedom of Information Act (FOIA) (5 U.S.C. 552; 12 CFR part 1202) and Enterprise Duty to Serve (12 CFR 1282.32(g)(2)). The Enterprises noted that, at a minimum, FHFA should provide the same protections for information contained in a new activity or new product submission that FHFA provides for many other communications between FHFA and its regulated entities.

FHFA has considered the comments and determined that no changes to the treatment of confidential information are warranted for the final rule. FHFA's treatment of confidential information in the final rule is appropriate to the context and in line with the intent of the underlying statute.

An Enterprise may request that information provided to FHFA in any context, including as part of a new activity or new product submission, be afforded protection from public disclosure under FOIA and FHFA's implementing regulation, 12 CFR part 1202. The fact that the final rule does not mention FOIA does not mean protections provided to an Enterprise under FOIA are unavailable. However, FOIA protections are triggered only when a member of the public requests that FHFA disclose information that an Enterprise has requested be kept confidential. As a general matter, FOIA does not limit or preclude FHFA from disclosing confidential, proprietary, or other non-public information at its own initiative. FHFA's independent decision to disclose non-public information in connection with the publication of a notice soliciting public comments on a proposed Enterprise new product is governed by FHFA's Availability of Non-public Information Regulation (12 CFR part 1214).

FHFA's Availability of Non-public Information Regulation grants the Director broad discretion to authorize the disclosure of non-public information. The Director's discretion is informed by statutory duties under the Safety and Soundness Act, including duties to ensure that the Enterprises operate in a safe and sound manner, that the operations and activities of the Enterprises foster liquid, efficient, competitive, and resilient housing finance markets, and that the activities of the Enterprises and the manner in which they operate are consistent with the public interest. The Director's exercise of discretion is also subject to privacy and other laws and regulations that may limit certain disclosures. Within this complex framework, FHFA must always be mindful of the need to protect sensitive information from public disclosure. Where the Director exercises discretion to authorize disclosure of non-public information, the Director, in view of the statutory and regulatory framework that governs such disclosure, balances the need for disclosure against other statutory responsibilities that may be facilitated by protecting sensitive information.

Striking the appropriate balance is context specific. Where the statutory or regulatory framework requires or encourages FHFA to publish the regulatory submissions prepared by an Enterprise or a Federal Home Loan Bank, FHFA's practice has been to omit confidential information from those publications ( e.g., Duty to Serve Underserved Markets Plans). In some cases—for example, under the Enterprise Resolution Planning Regulation (12 CFR part 1242) and the Federal Home Loan Bank Housing Goals Regulation (12 CFR part 1281)—this practice is facilitated by requesting that the regulated entity segregate confidential and non-confidential information into separate documents so that the non-confidential submissions can be published in their entirety.

The final rule strikes the appropriate balance between the need for disclosure and protecting sensitive information. In recognition of the fact that a substantial portion of an Enterprise's new product submission is likely to contain information that an Enterprise would prefer to remain confidential, FHFA does not expect to publish the submission or supporting documentation in whole. Instead, FHFA will review the submissions and, based on the information it contains, prepare a notice that provides the public with enough information to comment on the extent to which the proposed new product would serve the public interest. The public notice may include information that an Enterprise would prefer to be kept confidential. However, this approach is consistent with the statutory intent that FHFA disclose information to the public about a potential Enterprise new product prior to it being offered to the market. But for the statute, this information customarily would not be made public. The Director would make any such disclosures in view of the regulatory framework that governs FHFA's disclosure of non-public information, the statutory intent underpinning the final rule, and the Director's other statutory duties.

While some commenters expressed the need to protect the confidentiality of Enterprise submissions, most commenters sought greater transparency into Enterprise new activities. Commenters expressed various perspectives on how transparency could be enhanced. Several commenters suggested that FHFA should report on Enterprise new activities on a monthly, quarterly, or annual basis. Commenters' suggestions on the content of that reporting can be grouped into two categories—transparency about the new activities themselves and transparency into FHFA's decision-making.

With respect to the new activities, one commenter noted that the reporting should identify the Enterprise that submitted the notice and describe the basic parameters of a proposed activity, but not be so specific as to disclose operational details that might reveal confidential aspects of the work under development “that are not ready for public consumption.” In contrast, another commenter seemed to suggest that reporting on a new activity should be ongoing and include a list of all new activities and the market participants involved. Along the same lines, another commenter recommended that FHFA conduct an ex post evaluation of each new product after six months and that the resulting analysis should be made publicly available.

Several commenters also requested that FHFA publish a summary of its determinations on Enterprise new activity submissions. One commenter noted that this disclosure could provide some insight into Enterprise reaction to market trends and would give stakeholders a more informed “view of the dedication of Enterprise time and resources to innovation and a clearer picture of the types of activities that FHFA will and will not deem to be permissible for an Enterprise[ ] to pursue.” Another commenter remarked that in the absence of insight into why a proposed product was denied approval, the Enterprises and other market participants might refrain from investing human and financial resources into developing Enterprise new products.

FHFA agrees with the commenters suggestions that the final rule should have a provision that requires Agency reporting on the Enterprises' new activity and new product submissions and FHFA's decisions. FHFA anticipates leveraging existing reports, such as the Annual Report to Congress or annual Performance and Accountability Report, to include a section that identifies new activity and new product submissions by Enterprise, describes the basic parameters of proposed activities or products, and summarizes FHFA's new product determinations, approvals, and disapprovals and the basis for those decisions. Reporting under this new provision would omit confidential and proprietary information not already published in connection with the public notice for a new product since the report is for information only and the public would not be asked to comment.

Section 1253.1 of the final rule sets out the purpose and authority of the rule, which is to implement the Director's authority under section 1321 of the Safety and Soundness Act to review and approve new Enterprise products before they are offered to the market. Section 1253.2 of the final rule defines key terms used in the regulation. Of particular significance, the final rule defines “activity” as a business line, business practice, offering, or service, including a guarantee, a financial instrument, consulting or marketing, that the Enterprise provides to the market either on a standalone basis or as part of a business line, business practice, offering, or service. While this definition was implied by the Proposed Rule, it was not stated explicitly. In line with the Proposed Rule, § 1253.2 of the final rule also defines “pilot” as an activity that has a limited term and scope for purposes of evaluating the viability of the activity, regardless of the name assigned to the activity. The word “limited” has been added to enhance clarity. “New activity” and “new product” have the meanings assigned to them under §§ 1253.3 and 1253.4 of the final rule, respectively.

New Activities. Section 1253.3 of the final rule describes the criteria for identifying a new activity and describes the activities which are excluded from the review and approval requirements by statute. Because the final rule includes an explicit definition for “activity,” the structure of this section has changed from the Proposed Rule to reflect that addition and to improve clarity. A threshold criterion for distinguishing an ongoing activity from a new activity is timing. Under § 1253.3(a)(1) of the final rule, an activity is a “new activity” if it is not engaged in by the Enterprise on or before the effective date of the regulation. However, § 1253.3(a)(2) of the final rule provides that if an Enterprise does engage in an activity on or before the effective date of the regulation, but the Enterprise enhances, alters, or modifies the activity after the effective date of the regulation so as to: (1) require a new resource, type of data, policy (or modification to an existing policy), process, or infrastructure; (2) expand the scope or increase the level of credit risk, market risk, or operational risk to the Enterprise; or (3) involve a new category of borrower, investor, counterparty, or collateral, then the resultant activity would be considered a “new activity.” This approach simplifies the criteria for determining whether an activity is a new activity that was presented in the Proposed Rule without altering the scope of activities captured.

Section 1253.3(a)(3) and (4) of the final rule include two additional categories of new activities that are intended to comprehensively capture an Enterprise's activities related to pilots. Section 1253.3(a)(3) of the final rule classifies as a new activity: (1) any pilot engaged in by an Enterprise after the effective date of the regulation; and (2) any modification to the volume or duration of a pilot that occurs after the effective date of the regulation, regardless of whether the Enterprise initially engaged in the pilot before or after the effective date of the regulation. Section 1253.3(a)(4) of the final rule captures the transition from a pilot into an ongoing activity, regardless of whether the Enterprise initially engaged in the pilot before or after the effective date of the regulation. While an Enterprise's activities related to pilots are likely to also fall within the scope of § 1253.3(a)(1) or (2) of the final rule, including targeted provisions on pilots in the final rule emphasizes FHFA's commitment to closely scrutinize them. For this reason, the final rule expands the scope of pilots captured as new activities to include modifications to the volume or duration of a pilot. Unless a pilot or an activity resulting from a pilot falls into one of the exclusions set forth at § 1253.3(b) of the final rule, an Enterprise must submit a notice of new activity or a request for prior approval as a new product, as appropriate.

The final rule does not reflect one element of the new activity description from the Proposed Rule. Section 1253.3(a)(3)(iv) of the Proposed Rule provided that an activity could be a new activity if it would substantially impact the mortgage finance system, the Enterprise's safety and soundness, compliance with the Enterprise's authorizing statute, or the public interest. On further reflection, FHFA has determined that it would be unreasonable to hold the Enterprises to account for failing to file a notice of new activity based on the subjective determinations required by this provision.

Exclusions. As noted above, the following activities are excluded from the review and approval requirements under the Safety and Soundness Act: (1) the Enterprises' AUS, and any upgrades to the technology, operating system, or software to operate the underwriting system; (2) any modifications to mortgage terms and conditions or underwriting criteria relating to mortgages that are purchased or guaranteed by an Enterprise but that do not alter the nature of the underlying transaction as residential mortgage financing; and (3) substantially similar activities, as defined in Section I.A above. See section 1321(e) of the Safety and Soundness Act (12 U.S.C. 4541(e)). Section 1253.3(b) of the final rule incorporates these statutory exclusions and makes clear that activities conducted to facilitate the administration of an Enterprise's internal affairs but which are not provided to the market are also excluded from the review and approval requirements of section 1321 of the Safety and Soundness Act.

