I. Background

The RHS, an agency of the USDA, offers a variety of programs to build or improve housing and essential community facilities in rural areas. RHS offers loans, grants, and loan guarantees for single- and multi-family housing, childcare centers, fire and police stations, hospitals, libraries, nursing homes, schools, first responder vehicles and equipment, and housing for farm laborers. RHS also provides technical assistance loans and grants in partnership with non-profit organizations, Indian tribes, state and Federal government agencies, and local communities.

Title V of the Housing Act of 1949 (Act) authorized the USDA to make housing loans to farmers to enable them to provide habitable dwellings for themselves or their tenants, lessees, sharecroppers, and laborers. The USDA then expanded opportunities in rural areas, making housing loans and grants to rural residents through the Single-Family Housing (SFH) and Multi-Family Housing (MFH) Programs.

The RHS operates the MFH section 515 Rural Rental Housing direct loan program. The Section 515 program employs a public-private partnership by providing subsidized loans at an interest rate of one percent to developers to construct or renovate affordable rental complexes in rural areas. This one percent loan keeps the debt service on the property sufficiently low to support below-market rents affordable to low-income tenants. Many of these projects also utilize low-income housing tax credit proceeds.

The RHS also operates the MFH Farm Labor Housing direct loan and grant programs under sections 514 and 516 which provide low interest loans and grants to provide housing for farmworkers. These eligible farmworkers may work either at the borrower's farm (“on-farm”) or at any other farm (“off-farm”).

On March 1, 2022, RHS published a final rule in the Federal Register (87 FR 11275) requiring MFH direct loan housing projects to maintain a reserve account, subject to the requirements of 7 CFR part 1902, subpart A, regarding supervised bank accounts. The final rule also stipulated that a MFH housing project's reserve account may alternatively be escrowed by the Agency when the Agency deems necessary. In addition, the March 1, 2022, rule allowed for an annual U.S. Department of Housing and Urban Development Operating Cost Adjustment Factor (OCAF) increase in contributions to a MFH project reserve account. The borrower may choose the option for annual incremental OCAF increases in a project's reserve account contributions, which may improve property preparedness to address capital needs over the life of the project.

Amendments proposed in this rule are designed to increase flexibility in project refinancing for additional capital improvements needed for a section 515 or 514 MFH property. The MFH direct loan project's general operating account is deemed to contain surplus funds when the balance at the end of the housing project's fiscal year, after all payables, exceeds 20 percent of the operating and maintenance expenses. When a MFH property's Agency-approved budget results in surplus cash at the end of the year, this proposed change to the current regulation will allow the borrower to use surplus cash to fund Agency-approved soft debt. MFH-approved soft debt, such as “cash flow notes,” are often provided by state or local government as vital, additional sources of MFH direct loan property rehabilitation funding. The changes will allow owners the flexibility to access surplus cash notes as a new source of capital for property improvements, and to implement operating cost increases in property reserve contributions.

The proposed changes would amend 7 CFR 3560.306 to include reducing debt service on other third-party debt, as an allowable use of funds, including payments toward cash flow notes. Allowing borrowers to use surplus funds to repay third-party debt would allow those borrowers to access state and local government funding available as a capital source for property improvements. Acceptable third-party debt, including cash flow notes, will take the form of a written agreement for the payment of an Agency-approved debt obligation, with or without interest. Payments may occur only after approval has been granted by the Agency. These changes are designed to improve property condition and increase tools available to borrowers to preserve properties as affordable housing resources. This proposed rule no longer includes the reduction in rents as an allowable use of surplus funds, as rent-setting is part of the annual proposed budget process and should not be included in the reserve account section of this regulation. These changes are designed to improve property condition and increase tools available to borrowers to preserve properties as affordable housing resources.

The Rural Rental Housing program is authorized under sections 514, 515, 516 of title V of the Housing Act of 1949, as amended; 42 U.S.C. 1480 et seq.; and implemented under 7 CFR part 3560.

These loans are subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with state and local officials. RHS conducts intergovernmental consultations for each loan in accordance with 2 CFR part 415, subpart C.

This proposed rule has been determined to be non-significant and, therefore, was not reviewed by the Office of Management and Budget (OMB) under Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12988. In accordance with this rulemaking: (1) Unless otherwise specifically provided, all state and local laws that conflict with this rulemaking will be preempted; (2) no retroactive effect will be given to this rulemaking except as specifically prescribed in the rule; and (3) administrative proceedings of the National Appeals Division of the Department of Agriculture (7 CFR part 11) must be exhausted before suing in court that challenges action taken under this rulemaking.

The policies contained in this proposed rule do not have any substantial direct effect on States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. This proposed rule does not impose substantial direct compliance costs on state and local governments; therefore, consultation with States is not required.

This executive order imposes requirements on RHS in the development of regulatory policies that have tribal implications or preempt tribal laws. RHS has determined that the proposed rule does not have a substantial direct effect on one or more Indian tribe(s) or on either the relationship or the distribution of powers and responsibilities between the Federal Government and Indian tribes. Thus, this proposed rule is not subject to the requirements of Executive Order 13175. If tribal leaders are interested in consulting with RHS on this rulemaking, they are encouraged to contact USDA's Office of Tribal Relations or RD's Tribal Coordinator at: AIAN@usda.gov to request such a consultation.

This document has been reviewed in accordance with 7 CFR part 1970, subpart A, “Environmental Policies.” RHS determined that this action does not constitute a major Federal action significantly affecting the quality of the environment. In accordance with the National Environmental Policy Act of 1969, Public Law 91-190, an Environmental Impact Statement (EIS) is not required.

This proposed rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has determined and certified by signature on this document that this proposed rule will not have a significant economic impact on a substantial number of small entities since this rulemaking action does not involve a new or expanded program nor does it require any more action on the part of a small business than required of a large entity.

Title II of the UMRA, Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and on the private sector. Under section 202 of the UMRA, Federal agencies generally must prepare a written statement, including cost-benefit analysis, for proposed and Final Rules with “Federal mandates” that may result in expenditures to state, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires a Federal agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This proposed rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for state, local, and tribal governments or for the private sector. Therefore, this proposed rule is not subject to the requirements of sections 202 and 205 of the UMRA.

The information collection requirements contained in this regulation have been approved by OMB and have been assigned OMB control number 0575-0189. This proposed rule contains no new reporting and recordkeeping requirements that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

RHS is committed to complying with the E-Government Act by promoting the use of the internet and other information technologies to provide increased opportunities for citizen access to government information, services, and other purposes.

Rural Development has reviewed this proposed rule in accordance with USDA Regulation 4300-4, Civil Rights Impact Analysis, to identify any major civil rights impacts the proposed rule might have on program participants on the basis of age, race, color, national origin, sex, or disability. After review and analysis of the proposed rule and available data, it has been determined that implementation of the rulemaking will not adversely or disproportionately impact very low, low- and moderate-income populations, minority populations, women, Indian tribes, or persons with disability by virtue of their race, color, national origin, sex, age, disability, or marital or familial status. No major civil rights impact is likely to result from this proposed rule.

The program affected by this regulation is listed in the Assistance Listing Catalog (formerly Catalog of Federal Domestic Assistance) under number 10.415-Rural Rental Housing Loans.

In accordance with Federal civil rights laws and U.S. Department of Agriculture (USDA) Remedies and complaint filing deadlines vary by program or incident.

Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information ( e.g., Braille, large print, audiotape, American Sign Language) should contact the responsible Mission Area, agency, or staff office; the USDA TARGET Center at (202) 720-2600 (voice and TTY); or the Federal Relay Service at (800) 877-8339.

To file a program discrimination complaint, a complainant should complete a Form AD-3027, USDA Program Discrimination Complaint Form, which can be obtained online at https://www.ocio.usda.gov/document/ad-3027, from any USDA office, by calling (866) 632-9992, or by writing a letter addressed to USDA. The letter must contain the complainant's name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature and date of an alleged civil rights violation. The completed AD-3027 form or letter must be submitted to USDA by:

(1) Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410; or

(2) Fax: (833) 256-1665 or (202) 690-7442; or

(3) Email: program.intake@usda.gov .

USDA is an equal opportunity provider, employer, and lender.

