The FAA invites interested people to take part in the development of this proposed policy by sending written comments, data, or views. The most helpful comments reference a specific portion of the proposed policy, explain the reason for any recommended change, and include supporting data.

Before acting on this proposal, the FAA will consider all comments received on or before the closing date for comments. The FAA may consider comments filed late if it is possible to do so without incurring delay. The FAA may change the proposed policy based on the comments received.

Except for Confidential Business Information (CBI) as described in the following paragraph, the FAA will post all comments it receives, without change, to  https://www.regulations.gov/, including any personal information you provide. Using the search function of the docket website, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT's complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477-19478), as well as at https://www.dot.gov/privacy.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this proposed policy contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to these proposed airworthiness criteria, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and the indicated comments will not be placed in the public docket for this notice. Send submissions containing CBI to the individual listed under For Further Information Contact. Comments that the FAA receives, which are not specifically designated as CBI, will be placed in the public docket for this notice.

In 1992, the FAA issued Advisory Circular (AC) 21.17-3, 1 “Type Certification of Very Light Airplanes Under [14 CFR] 21.17(b)” (AC 21.17-3), to provide guidance on acceptable means of compliance for type, production, and airworthiness certification for very light airplanes (VLA). AC 21.17-3 designates the Joint Aviation Authorities (JAA) of Europe publication, “Joint Aviation Requirements for Very Light Aeroplanes” (April 26, 1990) (JAR-VLA), as acceptable airworthiness criteria that provides an equivalent level of safety under 14 CFR 21.17(b) for FAA type certification of VLA as a special class of aircraft. After the European Aviation Safety Agency (now the European Union Aviation Safety Agency) (EASA) was formed, EASA developed its VLA certification standards (CS-VLA) from JAR-VLA, with CS-VLA becoming effective on November 14, 2003.

In 2016, the FAA promulgated amendment 23-64 of 14 CFR part 23, Revision of Airworthiness Standards for Normal, Utility, Acrobatic, and Commuter Category Airplanes. 81 FR 96572. 2 In the preamble to that final rule, the FAA stated that it intended to continue to allow CS-VLA airplanes to be approved as a special, stand-alone class of airplane while also allowing eligibility for certification in accordance with part 23 using accepted means of compliance. In 2017, EASA issued CS-23 Amendment 5 and EASA recognized CS-VLA as an acceptable means of compliance to CS-23 Amendment 5.

AC 21.17-3 considers a VLA as a special class of aircraft, and defines a VLA as an airplane with a single engine (spark- or compression-ignition), not more than two seats, a maximum certificated takeoff weight of not more than 750 kg (approximately 1,654 pounds), and a stalling speed of not more than 45 knots (CAS) in the landing configuration, and limited to normal category maneuvers and day visual flight rule (VFR) operations only. AC 21.17-3 states that, “VLA operations at night and under [instrument flight rule] (IFR) conditions would be acceptable, provided the VLA is certificated to the JAR-VLA requirements plus certain additional [14 CFR] part 23 requirements, including those related to night and IFR operations, and that both the engine and propeller installed [are] type certificated under [14 CFR] part 33 (or JAR-E) and part 35 (or JAR-P).”

This notice of proposed policy contains additional airworthiness criteria that are an acceptable means of compliance for design features that differ from the VLA limits defined in AC 21.17-3 or that are not adequately addressed by CS-VLA or JAR-VLA. The FAA previously applied some of these additional airworthiness criteria to specific VLA type designs, 3 and these additional airworthiness criteria are among those included in this notice of proposed policy.

The FAA establishes airworthiness criteria and issues type certificates to ensure the safe design and operation of aircraft in accordance with 49 U.S.C. 44701(a) and 44704. VLA can be type certificated by the FAA as a special class of aircraft because VLA airworthiness standards have not yet been established by regulation. Under the provisions of 14 CFR 21.17(b), the airworthiness standards for special class aircraft are the portions of the requirements in 14 CFR parts 23, 25, 27, 29, 31, 33, and 35 found by the FAA to be appropriate and applicable to the specific type design and any other airworthiness criteria found by the FAA to provide an equivalent level of safety to the existing standards.

With the adoption of performance-based regulations in part 23, amendment 23-64, VLA airplanes are eligible for certification as normal category airplanes in accordance with part 23 using accepted means of compliance. Or, applicants may seek type certification of VLA airplanes as a “special class” under § 21.17(b) using CS-VLA or JAR-VLA requirements. The FAA accepts CS-VLA and JAR-VLA airworthiness criteria as providing an equivalent level of safety under § 21.17(b) for special class type certification of VLA airplanes. Special class certification may include airplane designs that differ from the limits defined in AC 21.17-3 ( e.g., engine mount, winglets, night-VFR, increased maximum certificated takeoff weight of not more than 850 kg (1,874 pounds), increased stall speed of not more than 50 KCAS, or lithium battery installation) provided the airplane was certificated to CS-VLA or JAR-VLA and the certification basis includes additional design requirements applicable and appropriate for the specific type design. The FAA plans to revise AC 21.17-3 to incorporate the additional acceptable airworthiness criteria proposed in this policy.

VLA airplanes meeting the limits defined in AC 21.17-3 are certificated to CS-VLA or JAR-VLA requirements. VLA airplane designs that differ from the limits defined in AC 21.17-3 or designs that incorporate features not adequately addressed by CS-VLA or JAR-VLA requirements may be certificated to CS-VLA or JAR-VLA with additional airworthiness criteria applicable and appropriate for the specific type design. Specifically, this proposed policy contains additional airworthiness criteria for such features as advanced avionic displays, engine mount to composite airframe, winglets, night VFR operations, increased maximum certificated takeoff weight and increased stall speed from those defined in AC 21.17-3, and rechargeable lithium ion battery installations.

The following are the proposed acceptable airworthiness criteria that provide an equivalent level of safety for VLA special class type certification under 21.17(b), in addition to the requirements in CS-VLA or JAR-VLA, that the FAA finds to be appropriate and applicable for specific type designs. Each of the new criteria use a “VLA.XXX” section-numbering scheme.

In addition to being certificated to CS-VLA or JAR-VLA requirements, designs incorporating advanced avionic displays would also need to meet the requirements of 14 CFR 23.1307, Miscellaneous Equipment, amendment 23-49; § 23.1311, Electronic Display Instrument Systems, amendment 23-62; § 23.1321, Arrangement and Visibility, amendment 23-49; and § 23.1359, Electrical System Fire Protection, amendment 23-49.

In addition to being certificated to CS-VLA or JAR-VLA requirements, airplanes with winglets on the wings would also need to meet the requirements of JAR 23.445, 4 amendment 1, Outboard Fins or Winglets.

In addition to being certificated to CS-VLA or JAR-VLA requirements, designs with engine mounting to composite airframe would also need to meet design requirements to address fire protection of the connection between the metal structure of an engine mount and composite airframe by demonstrating that the composite airframe can withstand a fire while carrying loads.

In addition to being certificated to CS-VLA or JAR-VLA, for certification for night VFR operations, the airplane would also need to meet design requirements to address the flight performance, design and construction, powerplant installation, equipment, and operating limitations and information, that are necessary for night VFR operations.

In addition to being certificated to CS-VLA or JAR-VLA, for approval of airplane designs with an increased maximum certificated takeoff weight of not more than 850 kg (1,874 pounds) and increased stall speed of not more than 50 KCAS, the airplane would also need to meet design requirements to address the flight performance, structure, crashworthiness, and performance information, that are necessary for the increased weight and stall speed.

(a) If an Equivalent Level of Safety (ELOS) to CS-VLA 1143(g) and CS-VLA 1147(b) is requested, the airplane would need to meet additional design requirements to incorporate design features to increase reliability, and maintenance items that make the engine controls attachment not likely to separate in flight, which are necessary to ensure that if the mixture control separates at the engine fuel metering device, the airplane is capable of continued safe flight and landing.

(b) Instead of the stall-characteristics requirements in CS-VLA 201(c), CS-VLA 201(f), and CS-VLA 203(c)(4), the requirements from CS 23.201(c), CS 23.201(e), and CS 23.203(c)(4)(ii), respectively, would need to be used.

(c) In place of the handling quality attributes in CS-VLA 177(a)(2) and CS-VLA 177(a)(3), neutral lateral stability would need to be achieved by showing compliance with the requirements in VLA.170.

(d) If an ELOS to CS-VLA 161(b)(2)(ii) is requested, additional airworthiness criteria from CS 23.161(c)(4), CS 23.73 (a), CS 23.75 (a)(1), (b), (c), and (d), CS 23.77(a), CS 23.145 (b)(5) and (d), CS 23.153(a), (b), (c), and (d), CS 23.157(c) and (d), and CS 23.175(c), would need to be met to address airplane trim requirements.

In addition to being certificated to CS-VLA or JAR-VLA, airplanes with rechargeable lithium ion battery would need to meet airworthiness criteria containing safety objectives necessary to address design and installation of rechargeable lithium ion batteries.

The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.

The authority citations for these airworthiness criteria are as follows:

The FAA proposes to continue to allow type certification of VLA as a special class of aircraft under 14 CFR 21.17(b) using CS-VLA or JAR-VLA requirements, while also allowing eligibility for certification as a normal category airplane in accordance with part 23 using accepted means of compliance. The FAA accepts CS-VLA and JAR-VLA airworthiness criteria as providing an equivalent level of safety under § 21.17(b) special class type certification of VLA airplanes. The FAA would consider proposals for airplane designs that differ from the VLA limits defined in AC 21.17-3 for type certification as a special class of aircraft under § 21.17(b), provided the VLA were certificated to the JAR-VLA or CS-VLA requirements plus additional airworthiness criteria the FAA finds appropriate and applicable for the proposed design. Additional design requirements may include but are not limited to the airworthiness criteria identified in the following paragraphs. Other additional airworthiness criteria may be required to address specific design proposals.

If the airplane has advanced avionic displays installed, the following requirements from 14 CFR part 23 apply:

• 14 CFR 23.1307 at amendment 23-49, Miscellaneous Equipment.

• 14 CFR 23.1311 at amendment 23-62, Electronic Display Instrument Systems.

• 14 CFR 23.1321 at amendment 23-49, Arrangement and Visibility.

• 14 CFR 23.1359 at amendment 23-49, Electrical System Fire Protection.

If the airplane has any outboard fins or winglets installed, the design must comply with JAR 23.445.

The requirements in this section are applicable to airplanes with an engine mounting to composite airframe. Tests must be performed that demonstrate that the interface between the metallic engine mount and the glass fiber reinforced plastic fuselage withstand a fire for 15 minutes while carrying loads under the following conditions:

(a) With one lost engine mount fitting the loads are distributed over the remaining three engine mount fittings. The most critical of these fittings must be chosen for the test.

The loads are:

(1) In Z-direction the mass of the propulsion unit multiplied by a maneuvering load factor resulting from a 30° turn for 15 minutes, superimposed by a maneuvering load of 3 seconds representing the maximum positive limit maneuvering load factor of n = 3.8 from JAR-VLA 337(a).

(2) In X-direction the engine propulsion force at maximum continuous power for 5 minutes.

(b) The flame to which the component test arrangement is subjected must provide a temperature of 500 °C within the target area.

(c) The flame must be large enough to maintain the required temperature over the entire test zone, i.e., the fitting on the engine compartment side.

(d) It must be shown that the test equipment, e.g., burner and instrumentation are of sufficient power, size, and precision to yield the test requirements arising from paragraphs (a) through (c) of this section.

The requirements in sections VLA.005 through VLA.105 are applicable to airplanes with a single engine (spark- or compression-ignition) having not more than two seats, with a maximum certificated takeoff weight of not more than 750 kg and a stalling speed in the landing configuration of not more than 83 km/h (45 knots) (CAS), to be approved for day-VFR [visual flight rules] or for day-and night-VFR.

(a) Any short period oscillation not including combined lateral-directional oscillations occurring between the stalling speed and the maximum allowable speed appropriate to the configuration of the airplane must be heavily damped with the primary controls—

(1) Free; and

(2) In a fixed position.

(b) Any combined lateral-directional oscillations (“Dutch roll”) occurring between the stalling speed and the maximum allowable speed appropriate to the configuration of the airplane must be damped to 1/10 amplitude in 7 cycles with the primary controls—

(1) Free; and

(2) In a fixed position.

(c) Any long period oscillation of the flight path (phugoid) must not be so unstable as to cause an unacceptable increase in pilot workload or otherwise endanger the airplane. When under the conditions specified in CS-VLA 175, the longitudinal control force required to maintain speeds differing from the trimmed speed by at least plus or minus 15% is suddenly released, the response of the airplane must not exhibit any dangerous characteristics nor be excessive in relation to the magnitude of the control force released.

The pilot compartment must be free from glare and reflections that could interfere with the pilot's vision under all operations for which the certification is requested. The pilot compartment must be designed so that—

(a) The pilot's view is sufficiently extensive, clear, and undistorted, for safe operation;

(b) The pilot is protected from the elements so that moderate rain conditions do not unduly impair the pilot's view of the flight path in normal flight and while landing; and

(c) Internal fogging of the windows covered under paragraph (a) of this section can be easily cleared by the pilot unless means are provided to prevent fogging.

(a) The airplane must be so designed that unimpeded and rapid escape is possible in any normal and crash attitude.

(b) The opening system must be designed for simple and easy operation. It must function rapidly and be designed so that it can be operated by each occupant strapped in their seat, and also from outside the cockpit. Reasonable provisions must be provided to prevent jamming by fuselage deformation.

(c) The exit must be marked for easy location and operation even in darkness.

(a) The engine must meet the specifications of CS-E, amendment 6, 5 or 14 CFR part 33, amendment 33-36, for night-VFR operation.

(b) Restart capability. An altitude and airspeed envelope must be established for the airplane for in-flight engine restarting and the installed engine must have a restart capability within that envelope.

(a) For day-VFR operation, the propeller must meet the specifications of CS-22 Subpart J, amendment 3. For night-VFR operations the propeller and its control system must meet the specifications of CS-P, amendment 2, 6 or 14 CFR part 35, amendment 35-10, except for fixed pitch propellers, for which CS-22  7 subpart J is sufficient.

(b) Engine power and propeller shaft rotational speed may not exceed the limits for which the propeller is certificated or approved.

If an air filter is used to protect the engine against foreign material particles in the induction air supply—

(a) Each air filter must be capable of withstanding the effects of temperature extremes, rain, fuel, oil, and solvents to which it is expected to be exposed in service and maintenance; and

(b) Each air filter must have a design feature to prevent material separated from the filter media from re-entering the induction system and interfering with proper fuel metering operation.

(a) Each exhaust system must ensure safe disposal of exhaust gases without fire hazard or carbon monoxide contamination in the personnel compartment.

(b) Each exhaust system part with a surface hot enough to ignite flammable fluids or vapours must be located or shielded so that leakage from any system carrying flammable fluids or vapours will not result in a fire caused by impingement of the fluids or vapours on any part of the exhaust system including shields for the exhaust system.

(c) Each exhaust system component must be separated by fireproof shields from adjacent flammable parts of the airplane that are outside the engine compartment.

(d) No exhaust gases may discharge dangerously near any fuel or oil system drain.

(e) Each exhaust system component must be ventilated to prevent points of excessively high temperature.

(f) Each exhaust heat exchanger must incorporate means to prevent blockage of the exhaust port after any internal heat exchanger failure.

(g) No exhaust gases may be discharged where they will cause a glare seriously affecting the pilot's vision at night.

(a) The power or supercharger control must give a positive and immediate responsive means of controlling its engine or supercharger.

(b) If a power control incorporates a fuel shut-off feature, the control must have a means to prevent the inadvertent movement of the control into the shut-off position. The means must—

(1) Have a positive lock or stop at the idle position; and

(2) Require a separate and distinct operation to place the control in the shut-off position.

(c) Each power or thrust control must be designed so that if the control separates at the engine fuel metering device, the airplane is capable of continuing safe flight and landing.

(a) The control must require a separate and distinct operation to move the control toward lean or shut-off position.

(b) Each manual engine mixture control must be designed so that, if the control separates at the engine fuel metering device, the airplane is capable of continuing safe flight and landing.

If warning, caution, or advisory lights are installed in the cockpit, they must be—

(a) Red, for warning lights (lights indicating a hazard which may require immediate corrective action);

(b) Amber, for caution lights (lights indicating the possible need for future corrective action);

(c) Green, for safe operation lights; and

(d) Any other color, including white, for lights not described in paragraphs (a) through (c) of this section, provided the color differs sufficiently from the colors prescribed in paragraphs (a) through (c) of this section to avoid possible confusion.

(e) If warning, caution, or advisory lights are installed in the cockpit, they must be effective under all probable cockpit lighting conditions.

(a) Each instrument provided with static pressure case connections must be so vented that the influence of airplane speed, the opening and closing of windows, moisture, or other foreign matter, will not significantly affect the accuracy of the instruments.

(b) The design and installation of a static pressure system must be such that—

(1) Positive drainage of moisture is provided;

(2) Chafing of the tubing, and excessive distortion or restriction at bends in the tubing, is avoided; and

(3) The materials used are durable, suitable for the purpose intended, and protected against corrosion.

(c) Each static pressure system must be calibrated in flight to determine the system error. The system error, in indicated pressure altitude, at sea-level, with a standard atmosphere, excluding instrument calibration error, may not exceed ±9 m (±30 ft) per 185 km/h (100 knots) speed for the appropriate configuration in the speed range between 1.3 V SO with flaps extended and 1.8 V S1 with flaps retracted. However, the error need not be less than ±9 m (±30 ft).

For each airplane—

(a) Each gyroscopic instrument must derive its energy from power sources adequate to maintain its required accuracy at any speed above the best rate-of-climb speed;

(b) Each gyroscopic instrument must be installed so as to prevent malfunction due to rain, oil, and other detrimental elements; and

(c) There must be a means to indicate the adequacy of the power being supplied to the instruments.

(d) For Night VFR operation there must be at least two independent sources of power and a manual or an automatic means to select each power source for each instrument that uses a power source.

(a) Electrical system capacity. Each electrical system must be adequate for the intended use. In addition—

(1) Electric power sources, their transmission cables, and their associated control and protective devices, must be able to furnish the required power at the proper voltage to each load circuit essential for safe operation; and

(2) Compliance with paragraph (a)(l) of this section must be shown by an electrical load analysis, or by electrical measurements, that account for the electrical loads applied to the electrical system in probable combinations and for probable durations.

(b) Functions. For each electrical system, the following apply:

(1) Each system, when installed, must be—

(i) Free from hazards in itself, in its method of operation, and in its effects on other parts of the airplane;

(ii) Protected from fuel, oil, water, other detrimental substances, and mechanical damage; and

(iii) So designed that the risk of electrical shock to occupants and ground personnel is reduced to a minimum.

(2) Electric power sources must function properly when connected in combination or independently.

(3) No failure or malfunction of any electric power source may impair the ability of any remaining source to supply load circuits essential for safe operation.

(4) Each electric power source control must allow the independent operation of each source, except that controls associated with alternators that depend on a battery for initial excitation or for stabilization need not break the connection between the alternator and its battery.

(5) Each generator must have an overvoltage control designed and installed to prevent damage to the electrical system, or to equipment supplied by the electrical system, that could result if that generator were to develop an overvoltage condition.

(d) Instruments. There must be a means to indicate to the pilot that the electrical power supplies are adequate for safe operation. For direct current systems, an ammeter in the battery feeder may be used.

(e) Fire resistance. Electrical equipment must be so designed and installed that in the event of a fire in the engine compartment, during which the surface of the firewall adjacent to the fire is heated to 1,100 °C for 5 minutes or to a lesser temperature substantiated by the applicant, the equipment essential to continued safe operation and located behind the firewall will function satisfactorily and will not create an additional fire hazard. This may be shown by test or analysis.

(f) External power. If provisions are made for connecting external power to the airplane, and that external power can be electrically connected to equipment other than that used for engine starting, means must be provided to ensure that no external power supply having a reverse polarity, or a reverse phase sequence, can supply power to the airplane's electrical system. The location must allow such provisions to be capable of being operated without hazard to the airplane or persons.

(a) Each storage battery must be designed and installed as prescribed in this section.

(b) Safe cell temperatures and pressures must be maintained during any probable charging and discharging condition. No uncontrolled increase in cell temperature may result when the battery is recharged (after previous complete discharge)—

(1) At maximum regulated voltage or power;

(2) During a flight of maximum duration; and

(3) Under the most adverse cooling condition likely to occur in service.

(c) Compliance with paragraph (b) of this section must be shown by tests unless experience with similar batteries and installations has shown that maintaining safe cell temperatures and pressures presents no problem.