The final rule clarifies the scope of the exclusions related to the AUS and mortgage terms and conditions or underwriting criteria but does not modify the scope of the exclusions, which remain as proposed. To further enhance clarity of the exclusions, the final rule interprets “upgrades” to an Enterprises' AUS and “modifications” to mortgage terms and conditions or underwriting criteria in a way that ensures that these types of changes are not inadvertently captured by the new activity description. Accordingly, a new activity does not include any enhancement, alteration, or modification to the technology, operating system, or software to operate the AUS or to mortgage terms and conditions or underwriting criteria that does not alter the nature of the underlying transaction as residential mortgage financing is excluded from the new activity description, even if that change: (1) requires a new resource, type of data, policy (or modification to an existing policy), process, or infrastructure; (2) expands the scope or increases the level of credit risk, market risk, or operational risk to the Enterprise; or (3) involves a new category of borrower, investor, counterparty, or collateral.

The final rule also revises the description of substantially similar activities in a manner that makes the exclusion easier to understand and more closely aligned with the statute, including with respect to the treatment of technology systems that apply or mirror the Enterprises' mortgage terms and conditions or underwriting criteria. A more detailed discussion of these revisions is found in Section G below.

Under § 1253.4(a) of the final rule, a new activity is a new product if the Director determines that the new activity merits public notice and comment about whether the proposed activity serves the public interest. This reflects a simplified approach from the Proposed Rule under which the Director would make the determination whether the new activity is a new product based on whether the new activity merits public notice and comment on three criteria: (1) compliance with specific provisions of the Enterprises' respective authorizing statutes; (2) the safety and soundness of the Enterprise or the mortgage finance system; and (3) the public interest.

The revisions to the new product determination criteria have been made for two reasons. First, FHFA is unlikely to seek public comment on redundant topics. FHFA proposed eight factors that the Director may consider when determining whether a new product is in the public interest. These are the same factors on which the Director would seek public comment to inform the decision as to whether approval of a new product would be in the public interest. To a large extent, the determination criteria in § 1253.4(a) of the Proposed Rule overlapped with the public interest factors in proposed § 1253.4(b). For example, one of the public interest factors examines the degree to which the proposed new product would advance the purposes of the Enterprise under its authorizing statute, which is similar to the determination criterion in § 1253.4(a) of the Proposed Rule about the new activity's compliance with specific provisions of the Enterprise's authorizing statute. Another public interest factor examines the degree to which the proposed new product might raise or mitigate risks to the mortgage finance or financial system, which is similar to the criterion in § 1253.4(a) of the Proposed Rule about the safety and soundness of the Enterprise or the mortgage finance system. While two of determination criteria have been deleted, the public interest factors remain unchanged from the Proposed Rule, and the Director retains the discretion to include other factors deemed appropriate to consider during the approval process. Second, one Enterprise raised a concern that seeking public input on the determination criteria in the Proposed Rule would likely require the public disclosure of confidential or privileged information. FHFA believes that it can adequately assess compliance with specific provisions of the Enterprises' respective authorizing statutes, as well as the safety and soundness of the Enterprise or the mortgage finance system, without seeking public input beyond what would be sought through the public interest factors.

Section 1253.5 of the final rule establishes the procedural framework for Enterprise submission and FHFA review of a notice of new activity. Before commencing any new activity, an Enterprise must submit to FHFA a written notice, the content of which is described in § 1253.9 of the final rule. Consistent with the Proposed Rule, an Enterprise includes any of its affiliates ( see 12 U.S.C. 4502; 12 CFR 1201.1) and if the new activity is to be offered by an affiliate, either the Enterprise or its affiliate may submit the required notice. In contrast to the Proposed Rule and in response to comments, the final rule explicitly states that an Enterprise may request prior consultation with FHFA about whether a notice of new activity is required. Circumstances which may merit a consultation could include when the Enterprise is uncertain about whether a notice of new activity is required.

A notice of new activity will not be considered complete and received for processing until the information required by § 1253.9 of the final rule has been submitted, including any follow-up information required by FHFA. Section 1253.5(c) of the final rule provides that nothing in the rule limits or restricts FHFA from reviewing the notice of new activity under any other applicable regulation or statute, as part of FHFA's authority to review for safety and soundness and for consistency with an Enterprise's statutory mission. For example, if a proposed new activity necessitated a review for compliance with the Uniform Mortgage-Backed Securities Regulation (12 CFR part 1248), FHFA's receipt of information necessary for that review may be part of FHFA's determination that the notice of new activity is complete and has been received.

The final rule provides that an Enterprise may not commence a new activity unless the Director makes a written determination that the new activity is not a new product within 15 days, or the 15 days pass and no determination is made. If the Director determines that the new activity is a new product, the Enterprise must elect to submit a request for prior approval of a new product and await approval of the new product under § 1253.6 of the final rule or it must discontinue its plan to offer the new product to the market. Providing this optionality for the Enterprises reflects a change from the Proposed Rule in response to the Enterprises' request to be permitted to decide whether to continue to pursue the offering following a new product determination. If FHFA issues a determination that the new activity is not a new product, or the 15 days pass without any determination, the Enterprise may begin the new activity, subject to such terms, conditions, or limitations as the Director may establish.

The final rule introduces the concept of a request for prior approval of a new product that is distinct from a notice of new activity. This change responds to commenters' concerns that the Proposed Rule did not provide this distinction and accommodates the changes made to § 1253.5 of the final rule that permit an Enterprise to decide whether it still wants to pursue an offering following a new product determination. Section 1253.6 of the final rule establishes the procedural framework for Enterprise submission and FHFA review of a request for prior approval of a new product. An Enterprise must submit a request for prior approval of a new product to FHFA before offering a new product to the market. However, since a determination by the Director under § 1253.4 of the final rule is required for a new activity to be classified as a new product, an Enterprise may only submit a request for prior approval of a new product if the Director has made such a determination. The Director may make a determination that a new activity is a new product at the conclusion of the Agency's review of a new activity or at the conclusion of an Enterprise's voluntary consultation with FHFA.

A request for prior approval of a new product will not be considered complete and received for processing until the information required by § 1253.9 of the final rule has been submitted, including any additional information requested by FHFA. In response to commenters' concerns that FHFA has an unlimited amount of time to prepare a public notice, the final rule makes clear that once FHFA makes the determination that the request for prior approval is “received,” FHFA will publish a public notice soliciting comments on the proposed new product without delay. FHFA will include in that public notice enough information from the request for prior approval of a new product to sufficiently describe the new product so that the public can provide meaningful comment. The final rule clarifies that the public notice will be published on FHFA's website and in the Federal Register . In response to public comments that requested FHFA to maximize time for public comment, the statutory 30-day comment period will commence on the date that the notice is published in the Federal Register , which is expected to be later than the date on which the notice is published on FHFA's website. The public notice will provide instructions for submission of public comments. As is the practice with other requests for information and proposed rules, comments submitted by the public on a new product will be made public and posted on FHFA's website.

In determining whether to approve a new product, the Director will consider all public comments received by the closing date of the comment period. The final rule incorporates the Safety and Soundness Act's approval requirements by providing that the Director may approve the new product if the Director determines that the new product: (1) in the case of Fannie Mae, is authorized under 12 U.S.C. 1717(b)(2), (3), (4), or (5) or 12 U.S.C. 1719; or (2) in the case of Freddie Mac, is authorized under 12 U.S.C. 1454(a)(1), (4), or (5); (3) is in the public interest; and (4) is consistent with the safety and soundness of the Enterprise or the mortgage finance system.

In accordance with the statutory timelines, the Director will make a determination on the new product no later than 30 days after the close of the public comment period. If no determination is made within that timeframe, the Enterprise may offer the new product. As with a new activity, a new product may be subject to any terms, conditions, or limitations as the Director may establish. Also, as with a new activity, the Director may review for safety and soundness or consistency with the Enterprise's statutory mission at any time; exercise of that authority is not constrained by any time limit provided for in the Act or reflected in the final rule.

Section 1253.7 of the final rule incorporates the statutory provision empowering the Director to make a new product temporarily available to the market without first seeking public comment. Section 1321(c) of the Safety and Soundness Act (12 U.S.C. 4541(c)) authorizes the Director to grant temporary approval of a new product if the Director finds “that the existence of exigent circumstances makes [the delay associated with seeking public comment] contrary to the public interest.” Section 1321(c)(4)(C) of the Act (12 U.S.C. 4541(c)(4)(C)). Under the final rule, an Enterprise may request temporary approval of a new product, or FHFA may act on its own initiative. The Director may impose terms, conditions, or limitations on the temporary approval, and upon the granting of a temporary approval for a new product, FHFA will begin the process for permanent decision on the proposed new product in accordance with § 1253.6 of the final rule, including issuing a notice for public comment without delay. This section remains unchanged from the Proposed Rule, except for conforming paragraph numbering.

As noted above, “substantially similar activities” are excluded from the review and approval requirements of the Safety and Soundness Act. Section 1253.8 of the final rule establishes the procedural framework for an Enterprise to offer a substantially similar activity. An Enterprise must provide written notice to FHFA of its intent to offer the substantially similar activity at least 15 days prior to offering the activity to the market. In contrast to the other statutory exclusions which do not require notice ( e.g., the AUS and enhancements, alterations, or modifications to mortgage terms and conditions or underwriting criteria), advance notice to FHFA is required for any substantially similar activity so that FHFA may exercise its regulatory and supervisory responsibilities to ensure that the activity qualifies for the exclusion.