For the reasons set forth in the preamble, Rural Housing Service proposes to amend 7 CFR part 3560 as follows:

Background

Under the Animal Welfare Act (AWA, 7 U.S.C. 2131 et seq. ), the Secretary of Agriculture is authorized to promulgate standards and other requirements governing the humane handling, care, treatment, and transportation of certain animals by dealers, research facilities, exhibitors, operators of auction sales, and carriers and intermediate handlers. The Secretary has delegated responsibility for administering the AWA to the Administrator of the U.S. Department of Agriculture's Animal and Plant Health Inspection Service (APHIS). Within APHIS, the responsibility for administering the AWA has been delegated to the Deputy Administrator for Animal Care. Regulations and standards established under the AWA are contained in 9 CFR parts 1, 2, and 3 (referred to below as the regulations). Part 1 contains definitions for terms used in parts 2 and 3; and part 2 provides administrative requirements and sets forth institutional responsibilities for regulated parties. Within part 2, subpart I contains, among other things, requirements for the handling of wild or exotic animals. Part 3 contains specifications for the humane handling, care, treatment, and transportation of animals covered by the AWA.

Currently, there are 1,970 active class C (exhibitor) licenses; since 2019, roughly 70 to 145 new licenses have been approved each year. Under the current regulations, licensees who maintain wild or exotic animals must demonstrate adequate experience and knowledge of the species they maintain (9 CFR 2.131(a)). The regulations also require that all animals be handled as expeditiously and carefully as possible in a manner that does not cause trauma, overheating, excessive cooling, behavioral stress, physical harm, or unnecessary discomfort, and prohibits physical abuse (9 CFR 2.131(b)), and during public exhibition, be handled so there is minimal risk of harm to the animal and to the public, with sufficient distance and/or barriers between the animal and the general viewing public so as to assure the safety of animals and the public (9 CFR 2.131(c)(1)). APHIS ensures licensees meet these criteria and are compliant with the regulations during on-site inspections of the facilities prior to licensure and at various intervals throughout the 3-year license period (regularly scheduled routine inspections and focused inspections following up on non-compliances or in response to complaints). We believe that providing greater regulatory clarity regarding the requirements to demonstrate “adequate experience and knowledge” of the species being maintained and to maintain “sufficient distance and/or barriers between the animal and the general viewing public” would benefit licensees, Animal Care inspectors, and the public, and would aid in the enforcement of the AWA.

Insufficient experience and knowledge of personnel and inadequate safeguards in activities involving exhibited animals can endanger both the animals and the public, particularly in activities involving public contact with wild or exotic animals. In 2021, 44.4 percent (969/2182) of APHIS' licensed exhibitors offered interactions between the public and animals as part of their business, representing a 1.8-fold increase from 2019 (25 percent; 505/2024). Between 2019 and 2021, 119 “handling” non-compliances were reported in eFile on APHIS inspection reports, 12.6 percent of which led to human or animal injury, or animal death. Species used in such interactions include large carnivores, megavertebrates, and nonhuman primates. Most interactions involved full contact (32 percent) or protected contact (43.7 percent) interactions between animals and the public. The risks to public safety inherent in these activities place the animals involved at an increased risk for harm. In situations in which an animal may pose a risk to public safety (for example, a child entering an animal's enclosure), the animal may be euthanized or otherwise harmed in an attempt to protect the public.

Another area that may warrant amendment of the current regulations is environmental enrichment for regulated animals. The current regulations regarding environmental enrichment are limited to addressing the needs of non-human primates and marine mammals. These requirements include developing, documenting, and following a plan addressing the non-human primates' social needs (9 CFR 3.81(a)), and a physical environment allowing the non-human primates to express species-typical activities (9 CFR 3.81(b)).

It is well-understood that environmental enrichment for animals under a licensee's care is vital to their psychological health and welfare. The most common concern regarding enrichment noted by APHIS inspectors of licensees exhibiting species other than non-human primates has been a complete lack of any enrichment or a barren environment, followed by single housing of social species, and an inability to express species-typical behaviors.

In light of the concerns regarding interactions between wild or exotic animals and the public, the lack of specificity regarding the requirement to demonstrate “adequate experience and knowledge” in the species being maintained, and the lack of requirements for environmental enrichment of all regulated animals, APHIS is contemplating amendments to the regulations.

To ensure that any regulations we promulgate regarding the public handling of exhibited animals account for the varying levels of risk involved with different species, we are contemplating categorizing animals into three categories.

Category 1 animals would refer to exotic or wild animals with the capability or potential to cause severe injury, dismemberment, or death to the public or staff. Animals in this category would include cheetahs, panthers, bobcats, lynxes, bears, wolves, coyotes, large primates (macaques, baboons, nonbrachiating species larger than 33 pounds, great apes), killer whales, walruses, zebras and zebra hybrids, large bovids (for example, bushbucks, kudus, nyalas, elands, bongos, sitatungas, bisons, buffalos, anoas, saolas, guars, bantengs, non-domesticated yaks, roans, sables, bluebucks, oryxes, addaxes, waterbucks, kobs, lechwes, and reedbucks), elephants, rhinoceroses, exotic canids (not otherwise listed), hippopotamuses, hyenas, clouded leopards, wolverines, onagers, Przewalski's horses, and wild asses.

Category 2 animals would include exotic or wild animals with the capability or potential to cause injury to the public or staff that is serious but not likely to be severe or life-threatening. Animals in this category would include small primates (callitrichids, capuchins, squirrel monkeys, lemurs, spider monkeys, gibbons, small African primate species), sloths, coatis, river otters, raccoons, camels, dolphins, pinnipeds, giraffes, kangaroos, other wild or exotic mammals (not otherwise listed in any category), wallabies, skunks/polecats, foxes, other primates (not otherwise listed in any category), wolf hybrids, medium bovids (for example, gazelles, springboks, blackbucks, gerenuks, duikers, impalas, tsessebes, topis, bonteboks, blesboks, hartebeests, wildebeests), servals, caracals, sand cats, ocelots, feline hybrid crosses, other exotic felines (not otherwise listed in any category), nondomestic pigs, okapis, beluga whales, wallaroos, meerkats, other marine mammals, civets, minks, giant anteaters, aardvarks, martins, mongooses, koalas, tapirs, peccaries, jaguarundis, javelinas, pigmy hippos, and other exotic canids (foxes, singing dogs, jackals, bush dogs).

Category 3 animals would include common farm animals and “pocket pets” (small exotic and domestic mammals) that are unlikely to cause serious injury to the public or staff. Animals in this category would include farm animals as defined by the AWA regulations in 9 CFR 1.1 (such as domestic bovines, sheep, goats, llamas, horses, domestic pigs, and rabbits, among others), guinea pigs, other cavy species, hedgehogs, other rodents, small and large cervids, opossums, porcupines, ferrets, kinkajous, armadillos, capybaras, sugar gliders, tenrecs, tamanduas, degus, agoutis, and guanacos.

We are seeking comment on whether classifying the animals is a useful regulatory framework and whether we have classified the above animals into the appropriate risk categories. Particularly, we are interested in receiving comments on whether any animals should be added or removed from the lists of animals that we have tentatively classified as Category 1, 2, or 3, and, if the animal should be removed from its current classification, which category it should be placed in.

With the aforementioned categories in mind, we are considering specifying regulatory requirements regarding public contact with animals that are commensurate with the risk posed by such animals. We are considering formulating such regulations for four types of public contact activities:

• Full contact activities: The public is in a shared space with animals with no barriers between the public and the animals, and direct physical contact is permitted or encouraged. Examples may include hand-feeding animals, photo opportunities, other hands-on encounters with animals, or rides on animals, all of which take place without any barriers in place between the public and the animal(s).

• Protected contact activities: A partial barrier separates the public and the animals, an attendant is present, and direct physical contact is permitted. Examples may include certain feeding activities, certain photo opportunities, certain drive-through exhibits (where guests are able to hand-feed or touch animals), or exhibits with PVC treat tubes.

• Walk-/Drive-Through Exhibits: The public is in shared space with animals, but direct physical contact is not permitted. Examples may include aviary-type exhibits, kangaroo walk-abouts, or drive-through parks where guests are in “closed” vehicles and are unable to feed or touch the animals.

• Performances: Performing animal shows in which there may be a partial barrier or no barrier between the public and animals, and direct physical contact is not permitted.

We are seeking comment on whether the above categories are appropriate, and if the distinctions between these four types of public contact activities are sufficiently clear, or whether they need further clarification.

For all public contact activities outlined above (full contact activities, protected contact activities, walk-/drive-through exhibits, and performances) involving regulated animals, we are considering developing general requirements that would promote animal welfare by minimizing risk to the animals, facility staff, and the public and that are commensurate with the risk posed by such animals.