(d) No explosive or toxic gases emitted by any battery in normal operation, or as the result of any probable malfunction in the charging system or battery installation, may accumulate in hazardous quantities within the airplane.

(e) No corrosive fluids or gases that may escape from the battery may damage surrounding structures or adjacent essential equipment.

(f) Each nickel cadmium battery installation capable of being used to start an engine or auxiliary power unit must have provisions to prevent any hazardous effect on structure or essential systems that may be caused by the maximum amount of heat the battery can generate during a short circuit of the battery or of its individual cells.

(g) Nickel cadmium battery installations capable of being used to start an engine or auxiliary power unit must have—

(1) A system to control the charging rate of the battery automatically so as to prevent battery overheating;

(2) A battery temperature sensing and over-temperature warning system with a means for disconnecting the battery from its charging source in the event of an overtemperature condition; or

(3) A battery failure sensing and warning system with a means for disconnecting the battery from its charging source in the event of battery failure.

(h) In the event of a complete loss of the primary electrical power generating system, the battery must be capable of providing 30 minutes of electrical power to those loads that are essential to continued safe flight and landing. The 30-minute time period includes the time needed for the pilot(s) to recognize the loss of generated power and to take appropriate load shedding action.

The instrument lights must—

(a) Make each instrument and control easily readable and discernible;

(b) Be installed so that their direct rays, and rays reflected from the windshield or other surface, are shielded from the pilot's eyes; and

(c) Have enough distance or insulating material between current carrying parts and the housing so that vibration in flight will not cause shorting. (A cabin dome light is not an instrument light.)

Each taxi and landing light must be designed and installed so that—

(a) No dangerous glare is visible to the pilots;

(b) The pilot is not seriously affected by halation;

(c) It provides enough light for night operations; and

(d) It does not cause a fire hazard in any configuration.

(a) Electronic equipment and installations must be free from hazards in themselves, in their method of operation, and in their effects on other components.

(b) For operations for which electronic equipment is required, compliance must be shown with CS-VLA 1309.

(a) A placard meeting the requirements of this section must be installed on or near the magnetic direction indicator.

(b) The placard must show the calibration of the instrument in level flight with the engine operating.

(c) The placard must state whether the calibration was made with radio receivers on or off.

(d) Each calibration reading must be in terms of magnetic headings in not more than 30° increments.

(e) If a magnetic non-stabilized direction indicator can have a deviation of more than 10° caused by the operation of electrical equipment, the placard must state which electrical loads, or combination of loads, would cause a deviation of more than 10° when turned on.

The following placards must be plainly visible to the pilot:

(a) A placard stating the following airspeeds (IAS):

(1) Design maneuvering speed, V A ;

(2) The maximum landing gear operating speed, V LO .

(b) A placard stating the following approved operation:

(1) For day-VFR only operation, a placard stating, “This airplane is classified as a very light airplane approved for day-VFR only, in non-icing conditions. All aerobatic maneuvers, including intentional spinning, are prohibited. See Flight Manual for other limitations.”

(2) If night-VFR operation is approved, a placard stating, “This airplane is classified as a very light airplane approved for day- and night-VFR operation, in non-icing conditions. All aerobatic maneuvers, including intentional spinning, are prohibited. See Flight Manual for other limitations.”

(a) Airspeed limitations. The following information must be furnished—

(1) Information necessary for the marking of the airspeed limits on the indicator, as required in CS-VLA 1545, and the significance of the color coding used on the indicator.

(2) The speeds V A , V LO , V LE (maximum landing gear extended speed) where appropriate.

(b) Weights. The following information must be furnished:

(1) The maximum weight.

(2) Any other weight limits, if necessary.

(c) Center of gravity. The established c.g. limits required by CS-VLA 23 must be furnished.

(d) Maneuvers. Authorized maneuvers established in accordance with CS-VLA 3 must be furnished.

(e) Flight load factors. Maneuvering load factors: the following must be furnished—

(1) The factors corresponding to point A and point C in the figure for CS-VLA 333(b), stated to be applicable at V A .

(2) The factors corresponding to point D and point E of figure 1 of CS-VLA 333(b) to be applicable at never exceed speed, V NE .

(3) The factor with wing flaps extended as specified in CS-VLA 345.

(f) The kinds of operation (day-VFR or day- and night-VFR, whichever is applicable) in which the airplane may be used, must be stated. The minimum equipment required for the operation must be listed.

(g) Powerplant limitations. The following information must be furnished:

(1) Limitation required by CS-VLA 1521.

(2) Information necessary for marking the instruments required by CS-VLA 1549 through 1551.

(3) Fuel and oil designation.

(4) For two-stroke engines, fuel/oil ratio.

(h) Placards. Placards required by CS-VLA 1555 through 1561 must be presented.

If the maximum certificated takeoff weight is higher than 750 kg, but not more than 850 kg, the requirements in sections VLA.120 through VLA.210 apply.

If the stall speed in landing configuration is higher than 45 knots, but not more than 50 knots (CAS), the requirements in section VLA.120 through VLA.210 apply.

The maximum horizontal distance traveled in still air, in km per 1,000 m (nautical miles per 1,000 ft) of altitude lost in a glide, and the speed necessary to achieve this, must be determined with the engine inoperative and its propeller in the minimum drag position, and landing gear and wing flaps in the most favorable available position.

(a) Each seat is to be equipped with at least a 4-point harness system;

(b) The applicant shall evaluate the head strike path with validated methods, and minimize the risk of injury in case of a head contact with the aircraft structure or interior.

(c) The design shall provide reasonable precautions to minimize the lumbar compression loads experienced by occupants in survivable crash landings;

(d) Each seat/harness system shall be statically tested to an ultimate inertia load factor of 18g forward, considering an occupant's mass of 77 kg. The lapbelt should react 60% of this load, and the upper torso restraint should react 40% of this load.

(a) The airplane, although it may be damaged in emergency landing conditions, must be designed as prescribed in this section to protect each occupant under those conditions.

(b) The structure must be designed to give each occupant reasonable chances of escaping injury in a minor crash landing when—

(1) Proper use is made of seat belts and shoulder harnesses; and

(2) The occupant experiences the ultimate inertia forces listed below:

(i) Upward 3.0g

(ii) Forward 9.0g

(iii) Sideward 1.5g.

(c) Each item of mass within the cabin that could injure an occupant if it came loose must be designed for the ultimate inertia load factors:

(1) Upward, 3.0g;

(2) Forward, 18.0g; and

(3) Sideward, 4.5g.

Engine mount and supporting structure are included in the above analysis if they are installed behind and above the seating compartment.

(d) The structure must be designed to protect the occupants in a complete turnover, assuming, in the absence of a more rational analysis—

(1) An upward ultimate inertia force of 3g; and

(2) A coefficient of friction of 0.5 at the ground.

(e) Each airplane with retractable landing gear must be designed to protect each occupant in a landing—

(1) With the wheels retracted;

(2) With moderate descent velocity; and

(3) Assuming, in the absence of a more rational analysis;

(i) A downward ultimate inertia force of 3g; and

(ii) A coefficient of friction of 0.5 at the ground.

(a) Each baggage compartment must be designed for its placarded maximum weight of contents and for the critical load distributions at the appropriate maximum load factors corresponding to the flight and ground load conditions for the airplane.

(b) There must be means to prevent the contents of any baggage compartment from becoming a hazard by shifting, and to protect any controls, wiring, lines, equipment, or accessories whose damage of failure would affect safe operations.

(c) Baggage compartments must be constructed of materials which are at least flame resistant.

(d) Designs which provide for baggage to be carried must have means to protect the occupants from injury under the ultimate inertia forces specified in CS-VLA 561(b)(2).

(e) If there is no structure between baggage and occupant compartments, the baggage items located behind the occupants and those which might become a hazard in a crash must be secured for 1.33 × 18g.

(a) General. For each airplane, the following information must be furnished:

(1) The takeoff distance determined under CS-VLA 51, the airspeed at the 15 m height, the airplane configuration (if pertinent), the kind of surface in the tests, and the pertinent information with respect to cowl flap position, use of flight path control devices, and use of the landing gear retraction system.

(2) The landing distance determined under CS-VLA 75, the airplane configuration (if pertinent), the kind of surface used in the tests, and the pertinent information with respect to flap position and the use of flight path control devices.

(3) The steady rate or gradient of climb determined under CS-VLA 65 and 77, the airspeed, power, and the airplane configuration.

(4) The calculated approximate effect on takeoff distance (paragraph (a)(1) of this section), landing distance (paragraph (a)(2) of this section), and steady rates of climb (paragraph (a)(3) of this section), of variations in altitude and temperature.

(5) The maximum atmospheric temperature at which compliance with the cooling provisions of CS-VLA 1041 through 1047 is shown.

(6) The glide performance determined under VLA.120.

(b) Skiplanes. For skiplanes, a statement of the approximate reduction in climb performance may be used instead of new data for skiplane configuration, if—

(1) The landing gear is fixed in both landplane and skiplane configurations;

(2) The climb requirements are not critical; and

(3) The climb reduction in the skiplane configurations is small (0.15 to 0.25 m/s (30 to 50 feet per minute)).

(c) The following information concerning normal procedures must be furnished:

(1) The demonstrated crosswind velocity and procedures and information pertinent to operation of the airplane in crosswinds, and

(2) The airspeeds, procedures, and information pertinent to the use of the following airspeeds:

(i) The recommended climb speed and any variation with altitude.

(ii) V X (speed for best angle of climb) and any variation with altitude.

(iii) The approach speeds, including speeds for transition to the balked landing condition.

(d) An indication of the effect on takeoff distance of a grass surface as determined from at least one takeoff measurement on short mown dry grass must be furnished.

(a) The rotation speed V R , is the speed at which the pilot makes a control input with the intention of lifting the airplane out of contact with the runway.

(b) V R must not be less than stalling speed, V S1 .

(c) The Airplane Flight Manual must provide the rotation speed established above for normal takeoff procedures.

If an Equivalent Level of Safety (ELOS) to CS-VLA 1143(g) and CS-VLA 1147(b) is requested, VLA.150 and VLA.155 are applicable.

Power or supercharger control attachment design must include:

(a) Features which are not likely to separate in flight ( i.e., a large load-bearing washer adjacent to the outside face of the power control cable rod end fitting which attaches to the fuel-metering device);

(b) Mandatory inspection intervals;

(c) Inspection procedures;

(d) Component replacement criteria.

Mixture control attachment design must include:

(a) Features which are not likely to separate in flight ( i.e., a large load-bearing washer adjacent to the outside face of the power control cable rod end fitting which attaches to the fuel-metering device);

(b) Mandatory inspection intervals;

(c) Inspection procedures;

(d) Component replacement criteria.

(a) For an airplane with independently controlled roll and directional controls, it must be possible to produce and to correct roll by unreversed use of the rolling control and to produce and to correct yaw by unreversed use of the directional control, up to the time the airplane stalls.

(b) For an airplane with interconnected lateral and directional controls (2 controls) and for an airplane with only one of these controls, it must be possible to produce and correct roll by unreversed use of the rolling control without producing excessive yaw, up to the time the airplane stalls.

(c) The wing level stall characteristics of the airplane must be demonstrated in flight as follows: The airplane speed must be reduced with the elevator control until the speed is slightly above the stalling speed, then the elevator control must be pulled back so that the rate of speed reduction will not exceed 1.9 km/h (one knot) per second until a stall is produced, as shown by an uncontrollable downward pitching motion of the airplane, or until the control reaches the stop. Normal use of the elevator control for recovery is allowed after the control has been held against the stop for not less than two seconds.

(d) Except where made inapplicable by the special features of a particular type of airplane, the following apply to the measurement of loss of altitude during a stall:

(1) The loss of altitude encountered in the stall (power on or power off) is the change in altitude (as observed on the sensitive altimeter testing installation) between the altitude at which the airplane pitches and the altitude at which horizontal flight is regained.

(2) If power or thrust is required during stall recovery, the power or thrust used must be that which would be used under the normal operating procedures selected by the applicant for this maneuver. However, the power used to regain level flight may not be applied until flying control is regained.

(e) During the recovery part of the maneuver, it must be possible to prevent more than 15° of roll or yaw by the normal use of controls.

(f) Compliance with the requirements of this section must be shown under the following conditions:

(1) Wing flaps. Retracted, fully extended and each intermediate normal operating position;

(2) Landing gear. Retracted and extended;

(3) Cowl flaps. Appropriate to configuration;

(4) Power

(i) Power off; and

(ii) 75% maximum continuous power. If the power-to-weight ratio at 75% of maximum continuous power results in extreme nose-up attitudes, the test may be carried out with the power required for level flight in the landing configuration at maximum landing weight and a speed of 1.4 stalling speed, V S0 , but the power may not be less than 50% maximum continuous power.

(5) Trim. The airplane trimmed at a speed as near 1.5 V S1 as practicable.

(6) Propeller. Full increase rpm position for the power off condition.

Turning flight and accelerated stalls must be demonstrated in tests as follows:

(a) Establish and maintain a coordinated turn in a 30° bank. Reduce speed by steadily and progressively tightening the turn with the elevator until the airplane is stalled or until the elevator has reached its stop. The rate of speed reduction must be constant, and—

(1) For a turning flight stall, may not exceed 1.9 km/h (one knot) per second; and

(2) For an accelerated stall, be 5.6 to 9.3 km/h (3 to 5 knots) per second with steadily increasing normal acceleration.

(b) When the stall has fully developed or the elevator has reached its stop, it must be possible to regain level flight by normal use of controls and without—

(1) Excessive loss of altitude;

(2) Undue pitchup;

(3) Uncontrollable tendency to spin;

(4) Exceeding 60° of roll in either direction from the established 30° bank; and

(5) For accelerated entry stalls, without exceeding the maximum permissible speed or the allowable limit load factor.

(c) Compliance with the requirements of this section must be shown with—

(1) Wing Flaps. Retracted and fully extended for turning flight and accelerated entry stalls, and intermediate, if appropriate, for accelerated entry stalls;

(2) Landing Gear. Retracted and extended;

(3) Cowl Flaps. Appropriate to configuration;

(4) Power. 75% maximum continuous power. If the power-to-weight ratio at 75% of maximum continuous power results in extreme nose-up attitudes, the test may be carried out with the power required for level flight in the landing configuration at maximum landing weight and a speed of 1.4 V S0 , but the power may not be less than 50% maximum continuous power.

(5) Trim. 1.5 V S1 or minimum trim speed, whichever is higher.

(a) Three-control airplanes. The stability requirements for three-control airplanes are as follows:

(1) The static directional stability, as shown by the tendency to recover from a skid with the rudder free, must be positive for any landing gear and flap position appropriate to the takeoff, climb, cruise, and approach configurations. This must be shown with power up to maximum continuous power, and at speeds from 1.2 V S1 up to maximum allowable speed for the condition being investigated. The angle of skid for these tests must be appropriate to the type of airplane. At larger angles of skid up to that at which full rudder is used or a control force limit in CS-VLA 143 is reached, whichever occurs first, and at speeds from 1.2 V S1 to V A , the rudder pedal force must not reverse.

(2) The static lateral stability, as shown by the tendency to raise the low wing in a slip, must not be negative for any landing gear and flap positions. This must be shown with power up to 75% of maximum continuous power at speeds above 1.2 V S1 , up to the maximum allowable speed for the configuration being investigated. The static lateral stability may not be negative at 1.2 V S1 . The angle of slip for these tests must be appropriate to the type of airplane, but in no case may the slip angle be less than that obtainable with 10° of bank.

(3) In straight, steady slips at 1.2 V S1 for any landing gear and flap positions, and for power conditions up to 50% of maximum continuous power, the rudder control movements and forces must increase steadily (but not necessarily linearly) as the angle of slip is increased up to the maximum appropriate to the type of airplane. At larger slip angles up to the angle at which full rudder or aileron control is used or a control force limit contained in CS-VLA 143 is obtained, aileron control movements and forces must not reverse. Enough bank must accompany slipping to hold a constant heading. Rapid entry into, or recovery from, a maximum slip may not result in uncontrollable flight characteristics. The applicant must demonstrate that lateral static stability characteristics do not result in any unsafe handling qualities.

(b) Two-control (or simplified control) airplanes. The stability requirements for two-control airplanes are as follows:

(1) The directional stability of the airplane must be shown by showing that, in each configuration, it can be rapidly rolled from a 45° bank in one direction to a 45° bank in the opposite direction without showing dangerous skid characteristics.

(2) The lateral stability of the airplane must be shown by showing that it will not assume a dangerous attitude or speed when the controls are abandoned for 2 minutes. This must be done in moderately smooth air with the airplane trimmed for straight level flight at 0.9 V H (maximum speed in level flight with maximum continuous power) or V C (design cruising speed), whichever is lower, with flaps and landing gear retracted, and with a rearward center of gravity.

If an ELOS to CS-VLA 161(b)(2)(ii) is requested, VLA.175 through VLA.210 are applicable.

Longitudinal trim. The airplane must maintain longitudinal trim under each of the following conditions:

(a) Approach with landing gear extended and with—

(i) A 3° angle of descent, with flaps retracted and at a speed of 1.4 V S1 ;

(ii) A 3° angle of descent, flaps in the landing position(s) at reference landing approach speed, V REF ; and

(iii) An approach gradient equal to the steepest used in the landing distance demonstrations of CS 23.75, flaps in the landing position(s) at V REF .

For normal, utility and aerobatic category reciprocating engine-powered airplanes of 2,722 kg (6,000 lb) or less maximum weight, the reference landing approach speed, V REF , must not be less than the greater of minimum control speed, V MC , determined under CS 23.149(b) with the wing flaps in the most extended takeoff setting, and 1.3 V SO .

(a) A steady approach at not less than V REF , determined in accordance with CS 23.73(a), (b) or (c) as appropriate, must be maintained down to 15 m (50 ft) height and—

(1) The steady approach must be at a gradient of descent not greater than 5.2% (3°) down to the 15 m (50 ft) height.

(b) A constant configuration must be maintained throughout the maneuver.

(c) The landing must be made without excessive vertical acceleration or tendency to bounce, nose-over, ground loop, porpoise, or water loop.

(d) It must be shown that a safe transition to the balked landing conditions of CS 23.77 can be made from the conditions that exist at the 15 m (50 ft) height, at maximum landing weight, or the maximum landing weight for altitude and temperature of CS 23.63(c)(2) or (d)(2), as appropriate.

(a) Each normal, utility, and aerobatic category reciprocating engine-powered airplane of 2,722 kg (6,000 lb) or less maximum weight must be able to maintain a steady gradient of climb at sea-level of at least 3.3% with—

(1) Takeoff power on each engine;

(2) The landing gear extended;

(3) The wing flaps in the landing position, except that if the flaps may safely be retracted in 2 seconds or less without loss of altitude and without sudden changes of angle of attack, they may be retracted; and

(4) A climb speed equal to V REF , as defined in CS 23.73(a).

(a) It must be possible to carry out the following maneuvers without requiring the application of single-handed control forces exceeding those specified in CS 23.143(c), unless otherwise stated. The trimming controls must not be adjusted during the maneuvers:

(1) With power off, landing gear and flaps extended and the airplane as nearly as possible in trim at V REF , obtain and maintain airspeeds between 1.1 V S0 and either 1.7 V S0 or V FE (maximum flap extended speed), whichever is lower, without requiring the application of two-handed control forces exceeding those specified in CS 23.143(c).

(b) It must be possible, with a pilot control force of not more than 44.5 N (10 lbf), to maintain a speed of not more than V REF during a power-off glide with landing gear and wing flaps extended.

It must be possible, while in the landing configuration, to safely complete a landing without exceeding the one-hand control force limits specified in CS 23.143(c) following an approach to land—

(a) At a speed of V REF 9.3 km/h (5 knots);

(b) With the airplane in trim, or as nearly as possible in trim and without the trimming control being moved throughout the maneuver;

(c) At an approach gradient equal to the steepest used in the landing distance demonstration of CS 23.75;

(d) With only those power changes, if any, which would be made when landing normally from an approach at V REF .

(a) Approach—It must be possible using a favorable combination of controls, to roll the airplane from a steady 30° banked turn through an angle of 60°, so as to reverse the direction of the turn within—

(1) For an airplane of 2,722 kg (6,000 lb) or less maximum weight, 4 seconds from initiation of roll; and

(2) For an airplane of over 2,722 kg (6,000 lb) maximum weight, 1,000/W + 1,300 but not more than 7 seconds, where W is weight in kg. (W + 2800/2200 but not more than 7 seconds where W is weight in lb.).

(b) The requirement of paragraph (a) of this section must be met when rolling the airplane in each direction in the following conditions—

(1) Flaps in the landing position(s);

(2) Landing gear extended;

(3) All engines operating at the power for a 3° approach; and

(4) The airplane trimmed at V REF .