The notice of substantially similar activity required under § 1253.8 of the final rule is distinct from a notice of new activity. Section 1253.8(d) of the final rule provides that a notice of substantially similar activity must include the name and a complete and specific description of the activity, as well as an explanation of why the Enterprise believes the activity qualifies as a substantially similar activity under § 1253.8(b) of the final rule. However, if the Director determines that the activity is not a substantially similar activity, the Enterprise must submit a notice of new activity under § 1253.5 of the final rule or a request for prior approval of a new product under § 1253.6 of the final rule and may not proceed with the activity until the requirements of those sections, as applicable, have been satisfied.

The final rule revises the description of substantially similar activities in a manner that makes the exclusion easier to understand and aligns more closely with the statute, including with respect to the treatment of technology systems that are related but independent of an Enterprise's AUS. The final rule distinguishes the criteria used for determining whether an activity is substantially similar to activities that are otherwise excluded from the review and approval requirements under the Safety and Soundness Act ( e.g., the AUS) from the criteria used for determining whether an activity is substantially similar to a new product that an Enterprise is authorized to offer to the market. The final rule also clarifies the criteria related to the latter category of substantially similar activities. Accordingly, under § 1253.8(b) of the final rule, the Director may determine that an activity is substantially similar to: (1) the AUS, including any enhancement, alteration, or modification to the technology, operating system, or software to operate the AUS; or (2) any enhancement, alteration, or modification to mortgage terms and conditions or underwriting criteria relating to residential mortgages that are purchased or guaranteed by an Enterprise if the activity is a technological implementation of mortgage terms and conditions or underwriting criteria relating to residential mortgages that are purchased or guaranteed by an Enterprise. Under § 1253.8(c) of the final rule, the Director may determine that an activity is substantially similar to a new product that the Director has approved for either Enterprise or that is permissible for either Enterprise to offer because the statutory timeframe lapsed without the Director rendering a decision on a request for prior approval of a new product, if the activity: (1) requires the same or a similar resource, type of data, policy, process, and infrastructure; (2) entails the same or similar levels of credit risk, market risk, and operational risk to the Enterprise; and (3) involves the same or a similar category of borrower, investor, counterparty, and collateral. In contrast, the Proposed Rule used a single set of negative criteria to identify which (if any) activities would qualify as substantially similar. The Proposed Rule also indicated that the exclusion for activities that were substantially similar to approved new products was available only to the Enterprise that did not receive approval for the original product, a result which is inconsistent with the provisions of the Act.

In response to comments regarding the burdensome submission process, § 1253.9 of the final rule introduces a two-step process for an Enterprise to submit information to FHFA with respect to a potential new product and makes minor adjustments to the required content. The scope of the information required for a notice of new activity is set out in § 1253.9(a) of the final rule. These streamlined information requirements include the five requirements from the Proposed Rule that are most critical to enable FHFA to assess the impact, risks, and benefits of a new activity and determine whether the new activity is a new product. If the Director determines that the new activity is a new product (following the review of a notice of new activity or following an Enterprise's voluntary consultation with FHFA), and the Enterprise elects to proceed with a request for prior approval of a new product, then the Enterprise must provide the additional information set out in § 1253.9(b) of the final rule. Those information requirements are substantially more detailed than what is required in connection with a notice of new activity, to ensure that FHFA can provide the public with sufficient information to review and meaningfully comment on the proposed new product and that the Director has the information required to inform any determination under the statutory standards for approval of a new product. The final rule removes one element of required content from the Proposed Rule—an Enterprise would not be required to indicate its view as to whether a new activity is a new product since the request for prior approval of a new product would only occur after the Director made such a determination.

Section 1253.10 of the final rule provides a mechanism for FHFA to enhance the transparency of its decision-making on new product determinations, approvals, and disapprovals. The provision commits FHFA to publish information related to the Director's determinations on new activity and new product submissions within a reasonable time period after the end of the calendar year during which the Enterprises filed such submissions. Any reporting by FHFA under this provision would not disclose confidential or proprietary information provided to FHFA by an Enterprise.

The content of section 1253.11of the final rule is unchanged from § 1253.10(a) of the Proposed Rule, but has been reformatted in the final rule. Section 1253.11 of the final rule confirms that the Director's exercise of authority to review new Enterprise activities and products under section 1321 of the Safety and Soundness Act in no way restricts any other authority of the Director over new and existing Enterprise activities or products, including the authority of the Director to review new and existing activities or products for safety and soundness or consistency with the statutory mission of the Enterprise. See section 1321(f) of the Safety and Soundness Act (12 U.S.C. 4541(f)). Under this authority, for example, the Director could find that an ongoing activity should be subject to certain conditions or terms.

Section 1253.10 (b) of the Proposed Rule, which as proposed set forth the actions that FHFA may take if an Enterprise fails to comply with the provisions of the rule, has been deleted from the final rule. FHFA has determined that it would be redundant to restate authorities contained elsewhere in the applicable legal and regulatory framework.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires that a regulation that has a significant economic impact on a substantial number of small entities must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. FHFA need not undertake such an analysis if the Agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities (5 U.S.C. 605(b)). FHFA has considered the impact of the final rule under the Regulatory Flexibility Act, and FHFA certifies that the final rule will not have a significant economic impact on a substantial number of small entities because the regulation only applies to Fannie Mae and Freddie Mac, which are not small entities for purposes of the Regulatory Flexibility Act.

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

In accordance with the Congressional Review Act (5 U.S.C. 801 et seq. ), FHFA has determined that this final rule is a major rule and has verified this determination with the Office of Information and Regulatory Affairs of OMB.

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2021-20-10, Amendment 39-21748 (86 FR 57574, October 18, 2021) (AD 2021-20-10). AD 2021-20-10 applied to Leonardo S.p.a. Model AB139 and AW139 helicopters, without MGB lock nut P/N 3G6320A09152 installed and with MGB P/N 3G6320A00131, 3G6320A00132, 3G6320A00133, 3G6320A00134, 3G6320A00135, 3G6320A00136, 3G6320A22031, 4G6320A00132, or 4G6320A00133 installed; or MGB P/N 3G320A00133 with serial number (S/N) M23 installed, or MGB P/N 3G6320A00134, with S/N M6, N76, N92, P124, P129, P131, P162, P184, Q230, Q243, Q249, R272, V21, V39, V96, V163, V211, V241, V272, V281, V384, V386, or V622 installed; or MGB P/N 3G6320A00136 with S/N AW1, AW2, AW3, AW5, or AW10 installed.

AD 2021-20-10 required, within 100 hours time-in-service (TIS), or during the next scheduled MGB overhaul, whichever occurs first after the effective date of the AD, removing a certain part-numbered MGB lock nut from service and replacing it with a different part-numbered MGB lock nut. AD 2021-20-10 also prohibited installing an MGB having an affected MGB lock nut on any helicopter and also prohibited installing an affected MGB lock nut on any helicopter as of the effective date of the AD.

AD 2021-20-10 was prompted by a series of EASA ADs beginning with EASA AD 2019-0036, dated February 15, 2019 (EASA AD 2019-0036), issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition for all serial-numbered Leonardo S.p.a. Helicopters (formerly Finmeccanica S.p.A, AgustaWestland S.p.A., Agusta S.p.A.; and AgustaWestland Philadelphia Corporation, formerly Agusta Aerospace Corporation) Model AB139 and AW139 helicopters. EASA advised that an occurrence was reported of a cracked MGB lock nut P/N 3G6310A09151, which is used to keep the planetary gears in position. EASA AD 2019-0036 required replacing each MGB lock nut with an airworthy MGB lock nut. EASA advised this condition, if not detected and corrected, could lead to failure of the MGB planetary gears, resulting in loss of control of the helicopter.

After EASA issued EASA AD 2019-0036, an additional occurrence was reported of a cracked MGB lock nut P/N 3G6320A09151. Accordingly, EASA superseded EASA AD 2019-0036 with EASA AD 2019-0174, dated July 18, 2019 (EASA AD 2019-0174), which retained the requirements of EASA AD 2019-0036 but reduced the compliance times. After EASA issued EASA AD 2019-0174, Leonardo Helicopters issued Alert Service Bulletin No. 139-609, dated December 18, 2019, to provide instructions for replacing the affected MGB lock nut with MGB lock nut P/N 3G6320A09152, which has a redesigned flange reducing the stress at the bearing nut locations where cracks were detected.

Accordingly, EASA then issued EASA AD 2020-0011, dated January 29, 2020, and corrected January 30, 2020 (EASA AD 2020-0011), which superseded EASA AD 2019-0174, and partially retained the requirements of EASA AD 2019-0174. EASA AD 2020-0011 revised the compliance times in EASA AD 2019-0174, required replacing each affected MGB lock nut with a newly designed MGB lock nut, and prohibited installing an affected MGB on any helicopter. After EASA issued EASA AD 2020-0011, EASA identified certain MGB part numbers that were inadvertently categorized incorrectly and therefore listed in the wrong group of helicopters. Accordingly, EASA issued EASA AD 2020-0011R1, dated November 20, 2020 (EASA AD 2020-011R1), thereby revising EASA AD 2020-0011. EASA AD 2020-0011R1 retained the requirements of EASA AD 2020-0011 and corrected Appendix 1 of EASA AD 2020-0011.

After EASA issued EASA AD 2020-0011R1, Leonardo Helicopters issued Alert Service Bulletin No. 139-609, Revision A, dated April 13, 2021, which identifies an additional part-numbered MGB, which is also affected by the unsafe condition. Accordingly, EASA superseded EASA AD 2020-0011R1 with EASA AD 2021-0121, dated May 4, 2021 (EASA AD 2021-0121). EASA AD 2021-0121 adds an additional part-numbered MGB with a certain S/N to the list of affected parts. EASA AD 2021-0121 retains the requirements of EASA AD 2020-0011R1, and corrects Table 1 and Appendix 1 of EASA AD 2020-0011R1.