Regulations could include, for example, activity-specific restrictions that would minimize risk; training requirements for the licensee and its employees; restrictions on participants (for example, age or number of people participating); and requirements for the animal involved (considering, for example, the risk to the public posed by the animal, including the animal's age, stage of development, or vaccination status).

We are considering requiring licensees to develop and implement a written plan specifying the measures that they will take to ensure compliance with the regulatory requirements for all public contact activities. The written plan would need to be signed and approved by an attending veterinarian and be available, upon request, for review by APHIS officials. A failure to follow the written plan would constitute a non-compliance with the AWA regulations and may result in enforcement proceedings.

We are seeking comment on our approach to regulating public contact activities with exhibited animals. Particularly, we are interested in receiving comments on the following questions:

• What general requirements should apply to all public contact activities, regardless of category (or species) of animal involved?

• What requirements or restrictions should apply to each of the four types of public contact activities involving Category 1 animals?

• What requirements or restrictions should apply to each of the four types of public contact activities involving Category 2 animals?

• What requirements or restrictions should apply to each of the four types of public contact activities involving Category 3 animals?

• Are there any requirements or restrictions that should apply only to a particular species involved in any one of the four types of public contact activities?

• Should any specific type of public contact activity involving any specific category of animal (or species) be prohibited?

• Should we require that an exhibitor file a written report within a specified period of time in the event of an animal escape, animal injury, or injury to the licensee or a member of the licensee's staff or the public? Should this requirement be limited to escapes or injuries involving specific categories (or species) of animals?

• If we choose to require a written plan specifying the measures that the licensee will take to ensure compliance with the regulatory requirements for all public contact activities, what specific requirements should the attending veterinarian consider when reviewing and/or approving public contact activities for each category (or species) of animal?

• What direct costs may be associated with developing a written plan for compliance for all public contact activities, including the cost and time it may take to develop a plan?

• Are there any reasonably foreseeable indirect costs ( e.g., opportunity costs or overhead) that stem from the direct costs of developing a plan?

We are also contemplating adding regulations regarding the training of licensees and staff of exhibitors who handle Category 1 and 2 animals at any time (including, but not limited to, handling during public contact activities). We welcome comments regarding training requirements that licensed exhibitors should be required to meet. We are particularly interested in comments regarding the nature of training that currently exists in the absence of APHIS requirements, including, but not limited to, the required duration and content of training, any particular training requirements for exhibitors who handle particular categories or species of animals, any differences in training requirements based on the extent or nature of the employee or volunteer's interaction with the animal, and any challenges that may exist in obtaining the necessary training. We are also seeking public comment on the costs that could be associated with training, if we were to require it, including the length of time that would be required to complete the training.

As noted earlier, the regulations currently only contain requirements for the environmental enrichment of non-human primates and marine mammals. We are contemplating adding regulatory requirements to address species-specific environmental enrichment for all regulated animals. Enrichments may address the psychological needs of species known to exist in social groups; species-specific feeding, foraging, and food acquisition behaviors; and enclosure space, lighting, and design that allow for species-typical behaviors.

Environmental enrichment requirements could be implemented as performance standards, and licensees and registrants would be able to use their own expertise to determine the specific measures that they would implement to meet the proposed requirements. If this approach were adopted, we would require licensees and registrants to develop and implement a written plan specifying the measures that they would take to provide for the environmental enrichment of the animals in their care that would be signed and approved by an attending veterinarian and made available to APHIS officials upon request. We anticipate that the licensee/registrant would be required to monitor the plan on an ongoing basis in order to ensure compliance with the plan and to make adjustments if warranted.

We are seeking comment on this approach to regulating environmental enrichment for regulated animals. Particularly, we are interested in receiving comments on the following questions:

• What, if any, general environmental enrichments should be required for all species?

• What environmental enrichments addressing psychological needs should be required for social species (in general or for particular species)?

• What environmental enrichments addressing natural feeding, foraging, and food acquisition behaviors should be required for animals in general, for certain taxa of animals, or for particular species?

• What environmental enrichments addressing enclosure space, lighting, and design to allow for species-typical behaviors should be required for animals in general, for certain taxa of animals, or for particular species?

• Are there other components or types of environmental enrichments we should consider when developing environmental enrichment requirements for certain taxa of animals or for particular species?

• If we choose to require a written plan, what specific requirements should the attending veterinarian consider when reviewing and/or approving the written plan?

• If environmental enrichment requirements were presented as performance standards, what guidance could APHIS provide to assist licensees and registrants to meet the performance standards?

• What direct costs may be associated with providing environment enrichment for the potentially affected animals in each category?

• Are there any reasonably foreseeable indirect costs ( e.g., opportunity costs or overhead) that stem from these direct costs?

APHIS seeks public comment on whether the changes being considered may require the preparation of an environmental assessment or environmental impact statement pursuant to the National Environmental Policy Act (NEPA). Comments will help inform APHIS as to the applicability of NEPA to modifications to the regulations regarding the handling of wild or exotic animals and environmental enrichment for animals.

APHIS seeks public comment on economic cost considerations for businesses, and in particular small businesses, associated with the amendments being considered. Specifically, we invite public comments on the number of entities that would be potentially impacted by the amendments to the regulations should we proceed to a proposed rule, and the costs associated with these amendments, and detailed comments on any additional costs that could be associated with the amendments to the regulations.

We welcome all comments on the issues outlined above and encourage the inclusion of supporting data.

Table of Contents I. Executive Summary II. Repurchase Agreement Market Background a. Structure of the Repurchase Agreement Market b. Importance of Repurchase Agreement Markets and Associated Vulnerabilities c. Characteristics of the Non-Centrally Cleared Bilateral Repurchase Agreement Market That Underlie Financial Stability Risks III. Data Available on U.S. Repurchase Agreement Activity a. Tri-Party Repurchase Agreements b. Centrally Cleared Repurchase Agreements c. Non-Centrally Cleared Bilateral Repurchase Agreements IV. Justification for Proposed Collection a. Collection of Non-Centrally Cleared Bilateral Repurchase Agreement Data b. Uses of the Data Collection c. Legal Authority V. Collection Design a. Scope of Application b. Scope of Transactions c. Information Required ISO 20022 Legal Entity Identifier Usage Unique Transaction Identifier Usage Collateral Information Date and Tenor Information Trade Direction, Trade Size, and Rate Risk Management Trade Venue d. Submission Process and Implementation VI. Administrative Law Matters a. Paperwork Reduction Act b. Regulatory Flexibility Act c. Plain Language I. Executive Summary

The Office of Financial Research (Office) is requesting comment on a proposed rule establishing a data collection covering non-centrally cleared bilateral transactions in the U.S. repurchase agreement (repo) market (proposed collection). This proposed collection would require reporting by certain U.S. covered reporters for repo transactions that are not centrally cleared and have no tri-party custodian. This proposed collection would enhance the ability of the Financial Stability Oversight Council (Council), Council member agencies, and the Office to identify and monitor risks to financial stability. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office is authorized to issue rules and regulations in order to collect and standardize data to support the Council in fulfilling its duties and purposes, such as identifying risks to U.S. financial stability. In a 2022 statement on nonbank financial intermediation, the Council supported a recommendation made by the Council's Hedge Fund Working Group that the Office consider ways to collect non-centrally cleared bilateral repo data. 1 Additionally, in July 2022 the Office consulted with the Council on efforts to collect non-centrally cleared bilateral repo data, including work on this proposed rule. 2 As a part of this consultation, the Office described the structure and objectives of a pilot study of the non-centrally cleared bilateral repo market conducted in the summer of 2022. This pilot study critically informed the Office's collection efforts.

This proposed collection would require reporting on non-centrally cleared bilateral repo transactions, which comprise the majority of repo activity by several key categories of institutions such as primary dealers and hedge funds. 3 In line with the Council's discussions on July 28, 2022, this proposed collection would provide visibility and transparency into a crucial segment of the U.S. repo market and, as explained below, the one remaining segment for which transaction-level data is not available to regulators.

Collection of information on the non-centrally cleared bilateral repo market is critical to the understanding of financial stability risks. The data proposed to be collected under this proposal will enable the Office to monitor risks in this market. Further, as the Council's duties relate to monitoring and responding to potential financial stability risks, the proposed collection supports the Office's statutory mandate to support the work of the Council.

The multitrillion-dollar market for repo transactions allows financial institutions to lend or borrow cash, usually overnight, using securities as collateral. A repo transaction is the sale of assets, combined with an agreement to repurchase the assets at a future date at a prearranged price. Repos are commonly used as a form of secured borrowing. The assets underlying the repo are used as collateral to protect the cash lender against the risk that the securities provider fails to repurchase the assets underlying the repurchase agreement. Market participants use repos for many reasons, such as to finance securities holdings or to borrow specific securities for use. Central banks also use repos as an important monetary policy tool. 4 The interest rate on repo borrowing is calculated based on the difference between the sale price and the repurchase price of the assets underlying the repo.

Cash lenders typically require over-collateralization from borrowers to protect themselves against a decline in the value of the securities subject to repurchase. In the non-centrally cleared bilateral repo market, the value of the securities pledged as collateral is discounted, which is referred to as a haircut. Margin requirements provide additional buffers for the variation in the value of collateral. Initial margin is a buffer meant to cover the costs of early termination of repo contracts. Drawn upon contingently, initial margin differs from a second type of periodically adjusted margin. If the market value of the collateral falls during the life of the repo, the cash lender has the right to call on its counterparty to deliver additional collateral, known as variation margin, so that the loan remains over-collateralized against future adverse price movements.

Repo transaction documentation specifies the agreement terms, including the types of securities that are acceptable to the cash lender as collateral, and risk management protocols. These protocols include haircuts and margin requirements, which address the costs related to variation in collateral value underlying repo transactions. Participants may have arrangements with each other to offset repo borrowing and lending agreements according to certain conventions. These arrangements, referred to as netting practices, relate to risk management considerations and the economic terms on which repo transactions are negotiated. Firms may employ netting practices across asset classes and instrument types outside of repo markets, on a portfolio basis. Stated differently, a repo market participant may manage netting practices on a repo counterparty across a range of financial exposures. Alternatively, a pair of counterparties may also manage their netting practices only within the context of repo transactions.

Repos can be entered into with a range of fixed maturities, though repos are often overnight transactions. For term repos, repo rates can be negotiated on either a fixed or floating basis. There are also open-tenor repos, which do not have a fixed maturity and are instead renewed by mutual agreement. A lender and a borrower may also write a repo contract to give the option to recall cash or collateral early or extend trades, especially for longer-tenor agreements with less-liquid collateral.

The repo market can be divided into four segments based on whether the transactions are cleared by a central counterparty and whether a tri-party custodian is used to settle transactions. 5 Central counterparties novate trades onto their balance sheets, interposing a common counterparty for all transactions that allows participants to better manage counterparty risk. Central counterparties also provide netting benefits for both balance sheet and settlement purposes. Tri-party custodians are banks that provide collateral valuation, margining, and management services to the counterparties in a repurchase agreement. The tri-party custodian provides back-office support to both parties in the trade by settling the repo on its books and confirming that the terms of the repo, such as eligible collateral and haircuts, are met.

The four segments of the repo market span the different combinations of centrally cleared and non-centrally cleared, tri-party and bilateral. For three of these segments, data are currently collected by regulators. For the U.S. non-centrally cleared tri-party repo market, Bank of New York Mellon serves as the tri-party custodian and transaction-level data is collected under the supervisory authority of the Federal Reserve Board of Governors (Federal Reserve Board). For the centrally cleared tri-party repo market and bilateral repo market, the Fixed Income Clearing Corporation (FICC) serves as the central counterparty. The centrally cleared bilateral repo market is provided by FICC's DVP Service and includes a sponsored service, which offers eligible clients the ability to lend cash or eligible collateral via FICC-cleared delivery-versus-payment (DVP) repo transactions in U.S. Treasury and agency securities on an overnight and term basis settled on a DVP basis. 6 The centrally cleared tri-party repo market is operated through FICC's GCF Repo Service, which also includes the Centrally Cleared Institutional Tri-Party Service, through which institutional counterparties (other than investment companies registered under the Investment Company Act of 1940) can participate as cash lenders in general collateral finance repo on a specified-counterparty basis. In 2021, FICC also began a cleared tri-party service for sponsored members known as the Sponsored General Collateral Service. 7 For all centrally cleared segments, data is collected through the Office's cleared repo collection, which has given financial regulators greater visibility into this segment of repo activity. 8

The final segment of the market is the non-centrally cleared bilateral repo market. This segment has no central counterparty or tri-party custodian, and all trades within this segment are agreed to bilaterally and are settled on a DVP basis. Unlike other segments of the market, less information is known to financial regulators about the non-centrally cleared bilateral segment. While some aggregate data are available from various regulatory filings, there is no transaction-level collection covering the market. However, research by the Office finds that this segment represents 60% of total repo lending by primary dealers and 37% of total repo borrowing. 9

This proposed collection is designed to fill a critical gap in regulators' information on the repo market by collecting data on the non-centrally cleared bilateral repo market, the last segment for which regulators do not have a transaction-level data source. The need for a collection of data on this segment of the market to assist policymakers' understanding of how the aggregate repo market operates has been recognized by the Council since 2016, when it first called for the Office to establish a permanent repo data collection. 10 This lack of visibility was felt acutely following recent episodes in repo markets, which are described in greater detail below. These episodes included a spike in repo market rates in September 2019 and events related to the use of repo with respect to Treasury collateral in March 2020. For both of these events, substantial portions of activity in these crucial funding markets could not be observed. In the wake of these episodes of stress, market participants and regulators have pointed to this segment as a critical blind spot in a market that plays a key role in financial stability. 11

Through a recently-published advance notice of proposed rulemaking (ANPRM), the Alcohol and Tobacco Tax and Trade Bureau (TTB) solicited comments on its trade practice regulations related to the Federal Alcohol Administration Act's tied house, exclusive outlet, commercial bribery, and consignment sales prohibitions, which are contained in 27 CFR parts 6, 8, 10, and 11, respectively. TTB published that ANPRM as Notice No. 216, “Consideration of Updates to Trade Practice Regulations,” in the Federal Register on November 9, 2022, at 87 FR 67612. TTB solicited comments on specific issues and questions set out in the ANPRM and also invited comments on any other issue or concern related to its trade practice regulations.

As originally published, the comment period closing date for the ANPRM was March 9, 2023.

TTB recently received a joint request from eight alcohol industry trade associations to extend the comment period for the ANPRM for an additional 90 days; see Comment 21 as posted in Docket TTB-2022-0011 on the “ Regulations.gov ” website at https://www.regulations.gov. The eight associations supporting the request are the Wine Institute, the Distilled Spirits Council of the United States (DISCUS), WineAmerica, the American Distilled Spirits Alliance (ADSA), the Wine and Spirits Wholesalers of America (WSWA), American Beverage Licensees (ABL), the Beer Institute, and the National Beer Wholesalers Association (NBWA).

The eight associations cite the changes to the beverage alcohol industry since the trade practice regulations were last revised, the differential affect changes to the regulations may have on small, mid-size, and large producers, the broad scope of the ANPRM, and the on-going holiday season as the reasons they are requesting an extension to the ANPRM's comment period for an additional 90 days.

In response to that request, TTB is extending the comment period for Notice No. 216 for an additional 90 days. TTB believes that the 90-day extension of the comment period, in addition to the original 120-day comment period, will be of sufficient length to allow interested parties to consider and comment on the issues raised in the ANPRM, while allowing TTB to then proceed with a notice of proposed rulemaking and ultimately conclude the rulemaking in a timely manner.

Therefore, TTB will now accept public comments on Notice No. 216 through June 7, 2023. See the ANPRM, Notice No. 216, for complete information on the specific issues and questions on which TTB is seeking comment, as well as information on how to submit comments electronically or by postal mail, and on the confidentiality and public disclosure of any submitted comments.

DSBG was initially developed off the U.S. West Coast through a series of research trials which began in 2011 and continued under exempted fishing permits (EFPs) beginning in 2015. The information collected indicated that DSBG was an effective gear type for selectively targeting swordfish with minimal bycatch and that the gear was potentially profitable to fishermen. These promising results led the Council to recommend that NMFS authorize DSBG as a legal gear type for targeting HMS in the U.S. West Coast Exclusive Economic Zone (EEZ) off California and Oregon.

The Council developed this draft amendment over a series of public meetings. The process began with the adoption of a range of alternatives (ROA) for federally authorized DSBG fishing in June of 2018. Later, in November 2018, the Council refined its ROA and adopted a preliminary preferred alternative (PPA) to authorize DSBG off the coasts of California and Washington, with a limited entry (LE) permitting system for use of the gear within the Southern California Bight (SCB). In September 2019, the Council adopted its final preferred alternative (FPA) after making a few minor clarifications to its PPA, including amending the tiered criteria of swordfish fishing experience necessary to qualify for an LE permit. At its March 2021 Meeting, the Council modified its FPA to clarify terms, such as “EFP holders,” in the recommended tiered criteria, and specified data sources for qualifying LE permit applicants under those tiers. The Council also provided additional input on the permit qualification procedures ( i.e., a one-time ranking of permit qualifiers according to tiers), and clarified its intent to issue permits to entities, including corporations, while prohibiting permit transfers through changes in entity ownership. During its November 2021 meeting, the Council adopted a standardized bycatch reporting methodology for an authorized DSBG fishery. Finally, during its March 2022 meeting, the Council considered additional measures for an authorized DSBG fishery related to compliance with the Endangered Species Act, and procedures for monitoring and management of the proposed fishery, including LE permit ownership.

The proposed changes to the HMS FMP are described in further detail below.

Section 6.1 would be amended to include the definition of DSBG as a legal gear type. Both “standard” and “linked” configurations of DSBG are described and would be authorized. Additionally, the section would be amended to clarify that DSBG must be actively tended, in contrast to surface hook and line gear, which does not require active tending.

Section 6.2 would be amended to describe the LE permitting regime for fishing DSBG within the SCB ( i.e., Federal waters east of 120°28′18″ W longitude). This includes language outlining the timing and pace of permit issuance, tiered qualifying criteria (including definitions for permit holders and vessel owners), procedures for permit renewals, and restrictions on permit transfers. Up to 50 permits would be issued for the first year, and up to 25 additional permits would be issued annually in subsequent years until a maximum of 300 permits are issued. The draft amendment also describes scenarios in which the Council or NMFS may determine that a fewer number of permits should be issued than 300. In such a scenario, the Council could recommend NMFS publish new regulations restricting permit issuance based on applicable law or other considerations. Finally, Section 6.2.1.1 describes the tiered criteria that NMFS will use to issue permits to potential DSBG fishermen based on industry participation history and swordfish fishing experience.

Section 6.3 would be amended to include DSBG-specific language related to standardized bycatch reporting methodology (SBRM). This language includes a synopsis of the gear's documented bycatch performance, and considerations related to logbook reporting and observer coverage in the authorized fishery. DSBG vessels would be subject to logbook reporting requirements in the same manner as other HMS fisheries. As an addendum to this section, Section 8.0 would also be amended to include a reference to the Draft Environmental Impact Statement (DEIS) analyzing the environmental and socioeconomic impacts of DSBG authorization, which NMFS published in August 2021.

The preamble to Section 6.6 would be amended to include DSBG when referring to HMS fishery conservation and management measures. Section 6.6.4 would also be amended to reference pending Federal regulations on the maximum amount of gear deployed, gear tending requirements, timing of gear deployment/retrieval, and simultaneous use of DSBG and other gear types on a single trip.

Need for Correction

On January 4, 2023, DHS published a proposed rule in the Federal Register at 88 FR 402 proposing amendments to certain immigration and naturalization benefit request fees charged by USCIS (FR Doc. 2022-27066). There were two typographical errors in the proposed fees listed in Table 1 that were noticed after the document was scheduled for publication. DHS was able to work with the Office of the Federal Register to correct these typographical errors in the version of the proposed rule that posted for public inspection on January 3, 2023. However, the printing of the January 4, 2023 edition of the Federal Register was too far along in production and the errors were not corrected in the official publication. First in Table 1 on page 410, fifth row from the bottom for I-129CW and I-129, Petition for a CNMI Nonimmigrant Worker (with biometric services fee), the proposed fee needs to change from “$1,055” to “$1,015” in the 4th column, and the difference values need to change from “$595” to “$470” and from “129%” to “86%” in the 5th and 6th columns, respectively. Second, in Table 1 on page 411, sixth row from the top for I-765, Application for Employment Authorization—Online (with biometric services), the proposed fee needs to from “$650” to “$555” in the 4th column, and the difference values need to change from “$240” to “$60” and “59%” to “12%” in the 5th and 6th columns, respectively.

Accordingly, Table 1 beginning on page 407 of the proposed rule, FR Doc. 2022-27066, published on January 4, 2023, at 88 FR 402, is corrected and republished as follows:

The Alaska National Interest Lands Conservation Act (ANILCA) allows harvest of wildlife in national preserves in Alaska for subsistence purposes by local rural residents under Federal regulations. ANILCA also allows harvest of wildlife for sport purposes by any individual under laws of the State of Alaska (referred to as the State) that do not conflict with federal laws. ANILCA requires the National Park Service (NPS) to manage national preserves consistent with the NPS Organic Act of 1916, which directs the NPS “to conserve the scenery, natural and historic objects, and wild life in the System units and to provide for the enjoyment of the scenery, natural and historic objects, and wild life in such manner and by such means as will leave them unimpaired for the enjoyment of future generations.” 54 U.S.C. 100101(a).

On June 9, 2020, the NPS published a final rule (2020 Rule; 85 FR 35181) that removed restrictions on sport hunting and trapping in national preserves in Alaska that were implemented by the NPS in 2015 (2015 Rule; 80 FR 64325). These included restrictions on the following methods of taking wildlife that were and continue to be authorized by the State in certain locations: taking black bear cubs, and sows with cubs, with artificial light at den sites; harvesting bears over bait; taking wolves and coyotes (including pups) during the denning season (between May 1 and August 9); taking swimming caribou; taking caribou from motorboats under power; and using dogs to hunt black bears. The 2015 Rule prohibited other harvest practices that were and continue to be similarly prohibited by the State. These prohibitions were also removed by the 2020 Rule. The 2020 Rule also removed a statement in the 2015 Rule that State laws or management actions that seek to, or have the potential to, alter or manipulate natural predator populations or processes in order to increase harvest of ungulates by humans are not allowed in national preserves in Alaska. The NPS based the 2020 Rule in part on direction from the Department of the Interior (DOI) to expand recreational hunting opportunities and align hunting opportunities with those established by states. Secretarial Orders 3347 and 3356. The 2020 Rule also responded to direction from the Secretary of the Interior to review and reconsider regulations that were more restrictive than state provisions, and specifically the restrictions on harvesting wildlife found in the 2015 Rule.

The harvest practices at issue in both the 2015 and 2020 Rules are specific to harvest under the authorization for sport hunting and trapping in ANILCA. Neither rule addressed subsistence harvest by rural residents under title VIII of ANILCA.

Some of the harvest methods prohibited by the 2015 Rule targeted predators. When the NPS restricted these harvest methods in the 2015 Rule, it concluded that these methods were allowed by the State for the purpose of reducing predation by bears and wolves to increase populations of prey species (ungulates) for harvest by human hunters. The State's hunting regulations are driven by proposals from members of the public, fish and game advisory entities, and State and Federal government agencies. The State, through the State of Alaska Board of Game (BOG), deliberates on the various proposals publicly. Many of the comments made in the proposals and BOG deliberations on specific hunting practices showed that they were intended to reduce predator populations for the purpose of increasing prey populations. Though the State objected to this conclusion in its comments on the 2015 Rule, the NPS's conclusion was based on State law and policies;  1 BOG proposals, deliberations, and decisions;  2 and Alaska Department of Fish and Game actions, statements, and publications leading up to the 2015 Rule. 3 Because NPS Management Policies state that the NPS will manage park lands for natural processes (including natural wildlife fluctuations, abundances, and behaviors) and explicitly prohibit predator control, the NPS determined that these harvest methods authorized by the State were in conflict with NPS mandates. NPS Management Policies (4.4.1, 4.4.3) (2006). For these reasons and because the State refused to exempt national preserves from these authorized practices, the NPS prohibited them in the 2015 Rule and adopted a regulatory provision consistent with NPS policy direction on predator control related to harvest. The 2015 Rule further provided that the Regional Director would compile, annually update, and post on the NPS website a list of any State predator control laws or actions prohibited by the NPS on national preserves in Alaska.

As stated above, the 2015 Rule only restricted harvest for “sport purposes.” Although this phrase is used in ANILCA, the statute does not define the term “sport.” In the 2015 Rule, the NPS reasoned that harvest for subsistence is for the purpose of feeding oneself and family and maintaining cultural practices, and that “sport” or recreational hunting invokes Western concepts of fairness which do not necessarily apply to subsistence practices. Therefore, the 2015 Rule prohibited the practices of harvesting swimming caribou and taking caribou from motorboats under power which the NPS concluded were not consistent with generally accepted notions of “sport” hunting. This conclusion also supported restrictions in the 2015 Rule on the practices of taking bear cubs and sows with cubs; and using a vehicle to chase, drive, herd, molest, or otherwise disturb wildlife. To illustrate how the 2015 Rule worked in practice, a federally qualified local rural resident could harvest bear cubs and sows with cubs, or could harvest swimming caribou (where authorized under federal subsistence regulations), but a hunter from Anchorage, Fairbanks, Juneau or other nonrural areas in Alaska, or a hunter from outside Alaska, could not.

In the 2015 Rule, the NPS also concluded that the practice of putting out bait to attract bears for harvest poses an unacceptable safety risk to the visiting public and leads to unnatural wildlife behavior by attracting bears to a food source that would not normally be there. The NPS based this conclusion on the understanding that bears are more likely to attack when defending a food source and therefore visitors who encountered a bait station would be at risk from bear attacks. In addition, the NPS concluded that baiting could cause more bears to become conditioned to human food, creating unacceptable public safety risks. The NPS based this conclusion on the fact that not all bears that visit bait stations are harvested; for example, a hunter may not be present when the bear visits the station, or a hunter may decide not to harvest a particular bear for a variety of reasons. Additionally, other animals are attracted to bait stations. Because bait often includes dog food and human food, including items like bacon grease and pancake syrup, which are not a natural component of animal diets, the NPS was concerned that baiting could lead to bears and other animals associating these foods with people, which would create a variety of risks to people, bears, and property. For these reasons, the 2015 Rule prohibited bear baiting in national preserves in Alaska.

The NPS received approximately 70,000 comments during the public comment period for the 2015 Rule. These included unique comment letters, form letters, and signed petitions. Approximately 65,000 comments were form letters. The NPS also received three petitions with a combined total of approximately 75,000 signatures. The NPS counted a letter or petition as a single comment, regardless of the number of signatories. More than 99% of the public comments supported the 2015 Rule. Comments on the 2015 Rule can be viewed on regulations.gov by searching for “RIN 1024-AE21”.

The 2020 Rule reconsidered the conclusions in the 2015 Rule regarding predator control, sport hunting, and bear baiting. First, the 2020 Rule reversed the 2015 Rule's conclusion that the State intended to reduce predator populations through its hunting regulations. As explained above, the NPS's conclusion in the 2015 Rule was based on BOG proposals, deliberations, and decisions; and Alaska Department of Fish and Game actions, statements, and publications that preceded the 2015 Rule. However, in their written comments on the 2015 and 2020 Rules, the State denied that the harvest practices for predators were part of their predator control or intensive management programs and therefore were not efforts to reduce predators. In its written comments, the State argued that the liberalized predator harvest rules were simply a means to provide new opportunities for hunters to harvest predators, in response to requests received by the BOG. The State argued that it provided these new opportunities under a “sustained yield” management framework, which is distinct from what the State considers “predator control.” The State asserted that it has a separate, formal predator control program which is not considered “hunting” by the State. According to the State, predator control occurs only through its “intensive management” program.

The NPS afforded the State's written comments on the 2020 Rule more weight than it did on the State's similar comments on the 2015 Rule, both of which were in conflict with other contemporaneous public State positions on the matter. The NPS took into account the analysis in the environmental assessment supporting the 2020 Rule, which concluded that the hunting practices in question would not likely alter natural predator-prey dynamics at the population level or have a significant foreseeable adverse impact to wildlife populations, or otherwise impair park resources. The NPS also considered what it viewed as the legislative requirements of ANILCA with respect to hunting. Based upon these considerations, the NPS concluded the hunting practices did not run afoul of NPS Management Policies section 4.4.3, which prohibits predator reduction to increase numbers of harvested prey species. This led the NPS to remove two provisions that were implemented in the 2015 Rule: (1) the statement that State laws or management actions intended to reduce predators are not allowed in NPS units in Alaska, and (2) prohibitions on several methods of harvesting predators. With prohibitions on harvest methods removed, the 2020 Rule went back to deferring to authorizations under State law for harvesting predators. To illustrate how the 2020 Rule works in practice, Alaska residents, including rural and nonrural residents, and out-of-state hunters may take wolves and coyotes (including pups) for sport purposes in national preserves during the denning season in accordance with State law.

The 2020 Rule also relied upon a different interpretation of the term “sport” in ANILCA's authorization for harvest of wildlife for sport purposes in national preserves in Alaska. As explained above, the 2015 Rule gave the term “sport” its common meaning associated with standards of fairness, and prohibited certain practices that were not compatible with these standards. In the 2020 Rule, the NPS stated that in the absence of a statutory definition, the term “sport” merely served to distinguish sport hunting from harvest under federal subsistence regulations. Consequently, under the 2020 Rule, practices that may not be generally compatible with notions of “sport”—such as harvesting swimming caribou or taking cubs and pups or mothers with their young—may be used by anyone in national preserves in accordance with State law.

Finally, the 2020 Rule reconsidered the risk of bear baiting to the visiting public. The NPS noted that peer-reviewed data are limited on the specific topic of hunting bears over bait. Additionally, the NPS concluded that human-bear interactions are likely to be rare, other than for hunters seeking bears, due to a lack of observed bear conditioning to associate bait stations with humans and the relatively few people in such remote areas to interact with bears. In making this risk assessment, the NPS took into account state regulations on baiting that are intended to mitigate safety concerns, and NPS authority to enact local closures if and where necessary. For these reasons and because of policy direction from the DOI and the Secretary of the Interior requiring maximum deference to state laws on harvest that did not exist in 2015, the 2020 Rule rescinded the prohibition on bear baiting that was implemented in the 2015 Rule. As a result, any Alaska resident, including rural and nonrural residents, or out-of-state hunter may take bears over bait in national preserves in Alaska in accordance with State law, including with the use of human and dog foods.

The NPS received approximately 211,780 pieces of correspondence, with a total of 489,101 signatures, during the public comment period for the 2020 Rule. Of the 211,780 pieces of correspondence, approximately 176,000 were form letters and approximately 35,000 were unique comments. More than 99% of the public comments opposed the 2020 Rule. Comments on the 2020 Rule can be viewed on regulations.gov by searching for “RIN 1024-AE38”.

In this proposed rule, the NPS reconsiders the conclusions that supported the 2020 Rule. This proposed rule addresses three topics that were considered in the 2015 and 2020 Rules: (1) bear baiting; (2) the meaning and scope of hunting for “sport purposes” under ANILCA; and (3) State law addressing predator harvest. After reconsidering these topics, the NPS proposes in this rule to prohibit the same harvest methods that were prohibited in the 2015 Rule. The proposed rule also would prohibit predator control or predator reduction on national preserves. Finally, the proposed rule would clarify the regulatory definition of trapping for reasons explained below. The NPS has begun consulting and communicating with Tribes and Alaska Native Claims Settlement Act (ANCSA) Corporations that would be most affected by this proposed rule and the feedback provided to date has been incorporated by the NPS in this proposed rule as discussed below.

The NPS proposes to prohibit bear baiting in national preserves in Alaska. Bait that hunters typically use to attract bears includes processed foods like bread, pastries, dog food, and bacon grease. As explained below, this proposal would lower the risk that bears will associate food at bait stations with humans and become conditioned to eating human-produced foods, thereby creating a public safety concern. This proposal would also lower the probability of visitors encountering a bait station where bears may attack to defend a food source. The proposal to prohibit baiting is supported by two primary risk factors and other considerations that are discussed below.

The risks caused by humans feeding bears (including baiting them with food) are widely recognized. 4 Bears are more likely to attack when defending a food source, putting visitors who encounter a bear at or near a bait station or a kill site at significant risk. 5 Visitors to national preserves in Alaska may inadvertently encounter bears and bait stations while engaging in sightseeing, hiking, boating, hunting, photography, fishing, and a range of other activities. This is because despite the vast, relatively undeveloped nature of these national preserves, most visitation occurs near roads, trails, waterways, or other encampments ( e.g., cabins, residences, communities). Establishing and maintaining a bait station requires the transport of supplies, including bait, barrels, tree stands, and game cameras. The same roads, trails, and waterways used by visitors are, therefore, also used by those setting up a bait station. Thus, despite the vast landscapes, bear baiting and many other visitor activities are concentrated around the same limited access points. Processed foods are most commonly used for bait because they are convenient to obtain and are attractive to bears. Processed foods do not degrade quickly nor are they rapidly or easily broken down by insects and microbes. As a result, they persist on the landscape along with the public safety risk of bears defending a food source.

The NPS recognizes that there are restrictions in State law intended to mitigate the risks described above. Bait stations are prohibited within 1/4 mile of a road or trail and within one mile of a dwelling, cabin, campground, or other recreational facility. State regulations also require bait station areas to be signed so that the public is aware that a bait station exists. Although these mitigation measures may reduce the immediate risk of park visitors approaching a bear defending bait, NPS records indicate that bait stations established at Wrangell-St. Elias National Park and Preserve often do not comply with the State's minimum distance requirements. Further, as discussed below, these requirements do not mitigate the risk of other adverse outcomes associated with baiting that are discussed below.

Another aspect of bear baiting that poses a public safety and property risk is the possibility that bears become habituated to humans through exposure to human scents at bait stations and then become food conditioned, meaning they learn to associate humans with a food reward (bait). This is particularly true of processed foods that are not part of a bear's natural diet because virtually all encounters with processed foods include exposure to human scent.

It is well understood that habituated and food-conditioned bears pose a heightened public safety risk. 6 The published works of Stephen Herrero, a recognized authority on human-bear conflicts and bear attacks explain the dangers from bears that are habituated to people or have learned to feed on human food, highlight that habituation combined with food-conditioning has been associated with a large number of injuries to humans, and indicate food-conditioning of bears may result from exposure to human food at bait stations.

The State's mitigation measures mentioned above, including requirements for buffers and signage, do not adequately address the risk associated with habituated and food-conditioned bears because bears range widely, having home ranges of tens to hundreds of square miles. 7 The buffers around roads, trails, and dwellings are therefore inconsequential for bears that feed at bait stations but are not harvested there. These bears have the potential to become habituated to humans and conditioned to human-produced foods, resulting in increased likelihood of incidents that compromise public safety, result in property damage and threaten the lives of bears who are killed in defense of human life and property.

In the 2020 Rule, the NPS determined that the lack of conclusive evidence that bear baiting poses safety concerns justified allowing bear baiting. While the NPS acknowledges the lack of peer-reviewed data demonstrating that bear baiting poses a public safety risk, this data gap exists primarily because rigorous studies specific to this point are logistically and ethically infeasible. The determination made by the NPS in the 2020 Rule did not fully consider the vast experience and knowledge of recognized experts and professional resource managers. In April 2022, the NPS queried 14 NPS resource managers and wildlife biologists from 12 different National Park System units in Alaska about bear baiting. These technical experts' unanimous opinion was that bear baiting will increase the likelihood of defense of life and property kills of bears and will alter the natural processes and behaviors of bears and other wildlife. Considering the potential for significant human injury or even death, these experts considered the overall risk of bear baiting to the visiting public to be moderate to high. These findings generally agree with the universal recognition in the field of bear management that food conditioned bears result in increased bear mortality and heightened risk to public safety and property, and that baiting, by its very design and intent, alters bear behavior. The findings also are consistent with the State's management plan for Denali State Park. The management plan expresses concern that bear baiting “teaches bears to associate humans with food sources” and states that bear baiting is in direct conflict with recreational, non-hunting uses of the park. The plan further notes that bear baiting has “the potential for creating serious human-bear conflicts, by encouraging bears to associate campgrounds and other human congregation points with food sources.”  8

In addition to the risks explained above, there are other considerations that support the proposal to prohibit all bear baiting. The NPS is guided by its mandates under the NPS Organic Act to conserve wildlife and under ANILCA to protect wildlife populations. Food-conditioned bears are more likely to be killed by authorities or by the public in defense of life or property. 9 While the NPS supports wildlife harvest as authorized in ANILCA, it cannot promote activities that increase non-harvest mortalities of bears.

Feedback received to date from Tribes and ANCSA Corporations indicates baiting bears is not a common activity in or near national preserves and not something done commonly by local rural residents. Many of the entities voiced support for prohibiting baiting altogether, limiting bait to natural items, increasing buffer zones around developments, or requiring a permit. On the other hand, a minority—mostly entities affiliated with the Wrangell-St. Elias area—recommended continuing to allow sport hunters to harvest bears over bait, including with use of processed foods like donuts and dog food. Consultation and communication with Tribes and ANCSA Corporations is ongoing and feedback will continue to be considered by the NPS throughout the rulemaking process.

Hunting is prohibited in National Park System units except as specifically authorized by Congress. 36 CFR 2.2(b). Title VIII of ANILCA allows local rural residents to harvest wildlife for subsistence in most, but not all, lands administered by the NPS in Alaska. Title VIII also created a priority for federal subsistence harvest over other consumptive uses of fish and wildlife. Separate from subsistence harvest, ANILCA authorized anyone to harvest wildlife for “sport purposes.” When first authorized under ANILCA, the State managed subsistence harvest by local rural residents under Title VIII as well as harvest for sport purposes by anyone. After a ruling from the State Supreme Court that the State Constitution barred the State from implementing the rural subsistence provisions of ANILCA, the Federal government assumed management of subsistence harvest under title VIII. Following this decision, the State only regulates harvest for sport purposes under ANILCA. 10 Under the State's current framework, Alaska residents have a priority over nonresidents but there is no prioritization based upon where one resides in Alaska. Accordingly, all residents of Alaska have an equal opportunity to harvest wildlife for “sport purposes” in national preserves under State law.

The NPS is re-evaluating whether it was appropriate for the 2020 Rule to change its interpretation of the term “sport” in the 2015 Rule. An important implication of that change is that the 2020 Rule expanded sport hunting opportunities for nonlocal residents who are not qualified to harvest wildlife under federal subsistence laws. As mentioned above, in the spring of 2022 the NPS reached out to Tribes and ANCSA Corporations that are most likely to be impacted by this proposed rule. In these discussions, most of these entities expressed concern that increasing harvest opportunities under ANILCA's authorization for sport hunting and trapping could result in increased competition from individuals that are not local to the area. In addition, most of these entities do not believe there is a demand to engage in these harvest practices in national preserves (other than limited demand to bait bears in Wrangell-St. Elias) and expressed a preference that the NPS not authorize practices that could encourage more nonlocal hunters to visit the area and compete for wildlife resources.

This feedback from Tribes and ANCSA Corporations illustrates a tension between the interests conveyed and the outcome of the 2020 Rule which increased harvest opportunities for nonlocal rural residents. In the 2015 Rule, the NPS said harvest of wildlife for “sport purposes” carries with it concepts of fairness or fair chase. These constructs do not necessarily apply to subsistence practices which emphasize cultural traditions and acquisition of calories for sustenance. In the 2020 Rule, the NPS changed its interpretation by saying the term “sport” only serves to differentiate harvest under State regulations from harvest under federal subsistence regulations. As a result, practices that some might consider only appropriate for subsistence harvest by local rural residents now may be used by anyone harvesting for “sport purposes” under State law. As conveyed by the Tribes and ANCSA Corporations, this increases competition between federal subsistence hunters and sport hunters by expanding hunting opportunities to those who are not local rural residents. It also allows for sport hunters to engage in practices that are not considered sporting under notions of the term as described above. The examples below illustrate how this issue plays out in national preserves in Alaska today:

• Swimming caribou. Under the 2015 Rule, only qualified rural residents could harvest swimming caribou in national preserves in accordance with federal subsistence regulations, which recognize the practice as part of a customary and traditional subsistence lifestyle. Individuals from Anchorage, Fairbanks, Juneau and other nonrural areas in Alaska, as well as out-of-state hunters, could not harvest swimming caribou in national preserves. Under the 2020 Rule, residents of nonrural areas in Alaska (including Anchorage, Fairbanks, and Juneau) and out-of-state hunters can harvest swimming caribou in national preserves in accordance with State law under ANILCA's authorization for harvest for “sport purposes.”

• Black bear cubs and sows with cubs. Under the 2015 Rule, only a qualified rural resident could harvest bear cubs and sows with cubs in accordance with federal subsistence regulations, which recognize this practice as an uncommon but customary and traditional harvest practice by some Native cultures in northern Alaska. Accordingly, while the NPS supported the activity under federal subsistence regulations, the NPS did not support it under ANILCA's authorization for “sport” hunting.” Under the 2020 Rule which deferred to State law, harvest of bear cubs and sows with cubs is not limited based on where one resides. Accordingly, under the 2020 Rule individuals who are not local to the area can harvest bear cubs and sows with cubs at den sites in national preserves under ANILCA's authorization for harvest for “sport” purposes.

• Take of wolves and coyotes, including pups, during the denning season. The 2015 Rule prohibited sport hunters from taking wolves and coyotes during the denning season, a time when their pelts are not in prime condition, which can leave pups and cubs orphaned and left to starve. Under the 2020 Rule, any hunter (including those from out of state) can harvest wolves and coyotes year-round, including pups during the denning season. This reduces the number of wolves and coyotes available to harvest when their pelts are fuller and therefore more desirable to subsistence users and other trappers.

These examples demonstrate that the NPS's interpretation of the term “sport” under the 2015 Rule created a result that is more in line with the majority of feedback received to date from Tribes and ANCSA Corporations. The NPS Organic Act directs the NPS to conserve wildlife. Based upon this conservation mandate, hunting is prohibited in National Park System units except as authorized by Congress. 36 CFR 2.2(b). ANILCA authorizes harvest for Federal subsistence and “sport purposes” in national preserves in Alaska. The NPS interprets the term “sport” to include the concept of fair chase as articulated by some hunting organizations, 11 as not providing an unfair advantage to the hunter and allowing the game to have a reasonable chance of escape. This involves avoiding the targeting of animals that are particularly vulnerable, such as while swimming, while young, or while caring for their young. While the NPS understands that the exact boundaries of this concept involve some level of ambiguity, the NPS believes the practices addressed in this proposed rule fall outside the norms of “sport” hunting.

The NPS requests comment on this concept of “sport” and whether the practices described in these examples should be allowed as a “sport” hunt in national preserves in Alaska. Giving meaning of the term “sport” also prioritizes harvest for subsistence by local rural residents by avoiding competition with nonlocal residents who are hunting for sport purposes under ANILCA. This is consistent with the priority that Congress placed on the customary and traditional uses of wild renewable resources by local rural residents under ANILCA ( see Sec. 101(c)). For these reasons, the proposed rule would reinstate the prohibitions in the 2015 Rule on methods of harvest that are not compatible with generally accepted notions of “sport” hunting. The proposed rule would define the terms “big game,” “cub bear,” “fur animal,” and “furbearer,” which are used in the table of prohibited harvest methods, in the same way they were defined in the 2015 Rule.

The proposed rule also would address opportunities to harvest predators that are authorized by the State. NPS policy interprets and implements the NPS Organic Act. NPS Management Policies require the NPS to manage National Park System units for natural processes, including natural wildlife fluctuations, abundances, and behaviors, and specifically prohibit the NPS from engaging in predator reduction efforts to benefit one harvested species over another or allowing others to do so on NPS lands. (NPS Management Policies 2006, Ch. 4). These activities are prohibited by policy even if they do not actually reduce predator populations or increase the number of prey species available to hunters. The NPS believes the 2020 Rule is in tension with these policies based upon the information it collected over a period of years before the publication of the 2015 Rule. This information indicates that the predator harvest practices that were allowed by the State were allowed for the purpose of benefited prey species over predators. For this reason, the proposed rule would reinstate the prohibitions in the 2015 Rule on methods of harvest that target predators for the purpose of increasing populations of prey species for human harvest. In addition, the proposed rule would add the following statement to its regulations to clarify that predator control is not allowed on NPS lands: “Actions to reduce the numbers of native species for the purpose of increasing the numbers of harvested species ( e.g., predator control or predator reduction) are not allowed.”

Finally, the proposed rule would revise the definition of “trapping” in part 13 to clarify that trapping only includes activities that use a “trap” as that term is defined in part 13. The definition of “trapping” promulgated in the 2015 Rule inadvertently omitted reference to the use of traps, instead referring only to “taking furbearers under a trapping license.” The proposed revision would resolve any question about whether trapping can include any method of taking furbearers under a trapping license, which could include the use of firearms depending upon the terms of the license. This change would more closely align the definition of “trapping” in part 13 with the definition that applies to System units outside of Alaska in part 1.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs in the OMB will review all significant rules. The Office of Information and Regulatory Affairs has determined that this proposed rule is significant because it raises novel legal or policy issues. The NPS has assessed the potential costs and benefits of this proposed rule in the report entitled “Cost-Benefit and Regulatory Flexibility Analyses: Alaska Hunting and Trapping Regulations in National Preserves” which can be viewed online at https://www.regulations.gov by searching for “1024-AE70.” Executive Order 13563 reaffirms the principles of Executive Order 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. The NPS has developed this proposed rule in a manner consistent with these requirements.

This proposed rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). This certification is based on the cost-benefit and regulatory flexibility analyses found in the report entitled “Cost-Benefit and Regulatory Flexibility Analyses: Alaska Hunting and Trapping Regulations in National Preserves” which can be viewed online at https://www.regulations.gov by searching for “1024-AE70.

This proposed rule does not impose an unfunded mandate on Tribal, State, or local governments or the private sector of more than $100 million per year. The proposed rule does not have a significant or unique effect on Tribal, State, or local governments or the private sector. It addresses public use of national park lands and imposes no requirements on other agencies or governments. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

This proposed rule does not effect a taking of private property or otherwise have takings implications under Executive Order 12630. A takings implication assessment is not required.

Under the criteria in section 1 of Executive Order 13132, the proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism summary impact statement. This proposed rule only affects use of federally administered lands and waters. It has no outside effects on other areas. A Federalism summary impact statement is not required.

This proposed rule complies with the requirements of Executive Order 12988. This proposed rule:

(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

The DOI strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and Tribal sovereignty. The NPS has begun consulting and communicating with Tribes and ANCSA Corporations that would be most affected by this proposed rule and the feedback provided to date has been incorporated by the NPS in this proposed rule. The NPS has evaluated this proposed rule under the criteria in Executive Order 13175 and under the Department's Tribal consultation and ANCSA Corporation policies. This proposed rule would restrict harvest methods for sport hunting only; it would not affect subsistence harvest under Title VIII of ANILCA. Feedback from Tribes and ANCSA Corporations indicates that these harvest methods are not common or allowed in many areas by the State. For these reasons, the NPS does not believe the proposed rule will have a substantial direct effect on federally recognized Tribes or ANCSA Corporation lands, water areas, or resources. Consultation and communication with Tribes and ANCSA Corporations is ongoing and feedback will continue to be considered by the NPS throughout the rulemaking process.

This proposed rule does not contain information collection requirements, and a submission to the Office of Management and Budget under the Paperwork Reduction Act is not required. The NPS may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid OMB control number.

The NPS will prepare an environmental assessment of this proposed rule to determine whether this proposed rule will have a significant impact on the quality of the human environment under the National Environmental Policy Act of 1969. The environmental assessment will include new information, as appropriate, as well as an impact analysis similar to what was provided in the environmental assessments prepared for the 2015 Rule and the 2020 Rule, both of which resulted in a finding of no significant impact.

This proposed rule is not a significant energy action under the definition in Executive Order 13211; the proposed rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy, and the proposed rule has not otherwise been designated by the Administrator of Office of Information and Regulatory Affairs as a significant energy action. A Statement of Energy Effects is not required.

The NPS is required by Executive Orders 12866 (section 1(b)(12)) and 12988 (section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule the NPS publishes must:

(a) Be logically organized;

(b) Use the active voice to address readers directly;

(c) Use common, everyday words and clear language rather than jargon;

(d) Be divided into short sections and sentences; and

(e) Use lists and tables wherever possible.

If you feel that the NPS has not met these requirements, send the NPS comments by one of the methods listed in the ADDRESSES section. To better help the NPS revise the rule, your comments should be as specific as possible. For example, you should identify the numbers of the sections or paragraphs that you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

It is the policy of the DOI, whenever practicable, to afford the public an opportunity to participate in the rulemaking process. Accordingly, interested persons may submit written comments regarding this proposed rule by one of the methods listed in the ADDRESSES section of this document.

Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask the NPS in your comment to withhold your personal identifying information from public review, the NPS cannot guarantee that it will be able to do so.

In consideration of the foregoing, the National Park Service proposes to amend 36 CFR part 13 as set forth below:

The additions and revision read as follows: