I. Background Information

The SBA's Disaster Loan Program provides direct assistance to homeowners, renters, businesses and nonprofits and is critical to rebuilding communities after a disaster. Pursuant to section 7(b)(1) of the Small Business Act, 15 U.S.C. 636(b)(1), SBA is authorized to make disaster loans available to repair, rehabilitate or replace real or personal property damaged or destroyed as a result of disasters. These long-term, low-interest loans support those needing to repair or replace their damaged primary residence and personal effects. In this direct final rule, SBA is increasing the lending limits applicable to home loans, including the limits on amounts for repair and replacement of disaster damaged real and personal property, for refinancing, for mitigation, and for contractor malfeasance. These changes are necessary as current home loan lending limitations have not been adjusted since 1994 and are insufficient to meet the needs of many homeowners and renters. SBA has determined that these increases are necessary due to inflation and higher costs for real and personal property repairs. These increases address the need for periodic adjustments in loan limits based on increases in home costs, the cost and availability of construction materials, and significant changes in labor costs. The current limits, established in 1994, are inadequate to compensate many disaster survivors for the costs associated with rebuilding, replacing and repairing their homes and household effects which have been lost or damaged as a result of a disaster. Housing prices have risen significantly over the past 25 years. The median price of a single-family house sold in the first quarter of 1994 was only $130,000. By the end of 2021, the median price of a home had risen to over $400,000. 1 More recent increases have also been noted. According to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics, 2 the prices of goods used in construction climbed each month during 2022 resulting in a 19% jump in producer prices for construction for a 12-month period ending November 2022. Additionally, the National Association of Home Builders (NAHB) price index of services inputs to residential construction registered even steeper increases. As a result, the price index of services used in home building (including trade services, transportation and warehousing) went up 15.2% since the start of 2022. The index increased 18.5% year over year. Since the start of the pandemic, services prices are now 39% higher. In addition, building materials prices increased 20.4% year over year and have risen 33% since the start of the pandemic. 3 From 2018 through 2022, approximately 8.5% of borrowers have been unable to fully restore their real estate and replace their personal property due to the current home loan lending limits. Most recently, 64.2% of recipients of home loans for damage caused by the 2021 Colorado Wildfires, and 17.6% of such borrowers from Hurricanes Fiona and Ian, were unable to fully restore their real estate and replace personal property; this level of shortfall is expected to continue to increase and impact greater numbers of disaster survivors in other regions. Historically, in the aftermath of disasters, especially large catastrophes, construction costs increase sharply as demand increases and supply decreases. Therefore, SBA, based on statutory authority and additional analyses cited above, has determined that it is appropriate and necessary at this time to increase home loan lending limits.

SBA is also increasing the initial deferment period from 5 months to 12 months, which reduces the immediate financial burden for disaster survivors. Repair and replacement timelines often extend beyond the existing 5 months permitted for deferment. This creates the responsibility and burden for a disaster survivor to begin making payments before their property is completely restored and all-in costs accounted for. Further, SBA is revising its regulations to allow the SBA Administrator to increase the maximum loan amounts to homeowners and renters under a specific disaster declaration based on appropriate economic indicators, such as current building costs, regional median home prices, and the Consumer Price Index (CPI) and the Producer Price Index (PPI) for the region(s). These disaster-specific increases will be published in the Federal Register .

Finally, SBA is making other revisions that will increase access to disaster loans and that clarify existing requirements, as further described below in the section-by-section analysis.

Current section 123.7 allows loan funds to be used to protect damaged or destroyed real property from possible future similar disasters. SBA is eliminating the word “similar,” which allows a disaster loan recipient to use loan funds allocated for mitigation to implement mitigation measures to protect against any type of disaster. The elimination of “similar” allows disaster loan recipients more flexibility to better protect their property from future disasters. For example, under current section 123.7, a homeowner that suffered damage from a fire would not be allowed to use mitigation funds to prevent earthquake damage, since the damage to the home was not caused by an earthquake. This change provides disaster borrowers with more options to mitigate future damage from all types of disasters, reducing the need for future financial assistance.

Section 123.11 defines when SBA requires collateral for disaster loans. Paragraph (b) lists examples of available collateral that may be required to secure a disaster loan, such as a lien on the damaged or replacement property, a security interest in personal/business property, or both. SBA is revising paragraph (b) to provide SBA more discretion to determine the collateral that will be required for disaster loans. This increased flexibility will allow SBA to tailor this collateral requirement to the disaster survivor's circumstances. For example, requiring liens on property with no liquidation value may increase the cost burden to the borrower without providing meaningful liquidated recovery for SBA in the event of a default. SBA will further define “available collateral” in its Standard Operating Procedures (SOP). SBA will clarify in the Disaster Assistance Program SOP 50 30 the circumstances under which blanket liens on all business assets will not be required.

Section 123.13 addresses declined applications and procedures for reconsideration. Current subsection (d) refers to documentation required to overcome SBA's denial of the original loan application and includes an additional requirement for business loan application reconsideration requests to include current business financial statements. SBA is removing this requirement to submit current business financial statements with every business loan reconsideration request. In instances where SBA declines a loan based on lack of repayment ability, current business financial statements would be required. However, other reconsiderations not based on repayment ability may not require this information.

SBA is amending this regulation by increasing the stated threshold limits within each subparagraph of § 123.105(a). Specifically, SBA is replacing “$40,000” with “$100,000” as the limit for repair and replacement of household and personal effects. SBA is also replacing “$200,000” with “$500,000” as the limit for repair and replacement of a primary residence. These changes will allow for many eligible disaster survivors to obtain full recovery for their disaster losses and align with increases in inflation, construction costs and home prices. In addition, SBA is removing the limit on landscaping and other improvements to grounds, currently capped at $5,000, to allow disaster borrowers to obtain the necessary funds to repair their damaged real estate. In accordance with the home lending limit increase, SBA is also increasing the limits from $200,000 to $500,000 for eligible refinancing purposes in section 123.105(a)(3), post-disaster mitigation in § 123.105(a)(4), and eligible malfeasance in § 123.105(a)(5). These changes are based on increases in median home prices and repair/replacement costs.

SBA is increasing the deferment period for the first payment due in § 123.105(c) from 5 months to 12 months from the date of the initial disbursement to reduce the financial burden for disaster survivors. Generally, the borrower will pay monthly installments of principal and interest, payment beginning 12 months from the date of the initial disbursement. Currently, SBA has the discretion to defer first payment due dates longer than 5 months and frequently defers payments for 12 months on a disaster-by-disaster basis. This change will create clarity and consistency across disaster declarations, since each will have the same deferment period, and will provide more time to a borrower recovering from a declared disaster to start making payments on the loan. SBA recognizes that full disbursements are not always completed immediately after approval and disaster recovery can be an ongoing process.

Finally, in order to allow for flexibility and to match the authority already granted to the Administrator for business loans, 4 SBA is adding a new paragraph (d) to § 123.105 to allow the Administrator to increase home loan lending limits within § 123.105(a) under an individual disaster declaration based on appropriate economic indicators for the region(s) in which the disaster occurred including but not limited to factors such as Consumer Price Index (CPI), Producer Price Index (PPI), median home prices and local construction costs. After reviewing the totality of circumstances, and if determined appropriate, SBA will publish any increased lending limit for an individual disaster declaration in the Federal Register .

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc., Model BD-100-1A10 airplanes. The NPRM published in the Federal Register on March 24, 2023 (88 FR 17748). The NPRM was prompted by AD CF-2022-55, dated September 21, 2022, issued by Transport Canada, which is the aviation authority for Canada (referred to after this as the MCAI). The MCAI states that during an unscheduled inspection, a design deficiency was discovered which could allow a no-back pawl to be incorrectly installed in an HSTA. The no-back mechanism is a primary means to prevent back driving of the HSTA, and the motor brake assemblies (MBAs) are the secondary means. If this condition is not corrected, a non-functioning no-back mechanism in combination with loss of, or degraded HSTA MBA braking capability, could lead to a loss of control of the airplane. The MCAI also states that as a mitigating action, Transport Canada AD CF-2019-23, dated June 18, 2019, was issued to mandate a software upgrade for the horizontal stabilizer trim electronic control unit to verify the MBA for braking capability during the power up test on certain Bombardier, Inc., Model BD-100-1A10 airplanes. Transport Canada AD CF-2019-23 corresponds to FAA AD 2019-15-04, Amendment 39-19697 (84 FR 38862, August 8, 2019) (AD 2019-15-04).

In the NPRM, the FAA proposed to require a check for part number and serial numbers of the HSTA, and if necessary, inspection of the no-back pawl installation, and corrective action. The FAA is issuing this AD to address the unsafe condition on these products.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-0439.

The FAA received comments from an individual who supported the SNPRM/NPRM without change.

The FAA has revised paragraph (h) of this AD to clarify the parts installation prohibition applies only to any HSTA with P/N C47100-003 or P/N C47100-004 that does not have either the suffix-K following the serial number or a modification plate showing “SB C47100-27-02” or “SB C47100-27-03.” In the NPRM, the FAA had inadvertently stated that installation of an HSTA with a modification plate showing “SB C47100-27-02” or “SB C47100-27-03” was prohibited.

This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data, considered the comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial change, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Bombardier Service Bulletins 100-27-20 and 350-27-009, both Revision 01, both dated December 1, 2020. This service information specifies procedures for a check for part number and serial numbers of the HSTA, and if necessary, inspection of the no-back pawl installation and corrective action. Corrective actions include replacement of the HSTA, and a re-identification and test of the HSTA. These documents are distinct since they apply to different airplane configurations. 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 estimates that this AD will affect 703 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of airplanes that might need these on-condition actions:

According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators. The FAA does not control warranty coverage for affected operators. As a result, the FAA has included all known costs in the cost estimate.

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:

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain DAHER AEROSPACE Model TBM 700 airplanes. The NPRM published in the Federal Register on March 8, 2023 (88 FR 14301). The NPRM was prompted by AD 2022-0149, dated July 21, 2022 (referred to after this as “the MCAI”), issued by the European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union.

The MCAI was prompted by a report that, due to interference between the emergency exit trim panel and the upholstery panel, additional effort may be required to open the emergency exit door. An investigation revealed that the gripping strap, which maintains the upholstery panel on the emergency exit trim panel, is not properly sized. The MCAI requires inserting a temporary revision (TR) into the emergency procedures section of the applicable pilot's operating handbook (POH), informing all flight crews, operating the airplane accordingly, and modifying the gripping strap, at which time the TR can be removed from the POH. The unsafe condition, if not addressed, could lead to failure of the emergency exit door to perform its intended function during an emergency opening, possibly resulting in reduced evacuation capacity from the airplane and injury to occupants.

In the NPRM, the FAA proposed to require modification of the gripping strap, which maintains the upholstery panel on the emergency exit trim panel. The FAA is issuing this AD to address the unsafe condition on these products.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-0425.

The FAA received no comments on the NPRM or on the determination of the costs.

These products have been approved by the aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data and determined that air safety requires adopting this 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 Daher Aerospace Service Bulletin SB 70-304, dated July 2022, which specifies procedures for modifying the gripping strap on the emergency exit trim panel.

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

The MCAI requires inserting a TR into the emergency procedures section of the applicable POH, informing all flight crews, and thereafter, operating the airplane accordingly until the modification of the gripping strap, at which time the TR can be removed from the POH. This AD requires modifying the gripping strap because FAA regulations mandate compliance with only the operating limitations section of the POH and not the emergency procedures section.

The FAA estimates that this AD affects 841 airplanes of U.S. registry.

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

The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators.

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:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations in the area.

The FAA published a notice of proposed rulemaking for Docket No. FAA 2023-0503 in the Federal Register (88 FR 21141; April 10, 2023), amending Class E airspace extending upward from 700 feet above the surface at Redstone AAF and Huntsville Executive Tom Sharp Field in Huntsville, AL. This action also updates terminology in the Class D and Class E surface airspace descriptions for Redstone AAF. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class D and E airspace designations are published in paragraphs 5000, 6002, and 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 annually. This document amends the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022. FAA Order JO 7400.11G is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next FAA Order JO 7400.11 update.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends 14 CFR part 71 by amending Class E airspace extending upward from 700 feet above the surface of Redstone AAF by increasing the radius to 14.1 miles (previously 9.5 miles). The FAA amends Class E airspace extending upward from 700 feet above the surface of Huntsville Executive Tom Sharp Field by increasing the radius to 7.6 miles (previously 6.3 miles). In doing so, the FAA removes Huntsville International-Carl T. Jones Field: RWY 36L-LOC from the legal description of Huntsville Executive Tom Sharp Field as it is no longer a necessary part of the legal description. In addition, this action replaces the outdated terms Airport/Facility Directory with the term Chart Supplement and Notice to Airmen with the term Notice to Air Missions in the Huntsville Class D and Class E surface airspace descriptions.

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. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it updates the information in the Madison Dane County Regional Airport-Truax Field, WI, Class C airspace description.

During a review of the Madison Dane County Regional Airport-Truax Field, WI, Class C airspace description, the FAA identified the need to update the airport name, the ARP geographic coordinates for the Dane County Regional Airport-Truax Field and the Waunakee Airport, and replace the outdated terms “Notice to Airmen” and “Airport/Facility Directory”.

Class C airspace areas are published in paragraph 4000 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022. FAA Order JO 7400.11G is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends 14 CFR part 71 by updating the Madison Dane County Regional Airport-Truax Field, WI, Class C airspace description as published in FAA Order JO 7400.11G, Airspace Designations and Reporting Points. The airport name “Dane County Regional Airport-Truax Field” is changed to “Dane County Regional/Truax Field,” to match the Airport Master Record database, and the ARP geographic coordinates are updated from “lat. 43°08′22″ N, long. 89°20′14″ W” to “lat. 43°08′24″ N, long. 089°20′15″ W.” The ARP geographic coordinates for the Waunakee Airport are updated from “lat. 43°11′00″ N, long 89°27′00″ W” to “lat. 43°10′43″ N, long. 089°27′05″ W.” The ARP coordinates updates are made to match the FAA's NASR database information. The airport name is removed from the first line in the text header of the description leaving just the city and state location of the airport. These changes follow the current formatting standard. In the body of the Class C description, the outdated term “Notice to Airman” is replaced by “Notice to Air Missions” and the outdated term “Airport/Facility Directory” is replaced by “Chart Supplement.”

This action consists of administrative changes only and does not affect the boundaries, altitudes, or operating requirements of the airspace. Therefore, notice and public procedure under 5 U.S.C. 553(b) is unnecessary.

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

The FAA has determined that this action of making administrative edits to the Madison Dane County Regional Airport-Truax Field, WI, Class C airspace description qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points). As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. Accordingly, the FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies Class E airspace to support IFR operations at Pullman/Moscow Regional Airport, Pullman/Moscow, WA.

The FAA published a notice of proposed rulemaking for Docket No. FAA-2023-0533 in the Federal Register (88 FR 18101; March 27, 2023), modifying Class E airspace at Pullman/Moscow Regional Airport, Pullman/Moscow, WA. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Subsequent to the publication of the NPRM, the FAA identified a typographical error in the docket number used in the proposal. The correct docket number is FAA-2023-0533, not FAA-2022-0533. The Airspace Docket Number (22-ANM-64) remains the same, as it was correct in the NPRM. Additionally, the phrase “extending upward from the surface” was missing from the first sentence of the Pullman/Moscow, WA E2 legal description in the NPRM. The phrase was added in this final rule as it is needed to align with the intent and purpose of Class E2 airspace.

Class E2 and E5 airspace areas are published in paragraphs 6002 and 6005, respectively, of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022 and effective September 15, 2022. FAA Order JO 7400.11G is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends 14 CFR part 71 by modifying the Class E airspace designated as a surface area, modifying the Class E airspace extending upward from 700 feet above the surface, and removing Class E airspace extending upward from 1,200 feet above the surface at Pullman/Moscow Regional Airport, Pullman/Moscow, WA.

The Class E surface area is expanded to better contain departing IFR operations until they reach the base of adjacent controlled airspace on the Runway (RWY) 23 Obstacle Departure Procedure (ODP). A 4.5-mile radius around the airport fully contains this procedure and appropriately contains IFR arrival operations between the surface and 1,000 feet above the surface. The extension northeast of the surface area centered on the airport's 046° bearing is now centered on the 058° bearing. It is also widened on either side of the 046° bearing—from 1.7 miles to 2.3 miles—to better contain departing IFR operations until they reach the base of adjacent controlled airspace on the RWY 5 ODP. The southwest extension to the surface area is no longer needed and is removed.

The Class E airspace extending upward from 700 feet above the surface is expanded 1.1 miles to the east to better contain arriving IFR operations below 1,500 feet above the surface on the Area Navigation (RNAV) Required Navigation Performance (RNP) Z RWY 23 approach. The Class E airspace extending upward from 700 feet above the surface is greatly reduced from the southeast clockwise through the northeast as the airspace is no longer needed. The Class E airspace extending upward from 1,200 feet above the surface is removed, as the area is already within the Spokane en route domestic airspace area.

Finally, the FAA is making administrative amendments to the airport's legal descriptions. The city name on line 1 of the text headers in both legal descriptions is updated from “Pullman” to “Pullman/Moscow” to match the FAA's database. The geographic coordinates located on line 3 of the text headers in both legal descriptions is updated to match the FAA's database. The Class E surface area legal description is updated to replace the outdated use of the phrases “Notice to Airmen” and “Airport/Facility Directory.” These phrases now read “Notice to Air Missions” and “Chart Supplement,” respectively, to align with the FAA's current nomenclature.

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. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends airspace for Augusta University Medical Center and Children's Hospital of Georgia Heliport, Augusta, GA, to support IFR operations in the area.

The FAA published a notice of proposed rulemaking for Docket No. FAA 2023-0502 in the Federal Register (88 FR 18264: March 28, 2023), amending Class E airspace extending upward from 700 feet above the surface at the Augusta University Medical Center and Children's Hospital of Georgia Heliport. One comment was received concerning whether the airspace would be exclusive to medical aircraft or if it would be open to the public. The controlled airspace surrounding Augusta University Medical Center and Children's Hospital was established to provide for the safety and management of instrument flight rules operations in the area, as a new instrument approach procedure was recently developed for the heliport. All aircraft operating within the Class E airspace must adhere to the requirements set forth in 14 CFR 91.127.

Subsequent to the publication of the Notice of Proposed Rulemaking, the FAA found that the geographical coordinates for the Emory NDB did not align with the information found in FAA's database. This action updates the Emory NDB geographical coordinates.

Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 annually. This document amends the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022. FAA Order JO 7400.11G is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next FAA Order JO 7400.11 update.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends 14 CFR part 71 by amending Class E airspace extending upward from 700 feet above the surface in Augusta, GA, by establishing Class E airspace extending upward from the surface within a 6-mile radius of the Augusta University Medical Center and Children's Hospital of Georgia. This airspace will allow medical transport helicopters to fly during inclement weather and will be included in the Augusta, GA, Class E5 legal description. In addition, this action will update the Emory NDB geographical coordinates in the Augusta, GA, Class E5 legal description to align with the information found in the FAA's database.

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. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5. a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

I. Background A. The Unfair and Deceptive Practices Statute and the Department's Related Rulemakings

The Department's authority to regulate unfair and deceptive practices in air transportation or the sale of air transportation is found at 49 U.S.C. 41712 (section 41712) in conjunction with its rulemaking authority under 49 U.S.C. 40113, which states that the Department may take action that it considers necessary to carry out this part, including prescribing regulations. Section 41712 gives the Department the authority to investigate and decide whether an air carrier, foreign air carrier, or ticket agent is engaged in an unfair or deceptive practice in air transportation or the sale of air transportation. Under section 41712, after notice and an opportunity for a hearing, the Department has the authority to issue orders to stop an unfair or deceptive practice.

On December 20, 2020, the Department published in the Federal Register a final rule titled “Defining Unfair or Deceptive Practices” (UDP Final Rule). 1 The UDP Final Rule was intended to provide regulated entities and other stakeholders with greater clarity about the Department's enforcement and regulatory processes with respect to aviation consumer protection actions under section 41712. 2 It sets forth procedures that the Department uses when conducting enforcement actions and rulemakings under the authority of section 41712. 3

On February 2, 2022, the Department amended its regulations regarding the hearing procedures that are available when DOT proposes a discretionary aviation consumer protection rulemaking declaring a practice to be unfair or deceptive. 4 On August 29, 2022, the Department issued an interpretive rulemaking (guidance) to inform the public and regulated entities about DOT's interpretation of the terms unfair, deceptive, and practices as it relates to its statutory authority to prohibit unfair or deceptive practices. 5

In the UDP Final Rule, the Department stated that when there are reasonable grounds to believe that an airline or ticket agent has violated Section 41712, and efforts to settle the matter have failed, then OACP may issue a notice instituting an enforcement proceeding before a DOT administrative law judge (ALJ). 6 However, the ALJ complaint process is not the only avenue available for taking formal enforcement action. Pursuant to existing law, DOT also has the option of filing a complaint in a United States District Court to enforce Section 41712, or any regulation, requirement, or order issued under the authority of Section 41712. 7 In the UDP Final Rule codifying the Department's formal enforcement procedures, the option to file a complaint in United States District Court was not listed. This final rule is intended to clarify and provide a more complete statement of formal enforcement procedures available under existing DOT authority.

Section 553 of the Administrative Procedure Act (5 U.S.C. 553) provides that when an agency, for good cause, finds that notice and public comment are impractical, unnecessary, or contrary to the public interest, the agency may issue a final rule without providing notice and an opportunity for public comment (5 U.S.C. 553(b)(B)). The Department has determined that there is good cause to issue this final rule without notice and an opportunity for public comment because such notice and comment would be unnecessary. Since this final rule only restates and clarifies existing legal authorities without imposing any new requirements, public comment is unnecessary.

The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866 (“Regulatory Planning and Review”). Accordingly, OMB has not reviewed it. The Department does not anticipate that this rulemaking, which amends the Department's internal procedures, will have an economic impact on regulated entities. E.O. 12866, as amended by E.O. 14094 (“Modernizing Regulatory Review”), requires that agencies “should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating.” The Department does not anticipate that this action will result in any costs because it is simply a clarification of existing legal authorities and, therefore, is not expected to change the behavior of regulated parties or how they interact with the Department. The primary benefit of this rulemaking is providing clarification regarding the legal authorities applicable to the Department's enforcement practices.

Since notice and comment rulemaking is not necessary for this rule, the analytical provisions of the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) do not apply.

Executive Order 13132 requires agencies to ensure meaningful and timely input by State and local officials in the development of regulatory policies that may 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. This action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (August 4, 1999), and DOT has determined that this action will not have a substantial direct effect or federalism implications on the States and would not preempt any State law or regulation or affect the States' ability to discharge traditional State governmental functions. Therefore, consultation with the States is not necessary.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Because this rulemaking does not significantly or uniquely affect the communities of the Indian tribal governments or impose substantial direct compliance costs on them, the funding and consultation requirements of Executive Order 13175 do not apply.

The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq. ) requires that DOT consider the impact of paperwork and other information collection burdens imposed on the public and, under the provisions of PRA section 3507(d), obtain approval from the Office of Management and Budget (OMB) for each collection of information it conducts, sponsors, or requires through regulations. The DOT has determined there are no new information collection requirements associated with this final rule.

The agency has analyzed the environmental impacts of this action pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq. ) and has determined that it is categorically excluded pursuant to DOT Order 5610.1C, “Procedures for Considering Environmental Impacts” (44 FR 56420, October 1, 1979). Categorical exclusions are actions identified in an agency's NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). Paragraph 4.c.6.i of DOT Order 5610.1C categorically excludes “[a]ctions relating to consumer protection, including regulations.” This rulemaking relates to the Department's authority to pursue a complaint in United States District Court on consumer protection matters. The agency does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

For the reasons set forth in the preamble, the Department of Transportation amends 14 CFR part 399 as follows:

I. Background

On January 19, 2021, the Department published an interim final rule (the Supply Chain Rule) to implement Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain” (E.O. 13873). The Supply Chain Rule established the Department regulations at title 15 of the Code of Federal Regulations (CFR) part 7, “Securing the Information and Communications Technology and Services Supply Chain” (part 7). These regulations set out procedures by which the Secretary of Commerce (Secretary), in consultation with the appropriate heads of other executive departments and agencies, reviews transactions involving information and communications technology and services (ICTS) that is designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries to determine whether those transactions present certain undue or unacceptable risks to the United States or U.S. persons. ICTS transactions include, as noted in 15 CFR 7.2, among other things, “any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service, including ongoing activities, such as managed services, data transmission, software updates, repairs, or the platforming or data hosting of applications for consumer download.”

On November 26, 2021, the Department published an NPRM seeking comments on amendments to Part 7 incorporating provisions of E.O. 14034 (86 FR 67379). Specifically, consistent with E.O. 14034, the NPRM proposed to add “connected software applications” to the range of ICTS transactions the Department can review under the regulations in Part 7. The Department proposed this addition given that the increased use of such connected software applications continues to potentially threaten the national security, foreign policy, and economy of the United States. E.O. 14034 also listed criteria that the Department should consider when evaluating the risks of any ICTS transaction involving “connected software applications.”

Specifically, the NPRM proposed to incorporate the term “connected software applications” into 15 CFR 7.1, 7.2, and 7.3 to address the purpose, definition, and scope of covered ICTS transactions. The Department sought public comment on whether it should adjust the definition of “connected software applications” from the definition in E.O. 14034, or whether the E.O.'s definition sufficiently identifies this category of ICTS transaction.

Drawing from the list of criteria in E.O. 14034 identifying potential indicators of risk the Secretary should consider when assessing whether an ICTS transaction involving connected software applications poses an undue or unacceptable risk, the Department proposed to incorporate these criteria into § 7.103 and requested comments on the usefulness and application of this criteria.

The public comment period for the NPRM initially ended on December 27, 2021, but the Department extended the comment period, at the request of several commenters, to January 11, 2022. The Department received ten comment letters on the NPRM, containing many individual comments. These comments and the Department's responses are addressed below.

The Department proposed adding the phrase “connected software applications” to 15 CFR 7.1. One commenter supported this addition and suggested that the Department continue to identify other subcategories of ICTS transactions to narrow the scope of ICTS transactions subject to Departmental review. Because the Department interprets E.O. 14034's purpose as only clarifying that connected software applications fall within the existing national emergency regarding the ICTS supply chain, the Department is not identifying other subcategories at this time. The Department has, though, added terms to this provision to clarify that the rule is intended to cover transactions involving ICTS, including connected software applications. In addition, the Department has clarified the types of activities related to connected software applications that the Department believes are important to be covered by the rule. Specifically, the “operation, management, maintenance, or service” of connected software applications by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries could present risks and are therefore covered by the rule.

Additionally, the Department notes that the rule's purpose statement at 15 CFR 7.1 specifically provides that the Secretary may evaluate individual as well as classes of ICTS transactions. Individual transaction reviews are and will remain an important aspect of the Department's authorities, but such reviews may indicate or uncover concerns about more than the single transaction being reviewed, and the Department reiterates that it has the authority to define and review classes of ICTS transactions as well.

In the NPRM, the Department sought comments on whether the definition of “connected software applications” supplied by E.O. 14034 was sufficient to fully identify this category of ICTS. Commenters generally supported the definition as written. One commenter suggested that the Department delete the word “process” in the definition, reasoning that because the software applications at issue in the rule were “connected,” the definition need only cover software applications that can “collect or transmit data.” The Department will not change the definition. The word “process” recognizes that there may be national security concerns with connected software applications that process, as well as that collect or transmit, data.

The same commenter felt that the definition's reference to the collection or transmission of data via “the internet” was too restrictive and instead proposed “communication network” as a replacement. The Department will not revise the definition presented in the E.O. However, to provide clarification, this final rule defines “via the internet,” for the purposes of this final rule, to mean communicating “using internet protocols to transmit data including, but not limited to, transmissions by cable, telephone line, wireless, satellite or other means.”

One commenter wrote that while the reference to “end-point computing device” in the definition was too narrow, “end-point device” should be used rather than “end-to-end technology,” and that the Department should include additional devices in the definition. This commenter was concerned that these terms would narrow the definition of connected software applications such that it would not capture devices that are the source and destination point of data in addition to devices that forward data. Other commenters noted that the term “end-point computing device” might not be technologically accurate, and recommended using another term, such as “end-to-end” to describe what the Department will be regulating.

The Department shares the concerns about an unduly narrow definition that may be technologically inaccurate, and therefore, to avoid confusion and technical inaccuracies, this final rule adds a definition for the term “end-point computing device” to clarify that such device is one that can receive or transmit data and includes as an integral functionality the ability to collect or transmit data via the internet, as that term is defined for the purposes of this final rule.

E.O. 13783 granted the Department authority to review individual as well as certain classes of ICTS transactions, and regulations issued pursuant to that E.O. clarified these classes of transactions as including those involving software, including desktop applications, mobile applications, gaming applications, and web-based applications, designed primarily for connecting with and communicating via the internet that is in use by greater than one million U.S. persons at any point over the twelve months preceding an ICTS transaction. To incorporate the types of software applications that are the subject of E.O. 14034, the Department proposed to add “connected software applications” to this category. One commenter suggested decreasing the user requirements for the software from one million to 250,000 U.S. persons. Though the Department at this time is not considering revisions to the provisions of § 7.3 that contain the user requirement, the Department takes this comment under consideration for potential future revisions to 15 CFR part 7 as the Department gains experience with ICTS involving connected software applications.

In the NPRM, the Department sought comments on the additions to Part 7 of the criteria laid out in E.O. 14034 regarding how the Department evaluates ICTS transactions involving connected software applications. Specifically, the Department requested comments on whether to modify or add criteria to assist the Department's review of ICTS transactions with connected software applications. The Department also sought input on whether the Department should use the E.O. 14034 criteria in its review of all ICTS transactions, rather than just those related to connected software applications.

Many commenters supported applying these criteria more broadly to all ICTS transactions. One of these commenters argued that incorporating these criteria into the Department's review of all ICTS transactions would streamline the regulation because ICTS transactions involving connected software applications are a subset of other ICTS transactions. Another commenter disagreed and suggested that the Department should not incorporate these criteria into its review of all ICTS transactions because different standards of review for different types of transactions are necessary given the diversity and complexity of the ICTS supply chain.

The Department has determined that not all of the criteria in E.O. 14034 are applicable to transactions not involving connected software applications. For example, the criterion regarding third-party auditing of connected software applications may not be appropriate to use in evaluating other ICTS transactions or classes of transactions because auditing may not be applicable in those instances. Similarly, the number of users might not be an appropriate factor for evaluating ICTS transactions that have low numbers of users but that service critical infrastructure or that might have significant risks if misused. Additionally, amending the criteria that apply to all ICTS transactions is beyond the scope of this rulemaking as contemplated in E.O. 14034. Therefore, the Department has decided to maintain the approach in the proposed rule and limit the application of these eight new criteria to only those ICTS transactions involving connected software applications.

In the NPRM, the Department also requested comments on additional criteria beyond the proposed eight criteria for evaluating ICTS transactions involving connected software applications. For example, the Department asked whether the software's ability to execute embedded out-going network calls or web server references, regardless of the ownership, control, or management of the software, should be a criterion. Though the Department received one comment in support of this position, other comments were concerned about the potential that this addition would unintentionally capture ICTS transactions, such as those involving call center software and Voice Over internet Protocol solutions from domestic vendors. These commenters felt the addition of such a criterion would be unduly broad and disagreed with adding it to the final rule. Commerce agrees with these commenters and is declining at this time to add the criterion. However, as the Department gains experience with ICTS transactions involving connected software applications, the Department may add criteria to these provisions in the future.

Having reviewed these comments, the Department will revise § 7.103 to add the eight criteria enumerated in E.O. 14034, as proposed in the NPRM. The Secretary will use these eight criteria to determine whether ICTS transactions involving connected software applications pose undue or unacceptable risks, as defined in Part 7. In making such decisions, the Secretary will evaluate both the criteria in § 7.103(c), which apply to all ICTS transactions, and the new criteria, which apply specifically to ICTS transactions involving connected software applications. This final rule redesignates current paragraph 7.103(d) as 7.103(e) and adds new paragraph 7.103(d) to include the eight criteria applicable to connected software applications.

Below, the Department addresses comments received on each of the eight new criteria taken from E.O. 14034:

(1) Ownership, control, or management by persons that support a foreign adversary's military, intelligence, or proliferation activities.

The Department requested comments on the definition of “ownership, control, or management” as it pertains to the criteria to review connected software applications. Specifically, the Department sought comments on whether this phrase includes or should include both continuous and sporadic “ownership, control, or management.” One commenter stated that the scope of the Department's review need not include an evaluation of parties with sporadic access to the software, including, for example, those with access to deploy updates or patches. The commenter believed the Department's scrutiny of such parties could potentially disrupt the frequency of security updates and patches to software applications. The Department understands this concern and does not want to disrupt necessary security patches and updates. However, the Department is also concerned about the risks, especially to critical infrastructure, posed by sporadic ownership of software applications by malicious cyber actors.

Overall, the Department believes that software security patches or updates for individual consumers typically would not pose risks that rise to the level of requiring the Department's scrutiny. On the other hand, the potential risks to critical infrastructure presented by sporadic access to connected software applications could result in significant harms to the country's infrastructure. The Department is concerned that specifically excluding transactions involving sporadic access to software would create a loophole that would allow exactly the types of malicious cyber acts the rule is meant to prevent. Accordingly, although the Department declines to implement the commenter's suggestion to narrow the definition of “ownership, control, or management” under the rule, the Department notes that it is not the Department's intent to scrutinize every ICTS transaction involving temporary or sporadic access to software to, for example, provide security updates, but rather to be more targeted in its reviews to address the types of risks identified in E.O. 13873.

(2) Use of the connected software application to conduct surveillance that enables espionage, including through a foreign adversary's access to sensitive or confidential government or business information, or sensitive personal data.

The Department did not receive comments to this criterion and adds it to part 7 as proposed.

(3) Ownership, control, or management of connected software applications by persons subject to coercion or cooption by a foreign adversary.

One commenter suggested that the Department further establish how a person could be found “subject to coercion or cooption,” and felt that it might prove difficult for one party to an ICTS transaction to identify the likelihood that the other party is or has been coerced or coopted by a foreign adversary. The Department agrees and, as a result, will align the risk calculation in this criterion with that used in E.O. 13873. Instead of “subject to coercion or cooption by a foreign adversary,” the criterion will read “subject to the jurisdiction or direction of a foreign adversary.” This language strikes the balance between the Department's need to be flexible to investigate future transactions and transacting parties' need for appropriate notice. Furthermore, because the Department interprets E.O. 14034 as clarifying that connected software applications fall within the existing national emergency regarding the ICTS supply chain, this change ensures the scope of the inquiry into ICTS transactions related to connected software applications aligns with the scope and language of E.O. 13873.

(4) Ownership, control, or management of connected software applications by persons involved in malicious cyber activities.

The Department did not receive comments on this criterion and will incorporate it as proposed.

(5) A lack of thorough and reliable third-party auditing of connected software applications.

Many commenters wrote that the auditing envisioned in this final rule should be a continuous process throughout the development and deployment life cycle of the connected software application, rather than a one-time audit. One commenter suggested that the parties developing the application and the parties implementing the application should be subject to audits. Another commenter raised security and privacy concerns regarding this criterion, arguing that granting access to this data to third-party auditors could introduce additional security and privacy concerns. Although the Department agrees that increased access to the data increases risks that the data could be exploited or otherwise misused, the Department has determined that the benefits to parties of being able to audit and secure their own ICTS transactions outweighs the incremental risk increase that results from reliable third-party auditors accessing a connected software application.

The Department also received a number of comments on the proposed definitions of “reliable third-party” and “independently verifiable measures.” One commenter suggested that the final rule should explicitly reference established standards or frameworks that parties could use when auditing this data, such as the standards and frameworks in SOC 2 (a compliance standard for service organizations developed by the American Institute of Certified Public Accountants), ISO/IEC 207001 (a set of standards on information security management published by the International Organization for Standardization and the International Electrotechnical Commission), IEC-62443 (a set of standards adopted by the International Electrotechnical Commission to secure industrial automation and control systems), or FedRamp (the U.S. Government's Federal Risk and Authorization Management Program).

The Department has decided to not reference specific standards or frameworks at this time, though the Department encourages the use of recognized standards by third-party auditors. The Department, however, does not want to mandate one type of standard, to allow parties flexibility to adopt an approach appropriate for their company. Therefore, the Department will determine whether a connected software application transaction has undergone reliable third-party auditing on a case-by-case basis to allow parties to these transactions flexibility to account for technological advances in cybersecurity.

One commenter suggested that the Department clarify how each criterion would apply. To address this, the final rule deletes the words “a lack of” so the criterion now reads “whether there is regular, thorough, and reliable third-party auditing.”

(6) The scope and sensitivity of the data collected.

One commenter suggested adding references to established guidelines such as NIST Special Publication 800-122 (Guide to Protecting the Confidentiality of Personally Identifiable Information (PII)) and guidelines such as ISO/IEC27018:2019 (a publication by the International Organization for Standardization describing a code of practice for protection of PII) in this criterion to clarify what the Department deems sensitive data. Upon consideration of the comment, the Department decided to leave the proposed language unchanged. To promote flexibility in accounting for changes in the type and sensitivity of the data collected by connected software applications, the Department declines to refer to specific published guidelines, which might soon become outdated or might not fully characterize the sensitivity of data. We also note that “sensitive personal data” is defined in 15 CFR 7.2.

(7) The number and sensitivity of the users of the connected software application.

One commenter wrote that the Department should consider not just active users of a connected software application, but also stored or past users who still may have sensitive data on the application. The Department agrees with this comment and is clarifying that the Department will consider not just active users of a connected software application but also number and sensitivity of the users and the data collected and/or stored by the connected software application in this criterion. Adding this language furthers the objective of this rulemaking to protect all sensitive data on the connected software application, regardless of whether the user is active.

(8) The extent to which identified risks have been or can be addressed by independently verifiable measures.

The Department received a comment on this criterion suggesting that identified vulnerabilities be given a specified period of time to remediate and promote timely mitigation. Because different measures will require different timeframes for mitigation to be effective, the Department believes that specifying a remediation timeline in the regulatory text will not be productive for the implementation and enforcement of this rule. Therefore, the Department has decided not to incorporate this commenter's suggestion into the final rule.

In response to the comments discussed above, the Department is editing the proposed language in § 7.103(d)(8) to clarify that the Secretary will be evaluating the extent to which identified risks have been or can be “mitigated,” rather than “addressed.” Specifically, the Department decided to delete “addressed by independently verifiable” and replace with “mitigated using measures that can be verified by independent third parties,” which is more precise.

As noted above, the Department added definitions of “via the internet” and “end-point computing device” to clarify those terms and address commenters' concerns about potential technological inaccuracies.

The Department also amended the language of the criteria, based on public comments. In criterion 3, regarding ownership and control, the Department changed the phrase “subject to coercion or cooption by a foreign adversary,” to “subject to the jurisdiction or direction of a foreign adversary” to clarify the criterion. Additionally, the Department removed from the criterion on third-party auditors the words “lack of” and replaced that term with the phrase “whether there is regular, thorough, and reliable third-party auditing” in order to clarify the Department's concern regarding such auditing. Finally, the Department added to criterion 7 regarding the number and sensitivity of users the term “with access to” in order to clarify that the criterion applies to any users that have access to the application.

Pursuant to the procedures established to implement Executive Order 12866, the Office of Management and Budget has determined that this rule is significant.

In the proposed rule, the Chief Counsel for Regulation in the Department of Commerce certified that the rule would not have a significant economic impact on a substantial number of small entities. The factual basis for this certification is contained in the proposed rule and is not repeated here. We received no comments from the public on this certification, and we have no new information about this rule's potential impact on small entities. Accordingly, a final regulatory flexibility analysis was not required, and none was prepared.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA) provides that an agency generally cannot conduct or sponsor a collection of information, and no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, unless that collection has obtained Office of Management and Budget (OMB) approval and displays a currently valid OMB Control Number. This proposed rule does not contain a collection of information requirement subject to review and approval by OMB under the PRA.

The Department has analyzed this proposed rule under Executive Order 13175 and has determined that the action would not have a substantial direct effect on one or more Indian tribes, would not impose substantial direct compliance costs on Indian tribal governments, and would not preempt tribal law.

The Department has reviewed this rulemaking action for the purposes of the National Environmental Policy Act (42 U.S.C. 4321 et seq. ). It has determined that this proposed rule would not have a significant impact on the quality of the human environment.

For reasons stated in the preamble, the Department of Commerce amends 15 CFR part 7 as follows:

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable, as we did not receive final details for this event until April 24, 2023. The Coast Guard must establish this safety zone by July 4, 2023, and lacks sufficient time to provide a reasonable comment period and consider those comments before issuing the rule.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying implementation of this rulemaking is impracticable and contrary to public interest because action is needed to protect personnel, vessels, and the marine environment from potential hazards created by the fireworks display on July 4, 2023.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector San Diego (COTP) has determined that potential hazards associated with the fireworks display on July 4, 2023, will be a safety concern for anyone within an 800-foot radius of the display location. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone during the fireworks display.

This rule establishes a safety zone from 8 p.m. until 10 p.m. on July 4, 2023. The safety zone will cover all navigable waters within an 800-foot radius of the fireworks display at Stingray Point, Coronado, CA. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters during the fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will only impact a small, designated area of Glorietta Bay for two hours in the evening. The Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule will allow vessels to seek permission to enter the zone.

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting only 2 hours that will prohibit entry within an 800-foot radius of a fireworks display. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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

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

The Coast Guard will enforce a safety zone in 33 CFR 165.845 for the Essence Festival fireworks display event. This safety zone will be enforced from 9:30 p.m. through 10:30 p.m. on July 1, 2023. This action is being taken to provide for the safety of life on these navigable waterways during this event. Our regulation for Safety Zones; Lower Mississippi River, mile markers 94 to 97 above Head of Passes, New Orleans, LA, in 33 CFR 165.845(a), specifies the location of the regulated area on the Lower Mississippi River, between MM 94.5 and MM 95.5. During the enforcement period, as reflected in § 165.845(c), entry into this safety zone is prohibited unless authorized by the Captain of the Port or a designated representative.

In addition to this notification of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via Marine Safety Information Bulletin and Broadcast Notice to Mariners.

On December 11, 2020, the Secretary published a document in the Federal Register announcing waivers and modifications of statutory and regulatory requirements governing the Federal student financial aid programs under the authority of the HEROES Act (20 U.S.C. 1098bb(a)(2)) in response to the COVID-19 national emergency. (85 FR 79856). On January 19, 2021, the Secretary published a notice correcting the date through which some of the waivers and modifications included in the prior document were extended. (86 FR 5008). The Secretary is issuing this document to provide updated waivers and modifications under the HEROES Act and to provide notice of their expiration date in connection with the termination of the COVID-19 national emergency.

The HEROES Act authorizes the Secretary to waive or modify any statutory or regulatory provision applicable to the Federal student financial assistance programs under title IV of the Higher Education Act of 1965, as amended (HEA) 20 U.S.C. 1070 et seq., as the Secretary deems necessary in connection with a war or other military operation or national emergency. Such waivers or modifications may be provided to affected individuals who are recipients of Federal student financial assistance under title IV of the HEA, institutions of higher education (IHEs), eligible lenders, guaranty agencies (GAs), and other entities participating in the Federal student financial assistance programs under title IV of the HEA that are located in areas declared disaster areas by any Federal, State, or local official in connection with a national emergency, or whose operations are significantly affected by such a disaster. These entities may be granted temporary relief from requirements that are rendered infeasible or unreasonable by a national emergency, including due diligence requirements and reporting deadlines.

Under 20 U.S.C. 1098bb(b)(1), section 437 of the General Education Provisions Act (20 U.S.C. 1232) and section 553 of the Administrative Procedure Act (5 U.S.C. 553) do not apply to the contents of this document.

On March 13, 2020, by Proclamation 9994, the President declared a national emergency concerning the COVID-19 pandemic, which was extended on February 24, 2021 (86 FR 11599), and February 18, 2022 (87 FR 10289). On February 10, 2023, President Biden announced his intention to terminate the COVID-19 national emergency. (88 FR 9385). On April 10, 2023, the President signed H.J. Res. 7 into law, which terminates this national emergency. The waivers and modifications provided in this document apply only to the declared COVID-19 national emergency. Prior waivers granted by the Secretary under the HEROES Act remain in effect for affected individuals, as defined in those waivers.

The terms “institution of higher education” and “institution of higher education for purposes of title IV programs” (IHE) used in this document are defined in sections 101 and 102 of the HEA.

In 20 U.S.C. 1098ee, the HEROES Act provides definitions critical to determining whether a person is an “affected individual” under the Act and, if so, which waivers and modifications apply to the affected individual. However, because these definitions do not include the specific circumstances under which these waivers and modifications are provided under the HEROES Act, we provide these definitions below.

For purposes of this document, “affected individual” means a student enrolled in an institution of higher education. An “affected borrower” is one whose Federal student loans provided under title IV are in repayment. These definitions are in keeping with 20 U.S.C. 1098bb(a)(2), which establishes that statutory and regulatory provisions can be waived or modified “as necessary to ensure that recipients of student financial assistance under title IV of the HEA who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals.” The statute also authorizes the Secretary to minimize administrative requirements placed on affected individuals who are recipients of student financial assistance to the extent possible without impairing the integrity of the student financial assistance programs, to ease the burden on such individuals and avoid inadvertent technical violations or defaults.

In accordance with the HEROES Act and the national emergency that was declared by the President on March 13, 2020, and subsequently extended on February 24, 2021, and February 18, 2022, the Secretary is publishing the following waivers and modifications of statutory and regulatory provisions applicable to the student assistance general provisions and student financial assistance programs under title IV of the HEA that the Secretary deems necessary in connection with the COVID-19 national emergency. Each provision is discussed further below:

• IHEs are permitted to waive the requirement for a parental signature in the event that it cannot be obtained, or to accept a document signed and photographed and sent by email or text message attachment, on any verification documentation required to validate a student's title IV eligibility.

• Borrowers with loans under the Federal Perkins Loan Program whose loans have been placed in a forbearance status on or after March 13, 2020, will have that period excluded from the 3-year cumulative limit on forbearances.

• Borrowers with Federal Perkins Loans who are employed full-time in specified occupations, such as teaching or law enforcement, may receive loan cancellation for every year of service if their service is uninterrupted. Under this waiver, borrowers working toward service cancellation of such loans are exempted from the requirement that performing service must be uninterrupted or consecutive to qualify for loan cancellation, if qualifying service was disrupted due to the COVID-19 national emergency. Institutions are required to obtain and retain a written attestation from the borrower (which may be by email or text message) requesting cancellation and describing how the qualifying service was interrupted as a result of the COVID-19 national emergency.

Appropriate explanations for the interruption of service include, but are not limited to, the closure of the facility where the borrower was working or decreased work hours as a result of the COVID-19 national emergency. Information provided by the borrower (that in the judgment of the IHE is reliable) is acceptable for documentation purposes.

• Borrowers who have received a total and permanent disability discharge are not required to certify their annual earnings during the 3-year post-discharge monitoring period.

• Borrowers who were in an in-school status or an in-school deferment status on or after March 13, 2020, for Direct Loan repayment purposes remain in such status when the borrower's attendance was interrupted by the COVID-19 national emergency, unless the borrower's institution ceased operations on or after March 13, 2020, and does not expect to reopen for more than 90 days, or the borrower officially withdraws or otherwise indicates their intent not to resume attendance at least half-time at the institution.

• Borrowers participating in income-driven repayment (IDR) plans under §§ 685.209(a)(5)(i) and 685.221(e)(1) are not required to provide documentation that enables the annual calculation of the borrower's payment amount for each year the borrower remains on the plan and will be notified of a new recertification date in advance of the deadline on which such documentation is required.

• The Secretary approved and announced the Fresh Start initiative on April 6, 2022. 1 During the COVID-19 national emergency many borrowers lost their jobs and fell behind on student loans payments. The Fresh Start Initiative will enable approximately 7.5 million borrowers with defaulted Federal student loans to return to repayment without any past due balance, just like non-defaulted borrowers. These borrowers are disproportionately likely to be first generation college students, have received a Federal Pell Grant, and qualify for low monthly payments under affordable IDR plans.

The Fresh Start initiative eliminates the negative effects on borrowers who defaulted on student loans made under the William D. Ford Federal Direct Loan Program prior to March 13, 2020 (prior to the payment pause); borrowers with Federal Family Education Loan (FFEL) Program loans that defaulted prior to March 13, 2020, that are held by the Department and GAs; and borrowers with defaulted Department-held Perkins loans. Borrowers who take advantage of Fresh Start will have renewed eligibility for additional title IV aid (without going through loan rehabilitation or consolidation) and would have a pathway to return to repayment on their defaulted loans without an overdue balance. Borrowers who take advantage of the opportunity provided by Fresh Start will also regain access to the full list of repayment options for loans not in default, including the opportunity to enter into an IDR repayment plan allowing a more affordable monthly payment. In addition, borrowers who attempted to rehabilitate their defaulted loan during the payment pause will regain access to the one-time loan rehabilitation opportunity, which provides credit reporting benefits and protects borrowers from involuntary debt collection.

• The Department waives the requirement that GAs meet minimum reserve levels in their Federal Funds for Federal fiscal years at least partially overlapping with the Fresh Start Initiative.

• The Department waives the requirement that GAs remit to the Secretary excess proceeds from the consolidation of defaulted loans that exceed 45 percent of the agency's total collections during Federal fiscal years at least partially overlapping with the Fresh Start Initiative.

• A GA will not have its reinsurance rate reduced if the total of reinsurance claims paid by the Secretary reaches specified thresholds prescribed in regulations for Federal fiscal years that partially overlap with the Fresh Start Initiative.

• The Department modifies the formula for the Account Maintenance Fee received by GAs so that a GA's revenue will not be significantly decreased due to the pause on collections of FFEL loans in default held by a GA. Modifications to the formula will continue through the fiscal year that partially overlaps with the Fresh Start Initiative.

• Perkins Loan and Health Education Assistance Loan (HEAL) borrowers whose loans are held by the Department are afforded the same benefits extended to Direct Loan borrowers in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 2

• Borrowers with federally held Direct Loans, FFEL loans, Perkins Loans, and HEAL loans did not accrue interest on those loans from March 13, 2020, to March 27, 2020. Borrowers were also permitted to suspend payment on their loans without any penalties during this period. The automatic suspension of payment and the application of a zero percent interest rate on loans held by the Department was extended to October 1, 2020, under the CARES Act. On August 24, 2022, the Secretary extended the pause on student loan payments and interest benefits through December 31, 2022. 3 The Secretary announced on November 22, 2022, another extension of the pause on student loan repayment, interest, and collections. 4 The Fiscal Responsibility Act of 2023 (Pub. L. 118-15) ends these waivers 60 days after June 30, 2023.

• The Department paused collections on loans in default on a commercial FFEL loan at a guaranty agency and set interest to 0 percent retroactively to March 13, 2020, until the end date for the overall payment pause, interest, and collections provision. This included a refund of all involuntary collections, the option to refund voluntary payments, and the cessation of collection charges for successful loan rehabilitations. Borrowers who are in the process of completing a loan rehabilitation agreement could have months of the pause count toward successful completion of that agreement, regardless of whether they made a payment. During and through the end of the payment pause, the guaranty agencies will assign any FFEL loans that defaulted on or after March 13, 2020, to the Department which will return those loans to good standing.

• Upon the end of the payment pause, the Department will not capitalize any interest that accrued on federally held Direct Loans or FFEL loans that were in a deferment, forbearance, in-school, grace period, or any other status in which payments were not required on March 12, 2020.

• Borrowers with qualifying loans working toward Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) were exempted from the requirement under section 455(m)(1)(B)(i) of the HEA that the borrower work for a qualifying employer at the time they apply for or receive forgiveness. To benefit from this waiver, borrowers with qualifying loans must have applied for the limited PSLF waiver announced by the Department on October 6, 2021, by October 31, 2022. 5

• Borrowers who submitted applications for a borrower defense discharge on or prior to August 31, 2022, that related to any Direct or Federal non-Direct loans made prior to July 1, 2020, and who consolidated those loans into a Direct Consolidation Loan on or after July 1, 2020, will have their application for a discharge adjudicated under the standards for borrower defense discharges on Direct Loans disbursed between July 1, 2017, and July 1, 2020.

• The Department waived the United States Medical Licensing Exam (USMLE) pass rate requirement for currently approved participating foreign graduate medical institutions for the duration of years when the test was unavailable due to the COVID-19 national emergency.

Each of the waivers and modifications described in this notice independently serves the purposes of the HEROES Act. The Secretary accordingly deems each of these waivers and modifications to be necessary in connection with the COVID-19 national emergency, and intends that these waivers and modifications be legally severable. Were a court to stay or invalidate any of these waivers or modifications, or to deem any waiver or modification unlawful as applied in certain factual circumstances, the Secretary would intend that all other waivers and modifications set forth in this notice remain in effect to the maximum possible extent.

Prior waivers granted by the Secretary under the HEROES Act that are not otherwise discussed in this document remain in effect for affected individuals, as defined in those waivers. (85 FR 79856, as corrected in 86 FR 5008).

Sections 668.57(b) and (c) require a statement signed by both the applicant and one of the applicant's parents if the applicant is a dependent student, or only the applicant if the applicant is an independent student, to verify the number of family members in the household and the number of family members enrolled in IHEs. Pursuant to § 668.57(d), an applicant may also be required to verify other information specified in the annual Federal Register document that announces the Free Application for Federal Student Aid (FAFSA) information as well as the acceptable documentation for verifying that FAFSA information. The Department waived the requirement that IHEs require parental signatures. IHEs may waive the requirement for a parental signature in the event that it cannot be obtained, or accept a document signed and photographed and sent by email or text message attachment, on any verification documentation required to validate a student's title IV eligibility. This waiver expires at the end of the payment period that begins after April 10, 2023, when the federally declared national emergency related to COVID-19 ended. Payment periods are as defined in 34 CFR 668.4. In a program measured in standard terms, the payment period is the term, i.e., semester, trimester, or quarter.

Under section 464(e) of the HEA and § 674.33(d)(2), there is a 3-year cumulative limit on the length of forbearances that a Federal Perkins Loan borrower can receive. To assist Federal Perkins Loan borrowers during the COVID-19 national emergency, for a borrower whose Perkins Loan was in forbearance status on or after March 13, 2020, the Secretary waived these statutory and regulatory requirements and will exclude that period of forbearance during the payment pause from the 3-year cumulative limit. The Secretary also applies the waivers described in this paragraph to loans held by the Department.

Federal Perkins Loan borrowers may qualify for loan cancellation if they are employed full-time in specified occupations and meet additional eligibility requirements or are providing eligible volunteer service, pursuant to sections 460 and 465 of the HEA. An eligible Perkins Loan borrower may qualify for a service cancellation under §§ 674.53 (Teacher), 674.55 (Teacher), 674.56 (Nurse, medical technician, employee in a child or family service agency, professional provider of early intervention services, firefighter, faculty member at a Tribal College or University, librarian, speech pathologist), 674.57 (Law enforcement officer, corrections officer, attorney in an eligible Federal public defender or community defender organization), 674.58 (Full-time staff member in a Head Start, pre-kindergarten, or child care program), and 674.60 (Volunteer under the Peace Corps Act or the Domestic Volunteer Service Act of 1973).

For Perkins Loan teacher cancellations under §§ 674.53 and 674.55, borrowers must perform uninterrupted, otherwise-qualifying service for a complete academic year.

For the Perkins Loan service cancellations under §§ 674.56, 674.57, 674.58, and 674.60, borrowers must perform uninterrupted otherwise-qualifying service for a complete year.

FFEL and Direct Loan borrowers may qualify for teacher loan forgiveness pursuant to section 428J of the HEA and §§ 682.216 and 685.217. To qualify for teacher loan forgiveness, a FFEL or Direct Loan borrower must provide qualifying teaching service for 5 consecutive, complete academic years.

The Secretary waived the requirements that provide that periods of qualifying service for the loan forgiveness opportunities mentioned above be uninterrupted or consecutive to qualify the borrower for loan cancellation or loan forgiveness if the service was interrupted due to COVID-19.

Institutions must obtain and retain a written attestation from the borrower (which may be by email or text message) requesting cancellation and which describes how the qualifying service was interrupted as a result of the COVID-19 national emergency.

Appropriate explanations for the interruption of service include, but are not limited to, the closure of the facility where the borrower was working or decreased work hours as a result of the COVID-19 national emergency. Information provided by the borrower (that in the judgment of the IHE is reliable) is acceptable for documentation purposes.

Therefore, the service period required for the borrower to receive or retain a loan cancellation or loan forgiveness for which they are otherwise eligible will not be considered interrupted by any period that these waivers are in effect. The Secretary applies the waivers described in this paragraph to loans held by the Department.

Under §§ 674.61(b)(7)(iii), 682.402(c)(7)(iii), and 685.213(b)(8)(iii), a borrower who receives a total and permanent disability discharge through the Social Security Administration or physician's certification process must certify their annual earnings during the 3-year post-discharge monitoring period. To assist borrowers, the Secretary waived the requirement that the borrower provide the Secretary with documentation of annual earnings from employment.

Under §§ 682.209(a) and 685.207, for purposes of the FFEL and Direct Loan Programs, a borrower ceases to be in an “in-school” status, and either resumes repayment or enters a grace period on a loan, when the borrower ceases to be enrolled at an eligible school on at least a half-time basis. Similarly, §§ 682.210 and 685.204 provide that, for purposes of the Direct Loan and FFEL Programs, a borrower's deferment while enrolled in an eligible school ends when the borrower ceases to be enrolled at least half-time. Section 668.2(b) defines a “half-time student” as one who is carrying a half-time academic workload, as determined by the institution, that amounts to at least half of the workload of the applicable minimum requirement outlined in the definition of a “full-time student,” or, if the student is enrolled solely in a program of study by correspondence, is carrying a workload of at least 12 hours of work per week, or is earning at least 6 credit hours per semester, trimester, or quarter.

The Secretary waived § 668.2(b), such that a student who met the institution's definition of a “half-time student” at the time the student's enrollment was interrupted due to the COVID-19 national emergency continues to be treated as enrolled at least half-time for purposes of the borrower's “in-school” and “in-school deferment” statuses, unless the borrower's institution ceased operations on or after March 13, 2020, and does not expect to reopen for more than 90 days; or unless the borrower officially withdraws or otherwise indicates their intent not to resume attendance at an institution on at least a half-time basis. A borrower whose enrollment was interrupted due to the COVID-19 national emergency, may not be treated as withdrawn or enrolled less-than-half-time for enrollment reporting purposes, unless the borrower officially withdraws; the borrower indicates their intent not to resume attendance on at least a half-time basis; or the borrower's institution ceased operations on or after March 13, 2020, and does not expect to reopen for more than 90 days. The institution must document this decision in its records.

Under §§ 685.209 and 685.221, a borrower participating in an income-driven repayment plan is required to provide documentation, acceptable to the Secretary, that enables annual calculation of the borrower's payment amount for each year that the borrower remains on the plan.

The Secretary waived the recertification documentation requirements of §§ 685.209(a)(5)(i) and 685.221(e)(1) and borrowers will be notified by their loan servicer of their new certification date, in advance of the deadline on which such documentation is required.

The Secretary waived the title IV eligibility requirements of § 668.32(g)(1) for a borrower who is in default on a Federal student loan and waived 20 U.S.C. 1091(a)(3), which makes defaulted borrowers ineligible for any title IV aid. Borrowers who qualify under the Fresh Start Initiative will be eligible for title IV student aid.

The Secretary also waived the conditions needed to regain title IV eligibility in § 668.35(a) for a student who is in default on a title IV loan.

The Fresh Start initiative will be available to qualifying borrowers for 1 full year following the end of the payment pause. The waivers provided as part of the Fresh Start Initiative will expire on October 1, 2024.

Section 682.410(a)(10) provides the minimum reserve fund levels that a GA is required to maintain. The reserve fund level is calculated as the GA's total reserve fund assets less the amount of reserve fund assets used in accordance with § 682.410(a)(2) and (3). The minimum reserve ratio is calculated by dividing a GA's reserve fund level by the amount of loans outstanding as defined in § 682.410(a)(11)(ii) and expressed as a percentage.

The Secretary waived the requirement that a GA meet a minimum reserve ratio requirement as provided in § 682.410(a)(10) for Federal fiscal years at least partially overlapping with the Fresh Start Initiative as described earlier in this document.

Under § 682.401(b)(18), a GA may charge collection costs in an amount not to exceed 18.5 percent of the outstanding principal and interest on a defaulted FFEL Program loan that is paid off by a Direct Consolidation loan. A GA that returns proceeds to the Secretary from the consolidation of a defaulted loan must remit the applicable amounts prescribed in § 682.401(b)(18)(ii) or (iii).

The Secretary waived the requirement in § 682.401(b)(18) that the GA return the funds identified as excess consolidation proceeds in § 682.401(b)(18)(ii) or (iii) to the Secretary during Federal fiscal years at least partially overlapping with the Fresh Start Initiative, described earlier in this document.

Under § 682.404(b), the reinsurance rate for payments of reinsurance to the GA is reduced if the total of reinsurance claims paid by the Secretary to the GA during any fiscal year reaches specified thresholds.

The Secretary waived the requirement in § 682.404(b) that would provide for the reduction in the reinsurance rate under § 682.404(b) for Federal fiscal years at least partially overlapping with the Fresh Start Initiative, described earlier in this document.

Section 682.404 outlines the ways GAs may receive compensation from their Federal fund for collections activity. This includes the provisions in § 682.404(g) that address the portion of borrower payments returned to the Secretary, the account maintenance fee equal to 0.06 percent of original principal amount of outstanding guaranteed loans in § 682.404(h), and the default aversion fee in § 682.404(j).

The Secretary modified the terms of § 682.404 to ensure that GAs will not have their revenue significantly decrease as a result of the pause on collections activity for FFEL loans in default held by a GA as required by the Secretary in connection with the COVID-19 national emergency.

In addition, the Secretary modified 34 CFR 682.404(h) to provide that GAs will receive an account maintenance fee on an annual basis equal to 0.76 percent of the original principal amount of outstanding loans. Under the modification, the fee is calculated each quarter from the period that covers the end of the pause on collections of defaulted FFEL loans at a GA through the fiscal year that is at least partially overlapping with the Fresh Start Initiative.

Section 3513 of the CARES Act directs the Secretary to (1) suspend all payments due, (2) cease interest accrual, and (3) suspend involuntary collections for loans that are held by the Department and made under parts D and B of title IV of the HEA through September 30, 2020. The section also directs the Secretary to deem each month for which a loan payment was suspended as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under parts D or B for which the borrower would have otherwise qualified. Lastly, this section directs the Secretary to ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

On August 8, 2020, President Trump issued a memorandum directing the Secretary to continue to waive interest and payments on such loans until December 31, 2020. On December 4, 2020, the pause was further extended to January 31, 2021. On January 21, 2021, President Biden extended the pause through September 30, 2021. On August 6, 2021, the President authorized the Secretary to use his authority under the HEROES Act to extend the benefits provided under section 3513 of the CARES Act until January 31, 2022, for borrowers with federally held Perkins, HEAL, Direct, and FFEL loans. President Biden announced on December 22, 2021, that the Secretary would extend the waiver on interest and payments on such loans through May 1, 2022. In accordance with these prior announcements, on August 24, 2022, the Secretary announced he was using his authority under the HEROES Act to modify the terms of the CARES Act to extend its benefits until December 31, 2022. 6

On November 22, 2022, the Secretary announced another extension of the pause on student loan repayment, interest, and collections. Under the Fiscal Responsibility Act of 2023 (Pub. L. 118-15), the payment pause will end 60 days after June 30, 2023.

On March 30, 2021, the Department announced that it would be extending the waivers on interest and payments originally provided under the CARES Act and extended by the Department as discussed above to also include defaulted commercial FFEL loans held by a GA. The information in this announcement was clarified in DCL Gen-21-03, which was published on May 12, 2021.

This announcement of the extension of the waivers required GAs to set the interest rate to 0 percent on commercial FFEL loans in default and cease collections activity and charges. Moreover, the GAs had to refund any involuntary collections payments received on or after March 13, 2020, and offer borrowers the ability to have voluntary payments refunded. Borrowers that were in the process of pursuing a loan rehabilitation were able to have any months during the pause count toward the successful completion of that rehabilitation agreement. The Secretary also waives the provisions in section 428F(a)(1)(D)(II) of the HEA, 20 U.S.C. 1078-6(a)(1)(D)(II) and 34 CFR 682.405(b)(1)(vi)(B) which authorizes guaranty agencies to charge collection costs when a borrower rehabilitates a defaulted loan.

The Department's announcement also noted that, during and through the end of the payment pause, the guaranty agencies must assign the FFEL loans that defaulted on or after March 13, 2020, to the Department in accordance with 34 CFR 682.409(a)(1) and that the Department will return those loans to good standing.

Prior to such assignment the GAs must delete their trade line from the borrower's credit report entirely.

Under § 685.202(b), § 685.204, and § 685.205 the Secretary capitalizes unpaid interest upon the end of a borrower's grace period and after expiration of a borrower's deferment or forbearance. Similar provisions that apply to FFEL loans are in § 682.200, § 682.210, and § 682.211.

As part of the waivers and modifications included in the Federal Register notice published on December 11, 2020, the Department announced that if the borrower's loan payments were current before March 13, 2020, interest accrued prior to that date, interest would not capitalize at the end of the coronavirus-related administrative forbearance period. However, interest that accrued on loans during the grace period and deferments and forbearances would be capitalized.

The Secretary has now waived the provisions related to capitalization of interest on loans held by the Department that, on March 12, 2020, were in a status during which interest was accruing and would be capitalized when the borrower exits that status. For instance, if a borrower was in their grace period on an unsubsidized loan on March 12, 2020, the interest on the loan that was due as of March 13, 2020, would not be capitalized when the borrower returns to repayment after the end of the payment pause. The same would be true of a loan that was in a deferment or forbearance immediately prior to the payment pause. Interest that accrued on those loans until March 13, 2020, would not be capitalized but would still have to be repaid.

First, § 685.219 provides that borrowers must be employed by a qualifying employer when making each qualifying payment, as well as when applying for and receiving PSLF. Section 3513 of the CARES Act and the waivers extending its student loan repayment benefits provide credit toward PSLF and TEPSLF during months when payments would have been due but for the suspension of payments. Borrowers are still required to have worked for a qualifying employer during those months to receive full credit toward PSLF and TEPSLF.

The Secretary waived the requirement under § 685.219(c)(1)(ii)(B) that the borrower must be working for a qualifying employer at the time they receive forgiveness if they otherwise meet the requirements for forgiveness from March 2020 through the end of the student loan repayment pause authorized by section 3513 of the CARES Act and extended through the HEROES Act waivers. Borrowers, however, still have to have accumulated 120 months of qualifying employment. For borrowers who reach the 120 qualifying payment mark as a result of section 3513 of the CARES Act, the Secretary further waived the requirement that the borrower apply to receive PSLF or TEPSLF.

Second, on October 6, 2021, as prescribed under § 685.219(c)(1)(iii) and (c)(1)(iv), the Department announced a temporary waiver to give borrowers credit for prior, late, or partial payments that would not otherwise count toward PSLF, as well as payments made on a repayment plan that do not otherwise qualify for credit toward PSLF, such as payments made under the extended or graduated repayment plans. 7 Specifically, any months in which the borrower is in a repayment status on their loan while they are also working for a qualifying employer counted as a qualifying payment, regardless of the Federal loan type or repayment plan. This waiver was limited only to borrowers who submitted PSLF Forms or Employer Certification Forms or who completed the PSLF Help Tool prior to October 31, 2022, that were subsequently approved.

Further, the Secretary waived section 455(m)(4) of the HEA and 34 CFR 685.217(c)(12)(ii) and borrowers who have applied for teacher loan forgiveness and PSLF credit will be able to receive credit toward both benefits for the same period of time.

This limited waiver applies to all Federal student loans, as well as to current borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those with other types of Federal student loans who submitted a Direct Consolidation Loan application between October 6, 2021, and October 30, 2022.

On December 11, 2020, the Department announced that borrowers who had applied prior to July 1, 2020, for a borrower defense discharge of FFEL, Perkins, and other loans that were not Direct Loans (non-Direct Loans), but who had not consolidated their non-Direct Loans prior to July 1, 2020, would have their applications for borrower defense discharges adjudicated under the standards for Direct Loans disbursed between July 1, 2017, and July 1, 2020. 85 FR at 79862.

To ensure those borrowers are treated equitably, and to align this waiver with prior extensions of the payment pause, borrowers who submitted applications for a borrower defense discharge on or before August 31, 2022, that relate to any Direct or non-Direct loans that were made prior to July 1, 2020, but which are consolidated on or after July 1, 2020, will be adjudicated under the standards for Direct Loans disbursed between July 1, 2017, and July 1, 2020.

Under § 600.55(f), unless exempt under the law, all foreign graduate medical schools must, on an annual basis, have at least a 75 percent pass rate on each step/test of the USMLE administered by the Educational Commission for Foreign Medical Graduates (ECFMG), including Step 1, Step 2—Clinical Knowledge (Step 2-CK), and Step 2—Clinical Skills (Step 2-CS). However, during the pandemic, the Step 2-CS test was permanently discontinued, and, upon expiration of this waiver, institutions will only resume reporting results for Step 1 and Step 2-CK. Pass rate scores must be submitted to the Department by April 30 of each year.

The Secretary waived the minimum 75 percent pass rate requirement for currently approved foreign graduate medical schools that participate in the Direct Loan program for the duration of admissions years when the test was unavailable for a period of time due to the COVID-19 national emergency. For admissions years that begin after the end of the COVID-19 national emergency on April 10, 2023, normal USMLE pass rate requirements will apply.

Accessible Format: On request to Mr. Jean-Didier Gaina, by telephone: 202-987-1333 or by email: Jean-Didier.Gaina@ed.gov, individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or other accessible format.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

(Assistance Listing Numbers: 84.032 Federal Family Education Loan Program; 84.032 Federal PLUS Program; 84.038 Federal Perkins Loan Program; 84.063 and 84.268 William D. Ford Federal Direct Loan Program.)

Program Authority: 20 U.S.C. 1071, 1082, 1087a, 1087aa, 1098bb.

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

On March 27, 2023 (88 FR 18106), the EPA proposed a limited approval and limited disapproval of the following rule that was submitted for incorporation into the California SIP.

We proposed a limited approval because we determined that this rule improves the SIP and is largely consistent with the relevant CAA requirements. We simultaneously proposed a limited disapproval because it contains a rule provision that is not consistent with the requirements of section 110 and part D of the Act. Specifically, section (E)(1)(b)(iii) is not consistent with EPA's SSM policy and Credible Evidence Rule in. Our proposed action contains more information on the basis for this rulemaking and on our evaluation of the submittal.

The EPA's proposed action provided a 30-day public comment period. During this period, we received one anonymous comment. The full text of this comment is available in the docket for this rulemaking. The comment was broadly supportive of the rule as a tool to address air pollution, particularly NO X emissions, and human health. The commenter indicated that they believed the rule would be successful at regulating clean air, once the rule deficiencies are corrected. After reviewing this comment, the EPA has determined that the comment is supportive of our proposed action and does not raise issues that change our assessment of MDAQMD Rule 1157.

No comments were submitted that change our assessment of the rule as described in our proposed action. Therefore, as authorized in sections 110(k)(3) and 301(a) of the Act, the EPA is finalizing a limited approval of the submitted rule. This action incorporates the submitted rule into the California SIP, including those provisions identified as deficient. As authorized under sections 110(k)(3) and 301(a), the EPA is simultaneously finalizing a limited disapproval of the rule.

As a result, the EPA must promulgate a federal implementation plan (FIP) under section 110(c) unless we approve subsequent SIP revisions that correct the rule deficiencies within 24 months.

In addition, the offset sanction in CAA section 179(b)(2) will be imposed 18 months after the effective date this action, and the highway funding sanction in CAA section 179(b)(1) six months after the offset sanction is imposed. A sanction will not be imposed if the EPA determines that a subsequent SIP submission corrects the identified deficiencies before the applicable deadline.

Note that the submitted rule has been adopted by the MDAQMD, and the EPA's final limited disapproval does not prevent the local agency from enforcing it. The limited disapproval also does not prevent any portion of the rule from being incorporated by reference into the federally enforceable SIP as discussed in a July 9, 1992 EPA memo found at: https://www.epa.gov/sites/production/files/2015-07/documents/procsip.pdf.

The EPA is also removing the previous conditional approval of the major NO X RACT element associated with Rule 1157 based on the finding that the District has met its commitment and submitted a rule that addressed all deficiencies identified in our February 12, 2018 conditional approval (83 FR 5921).

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Mojave Desert Air Quality Management District Rule 1157, Boilers and Process Heaters, amended on January 22, 2018, which regulates NO X and CO emissions from industrial, institutional, and commercial boilers, steam generators, and process heaters. The EPA has made, and will continue to make, these documents available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Additional information about these statutes and Executive orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to review state choices, and approve those choices if they meet the minimum criteria of the Act. Accordingly, this final action is finalizing a limited approval and limited disapproval of MDAQMD Rule 1157 as meeting federal requirements and does not impose additional requirements beyond those imposed by state law.

The State did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 15, 2023. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

For the reasons stated in the preamble, the Environmental Protection Agency amends part 52, chapter I, title 40 of the Code of Federal Regulations as follows:

I. Viewing Comments and Documents Viewing Documents and Comments

To view documents related to this docket, go to https://www.regulations.gov/docket/FMCSA-2022-0134/document and choose the document to review. To view comments, visit the same website, then click “Browse All Comments.” If you do not have access to the internet, you may view the docket online by visiting Dockets Operations on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. To be sure someone is there to help you, please call (202) 366-9317 or (202) 366-9826 before visiting Dockets Operations.

All comments the Agency received in response to the November 16, 2022, notice mentioned above were posted without change to http://www.regulations.gov. Anyone may search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or of the person signing the comment, if submitted on behalf of an association, business, labor union, etc.). DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.transportation.gov/privacy.

On November 15, 2021, the President signed the IIJA into law (Pub. L. 117-58, 135 Stat. 429). Section 23021 of the IIJA  1 directed the Secretary (through FMCSA) to issue guidance, within one year of the date of enactment of the IIJA, clarifying the definitions of the terms “broker” and “bona fide agents” in 49 CFR 371.2. The guidance must take into consideration the extent to which technology has changed the nature of freight brokerage, the role of bona fide agents, and other aspects of the freight transportation industry. Additionally, when issuing the guidance, FMCSA must, at a minimum: (1) examine the role of a dispatch service in the transportation industry; (2) examine the extent to which dispatch services could be considered brokers or bona fide agents; and (3) clarify the level of financial penalties for unauthorized brokerage activities under 49 U.S.C. 14916, applicable to a dispatch service. 2

The notice and comment rulemaking procedures of the Administrative Procedure Act (APA) do not apply to interpretative rules and general statements of policy (commonly called “guidance”) (5 U.S.C. 553(b)(A)). Accordingly, the APA did not specifically require FMCSA to solicit public comment, and most of the other statutes and executive orders that would be applicable if the opportunity for prior notice and public comment was required similarly do not apply. Nevertheless, in order to ensure that the guidance provides clear, useful, and relevant information for stakeholders, FMCSA solicited stakeholder input via a Federal Register notice published on June 9, 2022. (87 FR 35593). FMCSA then issued a Federal Register notice containing interim guidance. (87 FR 68635, Nov. 16, 2022). As part of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328 (Dec. 29, 2022)), Congress directed FMCSA to finalize the guidance by June 16, 2023. 3

While the interim guidance was effective immediately upon publication, FMCSA sought additional public comment to determine whether the guidance should be updated before being finalized. FMCSA also invited commenters to speak at a listening session during the Mid America Trucking Show (MATS) on March 31, 2023, but none of the commenters at the MATS session addressed this guidance. (87 FR 14439, Mar. 8, 2023). FMCSA also reopened the comment period for written comments, which were due by April 6, 2023. (87 FR 14322, Mar. 8, 2023).

FMCSA now issues final guidance on the definitions of “broker” and “bona fide agent,” including guidance on the role and activities of entities referred to as “dispatch services” and the level of financial penalties for unauthorized brokerage services provided by such entities. This document does not have the force and effect of law and is not meant to bind the public in any way, and the document is intended only to provide information to the public regarding existing requirements under the law or agency policies.

FMCSA received 55 comments on the interim guidance, in addition to more than 80 comments received during the previous comment period, and the Agency appreciates the time and effort stakeholders took in submitting these comments. The commenters included individuals, trade associations, brokers, and dispatch services. While the Agency does not specifically reference all comments in this guidance, the Agency would like to assure stakeholders it has reviewed and considered all comments filed.

The IIJA required FMCSA to examine the impact of technological advances in the freight transportation industry. In the interim guidance, FMCSA recognized that freight brokerage has changed immeasurably due to technology, including moving from a phone-based system to one conducted mainly over the internet. (87 FR 68637). However, such changes do not impact the fundamental nature of brokerage, which involves arranging transportation for compensation, and hence do not have a significant impact on this guidance.

Commenters on the interim guidance generally agreed with FMCSA's position on the extent to which technology has changed the freight brokerage business and the impact of such changes. FMCSA does not believe there is any reason to revise its analysis for the final guidance.

The IIJA also required FMCSA to examine the role of bona fide agents in the freight transportation industry. Based upon previous stakeholder comments, FMCSA determined in the interim guidance that bona fide agents are generally considered to be individuals or entities that solicit business for a motor carrier. (87 FR 68638). In the recent comments, several commenters indicated that this statement may have made the relationship between a motor carrier and a bona fide agent seem too casual, when in reality a bona fide agent has a formalized and ongoing relationship with a particular motor carrier. 4 FMCSA agrees that the regulatory definition of “bona fide agent” does not contemplate a casual relationship, as it requires the bona fide agent to be part of the motor carrier's normal operations and to perform duties as directed by the motor carrier pursuant to a preexisting agreement which provides for a continuing relationship. 49 CFR 371.2(b).

Another topic the IIJA requires FMCSA to consider when issuing this guidance is “other aspects of the freight transportation industry.” Numerous drivers and motor carriers raised concerns about economic pressures negatively affecting the industry. 5 A group of commenters also sought action regarding allegations of fraud, supply chain abuse, theft of cargo, double brokering, and misappropriation of funds occurring in the industry. 6 In response, FMCSA notes that “double brokering” is not a term defined by statute or regulation, and commenters use the term to refer to several different activities. However, it appears most commenters concerned with double brokering are referring to ways in which some entities act as brokers without proper authority.

FMCSA also notes that approximately 24 comments received in this docket asked the Agency to take actions beyond the scope of the guidance required by the IIJA, specifically regarding issues of transparency and fairness in transactions between motor carriers and brokers. 7

While the guidance contained in this notice is limited to the issues Congress required FMCSA to examine with the enactment of IIJA, FMCSA nevertheless recognizes that its guidance is operating in a broader context and has impacts beyond the immediate focus of this guidance. In today's notice, FMCSA has worked to avoid creating unintended consequences, in issuing its interpretation of its regulations and related matters. While the guidance may be relevant to stakeholder compliance with FMCSA's regulations, any changes to FMCSA's regulations, and consequently to a stakeholder's compliance responsibilities, would need to be made through a rulemaking proceeding.

The interim guidance concerned six main areas: (1) the definition of broker; (2) the definition of bona fide agent; (3) the role of dispatch services in the transportation industry; (4) how to determine whether a dispatch service is acting as a broker or as a bona fide agent; (5) services dispatchers may provide without broker authority; and (6) services for which dispatchers must obtain broker authority in order to provide. The guidance also clarified the level of financial penalties for unauthorized brokerage activities under 49 U.S.C. 14916.

FMCSA has considered the comments received and has made several updates to the guidance, discussed further below, and now issues final guidance on these topics.

Final Guidance: FMCSA has determined that the definition of “broker” at 49 CFR 371.2(a) is adequate. Handling money exchanged between shippers and motor carriers is one factor that strongly suggests the need for broker authority, but it is not an essential requirement for one to be considered a broker.

Discussion: As explained in the interim guidance, FMCSA is unable to change the statutory definition of “broker” at 49 U.S.C. 13102(2). (87 FR 68637). Nor is it able to change the regulatory definition of “broker” at 49 CFR 371.2(a) without going through the rulemaking process. However, FMCSA did clarify in the interim guidance that, although handling money exchanged between shippers and motor carriers strongly suggests the need for broker authority, it is only one factor of the analysis and is not, standing alone, determinative. (87 FR 68638). Stakeholder reactions to FMCSA's interim guidance were mainly supportive. 8

Stakeholders asked FMCSA to clarify whether internet-based load matching services and load boards are considered brokers. 9 While this topic garnered few comments, those that addressed it agreed that these services should not be considered brokers. 10 However, some commenters expressed concerns about motor carriers, brokers, and dispatch services perpetrating fraud through the use of load boards. 11

In response, FMCSA has determined that merely making information about potential shippers publicly available, regardless of whether a fee is charged, does not require an entity to obtain broker authority as long as the entity making the leads available is not otherwise involved in any transaction between the shipper and a motor carrier.

Final Guidance: A bona fide agent may be either an employee of a motor carrier or a contractor but must perform its duties as specified in a preexisting agreement between the parties. While FMCSA has determined that the definition of “bona fide agent” in 49 CFR 371.2(b) is adequate, FMCSA clarifies that the term “allocating traffic,” which appears in the definition, means any exercise of discretion on an agent's part when assigning a load to a motor carrier. If an entity representing more than one carrier exercises such discretion, it would not meet the definition of “bona fide agent.”

Discussion: The regulations define “bona fide” agents as “persons who are part of the normal organization of a motor carrier and perform duties under the carrier's directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others.” 49 CFR 371.2(b). FMCSA cannot change this definition absent a rulemaking.

In the interim guidance, FMCSA determined that representing more than one motor carrier does not necessarily mean one is a broker rather than a bona fide agent. (87 FR 68638). Any determination will be highly fact specific and will entail determining whether the person or company is engaged in the allocation of traffic between motor carriers. Several commenters requested more clarity on the meaning of “allocation of traffic.”  12 FMCSA intended this term to mean any exercise of discretion, choice, or decision-making on the agent's part about which motor carrier to assign a load.

If a bona fide agent represents only one motor carrier, it will assign all loads it sources to that particular carrier and thus, no exercise of discretion is necessary, and there is no dispute that the agent is not a broker. However, an agent representing multiple carriers should be careful to structure its agreements to avoid the possibility of allocating traffic. The scope of these agreements and the agent's compliance with the terms of the agreements are key factors in the analysis of whether such an agent may qualify as a bona fide agent under the regulatory definition at 49 CFR 371.2(b). To illustrate, FMCSA presents two examples of situations where a bona fide agent may be able to represent multiple motor carriers without engaging in allocation of traffic.

The first example is where a bona fide agent represents motor carriers that require the agent to source loads originating in different geographic areas and selected motor carriers will not pick up freight in the other carriers' locations. For instance, if the agreement between the bona fide agent and Carrier A requires the agent to source loads originating only in Maine, New Hampshire, Vermont, or Massachusetts, and its agreement with Carrier B requires it to source loads originating only in Florida, Georgia, or Alabama, the entity would not need to exercise discretion because all loads originating in a particular geographic location would necessarily be assigned to the relevant carrier.

A second example is if the bona fide agent has agreements with multiple carriers to source specific types of loads and these services do not overlap. For instance, if the agent's agreement with Carrier A requires the agent to source only hazardous materials loads, and the agreement with Carrier B requires it to exclude hazardous material loads, the agent would not have to exercise discretion as to which carrier to assign a load to, because the carriers are not willing or able to haul the same loads if sourced by the bona fide agent. Similarly, if Carrier A operates refrigerated trucks while Carrier B operates flatbed trucks, a bona fide agent may be able to represent both carriers without engaging in allocation of traffic.

However, if the agent's agreements require it to source the same type of loads for both carriers without geographic restrictions as described above, it could not represent both carriers without registering for broker authority, because any load assignments would necessarily require the entity to choose between carriers and would therefore constitute an allocation of traffic.

Several commenters operating in the household goods industry also asked FMCSA to clarify whether this guidance applies to “household goods agents,” as that term is defined at 49 U.S.C. 13907 and 49 CFR 375.205. 13 FMCSA initially determined it would address issues previously raised by the household goods industry in a separate proceeding. (87 FR 68638 at FN20). However, the stakeholders believe this would be unnecessary and asked FMCSA to address their concerns in this final guidance. 14 FMCSA agrees with the stakeholders and, consequently, is issuing guidance here.

FMCSA recognizes that entities operating in the household goods transportation industry are subject to additional regulations. “Household goods broker” is defined in 49 CFR 371.103 as “a person, other than a motor carrier or an employee or bona fide agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation of household goods by motor carrier for compensation.” Moreover, 49 CFR 375.205 permits household goods motor carriers engaged in interstate transportation of household goods to have agents and provides that a “prime agent,” a type of household good agent, “does not include a household goods broker or freight forwarder.” Thus, to the extent a person or company is operating as a prime agent in the household goods sector, this guidance would not be applicable to such person or company.

Final Guidance: There is no statutory or regulatory definition of a dispatch service, nor is there a commonly accepted definition of such a service. Some features of dispatch services include working exclusively for motor carriers, not for shippers; sourcing loads for motor carriers; and performing additional services for motor carriers that are unrelated to sourcing shipments. FMCSA does not have statutory authority to regulate dispatch services unless such entities also meet the criteria for registration as brokers, freight forwarders, and/or motor carriers.

Discussion: The IIJA required the agency to examine the role of dispatch services in the transportation industry and the extent to which such services could be considered brokers or bona fide agents. However, Congress did not define the term “dispatch service” in the IIJA provision mandating this guidance, and the comments FMCSA received prior to issuing the interim guidance made clear that there is no universally accepted definition of the term. Thus, FMCSA attempted to determine what constitutes a “dispatch service” by examining the role such entities play in the transportation industry and set out several common features of dispatch services in the interim guidance. (87 FR 68639).

TIA suggested that FMCSA should require all dispatch services to register with FMCSA, either as brokers or as a new class of licensed entity. 15 Freight Girlz also asked FMCSA to develop and issue a certificate of compliance to “legitimate dispatch companies” and suggested numerous criteria for obtaining such a certificate. 16 However, FMCSA cannot define a new class of operating authority in this guidance. The existing registration statutes do not authorize FMCSA to regulate any entity in the transportation industry other than motor carriers, brokers, and freight forwarders. If a dispatch service or other entity does not meet the criteria for inclusion in one of these categories, FMCSA is unable to require registration or otherwise regulate that entity.

Some commenters on the interim guidance indicated that dispatch services are more attuned than brokers are to a carrier's needs and a specific driver's preferences, location, and other data. 17 However, relatively few comments specifically addressed this portion of the interim guidance, as most commenters were concerned with the issue of how to determine whether a dispatch service is acting as a broker or as a bona fide agent.