Accordingly, EASA AD 2021-0121 requires replacing each affected MGB lock nut with a newly designed MGB lock nut, and prohibits installing an affected MGB on any helicopter.

The NPRM published in the Federal Register on April 20, 2022 (87 FR 23477). The NPRM was prompted by the discovery that MGB P/N 3G6320A00133 was incorrectly listed as MGB P/N 3G320A00133 in both the preamble and applicability paragraph of AD 2021-20-10. Also, the FAA determined that all MGBs, regardless of S/N, are affected by the unsafe condition. Therefore, the NPRM proposed to remove any reference to S/Ns in the applicability. In addition, the NPRM included the total U.S. fleet costs, which were inadvertently excluded in AD 2021-20-10. In the NPRM, the FAA also proposed to retain all of the requirements of AD 2021-20-10.

The FAA received comments from three commenters. The commenters were Leonardo Helicopters, Bristow Group, and Chevron Aviation. All commenters requested a change to the compliance time and two made a statement concerning who can perform the service task. The following presents the comments received on the NPRM and the FAA's response to each comment.

All commenters referred to an FAA-approved global Alternative Method of Compliance (AMOC) to AD 2021-20-10 and two commenters requested that the FAA change the proposed AD's compliance time to align with the global AMOC. The other commenter specifically requested that the compliance time approved in the global AMOC of 28,000 landings or during the next scheduled MGB overhaul be incorporated into the compliance time of the proposed AD.

The FAA agrees; however, instead of revising the Required Actions paragraph, the FAA has revised the AMOC paragraph by allowing the AMOC previously approved for AD 2021-20-10 as an approved AMOC for the corresponding requirements in paragraph (g) of this AD.

Two commenters noted that replacing the lock nut can only be performed by Leonardo at the overhaul level, but requested no change to the required actions of the proposed AD; the FAA, therefore, made no changes in this regard.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting the AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, including correcting a part number in paragraph (g)(2) of the required actions, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Leonardo Helicopters Alert Service Bulletin No. 139-609, Revision A, dated April 13, 2021, which the Director of the Federal Register approved for incorporation by reference as of November 22, 2021 (86 FR 57574, October 18, 2021).

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

The FAA also reviewed Leonardo Helicopters Alert Service Bulletin No. 139-567, Revision B, dated October 18, 2019, which provides additional information for replacing the MGB lock nut.

EASA AD 2021-0121 requires a compliance time based on number of landings, whereas this AD requires a compliance time based on hours TIS. The service information referenced in EASA AD 2021-0121 requires submitting certain information and parts to Leonardo, whereas this AD does not. EASA AD 2021-0121 applies to all serial-numbered Model AB139 and AW139 helicopters, whereas this AD applies to all Model AB139 and AW139 helicopters, regardless of S/N, with a certain part-numbered MGB lock nut and MGB installed.

The FAA estimates that this AD affects 130 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.

Replacing each affected MGB lock nut with a newly designed MGB lock nut takes about 190 work-hours (during next MGB overhaul) and parts cost about $7,600 for an estimated cost of $23,750 per helicopter and $3,087,500 for the U.S. fleet.

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

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

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

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

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

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

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

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

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all PW PW1519G, PW1521G, PW1521G-3, PW1521GA, PW1524G, PW1524G-3, PW1525G, and PW1525G-3 model turbofan engines. The NPRM published in the Federal Register on October 25, 2022 (87 FR 64397). The NPRM was prompted by a report that an airplane experienced an uncommanded dual engine shutdown upon landing, resulting in compromised braking capability due to the loss of engine power and hydraulic systems. A subsequent investigation determined that the sequence of the auto-throttle increasing throttle to maintain Mach number, immediately followed by pilot command to decrease throttle to idle, caused a transient disagreement between actual and commanded thrust. This disagreement triggered the thrust control malfunction (TCM) detection logic and resulted in dual engine shutdown once the weight on wheels signal was activated upon landing. The installed EEC FADEC software version latches the fault and allows the engine to continue operation as commanded but shuts down the engine upon landing. The manufacturer identified the situations that could trigger the TCM logic erroneously and updated the EEC FADEC software. This software update makes corrective improvements to the TCM logic, including revised criteria for triggering the TCM logic and establishing criteria that permit the TCM logic to unlatch during flight. In the NPRM, the FAA proposed to require removal from service of certain EEC FADEC software versions and replacement with a software version eligible for installation. The FAA is issuing this AD to address the unsafe condition on these products.

The FAA received one comment, from Air Line Pilots Association, International (ALPA). ALPA supported the NPRM without change.

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

The FAA reviewed PW Service Bulletin (SB) PW1000G-A-73-00-0054-00A-930A-D, Issue No. 002, dated June 20, 2022. This service information specifies procedures for replacing or modifying the EEC to incorporate FADEC software version V2.11.14.

The FAA estimates that this AD affects 147 engines installed on airplanes of U.S. registry.

The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about AD 2022-25-18. Submit comments as instructed in AD 2022-25-18, Amendment 39-22274 (87 FR 75915, December 12, 2022) (AD 2022-25-18).

AD 2022-25-18 requires repetitive inspections for cracking of the main landing gear (MLG) side stay outer links, and corrective actions if necessary. AD 2022-25-18 also provides an optional terminating action for the repetitive inspections, and prohibits the installation of affected parts under certain conditions. That AD applies to certain BAE Systems (Operations) Limited Model BAe 146 and Model Avro 146-RJ series airplanes.

As published, the identity of certain airplanes specified in the preamble and regulatory text, and one paragraph reference specified in the regulatory text, are incorrect in AD 2022-25-18.

In three locations in AD 2022-25-18, affected airplanes are incorrectly identified as “Model Avro 146-RJ-RJ70A” airplanes. Those airplanes are correctly identified as “Model Avro 146-RJ70A airplanes.” The errors are located in the “Differences Between This AD and the MCAI” section of the preamble and paragraph (c) of AD 2022-25-18.

In addition, paragraph (l)(1) of AD 2022-25-18 incorrectly refers to paragraph (n) of the AD for the contact information to send requests for approval of alternative methods of compliance. That contact information is correctly found in paragraph (m) of this AD.

U.K. CAA AD G-2022-0018, dated October 18, 2022, specifies procedures for doing repetitive detailed inspections for cracking of the MLG side stay outer link and replacement if necessary.

The FAA reviewed BAE Systems (Operations) Limited Alert Service Bulletin ASB.32-A189, dated September 16, 2022. This service information identifies the affected parts as MLG side stay outer links having Safran Landing Systems part numbers 200884304, 200884305, 200884346, 200884347, 201105300, 201105301, 201105308, 201105309, 201299300, 201299301, 201299305, or 201299306, and describes procedures for doing, among other actions, repetitive detailed inspections for cracking of MLG side stay outer links and replacement if necessary.

The FAA also reviewed Messier-Dowty Service Bulletin 146-32-147, dated May 29, 2001, which identifies the affected MLG side stay outer links for AD 2005-06-14, Amendment 39-14024 (70 FR 15574, March 28, 2005; corrected April 14, 2005 (70 FR 19681)).

This AD also requires BAE Systems (Operations) Limited Inspection Service Bulletin ISB.32-156, Revision 1, dated July 3, 2001, which the Director of the Federal Register approved for incorporation by reference as of May 2, 2005 (70 FR 15574, March 28, 2005; corrected April 14, 2005 (70 FR 19681)).

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 ADDRESSES .

This document corrects multiple errors and correctly adds the AD as an amendment to 14 CFR 39.13. Although no other part of the preamble or regulatory information has been corrected, the FAA is publishing the entire rule in the Federal Register .

The effective date of this AD remains December 27, 2022.

Since this action only corrects a model designation and a paragraph reference, it has no adverse economic impact and imposes no additional burden on any person. Therefore, the FAA has determined that notice and public procedures are unnecessary.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

I. Executive Summary

This action amends and extends SFAR No. 107, title 14 Code of Federal Regulations (CFR) 91.1613, which prohibits certain flight operations in the territory and airspace of Somalia at altitudes below FL260 by all: U.S. air carriers; U.S. commercial operators; persons exercising the privileges of an airman certificate issued by the FAA, except when such persons are operating U.S.-registered aircraft for a foreign air carrier; and operators of U.S.-registered civil aircraft, except when the operator of such aircraft is a foreign air carrier. Specifically, the FAA is amending the flight prohibition to permit overwater operations in the territory and airspace of Somalia at altitudes below FL260 necessary for climb-outs from, or descents into, Djibouti Ambouli International Airport (HDAM) in the Addis Ababa FIR (HAAA). These operations are subject to the approval of the appropriate authorities of Djibouti and must be conducted in accordance with the conditions established by those authorities and consistent with air traffic control instructions. Operators climbing out of or descending into Djibouti Ambouli International Airport (HDAM) must remain overwater while operating in the territory and airspace of Somalia at altitudes below FL260 and must be either on a published instrument procedure or under the direction of air traffic control. Because weapons systems to which extremist and/or militant groups active in Somalia likely have access have minimal ranges from the coastline, and aircraft using these approaches and departures would only briefly be present in the territory and airspace of Somalia at altitudes below FL260, the FAA determined such operations present a low risk.

However, the FAA has determined increasing safety-of-flight risks exist for U.S. civil aviation operations in the rest of the territory and airspace of Somalia at altitudes below FL260 from extremist and militant activity, as described in the Discussion of the Final Rule section of this preamble. For this reason, the FAA extends the expiration date of this rule from January 7, 2023, until January 7, 2027. Consistent with other recently published flight prohibition SFARs, this action also republishes the approval process and exemption information for this flight prohibition SFAR.

The FAA is responsible for the safety of flight in the U.S. and for the safety of U.S. civil operators, U.S.-registered civil aircraft, and U.S.-certificated airmen throughout the world. Sections 106(f) and (g) of title 49, U.S. Code (U.S.C.), subtitle I, establish the FAA Administrator's authority to issue rules on aviation safety. Subtitle VII of title 49, Aviation Programs, describes in more detail the scope of the agency's authority. Section 40101(d)(1) provides that the Administrator shall consider in the public interest, among other matters, assigning, maintaining, and enhancing safety and security as the highest priorities in air commerce. Section 40105(b)(1)(A) requires the Administrator to exercise this authority consistently with the obligations of the U.S. Government under international agreements.

The FAA is promulgating this rule under the authority described in 49 U.S.C. 44701, General requirements. Under that section, the FAA is charged broadly with promoting safe flight of civil aircraft in air commerce by prescribing, among other things, regulations and minimum standards for practices, methods, and procedures that the Administrator finds necessary for safety in air commerce and national security.

This regulation is within the scope of the FAA's authority because it continues to prohibit the persons described in paragraph (a) of SFAR No. 107, § 91.1613, from conducting flight operations in the territory and airspace of Somalia at altitudes below FL260 due to the increasing hazards to the safety of U.S. civil flight operations, as described in the preamble to this final rule.

Section 553(b)(B) of title 5, U.S. Code, 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.” Also, section 553(d) permits agencies, upon a finding of good cause, to issue rules with an effective date less than 30 days from the date of publication. In this instance, the FAA finds good cause to forgo notice and comment and the delayed effective date because they would be impracticable and contrary to the public interest.

The risk environment for U.S. civil aviation in airspace managed by other countries with respect to safety of flight is fluid in circumstances involving weapons capable of targeting or otherwise negatively affecting U.S. civil aviation, as well as other hazards to U.S. civil aviation associated with fighting, extremist and militant activity, or periods of heightened tensions. This fluidity and the need for the FAA to rely upon classified information and controlled unclassified information not authorized for public release in assessing these risks make providing notice and opportunity to comment impracticable. The potential for rapid changes in the risks to U.S. civil aviation significantly limits how far in advance of a new or amended flight prohibition the FAA can usefully assess the risk environment. Furthermore, to the extent these rules and any amendments are based upon classified information or controlled unclassified information not authorized for public release, the FAA cannot share such information with the general public. As a result, engaging in notice and comment would be impracticable.

Additionally, it is in the public interest for the FAA's flight prohibitions, and any amendments thereto, to reflect the agency's current understanding of the risk environment for U.S. civil aviation and set appropriate boundaries for the flight prohibition to minimize such risks. This allows the FAA to protect the safety of U.S. operators' aircraft and the lives of their passengers and crews without over-restricting or under-restricting U.S. operators' routing options. The delay that would be occasioned by providing an opportunity to comment on this action would significantly increase the risk that the resulting final action would not accurately reflect the current risks to U.S. civil aviation associated with the situation and thus would not establish boundaries for the flight prohibition commensurate with those risks.

While the FAA sought and responded to public comments, the boundaries of the area in which unacceptable risks to the safety of U.S. civil aviation existed might change due to: evolving military or political circumstances; extremist and militant group activity; the introduction, removal, or repositioning of more advanced anti-aircraft weapons systems; or other factors. As a result, if the situation improved while the FAA sought and responded to public comments, the rule the FAA finalized might be over-restrictive, unnecessarily limiting U.S. operators' routing options and potentially causing them to incur unnecessary additional fuel and operations-related costs, as well as potentially causing passengers to incur unnecessarily some costs attributed to their time. Conversely, if the situation deteriorated while the FAA sought and responded to public comments, the rule the FAA finalized might be under-restrictive, allowing U.S. civil aviation to continue operating in areas where unacceptable risks to their safety had developed. Such an outcome would endanger the safety of these aircraft, as well as their passengers and crews, exposing them to unacceptable risks of death, injury, and property damage that could occur if a U.S. operator's aircraft were shot down (or otherwise damaged) while operating in the territory and airspace of Somalia at altitudes below FL260.

For the reasons previously described, engaging in notice and comment for this rule would be impracticable and contrary to the public interest. Similarly, the potential safety impacts and the need for prompt action on up to date information that is not public would make delaying the effective date impracticable and contrary to the public interest. Accordingly, the FAA finds good cause exists to forgo notice and comment and any delay in the effective date for this rule.

When the FAA last extended the rule prohibiting certain U.S. civil flight operations in the territory and airspace of Somalia at altitudes below FL260 in 2019, 1 it assessed that the situation in the territory and airspace of Somalia at altitudes below FL260 remained hazardous for U.S. civil aviation operations due to the poor security environment and fragile governance structure in Somalia, as well as the threat posed by al-Shabaab, an al-Qa'ida-aligned extremist group, and other extremists/militants. Al-Shabaab had demonstrated an intent and capabilities to target civil aviation operations in the territory and airspace of Somalia at altitudes below FL260 through a variety of means, including the use of an insider to smuggle a concealed improvised explosive device (IED) onto a civil aircraft, use of anti-aircraft-capable weapons, and direct and indirect attacks on Somali airports. Al-Shabaab had frequently targeted Aden Adde International Airport (HCMM) with attacks using indirect fire, small-arms fire, and vehicle-borne IEDs.

In addition, al-Shabaab also frequently conducted vehicle-borne IED attacks targeting Western interests and public venues in Mogadishu, including detonating vehicle-borne IEDs near malls (February 2019), hotels (November 2018), and near a security checkpoint close to Aden Adde International Airport (HCMM) (June 2019). Al-Shabaab was also assessed to have access to anti-aircraft-capable weapons presenting a risk to U.S. civil aviation operations at altitudes below FL260. Furthermore, the Islamic State of Iraq and ash-Sham (ISIS) had a cell trying to gain influence in Somalia, which presented another extremist threat to Western interests, including civil aviation. The FAA was concerned ISIS elements in Somalia might have access to anti-aircraft-capable weapons.

In February 2019, the African Union Mission in Somalia (AMISOM) began to draw down its forces, as its mandate was set to expire in 2020, and began transferring security responsibilities back to Somalia. During the AMISOM drawdown, the FAA assessed that al-Shabaab might attempt to exploit vulnerabilities in Somali security and increase attacks on remaining AMISOM bases and Western interests. For these reasons, the FAA was concerned the risk to U.S. civil aviation operations might increase as AMISOM continued its scheduled drawdown. As a result of the significant continuing risks to the safety of U.S. civil aviation in the territory and airspace of Somalia at altitudes below FL260, the FAA extended the expiration date of SFAR No. 107, §  91.1613, from January 7, 2020 until January 7, 2023.

While developing this final rule, the FAA became aware that certain approaches and departures into and out of Djibouti Ambouli International Airport (HDAM) in the Addis Ababa FIR (HAAA) require flights using those approaches and departures to briefly transit overwater portions of Somalia's territorial airspace  2 at altitudes below FL260. The FAA assessed the flightpaths used to conduct these operations and determined the brief presence of U.S. civil aviation overwater in the territory and airspace of Somalia at altitudes below FL260 necessary to use these approaches and departures would present a low risk. The risks to U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260 from extremist and militant activity are concentrated primarily on and over the land territory of Somalia. Weapons systems to which extremist/militant groups active in Somalia likely have access have minimal ranges from the coastline. Therefore, the FAA is amending SFAR No. 107, § 91.1613, to permit U.S. civil aviation operations to operate overwater in the territory and airspace of Somalia at altitudes below FL260 to the extent necessary to climb out of, or descend into, Djibouti Ambouli International Airport (HDAM) in the Addis Ababa FIR (HAAA). These operations are subject to the approval of the appropriate authorities of Djibouti and must be conducted in accordance with the conditions established by those authorities and consistent with air traffic control instructions. Operators climbing out of or descending into Djibouti Ambouli International Airport (HDAM) must remain overwater while operating in the territory and airspace of Somalia at altitudes below FL260 and must be either on a published instrument procedure or under the direction of air traffic control.

The FAA assesses the situation in the rest of the territory and airspace of Somalia at altitudes below FL260 as being increasingly hazardous for U.S. civil aviation. Since mid-2020, the number, lethality, and complexity of militant and/or extremist attacks has continued to increase, posing increased risk concerns for U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260. The Government of Somalia remains challenged in establishing security and governance in the country amidst economic constraints and faces increased threats from militant and/or extremist groups, particularly al-Shabaab.

Since the December 2019 final rule, AMISOM has reduced its forces in Somalia and continues the process of restructuring its presence into the African Union Transition Mission in Somalia (ATMIS). Al-Shabaab, the primary threat to U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260, has taken advantage of security transitions and drawdowns to expand its influence and attack operations. Al-Shabaab continues to demonstrate its intent and various capabilities to conduct attacks on targets often collocated with airports and against civil aviation. In 2022, al-Shabaab conducted multiple high-profile attacks demonstrating its increasing capacity and capability to conduct complex attacks throughout Somalia.

For example, during the first half of 2022, al-Shabaab frequently targeted international forces and Government of Somalia electoral venues located at Aden Adde International Airport (HCMM) using a variety of capabilities and tactics, including rocket fire, small-arms fire, and IEDs. These attacks often resulted in temporary flight disruptions at Aden Adde International Airport (HCMM). In May 2022, al-Shabaab successfully overran an African Union base at El Baraf, resulting in significant casualties and al-Shabaab's seizure of various weapons, including light anti-aircraft artillery weapon systems. In August 2022, al-Shabaab claimed responsibility for an attack on a hotel complex in Mogadishu frequented by Somali government officials.

Al-Shabaab and ISIS factions operating in Somalia likely have access to a variety of weapons, including man-portable air defense systems (MANPADS), heavy machine guns, rocket-propelled grenades (RPGs), and small-arms. Some MANPADS may be capable of reaching a maximum altitude of 25,000 feet above ground level (AGL), presenting a risk to U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260.

Additionally, al-Shabaab is working to further develop its capabilities, including a weaponized unmanned aircraft systems (UAS) capability. If this effort is successful, it would present further increased safety-of-flight risks to aircraft operating at lower altitudes in the vicinity of potentially targeted airports and airfields and to aircraft on the ground at these locations, both as a collision hazard and as a weapon system. Al-Shabaab has also expanded its weapons procurement efforts and indigenous production of weapons, increasing the quantity of weapons available for use in attacks.

In addition to extremist/militant activity, third-party forces—operating in Somalia without adequate coordination with Somali aviation authorities and a complete air picture present inadvertent risks to U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260. For example, international forces operating in Somalia engaged civil aircraft with small-arms fire on at least two occasions in 2020.

The FAA has determined, based on the enduring risks to U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260 described in this preamble, that four years is an appropriate duration for this SFAR. Therefore, as a result of the increasing unacceptable risk to the safety of U.S. civil aviation operations in the territory and airspace of Somalia at altitudes below FL260, the FAA extends the expiration date of SFAR No. 107, § 91.1613, from January 7, 2023, until January 7, 2027.

Further amendments to SFAR No. 107, § 91.1613, might be appropriate if the risk to U.S. civil aviation safety and security changes. In this regard, the FAA will continue to monitor the situation and evaluate the extent to which persons described in paragraph (a) of this rule might be able to operate safely in the territory and airspace of Somalia at altitudes below FL260.

The FAA also republishes the details concerning the approval and exemption processes in sections V and VI of this preamble, consistent with other recently published flight prohibition SFARs, to enable interested persons to refer to this final rule for comprehensive information about requesting relief from the FAA from the provisions of SFAR No. 107, § 91.1613.

In some instances, U.S. Government departments, agencies, or instrumentalities may need to engage U.S. civil aviation to support their activities in the territory and airspace of Somalia at altitudes below FL260. If a department, agency, or instrumentality of the U.S. Government determines that it has a critical need to engage any person described in paragraph (a) of SFAR No. 107, § 91.1613, including a U.S. air carrier or commercial operator, to transport civilian or military passengers or cargo or conduct other operations in the territory and airspace of Somalia at altitudes below FL260, that department, agency, or instrumentality may request the FAA approve persons described in paragraph (a) of SFAR No. 107, § 91.1613, to conduct such operations.

The requesting U.S. Government department, agency, or instrumentality must submit the request for approval to the FAA's Associate Administrator for Aviation Safety in a letter signed by an appropriate senior official of the requesting department, agency, or instrumentality. 3 The FAA will not accept or consider requests for approval from anyone other than the requesting U.S. Government department, agency, or instrumentality. In addition, the senior official signing the letter requesting FAA approval must be sufficiently positioned within the requesting department, agency, or instrumentality to demonstrate that the organization's senior leadership supports the request for approval and is committed to taking all necessary steps to minimize aviation safety and security risks to the proposed flights. The senior official must also be in a position to: (1) attest to the accuracy of all representations made to the FAA in the request for approval and (2) ensure that any support from the requesting U.S. Government department, agency, or instrumentality described in the request for approval is in fact brought to bear and is maintained over time. Unless justified by exigent circumstances, requesting U.S. Government departments, agencies, or instrumentalities must submit requests for approval to the FAA no less than 30 calendar days before the date on which the requesting department, agency, or instrumentality wishes the operator(s) to commence the proposed operation(s).

The requestor must send the request to the Associate Administrator for Aviation Safety, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591. Electronic submissions are acceptable, and the requesting entity may request that the FAA notify it electronically as to whether the FAA grants the request for approval. If a requestor wishes to make an electronic submission to the FAA, the requestor should contact the Air Transportation Division, Flight Standards Service, at (202) 267-8166, to obtain the appropriate email address. A single letter may request approval from the FAA for multiple persons described in SFAR No. 107, § 91.1613, or for multiple flight operations. To the extent known, the letter must identify the person(s) the requester expects the SFAR to cover on whose behalf the U.S. Government department, agency, or instrumentality seeks FAA approval, and it must describe—

• The proposed operation(s), including the nature of the mission being supported;

• The service the person(s) covered by the SFAR will provide;

• To the extent known, the specific locations in the territory and airspace of Somalia at altitudes below FL260 where the proposed operation(s) will occur, including, but not limited to, the flight path and altitude of the aircraft while it is operating in the territory and airspace of Somalia at altitudes below FL260 and the airports, airfields, or landing zones at which the aircraft will take off and land; and

• The method by which the requesting department, agency, or instrumentality will provide, or how the operator will otherwise obtain, current threat information and an explanation of how the operator will integrate this information into all phases of the proposed operations ( i.e., the pre-mission planning and briefing, in-flight, and post-flight phases).

The request for approval must also include a list of operators with whom the U.S. Government department, agency, or instrumentality requesting FAA approval has a current contract(s), grant(s), or cooperative agreement(s) (or its prime contractor has a subcontract(s)) for specific flight operations in the territory and airspace of Somalia at altitudes below FL260. The requestor may identify additional operators to the FAA at any time after the FAA issues its approval. Neither the operators listed in the original request, nor any operators the requestor subsequently seeks to add to the approval, may commence operations under the approval until the FAA issues them an Operations Specification (OpSpec) or Letter of Authorization (LOA), as appropriate, for operations in the territory and airspace of Somalia at altitudes below FL260. The approval conditions discussed below apply to all operators. Requestors should send updated lists to the email address they obtain from the Air Transportation Division by calling (202) 267-8166.

If an approval request includes classified information or controlled unclassified information not authorized for public release, requestors may contact Aviation Safety Inspector Bill Petrak for instructions on submitting it to the FAA. His contact information appears in the FOR FURTHER INFORMATION CONTACT section of this final rule.

FAA approval of an operation under SFAR No. 107, § 91.1613, does not relieve persons subject to this SFAR of the responsibility to comply with all other applicable FAA rules and regulations. Operators of civil aircraft must comply with the conditions of their certificates, OpSpecs, and LOAs, as applicable. Operators must also comply with all rules and regulations of other U.S. Government departments, agencies, or instrumentalities that may apply to the proposed operation(s), including, but not limited to, regulations issued by the Transportation Security Administration.

If the FAA approves the request, the FAA's Aviation Safety organization will send an approval letter to the requesting U.S. Government department, agency, or instrumentality informing it that the FAA's approval is subject to all of the following conditions:

(1) The approval will stipulate those procedures and conditions that limit, to the greatest degree possible, the risk to the operator, while still allowing the operator to achieve its operational objectives.

(2) Before any approval takes effect, the operator must submit to the FAA:

(a) A written release of the U.S. Government from all damages, claims, and liabilities, including without limitation legal fees and expenses, relating to any event arising out of or related to the approved operations in the territory and airspace of Somalia at altitudes below FL260, unless climbing out of or descending into Djibouti Ambouli International Airport while remaining overwater in the territory and airspace of Somalia at altitudes below FL260 and either on a published instrument procedure or under the direction of air traffic control; and

(b) The operator's written agreement to indemnify the U.S. Government with respect to any and all third-party damages, claims, and liabilities, including without limitation legal fees and expenses, relating to any event arising out of or related to the approved operations in the territory and airspace of Somalia at altitudes below FL260, unless climbing out of or descending into Djibouti Ambouli International Airport while remaining overwater in the territory and airspace of Somalia at altitudes below FL260 and either on a published instrument procedure or under the direction of air traffic control.

(3) Other conditions the FAA may specify, including those the FAA might impose in OpSpecs or LOAs, as applicable.

The release and agreement to indemnify do not preclude an operator from raising a claim under an applicable non-premium war risk insurance policy the FAA issues under 49 U.S.C. chapter 443.

If the FAA approves the proposed operation(s), the FAA will issue an OpSpec or LOA, as applicable, to the operator(s) identified in the original request and any operators the requestor subsequently adds to the approval, authorizing them to conduct the approved operation(s). In addition, as stated in paragraph (3) of this section V.B., the FAA notes that it may include additional conditions beyond those contained in the approval letter in any OpSpec or LOA associated with a particular operator operating under this approval, as necessary in the interests of aviation safety. U.S. Government departments, agencies, and instrumentalities requesting FAA approval on behalf of entities with which they have a contract or subcontract, grant, or cooperative agreement should request a copy of the relevant OpSpec or LOA directly from the entity with which they have any of the foregoing types of arrangements, if desired.

Any operations not conducted under an approval the FAA issues through the approval process set forth previously may only occur in accordance with an exemption from SFAR No. 107, § 91.1613. A petition for exemption must comply with 14 CFR part 11. The FAA will consider whether exceptional circumstances exist beyond those described in the approval process in the previous section. To determine whether a petition for exemption from the prohibition this SFAR establishes fulfills the standard of 14 CFR 11.81, the FAA consistently finds necessary the following information:

• The proposed operation(s), including the nature of the operation;

• The service the person(s) covered by the SFAR will provide;

• The specific locations in the territory and airspace of Somalia at altitudes below FL260 where the proposed operation(s) will occur, including, but not limited to, the flight path and altitude of the aircraft while it is operating in the territory and airspace of Somalia at altitudes below FL260 and the airports, airfields, or landing zones at which the aircraft will take off and land;

• The method by which the operator will obtain current threat information and an explanation of how the operator will integrate this information into all phases of its proposed operations ( i.e., the pre-mission planning and briefing, in-flight, and post-flight phases); and

• The plans and procedures the operator will use to minimize the risks identified in this preamble to the proposed operations, to support the relief sought and demonstrate that granting such relief would not adversely affect safety or would provide a level of safety at least equal to that provided by this SFAR. The FAA has found comprehensive, organized plans and procedures of this nature to be helpful in facilitating the agency's safety evaluation of petitions for exemption from flight prohibition SFARs.

The FAA includes, as a condition of each such exemption it issues, a release and agreement to indemnify, as described previously.

The FAA recognizes that, with the support of the U.S. Government, the governments of other countries could plan operations that may be affected by SFAR No. 107, § 91.1613. While the FAA will not permit these operations through the approval process, the FAA will consider exemption requests for such operations on an expedited basis and in accordance with the order of preference set forth in paragraph (c) of SFAR No. 107, § 91.1613.

If a petition for exemption includes information that is sensitive for security reasons or proprietary information, requestors may contact Aviation Safety Inspector Bill Petrak for instructions on submitting it to the FAA. His contact information is listed in the FOR FURTHER INFORMATION CONTACT section of this final rule.

Federal agencies consider impacts of regulatory actions under a variety of Executive orders and other requirements. First, Executive Orders 12866 and 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354), as codified in 5 U.S.C. 603 et seq., requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act of 1979 (Pub. L. 96-39), as codified in 19 U.S.C. chapter 13, prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Agreements Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), as codified in 2 U.S.C. chapter 25, requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.

In conducting these analyses, the FAA has determined this final rule has benefits that justify its costs. This rule is a significant regulatory action, as defined in section 3(f) of Executive Order 12866, as it raises novel policy issues contemplated under that Executive order. As 5 U.S.C. 553 does not require notice and comment for this final rule, 5 U.S.C. 603 and 604 do not require regulatory flexibility analyses regarding impacts on small entities. This rule will not create unnecessary obstacles to the foreign commerce of the United States. This rule will not impose an unfunded mandate on State, local, or tribal governments, or on the private sector, by exceeding the threshold identified previously.

This rule prohibits U.S. civil flights in the territory and airspace of Somalia at altitudes below FL260 due to the significant, increasing risks to the safety of U.S. civil aviation described in this preamble. The alternative flight routes result in some additional fuel and operations costs to the operators, as well as some costs attributed to passenger time. Accordingly, the incremental costs of the extension of this SFAR are minimal. By continuing to prohibit unsafe flights, the benefits of this rule will exceed the minimal flight deviation costs. Therefore, the FAA finds that the incremental costs of extending SFAR No. 107, § 91.1613, will be minimal and are exceeded by the benefits of avoided risk of deaths, injuries, and property damage that could occur if a U.S. operator's aircraft were shot down (or otherwise damaged) while operating in the territory and airspace of Somalia at altitudes below FL260.

The Regulatory Flexibility Act (RFA), in 5 U.S.C. 603, requires an agency to prepare an initial regulatory flexibility analysis describing impacts on small entities whenever 5 U.S.C. 553 or any other law requires an agency to publish a general notice of proposed rulemaking for any proposed rule. Similarly, 5 U.S.C. 604 requires an agency to prepare a final regulatory flexibility analysis when an agency issues a final rule under 5 U.S.C. 553 after that section or any other law requires publication of a general notice of proposed rulemaking. The FAA concludes good cause exists to forgo notice and comment and to not delay the effective date for this rule. As 5 U.S.C. 553 does not require notice and comment in this situation, 5 U.S.C. 603 and 604 similarly do not require regulatory flexibility analyses.

The Trade Agreements Act of 1979 (Pub. L. 96-39) prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to this Act, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

The FAA has assessed the potential effect of this final rule and determined that its purpose is to protect the safety of U.S. civil aviation from risks to their operations in the territory and airspace of Somalia at altitudes below FL260, a location outside the U.S. Therefore, the rule complies with the Trade Agreements Act of 1979.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $155 million in lieu of $100 million.

This final rule does not contain such a mandate. Therefore, the requirements of Title II of the Act do not apply.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires the FAA to consider the impact of paperwork and other information collection burdens it imposes on the public. The FAA has determined no new requirement for information collection is associated with this final rule.

In keeping with U.S. obligations under the Convention on International Civil Aviation, the FAA's policy is to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined no ICAO Standards and Recommended Practices correspond to this regulation. The FAA finds this action is fully consistent with the obligations under 49 U.S.C. 40105(b)(1)(A) to ensure the FAA exercises its duties consistently with the obligations of the United States under international agreements.

While the FAA's flight prohibition does not apply to foreign air carriers, DOT codeshare authorizations prohibit foreign air carriers from carrying a U.S. codeshare partner's code on a flight segment that operates in airspace for which the FAA has issued a flight prohibition for U.S. civil aviation. In addition, foreign air carriers and other foreign operators may choose to avoid, or be advised or directed by their civil aviation authorities to avoid, airspace for which the FAA has issued a flight prohibition for U.S. civil aviation.

The FAA has analyzed this action under Executive Order 12114, Environmental Effects Abroad of Major Federal Actions, and DOT Order 5610.1C, Paragraph 16. Executive Order 12114 requires the FAA to be informed of environmental considerations and take those considerations into account when making decisions on major Federal actions that could have environmental impacts anywhere beyond the borders of the United States. The FAA has determined this action is exempt pursuant to section 2-5(a)(i) of Executive Order 12114 because it does not have the potential for a significant effect on the environment outside the United States.

The FAA has determined that this action will not have a significant environmental effect abroad. In accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 8-6(c), the FAA has prepared a memorandum for the record stating the reason(s) for this determination and has placed it in the docket for this rulemaking.

The FAA has analyzed this rule under the principles and criteria of Executive Order 13132. The agency has determined this action will not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, this rule will not have federalism implications.

The FAA analyzed this rule under Executive Order 13211. The agency has determined it is not a “significant energy action” under the Executive order and will not be likely to have a significant adverse effect on the supply, distribution, or use of energy.

Executive Order 13609 promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609 and has determined that this action will have no effect on international regulatory cooperation.

Except for classified and controlled unclassified material not authorized for public release, all documents the FAA considered in developing this rule, including economic analyses and technical reports, may be accessed from the internet through the docket for this rulemaking.

Those documents may be viewed online at https://www.regulations.gov using the docket number listed above. A copy of this rule will be placed in the docket. Electronic retrieval help and guidelines are available on the website. It is available 24 hours each day, 365 days each year. An electronic copy of this document may also be downloaded from the Office of the Federal Register's website at https://www.federalregister.gov and the Government Publishing Office's website at https://www.govinfo.gov. A copy may also be found at the FAA's Regulations and Policies website at https://www.faa.gov/regulations_policies.

Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW, Washington, DC 20591, or by calling (202) 267-9677. Commenters must identify the docket or notice number of this rulemaking.

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121) (set forth as a note to 5 U.S.C. 601) requires the FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document may contact its local FAA official, or the persons listed under the FOR FURTHER INFORMATION CONTACT section at the beginning of the preamble. To find out more about SBREFA on the internet, visit https://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations, as follows:

Background

The Metropolitan Washington Airports Authority (MWAA) plans airfield and runway construction at DCA beginning in 2023 and continuing into 2024. The main Runway 1-19 will be closed nightly from approximately May 1, 2023, through October 15, 2023, from 11:00 p.m. to 5:59 a.m. Eastern Time on weekdays and potentially on weekends depending on the construction project's progress. Runway 4-22 will be closed nightly and open for Runway 4 daytime departures only for the duration of the construction project. Runway 15-33 will have nightly closures in late April 2023 and again in mid-June to late July 2023, including the intersection with Runway 1-19. Associated taxiways will also be rehabilitated during the project.

The FAA limits the number of arrivals and departures at DCA through the implementation of the High Density Rule (HDR). 1 The HDR hourly limits at DCA are 37 air carrier slots, 11 commuter slots, and 12 reservations available for other operations. 2 The “Other” class of users is limited to unscheduled operations such as general aviation, charters, military, and non-passenger flights and is not intended for scheduled flight or other regularly conducted commercial operations. The FAA limits the number of arrivals and departures at JFK and LGA by FAA Order. 3

At DCA, JFK, and LGA, each slot must be used a minimum of 80 percent of the time. 4 At DCA and LGA, any slot not used at least 80 percent of the time over a two-month period will be recalled by the FAA. 5 At JFK, usage is calculated seasonally, slots not meeting the minimum usage requirement will not receive historic status for the following equivalent scheduling season. 6 The FAA may waive the 80 percent minimum usage requirement if a highly unusual and unpredictable condition beyond the control of the slot-holding air carrier affects carrier operations for a period of five consecutive days or more at JFK and LGA and nine consecutive days or more at DCA. 7

The FAA designated EWR a Level 2 airport under the Worldwide Slot Guidelines (WSG), now known as the Worldwide Airport Slot Guidelines (WASG). The FAA does not allocate slots, apply historic precedence, or impose minimum usage requirements at EWR. Level 2 schedule facilitation depends upon close and continuous discussions and voluntary agreement between airlines and the FAA to reduce congestion. At Level 2 airports, the FAA generally provides priority consideration for flights approved by the FAA and operated by the carrier in those approved times in the prior scheduling season when the FAA reviews proposed flights for facilitation in the next corresponding scheduling season. However, the FAA notes that the usual Level 2 processes include flexibility for the facilitator to prioritize planned flights, which are canceled in advance or on the day of the scheduled operation due to operational impacts that are beyond the control of the carrier.

On November 30, 2022, Airlines for America (A4A) filed a petition on behalf of member and associate member airlines requesting a limited waiver of the minimum slot usage rules at DCA due to the impending runway construction. The petition also sought either a limited waiver of the minimum slot usage requirements or schedule relief at LGA, EWR, and JFK for slots or movements for nonstop flights to and from DCA during specified hours. A4A states that “construction at DCA will impose conditions that will significantly impact operations and those conditions are beyond the control of the slot holders, thereby providing good cause for the requested waiver.” A4A indicates “the nighttime closing of the main Runway 1-19 will significantly impact carriers that hold slots in the 2300 hour by forcing them to use Runway 15-33 or not operate.” A4A notes that “for many carriers, the option to use 15-33 will have a negative impact because some aircraft, such as the 737-900/ER/MAX are unable to use runway 15-33” and “other aircraft will need to apply hefty payload penalties to operate on runway 15-33, for example some aircraft would need to reduce between 50 and 75 passengers on all but the shortest routes.”

A4A also requests relief for slot pairs associated with the 2300-0559 closure period, noting carriers may seek alleviation for the closures slot's pair, which may be outside the 2300-0600 hours and requests the FAA “work with carriers on an individual basis to determine their slot pairing needs and requests as carriers' monthly schedules develop.”

In addition, A4A requests relief for slot usage associated with several operations between DCA and JFK, EWR, or LGA. Specifically, A4A requests the FAA grant slot usage or schedule alleviation to “departure slots between 2100 and 2200 used for nonstop service to DCA, as such flights typically arrive at DCA in the 2300 hour” and “for any DCA departure slots between 0500 and 0659 used for nonstop service to those slot-controlled or schedule facilitated New York airports.”

Southwest Airlines Co. (Southwest) filed a request for temporary slot flexibility at DCA on December 5, 2022. Specifically, Southwest requests that the FAA permit Southwest to move three flights currently scheduled in the 2300 hour to available hours earlier in the day rather than canceling the flights during the DCA construction and closure periods. Southwest does not oppose the waiver request filed by A4A but “believes that FAA should pursue the goal of enabling carriers to maintain all possible capacity at DCA to promote competition, maintain low fares, and ensure nonstop travel options for the flying public.” Southwest states there is available capacity in other hours for Southwest to move its flights without exceeding hours limits based on 60 operations per hour. 8

The FAA has determined the DCA airport construction and runway closures warrant limited, conditional relief from the minimum slot usage requirements because the impacts to operations in certain hours are beyond the carriers' control and will exist for several months. The closures from 2300-0559 Eastern Time are expected to impact operations as described by A4A and Southwest.

DCA is a high-demand airport, and carriers have indicated they plan to operate flights if feasible. There are typically 15 to 16 arrivals in the 2300 hour with the corresponding aircraft used for departures in the morning hours with additional potential for a few cancellations in the late evening hours and the corresponding departures. The FAA is not limiting the relief to certain hours in order to provide some degree of flexibility to carriers to allow them to balance schedules and slot pairs. However, the FAA may require carriers to justify how returned slots are impacted by the runway closure if returned slots are not during or adjacent to the runway closure periods.

The FAA will work individually with carriers on retiming and schedule adjustment options; however, the FAA will not retime air carrier operations into hours that are currently at the air carrier slot limit. The FAA notes that carriers at DCA regularly engage in swapping slots for retiming purposes or in temporary leasing of slots and those options remain available for carriers to manage slot holdings at the airport.

In addition, the FAA is extending a limited, conditional waiver from minimum usage requirements at JFK and LGA and providing similar relief at EWR under the Level 2 process for departure slots or approved schedules between 2100 and 2200 used for nonstop service to DCA, as well as slots or approved schedules associated with a DCA departure between 0500 and 0659 used for nonstop service to those slot-controlled or schedule facilitated New York City area airports. Carriers may also choose to use those slots at JFK and LGA or the approved runway times at EWR for operations to other markets than DCA.

The FAA will treat as used the specific slots impacted by the construction for the period from April 1, 2023, through November 30, 2023. This provides some time before and after the currently planned runway closure dates to accommodate potential changes to the construction schedule and provide carriers that may need some relief on either side of the current anticipated construction dates to phase in or phase out current operations. The relief is subject to the following conditions:

1. The specific slots must be returned to the FAA at least four weeks prior to the date of the FAA-approved operation, by submission to 7-awa-slotadmin@faa.gov.

2. Slots newly allocated after December 1, 2022, for initial use before November 30, 2023, are not eligible for relief.

3. Slots authorized at DCA by Department of Transportation or FAA exemptions are not eligible for relief.

4. At JFK, LGA, and EWR only departure slots or approved schedules between 2100 and 2200 used for nonstop service to DCA and slots or approved schedules associated with a DCA departure between 0500 and 0659 used for nonstop service to those slot-controlled or schedule facilitated New York City area airport are eligible for relief.

This rule amends 14 CFR part 97 by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, 8260-15B, when required by an entry on 8260-15A, and 8260-15C.

The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their graphic depiction on charts printed by publishers or aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the type of SIAPS, Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure, and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPs as identified in the amendatory language for Part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flights safety relating directly to published aeronautical charts.

The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.

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 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. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

This rule amends 14 CFR part 97 by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained on FAA form documents is unnecessary. This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for Part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.

The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.

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 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. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, 14 CFR part 97 is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:

I. Background

Upon request, FDA has classified the human leukocyte antigen typing companion diagnostic test as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by placing the device into a lower device class than the automatic class III assignment.

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

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

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

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

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

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

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

On July 1, 2022, One Lambda, Inc., submitted a request for De Novo classification of the SeCORE CDx HLA Sequencing System. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act.

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

Therefore, on November 28, 2022, FDA issued an order to the requester classifying the device into class II. In this final order, FDA is codifying the classification of the device by adding 21 CFR 866.5960. 1 We have named the generic type of device human leukocyte antigen typing companion diagnostic test, and it is identified as a prescription genotyping or phenotyping in vitro diagnostic product intended for use as an aid in identifying patients who have specific human leukocyte antigen (HLA) allele(s) or express specific HLA antigen(s) and may benefit from treatment with a corresponding therapeutic product or are likely to be at increased risk for serious adverse reactions as a result of treatment with a corresponding therapeutic product.

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

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

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

This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations and guidance. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in 21 CFR part 860, subpart D, regarding De Novo classification have been approved under OMB control number 0910-0844; the collections of information in 21 CFR part 814, subparts A through E, regarding premarket approval, have been approved under OMB control number 0910-0231; the collections of information in part 807, subpart E, regarding premarket notification submissions, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 820, regarding quality system regulation, have been approved under OMB control number 0910-0073; and the collections of information in 21 CFR part 809, regarding labeling, have been approved under OMB control number 0910-0485.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:

I. Background

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

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

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

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

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

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

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

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

On April 3, 2020, FDA received Fifth Eye Inc.'s request for De Novo classification of the Analytic for Hemodynamic Instability. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act.

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

Therefore, on March 1, 2021, FDA issued an order to the requester classifying the device into class II. In this final order, FDA is codifying the classification of the device by adding

Electronic Availability

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

On December 5, 2022, the Secretary of the Treasury, in consultation with the Secretary of State, issued a determination pursuant to sections l(a)(ii), l(b), and 5 of Executive Order 14071 to impose a price cap on crude oil of Russian origin. The determination took effect at 12:01 a.m. eastern standard time on December 5, 2022, and was published on OFAC's website ( www.treas.gov/ofac ) on December 5, 2022. The text of the determination is below.

Pursuant to sections l(a)(ii), l(b), and 5 of Executive Order (E.O.) 14071 of April 6, 2022 (“Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression”), and the determination on November 21, 2022 made pursuant to sections l(a)(ii), l(b), and 5 of E.O. 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”), the Secretary of the Treasury, in consultation with the Secretary of State, hereby determines that, effective 12:01 a.m. eastern standard time on December 5, 2022, the price cap on crude oil of Russian Federation origin shall be $60 per barrel.

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register OMB Office of Management and Budget NPRM Notice of Proposed Rulemaking § Section U.S.C. United States Code WisDOT Wisconsin Department of Transportation II. Background Information and Regulatory History

On July 6, 2021, we published a notice of temporary deviation from regulations and request for comments in the Federal Register (86 FR 35402). Weaccepted comments until November 1, 2021. This deviation allowed mariners to experience the proposed regulation and comment about the operations of the bridges. We received nine comments that we addressed and incorporated into the NPRM that we published in the Federal Register (87 FR 18751) on March 31, 2022. We solicited comments on the NPRM until May 31, 2022, and we did not receive any additional comments.

The Coast Guard is issuing this rule under authority 33 U.S.C. 499.

The Main Street Bridge, mile 55.97, provides a horizontal clearance of 89 feet and a vertical clearance of 11 feet in the closed position, the Jackson Street Bridge, mile 56.22, provides a horizontal clearance of 97 feet and a vertical clearance of 11 feet in the closed position, the Wisconsin Street Bridge, mile 56.72, provides a horizontal clearance of 75 feet and a vertical clearance of 12 feet in the closed position, the Congress Avenue Bridge, mile 58.01, provides a horizontal clearance of 75 feet and a vertical clearance of 13 feet in the closed position, and the Tayco Street Bridge provides a horizontal clearance of 63 feet and a vertical clearance of 3 feet in the closed position. All of these bridges are over the Fox River and provide an unlimited clearance in the open position, and are governed by the regulations found in 33 CFR 117.1087.

The WisDOT requested to operate these bridges remotely and this required an update to the CFR and a sufficient public comment period on the bridge operations before any changes were made. This will not change the schedule of the bridges.

Because this rule will not change the bridge schedule or the movement of vehicles over the bridges, vehicle counts were not consulted.

Approximately 100 powered and unpowered recreational vessels pass through these bridges every day during the summer. Commercial salvage and construction vessels use the waterway in limited numbers.

During the Test Deviation, we provided a comment period of 180 days and received 9 comments that were used to develop and publish the NPRM; the NPRM provided an additional 60 days for the public to comment. We did not receive any additional comments pursuant to the NPRM.

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

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

There will be no burden to any mode of transportation. The only change is the bridges will operate remotely.

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

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

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

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

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

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

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

We did not receive any comments from any Indian Tribal Governments.

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series) which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges and is categorically excluded from further review, under paragraph L49, of Chapter 3, Table3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.

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

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