(a) Landing. The stick force curve must have a stable slope at speeds between 1.1 V S1 and 1.8 V S1 with—

(1) Flaps in the landing position;

(2) Landing gear extended; and

(3) The airplane trimmed at—

(i) V REF , or the minimum trim speed if higher, with power off; and

(ii) V REF with enough power to maintain a 3° angle of descent.

The applicant must consider the following safety objectives when showing compliance with regulations applicable to the rechargeable lithium ion battery.

Each rechargeable lithium ion battery installation must:

(a) Be designed to maintain safe cell temperatures and pressures under all foreseeable operating conditions to prevent fire and explosion;

(b) Be designed to prevent the occurrence of self-sustaining, uncontrollable increases in temperature or pressure, and automatically control the charge rate of each cell to protect against adverse operating conditions, such as cell imbalance, back charging, overcharging, and overheating;

(c) Not emit explosive or toxic gases, either in normal operation or as a result of its failure, that may accumulate in hazardous quantities within the airplane;

(d) Meet the requirements of 14 CFR 23.2325(g);

(e) Not damage surrounding structure or adjacent systems, equipment, components, or electrical wiring from corrosive or any other fluids or gases that may escape in such a way as to cause a major or more-severe failure condition;

(f) Have provisions to prevent any hazardous effect on airplane structure or systems caused by the maximum amount of heat it can generate due to any failure of it or its individual cells;

(g) Have a failure sensing and warning system to alert the flightcrew if its failure affects safe operation of the airplane;

(h) Have a monitoring and warning feature that alerts the flightcrew when its charge state falls below acceptable levels if its function is required for safe operation of the airplane;

(i) Have a means to disconnect from its charging source in the event of an over-temperature condition, cell failure, or battery failure.

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2023-1706; Project Identifier MCAI-2023-00039-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend the proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Chirayu Gupta, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email 9-avs-nyaco-cos@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

Transport Canada, which is the aviation authority for Canada, has issued Transport Canada AD CF-2023-02, dated January 11, 2023 (TC AD CF-2023-02) (also referred to after this as the MCAI), to correct an unsafe condition on certain Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes. The MCAI states that following a runway excursion on a different model, an investigation revealed that the nose wheel SSV can be slow to deactivate under low temperature conditions. A similar SSV is installed on the airplanes to which this AD is applicable. In the event of an un-commanded steering input, a slow SSV deactivation could lead to a delayed transition to free caster mode and result in an aircraft runway excursion.

The FAA is proposing 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-2023-1706.

The FAA reviewed the following Bombardier service information.

• Service Bulletin 700-32-044, Revision 01, dated December 7, 2022.

• Service Bulletin 700-32-6021, Revision 01, dated December 7, 2022.

• Service Bulletin 700-32-6507, Revision 01, dated December 7, 2022.

• Service Bulletin 700-1A11-32-031, Revision 01, dated December 7, 2022.

• Service Bulletin 700-32-5021, Revision 01, dated December 7, 2022.

• Service Bulletin 700-32-5507, Revision 01, dated December 7, 2022.

This service information specifies procedures for replacing the affected SSV with a re-designed SSV. 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.

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 and service information referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This proposed AD would require accomplishing the actions specified in the service information already described.

The FAA estimates that this AD, if adopted as proposed, would affect 442 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some or all of the costs of this proposed 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.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:

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

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

(3) Would 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 proposes to amend 14 CFR part 39 as follows:

The purpose of this action is to propose amendments to amend our regulations and revoke prior-sanctioned uses of PHOs to conform with the current state of scientific knowledge regarding the public health risks of PHOs. In June 2015, FDA published a declaratory order (Order) setting forth our final determination, based on the available scientific evidence and the findings of expert scientific panels, that there is no longer a consensus among qualified experts that PHOs, which are the primary dietary source of industrially produced trans fatty acids, are GRAS for any use in human food. The Order stated that we determined that this body of evidence established the health risks associated with the consumption of trans fat. In the Order, we recognized that there were some uses of PHOs in foods that are expressly authorized by GRAS affirmation regulations, acknowledged that there could be some uses recognized by “prior sanction” (and thus could not be regulated as a food additive), and stated that we would address such uses separate from the final determination. We also stated that we would consider taking further action, including revising certain standards of identity that list PHOs as optional ingredients.

As explained in the Order, there is a lack of convincing evidence that PHOs are GRAS. FDA has not approved a food additive petition for PHOs. Accordingly, we are proposing to remove PHOs from our food regulations in light of our determination that PHOs are no longer GRAS.

Furthermore, based on our current review of scientific data and information, as well as previous safety reviews performed to support various FDA actions regarding trans fat, we are proposing to prohibit all prior-sanctioned uses of PHOs. A prior sanction exempts a specific use of a substance in food from the definition of food additive and from all related food additive provisions of the Federal Food, Drug, and Cosmetic Act (FD&C Act) if the use was sanctioned or approved prior to September 6, 1958. In accordance with FDA's general regulations regarding prior sanctions, we may revoke a prior-sanctioned use of a food ingredient where scientific data or information demonstrate that prior-sanctioned use of the food ingredient may be injurious to health. We have tentatively determined that the prior-sanctioned uses of PHOs may render food injurious to health. Consequently, we are proposing to revoke the prior-sanctioned uses of PHOs.

The proposed rule if finalized, would remove PHOs as an optional ingredient in the standards of identity for peanut butter and canned tuna, revise the regulations affirming the use of menhaden oil and rapeseed oil as GRAS to delete language regarding partially hydrogenated forms of these oils, and revoke the regulation affirming hydrogenated fish oil as GRAS as an indirect food substance. We are also proposing to revoke prior sanctions ( i.e., pre-1958 authorization of certain uses) for the use of PHOs in margarine, shortening, and bread, rolls, and buns.

We are proposing this rule consistent with our authority in sections 201, 401, 402, 409, and 701 of the FD&C Act (21 U.S.C. 321, 341, 342, 348, and 371). We discuss our legal authority in greater detail in section V of this document.

We estimated the costs of removing PHO-containing foods from the market including those of product reformulation, relabeling products, changing food recipes, finding substitute ingredients, and changes in functional and sensory product properties, such as taste, texture, and shelf life. The benefits of the rule accrue from reduction of coronary heart diseases. Discounted at 7 percent over a 20-year period, the annualized primary cost estimate of the rule is $24.5 million with a lower bound estimate of $20.8 million and an upper bound estimate of $29.7 million. The annualized benefits of this rule discounted at 7 percent over 20-year period is $61.5 million for the primary estimate with a lower bound of $20.1 million and an upper bound of $120.7 million.

This proposed rule is a companion to the direct final rule published in the rules section of this issue of the Federal Register . This companion proposed rule provides the procedural framework to finalize the rule in the event the direct final rule receives any significant adverse comment and is withdrawn. The comment period for this companion proposed rule runs concurrently with the comment period for the direct final rule. Any comments received in response to this companion proposed rule will also be considered as comments regarding the direct final rule. FDA is publishing the direct final rule because we believe the rule contains noncontroversial changes and there is little likelihood that there will be significant adverse comments opposing the rule.

A significant adverse comment is defined as a comment that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. In determining whether an adverse comment is significant and warrants terminating a direct final rulemaking, we will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and comment process. Comments that are frivolous, insubstantial, or outside the scope of the rule will not be considered significant or adverse under this procedure. A comment recommending a regulation change in addition to those in the direct final rule would not be considered a significant adverse comment unless the comment states why the rule would be ineffective without the additional change. In addition, if a significant adverse comment applies to a part of the direct final rule and that part can be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of the significant adverse comment.

If any significant adverse comments to the direct final rule are received during the comment period, FDA will publish, within 30 days after the comment period ends, a notice of significant adverse comment and withdraw the direct final rule. If we withdraw the direct final rule, any comments received will be considered comments on the proposed rule and will be considered in developing a final rule using the usual notice-and-comment procedure.

If no significant adverse comment is received in response to the direct final rule during the comment period, no further action will be taken related to this proposed rule. Instead, we will publish a document confirming the effective date within 30 days after the comment period ends. Additional information about direct final rulemaking procedures is set forth in the document entitled “Guidance for FDA and Industry: Direct Final Rule Procedures,” announced and provided in the Federal Register of November 21, 1997 (62 FR 62466). The guidance may be accessed at: https://www.fda.gov/RegulatoryInformation/Guidances/ucm125166.htm.

In the Federal Register of November 8, 2013 (78 FR 67169), we announced our tentative determination that, based on currently available scientific information, PHOs are no longer GRAS under any condition of use in human food and, therefore, are food additives. Section 201(s) of the FD&C Act (21 U.S.C. 321(s)) defines a food additive, in part, as a substance that is not GRAS, and section 402(a)(2)(C) of the FD&C Act (21 U.S.C. 342(a)(2)(C)) establishes that food bearing or containing a food additive that is unsafe within the meaning of section 409 of the FD&C Act (21 U.S.C. 348) is adulterated. Section 409 of the FD&C Act establishes that a food additive is unsafe for the purposes of section 402(a)(2)(C) of the FD&C Act unless certain criteria are met, such as conformance with a regulation prescribing the conditions under which the additive may be safely used. In the Federal Register of June 17, 2015 (80 FR 34650), we published a declaratory order (the Order) announcing our final determination that there is no longer a consensus among qualified experts that PHOs, the primary dietary source of industrially produced trans fatty acids (IP-TFA), are GRAS for any use in human food. For a discussion of the science regarding PHOs, we refer readers to the Order and to our tentative determination that PHOs are no longer GRAS for any use in food (see 78 FR 67169 at 67171).

The Order acknowledged (see 80 FR 34650 at 34651) that the regulations at 21 CFR part 184, “Direct Food Substances Affirmed as Generally Recognized as Safe,” (GRAS affirmation regulations) include partially hydrogenated versions of two oils: (1) menhaden oil (§ 184.1472(b) (21 CFR 184.1472(b))); and (2) low erucic acid rapeseed (LEAR) oil (§ 184.1555(c)(2) (21 CFR 184.1555(c)(2))). Partially hydrogenated menhaden oil was affirmed as GRAS for use in food (54 FR 38219, September 15, 1989) on the basis that the oil is chemically and biologically comparable to commonly used partially hydrogenated vegetable oils such as corn and soybean oils. Partially hydrogenated LEAR oil was affirmed as GRAS for use in food (50 FR 3745, January 28, 1985) based on published safety studies ( i.e., scientific procedures) (21 CFR 170.30). In the Order, we stated that we would amend the GRAS affirmation regulations for menhaden oil and LEAR oil (§§ 184.1472 and 184.1555) in a future rulemaking (see 80 FR 34650 at 34651, 34655, and 34667).

In addition, our GRAS affirmation regulation for hydrogenated fish oil at § 186.1551 (21 CFR 186.1551) (44 FR 28323, May 15, 1979), provides for partial hydrogenation of oils expressed from fish, primarily menhaden, and secondarily herring or tuna, used as a constituent of cotton and cotton fabrics used for dry food packaging.

Certain standard of identity regulations include PHOs as an optional ingredient. Since 1990, the standard of identity for canned tuna at § 161.190 (21 CFR 161.190) has provided for the use of PHOs as an optional seasoning or flavoring ingredient in canned tuna in water (55 FR 45795, October 31, 1990). Since 1968, the standard of identity for peanut butter at § 164.150 (21 CFR 164.150) has provided for the use of PHOs as an optional stabilizing ingredient (33 FR 10506, July 24, 1968).

In addition, based on a review of our regulations and on comments submitted in response to our tentative determination, “prior sanctions” exist for the use of PHOs in margarine, shortening, and bread, rolls, and buns. As discussed in more detail in section VI of this document, a prior sanction exempts a specific use of a substance in food if the use was sanctioned or approved prior to September 6, 1958, from the definition of a food additive under section 201(s)(4) of the FD&C Act and from all related food additive provisions of the FD&C Act.

We are issuing this proposed rule under the legal authority of sections 201, 401, 402, 409, and 701 of the FD&C Act. The FD&C Act defines “food additive,” in relevant part, as any substance, the intended use of which results or may reasonably be expected to result, directly or indirectly, in its becoming a component of food, if such substance is not generally recognized by experts as safe under the conditions of its intended use (section 201(s) of the FD&C Act). The definition of “food additive” exempts any uses that are the subject of a prior sanction (section 201(s)(4) of the FD&C Act). Food additives are deemed unsafe except to the extent that FDA approves their use (section 409(a) of the FD&C Act). Food is adulterated when it contains an unapproved food additive (section 402(a)(2)(C) of the FD&C Act). In addition, we may establish standards of identity for foods to promote honesty and fair dealing in the interest of consumers (section 401 of the FD&C Act). Section 701(a) of the FD&C Act provides the authority to issue regulations for the efficient enforcement of the FD&C Act.

With respect to prior sanctions, section 201(s)(4) of the FD&C Act exempts from the definition of a food additive any substance used in accordance with a sanction or approval granted under the FD&C Act, the Meat Inspection Act, or the Poultry Products Inspection Act before the enactment of the Food Additives Amendment of 1958 on September 6, 1958. This type of sanction or approval is referred to as a “prior sanction.” Our regulation, at 21 CFR 170.3(l), defines this term as an explicit approval granted with respect to use of a substance in food before September 6, 1958, under the FD&C Act, the Meat Inspection Act, or the Poultry Products Inspection Act. Another FDA regulation (21 CFR 181.5(a)) states that a prior sanction exists only for a specific use(s) of a substance in food, i.e., the level(s), condition(s), product(s), etc., for which there was explicit approval by FDA or the U.S. Department of Agriculture (USDA) before September 6, 1958. The “explicit approval” needed to establish a prior sanction may be either formal or informal. If a formal approval, such as a food standard regulation issued under the FD&C Act before 1958, does not exist, correspondence issued by authorized FDA officials can constitute an informal prior sanction.

In accordance with FDA's general regulations regarding prior sanctions found at 21 CFR 181.1(b) and 181.5(c), we may revoke a prior-sanctioned use of a food ingredient where scientific data or information demonstrate that prior-sanctioned use of the food ingredient may be injurious to health and, thus, adulterates the food under section 402 of the FD&C Act.

The proposed rule, if finalized, would:

• Amend the food standard for canned tuna at § 161.190 to no longer include partially hydrogenated vegetable oil as an optional ingredient for seasoning in canned tuna packed in water;

• Amend the food standard for peanut butter at § 164.150 to no longer include partially hydrogenated vegetable oil as an optional stabilizing ingredient in peanut butter;

• Revise § 184.1472 to delete references to partially hydrogenated menhaden oil;

• Revise § 184.1555 to delete references to partially hydrogenated LEAR oil;

• Revoke § 186.1551, which permits the use of partially hydrogenated fish oil in cotton and cotton fabrics used for dry food packaging; and

• Revoke the prior sanctions for the use of PHOs in margarine, shortening, and bread, rolls, and buns.

Standard of identity regulations for food are issued under section 401 of the FD&C Act and do not provide either an authorization or an exemption from regulation as a food additive under section 409 of the FD&C Act. FDA's standards of identity, among other things, establish the common or usual name for a food and define the basic nature of the food, generally in terms of the types of ingredients that it must contain ( i.e., mandatory ingredients) and that it may contain ( i.e., optional ingredients). The purpose of food standards is to promote honesty and fair dealing in the interest of consumers. Therefore, the inclusion of PHOs in certain standards of identity does not necessarily mean that their use is permissible under section 409 of the FD&C Act. As such, our proposed changes to these standard of identity regulations are merely for clarification purposes.

Since 1990, our regulations, at § 161.190(a) have described canned tuna as processed flesh of fish of the species enumerated in § 161.190(a)(2), commonly known as tuna, in any of the forms of pack specified in § 161.190(a)(3) (55 FR 45795). The standard of identity for canned tuna includes, as an optional ingredient, edible vegetable oil or partially hydrogenated vegetable oil, excluding olive oil, to be used alone or in combination, as seasoning in canned tuna packed in water (§ 161.190(a)(6)(viii)).

The proposed rule would delete the words “or partially hydrogenated vegetable oil” and “alone or in combination” from the list of optional ingredients in canned tuna (§ 161.190(a)(6)(viii)). The remaining term “edible vegetable oil” would not include the use of any partially hydrogenated oils in canned tuna. (See Ref. 1.)

Since 1968, our regulations, at § 164.150 have described standardized peanut butter as a product prepared by grinding one of the shelled and roasted peanut ingredients provided for by § 164.150(b), to which may be added safe and suitable seasoning and stabilizing ingredients provided for by § 164.150(c), if such seasoning and stabilizing ingredients do not, in the aggregate, exceed 10 percent of the weight of the finished food (33 FR 10506).

The standard of identity for peanut butter, at § 164.150(c), includes oil products as optional stabilizing ingredients, which must be hydrogenated vegetable oils; for purposes of § 164.150(c), hydrogenated vegetable oil is considered to include partially hydrogenated vegetable oil.

The proposed rule would revise the standard of identity for peanut butter by deleting the reference to partially hydrogenated vegetable oil in § 164.150(c). The proposed rule also would make a minor editorial change by replacing “shall” with “must.”

Since 1997, our GRAS affirmation regulations for menhaden oil at § 184.1472(a) have described menhaden oil as being prepared from fish of the genus Brevoortia, commonly known as menhaden, by cooking and pressing (62 FR 30756, June 5, 1997). The resulting crude oil is then refined using the following steps: storage (winterization), degumming (optional), neutralization, bleaching, and deodorization.

Our regulations, at § 184.1472(b), address the preparation of partially hydrogenated and hydrogenated menhaden oils (§ 184.1472(b)(1)), the specifications for partially hydrogenated and hydrogenated menhaden oils (§ 184.1472(b)(2)), the uses of partially hydrogenated and hydrogenated menhaden oils (§ 184.1472(b)(3)), and the name to be used on the product's label (§ 184.1472(b)(4)).

The proposed rule would amend the GRAS affirmation regulation for menhaden oil at § 184.1472 to delete references to partially hydrogenated menhaden oil from § 184.1472(b), (b)(1), (b)(2), (b)(2)(iv), (b)(3), and (b)(4). The proposed rule also would change the iodine value specification for hydrogenated menhaden oil from the current specification of “not more than 10,” to “not more than 4.” This is consistent with our definition of PHOs in the Order. For the purposes of the Order, we defined PHOs as fats and oils that have been hydrogenated, but not to complete or near complete saturation, and with an iodine value greater than 4 (80 FR 34650 at 34651). The proposed rule also would make minor editorial changes, such as referring to hydrogenated menhaden oil (singular) rather than to hydrogenated menhaden oils (plural) and substituting “is” for “are” to reflect that the rule would refer to only hydrogenated menhaden oil.

Since 1985, our GRAS affirmation regulations for LEAR oil, at § 184.1555(c) have described LEAR oil, also known as canola oil, as the fully refined, bleached, and deodorized edible oil obtained from certain varieties of Brassica napus or B. campestris of the family Cruciferae (50 FR 3745 at 3755). The plant varieties are those producing oil-bearing seeds with a low erucic acid content. Chemically, low erucic acid rapeseed oil is a mixture of triglycerides, composed of both saturated and unsaturated fatty acids, with an erucic acid content of no more than 2 percent of the component fatty acids. The regulation provides for the partial hydrogenation of LEAR oil (§ 184.1555(c)(2)) and discusses the oil's purity (§ 184.1555(c)(3)) and uses in food (§ 184.1555(c)(4)).

The proposed rule would delete § 184.1555(c)(2) entirely, delete all mention of partially hydrogenated LEAR oil from § 184.1555(c)(3) and (4), and redesignate current § 184.1555(c)(3) and (4) as § 184.1555(c)(2) and (3), respectively.

Since 1979, our GRAS affirmation regulations for hydrogenated fish oil at § 186.1551 have described hydrogenated fish oil as a class of oils produced by the partial hydrogenation of oils expressed from fish, primarily menhaden and secondarily herring or tuna (44 FR 28323). The regulation allows the use of this oil as a constituent of cotton and cotton fabrics used for dry food packaging. It was noted in the final rule entitled “Substances Generally Recognized as Safe and Indirect Food Substances Affirmed as Generally Recognized as Safe; Hydrogenated Fish Oil” that no reports of a prior-sanctioned use for hydrogenated fish oil were submitted in response to the proposed rule, and therefore, in accordance with that proposal, any right to assert a prior sanction for a use of hydrogenated fish oil under conditions different from those set forth in this regulation had been waived (44 FR 28323). Prior sanctions for hydrogenated fish oil that differ from the use set forth in the GRAS affirmation regulations do not exist or have been waived (§ 186.1551(e)).

The proposed rule would delete the GRAS affirmation regulations for hydrogenated fish oil at § 186.1551 entirely. Our earlier determination that there are no prior sanctions for this ingredient different from the use provided for in § 186.1551 or that any other prior sanctions have been waived remains in effect.

We stated in our tentative determination that we were not aware that FDA or USDA had granted any explicit approval for any use of PHOs in food before the 1958 Food Additives Amendment to the FD&C Act (78 FR 67169 at 67171) and requested comments on whether there was knowledge of an applicable prior sanction for the use of PHOs in food (78 FR 67169 at 67174). We discuss the comments in this section. In addition, we tentatively conclude that any prior sanctions for other uses of PHOs in food different from the uses discussed in sections VI.C.1, 2, and 3 of this proposed rule do not exist or have been waived.

As noted in the Order we acknowledged that we had, in our regulations, previously affirmed as GRAS the use of PHOs in certain foods or food contact substances (80 FR 34650 at 34651). We describe these regulations and our proposed revocation elsewhere in this proposed rule. Although some comments on our tentative determination suggested that these uses are prior-sanctioned, in each case the regulation affirming the status of the use as GRAS post-dates 1958. We have no evidence that the uses affirmed for menhaden oil (§ 184.1472) or LEAR oil (§ 184.1555) are prior-sanctioned. In the case of hydrogenated fish oil (§ 186.1551), any prior sanctions for this ingredient different from the use in the GRAS affirmation regulation do not exist or have been waived (§ 186.1551(e)).

Some comments identified the standards of identity for canned tuna (§ 161.190) and peanut butter (§ 164.150) as providing proof of prior sanction of PHOs because “partially hydrogenated vegetable oil” is explicitly listed as an optional ingredient in each of those regulations. As discussed in section VI.A of this document, the standards of identity for canned tuna and peanut butter both post-date 1958. We have no evidence of any prior sanctions for the use of PHOs as described in the standards of identity for canned tuna and peanut butter.

Some comments identified the pre-September 6, 1958, standards of identity for mayonnaise (21 CFR 169.140), salad dressing (21 CFR 169.150), and French dressing (21 CFR 169.115 (revoked effective February 14, 2022 (87 FR 2038))) and claimed that they constituted prior sanctions for PHOs. The comments acknowledged that these standards did not explicitly list PHOs but argued that because the standards allow use of “edible vegetable oil” in the standardized products, they were understood by both FDA and industry to include PHOs because vegetable oil can be hydrogenated.

We issued the standards of identity for mayonnaise, French dressing, and salad dressing in 1950 (15 FR 5227, August 12, 1950). They permit use of “edible vegetable oil” in the standardized products. No comments to our tentative determination identified any reference to hydrogenation of oils in the rulemaking issuing these standards. No comments suggested that industry used PHOs in these products at the time or that industry is currently using PHOs in these products. We understand that, since at least 1940, hydrogenation changes the physical properties of an oil and therefore, changes a product's identity (see Ref. 1, discussing labeling for, among other things, “vegetable oils which have not had their identity changed through hydrogenation . . .”). Thus, the references to “edible vegetable oil” in these standards, without mention of hydrogenation or hardening, do not include PHOs or fully hydrogenated oils. Therefore, the evidence does not provide an adequate basis on which to establish a prior sanction.

Some comments identified the pre-September 6, 1958, standards of identity for bread, rolls, and buns (§ 136.110 (21 CFR 136.110)), and margarine (§ 166.110 (21 CFR 166.110)), and claimed that they constituted prior sanctions for PHOs. The comments acknowledged that these standards did not explicitly list PHOs but argued that because the standards allow use of “shortening” (bread, rolls, and buns), and “oil” (margarine) in the standardized products, they were understood by both FDA and industry to include PHOs because shortening and oil can be hydrogenated. Moreover, the comments acknowledged that, while there is no standard of identity for shortening that mentions PHOs specifically, historical evidence shows that shortening was generally understood to contain PHOs before 1958.

We issued the standard of identity for margarine in 1941 (6 FR 2761, June 7, 1941). At that time, the standard of identity stated that oleomargarine is prepared with one or more of several optional fat ingredients, including the rendered fat, or oil, or stearin derived therefrom (any or all of which may be hydrogenated), of cattle, sheep, swine, or goats or any vegetable food fat or oil, or oil or stearin derived therefrom (any or all of which may be hydrogenated) (6 FR 2761 at 2762). The standard of identity, as it existed in 1941, contained no specific limitations on these ingredients. The current standard of identity (now codified at § 166.110) states, in relevant part, that margarine may include edible fats and/or oils from animals, vegetables, or fish, or mixtures of these, which may have been subjected to an accepted process of physico-chemical modification (§ 166.110(a)(1)). The standard of identity for margarine also states that margarine “may contain small amounts of other lipids, such as phosphatides or unsaponifiable constituents, and of free fatty acids naturally present in the fat or oil” (id.).

We issued the standard of identity for bread, rolls, and buns in 1952 (17 FR 4453, May 15, 1952). The standard of identity, which is now codified at § 136.110, identifies “shortening” as an optional ingredient. We initially proposed a more detailed description of the term “shortening” in 1941 that was very similar to the term used in the margarine standard issued that same year; that description indicated that shortening is composed of fat or oil from animals, vegetables, or fish, any or all of which may be hydrogenated, or of butter, or any combination of two or more such articles (6 FR 2771, June 7, 1941). However, the final rule that we issued in 1952 simply referred to “shortening” and did not prescribe the contents of or otherwise define “shortening” (17 FR 4453). Similarly, the current standard of identity mentions “shortening,” but does not prescribe the contents of or otherwise define “shortening” (see § 136.110(c)(5)). Additionally, the standard of identity, as it existed in 1952, contained no specific limitations on these ingredients.

In addition to identifying these standards of identity, some comments to our tentative determination stated that the reference to hydrogenation in the pre-September 6, 1958, standard of identity for margarine was likely to have meant partially hydrogenated oils as a practical matter, based on the inherent difference in the functional characteristics of partially and fully hydrogenated oils and the history of use of PHOs in margarine products.

Other comments submitted historical evidence relating to widespread use of PHOs in margarine and shortening before 1958. This evidence included a 1945 USDA publication, “Foods—Enriched, Restored, Fortified” (Ref. 2), that described margarine by saying: “As it is made by 41 manufacturing plants in the United States, margarine contains a mixture of animal fats and vegetable oils or one or the other—fats that have been used as food for centuries. These are partially hydrogenated and blended to give the right spreading consistency.” The comments also submitted two patents, one from 1915 for “[a] homogeneous lard-like food product consisting of an incompletely hydrogenized vegetable oil,” (Ref. 3) and one from 1957 for “fluid shortening,” stating “[s]hortenings heretofore available for baking have included . . . compounded or blended shortenings, made from mixtures of naturally hard fats or hydrogenated vegetable oils with liquid, soft, or partially hydrogenated vegetable oils” (Ref. 4). One comment cited a Supreme Court decision regarding the patentability of the product of partial hydrogenation of vegetable oil for use as shortening ( Berlin Mills Co. v. Procter & Gamble Co., 254 U.S. 156 (1920)). In finding the 1915 patent invalid, the Court held that “it was known before [the patentee] took up the subject that a vegetable oil could be changed into a semi-solid, homogeneous, substance by a process of hydrogenation arrested before completion and that it might be edible” ( Berlin Mills, 254 U.S. at 165).

Some comments said that we intended to include PHOs in the terms “shortening” and “oil . . . (any or all of which may be hydrogenated)” used in these pre-1958 standards of identity. One comment said that we have, in other contexts, used the term “hydrogenated oils” when we intended to refer to PHOs (see, e.g., 68 FR 41434 at 41443, July 11, 2003 (“ trans fatty acids (provided by food sources of hydrogenated oil)”) and that the term “partially hydrogenated” did not appear in our regulations until 1978 (43 FR 12856, March 28, 1978 (amending the food labeling regulations by substituting “hydrogenated” and “partially hydrogenated” for “saturated” and “partially saturated” when describing a fat or oil ingredient)). Additionally, in trade correspondence in 1940, we described three general types of shortening in response to a question about ingredient labeling; we said that the types of shortening were: “(1) vegetable shortenings composed wholly of mixtures of edible vegetable oils, which have been subjected to a chemical hardening process known as hydrogenation; (2) mixtures of vegetable oils with or without varying proportions of hardened vegetable oils and with edible animal fats; and (3) hydrogenated mixtures of vegetable oils and marine animal oils (Ref. 1).” In addition, during a rulemaking regarding oils and fats, we used the phrase “oil . . . (any or all of which may be hydrogenated)” and acknowledged that this category included PHOs (36 FR 11521, June 15, 1971). We proposed that, if the vegetable fats or oils present are hydrogenated, the ingredient declaration should include the term “hydrogenated,” “partially hydrogenated,” or “hardened,” and gave an example of “partially hydrogenated cottonseed oil” (36 FR 11521).

Thus, a prior sanction, as provided for in section 201(s)(4) of the FD&C Act, exists for the uses of PHOs in margarine, shortening, and bread, rolls, and buns. However, as discussed in the next section, we are proposing to revoke the prior sanction for these uses.

We have tentatively concluded that there are prior-sanctioned uses of PHOs in margarine, shortening, and bread, rolls, and buns, and that these uses may be injurious to health and may adulterate food under section 402 of the FD&C Act. Therefore, we are proposing to revoke the prior sanction for the uses of PHOs in margarine, shortening, and bread, rolls, and buns. Our tentative conclusion is based on our current review of scientific data and information, as well as previous safety reviews performed in support of various FDA actions regarding trans fat and PHOs spanning 1999 to 2018 (see 64 FR 62746, November 17, 1999; 68 FR 41434, July 11, 2003; 78 FR 67169, November 8, 2013; 80 FR 34650, June 17, 2015; 83 FR 23382, May 21, 2018). In our review for this proposed rule, we estimated the dietary exposure for IP-TFA from the prior-sanctioned uses of PHOs in margarine, shortening, and bread, rolls, and buns (Ref. 5) and conducted a quantitative risk assessment for the coronary heart disease (CHD) and cardiovascular disease (CVD) risks associated with this estimated exposure to IP-TFA (Ref. 6). We also conducted an updated scientific review of published studies and evaluations by expert panels on the safety of trans fat (Ref. 7).

As for the standards of identity for margarine and bread, rolls, and buns, no corresponding revision to these regulations would be necessary. Each standard, as currently written, is limited so that only “safe and suitable” ingredients may be used, and neither current standard expressly refers to hydrogenation or partial hydrogenation (see §§ 136.110(b) and 166.110(a)). Moreover, our regulations provide that no provision of any regulation prescribing a definition and standard of identity is to be construed as affecting the concurrent applicability of the general provisions of the FD&C Act and our regulations (see § 130.3(c) (21 CFR 130.3(c))). For example, all standard of identity regulations contemplate that the food and all articles used as components or ingredients must not be poisonous or deleterious (see § 130.3(c); see also § 130.3(d) (further defining “safe and suitable”)). As for shortening, our standards of identity do not describe the contents of or otherwise define “shortening,” so no amendment is necessary.

Our Order references three safety memoranda prepared by FDA that document our review of the available scientific evidence regarding human health effects of trans fat, focusing on the adverse effects of trans fat on risk of CHD (Refs. 8 to 10). In addition, we previously reviewed the health effects of IP-TFA and PHOs in 2013 in support of our tentative determination regarding the GRAS status of PHOs (78 FR 67169, Docket No. FDA-2013-N-1317). Our Order announced our final determination that there is no longer a consensus among qualified experts that PHOs are GRAS for any use in human food (80 FR 34650). The safety reviews for the Order, together with the previous safety reviews of IP-TFA and PHOs, provided important scientific background information for our review and denial of a food additive petition for certain uses of PHOs in 2018 (83 FR 23382).

We based our Order on the available scientific evidence that included results from controlled feeding studies on trans fatty acid consumption in humans, findings from long-term prospective epidemiological studies, and the opinions of expert panels that there is no threshold intake level for IP-TFA that would not increase an individual's risk of CHD. We also published a safety review for specific uses of PHOs in a notice denying a food additive petition for certain uses of PHOs in food (83 FR 23382, Docket No. FDA-2015-F-3663)). This safety review reinforced our 2015 scientific review supporting the final determination that PHOs are not GRAS for use in human food. We denied the food additive petition because we determined that the petition did not contain convincing evidence to support the conclusion that the proposed uses of PHOs were safe (83 FR 23382 at 23391). All the previously mentioned safety reviews of IP-TFA and PHOs provide important scientific background information for review of the health effects of the prior-sanctioned uses of PHOs.

We are not aware of any new, scientific literature on the safety of IP-TFA and PHOs that would cause us to reconsider our previous safety conclusions. International and U.S. expert panels, using additional scientific evidence available since 2015, have continued to recognize the positive linear relationship between increased trans fat intake and increased low density lipoprotein cholesterol blood levels associated with increased CHD risk, have concluded that trans fats are not essential nutrients in the diet, and have recommended that trans fat consumption be kept as low as possible.

For this proposed rule, in order to estimate the risks to CHD and CVD associated with consumption of IP-TFA from prior-sanctioned uses of PHOs, we first had to estimate dietary exposure to IP-TFA from these uses of PHOs. We used two non-consecutive days of 24-hour dietary recall data from the 2011-2014 National Health and Nutrition Examination Survey (NHANES) to estimate dietary exposure to IP-TFA from the use of PHOs in margarine and shortening (which includes the prior-sanctioned uses in bread, rolls, and buns due to the use of margarine and/or shortening in the food). We included all foods reported in NHANES that contained margarine or shortening as an ingredient in our analysis. We applied levels of trans fat commonly used in margarine and shortening manufactured before the publication of the tentative determination in 2013. These use levels reflect our conservative assumption that manufacturers may revert back to using PHOs at these higher use levels in margarine and shortening if prior sanctions are not revoked. For the U.S. population aged 2 years and older, we estimated a cumulative mean dietary IP-TFA exposure of 0.3 grams per person per day for typical trans fat levels, for both margarine and shortening, based on 53 percent of the population consuming margarine or shortening (Ref. 5). The mean IP-TFA exposure for the total population ( i.e., per capita intake) was also determined (Ref. 7). Expressed as a percentage of total energy intake per day (%en) based on a 2000 calorie diet, the mean per-capita IP-TFA exposure for typical IP-TFA levels in foods was estimated to be 0.07%en (Ref. 7).

We used four risk methods to estimate change in CHD and CVD risk associated with 0.07%en IP-TFA exposure from prior-sanctioned uses of PHOs (Ref. 6). Our assessment methodology is documented in our memorandum (Ref. 6).

Our quantitative risk assessments demonstrate that there is a substantial health risk associated with 0.07%en from IP-TFA from prior-sanctioned uses of PHOs (Ref. 6). Along with our Order, our denial of the food additive petition for certain uses of PHOs in food, and our recent updated scientific literature review on the safety of PHOs and trans fat (Ref. 7), these analyses provide further support for the revocation of the prior-sanctioned uses of PHOs. The scientific consensus is that there is no threshold intake level of IP-TFA that would not increase an individual's risk of CHD (Ref. 7). Thus, based on the available data, we tentatively conclude that PHOs used in food may cause the food to be injurious to health and that the use of PHOs as ingredients in margarine, shortening, and bread, rolls, and buns would adulterate these foods under section 402(a)(1) of the FD&C Act.

FDA has examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, Executive Order 14094, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Executive Orders 12866, 13563, and 14094 direct us to assess all costs, benefits, and transfers of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Rules are “significant” under Executive Order 12866 Section 3(f)(1) (as amended by Executive Order 14094) if they “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of [the Office of Information and Regulatory Affairs (OIRA)] for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities.” OIRA has determined that this proposed rule is not a significant regulatory action as defined by Executive Order 12866 Section 3(f)(1).

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this rule may require some small business entities to undertake costly reformulations, we find that the proposed rule will have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $177 million, using the most current (2022) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would not result in an expenditure in any year that meets or exceeds this amount.

The benefits of this proposed rule are expected to accrue from the number of coronary heart diseases averted from discontinued use of foods made with PHOs. The removal of PHO containing foods from the marketplace will limit their access by most consumers. Such action will protect the public by reducing the health risk of developing CHDs and improving population health among those who would otherwise consume products containing PHOs. Continual use of PHOs is associated with increased CHD and CVDs. Per capita higher intake of PHOs can lead to elevated risk of CHD and CVDs among the U.S. population. Therefore, FDA notes that the benefit of this rule relative to baseline market conditions are expected to decrease over time as PHO containing products exit the marketplace. The annualized benefits of this rule at a 7 percent discount rate over a 20-year period is $61.5 million for the primary estimate with a lower bound of $20.1 million and an upper bound of $120.7 million.

The quantified costs of the rule are from reformulating manufactured products currently produced with PHOs, relabeling products that contain PHOs, changing recipes for some PHO containing breads by retail bakeries, finding substitute ingredients as well as costs arising from functional and sensory product properties such as taste and texture. The annualized cost of the rule at a 7 percent discount rate over a 20-year period has a primary estimate of $24.5 million with a lower bound estimate of $20.8 million and an upper bound estimate of $29.7 million.

Table 1 presents a summary of costs and benefits of the proposed rule.

We have developed a comprehensive Preliminary Economic Analysis of Impacts that assesses the impacts of the proposed rule. The full preliminary analysis of economic impacts is available in the docket for this proposed rule (Ref. 11) and at https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations.

We have determined under 21 CFR 25.32(m) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA tentatively concludes that this proposed rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13175. We have tentatively determined that the rule does not contain policies that would have a substantial direct effect on one or more Indian tribes, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. We invite comments from tribal officials or other interested parties, on any potential impact on Indian tribes from this proposed action.

We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that the proposed rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

The following references are on display with the Dockets Management Staff (see ADDRESSES ) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at https://www.regulations.gov. FDA has verified the website addresses, as of the date this document publishes in the Federal Register , but websites are subject to change over time.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, we propose to amend 21 CFR parts 161, 164, 184, and 186 as follows:

This document proposes to make technical corrections that correct or clarify several parts of the Resource Conservation and Recovery Act (RCRA) hazardous waste regulations. These technical corrections correct or clarify specific provisions in the existing hazardous waste regulations that were promulgated in the Hazardous Waste Generator Improvements rule, the Hazardous Waste Pharmaceuticals rule, and the Definition of Solid Waste rule. This rule also makes other minor corrections that fall within the same sections of the hazardous waste regulations but are independent of these three rules. We have published a direct final rule to codify these technical corrections and clarifications in the “Rules and Regulations” section of this Federal Register because we view this as a noncontroversial action and anticipate no adverse comment. We have explained our reasons for this action in the preamble to the direct final rule.

If we receive no adverse comment, we will not take further action on this proposed rule. If we receive adverse comment on any individual correction, we will publish a timely withdrawal in the Federal Register informing the public about the specific regulatory paragraph or amendment that will not take effect. The corrections that are not withdrawn will become effective on the date set out in the direct final rule. We would address all public comments in any subsequent final rule based on comments and new information submitted in response to the proposed rule.

We do not intend to institute a second comment period on this action. Any parties interested in commenting must do so at this time. For further information, please see the information provided in the ADDRESSES section of this document

Submit your comments, identified by Docket ID No. EPA-HQ-OLEM-2023-0081, at https://www.regulations.gov (our preferred method), or the other methods identified in the ADDRESSES section. Once submitted, comments cannot be edited or removed from the docket. The EPA may publish any comment received to its public docket. Do not submit to EPA's docket at https://www.regulations.gov any information you consider to be Confidential Business Information (CBI), Proprietary Business Information (PBI), or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission ( i.e., on the web, cloud, or other file sharing system). Please visit https://www.epa.gov/dockets/commenting-epa-dockets for additional submission methods; the full EPA public comment policy; information about CBI, PBI, or multimedia submissions; and general guidance on making effective comments.

Entities potentially affected by this action include hazardous waste generators, treatment, storage, and disposal facilities, healthcare facilities, reverse distributors, importers/exporters of hazardous waste, and users of the transfer-based exclusion to the definition of solid waste. Also affected are States and EPA Regions implementing the RCRA hazardous waste regulations.

For a complete discussion of all the administrative requirements applicable to this action, see the direct final rule in the Rules and Regulations section of this Federal Register .

This is a synopsis of the Commission's Schools and Libraries Universal Service Support Mechanism, Federal-State Joint Board on Universal Service, and Changes to the Board of Directors of the National Exchange Carrier Association, Inc., Further Notice of Proposed Rulemaking ( FNPRM ) in CC Docket Nos. 02-6, 96-45 and 97-21; FCC 23-56, adopted July 20, 2023 and released July 21, 2023. The Commission also released a companion Report and Order ( Order ) in CC Docket Nos. 02-6, 96-45 and 97-21; FCC 23-56, adopted July 20, 2023 and released July 21, 2023. The full text of this document is available for public inspection during regular business hours at Commission's headquarters 45 L Street NE, Washington, DC 20554 or at the following internet address: https://docs.fcc.gov/public/attachments/FCC-23-56A1.pdf.

1. The E-Rate program provides support to ensure that schools and libraries can obtain affordable, high-speed broadband services and Wi-Fi equipment to connect today's students and library patrons with next-generation learning opportunities and services. In January 2022, the Commission began an initiative to increase Tribal libraries' access to E-Rate support, recognizing the valuable role that these entities serve in providing high-speed internet access to Tribal communities. The Commission first clarified that Tribal libraries are eligible to participate in the program and later launched a Tribal Library Pilot Program to ensure that Tribal library entities have equitable access to the E-Rate program. Building on those efforts, the Commission initiated a rulemaking proceeding in February 2023 to seek comment on additional rule changes to improve Tribal participation in the E-Rate program. The Commission takes steps to further enhance Tribal applicants' access to the E-Rate program through program simplifications and other changes that aim to encourage greater Tribal participation in the program. At the same time, the Commission takes steps to simplify the E-Rate processes, where appropriate, for other E-Rate applicants and seeks comment on further possible rule changes suggested by commenters in this document.

2. Consistent with the changes adopted in the companion Order, in the FNPRM, the Commission seeks comment on the discrete issues that may further simplify the administration of the E-Rate program and reduce burdens for all applicants, including Tribal and other small, rural entities. Specifically, to continue meeting the program's performance goal of making the E-Rate application process and other E-Rate processes fast, simple, and efficient, the Commission seeks comment on a number of suggestions raised by commenters in response to the Tribal E-Rate NPRM, In the Matter of Schools and Libraries Universal Support Mechanism; Federal-State Joint Board on Universal Service; Changes to the Board of Directors of the National Exchange Carrier Association, Inc., CC Docket Nos. 02-6, 96-45, 97-21, Notice of Proposed Rulemaking, rel. Feb. 17, 2023, FCC 23-10, which sought comment on streamlining or simplifying the program.

3. The Commission remains committed to protecting the integrity of its programs. As the Commission considers proposals that look to further simplify the administration of the E-Rate program and reduce barriers that may inhibit Tribal and other small, rural applicants from participating in the program, the Commission notes its intention that reducing barriers does not mean reducing its commitment to maintaining the integrity of the E-Rate program. The Commission utilizes several different resources at its disposal to ensure that protections are in place prior to implementation of any rules regarding the oversight and administration of E-Rate, as well as investigating and rooting out bad actors from the program. The Commission intends for the Wireline Competition Bureau (Bureau) to continue coordinating with the Enforcement Bureau, the Office of Managing Director, the Office of General Counsel, the Office of Economics and Analytics and other Commission resources to ensure the E-Rate program is protected. Further, the Commission intends that the Bureau and other relevant Commission offices continue consultation with other entities, such as the Government Accountability Office (GAO) and the FCC Office of Inspector General, that have a shared interest in maintaining the integrity and improving the operations of the Commission's programs. Where possible, the Commission will strive to incorporate the recommendations of the various entities in the decisional documents in an effort to establish robust protections against waste, fraud, and abuse. The Commission seeks comment on these commitments and how best to ensure that any of the proposals herein maintain and enhance safeguards to protect the integrity of the E-Rate program. For example, do commenters believe it would be beneficial to compile and make available recommendations that were submitted as part of such consultations?

4. Updating Eligible Services. License/Software Distinction. The Commission first seeks comment on allowing all eligible multi-year software-based services that are purchased with category two equipment to be requested and reimbursed in the same manner. Currently, software-based services are eligible as Internal Connections service when they are necessary for the operation of a piece of eligible Internal Connections equipment, such as a client access license. However, bug fixes, security patches, and technical assistance-based software services are eligible as Basic Maintenance of Internal Connections (BMIC) services. As explained in the Sixth Report and Order, 75 FR 75393 (12/03/2010), “[r]equests for basic maintenance will continue to be funded . . . if, but for the maintenance at issue, the service would not function and serve its intended purpose with the degree of reliability ordinarily provided in the marketplace to entities receiving such service.” Applicants are currently required to amortize the cost of BMIC-related services, including for example, software-based technical assistance services, across the length of the BMIC multi-year contract, and cannot receive full funding for the BMIC software-based technical assistance services in the first year of the contract, even if the applicant has prepaid for the multi-year BMIC software service with the purchase of the category two equipment. This means that the current E-Rate rules allow the applicant to receive full funding for an internal connections-related multi-year software service in the first funding year, but for other multi-year software-based services for technical assistance, like bug fixes, which are considered to be BMIC services, the applicant must split the cost of the multi-year software service evenly for each funding year, even if the applicant was required to prepay for the multi-year BMIC software-based services at the start of the contract period. This procedure stems from the Commission's efforts in 2010 to only have the E-Rate program pay for basic maintenance services that are actually provided over the course of the funding year, and to prevent the E-Rate program from being used to prepay for BMIC services that were never used or needed by the applicant.

5. In their comments to the Tribal E-Rate NPRM, the State E-Rate Coordinators' Alliance, the Schools, Health, and Libraries Broadband Coalition, the Consortium for School Networking, and the State Educational Technology Directors Association (collectively, the Joint Commenters) explain that this distinction in the treatment of multi-year software-based services causes confusion during the competitive bidding process, where applicants are concerned about funding denials if they select the incorrect service subcategory ( i.e., use internal connections instead of BMIC) on FCC Form 470, and places a burden on applicants that requires them to divide the cost of a prepaid multi-year BMIC software-based service request across multiple funding years. The Commission therefore seeks comment on the proposal to treat these particular software-based services ( e.g., bug fixes, security patches, and software-based technical assistance) in the same way it currently treats eligible Internal Connections software-based services, like client access licenses. The Commission also proposes to allow applicants that sought bids on their FCC Form 470 only for Internal Connections software services to be permitted to request funding for their multi-year BMIC software-based services without being found to have violated its competitive bidding rules for failing to check the correct box for this software request, and to allow applicants requesting these types of software-based services to be funded based on how the software-based service is contracted and invoiced with the service provider ( e.g., funding a multi-year software-based service for bug fixes in a single funding request during the first year of service if the service is paid for in that first year). The Commission seeks comment on these proposals.

6. Transition of Services. Applicants and service providers have also sought additional clarification on how to request E-Rate support when an applicant is transitioning services between two providers during the same funding year. To prevent funding duplicative services, program procedures do not allow Universal Service Administrative Company (USAC) to commit funding to two funding requests for the same service, to the same recipients, that overlap in time. At the same time, due to concerns about exceeding the E-Rate funding cap, the Commission's service substitution rules require that post-commitment service substitutions be based on the lower of either the pre-discount price of the service for which support was originally requested or the pre-discount price of the new, substituted service. As such, applicants are encouraged to work with their service providers to try to determine the cutover dates when transitioning service to a new provider during a funding year. The Commission recognizes, however, that this can be difficult to determine with accuracy, months in advance of the planned transition.

7. One approach is to allow applicants to request twelve months of service from the higher-priced service offering, and then file a post-commitment request to change the service provider once the cutover dates are known. The Commission notes that this suggestion results in the service request being funded higher than the actual costs of the services, and may inflate the overall demand for E-Rate support for that year. However, the Commission seeks comment on whether this is still the best way to allow for mid-year service provider transitions, or whether it should consider alternative guidance or a rule change regarding these types of mid-year transitions. For instance, should the Commission consider amending its service substitution rules to allow applicants in this unique situation to request a service substitution that will result in an increase in the pre-discount price if the transition occurs at a different date than had been anticipated and requested? If so, should the Commission require applicants to include an explanation in their service substitution request documenting the reasons that the change resulted in an increase in the pre-discount price? Should the Commission limit USAC's ability to grant such a service substitution request on the availability of funding for the applicable funding year under the funding cap? Based on prior years' data, the Commission does not expect this to be a large amount of funding, but it generally does not increase annual E-Rate demand post-commitment. Are there any other issues that the Commission should take into account by allowing applicants to potentially receive a commitment amount higher than the one originally approved for the services? How might such increases in funding impact the annual E-Rate cap adopted by the Commission? Are there budget control measures that the Commission should adopt to ensure this new proposal does not cause the Commission to exceed the cap? The Commission seeks comment on these questions and how mid-year service provider transitions should be handled in the E-Rate program.

8. Duplicative Services. The Commission next seeks comment on the Joint Commenters' request for additional clarification regarding cost-effective purchasing on services from two different providers. In the Second Report and Order, 68 FR 36931 (06/20/2003), the Commission found that requests for duplicative services, or services that provide the same functionality for the same population in the same location during the same time, are ineligible and contravene the program requirements that discounts be provided based on the reasonable needs and resources of the applicant. It also found that requests for duplicative services are not cost-effective, but the Commission recognized that determining whether particular requests are functionally equivalent depends on the circumstances. In the Macomb Order, In the Matter of Requests for Review by Macomb Intermediate School District, Technology Consortium, Clinton Township, MI, Schools and Libraries Universal Service Support Mechanism, CC Docket No. 02-6, rel. May 8, 2007, FCC 07-64, USAC denied a funding request from the Macomb Intermediate School District Technology Consortium, which requested T-3 connections to provide internet access to its school district from three separate service providers. The Commission agreed that the school district violated § 54.511 of the Commission's rules by not selecting the most cost-effective service offering among the bids considered, but provided the school district with funding for all three T-3 connections at the amount associated with the least expensive of the three providers.

9. The Joint Commenters request clarification that applicants may seek needed services from multiple providers as part of the same procurement, so long as the applicant is limited to E-Rate funding based on the least expensive service when one provider could have met all the applicant's needs. The Commission seeks comment on this proposal and the desire by schools to purchase services from multiple providers in the same procurement. How often is the scenario in the Macomb Order present in current school network configurations? How can USAC best evaluate whether applicants need the services requested from multiple providers, or whether the services are actually duplicative, such as requests for redundant or failover connections? What kind of documentation can applicants and/or service providers use to demonstrate that the services are not duplicative services ( i.e., redundant or failover connections)? What safeguards can the Commission use to only fund services that are needed and are being used by the applicant? The rules require that price must be the primary factor in considering which service offering is the most cost-effective, but should the Commission require price to be the only factor in order to ensure applicants select the least expensive service option in these scenarios when the applicants wishes to use multiple providers for the requested services? Are additional safeguards needed to ensure competitive bidding is still effective for ensuring cost-effective services when applicants seek to contract with multiple service providers for the requested services? What information or data may need to be collected on the funding application forms to demonstrate the requested services are needed and are not duplicative services? Are there other issues that the Commission should consider in allowing multiple service providers to be selected for the same procurement and requested services? Finally, the Commission also seeks comment on whether further guidance is needed for applicants seeking redundant or resilient circuits provided by a single carrier. While redundant circuits would be considered duplicative, are there any unique types of arrangements or network configurations being used that might be needed and how can applicants and/or service providers document the need?

10. Other Simplification Opportunities. The Commission seeks comment on other changes to the eligible services list and cost allocation requirements that could simplify the E-Rate program, particularly for new and smaller applicants. For example, should the Commission revise the eligible services list to use the same terms as used on FCC Form 470 or FCC Form 471? For instance, would it make more sense to use the terms from FCC Form 470 like fiber, cable, copper, wireless, and other in the eligible services list of data transmission and/or internet access services, rather than listing out specific types, like “Broadband Over Power Lines”? Are there terms in the eligible services list that should be updated or streamlined? Are there updates the Commission could make to the eligible services list process to make it easier to approve and release the list with sufficient time for review, before applicants must submit their funding applications? For cost allocation requirements, are there additional changes the Commission could make to clarify when applicants must cost allocate parts of their E-Rate funding requests? For example, are there other types of equipment similar to cabling, such as switches, for which cost allocation guidance is needed? Are there other examples of challenging cost-allocation calculations that the Commission could further streamline for Tribal applicants? Are there other examples of ancillary use unique to Tribal libraries or small entities that share buildings on which the Commission could consider providing further guidance? Are there particular challenges with cost allocation of category two services used in multipurpose buildings, that the Commission could simplify? The Commission seeks comment on these questions and other suggestions for simplifying the cost-allocation. Finally, should the Commission consider changes to the application process for certain eligible services? Specifically, the Commission seeks comment on whether a rolling category two application deadline or a second application filing window for category two services would simplify or complicate the E-Rate program. If the Commission were to consider changes to the deadline for filing for category two applications, what limits would be needed to ensure demand can be appropriately calculated?

11. Changing or Clarifying the E-Rate Competitive Bidding Requirements. The E-Rate program's competitive bidding requirements reflect the Commission's determination that competition is the most efficient and effective means for applicants to select the most cost-effective service offerings. The Commission has long held that a fair and open competitive bidding process is fundamental to the integrity of the E-Rate program. Thus, the Commission has consistently required applicants to treat all potential bidders equally throughout the procurement process, provide all bidders access to the same information, and ensure that no bidder receives an unfair advantage. Selecting the most cost-effective bid and ensuring that price of the eligible equipment and services is the primary factor considered in the bid evaluation process are other fundamental requirements of the Commission's competitive bidding rules.

12. Competitive Bidding Exemptions. In their comments to the Tribal E-Rate NPRM, the American Library Association (ALA) recommends that small libraries requesting less than $10,000 in E-Rate funding to be subject to fewer competitive bidding requirements and less rigorous review during the application process by treating funding requests under $10,000 as de minimis. Specifically, ALA explains that libraries rely on state and local procurement rules for these purchases and additional competitive bidding requirements are not needed because of the low amount of requested funding. The Commission seeks comment on this proposal to create a competitive bidding exemption for E-Rate funding requests under $10,000 submitted by libraries. In the Order, the Commission adopted a competitive bidding exemption for libraries making category two purchases of $3,600 or less, per funding year. The Commission seeks additional comment on expanding the exemption for libraries making smaller annual E-Rate requests ( i.e., less than $10,000), along with data to support such a change. For example, ALA notes that 62.3% of libraries requested less than $10,000 in total support for category one and category two services in funding year 2023, and 100% of libraries in certain rural states, like Montana, did so. However, the Commission also relies on fair and open competitive bidding to result in applicants making cost-effective purchases. If the Commission adopts this proposal, how can the Commission ensure that applicants are still making cost-effective purchases? What state, local, or Tribal procurement rules are in place for purchases that are under $10,000? Should the Commission also consider permitting schools to use the competitive bidding exemption for category two purchases of $3,600 or less, per funding year, or another exemption for school entities? If the exemption is expanded to schools, how can the Commission protect the E-Rate program from waste, fraud, and abuse? For example, ALA's proposal relies on the fact that libraries are subject to state and local procurement laws and requirements; are all school entities subject to state, local or Tribal procurement requirements? For example, are private schools subject to any specific state, local, or Tribal procurement requirements? The Commission seeks comment on these questions and supporting data for adopting a competitive bid exemption for E-Rate purchases under $10,000 per funding year.

13. Mid-Year Bandwidth Increases. The Commission next seeks comment on adopting a limited exception to its competitive bidding rules to allow applicants to seek bandwidth increases in between E-Rate funding cycles. The E-Rate program rules require applicants to competitively bid services using FCC Form 470. This process starts at least 28 days before the applicant files their E-Rate funding requests during the annual application filing window, but can occur six months before, or—in the case or multi-year contracts—years before the funding request is submitted. Applicants are encouraged to seek bids for and sign contracts for a range of bandwidths in order to accommodate changes in bandwidth needs in the future, but applicants are not always able to anticipate changes in their bandwidth needs. In 2020, for example, the Bureau opened a second application filing window in September to address increased on-campus bandwidth needs as a result of remote learning challenges from the COVID-19 pandemic. However, in other instances, applicants may be unable to increase their bandwidth mid-funding year without potentially violating the E-Rate program competitive bidding rules.

14. The Joint Commenters therefore suggest an exception to the competitive bidding rules to allow applicants to increase bandwidth during the school year ( i.e., mid-funding year) by submitting a service substitution request to increase the bandwidth using their current provider at the existing committed amount without being found to have violated the program's competitive bidding rules. The Commission seeks comment on this proposal and how to allow for bandwidth increases without opening the door to applicants avoiding its competitive bidding rules or unfairly favoring incumbent service providers. What limitations would need to be adopted in order to ensure that the exception for mid-funding year bandwidth increases is not misused? How can USAC keep track of such mid-funding year bandwidth increases? Do commenters agree that applicants be allowed to request a service substitution request increasing the bandwidth, limited at the original funding commitment cost? Should such applicants be required to competitively bid for the increased bandwidth in the subsequent funding year? The Commission seeks comment on these questions and other issues the Commission should consider in adopting this exception to the E-Rate competitive bidding requirements.

15. Providing Guidance to Applicants on When Competitive Bidding Must be Restarted. The Commission next seeks comment on how to reduce confusion about when changes made to the information provided on FCC Form 470 or related requests for proposals (RFP) requires an applicant to restart the competitive bidding process and wait at least 28 days before selecting their service offering(s). Under the Commission's competitive bidding rules, applicants must conduct a fair and open competitive bidding process. This means that applicants must treat all potential bidders equally throughout the entire procurement process, provide all bidders access to the same information, and ensure that no bidder receives an unfair advantage. Furthermore, applicants must describe the requested services with sufficient specificity to enable potential service providers to submit responsive bids for such services. Sometimes, the facts are clear that the requested E-Rate services were not fairly competitively bid and there was a violation of the competitive bidding rules. For example, applicants may not request E-Rate support for services that were not included on FCC Form 470. Similarly, applicants that fail to indicate the existence of a RFP have also been denied E-Rate support for suppressing fair and open competitive bidding. As such, in some instances, when applicants make a change to an FCC Form 470—such as by modifying the services being requested or by including an omitted RFP—that would change whether a service provider reviewing the original FCC Form 470 could submit responsive bids, the competitive bidding process should be restarted to allow all potential bidders the opportunity to bid based on the additional or modified information, and the applicant should wait at least 28 days after making these changes before selecting the most cost-effective service offering(s). In other cases, the Commission has granted requests for review where an applicant changed information on FCC Form 470 or associated RFP without finding a competitive bidding violation because the change did not impact potential bidders' ability to be able to submit responsive bids.

16. As these examples indicate, whether a change to FCC Form 470 or RFP results in an unfair competitive bidding process is often a fact-specific inquiry. The Commission therefore seeks comment on scenarios where it can provide more guidance on whether an applicant's changes to their FCC Form 470 or RFP requires it to restart the competitive bidding process and wait at least 28 days before selecting its service offering(s). E-Rate participants are encouraged to provide examples of instances where they believe changes to FCC Form 470 and/or RFP do not result in an unfair competitive bidding process as all potential bidders would still be able to submit responsive bids although certain information was modified in FCC Form 470 and/or RFP. Are there any presumptions or safe harbors the Commission could adopt so that applicants could have more certainty about whether and when they need to restart the competitive bidding process because of that specific change that was made to FCC Form 470 and/or RFP? For instance, should applicants correcting errors in their bandwidth requests by less than 50% not be required to restart the competitive bidding clock ( i.e., the minimum 28 day waiting period)? Are there other types of common changes to FCC Form 470 and/or RFP that should not require applicants to restart their competitive bidding process? The Commission seeks comment on these questions and what type of guidance or clarifications would be helpful for the Commission to provide on when changes to FCC Form 470 and/or RFP would not result in an unfair competitive bid process and when the applicant would be required to restart their competitive bid process and wait a minimum of 28 days before selecting the most cost-effective service offering(s) after making the change or modification.

17. Spam Bids and Bids Received After 28 Day Waiting Period. Under the E-Rate competitive bidding rules, applicants are required to carefully consider all received bids, with price being the primary factor, and select the most cost-effective service offering. Applicants must also wait at least 28 days before selecting the most cost-effective service offerings. Applicants are permitted to set deadlines to close the competitive bid process (of at least four weeks after FCC Form 470 is filed) or establish other disqualification factors in FCC Form 470. The Joint Commenters explain that applicants are receiving more spam bids and other automated or “robo” responses to their FCC Form 470 that do not contain the information on the specific services requested by the applicant and seek guidance on whether these bid responses have to be considered and retained. They also seek guidance on whether and how long bids must be considered after the required four weeks have passed. Specifically, the Joint Commenters explain that service providers have set up automated responses to be sent, often within 24 hours, after an FCC Form 470 has been posted on USAC's website. In addition, multiple automated bid responses may be sent to the applicant for a single FCC Form 470. However, the automated bid responses do not contain the pricing and other information requested in FCC Form 470 and require the applicant to reach out to the service provider for additional information. The Joint Commenters request that the Commission clarify that spam and other automated bid responses do not meet the definition of an authentic bid and that applicants may, but are not required to, consider spam or other automated bid responses or be required to retain copies of the spam and other automated bid responses pursuant to the document retention rule. The Joint Commenters further explain that requiring applicants to acknowledge and retain spam and other automated bid responses is an onerous burden, and that the Commission should impose some minimal responsibility on service providers to submit responsive bids to the applicants and the automated bid responses should not be used as a basis to deny funding because of a non-compliant competitive bid process.

18. For purposes of disqualifying spam or other automated bid responses or consideration of bids received after a deadline set in FCC Form 470, the Joint Commenters request that the Commission clarify the requirements and confirm that spam and other automated bid responses do not need to be treated as bids and that applicants may rely on the 28 day allowable contract date (ACD) as the deadline for submitting bids when FCC Form 470 is silent on the bid submission deadline. In general, the Commission would expect applicants to carefully consider all bids received before the bid selection process has occurred, unless they provided a specific bid submission deadline and noted that bids received after the deadline would be disqualified on FCC Form 470. In light of the concerns raised by the Joint Commenters, the Commission first seeks comment on the types of spam and other automated bid responses that are being generated and sent to the applicant once or soon after their FCC Form 470 is posted. Please include examples of these types of bid automated bid response communications and other data regarding the frequency and number of automated responses that applicants receive after posting their FCC Form 470. The Commission seeks further comment on the Joint Commenters' request that the ACD be used as the bid response deadline when FCC Form 470 is silent on the bid submission deadline. The Commission notes that applicants are already allowed to state that bids that do not include all of the required information and/or are received after a specific deadline will be disqualified on their FCC Form 470 or in the accompanying RFP. The Commission requests further comment on why applicants are not able to add language to their FCC Form 470 that non-responsive bids will be disqualified or that bids received after the 28-day minimum waiting period will be considered late and will also be disqualified. Are changes to FCC Form 470 needed to include specific disqualification criteria that could be checked by the applicant? For example, should the Commission add a field to FCC Form 470 to allow applicants to indicate the deadline for submitting bids and any other requirement that will result in a bid being disqualified from consideration? The Commission also notes that it has an open proceeding related to a competitive bidding portal that could collect all bids that are received by the applicant and reduce confusion about these types of bids and deadlines. Procedurally, should the Commission delay taking action on the treatment of spam and other automated bid responses until after it takes action in that open proceeding, or should the Commission consider these proposals while that proceeding is still pending before the Commission? Would the proposed bidding portal be helpful as a competitive bid document repository to reduce the documentation retention related burdens on applicants? The Commission further seeks comment on how to ensure applicants are complying with program rules to carefully consider all bids received and retain them for the appropriate ten-year document retention period, if spam or other automated bid responses are not treated as “bids.” If exceptions are made regarding the consideration and retention of certain types of bid responses, how does the Commission ensure the exception is not misused and responsive bids are not considered or retained as required by the Commission's rules? The Commission seeks comment on all of these questions, as well as any other issues the Commission should consider to ensure the E-Rate competitive bidding process remains fair and open, and compliant with the Commission's rules if changes or clarification is provided about what response is a bid.

19. Evidence of a Legally Binding Agreement. The Commission's E-Rate rules also require that the applicant have a signed contract or legally binding agreement before requesting E-Rate funding. When modifying this rule in 2014 to allow for legally binding agreements rather than requiring only signed contracts, the Commission explained that USAC would consider the existence of a written offer from the service provider containing all the material terms and conditions and a written acceptance of that offer as evidence of a legally binding agreement. The Joint Commenters now suggest that board minutes approving a contract offer should be evidence of an applicant's acceptance, demonstrating a legally binding agreement. The Commission seeks comment on this proposal and whether there are additional examples that USAC should consider as evidence of a legally binding agreement. Conversely, ALA suggests removing the legally binding agreement requirement and suggests that E-Rate applicants be allowed to rely on a price quotation before submitting their E-Rate applications. In the Emergency Connectivity Fund program, applicants were allowed to rely on price quotations due to the emergency nature of the program and the lack of significant advance notice before the first application filing window opened. The Commission also seeks comment on this request and how accepting a price quotation would streamline the application process. The Commission also seeks comment on whether modifying this requirement, and allowing a price quotation to be used, may lead to greater potential of waste, fraud, and abuse, and the Commission invites comments on how to minimize that risk.

20. Ensuring Our Rules Recognize Tribal Law. The Commission seeks comment on whether the E-Rate program rules should be updated to recognize that competitive bidding regulations are often imposed by Tribal as well as state and local governments. For example, the Commission's competitive bidding rules state that the program-specific rules “apply in addition to state and local competitive bid requirements and are not intended to preempt such state or local requirements.” Recognizing that Tribal governments may also have procurement rules in place, should the Commission add Tribal to this list? Are there other areas of the Commission's program rules that should be updated to recognize the Tribal government role?

21. Finally, the Commission seeks comment on other competitive bidding-related requirements the Commission should consider updating or otherwise modifying. For example, the Commission seeks comment on how product demonstrations are conducted for applicants in the E-Rate program. Should the Commission modify or provide guidance related to its gift rules to provide additional clarity around product demonstrations? What safeguards should the Commission adopt to ensure applicants are not ultimately receiving free equipment through a product demonstration that would impact conducting a fair and open competitive bidding process? In considering any such changes to the competitive bidding rules, the Commission is mindful of its commitment to protect E-Rate funds. As the Commission continues its efforts to safeguard the program and assess fraud risks to the E-Rate program, should the Commission consider how to sequence any potential modifications to its rules in light of its ongoing work to protect the program's integrity?

22. Streamlining the E-Rate Program Forms. The Commission seeks comment on a number of proposals to modify the E-Rate program forms to streamline the application process. First, the Commission seeks comment on what modifications to FCC Form 470 (Description of Services Requested and Certification Form), which opens the competitive bidding process for E-Rate applicants, would reduce confusion for both applicants and service providers. Second, the Commission seeks comment on reducing the number of E-Rate forms by moving the information currently collected on FCC Form 486 (Receipt of Service Confirmation and Children's internet Protection Act Certification (CIPA) Form), which notifies USAC that services have started and that the applicant is in compliance with CIPA requirements, to other E-Rate forms.

23. Creating an “EZ” Application Form. In comments to the Tribal E-Rate NPRM, E-Rate participants explained that small library entities often require technical assistance to complete the FCC Form 471 application. ALA suggests that the Commission “create an `EZ' form with simple to understand language that also includes context-sensitive guidance and best practices to support applicants, such as including checklists and prompts to help users navigate and raise any flags for potentially incorrect entry of information.” The Commission seeks comment on this proposal and how to implement it effectively. Would such a form be available to all applicants, or would it be preferable to have a form targeted to Tribal entities or libraries? Is there any language on the FCC Form 471 application in particular that should be changed? Is any information collected on the form no longer needed? Is there additional information that should be collected to help streamline the application process? For example, should the Commission add the information currently collected on FCC Form 486 to FCC Form 471 instead? What questions are confusing to small entities, and what type of questions do small applicants require technical assistance with? Would additional system pop-ups and guidance within the online application form make a significant difference in encouraging new, small entities to apply and request funding through the E-Rate program?

24. Simplifying the FCC Form 470 Drop-Down Menu Options. In 2014, the Commission required all applicants and service providers to electronically file all E-Rate-related documents with USAC, adopted changes to the competitive bidding requirements for certain category one services, and amended the category two rules to fund additional services, such as managed internal broadband services (MIBS). As a result of those changes, FCC Form 470 currently has drop-down menu options that allow applicants to pick the services for which they are seeking bids in order to make it easier for service providers to search and locate relevant FCC Forms 470 to submit bids for. Despite efforts to improve the drop-down menu options, applicants and service providers continue to request changes to the drop-down menu options, and express concerns that selecting the wrong drop-down menu option(s) can result in a funding denial. Under the E-Rate program rules, applicants must conduct a fair and open competitive bidding process, seeking bids on FCC Form 470 with, at a minimum, a list of specified services for which the entity is requesting bids and sufficient information to enable bidders to reasonably determine the needs of the applicant. Under this rule, the Bureau has denied requests for review from petitioners denied funding for failing to seek competitive bids on their FCC Forms 470 for services requested on the FCC Forms 471. In addition, the Commission has established certain competitive bidding requirements for certain services, like managed internal broadband services and self-provisioned networks, in order to ensure applicants select the most cost-effective service option. The Commission therefore seeks comment on proposals from the Joint Commenters for changes to the drop-down menu options.

25. First, for category two services, the Joint Commenters propose that the three separate Service Types: (1) Internal Connections; (2) Managed Internal Broadband Services; and (3) Basic Maintenance of Internal Connections be combined or revised in order to reduce the likelihood that applicants select the wrong Service Type by accident. The Commission seeks comment on this approach from both applicants and service providers. Are the category two services subcategories useful in determining the needs of the applicant? Or would a category two services narrative section be sufficient to ensure that applicants are providing sufficient information regarding the specified equipment and services requested? For software-based services and licenses, as explained, the Commission understands that it is sometimes challenging for new applicants to determine which subcategory to use for the software or licenses needed for the category two internal connections equipment. However, if an applicant is seeking bids for specific pieces of equipment or for basic maintenance in the form of physical repair of the equipment, is information included in a narrative box sufficient for service providers to find and understand precisely what service(s) are being requested? Should the Commission consider a method for applicants to tag requests as potentially one particular type of service to assist service providers in finding the relevant requests for bids? How does the Commission weigh the benefits of a drop-down menu to service providers in finding and responding to FCC Forms 470 against the burden on applicants to determine the correct menu option(s) to use for the requested equipment and services?

26. Second, the Joint Commenters propose that the Commission again modify the FCC Form 470 drop-down menu options for category one services. Over the last several funding years, the Bureau and USAC have taken steps to improve the category one drop-down menu options to reduce applicant confusion. In funding year 2022, after seeking comment from E-Rate participants, the drop-down menu options specifically listing “Leased Lit Fiber” were modified as a result of continued confusion. The Joint Commenters now seek new drop-down menu options for “internet service over fiber facilities” and “data transmission over fiber facilities.” For instance, the Joint Commenters state that the USAC guidance on seeking bids for data transmission without internet access over fiber is unclear. The Commission seeks comment on this proposal. Based on the continued confusion from changes to FCC Form 470, the Commission is concerned that further changes to the drop-down menu options could result in greater applicant confusion. Are there ways to capture concerns about the drop-down options language without making additional changes? For example, can USAC add more guidance within the online FCC Form 470 or in trainings? Finally, are there any other ways the Commission could improve existing drop-down menu options for E-Rate applicants or participants?

27. Modifying or Eliminating FCC Form 486. The Commission seeks comment on whether to eliminate FCC Form 486 and move the information collected on that form to FCC Form 471 or remove some of the information collected on the form. FCC Form 486 notifies USAC that services have started for the recipients of service included on an approved funding request and the status of compliance with CIPA for the recipients of service for the funding requests. It must be filed after USAC issues a funding commitment decision letter, but no later than 120 days after the service start date or 120 days after the funding commitment decision letter, whichever date is later. Invoicing cannot begin until FCC Form 486 is filed by the applicant.

28. FCC Form 486 has included a number of program certifications over the years, such as whether technology plans are in place, but currently only collects information related to the services' start dates and CIPA compliance. These certifications now occur in the middle of the application cycle and can result in funding reductions due to ministerial or clerical errors. The Commission seeks comment on moving the CIPA certifications to FCC Form 471 and removing the requirement to notify USAC that services have started. The Joint Commenters explain that this would be a “simple, yet effective way to streamline the program for all applicants and the Administrator, but particularly for small and new applicants.” For the vast majority of applicants that are already in compliance with CIPA, the location of this CIPA certification should make no difference. While removing the requirement to notify USAC that services have started removes one possible check for USAC, the certifications on the requests for reimbursement forms already require services to have been delivered in order to seek funding, potentially making the additional notification about the start of services duplicative. If FCC Form 486 is removed for future funding years, how should the Commission modify the certifications on FCC Form 472 or FCC Form 474 to ensure services and/or equipment were delivered to and used by eligible entities? If the Commission makes changes to FCC Form 486, should it also make changes to the invoice filing deadline to link the deadline to the date of the funding commitment decision letter? The rules currently reference the date of the FCC Form 486 Notification Letter. Alternatively, the Joint Commenters suggest that the CIPA certifications be moved to FCC Form 471 but allow FCC Form 486 to remain as an option. While the Commission may need to retain FCC Form 486 for prior funding years where the certifications were not included on that funding year's FCC Form 471, the Commission seeks more detailed comment about the benefits of keeping FCC Form 486 as an optional form for future funding years.

29. Are there other E-Rate form changes that could help streamline application and reimbursement processes for the program? The Commission seeks comment on other E-Rate form modifications, particularly those that would help a new entity or a small or Tribal entity to apply for and receive E-Rate support. The Commission encourages commenters to provide sufficient detail for us to adopt changes to the E-Rate forms in upcoming funding years.

30. Validating Discount Rate. The Commission next seeks comment on potential ways to streamline the discount rate validation for E-Rate applicants. Eligible schools and libraries may receive discounts ranging from 20% to 90% of the pre-discount price of eligible equipment and services, based on indicators of need. Schools and libraries in areas with higher percentages of students eligible for free or reduced price lunch through the National School Lunch Program (NSLP) or an alternative mechanism qualify for higher discounts for E-Rate eligible services and equipment than applicants with lower levels of eligibility for such programs. For example, the most disadvantaged schools, where at least 75% of students are eligible for free or reduced price school lunch, receive E-Rate support for 90% of the cost of their eligible category one purchases (that is referred to as a 90% discount). Libraries receive funding at the discount level of the school district in which they are located. Schools and libraries located in rural areas also may receive an additional 5% to 10% discount compared to entities located in urban areas. During the application review, USAC may seek data to validate an entity's discount rate, which is typically based on student enrollment and NSLP data as of October 1 prior to the filing of the application.

31. The Commission now seeks comment on how to streamline the discount rate validation process for E-Rate applicants. For the majority of applicants, their discounts do not change from funding year to funding year. Absent a request for an increase in an entity's discount rate, should the Commission adopt a presumption that discount rates do not require validation for a certain period of time ( e.g., three or five funding years)? Under such a presumption, the Commission would still need to occasionally check for certain aspects of the calculation, like when new rurality data becomes available from the U.S. Census. How does the Commission factor in such changes? Alternatively are there other changes to the discount rate the Commission should consider? The Commission also seeks comment on any relevant changes to the Community Eligibility Provision (CEP), how it may impact the E-Rate program discounts, and whether any procedures should be changed. Are there any changes the Commission should consider for states and schools in states with statewide CEP or statewide free lunch calculating their discount?

32. Seeking Information on Other College Libraries Acting as Public Libraries. The Commission also seeks comment on whether there are other college or university libraries, similar to the TCU libraries, that act as the public library in their community. While the Commission continues to monitor whether TCU libraries participate successfully in the E-Rate program, it seeks data and examples from stakeholders about whether this is common in other types of college or university libraries and whether it should consider further changes to its eligibility rules for libraries. One commenter suggested expanding eligibility to other college libraries that serve as public libraries in their communities. If the Commission does, what other additional restrictions or limitations should be considered? Are colleges that specifically serve communities that have been historically underserved, marginalized, or adversely affected by persistent poverty or inequality, such as Historically Black Colleges and Universities (HBCUs) or Hispanic-Serving institutions (HSIs), also serving as public libraries in any instances?

33. Modifying E-Rate Invoice and Disbursement Standards. Modifying the Invoice Filing Deadline Rule. Before 2014, invoice filing deadlines were procedural, and applicants or service providers could request and receive a 120-day invoice filing extension under certain conditions. USAC granted invoice filing extension requests that met the criteria, including requests made up to a year after the original invoice filing deadline. In the First 2014 E-Rate Order, 79 FR 49160 (8/19/2014), the Commission codified the invoice filing deadline, and adopted a strict standard for waiving the rule and granting extensions of the applicable invoice filing deadline. Specifically, the Commission's rules only permit USAC to grant a single 120-day extension of an invoice filing deadline, provided that the applicant or service provider submits the request on or before the invoice filing deadline for that request. USAC will automatically grant timely filed invoice filing deadline extension requests. In the interest of efficient program administration, however, the Commission prohibited USAC from granting any additional invoice filing deadline extensions. As a result, if applicants and service providers require more time than the single 120-day extension to complete the invoicing process, they may only obtain it by seeking a waiver of the invoice filing deadline extension rule from the Commission. The Commission concluded, however, that “it is generally not in the public interest to waive [the] invoicing rules,” and the Bureau should grant waivers of the invoice filing deadline rules only under “extraordinary circumstances.”

34. As a result of this standard, applicants and service providers have filed large numbers of waivers related to invoicing errors. Under the extraordinary circumstances standard, the Bureau has denied many of those waiver requests. The Commission now seeks comment on the Joint Commenters' proposal to slightly modify the invoice filing deadline extension rule. Specifically, they propose that applicants be allowed to seek an extension of the original invoice deadline from USAC when the request is made within 15 days of the original invoice filing deadline date. This change would allow applicants or service providers to request a one-time 120 day extension if they realize they just missed an invoice filing deadline, reducing the number of denied requests for reimbursements and waiver requests, while maintaining the codified invoice filing deadline, as the new invoice filing deadline would remain 120 days from the original invoice filing deadline, and not based on the date the extension request was filed with USAC. Because the Commission is revisiting its overall approach to the invoice filing deadline, the Commission also modifies, on an interim basis, the prior guidance provided to the Bureau regarding waivers of the existing deadline. In particular, the Bureau remains free to grant waivers that would have been granted under the prior Commission guidance as meeting the extraordinary circumstances standard. The Commission directs the Bureau to leave pending any waiver requests related to applicants or service providers that were filed within 15 days of the original invoice filing deadline for now, and it will provide further guidance regarding the disposition of those waiver requests at the resolution of this proceeding. While the Commission declines to waive the invoice deadline rule during the pendency of the rulemaking, it seeks comment on the extraordinary circumstances standard.

35. Consistent with this proposal, the Commission also seeks comment on other ways to simplify or streamline the E-Rate invoicing and disbursement process. Should the Commission consider a 30-day grace period for applicants or service providers to resubmit invoices that were timely filed before the invoice filing deadline, but rejected in whole or part after the deadline has passed? Currently, applicants and service providers may appeal a rejected or denied invoice, but cannot resubmit the invoice filing if the deadline has passed. Applicants and service providers are encouraged to provide examples of why filing an appeal after the invoice filing deadline is not the most straightforward approach. Are there processes and requirements in the program that the Commission should consider changing in order to reduce the amount of work required by small applicants regarding the E-Rate reimbursement process? Are there particular situations where one extension is insufficient for requesting reimbursement from the E-Rate program?

36. The Commission also seeks comment on a billing issue that could complicate service provider invoicing for some applicants. E-Rate applicants may select one of two ways to seek reimbursement of the costs of eligible E-Rate equipment and services. If an applicant pays the full cost of the equipment and services upfront, then the applicant must submit an FCC Form 472, the Billed Entity Applicant Reimbursement (BEAR) form, to request reimbursement for the discounted share of the costs from USAC. If an applicant only pays its service provider the non-discounted share of the cost of the eligible equipment and services, then the service provider must file an FCC Form 474, the Service Provider Invoice (SPI) form, to receive reimbursement of the discounted share of the costs directly from USAC. Although the BEAR invoicing rules were modified in the First 2014 E-Rate Order, to allow applicants to receive direct reimbursement from USAC, service providers have continued invoicing applicants for the full cost of the E-Rate services and then provide a credit to the applicant after receiving reimbursement of the discounted share of costs for the equipment and services through SPI invoicing from USAC.

37. This practice by certain service providers of requiring the applicant to pay the full cost of the E-Rate services upfront when the applicant has elected SPI billing and is only required to pay the service the non-discounted share of costs is contrary to the clear intent of allowing SPI billing and the Commission's rules. As the Commission explained in the Second Report and Order, “requiring schools and libraries to pay in full could create serious cash flow problems for many schools and libraries and would disproportionately affect the most disadvantaged schools and libraries.” The Commission explained that “many applicants cannot afford to make the upfront payments that the BEAR method requires” and concluded “the potential harm to schools and libraries from being required to make full payment upfront, if they are not prepared to, justifies giving applicants the choice of payment method.” The Commission therefore seeks comment on amending its rules and certifications to make them consistent with the Commission's intent that applicants who select the SPI invoicing method must only pay their service provider for the non-discounted share of the costs of the eligible equipment and services, and the service provider must seek the remaining discounted portion of costs from USAC and may not require full payment from the applicant as well when the SPI invoicing method is used.

38. Seeking Comment on Program Recoveries. In 2000, the Commission set up a framework for recovering funds committed or disbursed in violation of the Act and the Commission's rules. USAC implemented a process for recovering funds disbursed in violation of statutory and rule violations and, in 2004, as part of the Fifth Report and Order, 69 FR 55097 (09/13/2004), the Commission largely affirmed and further refined USAC's approach when determining what amounts should be recovered by USAC and the Commission when funds have been disbursed in violation of the Commission's E-Rate program rules. In particular, the Commission amended its rules to apply the red light rule to E-Rate applicants and service providers. Commenters note that the recovery process can be confusing, leading to untimely appeals and applications being dismissed. Specifically, commenters raised challenges with USAC dismissing pending “requests for funding commitments” if a delinquent debt is not paid within 30 days of the notice provided for in the commitment adjustment procedures.” The Commission therefore seeks comment on whether deferring action on pending E-Rate submissions without dismissing them would be appropriate while participants are on red light status. If so, what limits should be imposed to ensure timely action on the delinquent debt?

39. Updating E-Rate Program Definitions. Finally, the Commission seeks comment on changes to some of the program's definitions that may be causing confusion or no longer be as relevant to the current program. The Commission also encourages E-Rate participants to provide other cleanup suggestions for the program rules.

40. Wiring Between Buildings. The Commission next seeks comment on amending the definition of “internal connections” and “wide area network” to allow applicants to seek funding for wiring between different schools in the same contiguous area as an internal connection. In funding year 2017, the Bureau modified the Eligibles Services List to provide guidance on the classifications of connections between buildings of a single school. In that guidance, the Bureau noted that “[c]onnections between different schools with campuses located at the same property ( e.g., an elementary school and middle school located on the same property) are considered to be category one digital transmission services.” In funding year 2018, the Bureau further clarified that connections between two schools in a single building may be classified as a category two service, but rejected requests to allow the term “single school campus” in the definition of “internal connections” as allowing for a single campus containing multiple schools. Applicants remain frustrated that cabling between two schools ( e.g., a high school and an elementary school) in the same location be considered category one services, which under current rules, has separate competitive bidding requirements.

41. The Joint Commenters suggest that applicants should be permitted to use their category two funding to pay for cabling between two different schools located in the same contiguous area, if desired. The Commission therefore proposes to modify the definitions of “internal connections” and “wide area network” to allow multiple schools ( e.g., a high school and a middle school) to share a campus by removed the word “single” from each definition. The Commission seeks comment on this proposal or on alternative ways to modify the rules governing which category of service wiring should be considered. Would this raise new issues for these types of connections? Are there simpler ways to handle this issue? For instance, would it be more straightforward to draw the line between Internal Connections and WANs at the building? The issue identified by the Joint Commenters would remain, but the overall policy determination would be simpler. The Commission also seeks comment on removing references to “voice” in the definition of “wide area network.”

42. Definition of Consortium. The Commission also seeks comment on amending the definition of “consortium” and whether to align it with the definition of “consortium” used in the Emergency Connectivity Fund program. The Commission's E-Rate rules only allow ineligible private sector entities to join consortia if the pre-discount prices for interstate services are at tariffed rates. Given that many services have been de-tariffed over the years, the Commission seeks comment on whether this language should be removed from the E-Rate definition of consortium and the definition be aligned with the ECF definition of consortium. If so, should the Commission continue to allow private entities to be in an E-Rate consortium? If the Commission were to allow ineligible entities to remain in E-Rate consortia should the limitation of “pre-discount prices for interstate services are at tariffed rates” be changed to another limitation as many services continue to be de-tariffed? The Commission also seeks comment on the potential advantages and disadvantages of permitting private sector entities to join E-Rate consortia. Is there any data or other information showing the impact on connectivity or pricing by allowing private sector entities to be in E-Rate consortia? What safeguards would the Commission have to put in place to ensure that the E-Rate program does not support services used by ineligible entities and to ensure ineligible entities are paying for their share of the consortium's costs? The Commission seeks comment on its proposal to remove this language and align the E-Rate definition of consortium with the ECF definition of consortium. If the Commission is to continue to include ineligible entities as member of E-Rate consortia, what limitations and restrictions should be adopted to ensure E-Rate funding is not being used to pay for the services of the ineligible consortia members? The Commission seeks comment on these questions.

43. The Commission, as part of its continuing effort to advance digital equity for all, including people of color, persons with disabilities, persons who live in rural or Tribal areas, and others who are or have been historically underserved, marginalized, or adversely affected by persistent poverty or inequality, invites comment on any equity-related considerations and benefits (if any) that may be associated with the proposals and issues discussed herein. Specifically, the Commission seeks comment on how its proposals may promote or inhibit advances in diversity, equity, inclusion, and accessibility, as well the scope of the Commission's relevant legal authority.

44. The Further Noticed of Proposed Rulemaking seeks comment on possible modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how to further reduce the information collection burden for small business concerns with fewer than 25 employees.

45. Ex Parte Rules—Permit but Disclose. Pursuant to § 1.1200(a) of the Commission's rules, the Further Notice of Proposed Rulemaking shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule § 1.1206(b) of the Commission's rules. In proceedings governed by the Commission's rules § 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable.pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

46. In light of the Commission's trust relationship with Tribal Nations and its commitment to engage in government-to-government consultation with them, the Commission finds the public interest requires a limited modification of the ex parte rules in this proceeding. Tribal Nations, like other interested parties, should file comments, reply comments, and ex parte presentations in the record to put facts and arguments before the Commission in a manner such that they may be relied upon in the decision-making process consistent with the requirements of the Administrative Procedure Act. However, at the option of the Tribe, ex parte presentations made during consultations by elected and appointed leaders and duly appointed representatives of federally recognized Indian Tribes and Alaska Native Villages to Commission decision makers shall be exempt from the rules requiring disclosure in permit-but-disclose proceedings and exempt from the prohibitions during the Sunshine Agenda period. To be clear, while the Commission recognizes consultation is critically important, the Commission emphasizes that the Commission will rely in its decision-making only on those presentations that are placed in the public record for the proceeding.

47. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in the FNPRM. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments in the FNPRM. The Commission will send a copy of the FNPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the FNPRM and IRFA (or summaries thereof) will be published in the Federal Register .

48. The Commission's E-Rate program, formally known as the schools and libraries universal service support mechanism, provides support to schools and libraries allowing them to obtain affordable, high-speed broadband services and internal connections, which enables them to connect students and library patrons to critical next-generation learning opportunities and services. In the Tribal E-Rate NPRM, the Commission's primary objectives were to address the underrepresentation of Tribal applicants and increase participation of Tribal libraries. To achieve these objectives, the Tribal E-Rate NPRM explored ways to further simplify the E-Rate program rules, reduce program barriers and burdens, and encourage greater Tribal participation and community representation.

49. In response to the Tribal E-Rate NPRM, the Commission received several comments suggesting ways to streamline or simplify aspects of the E-Rate program overall for all schools and libraries. In order to develop the record further on those comments, the Commission is now seeking further comment on a series of proposed ways to improve the program for schools and libraries. First, the Commission seeks comment on updating the eligible services list by modifying the distinction between two types of eligible software, Internal Connections, such as the license to access software, and Basic Maintenance of Internal Connections (BMIC), which includes bug fixes, security patches, and technical assistance. The modification would allow applicants to receive full funding for BMIC services in the first year of the contract, instead of splitting it across multiple years. The Commission also seeks comment on the best method to aid applicants that are transitioning between two service providers during the same funding year. The Commission requests comment on ways applicants may seek services from multiple suppliers without being deemed duplicative services. The Commission also seeks information on other changes to help simplify the program, particularly for new and smaller applicants, such as revising the list of eligible services to the same terms used on FCC Forms 470 or 471. The Commission also seeks comment on changing or clarifying the competitive bidding requirements in order to streamline aspects of the application process.

50. In addition, the Commission requests comment on creating a competitive bidding exemption for E-Rate funding requests under $10,000. In an effort to allow applicants flexibility in anticipating changes in bandwidth needs, the Commission seeks comment on how to increase bandwidth during the school year without requiring competitive bidding for the service. The Commission also seeks comment on when an applicant's change to FCC Form 470 or a related request for proposals (RFP) will require it to restart the competitive bidding process. The Commission requests information on automated bid and spam bid responses, and bid deadlines, and whether to expand evidence of a legally binding agreement to include board minutes approving a contract.

51. To streamline the E-Rate program forms, the Commission requests comment on modifications such as creating an “EZ” application form in plain language, adding navigation prompts that alert for potential entry errors, and updating drop down menu options on FCC Form 470, which is used to seek competitive bids, to reduce applicant confusion. The Commission also seeks comment on modifying FCC Form 470, or eliminating FCC Form 486, which is used to notify the Universal Service Administrative Company (USAC) that services have started and collect a certification of compliance with the Children's internet Protection Act Certification (CIPA).

52. The Commission seeks comment on streamlining how often it calculates and validates discount rates for applicants, and on modifying the deadline for requesting an invoice deadline extension, in order to reduce the number of applicants that are unable to get a program disbursement due to small errors near the invoice deadline. The Commission also requests information on amending its rules to address billing issues that would change requiring applicants to make full, up-front payments under certain billing methods. Finally, the Commission seeks comment on updating E-Rate program definitions to make it easier to build local networks in areas where two schools share a location, and reflect Tribal procurement rules.

53. The proposed action is authorized pursuant to sections 1 through 4, 201-202, 254, 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-202, 254, 303(r), and 403.

54. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

55. The Commission's actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, according to data from the Small Business Administration's (SBA) Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States, which translates to 33.2 million businesses.

56. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 or less to delineate its annual electronic filing requirements for small exempt organizations. Nationwide, for tax year 2020, there were approximately 447,689 small exempt organizations in the U.S. reporting revenues of $50,000 or less according to the registration and tax data for exempt organizations available from the IRS.

57. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2017 Census of Governments indicate there were 90,075 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number, there were 36,931 general purpose governments (county, municipal, and town or township) with populations of less than 50,000 and 12,040 special purpose governments—independent school districts with enrollment populations of less than 50,000. Accordingly, based on the 2017 U.S. Census of Governments data, the Commission estimates that at least 48,971 entities fall into the category of “small governmental jurisdictions.”

58. Small entities potentially affected by the rules herein include Schools, Libraries, Wired Telecommunications Carriers, All Other Telecommunications, Wireless Telecommunications Carriers (except Satellite), Wireless Telephony, Wired Broadband internet Access Service Providers (Wired ISPs), Wireless Broadband internet Access Service Providers (Wireless ISPs or WISPs), internet Service Providers (Non-Broadband), Vendors of Infrastructure Development or Network Buildout, Telephone Apparatus Manufacturing, and Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing.

59. The potential rule changes discussed in the FNPRM if adopted, could impose some new or modified reporting, recordkeeping or other compliance requirements on small entities. However, since the purpose of the FNPRM is to streamline and simplify procedures, and improve the E-Rate program processes, the Commission anticipates that the rule modifications that may result from the matters upon which the Commission is seeking comment should reduce the economic impact of current compliance obligations on small entities. For example, modifications to funding for BMIC services would allow applicants that are small entities to receive full funding for these services during the first year of the contract, instead of splitting funding across multiple years, reducing operational costs. Revising the list of eligible services to the same terms used on FCC Forms 470 or 471 could simplify the application process for new and small applicants. Exempting small libraries from the competitive bidding process when requested funding is less than $10,000 would ease compliance burdens for these small entities. The Commission also seeks comment on eliminating the need to file a form before beginning to invoice the program.

60. In the FNPRM the Commission inquires whether there are other rule changes to the application, invoicing, or other administrative processes in the E-Rate program that could be made to specifically help new and smaller schools and libraries. For example, creating an “EZ” application form in plain language and navigation prompts that alert for potential entry errors, as well as updating drop down menu options on FCC Form 470, may reduce operational and implementation costs for small applicants. Moving CIPA certifications to FCC Form 471 and removing USAC notification through FCC Form 486 would reduce reporting obligations for small entities. In response to comments to the FNPRM or this IRFA, the Commission may simplify and change the forms that applicants use to apply for the E-Rate program as well as modify filing and other administrative requirements, which should ease reporting, recordkeeping, and other compliance requirements for small entities.

61. In assessing the cost of compliance for small entities, at this time the Commission cannot quantify the cost of compliance with any of the potential rule changes that may be adopted. Additionally, the Commission is not in a position to determine whether, if adopted, the proposals and matters upon which the Commission seeks comment in the FNPRM will require small entities to hire professionals to comply. However, consistent with the Commission's objectives to streamline and simplify the E-Rate program processes and procedures, the Commission does not anticipate that small entities will be required to hire professionals to comply with any rule modifications it adopts. The Commission expects the information it receives in comments including where requested, cost information, will help the Commission identify and evaluate relevant compliance matters for small entities, including compliance costs and other burdens that may result from potential changes discussed in the FNPRM.

62. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

63. In the FNPRM, the Commission takes steps to minimize the economic impact on small entities from the changes to the E-Rate program on which it seeks comment. Specifically, each of the subjects on which the Commission seeks comment was identified by an E-Rate participant as a potential way to simplify the program in large or small ways and should lessen the economic impact on small entities. The Commission expects the comments received in response will allow us to consider ways to minimize the economic impact and explore alternatives to improve and simplify how small entities participate in the E-Rate program.

64. For example, in the FNPRM, the Commission explores ways to improve the process for applicants that have struggled with distinguishing how to apply for two different types of eligible software in the program, Internal Connections and BMIC, which is administratively more burdensome to request. If the applicant fails to file the competitive bidding forms for the right type of software, it can be denied funding even if the applicant otherwise applies correctly. If adopted some of the competitive bidding changes, such as exempting certain funding requests below $10,000, could result in less paperwork for small entities making low-cost purchases, and some of the form changes, such as creating the “EZ” application and adding plain-language to FCC Forms 470 and 471, while eliminating filing FCC Form 486, could reduce the number of forms that must be filed for all applicants, as well as reduce the number of applicants penalized for filing such forms past their deadline.

65. The Commission considered and seeks comment to the invoice deadline extension rule, beyond the single 120-day extension, in order to reduce the number of applicants and service providers that have invoices denied because they missed the deadline by a short period of time. All of these, and the other proposals on which the Commission seeks comment, would reduce costs for small entities.

66. None.

67. Accordingly, it is ordered , that pursuant to the authority contained in sections 1 through 4, 201-202, 254, 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-202, 254, 303(r), and 403, this Further Notice of Proposed Rulemaking IS ADOPTED effective September 8, 2023.

68. It is further ordered that the Office of the Secretary, Reference Information Center, SHALL SEND a copy of the Further Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Act Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed above, the Federal Communications Commission proposes to amend 47 CFR part 54 as follows:

This is a summary of the FCC's Public Notice, DA 23-656, released August 3, 2023. The full text of this document is available at the following internet address: https://www.fcc.gov/document/2023-incarcerated-peoples-communications-services-annual-reports-pn. The full text of the draft instructions, templates, and certification form discussed in the document are available at the following internet address: https://www.fcc.gov/proposed-2023-ipcs-annual-reports.

1. By this document, the Wireline Competition Bureau (WCB) and the Consumer and Governmental Affairs Bureau (collectively, the Bureaus) seek comment on proposed revisions to the instructions and templates for the Annual Reports and Annual Certifications that the Commission requires certain providers of incarcerated people's communications services (IPCS) to submit pursuant to the Commission's regulations in 47 CFR part 64. IPCS providers that are classified as inmate calling services (ICS) providers under the Commission's rules are required to make these filings to enable the Commission to monitor and track trends in the IPCS marketplace, increase provider transparency, and ensure compliance with the Commission's rules. In issuing this document, the Bureaus propose changes to reflect expanded reporting requirements regarding access to IPCS by persons with communication disabilities, including Telecommunications Relay Service (TRS) access, and the addition of video IPCS data necessary to help implement the Martha Wright-Reed Just and Reasonable Communications Act of 2022, Public Law 117-338, 136 Stat. 6156 (Martha Wright-Reed Act or Act).

2. In 2015, pursuant to delegated authority, WCB created standardized reporting templates (FCC Form 2301(a)) for the Annual Report and a related certification of accuracy (FCC Form 2301(b)), as well as instructions to guide providers through the reporting process. WCB amended the instructions, reporting templates, and certification form in 2020 in order to improve the type and quality of the information collected. In 2022, WCB again amended the instructions, reporting templates, and certification form to reflect significant reforms to the ICS rules adopted in the 2021 ICS Order, Rates for Interstate Inmate Calling Services, final rule, 86 FR 40682, July 28, 2021 ( 2021 ICS Order ) including lower interim rate caps for interstate ICS calls, new interim rate caps for international ICS calls, and a rate cap structure that requires ICS providers to differentiate between legally mandated and contractually required site commissions.

3. Subsequent developments now require additional changes to the instructions, reporting templates, and certification form. In the 2022 ICS Order, Rates for Interstate Inmate Calling Services, final rule, 87 FR 75496, December 9, 2022 ( 2022 ICS Order ), the Commission adopted requirements to improve access to communications services for incarcerated people with communication disabilities and expanded the scope of the Annual Reports to reflect those new requirements. Specifically, the Commission required ICS providers to list, at a minimum, for each facility served, the types of TRS that can be accessed from the facility and the number of completed calls and complaints for TTY-to-TTY calls, American Sign Language (ASL) point-to-point video calls, and each type of TRS for which access is provided. The Commission also eliminated the safe harbor, adopted in 2015, that had exempted providers from any TRS-related reporting requirements if they either (1) operated in a facility that allowed the offering of additional forms of TRS beyond those mandated by the Commission or (2) had not received any complaints related to TRS calls. The Commission found that the safe harbor was no longer appropriate given the expanded reporting requirement for additional forms of TRS, and the importance of transparency regarding the state of accessible communications in incarceration settings. The Commission delegated authority to the Bureaus to implement the expanded reporting obligations and to develop a reporting form that will most efficiently and effectively elicit the required information.

4. On January 5, 2023, the President signed into law the Martha Wright-Reed Act, which expanded the Commission's statutory authority over communications between incarcerated people and the non-incarcerated, including “any audio or video communications service used by inmates . . . regardless of technology used.” The new Act also amends section 2(b) of the Communications Act of 1934, as amended (the Communications Act), to make clear that the Commission's authority extends to intrastate as well as interstate and international communications services used by incarcerated people.

5. The Act directs the Commission to “promulgate any regulations necessary to implement” the Act, including its mandate that the Commission establish a “compensation plan” ensuring that all rates and charges for IPCS “are just and reasonable,” not earlier than 18 months and not later than 24 months after the Act's January 5, 2023 enactment date. The Act also requires the Commission to consider, as part of its implementation, the costs of “necessary” safety and security measures, as well as “differences in costs” based on facility size, or “other characteristics.” It also allows the Commission to “use industry-wide average costs of telephone service and advanced communications services and the average costs of service of a communications service provider” in determining just and reasonable rates.

6. Pursuant to the directive that the Commission implement the new Act and establish just and reasonable rates for IPCS services, the Commission released the 2023 IPCS Notice, Incarcerated People's Communications Services; Implementation of the Martha Wright-Reed Act; Rates for Interstate Inmate Calling Services, Notice of Proposed Rulemaking, 88 FR 20804, April 7, 2023 ( 2023 IPCS Notice ), seeking comment on how to interpret the Act's language to ensure that the Commission implements the statute in a manner that fulfills Congress's intent. Because the Commission is now required or allowed to consider certain types of costs, the Act contemplates that it would undertake an additional data collection. To ensure that it has the data necessary to meet its substantive and procedural responsibilities under the Act, the Commission adopted the 2023 IPCS Order, Incarcerated People's Communications Services; Implementation of the Martha Wright-Reed Act; Rates for Interstate Inmate Calling Services, Delegations of Authority; Reaffirmation and Modification, 88 FR 19001, March 30, 2023 ( 2023 IPCS Order ), delegating authority to WCB and the Office of Economics and Analytics (OEA) to modify the template and instructions for the most recent data collection to the extent appropriate to timely collect such information to cover the additional services and providers now subject to the Commission's authority. On July 26, 2023, WCB and OEA released an Order adopting instructions, a reporting template, and a certification form to implement the 2023 Mandatory Data Collection. 2023 Mandatory Data Collection for Incarcerated People's Communications Services, final order, 88 FR 51240, August 3, 2023.

7. In the 2023 IPCS Order, the Commission also reaffirmed and updated its prior delegation of authority to the Bureaus to revise the instructions and reporting templates for the Annual Reports. Specifically, the Commission delegated to the Bureaus authority to modify, supplement, and update the instructions and templates for the Annual Reports, as appropriate to supplement the information the Commission will receive in response to the 2023 Mandatory Data Collection.

8. In the next sections, the Bureaus seek comment on their proposed revisions to the Annual Report instructions, templates, and certification form, which are necessary to reflect the revised disability access rules adopted in the 2022 ICS Order and to help implement the Martha Wright-Reed Act to ensure just and reasonable rates for consumers and fair compensation for providers.

9. Pursuant to their delegated authority, the Bureaus propose to revise the Annual Report instructions, templates, and certification form to be consistent with the Commission's 2022 amendments to the annual reports rule and to include the additional services now subject to the Commission's authority under the Martha Wright-Reed Act. The Bureaus also propose minor improvements based on their experience reviewing prior Annual Reports, which has persuaded us that revised instructions would help providers better understand the requirements, making the submitted reports more useful to the Commission and consumers. As a general matter, the Bureaus propose to maintain the existing Excel-format template and Word-format template for the Annual Reports to better separate individual data items from narrative responses and seek comment on this proposal. The Bureaus also seek comment on these proposed revisions, generally, and on the specific structure, content, and format of the proposed templates and instructions attached hereto. The Bureaus likewise propose minor revisions to the certification form. Are there other general changes or additions the Bureaus should make to gather better or more accurate data or to make the instructions clearer? Is there additional information that the Bureaus should require providers to submit to enable the Commission to better monitor compliance and industry trends, or increase transparency to the public? Conversely, are there any proposed instructions, inquiries, or data fields that should be removed because they are unnecessary to ensure that providers report uniform and accurate data and other information?

10. As has been the case with prior Annual Reports, the reporting period is the calendar year immediately preceding the year during which the Annual Report is due. Thus, the reporting period for the next Annual Reports due on April 1, 2024 will be January 1, 2023 through December 31, 2023.

11. The Bureaus seek comment on whether the proposed instructions provide sufficient guidance to ensure that providers use uniform methodologies and report the required information in a consistent manner. Are there any additional changes that would help clarify the instructions, including the definitions, and increase uniformity across providers' responses? The Bureaus seek comment on all aspects of the proposed instructions, including any proposed revisions not explicitly addressed in this document.

12. General Categories of Information Requested. The proposed instructions, like those for prior reports, require providers to submit certain types of information related to their operations, IPCS rates, ancillary service charges, site commissions, and disability access. As a result of the Martha Wright-Reed Act, the proposed instructions would require providers to submit intrastate, interstate, and international information for both audio IPCS and video IPCS. Do the proposed instructions describe these categories of data in sufficient detail? Is there additional information that the Bureaus should require providers to submit in any of these categories to enable the Commission to better monitor compliance and industry trends, or increase transparency to the public? Are there any additional changes the Bureaus should make to the proposed instructions and templates to make them easier for providers to understand? The Bureaus seek comment generally on the benefits and burdens of their proposals, and whether additional changes to proposed or existing reporting categories are warranted.

13. Definitions. The proposed instructions contain new and revised definitions reflecting the Commission's expanded authority over IPCS. The Bureaus seek comment on these definitions. Are they sufficiently clear? If not, how should they be modified? Are there any undefined terms the Bureaus should define? Are there any terms that should be added to the proposed instructions that would help ensure that the Commission receives all relevant data? If so, what are they and how should they be defined? Should any proposed definitions be removed?

14. Facility and Contract Information. The proposed instructions include a reference to a new Excel template that moves detailed contract and facility information already collected on multiple worksheets throughout the Excel template to a single worksheet. Collecting this granular information on a single worksheet is intended to help ensure consistent facility and contract-level reporting, and eliminate the need to repeatedly enter such detailed information on other worksheets throughout the Excel template. This change is intended to reduce the amount of duplicative information required throughout the report and consequently reduce the burden on providers. The Bureaus seek comment on this proposal.

15. Audio and Video IPCS Rates. The proposed instructions and templates continue to require providers to submit intrastate, interstate, and international IPCS rates for audio services across a number of categories, including: (i) highest 15-minute rate; (ii) highest year-end 15-minute rate; and (iii) average per minute rate. For interstate and international rates, the Bureaus require providers to identify all rates charged in excess of the applicable rate caps. For international rates, the Bureaus clarify that reported termination charges should reflect the amount billed by the provider to the consumer for termination to each international destination. The Bureaus seek comment on whether these instructions are sufficiently clear.

16. To assist the Commission in determining just and reasonable rates for video IPCS, consistent with the Martha Wright-Reed Act, the Bureaus propose adopting a similar reporting approach for video IPCS. The Bureaus propose adding new worksheets that collect the same rate information for video IPCS as that collected for audio IPCS. The Bureaus do not request information on video IPCS rates that exceed a cap, since there is no rate cap for these services at this time. Is this proposed approach the best way to collect information on video IPCS rates? Are there additional rate categories for video IPCS that the Bureaus should consider? Conversely, are there categories for audio IPCS that should not be included for video IPCS? For example, the proposed worksheets for international video IPCS exclude charges to terminate communications to foreign countries because while these charges apply to audio services, they may not apply to video services. Do parties agree with this adjustment?

17. Because providers are already familiar with these reporting categories for audio IPCS, the Bureaus expect that using the same rate reporting approach for video IPCS will help minimize the burdens associated with reporting this additional information regarding their video services. The Bureaus seek comment on this assessment. Are there other changes the Bureaus should make to the proposed rate reporting structure that would minimize the burden on providers, without sacrificing any necessary information or transparency? The Bureaus also propose new questions seeking certain narrative information about the reported rates for video IPCS and seek comment on these proposed revisions.

18. The proposed worksheets for video IPCS rate information ask providers to submit information for 15-minute intervals. The Bureaus propose using a 15-minute interval because this is the rate interval used for collecting data on audio IPCS and using the same interval should allow for more meaningful rate comparisons. In addition, audio call lengths are often limited to around 15 minutes. Do parties agree with use of this session interval to evaluate video IPCS rates? If not, what interval should the Bureaus use instead? The proposed Excel template also seeks rate information for both domestic and international video calls. The Bureaus seek comment on the extent to which domestic video IPCS rates differ from international video IPCS rates. Do the Bureaus need separate worksheets for domestic video IPCS rates and international video IPCS rates? If the Bureaus decide to use separate worksheets and some providers have the same rates for domestic and international video IPCS, the Bureaus propose allowing providers that charge the same rates to opt out of filing a separate worksheet for international video IPCS. The Bureaus seek comment on this proposed approach.

19. Finally, the Word template contains questions seeking narrative information about provider operations, facilities, and services, including new questions regarding video IPCS. The Bureaus seek comment on these new questions. Is there additional information the Commission should seek that would help increase transparency and compliance without imposing unwarranted burdens on providers?

20. Ancillary Service Charges. The current instructions require providers to report a variety of information about any ancillary service charges they have assessed, and require a narrative explanation concerning any methodologies used to allocate these charges among facilities that are covered by a single contract, where applicable. The Bureaus propose adding a new worksheet that collects the same ancillary service charge information for video IPCS as that collected for audio IPCS. Do the Bureaus need separate worksheets for audio and video ancillary service charges or are these charges typically the same? If the Bureaus decide to use separate worksheets, the Bureaus propose allowing providers that charge identical ancillary service charges for audio and video IPCS to opt out of filing a separate worksheet for video services. The Bureaus seek comment on this approach. Is there any additional information the Bureaus should seek regarding ancillary service charges for audio or video IPCS?

21. Site Commissions. The current instructions require providers to report their average total monthly site commission payments on a facility-by-facility basis and to separate those payments between legally mandated and contractually prescribed site commission payments, consistent with the Commission's rules. The existing instructions also require providers to subdivide both types of payments between monetary and in-kind payments and, within those subdivisions, to report the portions of the payments that were either fixed or variable. The Bureaus propose adding a new worksheet that collects the same site commission payment information for video IPCS as that collected for audio IPCS. The Bureaus seek comment on this approach or whether a different approach should be considered. Is there any additional information the Bureaus should seek related to site commission payments made in connection with audio IPCS or video IPCS?

22. To the extent providers pay site commissions for both audio IPCS and video IPCS on a per-provider, per-facility, or per-contract basis, and those site commissions are fixed, the Bureaus propose requiring providers to allocate such site commission payments between audio IPCS and video IPCS based on their best estimate of the percentage of the total amount of their fixed site commissions attributable to each type of IPCS. The Bureaus also propose to direct providers to explain, document, and justify, in the Word template, any alternative methodology used to allocate fixed site commission payments between audio IPCS and video IPCS. Do commenters agree with this approach? Why or why not? Should the Bureaus require a different allocation methodology to help ensure more consistent reporting of fixed site commission payments that apply to multiple services? If so, what methodology should the Bureaus require and why?

23. Disability Access and Related Considerations. The proposed instructions modify providers' reporting obligations regarding the provision of TTY-based TRS and TTY-to-TTY calling for incarcerated people with hearing and speech disabilities, including any ancillary service charges that providers have assessed for or in connection with TTY-based calls. Providers would no longer be required to report the number of dropped calls for TTY-based TRS or TTY-to-TTY calls, but would still be required to report the number of calls and number of complaints related to TTY-based TRS and TTY-to-TTY calls. The Bureaus also propose updates to the instructions and the Excel template to reflect the 2022 reforms to the Commission's rules. Under the proposed changes to the “Disability Access” worksheet of the Excel template, providers would report, on a facility-by-facility basis, for each of the six kinds of TRS authorized by the Commission, (1) whether the service was available for use at the facility during the reporting period, (2) the number of calls made using the service, and (3) the number of complaints regarding the service. The same information would be collected for point-to-point video service and for TTY-to-TTY calling. The Bureaus seek comment on whether these proposed changes capture all of the information now required by the revised rules. If not, what additional changes should the Bureaus make?

24. Miscellaneous. The proposed Excel template includes minor changes designed to help reduce burdens and minimize provider error when completing the worksheets. For instance, the proposed template includes “drop-down” menus for data entry when there are only a few answer options. It also includes new cell formatting that restricts the data that can be entered ( e.g., numbers vs. text). For the worksheets that include rates paid for IPCS calls to international destinations, the Bureaus propose to require providers to enter their international destinations only once for each worksheet, instead of repeating this information multiple times on each worksheet. The Bureaus seek comment on these minor modifications. The Bureaus also seek comment on their proposed minor updates to the certification form ( e.g., inserting the word “Authorized” before “Officer”). Finally, the Bureaus ask for suggestions on additional modifications to the instructions, Excel and Word templates, and certification form that would make them clearer and easier to use.

25. Ex Parte Presentations. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in the prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with section 1.1206(b) of the Commission's rules. Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

26. Regulatory Flexibility Act. As required by the Regulatory Flexibility Act, the Commission has prepared a Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in the document. The Supplemental IRFA supplements the Commission's Regulatory Flexibility Analyses included in both the 2022 ICS Order, and in the 2023 IPCS Order and serves to further the process of implementing the revised disability access rules requirements adopted in the 2022 ICS Order and in the Martha Wright-Reed Act. The Supplemental IRFA is set forth in Appendix B. The Commission requests written public comments on the Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the deadlines for comments provided in this document. The Commission will send a copy of this document, including the Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, summaries of this document and the Supplemental IRFA will be published in the Federal Register .

27. Initial Paperwork Reduction Act Analysis. The document, and the attached instructions and templates, contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the OMB for review under section 3507(d) of the PRA. OMB, the general public, and other federal agencies are invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Bureaus note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198; see 44 U.S.C. 3506(4), the Bureaus seek comment on how the Commission will further reduce the information collection burden for small business concerns with fewer than 25 employees.

1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Wireline Competition Bureau (WCB) and the Consumer and Governmental Affairs Bureau (CGB) (collectively, the Bureaus) have prepared this Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in the document to supplement the Commission's Regulatory Flexibility Analyses contained in the Rates for Interstate Inmate Calling Services, Order and Notice of Proposed Rulemaking, and in the Incarcerated People's Communications Services; Implementation of the Martha Wright-Reed Act; Rates for Interstate Inmate Calling Services, Notice of Proposed Rulemaking and Order. The Bureaus request written public comment on this Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the deadlines for comments provided on the first page of the document.

2. In the document, the Bureaus seek comment regarding proposed revisions to the instructions, templates, and certification form for the Annual Reports submitted by providers of incarcerated people's communications services (IPCS). In issuing the document, the Bureaus act pursuant to the Commission's delegation of authority to the Bureaus to modify, supplement, and update the Annual Report instructions, templates, and certification form, as appropriate, to reflect revised rules adopted in the 2022 ICS Order and to provide additional information the Commission will need to implement the Martha Wright-Reed Just and Reasonable Communications Act of 2022 (Martha Wright-Reed Act or Act).

3. In the 2022 ICS Order, the Commission adopted requirements to improve access to communications services for incarcerated people with communication disabilities and expanded the scope of the Annual Reports to reflect these changes. Under the proposed, expanded reporting requirements, IPCS providers would be required to list, at a minimum, for each facility served, the types of TRS that can be accessed from the facility and the number of completed calls and complaints for TTY-to-TTY calls, American Sign Language (ASL) point-to-point video calls, and each type of TRS for which access is provided. The Commission also eliminated the safe harbor adopted in 2015 concerning the reporting requirement for TTY-based TRS calls. Additionally, the Commission delegated authority to the Bureaus to implement the expanded reporting obligations contained in the 2022 ICS Order and to develop a reporting form that will most efficiently and effectively elicit the required information.

4. On January 5, 2023, the President signed the Martha Wright-Reed Act into law, thereby expanding the Commission's statutory authority over communications between incarcerated people and the non-incarcerated to include “any audio or video communications service used by inmates . . . regardless of technology used.” The new Act also amends section 2(b) of the Communications Act of 1934, as amended (the Communications Act), to make clear that the Commission's authority extends to intrastate as well as interstate and international communications services used by incarcerated people. Further, the Martha Wright-Reed Act also directs the Commission to “promulgate any regulations necessary to implement” the Act, including its mandate that the Commission establish a “compensation plan” ensuring that all rates and charges for IPCS “are just and reasonable,” not earlier than 18 months and not later than 24 months after the Act's January 5, 2023 enactment.

5. In accordance with the Martha Wright-Reed Act's directive, the Commission released the 2023 IPCS Notice, which sought comment on how to best interpret the Act's language in order to ensure the Commission implemented the statute in a manner that fulfills Congress's intent. In the 2023 IPCS Order, the Commission reaffirmed and updated its prior delegation of authority to the Bureaus to revise the instructions and reporting template for the Annual Reports. Specifically, the Commission delegated authority to the Bureaus to modify, supplement, and update those instructions and templates as appropriate to supplement information WCB will be receiving in response to the 2023 Mandatory Data Collection.

6. Pursuant to their delegated authority, the Bureaus have proposed revisions to the instructions, templates, and certification form for the Annual Reports and are issuing the document to seek comment on all aspects of these proposed changes.

7. The proposed action is authorized pursuant to sections 1, 2, 4(i)-(j), 5(c), 201(b), 218, 220, 225, 255, 276, 403, and 716 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j), 155(c), 201(b), 218, 220, 225, 255, 276, 403, and 617, and the Martha Wright-Reed Act, Public Law 117-338, 136 Stat. 6156 (2022).

8. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed Annual Reports data collection. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. noted above,

9. As noted above, Regulatory Flexibility Analyses were incorporated in the 2022 ICS Order and the 2023 IPCS Notice. In those analyses, the Commission described in detail the small entities that might be affected. In this Supplemental IRFA, the Bureaus hereby incorporate by reference the descriptions and estimates of the number of small entities from the previous Regulatory Flexibility Analyses in the 2022 ICS Order and 2023 IPCS Notice.

10. The document seeks comment on the specifics of the proposed revisions to the instructions, templates, and certification form to ensure the Commission receives the data it needs for the Annual Reports. The proposed data collection would require certain providers that are classified as inmate calling services providers under the Commission's rules to submit, among other things, data and other information on providers' operations, IPCS rates, ancillary services, site commissions, and disability access. The proposed data collection may subject small and other providers to modified or new reporting or other compliance obligations. In addition, the Bureaus recognize that their actions in this proceeding may affect the reporting, recordkeeping, and other compliance requirements for several groups of small entities. At this time, the Bureaus do not have sufficient information to determine whether the proposed revisions to the Annual Reports data collection will require small entities to hire attorneys, engineers, or other professionals to comply with the new rules. The Bureaus, however, anticipate the information they receive in the comments will help the Commission identify and evaluate relevant compliance matters for small entities, including compliance costs and other burdens that may result from the proposals and inquiries the Bureaus make in the document.

11. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rules for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.” The Bureaus will consider these factors after reviewing any substantive comment the Bureaus have received from the public and potentially affected small entities.

12. In the document, the Bureaus have taken steps to minimize the economic impact on small entities and consider alternatives through its proposals that include considering different ways to revise the Annual Reports instructions, templates, and certification form without causing significant economic impact to small entities. For example, the Bureaus propose reporting and certification requirements that are similar to those used in prior Annual Reports data collections. In addition, the standardized templates and instructions simplify compliance with, and reduce the burden of, the information requirements related to submission of the Annual Reports. Further, the Bureaus have taken steps to ensure the instructions, annual reporting templates, and certification form are competitively neutral and are not unduly burdensome for all providers. Finally, the document proposes to allow providers that charge the same rates for domestic and international video IPCS to opt out of filing a separate spreadsheet for international video IPCS, thus reducing the regulatory burden to providers. The Bureaus will also consider any significant economic impact to small entities that may be raised in comments filed in response to the document and Supplemental IRFA.

13. None.

DoD, GSA, and NASA are proposing to revise the FAR to implement section 874 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020 (Pub. L. 116-92) which, for task orders or delivery orders exceeding the simplified acquisition threshold (SAT) but not greater than $6 million, requires contracting officers to provide, upon written request from an unsuccessful offeror, a brief explanation as to why the offeror was unsuccessful, including the rationale for award and an evaluation of the significant weak or deficient factors in the offeror's offer.

Section 874 of the NDAA uses the term “unsuccessful offeror.” FAR 16.505 uses the term “unsuccessful awardee”. Both terms are synonymous; referring to an entity who has been awarded a basic contract but has been unsuccessful for the award of an order competed under the basic contract. Since the term “unsuccessful awardee” is already used and understood by the acquisition community, the term will be used to implement the requirement.

FAR 16.505(b)(6) requires contracting officers to notify unsuccessful awardees when the total price of a task order or delivery order exceeds $6 million. If the $6 million threshold is met, contracting officers are directed to the procedures at FAR 15.503(b)(1) and FAR 15.506 when providing a postaward notification or postaward debriefing, respectively.

The FAR threshold at 16.505 is currently $6 million as a result of two inflation adjustments in accordance with FAR 1.109. FAR Case 2014-022 published on July 2, 2015, at 80 FR 38293 and 2019-013 published on October 2, 2020, at 85 FR 62485 each raised the threshold by $500,000 from the $5 million reflected at 41 U.S.C. 4106(d).

The proposed rule implements the requirement for contracting officers to, upon written request from an unsuccessful awardee, provide a brief explanation as to why the awardee was unsuccessful for a task order or delivery order exceeding the SAT but not exceeding $6 million. While the statutory threshold is $5.5 million, this rule is imposing these debriefing requirements at the higher $6 million threshold to align with the current threshold at FAR 16.505(b)(6). This avoids a gap between $5.5 million and $6 million. This new debriefing requirement for orders above the SAT and below $6 million does not provide a debriefing at the level of detail currently afforded to unsuccessful awardees over $6 million, however, this information is expected to benefit entities by improving future offers. While not expressly required by the statute, the proposed rule adds a postaward notification requirement for the applicable task orders and delivery orders to ensure unsuccessful awardees are provided an opportunity to obtain the debriefing information in a timely manner.

This rule does not create any new provisions or clauses, nor does it change the applicability of any existing provisions or clauses included in solicitations and contracts valued at or below the SAT, for commercial products, including COTS items, or for commercial services.

This proposed rule is expected to increase the availability of debriefing information to significantly more small and large entities participating in fair opportunity competitions than is currently required by the FAR. When requested by an unsuccessful awardee, the information provided is expected to enable these entities to improve future offers.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not anticipated to be a major rule under 5 U.S.C. 804.

DoD, GSA, and NASA do not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612, because the rule provides postaward information to unsuccessful awardees, if requested. However, an Initial Regulatory Flexibility Analysis (IRFA) has been performed and is summarized as follows:

The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2020-005), in correspondence.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Therefore, DoD, GSA, and NASA propose amending 48 CFR part 16 as set forth below: