Provisions of the Fair Chance Act were incorporated into the National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 116-92), which was signed into law by the President on December 20, 2019. The Fair Chance Act places limitations on agency requests for criminal history record information prior to a conditional offer of employment. It also requires a complaint process by which applicants for appointment to a position in the civil service may submit a complaint, or any other information, relating to compliance with the requirements of the Fair Chance Act. Furthermore, the Fair Chance Act establishes requirements and procedures regarding penalties for violations. Because of these statutory requirements, OPM issued proposed regulations published at 87 FR 24885, April 27, 2022, pertaining to when, during the hiring process, a hiring agency can request information typically collected during a background investigation from an applicant for Federal employment.

On December 1, 2016, OPM issued a final rule at 81 FR 86555 that revised its regulations pertaining to when, during the hiring process, a hiring agency can request information typically collected during a background investigation from an applicant for Federal employment. The changes were to promote compliance with Merit System Principles as well as the goal of the Federal Interagency Reentry Council and the Presidential Memorandum of January 31, 2014, “Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own,” otherwise known as “Ban the Box” rules. As noted by OPM when it first promulgated the rule, the intent of the rule was to conform regulatory requirements to what OPM believed was already the predominant agency practice, as many agencies already employed the practice of waiting until the later stages of the hiring process to collect criminal history information.

Current OPM regulations at 5 CFR parts 330 and 731 prevent agencies, unless an exception is granted by OPM, from making inquiries into an applicant's criminal or credit history of the sort asked on OPM Optional Form (OF) 306, titled Declaration for Federal Employment, in the `Background Information' section or other forms used to conduct suitability investigations for Federal employment unless the hiring agency has made a conditional offer of employment to the applicant. The Fair Chance Act contains the same prohibition with respect to criminal history and does not address credit history. The Fair Chance Act has elaborated on the methods of inquiry not permitted and provides for certain exceptions to the rule. Furthermore, the Fair Chance Act requires OPM, when making additional exceptions, to give due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions.

The OF 306 is used to assist OPM and Federal agencies in determining a person's suitability for employment as well as to provide other information that is required of applicants. Applicants must answer the questions on the form before they can be appointed or converted to a new appointment in the competitive, excepted, or Senior Executive Service. For most of the information on the OF 306, agencies may determine the timing of the collection of the OF 306 in the application and hiring process; however, unless permitted by law, they may not ask applicants to answer the questions on the form that address criminal history information until a conditional offer of employment has been extended. Further, unless they have been granted an exception by OPM, agencies may not ask individuals to complete the question that relates to credit history. Most applicants are likely to be asked to complete the form after a conditional offer of employment has been made. OPM's authority to direct Federal agencies to use the OF 306 is found in 5 U.S.C. 1302, 3301, 3304, 3328, 7301, and 8716; 5 CFR part 731; and E.O. 10577 and E.O. 13467, as amended. The OF 306 is one aspect of vetting that can be collected, in accordance with the provisions outlined in this rule, and used to begin to assess suitability in advance of the initiation of a required background investigation.

OPM is issuing these provisions under section 1122(b)(1) of the Fair Chance Act, under which the Director of OPM “shall issue such regulations as are necessary to carry out chapter 92 of title 5, United States Code (as implemented by this subtitle).” OPM is also issuing these provisions to implement the requirements of 5 U.S.C. 9202(c)(2), as added by the Fair Chance Act, which requires the OPM Director to issue regulations identifying positions with respect to which the prohibition shall not apply giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions, beyond those already identified in the statute.

Unless otherwise required by law, an employee of an agency may not request, in oral or written form (including through the Declaration for Federal Employment (OF 306) or any similar successor form, the USAJOBS internet website, or any other electronic means) that an applicant for an appointment to a position in the civil service disclose criminal history record information regarding the applicant before the appointing authority extends a conditional offer to the applicant. Under the provisions of the Fair Chance Act, this prohibition does not apply under the following circumstances:

• Determinations of eligibility described under clause (i), (ii) or (iii) of 5 U.S.C. 9101(b)(1)(A) i.e., for (i) access to classified information; (ii) assignment to or retention in sensitive national security duties or positions; or (iii) acceptance or retention in the armed forces; or

• Recruitment of a Federal law enforcement officer (defined in 18 U.S.C. 115(c)).

The Fair Chance Act applies to all appointments in the Executive branch; i.e., to appointments in the competitive service, the excepted service, and the Senior Executive Service (SES). Therefore, OPM is (1) revising the provisions in 5 CFR part 330, subpart M, which currently implements the Ban the Box rules for the competitive service, by removing the reference to criminal history so that the Fair Chance Act can be implemented for all types of appointments in a newly created part 920; (2) preserving the existing Ban the Box rules restricting pre-employment credit inquiries for appointments in the competitive service; and (3) amending part 731 to incorporate the exceptions to this provision as established by law and to refer agencies to the newly created part 920 for guidance on other types of positions for which the prohibition under the Fair Chance Act for collecting criminal history information will not apply. For the convenience of the reader, we are placing these provisions in the newly created part 920 rather than repeat the provisions in parts 302, Employment in the Excepted Service; 317, Employment in the Senior Executive Service; 319, Employment in the Senior-Level and Scientific and Professional Positions; 330, Recruitment Selection, and Placement (General); and 731, Suitability. OPM also amends parts 302, 317, and 319 to include a reference as a reminder that these types of positions are subject to the provisions of the Fair Chance Act found in chapter 92 of title 5, U.S.C., and 5 CFR part 920.

This final rule will continue to permit agencies to make an objection, pass-over request, or suitability determination on the basis of criminal or credit history record information only after the applicant's qualifications for the position being filled have been fairly assessed and the hiring agency has made a conditional offer of employment to the applicant. Exceptions previously granted to agencies by OPM pursuant to 5 CFR part 330 subpart M ( i.e., the Ban the Box provisions) continue to be valid.

Under section 9203, the Fair Chance Act requires the Director of OPM to establish and publish procedures under which an applicant for an appointment to a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee with 5 U.S.C. 9202. Under the provisions of section 9204, the Fair Chance Act further establishes minimum requirements regarding penalties for violations of the Fair Chance Act and provides that such penalties may be entered only after notice to the Federal employee accused and an opportunity for a hearing on the record (thereby, indirectly, establishing minimum procedural requirements before an adverse determination can be made). Finally, the Fair Chance Act requires the Director of OPM, by rule, to establish procedures providing for an appeal from any adverse action taken under section 9204 by no later than 30 days after the date of the action. The Fair Chance Act further notes in section 9205 that an adverse action taken under the Fair Chance Act shall not be subject to the procedures under chapter 75 of title 5 or, except as provided for in the appeal process established under the Fair Chance Act, be subject to appeal or judicial review. Therefore, OPM is issuing final regulations governing complaint procedures under which an applicant for a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency with section 9202 of title 5, and adverse action and appeal procedures for alleged violations of section 9202 of title 5.

In response to the proposed rule, OPM received 20 comments during the 60-day public comment period from individuals (including Federal employees), organizations, and Federal agencies. At the conclusion of the public comment period, OPM reviewed and analyzed the comments. In general, the comments ranged from categorical rejection of the proposed regulations to strong support. OPM reviewed and carefully considered all comments and arguments made in support of and in opposition to the proposed changes. The comments are summarized below, together with a discussion of the suggestions for revision that were considered and either adopted, adopted in part, or declined, and the rationale therefor. Finally, comments beyond the scope of the proposed changes or which were vague or incomplete are not addressed below.

In the first section below, we address general or overarching comments. In the sections that follow, we address comments related to specific portions of the regulations.

Some commenters offered support for the Fair Chance Act because it provides individuals who have been incarcerated an opportunity to be considered for employment based upon their skills and experience rather than what may be irrelevant, inaccurate, or stale criminal history records. One commenter shared their perspective that wrongful convictions happen often, and individuals who did commit the crime have time to reflect and change for the better. This commenter opined that the requirements of the Act should be enough for them to get another chance at life and redeem themselves. Similarly, another commenter shared their perspective that a lot of people are incarcerated for unfair reasons, and they and others who perhaps did commit the crime deserve a second chance.

OPM agrees that the Fair Chance Act advances important goals in that it places limitations on actions Federal agencies may take in the hiring process that would be detrimental for individuals who have been incarcerated. OPM's implementing regulations allow job applicants to present their qualifications and abilities for assessment and to be considered solely based on their merits without the specter of a criminal record during the selection process. Consistent with the statute, the regulations provide the opportunity for a qualified applicant with a criminal history record to advance in the hiring process in the same manner as a qualified applicant without a criminal history record.

Several organizations commended OPM for taking steps to implement strong regulations. These organizations stated their support for “the adoption of final regulations that provide additional clarity to both hiring agencies and the public, allow for effective enforcement of the new law, and reinforce the clear language and intent of the Fair Chance Act.” In addition, the organizations expressed gratitude for OPM's commitment to effectively implementing the Fair Chance Act. These organizations also requested that OPM incorporate additional protections and clarifications into the final rule. OPM notes that several public comments resulted in additional clarifications and changes in this final rule. These changes are addressed below in their respective areas of the Supplementary Information section of this preamble. OPM will address other comments in guidance that it will be issuing to assist agencies with implementing the requirements of this rule.

As for more general comments, one commenter stated that the proposed rule ensures “criminals gain employment.” This commenter characterized the rule as a political tactic and questioned how the proposed rule would help the government other than add union employees. Also, the commenter shared their observation of numerous employees leaving the government to seek a “higher professional working atmosphere.”

These final implementing regulations resulted from a bipartisan law that enjoyed Congressional support across two Administrations. The scope of OPM's regulations is determined by the contours of the law Congress drafted and directed OPM to implement. As such, OPM will not make any revisions to the rule based on this comment. This regulation prohibits Federal agencies and Federal contractors acting on their behalf from requesting that an applicant for Federal employment disclose criminal history record information before the agency makes a conditional offer of employment to that applicant. This final rule does not eliminate the requirement of agencies performing their due diligence in examining an applicant's criminal history or other relevant background information once a conditional offer of employment has been extended. Further, this regulation improves the government by supporting the Administration's initiative on diversity, equity, inclusion, and accessibility (DEIA), further positioning the Federal government as a model employer, and providing opportunities for talented, skilled individuals—both with and without a criminal history record—to put their talents to use to advance the mission of the Federal Government.

OPM disagrees that this rule will diminish professionalism in the Federal workforce. As stated in the regulatory impact analysis of this rule, studies show that employment is the single most important factor in reducing recidivism; people with criminal history records are no more likely to be fired for misconduct than people without records; and they are statistically less likely to quit, which saves employers in turnover costs. Therefore, the regulations benefit not only the Federal government as an employer but also American society as a whole and at the family and community levels.

Two individuals suggested changes based on the type of offense committed. One commenter, who generally supported the rule, stated that the rule may be too broad in removing access to criminal history. The individual suggested that people who have been convicted of sexual or violent offenses still be screened, but people whose records do not reflect a threat to safety have that barrier removed. Another commenter asked OPM to create an exception to the proposed rule for sexual offenders, specifically, suggesting that this exception would permit agencies to eliminate applicants who are sexual offenders from the hiring process before determining whether they qualify for a position.

OPM cannot adopt these suggestions because they are contrary to the text of the Fair Chance Act. The Fair Chance Act makes it unlawful, with few exceptions, to request criminal history from an applicant before the agency makes a conditional offer of employment to that applicant. As discussed, OPM's implementing regulations allow job applicants to present their qualifications and abilities for assessment and be considered based on their merits without the specter of a criminal history record during the selection process. The regulations provide the opportunity for qualified applicants with criminal history records to advance in the hiring process just as a qualified applicant without a criminal history record would advance. Moreover, in most cases, the separate personnel vetting determination can and should occur after the selection process and a conditional offer of employment has been made, thereby separating criminal history as an aspect of the vetting process from factors that are relevant at the time of the initial hiring assessment.

Two agencies commented that they already make offers of conditional employment before requesting criminal history, so this rule will have no negative impact to their policies and procedures.

Below we summarize the public comments that are most appropriately addressed by reference to the specific portion of the regulations to which the comments applied.

This final rule adds § 302.107 to subpart A to incorporate the requirements of the Fair Chance Act. This section addresses when inquiries into an applicant's criminal history may be made and circumstances under which exceptions may be requested and considered by OPM.

OPM received no comments on this section.

This final rule adds § 317.202 to subpart B to incorporate the requirements of the Fair Chance Act. Section 317.202 addresses when inquiries into an applicant's criminal history may be made and circumstances under which exceptions may be requested and considered by OPM.

OPM received no comments on this section.

This final rule adds § 319.106 to subpart A to incorporate the requirements of the Fair Chance Act. Section 319.106 addresses when inquiries into an applicant's criminal history may be made and circumstances under which exceptions may be requested and considered by OPM.

OPM received no comments on this section.

The Fair Chance Act does not specifically address the timing of suitability inquiries into a job applicant's credit history. The Presidential Memorandum on Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own of January 31, 2014, however, addresses credit history and is still in effect. Consistent with existing law and the Presidential Memorandum, OPM's revision of § 330.1300 retains its prohibition on making inquiries into a job applicant's credit history and removes any reference to criminal history. The prohibition on using criminal history is addressed in part 920.

OPM received no comments on this section.

The Fair Chance Act does not specifically address the timing of suitability inquiries into a job applicant's credit history. The Presidential Memorandum on Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own of January 31, 2014, however, addresses credit history, and is still in effect. In accordance with this Memorandum, applicants should not face undue obstacles to Federal employment because they are unemployed or face financial difficulties through no fault of their own. Agencies must take steps to ensure fair treatment of all applicants, as well as Federal employees, throughout the recruiting and hiring process. One of the ways that Federal agencies can ensure fair treatment for applicants who have experienced periods of unemployment and/or financial difficulty is to avoid unnecessary screening mechanisms, especially at early stages of the hiring process, before a candidate's qualifications have been fully assessed. Consistent with existing policy and the Presidential Memorandum, OPM's revision of § 731.103(d)(1) retains the prohibition on making inquiries into a job applicant's credit history and updates the reference to the prohibition relating to criminal history to align with the new part 920, which reflects the requirements of the Fair Chance Act. Both reduce the opportunity for information to be misused at the preliminary screening stage.

Several organizations addressed the proposed changes to this part in conjunction with changes to part 920. The comments that address the content of both parts are summarized below. Several organizations commented that language in § 731.103(d)(1) is less clear than in § 920.102(b) with regard to positions that are exempt because the hiring agency is required by statute to make inquiries into an applicant's criminal history prior to making a conditional offer. The organizations raised concerns that the language may be misconstrued as allowing exemptions any time consideration of criminal history is required by law, even if the timing is not mandated by law. OPM agrees and will make a change for clarity, by striking the portion of the sentence reading “Except as required by law.”

An organization expressed support for OPM's proposed new part 754, which the organization stated “creates a compliance mechanism for aggrieved applicants affected by `Ban the Box' violations and disciplinary mechanisms for employees who continue to unlawfully require pre-offer of disclosure of criminal or credit history in violation of the Fair Chance Act.”

The Fair Chance Act directs OPM to establish and publish procedures under which an applicant for an appointment to a position in the civil service may submit a complaint, or any other information, regarding compliance with 5 U.S.C. 9202. Based on these unique requirements, OPM adds a new 5 CFR part 754 to implement the complaint procedure requirements of the Fair Chance Act. The rule appears in subpart A of 5 CFR part 754 as “Complaint Procedures.” This final rule provides the regulatory framework for the complaint process for job applicants to allege violations of the nature described in the Fair Chance Act. This regulatory scheme is significant because job applicants do not have the ability to use any existing statutory or regulatory complaint procedures that may be available for other employment-related complaints, such as those of the U.S. Office of Special Counsel, which investigates prohibited personnel practices.

Subpart A establishes procedures under which an applicant for an appointment to a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency with section 9202, as required by section 1122(b)(1) of the Fair Chance Act.

This final rule describes who may use the agency complaint procedures and the actions covered and provides key terms that track the definitions in part 920.

OPM received no comments on this section.

This section establishes the complaint process to be utilized for actions taken under this part. The process includes respective roles for OPM and Federal government agencies.

Several organizations observed that OPM's proposed regulations include key protections and clarifications, which the organizations urged OPM to retain in the final rule, including the complaint and investigation process as required by the Fair Chance Act. In addition to the strengths they recognized in the proposed regulations, the organizations urged OPM to incorporate additional protections and clarifications into the final rule, including ensuring the complaint processes implemented by hiring agencies are fair and transparent. These organizations expounded that, in addition to individual agency processes for receiving complaints, OPM should clarify some of the elements of the complaint process as well as enhance protections as reflected immediately below.

Regarding § 754.102(a), some organizations recommended that OPM develop a centralized means for receiving complaints and forwarding them to the appropriate agency for an agency investigation. Organizations expressed concern that, while the rule requires each hiring agency to establish and publicize systems for receiving complaints from applicants regarding violations of the Fair Chance Act, some job applicants will likely remain confused as to whom to submit such a complaint or may feel more comfortable submitting a complaint directly to OPM instead of to the hiring agency that likely just rejected them for a job based on their criminal history record. These organizations posited that, even if OPM does not implement a centralized means for receiving Fair Chance Act complaints, the regulations should provide that any complaint related to a violation of the Fair Chance Act that is submitted directly to OPM shall be forwarded to the appropriate agency for investigation and will be considered timely if it was submitted to OPM within the time period described in the regulations.

OPM is confident that agencies will develop complaint processes that are fair and transparent, making centralized complaint intake unnecessary. Notably, the rule requires that agencies include information about the complaint process in their job announcements. This public notice aids in accomplishing complaint process transparency. Therefore, OPM will decline to adopt the organizations' recommendations to establish a centralized compliant process. As stated in the proposed rule, OPM believes there is ample precedent for agencies to establish internal procedures for receipt and investigation of employment-related complaints against the agency and to accomplish these tasks in a fair and impartial manner. Moreover, adding a procedural layer that involves OPM receiving a complaint and forwarding it to the appropriate agency adds time to the process that may delay resolution of the matter which would disserve applicants. Additionally, OPM does not have the resources necessary to effectively administer a new government-wide complaint process, and we have concluded that it is more efficient and cost-effective for agencies to leverage their existing resources. That said, to the extent OPM receives a complaint, OPM will promptly forward it to the appropriate agency.

As stated in the proposed rule, direct submission of complaints to agencies is a long-standing process with which the public is familiar. For example, currently, applicants submit Federal sector equal employment opportunity (EEO) complaints to agencies rather than to the Equal Employment Opportunity Commission (EEOC). Thus, if OPM were to change this long-standing process as the commenter seeks, it may create—not prevent—confusion.

To ensure applicants are informed, OPM encourages agencies to widely publicize information about the Fair Chance Act complaint process to job applicants, and, as stated above, agencies' job announcements must include information about the complaint process. OPM also notes that one safeguard the rule affords is that applicants have an opportunity to submit a complaint or any other information after 30 days if the applicant's rights to do so were not properly publicized. In addition, the agency must conduct outreach to inform an applicant of the procedure for submitting a complaint when it has reasonable cause to believe that the applicant is attempting to file a complaint. The employing agency has the ability to extend the 30-day time limit when an applicant shows that the applicant was not notified of the time limits and was not otherwise aware of them, that the applicant did not know and reasonably should not have known that the non-compliance with section 9202 and part 920 occurred, to consider a reasonable accommodation of a disability, or for other proper and adequate reasons considered by the agency. The agency must apply the regulatory provisions to determine if a complaint forwarded by OPM was timely filed, or if there is proper and adequate basis for an extension.

Additionally, with respect to § 754.102(a), an organization recommended that OPM consider “whether a more robust set of standards is needed to ensure that agencies will not brush aside complaints.” The organization stated that allowing complainants the option of submitting complaints directly to OPM in lieu of to the agency (as an alternative to concurrent and centralized intake as discussed above) offers a method whereby effective standard-setting and robust enforcement could be better ensured.

OPM will not make any revisions based on this comment. For the same reasons that OPM will not adopt concurrent or centralized complaint intake, OPM will not accept the recommendation to allow applicants to submit complaints directly to OPM. Agencies routinely receive and investigate allegations of wrongdoing against agency employees, including complex and sensitive matters such as off-duty misconduct, on-duty drug or alcohol use, and workplace harassment. An alleged violation of section 9202 of the Fair Chance Act and part 920 is well within the range of misconduct that agencies can handle in a fair and impartial manner.

Although we did not receive a comment in regard to § 754.102(a)(3), this rule corrects a cross reference in the regulatory text. The corrected reference now states “paragraph (a)(2) of this section” instead of “paragraph (b) of this section”.

In discussing the agency investigation process as outlined in § 754.102(b), an organization discussed that § 754.102 delegates to the employing agencies the task of ensuring compliance with the Fair Chance Act by having the agencies receive and investigate complaints made against them. The organization noted that the rule places a restriction that the same official cannot be both the executing-advising officer for the recruitment and the investigator. The organization stated, “. . . that is surely part of the minimum that should be expected of any investigatory process but likely does not go far enough in ensuring an impartial process.”

OPM disagrees with the organization's assertion that the investigatory process as outlined in § 754.102(b) is insufficient to achieve an impartial process. OPM believes there is abundant precedent, such as appeals of agency classification decisions and agency programs related to eliminating discriminatory practices and policies, for agencies to establish internal procedures for receipt and investigation of employment-related complaints in a fair and impartial manner. An agency must follow its investigatory procedures and gather all relevant information about an alleged violation of 5 U.S.C. 9202 and 5 CFR part 920. The investigation will be the foundation for an assessment of what misconduct, if any, occurred and any individual(s) responsible. Upon receipt of the agency's administrative report, OPM will consider the specific facts and circumstances on a case-by-case basis to determine whether to proceed. OPM believes that with appropriate OPM guidance and oversight, agencies can effectively investigate violations of Fair Chance Act requirements.

In further discussion of the agency investigation, an organization recommended that OPM should allow complainants to make submissions to OPM that would supplement, correct, or rebut the factual record that the agency's investigative process yielded pursuant to the agency's administrative report under § 754.102(b)(5). The organization recommended also that a complainant be allowed to make submissions of facts directly to OPM either in parallel to the agency's required report or within a reasonable time after being notified of the report's contents, before OPM adjudication takes place.

OPM will not make any revisions based on this comment. Part 754 lays out a straightforward administrative process with a framework for complaint intake and investigation that provides clear parameters and, where appropriate, agency discretion. Along with the complaint itself, an applicant may submit any other information the applicant deems necessary to ensure a complete factual record before OPM's adjudication takes place. The agency's administrative report to OPM should include “a complete copy of all information gathered during the investigation.” If OPM needs additional information from an applicant or agency employee for the purpose of adjudicating the complaint, OPM may make a request to the agency. For these reasons, it is unnecessary to create a mechanism for applicants to make submissions directly to OPM.

Some organizations recommended with respect to § 754.102(b) that OPM “ensure sufficient time for a complainant to respond to a hiring agency's request for information.” These organizations also urged OPM to put mechanisms in place that “ensure that agencies do not use a complainant's failure to quickly respond to a request for additional information as an excuse for abandoning an investigation.” The organizations continued that, in some cases, additional information beyond the initial complaint may not truly be needed from the complainant, and the investigation should therefore not be suspended even if the complainant fails to respond.

In response to these comments, and as discussed in greater detail below, we have added regulatory text to provide an objective timeframe of 10 days for applicants to respond to a request for additional information, yet we also indicate that the agency may extend this timeframe if the agency deems that extenuating circumstances warrant extension. Further, OPM would discourage agencies from using a complainant's failure to respond or failure to “quickly respond” to a request for additional information as the sole reason for abandoning an investigation. Instead, agency investigators should determine whether they can otherwise develop a record that allows a reasonable fact finder to draw conclusions as to whether non-compliance with section 9202 and part 920 occurred.

Furthermore, the organizations stated that the regulations must require hiring agencies to provide complainants with a reasonable amount of time to respond to any such requests for information. The commenters asserted that it is not a complainant's job to follow up on the complaint, and in fact, complainants will likely have been denied a job opportunity by the agency and may be employed elsewhere, still in search of employment while the investigation proceeds, or living under stresses related to unemployment, which could impact their ability to respond quickly. One of the organizations, speaking on behalf of itself and several collaborating organizations, opined that OPM's rule appropriately includes a time limit for an agency to complete its investigation so that investigations do not drag on indefinitely.

For these reasons, the organizations recommended that complainants receive 30 days to respond to such requests. They further suggested that OPM may wish to also provide in the regulations that an agency may receive additional time to complete the investigation beyond the 60-day investigative period if the complainant takes unusually long to respond.

OPM agrees with this recommendation to specify a reasonable amount of time for an applicant to respond to any such request for information during the investigation, which is consistent with OPM's establishment of a time limit for the investigation. Under ordinary circumstances, OPM believes a period of 10 calendar days from the date of the request is reasonable and balances the need for timely conclusion of the investigation. This brief but sufficient response period of 10 calendar days does not require additional time beyond the 60-day investigative period. However, as stated above, the agency may extend the applicant's response period for extenuating circumstances. In addition, an agency may extend the investigation period if the agency provides more than 10 calendar days for the applicant to respond to an agency's request for information.

An organization expressed concern that § 754.102(b)(2) delegates to agencies the discretion to determine the appropriate fact-finding methods for investigating the complaint, “subject only to the oversight and future issuances described respectively in proposed sections 754.102(d)(1) and (d)(3)” and recommended that OPM consider if more rigorous standards are needed.

OPM will not make any changes based on this comment. To reiterate, OPM believes there is abundant precedent, such as appeals of agency classification decisions and agency programs related to eliminating discriminatory practices and policies, for agencies to establish internal procedures for investigation of employment-related complaints in a fair and impartial manner. OPM believes that with appropriate OPM guidance and oversight, agencies can effectively investigate violations of Fair Chance Act requirements.

In further response to comments that expressed support for additional clarity for hiring agencies and a final rule that is effective and efficient, § 754.102(b)(5) will also permit the agency to send its administrative report to OPM via electronic mail at employeeaccountability@opm.gov as an alternative to postal delivery as proposed.

Regarding § 754.102(c), some organizations recommended that OPM require that the hiring agency and/or OPM inform the complainant of the results of an investigation and the ultimate findings. One of the organizations, speaking on behalf of itself and several collaborating organizations, noted that in § 754.102(c)(2), “the subject of the complaint” appears to refer to the agency employee who allegedly inquired about an applicant's criminal history record before a conditional offer. The organizations asserted that the regulations are silent on when, how, and by whom the complainant will be notified of the result of OPM's adjudication, and a complainant is another interested party who should be timely informed of the outcome. The organizations urged OPM to supplement § 754.102(c)(2) to specify that OPM will simultaneously notify the complainant in writing of its findings and decision.

OPM will not revise § 754.102(c) based on this comment. It is correct that the subject of the complaint is the agency employee who allegedly violated section 9202 of the Fair Chance Act and part 920 of this regulation. OPM plans to issue guidance to assist with implementation of this rule. An agency may only share information from the records concerning an individual's Fair Chance Act complaint pursuant to the Privacy Act and the applicable system of records notice, for example, with those who have a need to know, such as human resources staff involved in advising management and any management official responsible for approving the action, or others to whom disclosure is permitted pursuant to a routine use. As an interested party, an applicant has the option of submitting a Freedom of Information Act request to obtain any releasable information about the investigation and outcome.

OPM is revising the wording of § 754.102(c) to clarify that OPM will notify the agency and the subject(s) of the complaint regarding OPM's assessment that a violation may have occurred such that OPM is initiating the subpart B adverse action proceedings.

This section describes the requirements for an applicant's representative.

An agency asked if it is OPM's intent that an applicant under the definition be considered part of the bargaining unit if the position is a covered position. It is not OPM's intent that an applicant, who is not already employed by the agency in a bargaining unit position, as defined in newly created part 920, be considered part of the bargaining unit solely because the position for which the individual applied is covered by a collective bargaining agreement. OPM believes it is appropriate and fair for an applicant to receive assistance throughout the complaint process, subject to the restrictions outlined in § 754.103.

OPM adds subpart B, Adverse Actions, which describes the adverse actions and appeals process related to violations of the Fair Chance Act. This new subpart also describes the specific penalties to be imposed by OPM for each violation of 5 U.S.C. 9202. These provisions are significant because under the Fair Chance Act, the procedures of chapter 75 of title 5, United States Code, Adverse Actions, are not applicable and appeal or judicial review is not applicable except as provided under procedures established by the Director of OPM.

This section describes which actions and employees are covered by the new adverse action procedures established by OPM pursuant to the Fair Chance Act and defines key terms used in the subpart.

OPM received no comments on this section.

This section describes the specific penalties OPM may direct an agency to process when an agency employee has been found to have violated section 9202 of the Fair Chance Act. The Fair Chance Act specifies certain penalties for violations of the statute, which are written warnings, suspensions without pay, and civil penalties of various amounts depending on the violation. Notably the range of penalties under the Fair Chance Act includes some forms of penalty that are not enumerated under the “adverse actions” provisions found in chapter 75 of title 5, United States Code (written warnings, civil penalties). For certain violations, under the Fair Chance Act OPM can direct the employing agency to collect a civil penalty and remit it to the Treasury, for deposit in the Treasury. OPM invited public comment on the method for collecting and remitting civil penalties. However, we did not receive any such comments.

A commenter asserted that current case law shows that the proposed penalty determinations are inconsistent with penalties upheld for violating Federal regulations. This commenter opined that, while these recommendations include increasing days of suspensions and adding civil penalties for the fourth and greater offenses, they are still setting precedent that a Federal employee could violate Federal regulations more than five times and still maintain their Federal employment. The commenter suggested adjusting penalty determinations to include proposed removal for multiple violations of the Fair Chance Act, decrease the number of potential violations that have penalty determinations, and add an aggravating factor of intent to violate government regulations as a reason to increase the penalty on an earlier offense. The commenter requested, to the degree that OPM can influence the penalties required, that discretion be afforded to the agencies so they can weigh relevant factors.

OPM will not make any revisions based on this comment. Congress, through the Fair Chance Act, prescribed the range of penalties OPM may direct an agency to process when an agency employee has been found to have violated section 9202 of the Fair Chance Act and part 920 of this regulation. Therefore, OPM will not add removal to the penalty range, decrease the number of violations prescribed as a threshold for a certain penalty, or add an aggravating factor of intent to the regulation. Note that OPM is the proposing and deciding authority for penalties imposed for section 9202 violations. Accordingly, OPM, not the employing agency, is responsible for evaluating the facts and circumstances in each case. Also, the penalty scheme developed by Congress in the Fair Chance Act is unique to violations of section 9202 of the Act.

An agency shared observations that written warnings are maintained in a local file and removed after a certain period, and reprimands are maintained in an employee's Official Personnel Folder (OPF) temporarily and removed after a certain period. The agency asked if it is OPM's intent to have “reprimands” for violations of section 9202 maintained on the permanent side of an employee's OPF.

OPM will not make any revisions based on this comment. OPM notes that Congress elected not to include a reprimand in its prescribed range of penalties for a violation of section 9202 of the Act, and we will not add a reprimand as a penalty option. To clarify, section 9204 of the Act defines a written warning as an adverse action for the purpose of addressing a first violation of section 9202. Further, the Act specifies that after OPM provides procedural rights, if we determine that an employee has committed a first violation of section 9202, OPM shall issue a written warning that includes a description of the violation and the additional penalties that may apply for subsequent violations, and direct the employee's agency to file such warning in the employee's official personnel record. Thus, a written warning issued under § 754.202 is an adverse action and is subject to the same procedures as other adverse actions, including permanent retention in the employee's OPF.

OPM is revising its proposed regulatory text for § 754.202(a) to parallel the language in paragraph (b), making clear that the process for a penalty determination for the first violation and subsequent violations is the same and that OPM's determination of violation and imposition of a penalty occurs only after the employee has been provided the procedural rights in § 754.203.

The final rule establishes the procedures to be utilized for actions taken under this subpart.

OPM received no comments on this section.

This section describes the appeal rights for those actions taken by OPM under § 754.203. Appeal rights are conferred for suspensions of more than 14 days or any decision to impose a civil penalty under this subpart.

OPM received no comments on this section.

This section outlines the records that OPM and the covered agency must maintain and their obligations under the Privacy Act.

An organization asserted that the proposed rule provides no guidance about how the investigatory process should handle private or sensitive information that may be disclosed, intentionally or inadvertently, in the course of the fact-gathering and reporting process. The organization recommended that OPM consider analyzing and potentially issuing guidelines or revised rules that would require that the processes to implement the Fair Chance Act requirements are consistent with the intent of the statute and other applicable Federal law concerning privacy and sensitivity of personal information including but not limited to criminal conviction-related history. The commenter also suggested that agencies and OPM take into account local, Tribal, and State privacy and fair chance-type laws when carrying out their investigatory and oversight responsibilities under this rule.

We disagree with the organization's assertion that the rule provides no guidance about the handling of private or sensitive information that may be disclosed, intentionally or inadvertently, in the course of the investigatory process. In the Supplemental Information section of the proposed rule, OPM addressed handling of private or sensitive information by stating that OPM and agencies have obligations under the Privacy Act. Private or sensitive information disclosed during the investigation will be added to the agency's administrative file and is covered by Federal law in accordance with the Privacy Act requirements of this section. Indeed, the regulatory text for § 754.205 states, “The complaint, the applicant's supporting material, the agency's administrative file, the notice of the proposed action, the employee's written reply, if any, any summary or transcript of the employee's oral reply, if any, the notice of decision, and any order to the covered agency effecting the action together with any supporting material, must be maintained in an appropriate system of records under the Privacy Act.”

Regarding the organization's recommendation that agencies and OPM consider local, Tribal, and State privacy and fair chance-type laws, OPM will not make any revisions to this rule. As noted above, the records received through the Fair Chance complaint investigation process are subject to the requirements of the Privacy Act. Federal agencies have well-established Privacy Act programs. Under the Privacy Act and other Federal laws, records are protected from unauthorized access and misuse through various administrative, technical, and physical security measures. OPM's regulations and guidance implement applicable Federal statutes for Federal personnel management. Congress has not authorized coverage under any other type of law for the Fair Chance Act implementation.

OPM is regulating the provisions of the Fair Chance Act in 5 CFR part 920 because these provisions apply to positions in the excepted, Senior Executive, and competitive services. For the convenience of the reader, we are placing them in one location rather than repeat the provisions in parts 302, 317, 319, and 330, respectively. Additionally, some agencies may have positions that are exempt from part 302 but not exempt from the provisions of the Fair Chance Act.

Subpart A of part 920 contains general provisions that are applicable to the timing of criminal history inquiries. This subpart explains which positions are covered by this part and which positions may be excluded. This subpart also provides definitions for the purpose of this part.

This section contains definitions necessary for the administration of this part.

Several organizations commented that OPM's proposed definition of “conditional offer”—defined as “an offer of employment in the civil service that is conditioned upon the results of a criminal history inquiry”—does not provide that a conditional offer can be revoked for reasons other than a criminal history inquiry, and that therefore OPM should clarify that the criminal history inquiry should be isolated from other necessary background screening. OPM agrees that the proposed definition of “conditional offer” is too narrow, and is revising the definition in § 920.101 in this final rule to read as follows: “conditional offer means an offer of employment to a position in the civil service that is conditioned upon the results of a background investigation, including, as relevant here, the results of a criminal history inquiry.”

These organizations also encouraged OPM to clarify in its regulations that a hiring agency must extend a conditional offer in writing before inquiring about criminal history record information. OPM declines to make changes in response to this comment. OPM believes that agencies already extend all conditional offers in writing and that such clarification is unnecessary. OPM will, however, consider whether to address this point in subsequent guidance.

OPM received a comment from one agency recommending that OPM add language to the definition of “applicant” in 920.101(a) that explicitly includes or excludes current Federal employees. OPM is not adopting this suggestion. An “applicant” is defined as a person who has applied to an agency under its procedures for accepting applications. OPM notes that an applicant may, at times, be a Federal employee. The definition of “applicant” in the rule encompasses any person who has applied to an agency under its procedures for accepting applications; therefore, further clarification is not necessary.

Section 920.102 explains which positions are covered by this part and which positions may be excluded.

Several organizations asked for OPM to remove the open-ended possibility for case-by-case exceptions, arguing that the statute requires OPM to list within the regulation the additional positions to which the exception may apply. Therefore, they argued that the proposal to grant case-by-case exceptions is contrary to the statute. OPM is adopting this recommendation in this final rule. The final rule deletes the language in § 920.201(b)(3) from the notice of proposed rulemaking that indicated that OPM will continue to consider case-by-case exceptions for exempting positions from the Fair Chance Act criminal history inquiry requirements. Previously, agencies were permitted to make requests for exceptions to the timing of collection of criminal history information based upon a job-related need, and with appropriate supporting information, including, for example, for positions in which criminal history information is required to determine whether the applicant is eligible for further consideration for the position. OPM granted these requests, which will remain in effect.

During the public comment period, one agency asked OPM to consider positions that have contact with minors to be an exception to the proposed rule. Another agency recommended that OPM exempt (1) Testing Designated Positions and positions requiring Certification Licensure or Registration from the Act based on the sensitive nature of duties for covered positions; and (2) positions that provide direct care to elderly and to individuals with physical, mental, and intellectual disabilities which impair their ability to manage their personal affairs. The comments do not provide sufficient information for OPM to determine that all such positions—above and beyond those that are already exempted by statute—should be exempted from the Fair Chance Act's requirement to delay criminal history information, and, at this time, OPM is not exempting any additional positions in this regulation. To the extent agencies believe that additional positions should be exempt from such requirements, agencies should alert OPM, which will carefully consider any input for the purpose of future rulemaking or guidance.

Several organizations also asked that OPM provide clarity to agencies regarding their legal responsibility to conduct individualized assessments and otherwise fairly consider applicants with criminal history records even after a conditional offer and in accordance with Title VII and EEOC requirements. OPM notes that these rules only pertain to the timing of inquiries into an applicant's criminal history, not to the substantive selection process for Federal employment. OPM does not believe it is necessary to modify the regulation in response to these comments, but OPM does note that agencies have an independent obligation to comply with Title VII and that nothing in this rule shall be read in derogation of any individual's rights under Title VII.

A commenter asked how this regulation relates to the Bond Amendment when hiring for sensitive positions. As is addressed in § 920.201(b), the prohibition for requesting criminal history information before a conditional job offer does not apply for positions that require a determination of eligibility for access to classified information or which have been designated as a sensitive position under the Position Designation System issued by OPM and the Office of the Director of National Intelligence. Therefore, these changes have no effect on the requirements of the Bond Amendment.

Subpart B addresses when inquiries into an applicant's criminal history may be made.

Section 920.201 describes the agency personnel who are covered by the prohibition of criminal history inquiries at certain points in the recruitment and hiring process, as well as the restrictions on when criminal history inquiries may be made and the exceptions for this limitation. This section also establishes notification requirements of the prohibition to applicants.

Several organizations asked that additional instructions be provided to hiring agencies about what actions must be delayed until after a conditional offer and how staff should respond if criminal history information is disclosed before a conditional offer. These organizations also commented that agencies should be directed, within the regulation, to not consider criminal history information that may be inadvertently disclosed earlier in the process or gained through informal attempts, such as through internet searches. OPM believes that part 920 clearly and with significant detail outlines the applicability of the limitations in terms of the means through which agencies may obtain information of this nature and the timing of which they may employ such means. Furthermore, this section requires agencies to publicize this prohibition, when applicable, within the job announcement, giving applicants the opportunity to know that the information is not to be requested ahead of the job offer. Therefore, OPM will not make any changes in this regulation based on these comments; OPM will, however, provide further instructions to agencies on these points in supplemental guidance.

This section defines what constitutes a violation of the Fair Chance Act and the prohibition in section 920.201.

In the above sections, OPM has addressed the comments received related to section 920.202.

OPM is issuing this final rule to implement the provisions of the Fair Chance Act found in chapter 92 of title 5, United States Code. This statute prohibits Federal agencies and Federal contractors acting on their behalf from requesting that applicants for employment disclose criminal history record information before the agency makes a conditional offer of employment to that employee. The Fair Chance Act identifies some positions to which the prohibition shall not apply and requires OPM to issue regulations identifying additional positions to which the prohibition shall not apply. It also requires OPM to establish complaint procedures under which an applicant for a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency with the Fair Chance Act, and adverse action and appeal procedures when it has been determined that a Federal employee has violated the Fair Chance Act. OPM is implementing these statutory requirements in the least burdensome way it can while still effectuating the Fair Chance Act.

The final rule allows job applicants to present their qualifications and abilities for assessment and be considered based on their merits without the specter of a criminal history record during the selection process. Various studies show that offenders who maintain steady employment are less likely to become involved in criminal behavior after release from prison. 1 Although several factors may impact recidivism (such as family ties, and mental and physical health), it is widely held that stable employment supports relationship and financial goals that decrease the likelihood of re-offending. 2 As the nation's largest employer and a model employer, through this rule the Federal government will demonstrate an example of fair hiring practices by removing unnecessary barriers for people with records who desire to join the Federal workforce. Given that people with criminal history records are statistically less likely to quit, 3 Federal employers stand to save in turnover costs. For example, in a 2021 study, the Society for Human Resources Management found that 73% of business leaders and human resources professionals said workers with criminal records were just as or more dependable than workers without criminal records. 4 Not only does employment of formerly incarcerated individuals affect rates of recidivism, it benefits communities and society by reducing criminal justice costs, crime victimization costs, and the costs of incarceration to the reoffenders and their families. 5

OPM believes there is significant value in being able to demonstrate the effect of these final regulations on both Federal agencies and formerly incarcerated individuals. As noted earlier, however, OPM currently does not have and is not aware of any data to show what impact, if any, OPM's existing “Ban the Box” rules have had on agency hiring processes. Therefore, OPM invited comments regarding any hiring data agencies may have that demonstrate the effect of either OPM's prior regulations or the potential impact of these proposed rules. This included ways that the proposed rules may impact the size of applicant pools for positions not previously covered by OPM's regulation, including positions in the excepted service as well as positions in the U.S. Postal Service and the Postal Regulatory Commission.

Several organizations commented with recommendations for the data that OPM should collect. Those recommendations include the following:

OPM appreciates these public comments and will take these recommendations into account as it formulates a data strategy including in consultation with other agency partners.

OPM's implementing regulations are required by statute and cannot be avoided. In the final regulations for part 754, OPM fleshes out procedures for receiving and investigating complaints, or any other information, as well as procedural and appeal rights for an agency employee alleged to have violated section 9202. The statute establishes the agencies and employees covered by 5 CFR 754, available penalties that can be imposed for an employee found to have violated section 9202, and the 30-day timeframe for appealing an adverse action.

First, OPM considered the option of receiving complaints, and any other information, directly from applicants and conducting its own outreach and investigative fact-finding, as appropriate to the nature of the applicant's submission. But agencies have already established internal procedures for receipt and investigation of employment-related complaints against the agency and to accomplish these tasks in a fair and impartial manner. Therefore, we have laid out an approach that we believe is minimally burdensome for agencies and straightforward for applicants. Subject to OPM guidelines and oversight, the final rule assigns to each agency covered by the Fair Chance Act regulations the responsibility to receive complaints, or any other information, and any applicable supporting material. Further, this final rule delegates to each agency OPM's responsibility to conduct an investigation of the complaint, or any other information, regarding compliance with 5 U.S.C. 9202. OPM believes that establishing a process that is similar to other successful and effective processes will facilitate implementation of the Fair Chance Act complaint process in covered agencies as agencies are already familiar with these similar processes. While the final rule provides parameters to guide agencies and facilitate governmentwide consistency, the assignment and delegation to agencies reduces the need for what would be more extensive regulations if OPM were directly receiving and investigating complaints, and other information, related to an alleged violation of section 9202.

Regarding the procedures for adverse actions, the statute requires notice and an opportunity for a hearing on the record by OPM for any employee alleged to have committed a violation of section 9202. Section 9205 further notes that the procedures of chapter 75 of title 5, United States Code, are not applicable and that appeal or judicial review are not applicable except as provided under procedures established by the Director of OPM. Because chapter 75 procedures are not available, the final rule establishes an alternative to implement the unique procedural and appeal elements of the Fair Chance Act. In developing the procedures, OPM considered the benefits of adapting the adverse action procedures found at 5 CFR part 752 rather than another approach. Adapting the part 752 procedures affords agencies the benefit of familiarity, facilitates ease of transfer in knowledge and skills to the new regulations, and reduces the need for more extensive or complex regulations.

OPM did not receive any comments on the estimated costs in the proposed rule. The economic assessment is finalized with no changes.

This rule will affect the operations of over 80 Federal agencies ranging from cabinet-level departments to small independent agencies. This rule expands the prohibition on making inquiries into an applicant's criminal background prior to a conditional offer of employment. The prohibition currently applies to positions in the competitive service. This final rule will expand this prohibition to include agencies with positions in the excepted service and the Senior Executive Service. There are approximately 20 agencies in the Executive Branch that are fully in the excepted service that will be impacted by this final rule. We estimate that this rule will require individuals employed by these agencies to develop policies and procedures to implement the rule when making appointments. For the purpose of this cost analysis, with regard to parts 302, 317, 319, 330, 731, and 920, the assumed average salary rate of Federal employees performing this work will be the rate in 2022 for GS-14, step 5, from the Washington, DC, locality pay table ($143,064 annual locality rate and $68.55 hourly locality rate). We assume that the total dollar value of labor, which includes wages, benefits, and overhead, is equal to 200 percent of the wage rate, resulting in an assumed labor cost of $137.10 per hour.

In order to comply with the regulatory changes in this final rule, affected agencies will need to review the rule and update their policies and procedures. We estimate that, in the first year following publication of the final rule, this will require an average of 250 hours of work by employees with an average hourly cost of $137.10. This would result in estimated costs in that first year of implementation of about $34,275 per agency, and about $2,742,000 in total governmentwide. We do not believe this rule will substantially increase the ongoing administrative costs to agencies (including the administrative costs of administering the program and hiring and training new staff) as this rule sets out leveraging existing procedures.

Regarding the implementation of the regulatory requirements in part 754, in the event of a complaint by an applicant, agencies will incur labor costs associated with the investigation into the complaint. OPM will incur labor costs associated with reviewing the results of the investigation and reaching a determination, which could include issuing a notice of proposed action to the subject of the complaint, considering any response, and making a final determination. In the event OPM directs the employing agency to take an action as a result of a founded complaint, OPM would incur labor costs in responding to and/or defending any appeal by the subject of the complaint to the Merit Systems Protection Board (MSPB).

In order to estimate the costs to implement the final regulatory requirements in part 754 for complaint procedures, adverse actions, and appeals, OPM made certain assumptions and considered that some costs may vary depending on agency size and the extent to which an agency is able to leverage existing policies, practices, and procedures. For this cost analysis, the assumed staffing for Federal employees performing the work required by the regulations in part 754 is one executive; one GS-14, step 5; a GS-15, step 5; and one GS-7, step 5 in the Washington, DC, locality area. The 2022 basic rate of pay for an executive at an agency with a certified SES performance appraisal system ranges from $135,468 to $203,700 annually, for an average of $169,584 per year or $81.26 per hour. For General Schedule employees in the Washington, DC, locality area, the 2022 pay table rates are $168,282 annually and $80.63 hourly for GS-15, step 5; $143,064 annually and $68.55 for GS-14, step 5, and $57,393 annually and $27.50 hourly for GS-7, step 5. We assume that the total dollar value of labor, which includes wages, benefits, and overhead, is equal to 200 percent of the wage rate, resulting in assumed hourly labor costs of $162.51 for an executive; $161.27 for a GS-15, step 5; $137.10 for a GS-14, step 5; and $55 for a GS-7, step 5.

As to overall complaint procedures, program implementation and oversight, OPM assumes it will incur certain upfront costs and then ongoing costs. For example, the establishment of new processing codes requires one-time updates to OPM's databases and personnel action processing handbook. After the issuance of any final rule effecting part 754, OPM may develop additional materials related to its implementation. This includes, but is not limited to, procedures and guidance related to agency obligations to report to OPM actions taken to investigate any complaints filed by an applicant regarding an agency's compliance with 5 U.S.C. 9202 and adverse actions taken at the direction of OPM for non-compliance with 5 U.S.C. 9202. OPM estimates that the cost for its implementation and oversight in the first year will be $30,370.00 and $3,687.04 on average in subsequent years.

OPM estimates that it will cost each agency $21,319.04 in the first year to establish an internal policy for handling alleged violations of 5 U.S.C. 9202. We assume that larger agencies advertise more vacancies and are therefore likely to receive a greater number of complaints. We estimate the annual cost of complaint intake and investigation for large agencies to be $172,746.00 (based on an average of 30 complaints per large agency); medium size agencies $115,164.00 (for 20 complaints); and small size agencies $57,582.00 (for 10 complaints). The total estimated cost for agencies to receive and investigate complaints is $345,492.00 annually, which averages to $5,758.20 per complaint.

For agency outreach regarding any other information that may potentially be an attempt to file a complaint for an alleged violation of 5 U.S.C. 9202, OPM again assumes that larger agencies advertise more vacancies and are therefore likely to experience a greater number of such instances. We estimate that large agencies on average may conduct 30 instances of outreach and incur $8,226.00 for the total number of instances. Medium size agencies may conduct outreach for 20 instances and incur $5,484.00 total. Small agencies may conduct outreach for 10 instances and incur $2,742.00 total. The total estimated annual cost of agency outreach is $16,452.00 and the average cost of agency outreach is $274.20 per instance.

Following agency intake, outreach (if applicable), and investigation, OPM is responsible for administering the adverse action procedures as outlined in § 754.203. Based on the estimate for the annual number of complaints that Federal agencies may receive (60 for large, medium, and small agencies combined), OPM estimates that 25%, or 15, of the complaints may result in a finding of a violation of 5 U.S.C. 9202. While OPM will carefully review and consider each investigative file submitted by agencies, OPM expects that only those investigations that result in a finding of a violation will generate a meaningful increase in cost above staff's usual duties and responsibilities. Assuming 15 such cases, the total cost for OPM's administration of the adverse action procedures, including proposing an action, considering any reply, and issuing a decision, is estimated to be $159,818.40. The average cost for OPM per adverse action is $10,654.56.

Under this final regulation, agencies are responsible for processing any adverse action imposed by OPM. Agencies routinely process suspensions for other forms of misconduct. Thus, applying those same procedures to adverse actions imposed for violations of 5 U.S.C. 9202 will be a negligible cost for agencies as they will be leveraging existing processes and procedures. However, OPM does anticipate some cost for the one-time update to agency processing systems for the new codes established by OPM to identify that the adverse actions are taken under 5 U.S.C. 9202, as well as the establishment of agency procedures for the collection of civil penalties. OPM estimates the costs to agencies in the first year for updating their systems and procedures and processing actions to be $24,690.04. Thereafter, we estimate that the average cost for an agency to process an adverse action, including any civil penalty, is $960.50 per action.

The available penalties for violations of 5 U.S.C. 9202 include written warnings and short suspensions (14 days or less) that are not grievable or appealable. Further, an employee's first two violations of section 9202 will result in a penalty no stronger than a seven-day suspension. For only a third or subsequent violation would OPM impose a penalty that may be appealable to the MSPB. While such an appeal to the MSPB is possible, we believe that it will be rare that an employee violates section 9202 three or more times. OPM anticipates that if 15 adverse actions are imposed per year, OPM anticipates that only one on average will be appealable to the MSPB. We therefore do not believe there will be a measurable impact on MSPB operations and thus, we have not estimated costs for the MSPB.

Because any appeal filed is against OPM and not the employing agency, OPM will be responsible for defending the action. OPM estimates $11,447.84 to defend an appeal.

The remaining requirements of part 754 for complaint procedures, adverse actions, and appeals will require minimal costs for OPM or agencies, or only negligible costs. With respect to informing applicants of the agency's complaint procedures via the agency's public website and in vacancy announcements, the additional cost to agencies will be small. Agencies already provide notice on their public websites and in vacancy announcements about how an applicant can file an EEO complaint. Also, agencies provide information to the public on their external websites about how to file an Inspector General complaint. Thus, an additional notice does not present a significant additional cost. In conclusion, OPM estimates a cost of $598,141.47 to implement the complaint procedures under the final Fair Chance Act regulations in the first year and the recurring cost per year to be $32,782.34.

We note that the final rule may have indirect costs on other entities. Section 1122(d) of the Fair Chance Act amends section 207(d)(2) of the Congressional Accountability Act of 1995 to require the Board of Directors of the Office of Congressional Workplace Rights to promulgate regulations that are “the same” as OPM's “except to the extent that the Board may determine, for good cause shown and stated together with the regulation, that a modification of such regulations would be more effective for the implementation of the rights and protections under this section.” Section 1122(e) of the Fair Chance Act similarly amends 28 U.S.C. 604(e)(5)(B) to require the Director of the Administrative Office of the U.S. Courts to promulgate regulations that are “the same” as OPM's “except to the extent that the Director . . . may determine, for good cause shown and stated together with the regulation, that a modification of such regulations would be more effective for the implementation of the rights and protections under this subsection.” Finally, section 1123(c) of the Fair Chance Act requires the Federal Acquisition Regulation (FAR) Council to amend the FAR “to be consistent with” OPM's regulations “to the maximum extent practicable” and to “include together with such revision an explanation of any substantive modification of the Office of Personnel Management regulations, including an explanation of how such modification will more effectively implement the rights and protections under this section.” Such indirect costs are not quantifiable since sections 1122(d)-(e) and 1123(c) of the Fair Chance Act give the other entities significant leeway to adopt, reject, or modify OPM's regulations with respect to the populations covered by those sections.

This final regulation provides the opportunity for a qualified applicant with a criminal history record to advance in the hiring process just as a qualified applicant without a criminal history record would advance. The regulation benefit not only the Federal government as an employer but also American society as a whole at the family and community levels in terms of a strengthened economy.

This final regulation will support the Administration's priority to advance comprehensive equity. The final rule can help Federal agencies realize the vision of the Federal government as a model employer and to advance the principles of diversity, equity, inclusion, and accessibility. Finally, another benefit of this rule is increased transparency and accountability in the Federal hiring process. The regulations provide applicants who believe they have been subjected to a violation of 5 U.S.C. 9202 the right to report the alleged violation and holds accountable Federal employees found to have committed such a violation.

In addition to the questions posed in the regulatory analysis and given the limited information on the Federal Government's implementation on Ban the Box, OPM requested comment on the implementation and impacts of Ban the Box efforts in the private sectors. As noted above, OPM received multiple responses regarding the data that OPM should collect to inform the impact of this effort. OPM appreciates the responses received and is formulating a strategy for future data collections.

Executive Orders 13563 and 12866 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. In accordance with the provisions of Executive Order 12866, this rule was reviewed by the Office of Management and Budget as significant.

The OPM Director certifies that this rule will not have a significant economic impact on a substantial number of small entities because it applies only to Federal agencies and employees.

This regulation will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment.

This regulation meets the applicable standard set forth in section 3(a) and (b)(2) of Executive Order 12988.

This rule will not result in the expenditure by State, local or Tribal governments of more than $100 million annually. Thus, no written assessment of unfunded mandates is required.

Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act or CRA) (5 U.S.C. 801 et seq. ) requires rules to be submitted to Congress before taking effect. OPM will submit to Congress and the Comptroller General of the United States a report regarding the issuance of this rule before its effective date, as required by 5 U.S.C. 801. The Office of Information and Regulatory Affairs in the Office of Management and Budget has determined that this rule is not a major rule as defined by the CRA (5 U.S.C. 804).

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule makes reference to an OMB approved collection of information subject to the PRA titled Declaration for Federal Employment (OF 306), OMB Control Number 3206-0182. The systems of record notice for this collection is https://www.opm.gov/information-management/privacy-policy/sorn/opm-sorn-govt-1-general-personnel-records.pdf.

OPM requested comments as part of the proposed rule on this information collection. While no comments were received on the burden or cost estimate, OPM did receive other comments. In response to comments regarding the timing of asking applicants about criminal history, OPM is replacing a sentence in the instructions to add clarity to the timing within the process when an individual is most likely to be asked to complete the form ( i.e., after a tentative job offer has been made). Should an individual need to fill out an OF 306, it can be done in several ways such as through USAStaffing, in response to an email from the hiring agency, or through other electronic means.

Accordingly, for the reasons stated in the preamble, OPM amends chapter I of title 5, Code of Federal Regulations, as follows:

On October 23, 2020, FDA published the 2020 Compliance Policies. FDA is announcing the availability of a guidance for industry entitled “Wholesale Distributor Verification Requirement for Saleable Returned Drug Product and Dispenser Verification Requirements When Investigating a Suspect or Illegitimate Product—Compliance Policies, Revision 1”, which extends the enforcement policies described in the 2020 Compliance Policies for an additional year, from November 27, 2023, until November 27, 2024. As described in this revised guidance, FDA does not intend to take enforcement action, prior to November 27, 2024, against wholesale distributors who do not verify the product identifier prior to further distributing saleable returned product, or against dispensers who do not verify the product identifier of the statutorily designated proportion of suspect or illegitimate product in the dispenser's possession or control, as required under section 582 of the FD&C Act (21 U.S.C. 360eee-1), as added by the DSCSA (Title II of Pub. L. 113-54).

This revised guidance is being issued consistent with FDA's good guidance practices regulations (21 CFR 10.115). FDA is implementing this guidance without prior public comment because the Agency has determined that prior public participation is not feasible or appropriate (21 CFR 10.115(g)(2)). FDA made this determination because this guidance document provides information pertaining to statutory requirements that FDA had planned to begin enforcing as of November 27, 2023, for wholesale distributors to verify the product identifier prior to further distributing saleable returned product under section 582(c)(4)(D) of the FD&C Act and for dispensers to verify the product identifier, including the standardized numerical identifier, for suspect or illegitimate product in the dispenser's possession or control under section 582(d)(4)(A)(ii)(II) and (d)(4)(B)(iii) of the FD&C Act. It is important that FDA provide this information before that date. Although this guidance document is being implemented immediately, it remains subject to comment in accordance with the Agency's good guidance practices (21 CFR 10.115(g)(3)).

Beginning November 27, 2019, wholesale distributors were required, under section 582(c)(4)(D) of the FD&C Act, to verify the product identifier, including the standardized numerical identifier, on each sealed homogeneous case of saleable returned product, or, if such product is not in a sealed homogeneous case, on each package of saleable returned product, prior to further distributing such returned product. In the Federal Register published September 24, 2019 (84 FR 50044), FDA issued a notice announcing the availability of the Wholesale Distributor Verification Requirement for Saleable Returned Drug Product—Compliance Policy guidance (2019 Compliance Policy), which described a 1-year enforcement policy with respect to this wholesale distributor requirement, until November 27, 2020. The Agency subsequently published the 2020 Compliance Policies, which extended the enforcement policy in the 2019 Compliance Policy with respect to this wholesale distributor requirement for 3 years, until November 27, 2023, and also included an enforcement policy until that same date with respect to the requirement for dispensers to verify the product identifier, including the standardized numerical identifier, for suspect or illegitimate product in the dispenser's possession or control.

Since the announcement of the 2020 Compliance Policies, FDA has received additional comments and feedback from wholesale distributors, as well as other trading partners and stakeholders, expressing concern with industry-wide readiness for implementation of the verification of saleable returned product requirement for wholesale distributors and the challenges stakeholders face with developing interoperable, electronic systems to enable such verification and achieve interoperability between networks. Specifically, comments received point out continuing challenges posed by the large volume of saleable returned product, explaining that wholesale distributors still need more time to test verification systems using real-time volumes of saleable returned product with all trading partners involved, as opposed to using small-scale pilot test projects. Given all these concerns, FDA recognizes that some wholesale distributors may need additional time, beyond November 27, 2023, before they can begin verifying returned products prior to resale or other further distribution as required by section 582(c)(4)(D) of the FD&C Act in an efficient, secure, and timely manner. Additionally, section 582 of the FD&C Act requires certain trading partners (manufacturers, repackagers, wholesale distributors, and dispensers) to exchange transaction information, transaction history, and a transaction statement when engaging in transactions involving certain prescription drugs. Section 581(27)(E) of the FD&C Act (21 U.S.C. 360eee(27)(E)) requires that the transaction statement include a statement that the entity transferring ownership in a transaction had systems and processes in place to comply with verification requirements under section 582 of the FD&C Act. This revised guidance also explains that, prior to November 27, 2024, FDA does not intend to take action against a wholesale distributor for providing a transaction statement to a subsequent purchaser of product on the basis that such wholesale distributor does not yet have systems and processes in place to comply with the saleable return verification requirements under section 582(c)(4)(D) of the FD&C Act. The guidance explains the scope of the compliance policy in further detail.

In addition to helping minimize possible disruptions in the distribution of certain prescription drugs in the United States, FDA believes that by extending the enforcement approach described in the 2020 Compliance Policies until November 27, 2024, wholesale distributors will be able to focus resources and efforts on the requirements for enhanced drug distribution security under section 582(g) of the FD&C Act (as described below). Thus, instead of developing separate processes or infrastructures solely for the saleable return verification requirement, wholesale distributors can incorporate the saleable return verification requirements into the enhanced verification required under section 582(g) of the FD&C Act.

Further, section 582 of the FD&C Act, as added by the DSCSA, also established the requirements that specify how dispensers must investigate suspect and illegitimate product. As part of the investigation, section 582(d)(4)(A)(ii)(II) of the FD&C Act requires dispensers to verify the product identifier, including the standardized numerical identifier, of at least three packages or 10 percent of such suspect product, whichever is greater, or all packages, if there are fewer than three, corresponds with the product identifier for such product in the dispenser's possession or control. Section 582(d)(4)(B)(iii) of the FD&C Act requires dispensers to verify product as described in section 582(d)(4)(A)(ii), which includes the section 582(d)(4)(A)(ii)(II) requirement, in response to a notification from FDA or a trading partner that the product is an illegitimate product.

In response to comments received from stakeholders regarding dispenser readiness to meet these requirements, and to minimize possible disruptions in the distribution of affected prescription drugs in the United States, this guidance also announces that FDA does not intend to take action before November 27, 2024, against dispensers who do not verify the product identifier of the statutorily designated proportion of suspect product as required by section 582(d)(4)(A)(ii)(II) of the FD&C Act, and that part of section 582(d)(4)(B)(iii) of the FD&C Act that requires dispensers to perform the same verification activities of section 582(d)(4)(A)(ii)(II) when responding to a notification of illegitimate product from FDA or another trading partner. FDA believes that the 1-year extension under this guidance of the applicable 2020 Compliance Policies will facilitate the ability of dispensers to ensure the systems and processes that are put into place to meet the enhanced drug distribution security requirements, which FDA will generally not enforce before November 27, 2024, will also fulfill the dispenser verification requirements under section 582(d)(4) of the FD&C Act.

In the “Enhanced Drug Distribution Security Requirements Under Section 582(g)(1) of the Federal Food, Drug, and Cosmetic Act—Compliance Policies” (Enhanced Drug Distribution Security Compliance Policies) (88 FR 58498), FDA announced a 1-year enforcement policy with respect to the enhanced drug distribution security requirements set to take effect on November 27, 2023. FDA chose to adopt this enforcement policy until November 27, 2024, because FDA was aware that some stakeholders were facing challenges with implementing the section 582(g) requirements and needed additional time to comply with these requirements.

While FDA generally expects trading partners to have the systems and processes in place to meet the requirements of section 582(g) of the FD&C Act, FDA recognizes that some technical and operational issues may not be fully resolved by November 27, 2023. The Agency believes the Enhanced Drug Distribution Security Compliance Policies can help trading partners address such issues by accommodating the additional time that may be needed to implement, troubleshoot, and mature their systems and processes. For additional information about enhanced drug distribution security please see the June 2021 draft guidance for industry entitled “Enhanced Drug Distribution Security at the Package Level Under the Drug Supply Chain Security Act” (available at: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/enhanced-drug-distribution-security-package-level-under-drug-supply-chain-security-act ).

This guidance represents the current thinking of FDA on “Wholesale Distributor Verification Requirement for Saleable Returned Drug Product and Dispenser Verification Requirements When Investigating a Suspect or Illegitimate Product—Compliance Policies.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. 1

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

Persons with access to the internet may obtain the guidance at either https://www.fda.gov/drugs/guidance-compliance-regulatory-information/guidances-drugs, https://www.fda.gov/regulatory-information/search-fda-guidance-documents, or https://www.regulations.gov.

The Coast Guard will enforce special local regulations in 33 CFR 100.1302 for the Portland Dragon Boat Races regulated area from 7:30 a.m. to 5:30 p.m. on September 9 and 10, 2023. This action is being taken to provide for the safety of life on navigable waterways during this event. Our regulation for marine events within the Thirteenth Coast Guard District, § 100.1302, specifies the location of the regulated area for the Portland Dragon Boat Races which encompasses portions of the Willamette River in Portland, OR. During the enforcement periods, as reflected in § 100.1302, vessels may not transit the regulated areas without approval from the Patrol Commander or an Official Patrol Vessel. Vessels permitted to transit must operate at a no wake speed, in a manner which will not endanger participants or other crafts in the event.

In addition to this notification of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners and marine information broadcasts.

On August 5, 2021, VA published an interim final rule in the Federal Register (86 FR 42724) to amend its adjudication regulations to establish presumptive service connection for asthma, rhinitis, and sinusitis, to include rhinosinusitis, in association with presumed exposure to fine particulate matter. These presumptions apply to veterans who served on active military, naval, air, or space service in the Southwest Asia theater of operations during the Persian Gulf War (hereinafter Gulf War), as well as in Afghanistan, Syria, Djibouti, or Uzbekistan, on or after September 19, 2001. VA provided a 60-day comment period which ended on October 4, 2021. VA received comments from the National Veterans Legal Services Program, National Law School Veterans Clinic Consortium, Stronghold Freedom Foundation, Disabled American Veterans, Veterans of Foreign Wars, Wounded Warrior Project, and nineteen individuals. Nine of the comments received expressed general support of the rule. VA has made limited changes based on the comments, as discussed below.

VA received one comment suggesting that asthma, obstructive sleep apnea, and other respiratory illnesses should be considered medically unexplained chronic multisystem illnesses under 38 CFR 3.317, Compensation for certain disabilities occurring in Persian Gulf veterans. This commenter stated that evidence is not required to prove that an illness is associated with a veteran's service in Southwest Asia for claims under 38 U.S.C. 1117 and 38 CFR 3.317. However, this rulemaking and the interim final rule address regulations governing presumptive service connection for respiratory conditions based on presumed exposures to fine particulate matter. The rulemaking does not address 38 CFR 3.317 or whether certain conditions may be considered medically unexplained chronic multisymptom illnesses. Further, as explained in the interim final rule, the Secretary relied on the broad authority under 38 U.S.C. 501(a) when establishing section 3.320. Section 3.320 and the presumptions it established are not based on the same authority that underlies section 3.317, to include 38 U.S.C. 1117 and 1118. Therefore, this comment is outside the scope of the rulemaking, and VA makes no change based on it.

One commenter expressed concern that VA considers veterans who served in Afghanistan to be exposed to infectious diseases and fine particulate matter in the same manner as other veterans in Southwest Asia, however, excludes their service from the exposures and illnesses under paragraph (a) and (b) of 38 CFR 3.317. However, as explained above, this rulemaking and the interim final rule address regulations governing presumptive service connection for respiratory conditions based on presumed exposures to fine particulate matter and do not address 38 CFR 3.317.

Paragraphs (a) and (b) of 38 CFR 3.317 regulate claims for compensation due to undiagnosed illnesses and medically unexplained chronic multisymptom illnesses. The rule establishing 38 CFR 3.317 (a) and (b) (75 FR 59968) was based on a National Academies of Sciences, Engineering, and Medicine (NASEM) review focused primarily upon health effects of exposure to hazards associated with service in the Southwest Asia theater of operations, as that area was defined for purposes of the 1991 Gulf War. See Executive Order 12744 (Jan. 12, 1991). Afghanistan is not located in Southwest Asia and therefore was not included as a qualifying location under 38 CFR 3.317(a) and (b). However, section 405 of the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022, Public Law 117-168, (PACT Act) expanded the definition of a Persian Gulf veteran by adding Afghanistan, Israel, Egypt, Turkey, Syria, and Jordan as eligible locations under 38 U.S.C. 1117. Thus, individuals with service in Afghanistan are no longer excluded from the exposures and illnesses under paragraph (a) and (b) of 38 CFR 3.317 due to the PACT Act. But implementing that provision of the PACT Act is beyond the scope of this rule, and VA plans to address that statutory change in a separate rulemaking. Therefore, VA makes no changes based on this comment.

Three commenters inquired about effective dates and stated that claims for the three new presumptive conditions should be granted retroactive effective dates in the same manner as claims under Nehmer v. United States Department of Veterans Affairs. Nehmer was a class-action lawsuit against VA by Vietnam veterans and their survivors, who alleged that VA had improperly denied their claims for service-connected compensation for disabilities allegedly caused by exposure to the herbicide Agent Orange in service. See Nehmer v. U.S. Department of Veterans Affairs, No. CV-86-6161 TEH (N.D. Cal.). 38 CFR 3.816 regulates effective date rules required by Nehmer and defines a Nehmer class member as “a Vietnam veteran who has a covered herbicide disease; or a surviving spouse, child, or parent of a deceased Vietnam veteran who died from a covered herbicide disease.” 38 CFR 3.816(b). VA notes that the effective date provisions of the Nehmer court order and section 3.816 apply only to claims based on exposure to herbicides in the Republic of Vietnam during the Vietnam era and are therefore inapplicable to this final rule.

Further, as stated in the interim final rule, this rule applies to claims received by VA on or after the effective date of the rule and to claims pending before VA on that date. This will ensure that VA adheres to the provisions of its change-of-law regulation, 38 CFR 3.114, which states, “[w]here pension, compensation, dependency and indemnity compensation . . . is awarded or increased pursuant to a liberalizing law, or a liberalizing VA issue approved by the Secretary or by the Secretary's direction, the effective date of such award or increase shall be fixed in accordance with the facts found, but shall not be earlier than the effective date of the act or administrative issue.” Section 3.114 reflects ordinary statutory effective date principles that VA is bound to apply in cases outside the scope of Nehmer. See 38 U.S.C. 5110. Specifically, the law requires that the effective date for an award of benefits pursuant to an Act or administrative issue “shall not be earlier than the effective date of the Act or administrative issue.” 38 U.S.C. 5110(g).

Therefore, VA makes no changes based on these comments.

One commenter inquired whether the interim final rule included exposure to fine particulate matter in other locations, specifically in Germany. 38 CFR 3.320 was based on scientific and medical studies that focused on the respiratory effects of fine particulate matter for Veterans who served in the Southwest Asia theater of operations, Afghanistan, Syria, Djibouti, and Uzbekistan during the Gulf War. As stated in the interim final rule, veterans began reporting a variety of respiratory health issues during and after the initial Gulf War conflict. As a result, Congress mandated that VA study the health outcomes of veterans deployed to the Southwest Asia theater of operations. VA then requested NASEM to study the evidence regarding respiratory health outcomes in veterans of the Southwest Asia conflicts. The results of that study form the basis for this rulemaking. As Germany was not a location considered in the study, it cannot be included as a qualifying location under 38 CFR 3.320. VA makes no changes based on this comment.

One commenter questioned whether eligible locations in Southwest Asia, Afghanistan, Syria, Djibouti, or Uzbekistan will be limited to specific bases or combat outposts. The simple answer is no. A qualifying period of service for presumptive service connection based on exposure to fine particulate matter is defined as service in the Southwest Asia theater of operations during the Gulf War, or in Afghanistan, Syria, Djibouti or Uzbekistan on or after September 19, 2001, during the Gulf War. The Southwest Asia theater of operations refers to Iraq, Kuwait, Saudi Arabia, the neutral zone between Iraq and Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Oman, the Gulf of Aden, the Gulf of Oman, the Persian Gulf, the Arabian Sea, the Red Sea, and the airspace above these locations. 38 CFR 3.317(e)(2). The eligible locations listed under 38 CFR 3.320 are more expansive than specific bases or combat outposts. VA makes no changes based on this comment.

One commenter stated that VA failed to consider that for “veterans who claim that their condition is a result of their combat service in Southwest Asia, their [ sic ] becomes an evidentiary burden shift that requires the VA to show affirmative evidence proving that the claimed presumptive condition did not manifest during service in Southwest Asia, the VA must confirm if an event after service caused the veteran's condition, or the VA must confirm if the claimed condition was directly caused as a result of the veteran's own willful misconduct or while under the influence of drugs or alcohol.” The commenter suggested that claims based on combat service for asthma, rhinitis, and sinusitis, to include rhinosinusitis, already have a presumption in place that is equally advantageous to veterans as the new 38 CFR 3.320. VA disagrees with this suggestion.

There are three basic elements required to establish service connection: (1) a current disability, (2) an injury or disease that was incurred or aggravated during service, and (3) a causal relationship between the injury or disease and the veteran's current disability. Several presumptions have been created to ease the burden of providing evidence of these three elements.

Consideration of combat service is directed by 38 CFR 3.304(d), which provides a reduced evidentiary burden for combat veterans in proving an in-service illness or injury (Element #2). See Collette v. Brown, 82 F.3d 389, 392-93 (Fed. Cir. 1996). However, the reduced evidentiary burden provided by 38 CFR 3.304(d) should not be confused with the presumption provided by 38 CFR 3.320. 38 CFR 3.320 eases the evidentiary burden of proving exposure to fine particulate matter in service (Element #2) and additionally addresses the requirement to demonstrate causation (Element #3). Claims for service connection based on combat must still show “a causal relationship between the present disability and the injury, disease, or aggravation of a preexisting injury or disease incurred during active duty.” See Shedden v. Principi, 381 F.3d 1163, 1167 (Fed. Cir. 2004). We also note that while the presumptions in section 3.320 should, in the vast majority of cases, obviate the question of whether a given disease or injury was incurred in combat, to the extent rare cases genuinely implicate both regulations, VA sees no reason why they cannot operate to benefit the same veteran. As the presumption under the new 38 CFR 3.320 addresses different and additional aspects of establishing entitlement to service connection than 38 CFR 3.304(d), VA makes no changes based on this comment.

One commenter proposed that VA establish presumptive service connection for Vietnam Veterans who served aboard World War II era ships and were exposed to asbestos. As previously explained, this rulemaking is based on current medical and scientific evidence related to the respiratory health effects of fine particulate matter for veterans who served in the Southwest Asia theater of operations during the Gulf War, or in Afghanistan, Syria, Djibouti or Uzbekistan on or after September 19, 2001, during the Gulf War. As this comment is beyond the scope of our rulemaking, VA makes no changes based on this comment.

One commenter asked whether veterans who are currently service connected for allergic rhinitis with a 0 percent evaluation can file an appeal based on this amendment and what the criteria would be. Veterans who are already service connected and seek an increased evaluation because their condition has worsened should submit a claim for increased evaluation on VA Form 21-526EZ, Application for Disability Compensation and Related Compensation Benefits. VA makes no changes based on this comment.

Another commenter inquired whether claims for allergic rhinitis would warrant a VA examination to determine if this condition was in fact “chronic rhinitis” and therefore eligible for presumptive service connection. Generally, pursuant to 38 CFR 3.159(c)(4), VA will assist a claimant in obtaining an examination if it is necessary to decide the claim. An examination may serve the purpose of obtaining medical evidence relevant to establishing entitlement to benefits, such as information about diagnosis, onset, and etiology, or may be necessary to develop adequate information for rating purposes. Applying the criteria from 38 CFR 3.159(c)(4) to the substantive criteria of the version of section 3.320 implemented by the interim final rule, an examination is warranted in claims under 38 CFR 3.320(a)(2) when three criteria are met: (1) the veteran claims a qualifying condition listed at 38 CFR 3.320(a)(2)(i)-(iii) (or signs or symptoms of a qualifying condition under 38 CFR 3.320(a)(2)), (2) the veteran's military records show a qualifying period of service under 38 CFR 3.320(a)(5), and (3) evidence shows that the veteran's qualifying condition manifested within 10 years from the date of last discharge. However, as explained below, VA is removing the 10-year manifestation period, and so that criterion is no longer necessary for an examination to be warranted. Allergic rhinitis is a covered condition under 38 CFR 3.320 as long as the condition is chronic in nature and not an acute manifestation. VA makes no changes based on this comment.

One commenter recommended that VA explicitly state that chronicity is presumed to be innate to asthma, rhinitis, and sinusitis, to include rhinosinusitis. The paragraph heading at 38 CFR 3.320(a)(2) is “ Chronic diseases associated with exposure to fine particulate matter. ” 38 CFR 3.320 makes clear that the diseases associated with exposure to fine particulate matter are chronic in nature. However, as explained in the interim final rule notice, diseases that are seasonal or acute allergic manifestations in nature are not covered diseases as, pursuant to 38 CFR 3.380, “[s]easonal and other acute allergic manifestations subsiding in the absence of or removal of the allergen are generally to be regarded as acute diseases, healing without residuals.” Therefore, VA makes no changes based on this comment.

One commenter stated that VA failed to provide a reasonable explanation as to why asthma, rhinitis, and sinusitis, to include rhinosinusitis, were approved for presumptive service connection and not all 27 health outcomes listed in NASEM's 2020 report, Respiratory Health Effects of Airborne Hazards Exposures in the Southwest Asia Theater of Military Operations. As explained in the interim final rule, NASEM's report identified 27 of the most prevalent respiratory health outcomes experienced by Gulf War veterans. Of the 27 respiratory health outcomes, only three respiratory symptoms met the criteria for limited or suggestive evidence of an association with service in Southwest Asia: chronic persistent cough, shortness of breath (dyspnea), and wheezing. The remaining 24 conditions, including asthma, rhinitis, and sinusitis, had inadequate or insufficient evidence to determine an association.

To respond to the findings in NASEM's 2020 report, VA convened a workgroup of VA subject matter experts in disability compensation, health care, infectious diseases, occupational and environmental medicine, public health, epidemiology, toxicology, and research. The VA workgroup reviewed the most claimed chronic conditions related to airborne hazards for disability compensation benefits and found that asthma, sinusitis, and rhinitis were the most claimed and granted (on the basis of direct service connection) respiratory conditions, and these conditions also most closely represented the symptomatology of chronic persistent cough, shortness of breath (dyspnea), and wheeze. The VA workgroup then analyzed respiratory claims data comparing veterans who were deployed to Southwest Asia with veterans who had never been deployed. The VA workgroup found that the claim rates and service connection prevalence rates for asthma, rhinitis, and sinusitis were higher than for non-deployed veterans.

VA recognizes that there are limitations in evidence specific to deployed service members and a range in the strength of association between fine particulate matter exposure and the 27 respiratory health outcomes. However, section 501(a)(1) of title 38, United States Code, provides that “[t]he Secretary has authority to prescribe all rules and regulations which are necessary or appropriate to carry out the laws administered by [VA] and are consistent with those laws, including . . . regulations with respect to the nature and extent of proof and evidence and the method of taking and furnishing them in order to establish the right to benefits under such laws.” This broad authority includes the establishment of a presumption of service connection and exposure under specified circumstances, provided there is a rational basis for the presumptions. For the reasons noted above and in the interim final rule, including the review of NASEM's 2020 report, review of internal claims data, and a comprehensive supplemental literature review, the Secretary has determined that there was a rational basis to support a presumption of service connection when there is proof of qualifying service (38 CFR 3.320(a)(5)) and the subsequent development of asthma, rhinitis, or sinusitis, to include rhinosinusitis. However, the Secretary also determined that there was not a rational basis at this time to support creating a presumption of service connection for the remaining 24 health outcomes listed in NASEM's 2020 report. VA makes no changes based on this comment.

Multiple commenters also suggested that VA should create presumptions for additional conditions. For example, one commenter suggested that secondary health concerns for individuals diagnosed with asthma or severe sinusitis should be reviewed and added to 38 CFR 3.320. VA recognizes that chronic respiratory conditions can lead to numerous secondary health effects. However, for the reasons explained above and in the interim final rule, the Secretary determined that at this time there was a reasonable basis to support creating presumptions of service connection for only the three listed conditions. VA makes no changes based on this comment.

Another commenter specifically requested that VA create a presumption of service connection for chronic obstructive pulmonary disorder (COPD), chronic bronchitis, obstructive sleep apnea, and emphysema. The commenter stated that COPD, chronic bronchitis, obstructive sleep apnea, and emphysema involve symptoms of chronic persistent cough, shortness of breath, and wheezing and have increased claim rates that are comparable to or exceed those for asthma, rhinitis, and sinusitis. Another commenter questioned why obstructive sleep apnea was not added as a presumptive condition. For the reasons provided below, VA makes no changes based on these comments.

The complexity of the etiologic factors associated with obstructive sleep apnea were considered when establishing new presumptions under 38 CFR 3.320. Unlike asthma, sinusitis, and rhinitis, obstructive sleep apnea can be related to anatomic risk factors, such as craniofacial profile, structural abnormalities ( e.g., pharyngeal wall instability) and neck circumference. Furthermore, obesity and high body mass index are the strongest risk factors for obstructive sleep apnea. 1

Additionally, provisions of the PACT Act added presumptions related to Gulf War service for additional respiratory conditions, including COPD, chronic bronchitis, and emphysema. Incorporation of provisions of this Act relevant to this regulation will be the subject of separate and future rulemakings.

Further, we note that section 202 of the PACT Act created a new process for establishing presumptions of service connection based on toxic exposure. Under the new process, VA is required to publish notice in the Federal Register , no less than once per year, to notify the public of the formal evaluations of environmental exposures and adverse health outcomes that the Secretary plans to conduct. With each notice published in the Federal Register , VA will seek public comment and hold an open meeting for members of the public to ensure that the public participates in the decision-making process (38 U.S.C. 1171-1174). VA welcomes comments and contributions from the public on future notices.

VA received nine comments that either objected to or requested revision of the 10-year manifestation period requirement. VA found that several comments identified factors that were not considered in our initial analysis. Based on the substantive comments received, summarized below, VA will amend 38 CFR 3.320(a)(2) to remove the requirement that asthma, sinusitis, and rhinitis manifest within 10 years from the date of the most recent separation from military service.

VA received one comment that questioned whether the 10-year manifestation period starts following the most recent period of service, even if qualifying service in the defined locations did not occur during that period of service, or whether the manifestation period begins at the end of the period of service during which actual qualifying service took place, even if there is a later, separate period of active service during which no qualifying service took place. Another commenter stated that the 10-year manifestation period was poorly defined.

Several commenters recommended that the 10-year manifestation period be extended beyond 10 years. One commenter noted they had suffered symptoms of respiratory illness since their discharge in 2006 but did not receive a formal diagnosis until 2020, more than 10 years since discharge. The commenter felt that they would not be eligible for presumptive service connection based on the 10-year manifestation period.

Several commenters objected to the 10-year manifestation period stating that many veterans do not seek treatment and self-treat with over-the-counter medications, making it difficult to produce medical records in support of their claim. One commenter noted that symptoms of asthma, rhinitis, and sinusitis that would warrant a non-compensable rating may not require treatment from a medical provider, and veterans may not seek medical treatment until their symptoms increase in severity and self-treatment of the disability is no longer sufficient. Several commenters also stated that veterans who served during the Gulf War were not aware that there was a possible connection between their symptoms and their service, as the scientific studies on the effects of fine particulate matter did not exist at the time; therefore, they may not have collected and maintained medical records in support of their claims.

Two commenters stated that the 10-year manifestation period for asthma, rhinitis, and sinusitis, to include rhinosinusitis, was not based on evidence establishing their development and should therefore be removed.

One commenter recommended elimination of the 10-year manifestation period and stated that for the majority of the diseases for which VA has recognized a presumption due to exposure to toxic substances, VA has not required that the disease manifest itself within any specific period of time after exposure.

One commenter stated that VA should not impose a manifestation period unless and until it provides the public with adequate notice and an opportunity to comment on a proposed manifestation period after publicly disclosing and providing all the scientific evidence it reviewed and considered. The commenter further stated that VA not citing every study used in its decision-making is a failure in Administrative Procedure Act required notice.

One commenter disagreed with the 10-year manifestation period starting after the veteran's most recent discharge, even if that discharge did not include a qualifying period of service, as long as there was a previous deployment to a qualifying location. The commenter recommended that the 10-year manifestation period begin at the date of discharge that included deployment to a qualifying location.

VA appreciates the substantive comments received on the interim final rule. Upon further evaluation, and weighing the evidence and claims data available against the substantive comments received, VA will amend 38 CFR 3.320(a)(2) to remove the 10-year manifestation requirement under 38 CFR 3.320(a)(2). While claims data was given significant weight in VA's initial determination, VA acknowledges that sufficient consideration was not given to the difficulties veterans may face in documenting the onset of their disease. In addition, section 405 of the PACT Act removed the manifestation period requirement under 38 U.S.C. 1117 (codified at 38 CFR 3.317). As stated above, incorporation of provisions Public Law 117-168 will be the subject of separate and future rulemaking.

One commenter urged VA to reject a cause-and-effect standard in deciding whether to adopt a presumption of service connection and recommended a statistical association test as the most appropriate standard to use. In addition, the commenter urged VA to apply a statistical association test consistently when creating new presumptions. VA notes that it did not employ a cause-and-effect standard in determining to establish the presumptions of service connection for asthma, rhinitis, and sinusitis, to include rhinosinusitis. We note that the PACT Act created a new process for establishing presumptions of service connection based on toxic exposure. As stated above, implementation of provisions in Public Law 117-168 will be the subject of separate and future rulemaking. Therefore, VA makes no changes based on this comment.

One commenter suggested that VA revise the language describing qualifying periods of service because the current wording may be misinterpreted as excluding Gulf War Veterans who served prior to September 19, 2001. The commenter noted that including the definition of the Southwest Asia theater of operations and the definition of the Gulf War within 38 CFR 3.320 would improve clarity. VA agrees with this recommendation and will amend 38 CFR 3.320 to include new paragraph (a)(6). 38 CFR 3.320(a)(6) will provide the definition of the Southwest Asia theater of operations, also found at 38 CFR 3.317(e)(2), and the definition of the Gulf War, also found at 38 CFR 3.2(i). This addition will clarify the intent of the regulation.

Additionally, VA is amending the definition of the qualifying periods of service in paragraph (a)(5) by adding space service to the list of types of service as it was inadvertently omitted from the interim final rule.

One commenter asked that VA clarify that this rule in no way precludes future rules providing presumptive service connection for health conditions resulting from Gulf War service that are not respiratory in nature. While this rulemaking is based on current medical and scientific evidence related to the respiratory health effects of fine particulate matter on veterans who served during the Gulf War, VA will continue to review new scientific evidence as it develops relating to all health effects resulting from exposure to fine particulate matter. This rulemaking does not limit the future establishment of presumptive service connection for conditions related to respiratory or other body systems.

One commenter requested that VA notify stakeholders promptly regarding the progress of its ongoing review of health outcomes related to exposure to fine particulate matter, its expected timetable, the steps it is taking and will take as part of the review, and the opportunities for additional public comment that will be provided. VA appreciates the comments and valuable feedback it receives from its stakeholders and will continue to participate in notice-and-comment rulemaking (as appropriate) on future presumptive conditions.

VA appreciates all comments submitted in response to the interim final rule. Based on the rationale stated in the interim final rule and in this document, the final rule is adopted with changes as noted.

VA has considered all comments submitted in response to the interim final rule and does not consider any to be objecting to the rule. Rather, the comments received have suggested ways in which the rule could be refined or liberalized. And for the reasons set forth in the foregoing responses to those comments, VA has made changes. Accordingly, based upon the authorities and reasons set forth in the interim final rule, VA is adopting the provisions of the interim final rule as a final rule with the changes as described above.

Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits 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 effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 (Executive Order on Modernizing Regulatory Review) supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review established in Executive Order 12866 and Executive Order 13563. The Office of Information and Regulatory Affairs has determined that this rulemaking is a significant regulatory action under Executive Order 12866, section 3(f)(1), as amended by Executive Order 14094. The Regulatory Impact Analysis (RIA) associated with this rulemaking can be found as a supporting document at www.regulations.gov.

The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable to this rulemaking because notice of proposed rulemaking is not required. 5 U.S.C. 601(2), 603(a), 604(a). On August 5, 2021, VA published an interim final rule in the Federal Register (86 FR 42724). This Final rule adopts the Interim Final rule without changes.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and Tribal governments, or on the private sector.

This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

The Assistance Listing program numbers and titles for this rule are 64.101, Burial Expenses Allowance for Veterans; 64.102, Compensation for Service-Connected Deaths for Veterans' Dependents; 64.104, Pension for Non-Service-Connected Disability for Veterans; 64.105, Pension to Veterans, Surviving Spouses, and Children; 64.109, Veterans Compensation for Service-Connected Disability; and 64.110, Veterans Dependency and Indemnity Compensation for Service-Connected Death.

Under the Congressional Review Act, this regulatory action may result in an annual effect on the economy of $100 million or more, 5 U.S.C. 804(2), and so is subject to the 60-day delay in effective date under 5 U.S.C. 801(a)(3). In accordance with 5 U.S.C. 801(a)(1), VA will submit to the Comptroller General and to Congress a copy of this Regulation and the Regulatory Impact Analysis (RIA) associated with the Regulation.

Denis McDonough, Secretary of Veterans Affairs, approved and signed this document on August 25, 2023, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.

For the reasons stated in the preamble, the interim final rule amending 38 CFR part 3, which was published at 86 FR 42724, is adopted as final with the following changes:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

On June 23, 2023, EPA published a Notice of Proposed Rulemaking (NPRM) for the State of Rhode Island. See 88 FR 41056. The NPRM proposed approval of revisions to the Rhode Island Air Pollution Control Regulation (APCR) No. 36, Control of Emissions from Organic Solvent Cleaning. The SIP revisions include minor regulatory changes that provide consistency with federal regulations for National Emissions Standards for Hazardous Air Pollutants (NESHAP) for Halogenated Solvent Cleaning. The formal SIP revision was submitted by Rhode Island on June 9, 2022.

Other specific requirements of Rhode Island's order and the rationale for EPA's proposed action are explained in the NPRM and will not be restated here. No public comments were received on the NPRM.

EPA is approving revisions to the Rhode Island APCR No. 36, Control of Emissions from Organic Solvent Cleaning.

In this rule, the EPA is approving and finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of Rhode Island's 250-RICR-120-05-36, Control of Emissions from Organic Solvent Cleaning dated May 3, 2022, which regulates emissions related to halogenated solvent cleaning. The EPA has made, and will continue to make, these documents generally available through https://www.regulations.gov and at the EPA Region 1 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 1

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 001); and

• Is not subject to requirements of section 12(d) of the National Technology Transfer and advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

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

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 31, 2023. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean the EPA.

On January 22, 2022 (87 FR 78621), the EPA published a Notice of Proposed Rulemaking (NPRM) that proposed approval of RI DEM's amended rules in the Rhode Island Code of Regulations, Control of Emissions from Organic Solvent Cleaning (Organic Solvent Cleaning Rule), and the General Definitions Regulation (General Definitions Rule) in place of the National Emission Standard for Halogenated Solvent Cleaning (Halogenated Solvent NESHAP) as a partial rule substitution as it applies to organic solvent cleaning machines in Rhode Island.

Under CAA section 112(l), the EPA may approve state or local rules or programs to be implemented and enforced in place of certain otherwise applicable Federal rules, emissions standards, or requirements for hazardous air pollutants (HAPs). The Federal regulations governing the EPA's approval of state and local rules or programs under section 112(l) are located at 40 CFR part 63, subpart E ( see 58 FR 62262 (November 26, 1993), as amended by 65 FR 55810 (September 14, 2000)). Under these regulations, a state air pollution control agency has the option to request EPA's approval to substitute a state rule for the applicable Federal rule ( e.g., the National Emission Standards for Hazardous Air Pollutants). Upon approval by EPA, the state agency is authorized to implement and enforce its rule in place of the Federal rule.

The EPA promulgated the Halogenated Solvent NESHAP on December 2, 1994. See 40 CFR part 63, subpart T. The EPA promulgated several amendments to the Halogenated Solvent NESHAP, with the latest amendments promulgated on May 3, 2007 ( see 72 FR 25138).

On June 18, 2010, the EPA approved the Rhode Island Air Pollution Control Regulation No. 36, currently codified in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 36 Control of Emissions from Organic Solvent Cleaning (Organic Solvent Cleaning Rule), and Rhode Island Air Pollution Control General Definitions Regulation, currently codified in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 0 General Definitions Regulation (General Definitions Rule), as a partial rule substitution for the Halogenated Solvent NESHAP, applicable to all sources in Rhode Island, except for continuous web cleaning machines, 1 for which the Halogenated Solvent NESHAP continues to apply ( see 75 FR 34647).

In a letter dated June 30, 2022, RI DEM requested approval of its amended rules pertaining to organic solvent cleaning in Rhode Island. Specifically, RI DEM requested approval of its amended rules in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 36 Control of Emissions from Organic Solvent Cleaning, effective June 13, 2022, excluding the provisions in Parts 36.2, 36.5.A.28, 36.6.D, and 36.17, 2 and in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 0 General Definitions Rule, effective January 4, 2022, excluding the provisions in Part 0.2. 3 In this Federal Register notice, the EPA is approving the amended Organic Solvent Cleaning Rule and General Definitions Rule under the rule substitution criteria in 40 CFR 63.93. No public comments were received on the NPRM.

EPA is approving RI DEM's amended rules in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 36 Control of Emissions from Organic Solvent Cleaning, effective as of June 13, 2022, excluding the provisions in Parts 36.2, 36.5.A.28, 36.6.D, and 36.17, and in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 0 General Definitions Regulation, effective as of January 4, 2022, excluding the provisions in Part 0.2, as a partial rule substitution for the Halogenated Solvent NESHAP, for all sources in Rhode Island, except for continuous web cleaning machines.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of Rhode Island's rules in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 36 Control of Emissions from Organic Solvent Cleaning, effective as of June 13, 2022, which limits emissions from organic solvent cleaning machines and industrial solvent cleaning operations, excluding the provisions in Parts 36.2, 36.5.A.28, 36.6.D, 36.17, and in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, Part 0 General Definitions Regulation, effective as of January 4, 2022, which provides a consistent set of definitions and abbreviations for terms used in Title 250 Department of Environmental Management, Chapter 120 Air Resources, Subchapter 05 Air Pollution Control, excluding the provisions in Part 0.2. The EPA has made, and will continue to make, these documents generally available through at the EPA Region 1 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the CAA, the Administrator has the authority to approve CAA section 112(l) submissions that comply with the provisions of the Act and applicable Federal regulations. In reviewing section 112(l) submissions, the EPA's role is to approve state choices, provided that they meet the criteria and objectives of the CAA and of the EPA's implementing regulations. Accordingly, this action approves the State's request as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001).

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the 112(l) submission is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

For the reasons stated in the preamble, EPA amends 40 CFR part 63 as follows:

This is a summary of the Commission's Sixth Report and Order (Order) in WC Docket No. 21-450; adopted on August 3, 2023 and released on August 4, 2023. The full text of this document is available at the following internet address: https://www.fcc.gov/document/fcc-acts-provide-subsidy-consumers-certain-high-cost-areas-0 .

1. In this final rule, as required by the Infrastructure Investment and Jobs Act (Infrastructure Act), the Commission adopts rules to establish the enhanced discounts available for monthly broadband services provided in high-cost areas by participants in the ACP. The Infrastructure Act recognizes that in certain high-cost areas of the country, offering broadband service to ACP eligible households at the standard up-to-$30 monthly benefit level could lead providers to experience particularized economic hardship such that the provider may not be able to maintain the operation of part or all of its broadband network. To address this, the Infrastructure Act allows for providers to provide an up-to-$75 monthly benefit to ACP eligible households in high-cost areas upon a showing of such particularized economic hardship in a given high-cost area. The steps the Commission takes to implement this provision will help narrow the digital divide by ensuring that more low-income households throughout the country, including households in rural and insular areas, have access to discounted broadband services. In particular, the high-cost area benefit will maximize provider participation in the ACP, by encouraging additional providers to participate in the ACP in high-cost areas and incentivizing existing ACP providers experiencing an economic hardship in high-cost areas to continue participating in the program. The high-cost area benefit also complements and supports other Federal initiatives, including those in the Infrastructure Act, to spur deployment and adoption in rural areas by strengthening the business case for providers to deploy broadband in rural and insular areas.

2. The Commission now establishes the requirements to implement the ACP high-cost area benefit as required by the Infrastructure Act. In this section, the Commission discusses determining high-cost areas that will be eligible for the high-cost area benefit, eligibility to receive the high-cost area benefit, requirements to make a showing of economic hardship, as well as other administrative aspects necessary to implement the high-cost area benefit.

3. Pursuant to the Infrastructure Act, for purposes of the ACP high-cost area benefit, the Commission must use the definition of high-cost areas established by the National Telecommunications and Information Administration (NTIA) for its Broadband Equity, Access, and Deployment (BEAD) grant program. The ACP statutory provisions specifically reference NTIA's determination of high-cost areas under the BEAD program in defining a high-cost area for the ACP high-cost area benefit. As such, the high-cost areas used by the Commission for the ACP high-cost area benefit will be the same as the high-cost areas used for the BEAD program as determined by NTIA.

4. The statute establishing the BEAD program requires NTIA, “on or after the date on which the [Commission's] broadband DATA maps are made public,” to allocate funding to eligible States for the high-cost areas within the State. By definition, a “ `high-cost area' [as determined by NTIA in consultation with the Commission] means an unserved area in which the cost of building out broadband service is higher, as compared with the average cost of building out broadband service in unserved areas in the United States.” For purposes of defining “high-cost area”, the term “unserved area” means an area in which not less than 80 percent of broadband-serviceable locations are unserved locations.

5. On June 26, 2023, NTIA announced the State allocations for the BEAD grant program. As part of BEAD, NTIA has made State allocations in part based on the determined “high-cost areas” within each State. Pursuant to the Infrastructure Act, the Commission therefore makes the ACP high-cost area benefit available in those high-cost areas identified by NTIA consistent with the Infrastructure Act's definition of “high-cost area,” and subject to the provider's demonstration of particularized economic hardship, as described in further detail in the following.

6. The Commission next addresses the requirements for participating providers seeking to offer a high-cost area benefit to eligible households located in designated high-cost areas served by the provider. Specifically, the Commission defines “particularized economic hardship,” to clarify that the benefit is limited to facilities-based providers, and address the specific showing that participating providers must make to demonstrate they are experiencing a particularized economic hardship in a given high-cost area. The Commission also prescribes the process for submitting, reviewing, and taking action on such showings, and for requests for review of adverse decisions. Lastly, the Commission clarifies the interplay between the qualifying Tribal land and high-cost area benefits by interpreting the Infrastructure Act to mean that participating providers can either offer one or the other, but not both simultaneously, to eligible households located on both a Tribal land and in a designated high-cost area.

7. Particularized Economic Hardship. First, consistent with the Infrastructure Act, the Commission will require a participating provider to demonstrate economic hardship to be eligible for the high-cost area benefit. The Infrastructure Act directs the Commission to establish a mechanism whereby a “participating provider” in a high-cost area “may provide” an enhanced monthly benefit up to $75 “upon a showing that the applicability of the lower [$30] limit . . . would cause particularized economic hardship to the provider such that the provider may not be able to maintain the operation of part or all of its broadband network.” The Commission implements this directive by requiring a participating provider seeking application of the high-cost area benefit to demonstrate the economic hardship to which it would be subject if only the standard $30 monthly discount were applied to its provision of ACP service in a high-cost area(s). This approach to implementing the statute is consistent with the positions taken by several commenters in the record.

8. Next, the Commission defines particularized economic hardship by focusing on the provider's operating costs and revenues in the high-cost area(s) where the provider seeks approval to offer the high-cost area benefit. The Commission finds that a provider that demonstrates it is unable to cover the costs of maintaining the operation of all or part of its broadband network in a high-cost area where it seeks to offer the high-cost area benefit as described in the following meets the “particularized economic hardship” standard. Hereafter, the Commission describes such a provider as operating at a loss. To establish “particularized economic hardship,” the Commission will require providers to submit documentation, such as an income statement, showing that they are unable to cover the costs of maintaining the operation of all or part of their broadband network for each high-cost area for which the high-cost area benefit is being sought. Aside from required documentation, the Commission will also require each provider to certify to and explain how the up to $75 a month high-cost area benefit would materially improve the provider's ability to offer service through the ACP and maintain and operate its broadband network and how the economic hardship limits its ability to “maintain the operation of all or part of its broadband network” in each high-cost area for which it seeks to offer the high-cost area benefit.

9. The Commission finds this standard to be consistent with the language and intent of the statute, as well as the record. Congress did not provide details on the nature of the showing of economic hardship providers must make to obtain the high-cost area benefit. The statute provides that the provider must show that the applicability of the basic $30 benefit would cause “particularized economic hardship . . . such that the provider may not be able to maintain the operation of part or all of its broadband network.” The Commission sought comment on the mechanism by which providers can show particularized economic hardship. Because a provider operating at a loss in the high-cost area for which it seeks the high-cost area benefit may be unable to maintain broadband network operations in that area, the Commission finds this standard to be consistent with the language and intent of the statute. For purposes of this standard, the provider will need to factor in the standard monthly $30 ACP benefit as well as subsidies and other financial benefits the provider receives, including Universal Service Fund (USF) high-cost support, as they are directly relevant when evaluating the overall costs and revenues of the provider. No commenter opposed the Commission's proposal in the Notice of Proposed Rulemaking (NPRM), 87 FR 8385, February 14, 2022, of including subsidies and other financial benefits in the economic hardship analysis.

10. The Commission rejects ACA Connects' suggestion to interpret “particularized economic hardship” to mean those instances where the provider's administrative costs of participating in the ACP exceeds the benefits received, and where the provider shows that in the context of its overall financial position, that net loss would affect its ability to maintain part of its broadband network. A provider could be profitable overall and willing to maintain network operations even if the costs of voluntarily participating in the ACP exceeded the benefits received. Conversely, a provider could be unprofitable overall, but the administrative costs of ACP participation could be less than the benefits received. Accordingly, the Commission finds ACA Connects' suggested approach would not provide a meaningful indication of whether a provider can “maintain the operation of part or all of its broadband network” when just the standard $30 benefit is available to eligible households in the designated high-cost areas it serves.

11. The Commission also declines to define “particularized economic hardship” as the serving of less than a Commission-defined threshold of broadband subscribers across a smaller provider's entire service territory, as suggested by ACA Connects. The Commission did seek comment on this approach in the NPRM in response to earlier comments by NTCA—The Rural Broadband Association (NTCA) and Conexon. However, the Commission received no comments that would help them determine how to apply a standard under a threshold-based approach to determine whether a provider may not be able to maintain the operation of part or all of its broadband network without the high-cost area benefit. Furthermore, the Commission believes that a subscriber threshold-based approach would be at odds with Congress's directive to require a showing of “particularized” economic hardship. The Commission interprets the meaning of “particularized” in the context of the high-cost area benefit to mean that a provider must show that it is individually experiencing economic hardship. A subscriber-based threshold approach is inconsistent with this interpretation because it would necessarily assume that all providers that met the threshold were experiencing sufficiently similar circumstances to merit access to the high-cost area benefit, without regard to whether each provider's specific circumstances demonstrated that the provider would experience economic hardship absent the application of the high-cost area benefit. Accordingly, the Commission finds that the statute requires them to define particularized economic hardship based on an individualized showing so that each provider can account for its own particularized cost and revenue structure.

12. To the extent that NTCA suggests an approach that allows providers to qualify for the high-cost area benefit based solely on the receipt of USF high-cost support, the Commission declines to adopt such an approach. Recipients of USF high-cost support receive subsidies to provide reasonably comparable services at rates reasonably comparable to those in urban areas. Indeed, those subsidies are a way for providers to cover certain costs of operating and maintaining their networks, which may, if anything, make it less likely that a provider would be suffering a particularized economic hardship in the geographic area where it receives high-cost support. Therefore, receipt of USF high-cost support, in and of itself, does not show the provider is experiencing a “particularized economic hardship” in general, or as defined herein. To bolster its argument, NTCA attempts to tie the ACP high-cost area benefit to the role USF high-cost support plays in enabling “ `affordable' broadband services for all rural consumers, regardless of income level.” NTCA contends that the “ `enhanced' ACP subsidy can make up for [the] `gap' between `reasonable comparability' and `affordability' that the High-Cost USF program does not close on its own.” However, this argument does not address the specific language of the statute, which focuses on a provider's inability to “maintain the operation of part or all of [a provider's] broadband network” rather than on whether the service at issue is affordable to subscribers with the standard ACP benefit. Accordingly, the Commission rejects this proposal.

13. The Commission also disagrees with the Wireless Internet Service Providers Association's (WISPA) position that small Internet Service Providers “lack the administrative resources to establish their specific costs to provide broadband service in an area,” and that it is unnecessary to examine an individual operator's cost of doing business.” Instead, WISPA asserts that all areas eligible for the Connect America Fund or Rural Digital Opportunity Fund, as well as any census block identified as a high-poverty area on the map created by the Department of Agriculture and NTIA, should be designated as high-cost areas eligible for the $75 subsidy. WISPA's suggested approach would seem to read the “particularized economic hardship” showing out of the statute entirely. As discussed in this document, the statute's particularized economic hardship requirement is separate from and in addition to the requirement that this enhanced support only be made available in “high-cost areas,” and the determination of those high-cost areas will be made by NTIA. Moreover, the Commission expects that any business, regardless of size, will have knowledge of the costs and revenues associated with its business operations, at least to the extent necessary to determine if the provider is experiencing particularized economic hardship in a high-cost area.

14. Facilities-Based Provider Limitation. Pursuant to the Infrastructure Act's direction that a provider show that particularized economic hardship may impair its ability “to maintain the operation of part or all of its broadband network,” the Commission clarifies that only facilities-based providers will be eligible for the high-cost benefit. The Commission finds that the Act directs them to prohibit non-facilities-based providers from receiving a high-cost area benefit as such providers would not experience an inability to maintain their network absent the application of the high-cost benefit. For purposes of this final rule, the Commission defines facilities-based provider consistent with its rules regarding the Form 477 collection, to include provider owned physical facilities, and wireless spectrum. The Commission directs the Universal Service Administrative Company (USAC) to validate and verify a provider's facilities-based status as part of the process of approving providers to offer the high-cost area benefit. Providers will additionally be required to certify to their status as a facilities-based provider as part of their application to offer the high-cost area benefit.

15. Showing to Support Request for Approval to Offer the High-Cost Area Benefit. The Commission's objective is to administer the high-cost area benefit consistent with the statutory language requiring, among other things, a showing of particularized economic hardship by the ACP provider balanced with “a minimal burden on qualifying households and providers.” In implementing this approach, the Commission seeks to safeguard program integrity while also minimizing the administrative burden for a provider seeking to demonstrate that it is unable to cover the costs of operating and maintaining all or part of its network operations in the high-cost area(s) absent the high-cost area benefit.

16. The Commission outlines the type of documentation that it expects would be sufficient for a provider to demonstrate that it is experiencing “particularized economic hardship” for purposes of the high-cost area benefit. Participating providers must demonstrate particularized economic hardship by submitting an affidavit supported by an income statement demonstrating the provider is currently operating at a loss in each high-cost area(s) for which the provider is seeking approval to offer the high-cost area benefit. To facilitate the administration of the benefit and minimize provider burdens, providers may submit a single application with supporting documentation for all of the high-cost areas where they are seeking approval to offer the high-cost area benefit.

17. To support its affidavit, the provider must include a copy of its most recent income statement(s), prepared in the ordinary course of business, consolidated and at the component level, as applicable, covering the previous fiscal year of operations or the last six quarters of operations, and separately identify, in the method determined by the Wireline Competition Bureau (the Bureau), the high-cost areas, as designated by NTIA, that the provider serves and in which it is seeking to provide the high-cost area benefit. An income statement, otherwise known as a profit and loss statement, showing the provider's revenue, expenses, gains, and losses during the required time period, strikes the appropriate balance between ensuring the high-cost area benefit is appropriately limited and minimizing the administrative burden on providers. An income statement is a routine financial statement prepared by companies, and thus most providers already prepare such statements in the normal course of business. The income statement must, at a minimum, include detailed information on the provider's net income, operating revenue and operating expenses, including, but not necessarily limited to, cost of goods sold or services, selling, general and administrative expenses and depreciation or amortization expenses. To protect program integrity providers that are publicly traded or that prepare audited income statements in the ordinary course of business shall be required to submit the audited income statement, rather than an unaudited income statement, to support their affidavit. The Commission delegates authority to the Bureau, in consultation with the Office of Economics and Analytics (OEA) as appropriate, and consistent with the standard established in this Order, to further specify or modify the types of documentation that providers must submit to show “particularized economic hardship”.

18. To protect program integrity, and consistent with other submissions made to justify the receipt of a Federal benefit, such an affidavit shall be made under penalty of perjury from a company officer with knowledge of the provider company's costs and revenues. The affidavit must describe in sufficient detail the methodology used for determining that the annualized expenses of maintaining the operation of the provider's broadband network in a particular high-cost area exceeds the provider's expected total revenues in that high-cost area. This should include an allocation of provider broadband internet access service revenues and costs for the relevant high-cost area(s) if the income statement is too broad to demonstrate that the provider is operating at a loss relative to providing broadband internet access service in the high-cost area(s) in question. The affidavit should also factor in payments from customers for broadband internet access service as well as the up-to-$30 ACP benefit and additional subsidies and other financial benefits received, including USF high-cost support related to providing broadband internet access service. The affidavit must also include an explanation as to how the economic hardship resulting from the operating loss may limit the provider's ability to maintain the operation of all or part of its broadband network in the high-cost area(s) for which it seeks to offer the high-cost area benefit. Additionally, in the affidavit, each provider must explain when and why the provider originally began operating in the high- cost area(s). In support of the affidavit a provider is also required to submit any Federal income tax returns relating to the submitted income statements. These tax returns could be used to identify anomalies or other potential issues in the financial data being provided as part of the application for the high-cost area benefit.

19. To demonstrate that a provider is operating at a loss, the income statement, and cost-allocation as applicable, must show that the provider's broadband revenue has been below broadband expenses in at least four of the last six fiscal quarters or for the last full fiscal year for each relevant high-cost area. If the income statement includes costs and revenues for broadband network operations outside of the high-cost areas for which the provider seeks approval to offer the high-cost area benefit, then the provider will need to allocate the costs and revenues associated with the relevant high-cost area(s) and provide the cost and revenue allocation for the high-cost area(s) in the supporting affidavit.

20. To determine the share of the provider's total operating costs that are associated with its broadband network operations in the relevant high-cost area(s), the provider must use a reasonable cost assignment and/or cost-allocation method. A provider should first attempt to directly assign or attribute costs to broadband internet access services and to the relevant high-cost area(s). Costs that are not directly assignable ( e.g., common or shared costs) should be allocated based on a cost-causative mechanism wherein the participating provider should identify a cost-causative link to an expense category (or group of categories) that has already been directly assigned or attributed. Finally, where none of the methods described in this document are possible, the participating provider should employ a reasonable cost-allocation of operating expenses, which may be based on factors, such as, for the relevant high-cost area(s), the share of a provider's total investments, total locations served, or in proportion to the share of directly assignable investments or expenses for the relevant high-cost area(s). Different cost allocators may be used to allocate different shared costs and must be sufficiently described in the supporting affidavit. For providers applying for multiple high-cost areas, the cost allocation methods should be consistent for all relevant high-cost areas to the extent feasible. To determine the share of the provider's total revenues associated with its broadband network operations in the relevant high-cost area(s), the provider must calculate and allocate revenue for the relevant time periods based on revenues for the applicable high-cost area(s), and account for any subsidies received by the provider or other financial benefits, including USF high-cost support. Regardless of which cost allocation methods is used, all company-wide financial data submitted in support of an application for the high-cost area benefit must comply with generally accepted accounting principles.

21. To maximize flexibility, the Commission will allow a provider to choose the reasonable cost and revenue allocation method(s) within the parameters described in this document, rather than prescribe one. To mitigate any program integrity issues that this discretion might introduce, however, the Commission requires providers to identify and justify their chosen allocation method(s). Allowing providers options for reasonable cost and revenue allocation method(s) will allow even those providers with limited financial expertise to submit a showing based on their records that meets the standards adopted herein. The Commission directs the Bureau to develop a more detailed process for determining, in consultation with OEA, whether the provider's allocation method and justification are reasonable.

22. Notwithstanding the Commission's recognition that the needs to minimize the burden on participating providers and to encourage provider participation in the ACP are paramount, the Commission requires the filing of documentation showing that a provider will experience particularized economic hardship, which shall include the filing of both an affidavit with the information outlined in this document, along with the required income statement, and tax filings. An income statement alone would not provide sufficient assurances that a provider has satisfied the standard for offering the high-cost area benefit in a given high-cost area. The affidavit is an important safeguard for ensuring that the high-cost area benefit is appropriately limited to providers that are facing “particularized economic hardship” such that they will be unable to maintain part or all of their broadband network if they can only offer the standard $30 ACP benefit. The Commission recognizes that providers may not routinely prepare cost-allocations specific to the relevant high-cost areas. However, for income statements that are not specific to the relevant high-cost areas, cost allocations are necessary to satisfy the statute's requirement that the high-cost area benefit only be made available in high-cost areas where the provider experiences economic hardship. As noted earlier, to minimize the burden associated with cost-allocations, the Commission allows providers some flexibility in determining which cost-allocation method to use where the provider is unable to directly assign or attribute costs to broadband internet access services and to the relevant high-cost area(s) or use a cost-causative mechanism. An affidavit accompanying an income statement strikes the appropriate balance between protecting program integrity while minimizing the burden on providers.

23. Commenters stressed the importance of the Commission choosing a means for “qualification that imposes the least administrative burdens on providers, while protecting against waste, fraud, and abuse.” The Commission agrees, although it also concludes that proposals that effectively eliminate the need for any showing altogether are at odds with the statute. Similarly, the Commission finds that a mere certification as to a provider's particularized economic hardship in the high-cost area(s) it serves, as suggested by ACA Connects, is insufficient to satisfy the express “showing” mandated by Congress and impedes the Commission's ability to ascertain whether the provider is, in fact, experiencing a particularized economic hardship.

24. The Commission declines to adopt the suggestion from the Mississippi Center for Justice that it requires service providers to submit additional speed and coverage tests before allowing a broadband service provider to receive the high-cost area benefit. While the Commission is sympathetic to concerns about whether a provider's asserted coverage and speed matches actual network performance, the Infrastructure Act is clear that the only criterion it may consider when deciding whether a provider can receive the high-cost area benefit, is whether the absence of a high-cost area benefit would cause a particularized economic hardship to the provider. Furthermore, the Commission has taken steps in other proceedings to address service quality concerns and the reporting of accurate coverage and speed data. Accordingly, the Commission declines to require participating providers to perform these additional tests.

25. Additional Information Required for High-Cost Area Benefit Application. To facilitate the evaluation of a provider request for approval to offer the high-cost area benefit and to help protect program integrity, the Commission directs USAC to communicate with the provider about its request and collect information, as part of the application for approval to offer the high-cost area benefit, sufficient to identify the provider and the nature of the services it offers in the relevant high-cost areas, such as: contact information; FCC Registration Number; Unique Entity Identifier; Federal Tax ID Number; Service Provider ID Number; whether the provider is facilities-based in the relevant high-cost areas; and the nature of the provider's broadband network technology in the relevant high-cost area(s). Finally, a provider's submission must include certifications from a company officer with knowledge of the provider's cost and revenues under penalty of perjury that: (1) all information submitted is true and correct to the best of the filer's knowledge; (2) the provider will comply with all applicable statutes and the Commission's rules and orders; and (3) the provider will use any reimbursed funds received for its intended purpose of providing discounted broadband internet access services to eligible low-income households.

26. To help protect program integrity, a participating provider will also be required to indicate in its application seeking to offer the ACP high-cost area benefit whether it has previously applied for Federal financial assistance in the three fiscal years prior to the provider's application. Upon request, the participating provider must submit to USAC or the Commission applications for loans submitted to the U.S. Department of Agriculture Rural Utility Service (RUS), approvals or denials of such loans, the provider's RUS Operating Report for Telecommunications Borrowers filed with the RUS, and any financial reports filed with a state Public Utility Commission, as applicable. The requirement to submit these documents is an important safeguard against provider manipulation of the financial information in its application. This requirement will also assist USAC in ascertaining the validity of the financial information in the provider's application materials. Finally, in evaluating a provider's request for approval to offer the high-cost area benefit and to help protect program integrity the Commission or USAC must consider the extent to which other providers are operating in the high-cost area and not requesting this benefit.

27. Submission and Review of Showings and Appeals. The Commission directs USAC, under the oversight of the Bureau and the Office of the Managing Director, to develop a mechanism to enable participating providers to electronically submit the requisite particularized economic hardship showings. The Commission further directs USAC, under the oversight of the Bureau and OEA, to produce provider education and training materials concerning seeking approval to offer the high-cost area benefit and the Commission directs the Bureau to provide additional guidance to providers on the submission process. All provider submissions will be treated as presumptively confidential and will not be available for routine public inspection consistent with the Freedom of Information Act and the Commission's rules. While the actual content of the provider filings will remain confidential, the Commission directs USAC to publicly issue information identifying which providers are approved to offer the high-cost area benefit and the high-cost areas where they are approved to offer it. The Commission further directs the Bureau to release a Public Notice within 90 days after NTIA's determination of high-cost areas, announcing the date upon which providers can start to submit applications requesting authority to offer the high-cost area benefit. The Bureau shall have the discretion to determine whether to establish an initial deadline for provider requests or accept applications on a rolling basis.

28. The Commission directs USAC to review each economic hardship submission for completeness and then either approve or deny each submission pursuant to guidance and oversight by the Bureau and OEA. Each decision by USAC shall be made in writing, provide a written explanation of the basis for the decision, and provide the approval period for the high-cost area benefit as appropriate. Each USAC decision will be subject to the restrictions of § 54.702(c) of the Commission's rules which prohibits USAC from making policy, interpreting unclear provisions of the statute or rules, or from interpreting the intent of Congress. Any provider aggrieved by an action taken by USAC may seek review of that action, as set forth in Subpart I of the Commission's rules. While review of that action is pending, a provider will be able to submit claims for up to the $30 standard monthly benefit. Following a successful appeal, providers approved to offer the high-cost area benefit may submit revised claims for eligible households in the approved high-cost areas as set forth in 47 CFR 54.1808. The provider may only submit revised claims for up to $75 per month per eligible subscriber for the snapshot dates from the start of the period of approval, and the provider will be responsible for passing the full benefit amount on to subscribers as a discount off the price of their monthly bills before seeking reimbursement for the high-cost area benefit amount.

29. The Commission directs USAC to make updates to ACP systems, including to the National Lifeline Accountability Database, as appropriate, to allow providers that are approved to receive reimbursement for the high-cost area benefit to enroll households with the high-cost area benefit or to update existing ACP subscribers' records to reflect the designated high-cost areas associated with the participating provider's approved showing. The Commission also directs USAC to incorporate the high-cost area benefit into the ACP claims and enrollment tracker, with a separate column for households receiving the up to $75 high-cost area benefit. The Commission further directs USAC, with Bureau oversight, to develop provider training materials on how to enroll or update subscriber information to reflect the high-cost area benefit and to seek reimbursement for the enhanced benefit for eligible households in the relevant high-cost areas.

30. Annual Resubmission Requirement. To account for changing financial circumstances, participating providers approved to offer the high-cost area benefit must annually resubmit a showing of particularized economic hardship to demonstrate continued eligibility to offer the high-cost area benefit. The Commission directs the Bureau to determine any modifications providers should make to the financial showing for the resubmission, consistent with the statutory language and standard outlined in this Order, as well as the deadline for such resubmissions. The deadline shall allow sufficient time for review and a determination on the renewal submission, and provider notification to households of any benefit level changes as appropriate, before the expiration of the prior approval period. The Commission directs USAC to issue reminders to providers with current approvals of the renewal submission requirements within at least 30 days and at least 15 days of the deadline the Bureau announces for resubmissions. These reminders shall also inform providers that failure to make a resubmission will result in the loss of their approval to offer the high-cost area benefit and the date on which the provider must cease offering and can no longer claim the high-cost area benefit if it does not timely make a renewal submission. The Commission directs the Bureau to ensure that the renewal resubmissions are reviewed and a determination is issued in a reasonable timeframe.

31. There may be instances where a provider fails to submit the renewal submission, or does not satisfy the criteria to offer the high-cost area benefit based on its renewal submission. The Commission recognizes that the loss of the high-cost area benefit may cause a financial burden to low-income households that would be transitioned to the standard discount rather than the higher subsidy. To mitigate financial hardship and to avoid an accrual of household debt related to the loss of the high-cost area benefit, the Commission adopts several protections for ACP households where the provider is no longer approved to offer the high-cost ACP benefit. If a provider fails to submit the renewal submission by the deadline, the provider shall provide written notice to its ACP households receiving the high-cost area benefit at least 30 days prior to the last date that the provider is approved to offer the high-cost area benefit and a second notice at least 15 days before the last date that the provider is approved to offer the high-cost area benefit. If USAC determines that a provider no longer qualifies for the high-cost area benefit based on its renewal submission, the provider shall also follow the same customer notification process and deadlines as providers that fail to submit the renewal submission by the deadline. Such notices shall include: (1) a statement that the provider will no longer be offering the high-cost benefit; (2) the effective date of the loss of the high-cost area benefit; (3) a statement that upon the effective date of the loss of the high-cost area benefit, the ACP-supported service purchased by the household will no longer be discounted at the higher subsidy amount; and (4) the amount the household will be expected to pay if it continues purchasing the service from the provider after the high-cost area benefit is no longer available.

32. The Commission finds that providers may transition a household to a lower-priced service plan once the provider is no longer eligible to offer the high-cost area benefit upon advance notice to the household and after offering a reasonable opportunity for the household to agree to retain its current service plan or switch to another service plan. If the provider offers to transition the eligible household to a lower-priced plan, the offer to transition must be included in the required 30-day and 15-day notices, and must: (1) provide details about the new plan and monthly price; (2) inform the subscribers they can opt out of the transition and retain their current service plan or change to a different service plan than the lower-priced plan the service provider identified; (3) provide instructions for opting out of the transition or switching plans; and (4) provide the deadline for opting out of the transition or switching plans. The Commission believes this approach minimizes the potential for bill shock by allowing providers to transition eligible subscribers to a lower-priced plan, while also giving them an opportunity to opt out of the transition and either remain on their current service plan or choose another service plan. The Commission clarifies that moving eligible subscribers to a lower-priced plan upon advance notice and reasonable opportunity for subscribers to opt out of such a transition where the high-cost area benefit is no longer available does not constitute inappropriate down-selling.

33. Subscriber Initial Notice Concerning High-Cost Area Benefit. The Commission requires providers to seek annual approval to continue offering the high-cost area benefit. Accordingly, there is a potential for ACP subscribers receiving the high-cost area benefit to experience financial difficulty if their provider ceases being eligible to offer the high-cost area benefit.

34. To promote transparency and avoid the potential for subscriber confusion, participating providers approved to offer the high-cost area benefit must provide written notice to the subscriber when the provider first applies the high-cost area benefit to the subscriber's bill, stating: (1) that the subscriber is receiving an high-cost area benefit and specifying the difference between the standard ACP benefit and the high-cost area benefit being applied to the subscriber's ACP service; (2) that the receipt of the high-cost area benefit is contingent on the provider's annual continued eligibility to offer the high-cost area benefit; (3) that the provider is required to provide the subscriber advance notice if the provider is no longer deemed eligible to offer the high-cost area benefit; and (4) that the provider is required to provide the subscriber advance notice of any changes to the subscriber's ACP service rate or service plan stemming from any loss of the provider's eligibility to offer the high-cost area benefit.

35. Program Integrity. To ensure that providers are only seeking reimbursement for households that are eligible to receive the ACP high-cost area benefit, the Commission directs USAC to conduct program integrity reviews of claims related to the high-cost area benefit on an annual basis, in addition to targeted reviews of providers approved to offer the high-cost area benefit as needed ( e.g., based on indicia of program integrity risks). The Commission recognizes that a risk exists where providers receiving the high-cost benefit could attempt to raise rates or push ACP subscribers to higher priced pans to maximize their reimbursement for the high-cost area benefit claims. The Commission reminds providers that they are required to offer the same services to ACP households on the same terms and conditions as non-ACP households and inappropriate upselling is a violation of the ACP rules. The Commission also clarifies that, as with the standard benefit and the enhanced Tribal benefit, providers are required to pass through the entire benefit to ACP eligible households. In addition to USAC's program integrity reviews, the Bureau, in coordination with OEA, shall also use available data from ACP providers to maximize program integrity with respect to the high-cost area benefit, including, but not limited to, inflating rates, or claiming the high-cost area benefit for a greater number of households than the number of the provider's broadband serviceable locations in a given high-cost area. The Commission reminds providers that it may suspend or remove a participating provider from the ACP for a variety of reasons, including violations of the rules or requirements of ACP or any action that indicates a lack of business integrity or business honesty that seriously and directly affects the provider's responsibilities under the ACP or undermines the integrity of the program. The Commission further directs the Bureau, in coordination with USAC, to provide additional details and procedures, as necessary, in conformance with this Order to ensure the efficient functioning of the high-cost area benefit.

36. Lastly, the Commission reminds providers that the Infrastructure Act allows eligible households to apply the ACP benefit to “any internet service offering of the participating provider, at the same terms available to households that are not eligible households.” The Commission has found this requirement will help “ensure the marketplace will not be limited, and consumers can apply the affordable connectivity benefit to a plan of their choosing.” This, in turn, will help minimize concerns that “providers may introduce or alter plans solely to maximize the reimbursement amount.” However, as the Commission clarified, providers are not precluded “from making internet service offerings that are only available to ACP subscribers provided that the terms are at least as good as plans that are available to non-eligible households. . . .”

37. Clarification of the Scope of Both ACP Enhanced Benefits. The statute is silent on whether a household that is both eligible for the ACP high-cost area benefit and the ACP enhanced qualifying Tribal land benefit may receive both benefits simultaneously However, nothing indicates that Congress intended for households in this scenario to be eligible to receive more than one ACP enhanced benefit. Further, allowing households to receive both enhanced ACP benefits at the same time would not be a fiscally responsible use of limited ACP funds. Absent Congressional intent to the contrary, the Commission clarifies that the ACP enhanced benefits are not cumulative and thus, a participating provider can only offer and seek reimbursement for one ACP enhanced benefit to eligible households in such situations. Accordingly, a participating provider is allowed to seek reimbursement for the enhanced qualifying Tribal land or the high-cost area benefit per eligible household up to the maximum benefit amount of $75 per month, not both.

38. Pursuant to 47 U.S.C. 1752(h)(2) the collection of information sponsored or conducted under the regulations promulgated in this Order is deemed not to constitute a collection of information for the purposes of the Paperwork Reduction Act, 44 U.S.C. 3501-3521.

39. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, OMB, concurs, that this rule is non-major under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this final rule to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

40. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking ( NPRM ) released in March 2021. The Commission sought written public comment on the proposals in the Notice, including comment on the IRFA. No comments were filed addressing the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

41. In the Infrastructure Act, Congress established the ACP, which is designed to promote access to broadband internet access services by households that meet specified eligibility criteria by providing funding for participating providers to offer certain services and connected devices to these households at discounted prices. The ACP funds an affordable connectivity benefit consisting of a per month discount up to $30 on the price of broadband internet access services that participating providers supply to eligible households in most parts of the country and a per month discount up to $75 on such prices for households on qualifying Tribal lands. The Commission established rules governing the affordable connectivity standard $30 benefit and the enhanced Tribal lands benefit in the ACP Report and Order, 87 FR 8346, February 14, 2022, adopted on January 14, 2022.

42. The Infrastructure Act also establishes a separate, enhanced affordable connectivity benefit for eligible households served by participating providers in certain high-cost areas. Specifically, the Infrastructure Act makes available a high-cost area benefit of up to $75 per month for broadband internet access service offered by participating providers in certain areas where the cost of building broadband facilities is relatively high, upon a showing that the lower $30 per month benefit “would cause particularized economic hardship to the provider such that the provider may not be able to maintain the operation of part or all of its broadband network.” In the earlier NPRM to which the IRFA applied, the Commission sought comment on the rules to implement this enhanced benefit.

43. In the Order, the Commission adopts the rules necessary to implement the enhanced benefit in high-cost areas the NTIA designated in consultation with the Commission. Specifically, the Commission addresses the rules and procedures for participating providers that are facilities-based to offer an high-cost area benefit to eligible households located in designated high-cost areas served by the provider. The Commission defines “particularized economic hardship” for purposes of determining eligibility for the high-cost area benefit. The Commission then addresses the specific showing that participating providers must make to demonstrate they are experiencing a particularized economic hardship. The Commission also prescribes the process for submitting, reviewing, taking action on such showings, and for requests for review of adverse decisions.

44. 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; (3) satisfies any additional criteria established by the Small Business Administration (SBA).

45. Small Businesses, Small Organizations, and Small Governmental Jurisdictions. Small Businesses, Small Organizations, Small Governmental Jurisdictions. 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 SBA's 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 32.5 million businesses.

46. 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.

PHMSA, in coordination with FRA, is suspending recent amendments to the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) authorizing transportation of “Methane, refrigerated liquid,” commonly known as liquefied natural gas (LNG) in DOT-113C120W9 specification rail tank cars while it conducts a thorough evaluation of the HMR's regulatory framework for rail transportation of LNG in a companion rulemaking under Regulatory Identification Number (RIN) 2137-AF54, and determines whether any modifications are necessary. Transportation of LNG by rail tank car has not occurred since the July 24, 2020, publication of a final rule authorizing transportation of LNG in rail tank cars  1 and there is considerable uncertainty regarding whether any would occur in the time it takes for PHMSA to consider potential modifications to existing, pertinent HMR requirements. However, this temporary suspension of the HMR provisions authorizing transportation of LNG in rail tank cars guarantees no such transportation will occur before its companion rulemaking has concluded or June 30, 2025, whichever is earlier, thereby: (1) avoiding potential risks to public health and safety or environmental consequences (to include direct and indirect greenhouse gas (GHG) emissions)  2 that are being evaluated in the companion rulemaking under RIN 2137-AF54; (2) allowing for the completion of ongoing testing and evaluation efforts undertaken in collaboration with FRA, as well as further consideration of the recommendations from external technical experts of the National Academy of Sciences, Engineering, and Medicine (NASEM); (3) assuring an opportunity for the potential development of any mitigation measures and operational controls for rail tank car transportation of LNG; (4) reducing the potential for economic burdens by ensuring that entities avoid ordering rail tank cars for transporting LNG compliant with current HMR requirements when the companion rulemaking may adopt alternative requirements; and (5) enabling potential opportunities for stakeholders and the public to be apprised of, and comment on, the results of ongoing testing and evaluation efforts.

Towards that end, PHMSA is adding a new special provision 439 that prohibits LNG transportation in rail tank cars until issuance of a final rule concluding the rulemaking proceeding under a companion rulemaking under RIN 2137-AF54, or June 30, 2025, whichever is earlier. Rail transport of LNG may still be permitted as authorized by the conditions of a PHMSA special permit (SP) under § 107.105, or in a portable International Organization for Standardization (ISO) tank secured to a rail car pursuant to the conditions of an FRA approval under § 174.63. PHMSA is also adopting a modest extension (until June 30, 2025, at the latest) of the sunset for the temporary suspension period identified in its November 2021 notice of proposed rulemaking in this proceeding, 3 consistent with comments received on the NPRM and information obtained after its publication evincing greater uncertainty regarding the near-term commercial viability and potential environmental and safety risks associated with rail tank car transportation of LNG as authorized by the July 2020 Final Rule.

LNG is a natural gas that has been cooled and converted to a liquid form for easier and more efficient transportation. In the United States, pipelines have historically delivered most natural gas, although other modes of transportation—such as rail and highway—have accounted for a relatively minor portion of natural gas transportation, typically in the form of LNG. Before PHMSA published the July 2020 Final Rule, rail transportation of LNG would have been limited to UN portable tank shipments (commonly referred to as ISO tank shipments) under an FRA approval and shipments made under SPs issued by PHMSA. This approach reflected the unique safety risks presented by rail transportation of large volumes of LNG and the historically low demand to transport LNG by rail.

Executive Order 13868 (“Promoting Energy Infrastructure and Economic Growth”)  4 was signed in April 2019 and required PHMSA to treat LNG the same as other cryogenic liquids, authorize LNG to be transported in approved rail tank cars, and to finalize that rulemaking within 13 months. 5 In response, PHMSA published a notice of proposed rulemaking titled “Hazardous Materials: Liquefied Natural Gas by Rail”  6 in which it proposed to authorize the transportation of LNG in existing DOT-113C120W specification tank cars. The initial comment period for the NPRM closed on December 23, 2019, and was subsequently extended until January 13, 2020, following PHMSA's issuance to Energy Transport Solutions, LLC (ETS) in early December 2019 of DOT-SP 20534 for the transportation of LNG by rail tank car. 7

DOT-SP 20534 allowed the transportation of LNG in existing DOT-113 tank cars from Wyalusing, PA, to Gibbstown, NJ, with no intermediate stops. This SP contained safety controls including a requirement to conduct remote sensing for detecting and reporting internal pressure, location, leakage, and (prior to the initial shipment of a tank car under the SP) a requirement to provide training to emergency response agencies that could be affected on the route. DOT-SP 20534 expired by its terms on November 30, 2021, after ETS had not filed an application for renewal until November 29, 2021. After careful consideration, PHMSA denied ETS' application for renewal on March 31, 2023. 8

In January 2020, PHMSA established a joint LNG Task Force with FRA to undertake testing and evaluation activity on the transportation of LNG that could inform potential future regulatory actions, as appropriate. In order to identify tasks within that effort, the LNG Task Force utilized a risk-based framework focused on knowing the risk, predicting the risk, reducing the risk, and preparing for the risk. Using that framework, the LNG Task Force identified and undertook 15 tasks to synthesize ongoing research and outreach activities. Those tasks included empirical review of international LNG transportation, safety and security route risk assessments, a re-evaluation of the costs and benefits of electronically controlled pneumatic (ECP) brakes, and the validation of emergency responders' opinions and needs. Although the LNG Task Force initially projected completion of its tasks by late 2021, much of its work was interrupted or delayed because of the coronavirus disease 2019 (COVID-19) public health emergency and because of subsequent modification of the scope of its activities. The ongoing efforts of the LNG Task Force are discussed further below.

In parallel with its work under the LNG Task Force, and pursuant to a mandate in the “Further Consolidated Appropriations Act, 2020” (Pub. L. 116-94), PHMSA and FRA partnered with NASEM to conduct a study on the transportation of LNG in rail tank cars through a committee of the Transportation Research Board (TRB). 9 The TRB commenced work in mid-July 2020. Roughly contemporaneous with the TRB beginning its work, PHMSA published the July 2020 Final Rule authorizing the shipment of LNG in new DOT-113C120W9 specification rail tank cars with enhanced outer tank requirements, subject to all applicable requirements and certain new operational controls. The July 2020 Final Rule became effective on August 24, 2020 and was swiftly followed by several petitions for judicial review. Specifically, six environmental groups, a coalition of attorneys general for 14 States and the District of Columbia, and the Puyallup Tribe of Indians filed separate petitions for review challenging the July 2020 Final Rule. All the petitioners asked the court to vacate the July 2020 Final Rule, alleging violations of the Hazardous Materials Transportation Act (HMTA; 49 U.S.C. 510 2012;5127), the Administrative Procedure Act (APA; 5 U.S.C. 553 et seq. ), and the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq. ). The Puyallup Tribe also alleged violations of the Tribal consultation protocols under the National Historic Preservation Act (54 U.S.C. 300101 et seq. ) and Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”), 10 as well as disparate impacts on the Tribe in violation of Executive Order 12898 (“Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations”)  11 and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq. ). The petitions were subsequently consolidated within a single proceeding in the U.S. Court of Appeals for the District of Columbia Circuit  12 with the court granting PHMSA's motion to place the petitions in abeyance while PHMSA reviewed the July 2020 Final Rule. PHMSA submitted the latest status report in that proceeding in early June 2023. The Court lifted the abeyance on July 18, 2023. 13

Immediately after taking office, the Biden-Harris Administration issued Executive Order 13990 (“Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis”)  14 on January 20, 2021. Executive Order 13990 required the review of agency regulations and other actions promulgated or adopted between January 20, 2017, and January 20, 2021, that are candidates for suspension, modification, or rescission because of inconsistency with Biden-Harris Administration policies to improve public health, protect the environment, prioritize environmental justice, and reduce GHG emissions. The Biden-Harris Administration identified the July 2020 Final Rule in a non-exclusive list  15 of agency actions that would be reviewed in accordance with Executive Order 13990. Additionally, section 7 of Executive Order 13990 revoked Executive Order 13868, along with several other executive orders and executive actions, and directed agencies to promptly take steps, consistent with applicable law, to rescind any rules or regulations that had been issued “implementing or enforcing” those executive orders and executive actions.

In response to Executive Order 13990, DOT published a notice on May 5, 2021, soliciting comment on potential candidates for review under Executive Order 13990 from among existing rules and other DOT actions. 16 DOT received one comment pertaining to the July 2020 Final Rule from the Transportation Trades Department of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). The commenter requested a reexamination of the July 2020 Final Rule as it believed that rulemaking “neglected to include meaningful safety measures to adequately address the inherent risks to this type of operation.”  17

The TRB issued its Phase I Report on June 15, 2021, 18 which reviewed the plans and progress of the LNG Task Force and evaluated the relevance, completeness, and quality of those efforts. The Phase I Report generally praised the LNG Task Force's “comprehensive as planned” program for making effective use of a “number of long standing and high-quality research and testing programs.” However, the TRB noted that the COVID-19 public health emergency resulted in delays in initiation and completion of several tasks. The TRB also noted that the interdependency of many of those outstanding tasks complicated its and the LNG Task Force's work in developing a complete understanding of the risks associated with the transportation of LNG in rail tank cars. Specifically, it expressed concern on the incomplete status of tasks pertaining to full-scale impact testing, portable tank pool fire testing, worst-case scenario analysis, and quantitative risk assessment. The Phase I Report made several recommendations including proposing that PHMSA and FRA make changes to the planned portable fire tank testing, assess the potential for cryogenic damage cascading to adjacent tanks, enhance the modeling for worst-case scenarios, evaluate explosion hazards from a spill of LNG resulting in vapor dispersion in an environment with confined or congested spaces, and add loading and unloading operations to the risk assessment. PHMSA subsequently modified its LNG Task Force testing activity in response to the Phase I Report recommendations by, among other things, undertaking each of the following: enhanced impact testing directed toward evaluating post-weld, heat-treated seams from a DOT-113C120W9-specification tank car; enhanced worst-case scenario modeling; performing an enhanced quantitative risk assessment; modification of ISO tank pool fire testing protocols to better simulate release conditions; and enhanced train dynamic simulations to better capture effects from use of distributed power and buffer car placement within a train consist transporting LNG.

On November 8, 2021, PHMSA published the NPRM in this rulemaking proceeding. In that NPRM, PHMSA reviewed pertinent economic data, TRB's Phase I Report recommendations, and the status of ongoing work of the LNG Task Force en route to proposing a temporary suspension of the transportation of LNG by rail tank car until the earlier of either June 30, 2024, or the publication of a companion rulemaking under RIN 2137-AF54. PHMSA's proposal reflected its understanding that uncertainties acknowledged in the July 2020 Final Rule— e.g., regarding the near-term commercial viability of rail tank car transportation of LNG, as well as potential safety and environmental benefits and risks of rail tank car transportation—had only increased since issuance, thereby “casti[ng] doubt on the continued validity of the balance between potential benefits and public safety and environmental risks underpinning the [July 2020 Final Rule].”  19 PHMSA therefore proposed a temporary suspension of the July 2020 Final Rule to allow time for PHMSA to review the results of the (then-forthcoming) TRB Phase II Report, complete ongoing LNG Task Force testing and evaluation activities, and (based on the results of those efforts) modify HMR requirements as appropriate within the companion rulemaking under RIN2137-AF54. The comment period closed on December 23, 2021. PHMSA received over 10,500 comments from private individuals, environmental groups, government officials, the rail industry, and other stakeholders. See Section III for further details.

The TRB issued its Phase II Report on September 9, 2022. 20 The Phase II Report involved a more comprehensive assessment than that undertaken in connection with the Phase I Report regarding topics relevant to the safe movement of LNG by rail tank car pursuant to both SPs and the HMR following issuance of the July 2020 Final Rule. Specifically, it examined bulk shipments of LNG by other modes of transportation (including vessel and highway) to identify the basic principles used in those modes for safety assurance. It also examined the effectiveness of regulatory requirements and industry practices ( e.g., pertaining to speed and routing, as well as other operational controls applicable to high-hazard flammable trains) intended to assure the safe transportation of bulk rail shipments of other hazardous materials.

The Phase II Report also made recommendations on necessary near- and long-term actions to improve the understanding of the risks associated with transporting LNG by rail tank car, mitigate those risks, and prevent and prepare for potential incidents. The first recommendation suggested launching an LNG safety assurance initiative before LNG tank cars are put in service. The safety assurance initiative would actively monitor initial plans for and early patterns of LNG traffic activity, including the locations and routes of shipments, the number and configuration of tank cars in trains, and reports of incidents involving a tank car or train carrying LNG. The second and final recommendation suggested that PHMSA and FRA should review the DOT-113C120W9 tank car specification to ensure that it adequately accounts for the cryogenic and thermal properties of LNG that could contribute to a tank release in the event of a rail incident and potential cascading impacts therefrom. The TRB's elaboration on its second recommendation emphasized the value in assessing each of the following: the capacity of the pressure relief devices on the new DOT-113C120W9-specification tank cars to vent a sufficient amount of LNG when the tank car is engulfed in an LNG fire in derailment conditions, including a rollover event; the effects of adding more and different types of insulation in the annular space to ensure sufficient performance of the multilayer insulation system when the tank car is exposed to heat flux and direct flame impingement from an LNG fire; and the potential for the outer tank of the DOT-113C120W9 tank car to experience cryogenic brittle failure and loss of vacuum insulation when exposed to an LNG pool fire. PHMSA subsequently adjusted its LNG Task Force testing activity in response to the Phase II Report recommendations by modifying its ongoing worst-case analysis modeling and quantitative risk assessment efforts to address the DOT-113C120W9-specification design element concerns raised by the TRB. In light of the new information received from the TRB reports and PHMSA's completed research and ongoing tests, PHMSA suspends the regulations adopted in the July 2020 Final Rule to allow PHMSA sufficient time to complete its analysis to reconsider the determinations made in the July 2020 Final Rule.

The LNG Task Force has completed most of its testing and evaluation activities (as modified in response to the TRB Phases I and II Reports). Of those remaining activities, PHMSA expects to complete its enhanced quantitative risk analysis and worse case analysis modeling no later than Q3-2023. This analysis has taken longer than expected because it was modified first to address concerns in the TRB Phase I Report in June 2021 and then again in response to the TRB Phase II Report issued in September 2022. PHMSA is in the process of contracting for performance of each of the following remaining tasks: (1) enhanced impact testing directed toward evaluating post-weld, heat-treated seams from a DOT-113C120W9-specification tank car in response to the TRB Phase I Report; and (2) enhanced train dynamic simulations to better capture effects from use of distributed power and buffer car placement within a train consist transporting LNG in response to the TRB Phase I Report.

On February 3, 2023, a mixed-consist freight train operated by Norfolk Southern Railway—comprised of two head-end locomotives, 149 railcars, and 1 distributed power locomotive—derailed in East Palestine, Ohio. Thirty-eight railcars derailed, including 11 tank cars carrying combustible liquid and flammable gas hazardous materials, though none of the railcars were carrying LNG. The derailment resulted in a fire impacting the derailed tank cars and damaging 12 additional railcars that had not derailed. Included in the derailment and fire were five DOT-105 specification tank cars containing vinyl chloride—a hazardous material classified as a Division 2.1 flammable gas. These DOT-105 specification tank cars were not punctured in the derailment. PHMSA is working with the National Transportation Safety Board to learn all it can from this incident and determine whether the lessons learned should inform rail transportation of other hazardous commodities such as LNG.

The comment period for the NPRM in this proceeding closed on December 23, 2021. PHMSA received over 10,500 sets of comments to the rulemaking docket through and after the formal comment period; consistent with § 106.70, PHMSA considers late-filed comments to the extent possible. PHMSA considered all comments received in the development of this Final Rule. The comments submitted to this docket may be accessed via http://www.regulations.gov. The following table categorizes the commenters. Please note that some commentors submitted multiple comments.

Comments received could generally be summarized as advancing one or more of the following positions:

• Comments requesting an immediate, permanent ban of LNG by rail;

• Comments requesting the removal of the June 30, 2024, sunset date;

• Comments of general support for the NPRM;

• Comments alleging chilling of near-term demand for LNG transportation by rail tank car pursuant to the July 2020 Final Rule;

• Comments alleging that LNG by rail improves safety;

• Comments alleging environmental benefits from LNG by rail;

• Comments alleging PHMSA is overstepping its authority by attempting to regulate oil and gas production;

• Comments alleging PHMSA did not meet its evidentiary burden under the APA for temporary suspension of the July 2020 Final Rule;

• Comments alleging that PHMSA's proposal will have miscellaneous adverse consequences for regulated entities, the U.S. economy, and national security; and

• Comments beyond the scope of this rulemaking.

Based on the comments received in response to the NPRM, the recommendations in the TRB Phases I and II Reports, the ongoing LNG Task Force testing and evaluation activities, and pertinent information regarding the near-term commercial prospects for rail tank car transportation of LNG, PHMSA has concluded that a temporary suspension of the July 2020 Final Rule's authorization for rail tank car transportation of LNG in new DOT-113C120W9-specification tank cars is appropriate. PHMSA finds that, consistent with the analysis in the NPRM, these resources indicate that the uncertainties described in the July 2020 Final Rule ( e.g., regarding whether, when and how LNG by rail tank car transportation will occur, and the safety and environmental risks and benefits of such transportation) have only increased since its issuance, calling into question the balance between potential benefits and public safety and environmental risks PHMSA understood itself to be striking in that rulemaking. In contrast (and as explained at greater length below in this Section III responding to comments received on the NPRM) a temporary suspension will ensure each of the following: (1) avoidance of potential safety risks to public and worker safety and the environment while PHMSA completes its companion rulemaking under RIN 2137-AF54; (2) HMR authorization of rail tank car transportation of LNG pursuant to that companion rulemaking reflects the best science by accounting for ongoing LNG Task Force testing and evaluation activities as informed by the TRB Phases I and II Report recommendations; (3) consideration of additional public comment from diverse stakeholders in that companion proceeding; and (4) minimizing the potential for economic burdens by ensuring that entities avoid ordering rail tank cars for LNG service compliant with the requirements of the July 2020 Final Rule when the companion rulemaking may alter those requirements. 21 See 86 FR at 61732, 67135-36. As noted in the NPRM, stakeholders seeking to transport LNG by rail during the suspension period may seek (on an ad hoc basis) either SPs from PHMSA or approvals from FRA.

Lastly, the Final Rule extends the duration of the temporary suspension an additional year (until June 30, 2025, at the latest) beyond the sunset date (June 30, 2024) proposed in the NPRM. This extension—which is consistent with comments received from stakeholders  22 on the NPRM discussed in section III.B below—is warranted due to delays in completion of the LNG Task Force activity (discussed in section III.C below) that will inform the companion rulemaking under RIN 2137-AF54. Also, economic information discussed in section III.D below shows that the commercial prospects for rail tank car transportation pursuant to the July 2020 Final Rule have become even more uncertain than they were when the NPRM issued in November 2021.

PHMSA received numerous comments requesting the immediate, permanent ban of all LNG by rail in lieu of the temporary suspension as proposed in the NPRM. Many of these comments were part of write-in campaigns comprising approximately 6,650 comments in an initial campaign during the formal comment period, and an additional 3,500 comments in a second campaign coordinated by the National Resource Defense Council (NRDC) after the East Palestine derailment in early 2023 (NRDC Coordinated Write-in Campaign Comments). Other comments were stand-alone comments submitted by non-governmental organizations ( e.g., environmental advocacy organizations); Federal, State, and local government officials; and private citizens.

Many of these comments attributed the need for an immediate, permanent ban on the risk to public safety and the environment from LNG's material properties—specifically, pointing to its flammability, explosive potential, and GHG contributions—in the event of a release. Of particular concern for many commenters were the risks of a boiling liquid expanding vapor explosions (BLEVEs) or asphyxiation in the event of a release of LNG during an accident or incident. Some commenters elaborated on their safety concerns by highlighting the potential limitations ( e.g., of personnel and equipment resources and training) of emergency response personnel to respond to an incident involving rail transportation of LNG in their jurisdictions. Other commenters alleged that the new DOT-113C120W9 tank car specification was inadequate or untested for rail transportation of LNG and that a more robust safety history—coupled with more robust, mandatory operational controls (such as limits on train length, tank car weight, and maximum allowable speed) than required in the July 2020 Final Rule—would be necessary to ensure safety. Other commenters cited safety and environmental justice concerns for those who live along rail lines that would carry LNG, stating that “bomb trains” would threaten the safety of those who live in these communities—many of which communities may be densely-populated or historically disadvantaged. Other commenters called for an immediate ban of LNG transportation by rail given methane's status as a potent GHG and the Biden-Harris Administration's commitments to reducing GHG emissions. And commenters from the NRDC campaign called for a ban on LNG by rail in the “in the wake of the devastating train derailment in East Palestine, Ohio.”  23 Lastly, some commenters contended that if the “. . . rule was already bad enough to reconsider, it should be repealed outright.”  24

PHMSA acknowledges the concerns raised by these stakeholders and agrees that any risks related to the transportation of LNG by rail should be examined closely and properly mitigated to ensure safety for the public and the environment. Accordingly PHMSA is suspending LNG transportation by rail tank car pursuant to the July 2020 Final Rule until the conclusion of the companion rulemaking under RIN 2137-AF54 or June 30, 2025, whichever is earlier. This will provide PHMSA an opportunity to conduct a thorough evaluation of the HMR's regulatory framework for rail transportation of LNG based on the information received from the LNG Task Force testing and evaluation efforts, TRB Phases I and II Reports, and stakeholders' written comments. PHMSA also encourages those stakeholders to consider submitting comments in response to any future notice of proposed rulemaking issued by PHMSA in the companion rulemaking under RIN 2137-AF54.

PHMSA received comments requesting removal of the sunset date of June 30, 2024, proposed in the NPRM so that the proposed suspension would be in effect until the companion rulemaking under RIN 2137-AF54 has concluded. Delaware Riverkeeper Network (DRN) commented that in the NPRM, PHMSA justified the sunset date by indicating that the TRB Phase II Report was expected in mid-2022 and that PHMSA needed time to incorporate those results and publish a rule. DRN argued that “this rationale begs the question—why not wait until PHMSA actually incorporates the results of the Phase II Report and concludes the rulemaking process?” They further stated that “the unpredictability of the COVID-19 pandemic indicates that timelines are not as predictable as they were pre-2019.”  25

The International Association of Fire Fighters (IAFF) suggested an objective-based approach whereby the suspension would only be lifted if certain criteria have been met. IAFF further urged “. . . the FRA to establish specific criteria to be attained prior to the lifting of the proposed suspension.”  26 Similarly, comments from the AFL-CIO and others supported suspending LNG by rail tank car until LNG Task Force testing and evaluation efforts are complete, stating they “. . . support PHMSA's suspension of the implementation of the rule until a time when the agencies have completed a more thorough safety review.”  27 Other commenters proposed longer suspension periods than had been proposed in the NPRM.

PHMSA in the NPRM specifically sought comments on the proposed suspension date, including the sunset date, and whether PHMSA should modify the proposed expiration of the suspension period. 28 PHMSA appreciates and acknowledges the points made by commenters and, consistent with the discussion in the introduction to section III above, is extending the sunset date for the suspension period an additional year such that rail tank car transportation of LNG pursuant to the July 2020 Final Rule will be suspended until the earlier of either (1) a final rule concluding the companion rulemaking under RIN 2137-AF54, or (2) June 30, 2025. This one-year extension beyond the sunset date (June 30, 2024) proposed in the NPRM will give PHMSA adequate time to complete LNG Task Force testing and evaluation activities (and delays in receipt of the TRB Phases I and II Reports) that had been delayed because of the COVID-19 public health emergency and additional scoping and contracting issues, and thereafter integrate those results into each of a notice of proposed rulemaking and final rulemaking in the companion rulemaking under RIN 2137-AF54.

PHMSA received numerous comments in support of the NPRM's proposed suspension, including comments from Governor Jay Inslee of Washington State; the Attorneys General of Maryland, New York, Connecticut, Delaware, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia; and the Puyallup Tribe of Indians. Many commenters who supported the temporary suspension proposed in the NPRM also urged PHMSA to subsequently ban LNG in the companion rulemaking under RIN 2137-AF54. Commenters supporting the NPRM's proposed suspension of the July 2020 Final Rule generally articulated the same safety and environmental concerns as those calling for an immediate, permanent bans of rail tank car transportation of LNG discussed in section III.A above.

PHMSA acknowledges the thousands of comments submitted in support of the NPRM. Although some of those commenters also urged PHMSA to permanently ban rail tank car transportation of LNG in the companion rulemaking under RIN 2137-AF54, PHMSA submits that it will need to complete (and review the results of) the LNG Task Force testing and evaluation efforts before it will be in a position to speak to the contents of a forthcoming notice of proposed rulemaking in that companion rulemaking. PHMSA encourages stakeholders to consider submitting comments in response to any future notice of proposed rulemaking issued by PHMSA in the companion rulemaking under RIN 2137-AF54.

PHMSA received several comments  29 on the NPRM's observations of increased uncertainty regarding whether there will be near-term demand for rail tank car transportation of LNG pursuant to the July 2020 Final Rule. Specifically, CSX noted in its comments that it had several projects in development to transport LNG by rail in or before 2024, and that “[t]he continued investment in and pursuit of those projects, which require design, permitting, and construction with long lead times, would be impaired if the July 2020 Final Rule were suspended indefinitely, delaying them potentially for years and harming CSX's reliance interests and imposing costs and lost business opportunities on CSX and its partners” (emphasis added). CSX subsequently met with PHMSA on February 17, 2022, and elaborated on their written comments by noting that those projects had been shelved and that the issuance of the NPRM was the occasion for those decisions. The Attorney General for the State of Louisiana, Jeff Landry, joined by State Attorneys General from Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Kentucky, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Ohio, South Carolina, South Dakota, Texas, Utah, Virginia, West Virginia, and Wyoming (Landry, et. al.) similarly contend that “the proposed rule itself is the cause of the regulatory uncertainty of which it complains” (emphasis in original) in that it “discourages companies from making any capital investment in LNG by rail, specifically the DOT-113C120W9 specification tank cars that the 2020 Rule authorized.”

PHMSA finds these comments unconvincing statements of the near-term commercial viability of rail tank car transportation of LNG pursuant to the July 2020 Final Rule. The suspension proposed in the NPRM and adopted in this Final Rule is not “indefinite” as characterized by CSX; rather, it is time-limited to the earlier of a date certain (June 2025) or to the completion of the milestone of issuing a final rule in the companion rulemaking under RIN 2137-AF54. Even if the NPRM affected one or more of CSX's nascent projects exploring rail tank car transportation of LNG, CSX or other entities could have applied for, and may still apply for, an alternative regulatory vehicle ( e.g., an SP under § 107.105, 30 or an FRA approval for rail transportation via portable tank) to allow work to proceed on those projects during the suspension period. PHMSA is unaware of CSX, its collaborators in those projects, or any other entities having pursued alternatives. Indeed, in its written comments and again during its February 17, 2022, meeting with PHMSA, CSX personnel acknowledged that the choice of package ( i.e., the particular DOT-specification rail tank car or ISO tank) employed in rail transportation of LNG is merely one decision within a multi-step, multi-year project development and execution chain involving, among other things, the construction of origin facilities and off-loading facilities, and the acquisition of one or more enabling Federal and State permits. The projects CSX and others may have been pursuing were prolonged, highly contingent processes in which there are multiple potential bases for material delay or cessation of a project throughout the development cycle. That said, PHMSA understands the shelving of CSX's or any other entities' projects following the proposal of a time-limited, temporary suspension for which there could be alternative rail transportation methods evinces less an alleged “chilling” of investment than the significant uncertainty discussed in the NPRM regarding whether there would be any commercially viable projects for rail transportation of LNG in the near-term.

And PHMSA understands that a variety of forces have created—and will continue to create throughout the suspension period—headwinds for the near-term commercial viability of any project for rail transportation of LNG. The NPRM explained that the near-term commercial prospects for LNG by rail (which the July 2020 Final Rule had acknowledged were uncertain at its issuance) had grown even more uncertain due to near-term structural changes in international markets including (1) massive investment in greatly increased export capacity by competing providers such as Qatar, and (2) reduced demand for LNG customers seeking to reduce their GHG emissions. 31 The comments submitted by CSX, other industry stakeholders, and Landry, et. al. did not attempt to rebut this evidence, or PHMSA's finding that the near-term commercial uncertainty for rail transportation of LNG had increased. Further, the structural headwinds for rail transportation of LNG are likely to accelerate in the near future, as the U.S. Energy Information Administration (EIA) predicts that the capacity of pipeline-supplied U.S. LNG export terminals are expected to increase significantly beginning around 2025 which some analysts note could depress the offtake prices for LNG in the international export market—which could divert demand for LNG exports that could have been serviced by LNG by rail. 32 Further, the supply shocks of the conflict in Ukraine have highlighted both in the United States and abroad the volatility of natural gas prices and fragility of international LNG market supply, accelerating movement among historical consumers of natural gas toward renewable energy and reduced reliance on LNG exports. 33 Meanwhile, domestic consumption of natural gas in the United States is expected to fall in the next decade due to increasing electrification driven by consumer preferences and Federal and State policy initiatives to reduce GHG emissions. 34 Durably high commodity ( e.g., steel) prices and interest rates  35 would also tend to discourage capital investment in the manufacture of a new fleet of DOT-113C120W9-specification tank cars for dedicated commercial LNG service.

PHMSA finds this recent evidence, coupled with the evidence discussed in the NPRM, augurs uncertainty regarding the commercial prospects for rail transportation of LNG that will continue beyond the originally proposed suspension period and into the longer suspension period adopted in this final rule. 36 Following the conclusion of the (temporary) suspension period, stakeholders would be able to evaluate whether the commercial prospects for rail tank car transportation of LNG pursuant to the July 2020 Final Rule merit pursuing.

PHMSA received several comments arguing temporary suspension of the July 2020 Final Rule would forfeit safety benefits. 37 Some of those comments pointed to the physical properties ( e.g., auto-ignition temperatures) of LNG they assert make its rail transportation inherently safer than transportation of natural gas in other physical states. Others contended that, absent the July 2020 Final Rule, industry would be forced to utilize other modes of transportation of natural gas—in particular, highway transportation via MC-338 cargo tanks—which would entail more frequent accidents and incidents than rail transportation. Some comments generally praised the DOT-113C120W9-specification tank car approved for use in transporting LNG in the July 2020 Final Rule because it was an improvement on the proven, existing DOT-113C120W-specification tank cars that PHMSA had approved for use in rail tank car transportation of LNG via SP. Lastly, RSI asserted that by discouraging investment in DOT-113C120W9 tank cars for LNG service, PHMSA was discouraging construction of those enhanced tank cars for use in transporting other cryogenic liquid hazardous materials.

PHMSA finds these contentions unconvincing. As presented, each of those arguments suggest that any potential benefits of rail tank car transportation of LNG will be lost if PHMSA suspends the July 2020 Final Rule as proposed in the NPRM. But that binary understanding confuses the temporary, time-limited suspension proposed in the NPRM and adopted in this final rule with a permanent or indefinite ban on rail tank car transportation of LNG. A temporary suspension would mean that any safety benefits would only be unavailable for the suspension period— i.e., until the end of June 2025 (at the latest). See 86 FR at 61737-38. Further, any such potential, time-limited comparative advantage turns on whether any rail transportation of LNG pursuant to the July 2020 Final Rule would in fact have occurred during the suspension period, but, as explained above, market conditions now and in the near future do not support demand to transport LNG in rail tank cars. That demand, which was uncertain at issuance of the July 2020 Final Rule has become only more uncertain since given the commercial headwinds facing the development of that market. 38 Further, any time-limited comparative advantage from leaving the July 2020 Final Rule undisturbed would also be mitigated by the availability of other regulatory vehicles (FRA approvals and PHMSA SPs) that entities can pursue during the suspension period.

Uncertainty regarding whether the July 2020 Final Rule's authorization of rail transportation in DOT-113C120W9-specification tank cars ensures adequate protection of public safety has only increased since the time of issuance of each of the July 2020 Final Rule and the NPRM proposing its suspension. The July 2020 Final Rule itself acknowledged that its authorization of rail transportation of LNG in the new DOT-113C120W9 tank car did not turn only on the tank car itself; rather, a number of other factors (including, but not limited to, the material properties of LNG and natural gas, the quantity of LNG that will be moved by rail, the routes involved, the availability of emergency response planning resources, etc.) affected the risks involved in rail tank car transportation of LNG. See 86 FR at 61734. 39 Subsequently, the TRB Phase I Report highlighted gaps (discussed in section II.C above) within the LNG Task Force testing efforts undertaken to improve confidence in the safety benefits of rail transportation of LNG. TRB's subsequent Phase II Report identified additional areas warranting additional research and evaluation to ensure the safety of rail transportation of LNG in the DOT-113C120W9-specification tank car. Although PHMSA has revised the LNG Task Force's testing and evaluation activities in response to the TRB Phases I and II Report recommendations, that work continues; and even after completing the activities PHMSA must evaluate the results and determine whether and how to make permanent modifications to the HMR governing rail transportation of LNG. Further, the comments submitted in response to the NPRM proposing suspension of the July 2020 Final Rule show a lack of consensus among stakeholders regarding whether some of the critical safety challenges known when PHMSA issued the July 2020 Final Rule have been addressed. For example, a comment submitted by IAFF on the NPRM noted that “the capabilities of fire fighters and emergency medical responders to safely and effectively respond to hazmat incidents involving LNG rail cars has not improved since our 2019 comments” notwithstanding any PHMSA and FRA outreach and engagement efforts in the interim. 40

Additionally, comments touting the inherent safety advantages of rail tank car transportation of liquefied natural gas miss the larger safety issue toward which much of the LNG Task Force testing evaluation activity is directed. Natural gas in liquid form, undisturbed within a DOT-113C120W9 tank car is a very stable material that will not combust unless it vaporizes which only happens if the material warms. Further, any vapor present in the outage of the tank car will be of a concentration that is too high to combust. Rather, the principal safety concern—highlighted by PHMSA in the July 2020 Final Rule, in the NPRM and comments thereon, and in TRB's evaluation of safety risks associated with rail transportation of LNG—pertains to consequences should either there be a release of LNG to atmosphere, or a tank car be exposed to harsh conditions during an incident or accident. LNG releases can expose personnel and materials to extreme cold (as low as −120 °C or −260 °F) and can be an asphyxiant within a confined space. When released to the atmosphere (as a result of a puncture of the inner and outer tanks during an accident or incident), liquid methane will convert to a gas that has a relatively low auto-ignition point (about 540 °C or 1000 °F) in addition to being highly combustible when exposed to an ignition source such as fire or electrical sparking. When methane ignites, it burns at very high temperatures (about 1330 °C, or 2426 °F), potentially resulting in exposure of personnel and materials—including (potentially) undisturbed DOT-113C120W9 tank cars adjacent to an LNG pool fire to significant radiant heat hazards. Although PHMSA had undertaken (via the LNG Task Force) a robust testing regime to develop a fulsome understanding of those potential, significant hazards of LNG when transported by rail tank car in parallel with the development and issuance of the July 2020 Final Rule, the subject matter expert recommendations within each of the TRB's Phases I and II Reports underscore the value in obtaining that understanding from completing enhanced testing and evaluation activities before LNG begins moving in DOT-113C120W9 rail tank cars pursuant to the July 2020 Final Rule. A temporary suspension gives the LNG Task Force and PHMSA an opportunity to complete that critical work.

PHMSA also disagrees that suspension of the July 2020 Final Rule would discourage investment in enhanced, DOT-113C120W9-specification tank cars for use in rail transportation of any cryogenic liquid hazardous materials—not just LNG. PHMSA acknowledges that the HMR (at 49 CFR part 179 Subpart F) contemplates use of DOT-113C120W9-specification tank cars for transportation of other materials authorized for transportation in the DOT-113 series tank cars in that DOT-113C120W9 tank cars will also meet and exceed the minimum DOT-113C120W standard. However, factors influencing whether to invest in new DOT-113C120W9-specification tank cars for use in transporting those other cryogenic liquids are very different from the factors driving decision making on investing in those tank cars for LNG service. For example, those other cryogenic liquid hazardous materials would likely be destined for more mature domestic and international markets than the (currently) speculative domestic and international market for LNG transported by rail tank car. Perhaps for this reason, PHMSA is aware of at least one entity having submitted an order for construction of new DOT-113C120W9-specification tank cars for cryogenic ethylene service—even as, over three years after the July 2020 Final Rule issued, PHMSA is unaware of a single order from a commercial entity for a new DOT-113C120W9 specification tank car for LNG service. 41

For the reasons discussed above and in section III.D, PHMSA concludes that uncertainty on critical issues regarding the safety profile of rail tank car transportation of LNG pursuant to the July 2020 Final Rule has increased since its issuance—and will persist through the suspension period adopted in this final rule until PHMSA and FRA have had an opportunity to complete and review the results of the LNG Task Force's testing and evaluation activities and implement any necessary regulatory amendments in the companion rulemaking under RIN2137-AF54.

PHMSA received several comments arguing temporary suspension of the July 2020 Final Rule would forfeit important environmental benefits. Comments describe several mechanisms for such environmental benefits including potential reduction in flaring from oil and gas production activities and reduced GHG emissions compared to highway transportation of the same volume of LNG in MC-338 cargo tanks. 42

For largely the same reasons discussed in section III.E above, PHMSA finds these arguments unconvincing. The statements in those comments regarding the environmental benefits of the July 2020 Final Rule were offered without any evidentiary support and little analysis, frustrating evaluation against the comments submitted in response to the NPRM attributing potential environmental harms (including those pertaining to commodity releases and lifecycle and indirect GHG emissions) to rail tank car transportation of LNG. As explained in the NPRM, both environmental benefits and risks of rail tank car transportation of LNG are a function of whether, when, and where viable market opportunities for such transportation develops. The July 2020 Final Rule acknowledged considerable uncertainty regarding those questions—and as explained in the section III.D above, the commercial prospects for rail tank car transportation of LNG are more speculative now than in July 2020 or even when the NPRM in this proceeding issued in November 2021.

These considerations are particularly relevant to the mechanisms for environmental benefits identified in those comments charactering the environmental benefits of the July 2020 Final Rule. Whether a market will emerge during the suspension period (or for that matter, may ever emerge) for capture of methane that would be otherwise be flared from oil and gas production operations and transported by rail tank car is not a straightforward proposition. In addition to the non-trivial capital investment for rail tank cars, such an approach would require, among other things, liquefaction equipment at the production site and gasification equipment at the destination and enabling Federal or state regulatory authorizations—and each of those elements may need to be procured sooner at break-even or lower cost than alternatives such as capture and transportation via pipeline or MC-338 cargo tank carried by truck (or, by extension, by rail tank car via FRA approval or PHMSA SP). And even if such a market opportunity would have arisen, meaningful evaluation of the GHG emissions benefits would inevitably involve myriad assumptions ( e.g., accident/incident rates for rail and highway transportation; lifecycle emissions from construction and operation of the tank cars and related equipment; potential indirect effects such as emissions associated with upstream production induced by newly-available takeaway capacity) that increase uncertainty regarding GHG impacts. Similarly, modal shifting between highway transportation of LNG via MC-338 cargo tank and rail tank car may not be as easy or as desirable as those comments assume. As discussed above in section III.D, highway transportation sacrifices economies of scale that is among the principal advantages of rail tank car transportation of LNG.

For the reasons discussed above, PHMSA concludes that uncertainty regarding the potential environmental benefits and harms from rail tank car transportation of LNG pursuant to the July 2020 Final Rule will continue throughout the suspension period adopted in this Final Rule. This persistent uncertainty on a critical potential benefit identified for the July 2020 Final Rule militates in favor of its temporary suspension as the LNG Task Force completes its testing and evaluation activity and PHMSA implements any necessary regulatory amendments in the companion rulemaking under RIN 2137-AF54.

PHMSA received comments alleging that PHMSA's proposed suspension of the July 2020 Final Rule overstepped its statutory authority under the HMTA by attempting to discourage oil and gas production activity. 43

Those arguments mischaracterize PHMSA's intentions and misapprehend pertinent law. 44 Indeed, PHMSA nowhere in either the NPRM or in this Final Rule identifies decreasing oil and gas production activity as an explicit goal of its suspension of the July 2020 Final Rule. Instead, Landry, et al. divines that intention from a reference to “[induced] natural gas extraction” within a list of several considerations in the NPRM that are probative to the safety and environmental risks attendant to rail tank car transportation of LNG. 45 But PHMSA's acknowledgement in the NPRM of the common-sense proposition that new oil and gas production activity—and any attendant environmental benefits as well as risks (including release to atmosphere of methane lost during extraction and transportation) associated with those activities—could be a reasonably foreseeable consequence of authorizing new takeaway capacity is consistent with its obligations under NEPA. See 86 FR 61735-36 & n. 35. It is also consistent with the reasoning supporting the July 2020 Final Rule, which (along with its supporting documentation) explicitly identified potential indirect effects on each of upstream production activity and downstream fuel switching from coal as justifications for that rulemaking. 46

Nor, moreover, would any indirect effect on production activity from PHMSA's exercise of its authority under the HMTA to regulate interstate rail transportation of hazardous material implicate, as suggested by Landry, et al., the “major questions” concerns articulated in Utility Air Regulatory Group v. EPA (573 U.S. 302 (2014)), and in West Virginia v. EPA (597 U.S. (2022)). Neither case disturbed the longstanding tolerance of minor, incidental, or accidental effects when an agency takes actions within the core of its statutory responsibilities. And here, PHMSA is doing just that: imposing a temporary suspension of a recent (July 2020) exercise of its authority under the HMTA to prescribe regulations governing interstate transportation by rail of hazardous materials to temporarily restore the status quo ex ante preceding the July 2020 Final Rule. Lastly, given that (as explained in section III.D above) there is considerable uncertainty regarding the commercial viability of rail tank car transportation of LNG, the limited-duration suspension adopted in this Final Rule hardly resembles the fact sets before the Supreme Court in either of the above decisions in which EPA was said to have “discover[ed] . . . an unheralded power to regulate `a significant portion of the American economy.' ”

PHMSA also received comments claiming that the NPRM did not make the required showing under the APA for suspension of currently-effective regulations. 47 Landry, et al. in particular characterizes controlling precedent as establishing a uniquely high burden for temporary suspension of existing regulations. PHMSA must, in their view, provide “a detailed justification of new facts that contradict facts underlying . . . prior policy”, as well as “a more `reasoned explanation' to justify suspension of a regulation” than merely the “inauguration of a new President.” PHMSA must also demonstrate an “awareness that it is changing position.” Landry, et al. ultimately concluded that PHMSA “had not provided any . . . explanations” demonstrating compliance with those purported requirements.

These criticisms misapprehend controlling precedent. Indeed, PHMSA does not understand the cited decisions to stand for the proposition suggested in those comments that “reasoned decision-making” in the context of suspension of currently effective regulations necessarily entails a heightened evidentiary burden. Rather, the Supreme Court explicitly stated that the evidentiary burden for agency action is not heightened when that action is a change. F.C.C. v. Fox Studios, 556 U.S. at 502, 514-15 (2009). And although agencies suspending currently effective regulations must acknowledge a change in their position, address any tensions between conflicting factual findings, and confront any serious reliance interests on the old policy, those common-sense expectations do not constitute a different, uniquely higher evidentiary standard for suspending a currently-effective regulation; rather, those are the sort of issues an agency may need to address (as applicable) when adopting any change in its regulations. See Motor Veh. Mfrs. Ass'n v. State Farm Ins., 463 U.S. 29, 51-52 (1983).

Nor did Landry, et al.'s comments provide any analysis explaining how PHMSA had run afoul of judicial guardrails for suspending currently-effective regulations. They simply asserted that PHMSA had failed to “explain[ ]” its compliance with pertinent APA requirements. But the NPRM acknowledged that it proposed a change in position from the July 2020 Final Rule: it stated in multiple places that rail tank car transportation of LNG authorized by the July 2020 Final Rule would be temporarily suspended. See, e.g., 86 FR at 61731-32. Further, PHMSA described at length its rationale and the evidence relied on in making that change. Specifically, information (including the TRB Phase 1 Report, COVID-related delays in the execution of LNG Task Force testing and evaluation efforts that had been expected to corroborate the conclusions in the July 2020 Final Rule, and potential fundamental shifts in the domestic and international market dynamics) that had emerged following issuance of the July 2020 LNG Final Rule cast doubt on the validity of PHMSA's understanding of the potential benefits and risks on which that rulemaking's policy decisions rested. See 86 FR at 61735-36. And (as explained in section III.D above) because uncertainty on these considerations has only increased since the NPRM's issuance in November 2021, PHMSA has now decided to impose that suspension with a marginally longer (but still time-limited) duration. Lastly, this decision does not rest, as Landry, et al. suggests, on specious reasoning that “no policy is better than the old policy solely because a new policy might be put in place . . .”; rather, temporary suspension ensures that no rail car transportation of LNG pursuant to the July 2020 Final Rule will occur during the time needed for PHMSA to develop confidence regarding its potential risks and benefits within the companion rulemaking under RIN 2137-AF54.

PHMSA also received a handful of comments warning of miscellaneous adverse effects from the NPRM's proposed suspension of the July 2020 Final Rule. 48 Certain members of the U.S. House Transportation and Infrastructure Committee and Landry, et al. caution suspension of the July 2020 Final Rule could increase household energy expenses and compromise U.S. energy independence and geopolitical influence. Meanwhile RSI warns that the NPRM's invocation of economic uncertainty and “hypothetical concerns” as considerations when tailoring HMR requirements could portend shifting regulatory requirements for the transportation of other hazardous materials. RSI also contends that a more appropriate tool for addressing PHMSA's concerns with the July 2020 Final Rule would be to exercise its authority under § 107.339 to obtain emergency orders from a U.S. District Court to address “imminent hazards.”

PHMSA finds these comments unconvincing. The claim that temporary suspension of the July 2020 Final Rule could affect U.S. household energy prices or the geopolitical balance of power strains credulity given that no DOT-113C120W9 tank cars intended for commercial LNG service have been sold and the commercial viability of such rail tank car transportation is increasingly uncertain. Additionally, RSI's concern that PHMSA could invoke changing market dynamics to modify longstanding HMR requirements for other hazardous materials is misplaced. Unlike other hazardous materials, the rail tank car transportation of LNG is not a mature market—in fact, as discussed elsewhere in this Final Rule, no such market has emerged in over three years since the July 2020 Final Rule issued and a market may not emerge at all. Nor does PHMSA's decision to temporarily suspend the July 2020 Final Rule hardly address merely “hypothetical concerns”; rather, (as discussed in sections III.E and F above) the potential safety and environmental hazards associated with LNG could be significant, and it is PHMSA's responsibility under the HMTA to evaluate and adjust the HMR to ensure its transportation by rail tank car is conducted in a manner that protects public safety and the environment. Additionally, PHMSA's decision in this Final Rule to adjust pertinent HMR requirements on a time-limited basis and before any rail tank car transportation of LNG commences (or is likely to commence), minimizes the risk of stranded investments or lost business opportunities for regulated entities should PHMSA's ongoing evaluation of the safety and environmental risks and benefits merit imposing additional or conflicting safety requirements in the companion rulemaking under RIN 2137-AF54.

In addition, the final rule addresses any potential public safety and environmental risks from rail tank car transportation of LNG via a generic, nationwide, time-limited suspension following notice-and-comment rulemaking is a more appropriate approach than utilizing the emergency order authority recommended by RSI. The July 2020 Final Rule was a legislative rule that itself was the product of notice-and-comment rulemaking, and the APA establishes a presumption that a subsequent legislative rule providing for its modification (to include its temporary suspension) should similarly involve notice-and comment rulemaking. See 5 U.S.C. 553. In addition, PHMSA's emergency order authority may be difficult to assert on a time-limited, precautionary, nationwide basis like the temporary suspension adopted in this Final Rule. Each of PHMSA's § 107.339 emergency order authority and the Secretary`s authority to address imminent hazards under 49 U.S.C. 5122(b) are seldom exercised. A finding of “imminent harm” may make it more difficult for any controls addressing that harm to be removed later based on PHMSA's evaluation of whether and how to amend pertinent HMR requirements in a companion rulemaking under RIN 2137-AF54.

PHMSA received miscellaneous comments beyond the scope of this rulemaking. These comments pertained to concerns regarding PHMSA's process in developing, and reasoning in adopting, the July 2020 Final Rule; concerns with the adequacy of conditions imposed by PHMSA within DOT-SP 20534 issued to ETS in 2019; a requested ban on fracking (the process of hydraulic fracturing to extract oil or gas) and all fossil fuels; and additional miscellaneous comments unrelated to this rulemaking or rail tank car transportation of LNG. A number of commentors requested repeal of any existing regulatory approvals or regulatory provisions—whether by FRA or PHMSA—authorizing rail transportation of LNG.

Although PHMSA appreciates the concerns raised by the commenters that the NPRM's proposal to suspend the transportation of LNG by rail tank car authorized by the July 2020 Final Rule did not go far enough to protect public safety and the environment, PHMSA declines to adopt their far-reaching recommendations in this proceeding. However, PHMSA encourages those stakeholders to consider submitting comments in response to any future notice of proposed rulemaking in PHMSA's companion rulemaking under RIN 2137-AF54, as well as to engage other Federal and State regulatory authorities with jurisdictional responsibilities for the issues they asked PHMSA to address.

Statutory authority for this final rule is provided by the HMTA. Section 5103(b) of the HMTA authorizes the Secretary of Transportation to “prescribe regulations for the safe transportation, including security, of hazardous materials in intrastate, interstate, and foreign commerce.” The Secretary has delegated the authority granted in the HMTA to the PHMSA Administrator at § 1.97(b).

Executive Order 12866 (“Regulatory Planning and Review”), 49 as amended by Executive Order 14094 (“Modernizing Regulatory Review”), 50 requires that agencies “should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating.” Agencies should consider quantifiable measures and qualitative measures of costs and benefits that are difficult to quantify. Further, Executive Order 12866 requires that “agencies should select those [regulatory] approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity), unless a statute requires another regulatory approach.” Similarly, DOT Order 2100.6A (“Rulemaking and Guidance Procedures”) requires that regulations issued by PHMSA and other DOT Operating Administrations should consider an assessment of the potential benefits, costs, and other important impacts of the proposed action and should quantify (to the extent practicable) the benefits, costs, and any significant distributional impacts, including any environmental impacts.

Executive Order 12866 and DOT Order 2100.6A require that PHMSA submit “significant regulatory actions” to the Office of Management and Budget (OMB) for review. Executive Order 14094 amended Executive Order 12866, which defines significant regulatory actions. This rulemaking is considered a significant regulatory action under section 3(f) of Executive Order 12866 as amended by Executive Order 14094. This final rule has, therefore, been reviewed by OMB.

PHMSA concludes that the temporary suspension of transporting LNG by rail tank car is not expected to have an economic impact because LNG transport by rail tank car is not expected to occur during the suspension period. As explained in section III.D above, since issuance of the July 2020 Final Rule, the commercial prospects for rail tank car transportation of LNG have become increasingly unlikely. LNG has not been transported in any rail tank cars (whether pursuant to the July 2020 Final Rule, SP issued by PHMSA, or FRA approval), and PHMSA is unaware of any planned movements in the near future. Indeed, the development of the necessary infrastructure—including construction of DOT-113C120W9 tank cars, loading and unloading facilities, vessel handling facilities if sea transport is required, liquification facilities, and regasification facilities—to transport LNG by rail as authorized by the July 2020 Final Rule demands significant financial investment, long-term commitment, and considerable planning associated with constructing a new LNG tank car fleet (which construction may itself be subject to delays because of limited capacity in the rail car manufacturing industry). PHMSA is unaware of any orders having been placed for the manufacture of new DOT-113C120W9 tank cars for commercial LNG service. This absence of commercial demand occurred despite the highest prices for domestic U.S. natural gas markets and LNG export markets in nearly a decade. 51 Additionally, it appears LNG export prices have risen faster than the domestic price which has resulted in a substantial increase in US LNG exports over the last decade. However, the increase in export capacity does not appear to have translated into increased demand for tank cars, possibly due to the majority of the increase in liquefication capacity occurring at waterfront LNG facilities. 52

PHMSA expects no economic impact due to the temporary suspension. Indeed, PHMSA's temporary suspension may in fact reduce economic burden by discouraging a shipper from ordering rail tank cars compliant with the July 2020 Final Rule when the companion rulemaking (under RIN 2137-AF54) may adopt different requirements. Additionally, should any potential shippers need to transport LNG by rail tank car during the suspension period, they could avail themselves of the PHMSA SP or FRA approval processes for such transport. 53 Further, temporary suspension guarantees avoidance of potential adverse public safety and environmental impacts (including, but not limited to, contribution of direct and indirect GHG emissions) that could have arisen from rail tank car transportation of LNG under the HMR. Lastly, the limited duration of the suspension will also mitigate any potential adverse economic, public safety, or environmental impacts that could arise in the unlikely event that demand for rail tank car transportation under the July 2020 Final Rule would have materialized during the suspension period in the absence of this final rule.

In addition to the PHMSA SP and FRA approval alternatives, shippers could transport LNG by highway via MC-338 insulated cargo tanks. All of these alternatives for LNG shippers would involve higher costs than rail transportation, but they are available in the unlikely case that market conditions evolve to warrant LNG transportation prior to June 30, 2025, or the completion of the companion rulemaking. 54

PHMSA analyzed this rulemaking in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”)  55 and its implementing Presidential Memorandum (”Preemption”). 56 Executive Order 13132 requires agencies to assure meaningful and timely input by State and local officials in the development of regulatory policies that may have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This rulemaking may preempt State, local, and Native American Tribe requirements, but does not contain any regulation that has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government.

The HMTA contains an express preemption provision at 49 U.S.C.5125(b) that preempts State, local, and Tribal requirements on certain covered subjects, unless the non-Federal requirements are “substantively the same” as the Federal requirements, including the following:

(1) the designation, description, and classification of hazardous material;

(2) the packing, repacking, handling, labeling, marking, and placarding of hazardous material;

(3) the preparation, execution, and use of shipping documents related to hazardous material and requirements related to the number, contents, and placement of those documents;

(4) the written notification, recording, and reporting of the unintentional release in transportation of hazardous material; and

(5) the design, manufacture, fabrication, inspection, marking, maintenance, recondition, repair, or testing of a packaging or container represented, marked, certified, or sold as qualified for use in transporting hazardous material in commerce.

This final rule addresses subject items (2) and (5) above, which are covered subjects, and therefore, non-Federal requirements that fail to meet the “substantively the same” standard are vulnerable to preemption under the Federal hazmat law. Moreover, PHMSA will continue to make preemption determinations applicable to specific non-Federal requirements on a case-by-case basis, using the obstacle, dual compliance, and covered subjects tests provided in Federal hazmat law.

PHMSA analyzed this rulemaking in accordance with the principles and criteria contained in Executive Order 13175 and DOT Order 5301.1 (“Department of Transportation Policies, Programs, and Procedures Affecting American Indians, Alaska Natives, and Tribes”). Executive Order 13175 and DOT Order 5301.1 require DOT Operating Administrations to assure meaningful and timely input from Native American Tribal government representatives in the development of rules that significantly or uniquely affect Tribal communities by imposing “substantial direct compliance costs” or “substantial direct effects” on such communities or the relationship and distribution of power between the Federal government and Tribes.

In addition to the petitions filed by the environmental groups and State attorneys general mentioned above, the Puyallup Tribe also challenged the July 2020 Final Rule and alleged violations of the Tribal consultation protocols under the National Historic Preservation Act and Executive Order 13175 and disparate impacts on the Tribe in violation of Executive Order 12898 and Title VI of the Civil Rights Act of 1964.

PHMSA assessed the impact of this final rule and concluded that it will not significantly or uniquely affect Tribal communities or Tribal governments. This rulemaking does not impose substantial compliance costs on Tribal governments or communities, nor does it mandate Tribal action. Insofar as PHMSA expects the final rule will not adversely affect the safe transportation of hazardous materials generally, PHMSA does not expect it will entail disproportionately high adverse risks for Tribal communities. This final rule could in fact reduce risks to Tribal communities, as it could avoid the release of hazardous materials (in particular, LNG) by railroad in the vicinity of Tribal communities. For these reasons, PHMSA has concluded that the funding and consultation requirements of Executive Order 13175 and DOT Order 5301.1 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires agencies to consider whether a rulemaking would have a “significant economic impact on a substantial number of small entities” to include small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations under 50,000. The Regulatory Flexibility Act directs agencies to establish exceptions and differing compliance standards for small businesses, where possible to do so and still meet the objectives of applicable regulatory statutes. Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”)  57 requires agencies to establish procedures and policies to promote compliance with the Regulatory Flexibility Act and to “thoroughly review draft rules to assess and take appropriate account of the potential impact” of the rules on small businesses, governmental jurisdictions, and small organizations. The DOT posts its implementing guidance on a dedicated web page. 58

This rulemaking has been developed in accordance with Executive Order 13272 and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act and ensure that potential impacts of draft rules on small entities are properly considered. Consistent with the analysis above, PHMSA certifies that the temporary suspension of the July 2020 Final Rule will not have a significant economic impact on a substantial number of small entities.

Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), no person is required to respond to any information collection unless it has been approved by OMB and displays a valid OMB control number. Pursuant to 44 U.S.C. 3506(c)(2)(B) and 5 CFR 1320.8(d), PHMSA must provide interested members of the public and affected agencies an opportunity to comment on information collection and recordkeeping requests.

PHMSA has analyzed this rulemaking in accordance with the Paperwork Reduction Act. PHMSA currently accounts for security plan burdens under OMB Control Number 2137-0612, “Hazardous Materials Security Plans.” In the July 2020 Final Rule, PHMSA required any rail carrier transporting a tank car quantity of UN1972 (Methane, refrigerated liquid (cryogenic liquid) or Natural gas, refrigerated liquid (cryogenic liquid)) to comply with the additional rail transportation safety and security planning requirements. Following publication of the July 2020 Final Rule, PHMSA published both a 60-day  59 and 30-day  60 notice and comment period to provide an opportunity for public comment on the estimated increase in burden. PHMSA did not receive comments to either notice. Subsequently, PHMSA submitted the revision to OMB and received approval for the increased burden. As PHMSA implements a temporary suspension of the authorization to ship LNG by rail tank car pursuant to July 2020 Final Rule, PHMSA estimates this rulemaking would result in a decrease in the burden associated with additional rail transportation safety and security planning requirements imposed by the July 2020 Final Rule. Because this final rule contains revisions to an information collection approved under OMB control number 2137-0612 that are subject to review by OMB under the PRA Act, PHMSA has submitted the revised information collection to OMB and will publish a subsequent Federal Register notice to advise the public when OMB has approved the revisions. The following reflects this estimated decrease in burden:

Total Annual Decrease in Number of Respondents: 0.

Total Annual Decrease in Number of Response: 8.

Total Annual Decrease in Burden Hours: 680.

Total Annual Decrease in Salary Costs: $51,598.

Total Annual Decrease in Burden Costs: $0.

The Unfunded Mandates Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et seq. ) requires agencies to assess the effects of Federal regulatory actions on State, local, and Tribal governments, and the private sector. For any notice of proposed rulemaking or final rule that includes a Federal mandate that may result in the expenditure by State, local, and Tribal governments, or by the private sector of $100 million or more in 1996 dollars in any given year, the agency must prepare, amongst other things, a written statement that qualitatively and quantitatively assesses the costs and benefits of the Federal mandate.

This rulemaking does not impose unfunded mandates under the UMRA. As explained above, it is not expected to result in costs of $100 million or more in 1996 dollars on either State, local, or Tribal governments, in the aggregate, or to the private sector in any one year, and is the least burdensome alternative that achieves the objective of the rule.

The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), 63 requires federal agencies to consider the environmental impacts of their actions in the decision-making process. NEPA requires Federal agencies to assess the environmental effects of proposed Federal actions prior to making decisions and involve the public in the decision-making process. Agencies must prepare an environmental assessment (EA) for an action for which a categorical exclusion is not applicable and is either unlikely to have significant effects or when significance of the action is unknown. In accordance with these requirements, an EA must briefly discuss: (1) the need for the action; (2) the alternatives considered; (3) the environmental impacts of the action and alternatives; and (4) a listing of the agencies and persons consulted. If, after reviewing the EA and public comments if applicable, in response to a draft EA (DEA), an agency determines that a proposed action will not have a significant impact on the human or natural environment, it can conclude the NEPA analysis with a finding of no significant impact (FONSI).

PHMSA has determined that the recommendations from the TRB, its ongoing research, and recent events stemming from the COVID-19 public health emergency predicate the need to re-evaluate the amendments authorized in the July 2020 Final Rule. Research activity that PHMSA had expected would enhance its understanding of the risks attendant in rail transportation of LNG has been delayed, and uncertainties have increased in whether there will be any potential benefits, and in the underlying economic dynamics bounding those risks ( e.g., the quantity of LNG that will move by rail, and the routes involved). Therefore, PHMSA is amending the HMR to suspend authorization of LNG transportation in a rail tank car pending further analysis and completion of a companion rulemaking that will consider changes to the conditions under which LNG could be moved by rail, to potentially include additional safety, environmental, and environmental justice protections. This action will provide PHMSA an opportunity to review recent actions that could be obstacles to Administration policies promoting public health and safety, the environment, and climate change mitigation; and to evaluate the results of ongoing and delayed research efforts to ensure the safe transportation of LNG by rail tank car.

In this rulemaking, PHMSA considered the following alternatives:

If PHMSA were to select the No Action Alternative, current regulations authorizing the transport of LNG in rail tank cars would remain in effect and no provisions would be amended or added. Therefore, the HMR would continue to authorize the transportation of LNG in DOT-113C120W9 tank cars with a 9/16-inch outer tank composed of TC-128B normalized steel. The following operational controls and safety measures would also remain in effect:

• Each tank car must be operated in accordance with § 173.319, which includes:

○ testing of relief valves every 5 years

○ annual replacement of rupture discs

○ thermal integrity tests following an average daily pressure rise during any shipment exceeding 3 psig per day

○ other requirements specific to liquids in cryogenic tank cars.

• 49 CFR part 179, subpart F contains detailed design, construction, and operational requirements for DOT-113C120W tank cars with the specification suffix “9” to be used in rail transportation of LNG.

• Trains transporting 20 or more tank cars of LNG in a block, or 35 such tank cars throughout the train, must be equipped and operated with a two-way EOT device, pursuant to the requirements in 49 CFR part 232, subpart E, or a distributed-power (DP) locomotive as defined in 49 CFR 229.5.

• The offeror must remotely monitor each tank car while in transportation for pressure and location.

• The offeror must notify the carrier if the tank pressure rise exceeds 3 psig over any 24-hour period.

• Trains transporting any quantity of LNG must comply with the route planning requirements in § 172.820, which requires rail carriers transporting LNG by rail tank car to conduct an annual route analysis considering, at a minimum, 27 risk factors listed in appendix D to part 172.

• Each LNG tank car must have:

○ a reclosing pressure relief device with a start-to-discharge pressure of 75 psig;

○ a non-reclosing pressure relief device set to discharge at the tank test pressure;

○ a maximum permitted filling density (percent by weight) of 37.3 percent;

○ a design service temperature of −162 °C (−260 °F);

○ a maximum pressure when offered for transportation not to exceed 15 psig;

○ a minimum steel thickness, after forming, on the outer tank shell and tank heads of 9/16 inch, which is thicker than the requirement for other DOT-113C120W tank cars; and

○ an outer tank shell constructed of AAR TC-128, Grade B normalized steel plate as specified in § 179.100-7(a), which has a higher tensile strength of 81,000 psi which makes it stronger than that used for the existing DOT-113 outer shell.

The final environmental analysis (FEA), which—except for the finding of no significant impact therein—is incorporated by reference into this final rule, examined how the above requirements were imposed to reduce risks to human safety and the environment from the transportation of LNG in rail tank cars and incidents occurring as a result of this transportation. 64 The No Action Alternative would allow the shipment of LNG in rail tank cars, and PHMSA could continue to consider whether additional mitigations are necessary based on the expert recommendations from the TRB Phase I and Phase II Reports and results from ongoing, delayed testing and evaluation activity by the LNG Task Force.

This Selected Action Alternative as it appears in this final rule, adding a new special provision to the HMR that would suspend the transportation of LNG in rail tank cars while PHMSA undergoes a comprehensive review to ensure the safe transportation of LNG by rail in accordance with ongoing research and incorporation of recommendations from the TRB, as well as the best available economic analysis and science. Rail transport of LNG would be permitted only as authorized by the conditions of a PHMSA special permit (49 CFR 107.105) that would apply only to the railroad(s) operating under such a permit or in a portable tank secured to a rail car pursuant to the conditions of an FRA approval (49 CFR 174.63). The amendments included in this alternative are more fully discussed in the preamble and regulatory text sections of this final rule.

If PHMSA selected the No Action Alternative, current regulations would remain in place without suspension. As described in the FEA, the No Action Alternative could pose risks to public safety and the environment because the authorization under the HMR to offer shipments of LNG by rail tank car would remain in place. LNG poses potential hazards as a cryogenic liquefied flammable gas, including cryogenic temperature exposure, fire, and asphyxiation hazards. Transportation of any hazardous material introduces risk to safety and the environment, and each additional tank car increases the overall risk of an incident occurring and the quantity that could be released in the event of a derailment. While this is true for all hazardous materials transportation, PHMSA seeks to better understand the risks inherent to LNG transportation in the DOT-113C120W9, especially given that the July 2020 Final Rule authorized large quantities to be transported in rail cars. The July 2020 Final Rule FEA explained that transporting LNG in rail tank cars is expected to be safer than transporting LNG by truck on highways—however, it is possible that allowing LNG to be transported in rail tank cars would increase the amount of LNG transported, and therefore a direct comparison of the risks by rail and highway may be misleading. PHMSA will also consider, based on existing rail infrastructure locations and anticipated routes, whether transportation of LNG in rail tank cars could pose disproportionate harm or risk to communities of color or low-income communities. As described in the preamble to this final rule, various market and other uncertainties exist regarding specific routes that may be used for the transport of LNG by rail tank car.

No release of LNG vapor to the environment is allowed during the normal transportation of LNG in tank cars whether by roadway or railway. However, methane is odorless, and LNG contains no odorant, making detection of a release resulting from an incident difficult without a detection device. Releases of LNG due to venting or to accidents/incidents, without immediate ignition, involving either an MC-338 cargo tank, a portable tank, or a DOT-113C120W9 rail tank car have the potential to create flammable vapor clouds of natural gas because recently gasified LNG does not dissipate in the atmosphere as quickly as ambient-temperature natural gas. Large releases of LNG due to the breach of the inner tank of these transport vessels could result in a pool fire, vapor fire, and explosion hazards if methane vapors become confined. These flammability hazards pose a risk of higher potential impacts than localized cryogenic hazards.

Some commenters on the July 2020 Final Rule argued that the authorization of LNG by rail would further incentivize the production of natural gas, which is a fossil fuel. Methane has much greater heat trapping potential in the atmosphere than carbon dioxide in the short term. Thus, methane is considered a potent GHG, and comprises a significant portion of the United States' GHG emissions. While methane leaks are highly unlikely during transportation in the DOT-113C120W9 due to tank car design, increased natural gas production could lead to indirect environmental impacts of increased methane emissions released during production, loading and unloading, or at other times during its life cycle. In considering whether the authorization could further incentivize the production of natural gas, PHMSA will consider the scope of existing natural gas production and transportation via natural gas pipeline and other modes of transportation.

The FEA for the July 2020 Final Rule discussed potential environmental benefits that could be associated with the authorization to transport LNG by rail tank car. First, PHMSA discussed that the authorization could allow for the delivery of natural gas to locations dependent on more polluting energy forms, such as coal, diesel, heating oil, or firewood. 65 Use of natural gas in such areas, whether foreign or domestic, could allow for a reduction in polluting and climate-warming emissions. Additionally, the authorization to transport LNG by rail tank car could potentially replace some shipments of LNG by highway. As discussed in the FEA for the July 2020 Final Rule, highway transportation is less efficient in comparison to rail transportation when considering fuel use, combustion emissions, and climate change impacts. However, in order to supplement, reduce, or replace highway transportation, rail infrastructure would need to exist between the origin and destination locations or be developed. Finally, the FEA explored industry claims that the authorization could incentivize the capture, storage, and liquefaction of natural gas over venting and flaring of natural gas during oil production and other industrial activities, in areas where natural gas pipeline capacity is unavailable. Facilitating the productive end use of by-product methane could reduce the venting and flaring of natural gas, which causes methane and carbon dioxide emissions. Similar to other above-described benefits, it is difficult to predict the extent to which industries would invest in the equipment, technology, and expertise necessary to pursue natural gas capture, storage, and liquefaction necessary to pursue LNG transportation by rail. A suspension of the authorization to transport LNG by rail could curtail these potential benefits in the near term.

Under this Selected Action Alternative, PHMSA will amend the HMR to suspend authorization of LNG transportation in rail tank cars pending further analysis and completion of a companion rulemaking or June 30, 2025, whichever is earlier. Therefore, the HMR will not authorize shippers to transport bulk quantities of LNG by rail tank car. Instead, LNG by rail will only be permitted pursuant to a DOT SP or in portable tanks subject to FRA approval. The Selected Action Alternative will avoid the risks that transportation of LNG in rail tank cars, and particularly potential derailments of rail cars transporting LNG, could pose to public safety and the environment. PHMSA will be able to further consider whether the transportation of LNG could pose disproportionately high or adverse effects on minority and low income communities, which have historically borne the brunt of deleterious Federal policy decisions. PHMSA will also be able to further consider whether shipping LNG in rail tank cars is consistent with public health and safety, environmental protection, including climate change mitigation; and to evaluate the results of ongoing and delayed research efforts and collaboration as part of an accompanying rulemaking under RIN 2137-AF54.

However, as noted above and in the FEA for the July 2020 Final Rule, the authorization to transport LNG in DOT-113C120W9 specification tank cars could have yielded some environmental benefits or improvements, which will not be realized during the suspension period. The scope of potential environmental effects of suspending the July 2020 Final Rule depend on whether use of MC-338 for transportation of LNG increases as a result of the suspension of the DOT-113C120W9 or whether environmental benefits of the authorization have been realized that would not occur during the suspension. PHMSA is unaware of any order from a commercial entity for a new DOT-113C120W9-specification tank car for LNG service. Thus, no increased use of MC-338 tank cars for LNG service is expected as a result of this suspension.

In the unlikely event that the use of MC-338 cargo tank cars for LNG transportation increases due to the inability to transport LNG in rail tank cars, a few environmental effects could result. First, highway transportation of LNG requires more diesel engine vehicles and would result in more emissions, including volatile organic compounds, carbon dioxide, nitrogen oxides, sulfur oxides, and particulate matter of 10 microns or less. Next, increased highway congestion also increases the potential for a highway incident involving LNG, depending on the extent of the increase. In the event highway transportation increases as a result of this rule, these environmental effects would be speculative and minor, and PHMSA finds that they are warranted during the suspension period while PHMSA undertakes a full analysis of risks inherent in transporting LNG in rail tank cars.

The July 2020 Final Rule FEA noted that the transportation of LNG could allow natural gas to reach markets that lack this access and could potentially reduce and replace the burning of more polluting and carbon-intensive sources of energy such as coal, wood, and diesel. As noted above, the July 2020 Final Rule has not resulted in these replacements or emissions reductions, such that the suspension would not reverse any such benefits. The July 2020 Final Rule FEA also explained that authorization to transport LNG in rail tank cars had the potential to reduce the wasteful and carbon-intensive practice of natural gas flaring because it could provide a market for by-product natural gas in areas where natural gas pipeline transportation is not available. The July 2020 Final Rule has not resulted in this benefit, and there is no indication that this benefit would have occurred anytime in the foreseeable future in the event that it remained available. Thus, PHMSA does not anticipate negative environmental effects from the suspension of the July 2020 Final Rule.

PHMSA has coordinated with FRA, the Federal Aviation Administration, the Federal Motor Carrier Safety Administration, and the U.S. Coast Guard in the development of this rule. The final rule has also been made available to other Federal agencies within the interagency review process contemplated under Executive Order 12866.

Executive Order 12898 (“Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations”), 66 directs Federal agencies to take appropriate and necessary steps to identify and address disproportionately high and adverse effects of Federal actions on the health or environment of minority and low-income populations to the greatest extent practicable and permitted by law. DOT Order 5610.2C (“U.S. Department of Transportation Actions to Address Environmental Justice in Minority Populations and Low-Income Populations”) establishes departmental procedures for effectuating Executive Order 12898 promoting the principles of environmental justice through full consideration of environmental justice principles throughout planning and decision-making processes in the development of programs, policies, and activities—including PHMSA rulemaking.

PHMSA has evaluated this final rule under DOT Order 5610.2C and Executive Order 12898 and has determined it will not cause disproportionately high and adverse human health and environmental effects on minority and low-income populations. The final rule is national in scope; it is neither directed toward a particular population, region, or community, nor is it expected to result in any adverse environmental or health impact to any particular population, region, or community.

This final rule could reduce risks to minority populations, low-income populations, or other underserved and disadvantaged communities. Insofar as these HMR amendments could avoid the release of hazardous materials, the final rule could reduce risks to populations and communities—including any minority, low-income, underserved, and disadvantaged populations and communities—in the vicinity of railroad lines. However, as noted in the FEA for the July 2020 Final Rule, access to LNG may result in potential economic benefits for underserved communities because of the efficiencies of transporting LNG by rail, and thereby domestic production, distribution, and consumption of natural gas could increase. These potential economic benefits that could result from the transportation of bulk quantities of LNG by rail car would not be realized by underserved communities in the short term. In addition, to the extent that suspending shipment of LNG by rail tank car could increase demand for shipping LNG by truck on highways, these HMR amendments could increase risks to environmental justice communities in the vicinity of those highways.

Further, this rule advances the policy goals of the most recent environmental justice Executive Order 14096— Revitalizing Our Nation's Commitment to Environmental Justice for All, 67 which deepens the Administration's whole-of-government approach to environmental justice to better protect communities from pollution and other environmental justice concerns.

The adoption of the Selected Action Alternative's suspension will prohibit the transportation of LNG in rail tank cars while PHMSA and FRA undertake a comprehensive analysis of safety and environmental issues associated with the transportation of LNG by rail. As such, the HMR amendments in this final rule will have no significant impact on the human environment. The Selected Action Alternative will allow PHMSA to review new information to evaluate the potential impact on safety, environmental justice, and GHG emissions. Further, based on PHMSA's analysis of these provisions described above and insofar as there has been no significant progress toward the movement of LNG by rail tank car, PHMSA finds that codification and implementation of this rule will not result in a significant impact to the human environment.

In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to http://www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed on DOT's website at http://www.dot.gov/privacy or DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000. 68

Executive Order 13609 (“Promoting International Regulatory Cooperation”)  69 requires that agencies must consider whether the impacts associated with significant variations between domestic and international regulatory approaches are unnecessary or may impair the ability of American business to export and compete internationally. In meeting shared challenges involving health, safety, labor, security, environmental, and other issues, international regulatory cooperation can identify approaches that are at least as protective as those that are or would be adopted in the absence of such cooperation. International regulatory cooperation can also reduce, eliminate, or prevent unnecessary differences in regulatory requirements.

Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to the Trade Agreements Act, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standards have a legitimate domestic objective, such as providing for safety, and do not operate to exclude imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

PHMSA participates in the establishment of international standards in order to protect the safety of the American public. PHMSA has assessed the effects of this rulemaking to ensure that it does not cause unnecessary obstacles to foreign trade. While the suspension the transport of LNG by rail tank car has potential to impact the United States' export of bulk LNG internationally, there has been no significant reliance interest or progress toward the near-term movement of LNG by rail tank cars. As such, PHMSA expects the amendments herein to pose a minimal impact to international trade if adopted. Therefore, PHMSA is amending the HMR to suspend authorization of LNG transportation in a rail tank car pending further analysis to ensure potential future regulatory actions to allow bulk transport of LNG by rail promote public health and safety, the environment, and climate change mitigation. Accordingly, this rulemaking is consistent with Executive Order 13609 and PHMSA's obligations under the Trade Agreement Act, as amended.

Executive Order 13211 (“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use”)  70 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” Executive Order 13211 defines a “significant energy action” as any action by an agency (normally published in the Federal Register ) that promulgates, or is expected to lead to the promulgation of, a final rule or regulation that (1)(i) is a significant regulatory action under Executive Order 12866 or any successor order and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy (including a shortfall in supply, price increases, and increased use of foreign supplies); or (2) is designated by the Administrator of the Office of Information and Regulatory Affairs (OIRA) as a significant action.

Although this rule is a significant action under Executive Order 12866, PHMSA expects it to have an annual effect on the economy of less than $200 million. Further, this action is not likely to have a significant adverse effect on the supply, distribution, or use of energy in the United States. While the amendment to suspend the transport of LNG by rail tank car has potential to impact the supply, distribution, or use of energy in the United States, PHMSA does not anticipate any near-term movement of LNG by rail tank cars. For additional discussion of the anticipated economic impact of this rulemaking, please see section IV.B above.

Executive Order 14028 (“Improving the Nation's Cybersecurity”)  71 directed the Federal government to improve its efforts to identify, deter, and respond to “persistent and increasingly sophisticated malicious cyber campaigns.” Consistent with Executive Order 14028, the Transportation Security Administration (TSA) in October 2022 issued a Security Directive to reduce the risk that cybersecurity threats pose to critical railroad operations and facilities through implementation of layered cybersecurity measures that provide defense-in-depth. 72 PHMSA has considered the effects of the final rule and determined that its regulatory amendments will not materially affect the cybersecurity risk profile for rail transportation of hazardous materials.

In consideration of the foregoing, PHMSA is amending 49 CFR chapter I as follows:

Migratory game birds are those bird species so designated in conventions between the United States and several foreign nations for the protection and management of these birds. Under the Migratory Bird Treaty Act (16 U.S.C. 703-712), the Secretary of the Interior is authorized to determine when “hunting, taking, capture, killing, possession, sale, purchase, shipment, transportation, carriage, or export of any such bird, or any part, nest, or egg” of migratory game birds can take place and to adopt regulations for this purpose. These regulations must give due regard to the zones of temperature and to the distribution, abundance, economic value, breeding habits, and times and lines of migratory flight of such birds (16 U.S.C. 704(a)). The Secretary of the Interior has delegated to the Service the lead Federal responsibility for managing and conserving migratory birds in the United States; however, migratory bird management is a cooperative effort of Federal, Tribal, and State governments. Federal regulations pertaining to migratory bird hunting are located in title 50 of the Code of Federal Regulations in part 20.

Acknowledging regional differences in hunting conditions, the Service has administratively divided the United States into four Flyways for the primary purpose of managing migratory game birds. Each Flyway (Atlantic, Mississippi, Central, and Pacific) has a Flyway Council, a formal organization generally composed of one member from each State within the Flyway, as well as Provinces in Canada that share migratory bird populations with the Flyway. The Flyway Councils, established through the Association of Fish and Wildlife Agencies, assist in researching and providing migratory game bird management information for Federal, Tribal, State, and Provincial governments, as well as private conservation entities and the general public.

The Service annually develops migratory game bird hunting outside limits (hereinafter, Federal outside limits or Federal limits) for season dates, season lengths, shooting hours, bag and possession limits, and areas where migratory game bird hunting may occur. Hunting seasons selected by the States and Tribes within these Federal limits are set forth in regulations at 50 CFR part 20, subpart K. Because the Service is required to take abundance of migratory game birds and other factors into consideration, the Service undertakes several surveys throughout the year in conjunction with Service Regional Offices, the Canadian Wildlife Service, Tribes, and State and Provincial wildlife management agencies. For each annual regulatory cycle, Service biologists gather, analyze, and interpret biological survey data and provide this information through a series of published status reports and presentations to the Flyway Councils and other interested parties. The August 6, 2015, Federal Register at 80 FR 47388 provides a detailed overview of this process.

The Federal outside limits are necessary to allow harvest at levels compatible with migratory game bird population status and habitat conditions. To determine the appropriate outside limits for each species, we consider factors such as population size and trend, geographical distribution, annual breeding effort, condition of breeding and wintering habitat, number of hunters, and anticipated harvest. After Federal limits are established, States may select migratory game bird hunting seasons within these limits. States may always be more conservative in their selections than the Federal limits, but never more liberal.

Beginning with the 1985-86 hunting season, we have employed guidelines described in the June 4, 1985, Federal Register (50 FR 23459 at 23467) to establish special (independent from the State or States where the reservation is located) migratory game bird hunting regulations on Federal Indian reservations (including off-reservation trust lands) and ceded lands. We developed these guidelines in response to Tribal requests for our recognition of their reserved hunting rights, and for some Tribes, recognition of their authority to regulate hunting by both Tribal and nontribal members throughout their reservations. The guidelines provide appropriate opportunity to accommodate the reserved hunting rights and management authority of Indian Tribes while also ensuring that the migratory game bird resource receives necessary protection. The Service adopted the 1985 guidelines as final in 1988 (53 FR 31612, August 18, 1988).

From the 1985 through 2022 hunting seasons, as part of our preliminary proposed rule to annually promulgate Federal migratory bird hunting regulations, we asked Tribes to submit their proposed migratory bird hunting regulations. Proposals were to include season dates and other regulations, methods to monitor harvest, anticipated harvest, steps taken to limit harvest levels, and capabilities to establish and enforce migratory bird hunting regulations. Then, upon receipt of information provided by the Tribes each year on the status of migratory bird populations and expected migratory bird harvest, we evaluated the potential impact of special Tribal hunting regulations on the migratory bird resource. Annually, we published in the Federal Register the special Tribal migratory bird hunting regulations as a proposed rule and, following review and consideration of any public comments, published a final rule setting forth the regulations. We have always concluded that this harvest, when conducted within our guidelines, is small and, therefore, would have a negligible impact to the bird population status.

For the 2023-24 hunting season, we published proposed regulations for certain migratory game birds on November 3, 2022 (87 FR 66247). In that proposed rule, we stated that we would handle Tribal regulations for the 2023-24 hunting season via a separate rulemaking process in later Federal Register documents. Accordingly, on March 23, 2023, we proposed a revised process for establishing special regulations for certain Tribes on Federal Indian reservations, off-reservation trust lands, and ceded lands for migratory bird hunting seasons (88 FR 17511). That proposed rule initiated a process for developing special migratory game bird hunting regulations on Federal Indian reservations (including off-reservation trust lands) and ceded lands for the 2023-24 hunting season and beyond.

Under the regulations in this final rule, we anticipate that Tribal hunting will continue to have similar minimal impact to the migratory bird resource in the future due to declining trends in active hunters for some Tribes and also increasing population trends for many migratory game birds (as identified in the 2022 State of the Birds Report; see state-of-the-birds-2022-spreads.pdf at stateofthebirds.org. ). Based on the demonstrated successful implementation of our Tribal guidelines since 1985 and the historical and future expected minimal impacts to migratory game bird resources, we have simplified the process for establishing special Tribal migratory game bird hunting regulations for the upcoming hunting season (2023-2024) and afterwards. We have removed the requirement that Tribes annually submit their proposed migratory game bird hunting regulations (and associated monitoring, anticipated harvest, and capabilities for regulation development and enforcement) for our review and approval. We also will no longer publish special Tribal migratory game bird hunting regulations in the Federal Register ( i.e., a proposed and final rule). The regulations set forth in this rule adopt elements of our guidelines for establishing special migratory game bird hunting regulations on Federal Indian reservations (including off-reservation trust lands) and ceded lands. Tribes that comply with these regulations will be authorized to independently establish special Tribal migratory bird hunting regulations. However, if circumstances change and data indicates migratory game bird populations are substantially declining or Tribal hunting increases significantly, we will reevaluate this regulation.

By allowing Tribes to independently establish special migratory bird hunting regulations, the Service recognizes Tribal sovereignty to exercise reserved hunting rights and, for some Tribes, recognition of their authority to regulate hunting by both Tribal and nontribal members on their reservation. This rule will extend to Tribes with reserved hunting rights the same autonomy as the States to independently establish migratory game bird hunting seasons for nontribal members within annually established, biologically appropriate Federal outside limits. As an alternative to promulgating special Tribal migratory game bird hunting regulations, Tribes may choose to observe the hunting regulations established by the State or States in which the reservation is located. We coordinated with Tribes over the past 2 years via letters and four webinars as we developed this new regulatory approach for Tribal self-management of the harvest, and we have received positive feedback. The new system will reduce the annual administrative burden on both the Tribes and the Service to propose, review, and publish special migratory game bird hunting regulations while continuing to sustain healthy migratory game bird populations for future generations.

As with the prior process, the new regulations will be applicable to those Tribes that have reserved hunting rights on Federal Indian reservations (including off-reservation trust lands) and ceded lands. These regulations also may be applied to the establishment of migratory game bird hunting regulations for nontribal members on all lands within the reservations where Tribes have full wildlife-management authority over such hunting, or where the Tribes and affected States otherwise have reached agreement over hunting by nontribal members on non-Indian lands within the reservation. Tribes usually have the authority to regulate migratory game bird hunting by nonmembers on Indian-owned reservation lands. The question of jurisdiction is more complex on reservations that include lands owned by non-Indians, especially when the surrounding States have established or intend to establish regulations governing migratory game bird hunting by non-Indians on these lands. In those cases, we encourage the Tribes and States to reach agreement on regulations that would apply throughout the reservations. When appropriate, we will consult with a Tribe and State with the aim of facilitating an accord. We also will consult jointly with Tribal and State officials in the affected States where Tribes may wish to establish special migratory game bird hunting regulations for Tribal members on ceded lands. It is incumbent upon the Tribe and/or the State to request consultation. We will not presume to make a determination, without being advised by either a Tribe or a State, that any issue is or is not worthy of formal consultation. Tribal and State requests for consultation with the Service should be sent to the Service's Assistant Director for the Migratory Bird Program; see FOR FURTHER INFORMATION CONTACT . We note that our guidance on resolving issues of concern between Tribes and States on reservations and ceded lands is the same guidance we provided under the previous Tribal regulation process.

The rule portion of this document includes requirements for Tribes to follow if they establish special Tribal migratory game bird hunting regulations, which are based on elements from the 1985 guidelines. The regulations provide that all Federal hunting regulations in this part apply to hunting by Tribal and nontribal members. We note that migratory game birds are defined in 50 CFR 20.11(a) as those birds included in the terms of conventions between the United States and any foreign country for the protection of migratory birds, belonging to certain families (Anatidae, Columbidae, Gruidae, Rallidae, and Scolopacidae), and for which open seasons are prescribed in this part. Open seasons for certain migratory game bird species are established by the Service annually as appropriate based on the biological status of these populations and published in the Federal Register as Federal outside limits. Tribes are encouraged to review each year the Federal outside limits to determine the list of migratory game bird species and species groups with authorized open seasons, and any special concerns regarding population status. Furthermore, annual review of the Federal outside limits for migratory game bird hunting seasons ensures that Tribal regulations for nontribal members on reservation lands comply (as required by regulations) with opening and closing dates, season length, and daily bag and possession limits established by the Service.

In addition, we encourage Tribes wanting to establish special migratory game bird hunting regulations to consider the elements we previously required in their proposals:

(1) Season dates and other regulations;

(2) anticipated harvest;

(3) methods that will be employed to measure or monitor harvest;

(4) steps that will be taken to limit the level of harvest, where it could be shown that failure to limit such harvest would have serious impacts on the migratory bird resource; and

(5) Tribal capabilities to establish and enforce migratory bird hunting regulations.

We recommend that Tribes that allow swan hunting require that all swan hunters successfully complete a course on swan identification and conservation to minimize take of trumpeter swans during the swan season.

These regulations provide for the continuation of Tribal members' harvest of migratory game birds on reservations where such harvest is a customary practice. We are supportive of this harvest provided it does not take place during the closed season (March 11 to August 31) mandated by the 1916 Convention Between the United States and Great Britain (for Canada) for the Protection of Migratory Birds and it is not so large as to adversely affect the status of the migratory game bird resource. Since the inception of the 1985 guidelines, we have reached annual agreement with Tribes for migratory game bird hunting by Tribal members on their lands or on lands where they have reserved hunting rights.

We will continue to consult with Tribes that wish to reach a mutual agreement (memorandum of understanding (MOU) or similar type of formal agreement) on conducting short-term (possibly several years) experimental hunting seasons using methods outside of the Federal hunting methods at § 20.21 for on-reservation and ceded lands hunting by Tribal members. The Tribal-member-only experimental hunting season would provide data and evaluation criteria specified in an agreement for consideration if a Tribe would like to make the additional hunting method operational. Tribes should send such requests for consultation to the Service's Assistant Director for the Migratory Bird Program at least 9 months before the season or ceremony regarding hunting methods outside of the Federal regulations (see FOR FURTHER INFORMATION CONTACT ). While we intend to make proposed MOUs or other agreements available for public comment through a notice of availability, we might not use the public process for very minor or nonsignificant MOUs or agreements. The Service will make all signed agreements publicly available. If any individual Tribe wishes to make these additional experimental hunting methods operational and the Service agrees, the Service will conduct rulemaking (using any data from the experimental hunting season) to amend 50 CFR part 20 to allow Tribal members to use these additional hunting methods.

Starting with the 2023-2024 hunting season, annual Tribal hunting season regulations will no longer be published in the Federal Register , alleviating the administrative burden to both the Service and the Tribes of developing special Tribal migratory bird hunting regulation proposals, reviewing proposals, and publishing Tribal regulations as Federal regulations. This process would not apply to seasons for subsistence take of migratory birds in Alaska.

For the 2023-24 migratory bird hunting season and beyond, we proposed regulations (88 FR 17511, March 23, 2023) that followed the revised 1985 guidelines. The comment period for the March 23, 2023, proposed rule closed on May 8, 2023.

We received a total of 10 written responses from 5 individuals, 3 Tribes, 1 State, and 1 organization. Five commenters supported the proposed new process, and two commenters did not support the proposed process. Three commenters were opposed to migratory bird hunting in general. We grouped written comments of a similar nature and discuss them below. We have incorporated, as appropriate, into the final rule information obtained through the public comment period.

We also note that, in addition to the written comments, we received substantial support for the new process via verbal comments (21 supporting, none opposed) during the 4 Tribal webinars during 2022 and 2023 where we explained the proposed new Federal process for establishing Tribal hunting regulations. We also received five emails or telephone calls in support of the new process, and none that were opposed.

Comment 1: There is a potential conflict between harvesting wild rice and hunting during September teal seasons, and this issue was not adequately addressed by the Service in the proposed rule. Tribal autonomy is needed to coordinate with Tribal farmers to ensure safety as well as hunting success. A convention between States and Tribes may be needed to find common ground in addressing this potential conflict.

Service response: We have since facilitated meetings with the applicable Tribe and State to understand the potential conflict between harvesting wild rice and teal hunting. These activities are not mutually exclusive. Based on the facilitated meetings held, we remain optimistic that those discussions will result in local solutions that minimize potential conflicts into the future. For the specific area referred to in the comment, an agreement has been reached and area restrictions will be identified in State and Tribal regulations.

Comment 2: The Service should consider environmental impacts from new hunting methods on the fish population, water quality, and streambank preservation. For example, lead shot (which is currently illegal) has a high potential to contaminate local waterways creating dangerous drinking water and decimated fish populations.

Service response: We share the commenter's concern and do take into consideration and address environmental impacts on a case-by-case basis during the National Environmental Policy Act (NEPA) process for migratory game bird hunting regulations. The Service would analyze these possible environmental impacts as part of any short-term experimental hunting season; and if a Tribe would like to make an additional hunting method operational, the Service would also analyze these possible environmental impacts when conducting rulemaking to amend the regulations.

Comment 3: Several commenters oppose the entire migratory game bird hunting regulations process and the killing of migratory birds and questions the status and habitat data on which the migratory bird hunting regulations are based.

Service response: As we indicate in the annual population status and harvest reports, our long-term objectives continue to include providing opportunities to harvest portions of certain migratory game bird populations and to limit harvests to levels compatible with each population's ability to maintain healthy, viable numbers. Sustaining migratory bird populations and ensuring a variety of sustainable uses, including harvest, is consistent with the guiding principles by which migratory birds are to be managed under the conventions between the United States and several foreign nations for the protection and management of these birds. We have taken into account available information and considered public comments and continue to conclude that the hunting seasons provided for herein are compatible with the current status of migratory bird populations and long-term population goals. In regard to the regulations process, the Flyway Council system of migratory bird management has been a longstanding example of State-Federal cooperative management since its establishment in 1952 in the regulation development process and bird population and habitat monitoring. However, as always, we continue to seek new ways to streamline and improve the process and ensure adequate conservation of the resource.

Comment 4: Both Indigenous and non-Indigenous hunters need to be addressed on reservations and ceded lands. The proposed rule mentions the importance of this issue but does not address the various cases.

Service response: We have concluded that the regulatory framework authorizing the establishment of Tribal hunting regulations does allow Tribes to establish combined or separate regulations within certain limits, and as appropriate for both Tribal and non-Tribal hunters on reservations and ceded lands. This rule does address the various cases. On reservations, nontribal members are subject to the Federal outside limits for season dates, season length, and daily bag and possession limits; Tribal members can have the same regulations as nontribal members, or the Tribe can choose different regulations for Tribal members only that may be outside of the Federal limits, subject to the annual March 11 to August 31 closed season mandated by the 1916 Convention. On ceded lands, Tribes may establish regulations for Tribal members with hunting seasons that may be outside of Federal limits, subject to the closed season mandate.

Comment 5: Highly pathogenic avian influenza (HPAI) is causing avian mortality and may decimate bird populations. The most important aspect for these hunting regulations is not only preventing extinction for these species, but maintaining healthy population numbers to ensure sustainable ecosystems.

Service response: We are working with partners to monitor HPAI mortality of migratory birds, and we anticipate that our current monitoring programs will detect any significant changes to migratory game bird populations. The Service currently chairs the Interagency Steering Committee for Avian Influenza Surveillance in Wild Migratory Birds, which has increased avian influenza surveillance of wild birds across the country. To ensure effective surveillance, we are coordinating with partners so that there can be early detection; rapid communications; quick and accurate laboratory diagnosis; efficient relay of diagnostic findings back to the field, decision-makers, and the public; and implementation of prevention and management actions where necessary.

Comment 6: The Service is also considering changes to the current hunting regulation promulgation process for States, and advancing the two proposals on a similar timeline could be beneficial for commenters as it is challenging to evaluate the full effect of the proposed rule without being able to place it in a more complete context.

Service response: To better serve State partners and the hunting public, we are working to develop a more efficient process for promulgating and publishing annual migratory game bird hunting regulations, while continuing to meet the legal requirements and conservation purpose of the Migratory Bird Treaty Act. We are working to make these improvements as soon as practicable, but this effort will take some time and involves extensive coordination with the Service's Office of Law Enforcement, the Department's Solicitor's Office, and the Flyway Councils. Also, we note that any such changes are expected to change only the Federal internal process for hunting regulation promulgation and does not otherwise change the long-established effective process of annually working with the Tribes, Flyway Councils, and States to monitor the status of migratory game bird populations, make informed regulatory decisions from established frameworks, or change the process for Flyway Councils to make recommendations on Federal outside limits.

Comment 7: The Service should add recognition of Tribal treaty rights to migratory bird hunting regulations to ensure that impacts on Tribal treaty rights are considered and protected.

Service response: We added a statement above in the preamble of this final rule regarding recognition of Tribal treaty rights.

Comment 8: The rule should clarify that, for on-reservation lands, hunting methods outside of the Federal hunting methods at § 20.21 remain available for ceded lands and add this clarification to § 20.110.

Service response: We agree that clarification is needed in the rule in regard to hunting by Tribal members and also note that the proposed regulations allowed for this change. For clarification, we have added “and ceded lands” to the preamble of this final rule under the section “New Process for Managing Tribal Migratory Bird Hunting” and to the final regulations that are set forth in this final rule (§ 20.110).

Comment 9: The Service should continue to publish proposed Tribal regulations in the Federal Register . This process should not be mutually exclusive with advances in recognition of Tribal sovereignty and pursuit of administrative efficiency. Further, should the Service determine that changes or efficiencies are needed in the existing process, we would recommend that States, Tribes, and Flyway Councils be engaged collectively to determine the best path forward for any modifications.

Service response: Similar to this rulemaking, we will publish any subsequent proposed changes to Tribal migratory bird hunting regulations in the Federal Register for public review and comment.

Regarding the regulations set forth in this final rule, we have determined that annual publication of Tribal regulations is not necessary so long as Tribal hunting seasons are consistent with our guidelines. As described above, beginning with the 1985-86 hunting season, we have employed guidelines described in the June 4, 1985, Federal Register (50 FR 23459 at 23467) to establish special migratory game bird hunting regulations (independent from the State or States where the reservation is located) on Federal Indian reservations (including off-reservation trust lands) and ceded lands. We developed these guidelines in response to Tribal requests for our recognition of their reserved hunting rights, and for some Tribes, recognition of their authority to regulate hunting by both Tribal and nontribal members throughout their reservations. The guidelines provide appropriate opportunity to accommodate the reserved hunting rights and management authority of Indian Tribes while also ensuring that the migratory game bird resource receives necessary protection. The Service adopted the 1985 guidelines as final in 1988 (53 FR 31612, August 18, 1988).

The regulations set forth in this final rule include elements of our current guidelines successfully employed since 1985 for establishing special migratory game bird hunting regulations on Federal Indian reservations (including off-reservation trust lands) and ceded lands. By incorporating these guidelines into regulations, Tribes are authorized to independently establish hunting seasons for migratory game birds, so long as they are within certain limits as specified in these regulations. This rule will extend to Tribes with reserved hunting rights the same autonomy as the States to independently establish migratory game bird hunting seasons for nontribal members within annually established, biologically appropriate Federal limits. This approach results in a more efficient promulgation process for both the Tribes and the Service. Resultant Tribal regulations for migratory game bird hunting are unchanged as a result of the new process. This rule does provide some flexibility for hunting by Tribal members on reservations and ceded lands to deviate from Federal regulations that apply in this part where such harvest is a customary practice, but these deviations are subject to an MOU between the Service and the Tribe or Federal rulemaking, both of which will be published in the Federal Register and subject to public review and comment. However, we may not use the public process for very minor or nonsignificant MOUs or agreements.

Furthermore, each year from the 1985-86 hunting season through the 2022-2023 hunting season, the Service received game bird harvest data from the Tribes. Using information on the status of migratory bird populations, the Service evaluated the potential impact of special Tribal hunting regulations on migratory game bird populations. Throughout that time, the Service concluded that annual Tribal harvest is small and, therefore, would have negligible impacts on the population status of migratory game birds. For each species/species group reported, Tribal harvest was less than one-half a percent of the total U.S. harvest, and for several species/species groups was less than one-tenth a percent as indicated in the NEPA review process.

Comment 10: The Service should include a presumption that Tribes have reserved hunting rights on Federal Indian reservations and trust lands. Unless a treaty or Federal statute clearly revokes a Tribe's rights to hunt or fish, those rights are reserved to the Tribe. See, e.g., United States v. Winans, 198 U.S. 371 (1905). The Service should make the following clarification to paragraph (b) of the regulatory text regarding applicability: Unless a Tribe's hunting rights have been expressly revoked by Congress, special Tribal migratory game bird hunting regulations may be established by Tribes that have reserved hunting rights on Federal Indian reservations.

Service response: We conclude that the proposed regulation authorizing, within limits, certain Tribes to establish hunting seasons for migratory game birds on Federal Indian reservations, off-reservation trust lands, and ceded lands give Tribes more flexibility, consistent with Tribal sovereignty and in recognition of Tribal treaty rights. Further, the Service has been charged by Congress to manage migratory birds and given authority over associated migratory bird hunting regulations. We also conclude that Congress' process to revoke the hunting rights for Tribal migratory bird hunting is outside the scope of these regulations. In this final rule, we have retained the language from the proposed rule for paragraph (b).

Comment 11: The United States Code (16 U.S.C. 704(a)) requires the Service to consider certain factors in authorizing and regulating migratory bird harvest, including: zones of temperature and the distribution, abundance, economic value, breeding habits, and times and lines of migratory flight of migratory birds. Under the proposed rule, it is not clear how the Service will continue to assess these factors with respect to Tribal migratory bird regulations moving forward.

Service response: The new process for authorizing, within limits, Tribal regulations for migratory game bird hunting seasons will not change resultant Tribal regulations or cooperative monitoring programs to evaluate migratory game bird population status. Also, it will not change the established decision frameworks for informing Federal outside limits or the Tribal, State, and Federal collaborative process for establishing these Federal limits. The Federal limits allow Tribal and State selections of hunting seasons and limits and the opportunity for harvest at levels compatible with population status and habitat conditions.

Comment 12: The proposed rule is predicated on the Service's anticipation that Tribal harvest will always have minimal impacts on migratory bird resources in the future due to declining trends in Tribal hunting participation and increasing trends for many migratory bird populations. The potential exists that circumstances, which underlie the Service's conclusion, may change. The proposed rule does not clarify what steps the Service may take if such change in circumstances occurs.

Service response: To address this issue, we have stated above in the preamble of this final rule that, if circumstances change and data indicates that migratory game bird populations are substantially declining or Tribal hunting increases significantly, we intend to reevaluate this regulation. Also, we note that the regulations as set forth in this final rule provide that regulations for nontribal members on reservations must be within the annual outside limits for migratory bird hunting seasons established by the Service, and all Federal hunting regulations in this part also apply to nontribal hunters. The annual establishment of Federal limits for migratory game bird hunting seasons ensures harvest each year is at levels compatible with game bird population status and habitat conditions (see the response to the previous comment for more details).

Comment 13: Due to the unique shared nature of migratory bird resources, there is benefit in Tribes continuing to share information (including proposed regulations, anticipated harvest, harvest monitoring methods, steps that will be taken to limit harvest if necessary to avoid harm to migratory bird resources, and enforcement capabilities) with the Service but the commenter recognized that there may be other ways of facilitating this information exchange compared to what is currently required. Additionally, it would add clarity if all expectations related to data gathering and consideration are relocated from the nonbinding explanatory text to the rule itself.

Service response: We conclude that the Tribal information sharing pertaining to migratory game bird hunter activity and harvest is not necessary to ensure harvest is sustainable within the limits specified within our authorizing regulations set forth in this final rule. Our conclusion on annual information sharing is based on Tribal harvests having negligible impacts on the population status of migratory game birds as noted in this final rule. However, any new proposed experimental hunting would require an agreement with specific evaluation criteria, and any new Federal regulations would require rulemaking. Both of these proposals would be published in the Federal Register and be subject to public review and comment prior to any final agreement or regulations. Regarding experimental hunting, the requirement for a formal agreement has been incorporated into 50 CFR 20.110 for certain Federal Indian reservations and ceded lands. Also, we note that, in accordance with 50 CFR 20.20(c), Migratory Bird Harvest Information Program—Tribal exemptions, the regulations' general provisions for information collection and sharing does not apply to Tribal members on Federal Indian reservations or to Tribal members hunting on ceded lands. However, our regulations do not preclude the Tribes from sharing hunter activity and harvest information. Tribes may voluntarily share information with the Service and/or States or post this information on Tribal websites for public review.

Finally, we continue to work with the Tribes, Flyway Councils, and States to annually monitor the status of migratory game bird populations and habitat conditions and to make informed regulatory decisions on appropriate Federal outside limits. This monitoring data is the most informative information available on the status of these managed populations, and significant reductions in population status should first be identified in these long-term monitoring data sets. Further, this rule will not change the established decision frameworks for informing Federal outside limits from monitoring data or the Tribal, State, and Federal collaborative process for establishing these Federal limits.

Comment 14: Formal consultation between States and Tribes may be appropriate in certain circumstances, and the rule is silent on this topic. It is unclear when consultation may be requested and what process would be applied. Additionally, because advanced notice of proposed Tribal regulations may not be required, there is potential that States may not have timely or sufficient information to make a consultation request.

Service response: We agree that Tribes should notify the associated State as soon as reasonably possible before hunting seasons begin regarding regulations for Tribal members on ceded lands to maximize the opportunity to coordinate with State law enforcement and minimize the time needed for hunter checks in the field. We clarified the regulation in this regard (see § 20.110(d)). Further, we encourage Tribes to consult with States on any significant changes in hunting regulations for Tribal members on ceded lands before adopting such regulations. Also, States may request formal consultation directly with the Tribe, and vice versa, at any time there is concern regarding appropriate hunting regulations for Tribal members on ceded lands, or Tribal members on reservations, with the aim of facilitating an accord. We may consult with a Tribe and State at the request of either party to help resolve any relevant migratory game bird hunting regulation issues. Regarding hunting regulations for nontribal members on reservations, we have noted throughout this final rule that regulations for nontribal members on reservations must be within the annually established, biologically appropriate Federal limits for migratory bird hunting seasons, and all Federal hunting regulations in this part also apply to nontribal hunters. The annual establishment of outside limits for migratory game bird hunting seasons allows harvest at levels compatible with game bird population status and habitat conditions.

We are making this substantive rule effective immediately upon its publication because this rule: (1) Relieves a restriction that Tribes annually submit a proposal to the Service for our review and approval to establish annual regulations for hunting migratory game birds; (2) reduces the administrative burden on Tribes and the Service; and (3) is necessary to allow hunting seasons to begin as soon as September 1, 2023. For the reasons cited above, we find that “good cause” exists, within the terms of the Administrative Procedure Act at 5 U.S.C. 553(d)(3), for these regulations to take effect immediately upon publication.

The programmatic document, “Second Final Supplemental Environmental Impact Statement: Issuance of Annual Regulations Permitting the Sport Hunting of Migratory Birds (EIS 20130139),” filed with the Environmental Protection Agency (EPA) on May 24, 2013, addresses NEPA compliance by the Service for issuance of the annual outside limits for hunting of migratory game bird species. We published a notice of availability in the Federal Register on May 31, 2013 (78 FR 32686), and our Record of Decision on July 26, 2013 (78 FR 45376). We also address NEPA compliance for waterfowl hunting outside limits through the annual preparation of separate environmental assessments, the most recent being “Duck Hunting Regulations for 2023-24,” with its corresponding finding of no significant impact. Both of these documents are available at https://www.regulations.gov at Docket No. FWS-HQ-MB-2022-0090.

We completed a Biological Review and NEPA Categorical Exclusion Analysis in 2023 for this final rule available at https://www.regulations.gov at Docket No. FWS-HQ-MB-2022-0090. We analyzed this rule in accordance with the criteria of the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4332(C)), 43 CFR part 46, and 516 Departmental Manual (DM) 8. In addition, an August 1985 environmental assessment entitled “Guidelines for Migratory Bird Hunting Regulations on Federal Indian Reservations and Ceded Lands” is available from the person listed above under FOR FURTHER INFORMATION CONTACT .

Section 7 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ), provides that the Secretary shall insure that any action authorized, funded, or carried out is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of critical habitat.

After we published the March 23, 2023, proposed rule, we conducted formal consultations to ensure that actions resulting from this regulation, and other Federal fall-winter hunting regulations, would not likely jeopardize the continued existence of endangered or threatened species or result in the destruction or adverse modification of their critical habitat. Findings from these consultations are included in a biological opinion, which concluded that this regulation, and other Federal fall-winter hunting regulations, are not likely to jeopardize the continued existence of any endangered or threatened species. The biological opinion resulting from this section 7 consultation is available for public inspection at the address indicated under ADDRESSES .

Executive Order 14094 reaffirms the principles of E.O. 12866 and E.O. 13563 and states that regulatory analysis should facilitate agency efforts to develop regulations that serve the public interest, advance statutory objectives, and are consistent with E.O. 12866, E.O. 13563, and the Presidential Memorandum of January 20, 2021 (Modernizing Regulatory Review). Regulatory analysis, as practicable and appropriate, shall recognize distributive impacts and equity, to the extent permitted by law. We have developed this final rule in a manner consistent with these requirements.

E.O. 12866, as reaffirmed by E.O. 13563 and E.O. 14094, provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) will review all significant rules. The annual migratory bird hunting regulations are considered a “significant regulatory action,” as defined under section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), as amended by Executive Order 14094 (88 FR 21879, April 11, 2023).

An economic analysis was prepared for the 2023-24 migratory bird hunting season. This analysis was based on data from the 2011 and 2016 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation (National Survey), the most recent year for which data are available. See discussion under Required Determinations, Regulatory Flexibility Act, below. This analysis estimated consumer surplus for four alternatives for duck hunting regulations. As defined by OMB in Circular A-4, consumers' surplus is the difference between what a consumer pays for a unit of a good or service and the maximum amount the consumer would be willing to pay for that unit. The duck hunting regulatory alternatives are (1) not opening a hunting season, (2) issuing restrictive regulations that allow fewer days than the 2022-23 season, (3) issuing moderate regulations that allow more days than those in Alternative 2 but fewer days than the 2022-23 season, and (4) issuing liberal regulations that allow days similar to the 2022-23 season. For the 2023-24 season, we chose Alternative 4, with an estimated consumer surplus across all flyways of $356 million. We also chose Alternative 4 for the 2009-10 through 2022-2023 seasons. The 2023-24 analysis is part of the record for this rulemaking action and is available at https://www.regulations.gov at Docket No. FWS-HQ-MB-2022-0090.

The annual migratory bird hunting regulations have a significant economic impact on substantial numbers of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). An initial regulatory flexibility analysis was prepared to analyze the economic impacts of the annual hunting regulations on small business entities. This analysis is updated annually. The primary source of information about hunter expenditures for migratory game bird hunting is the National Survey, which is generally conducted at 5-year intervals. The 2023-24 analysis is based on the 2011 and 2016 National Survey and the U.S. Department of Commerce's County Business Patterns, from which it is estimated that migratory bird hunters would spend approximately $2.5 billion (2022$) at small businesses during the 2023-24 migratory bird hunting season. Copies of the analysis are available upon request from the person listed above under FOR FURTHER INFORMATION CONTACT or from https://www.regulations.gov at Docket No. FWS-HQ-MB-2022-0090.

Pursuant to subtitle E of the Small Business Regulatory Enforcement Fairness Act (also known as the Congressional Review Act or CRA), 5 U.S.C. 801 et seq., OIRA designated the annual migratory bird hunting regulations as a major rule, as defined by 5 U.S.C. 804(2), because this activity is likely to result in an annual effect on the economy of $100 million or more. However, because this rule would establish a regulatory program for activity related to hunting and because hunting seasons are time sensitive, we do not plan to defer the effective date under the exemption in the CRA, 5 U.S.C. 808(1).

This rule does not contain any new collection of information that requires approval by the OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). OMB has previously approved the information collection requirements associated with migratory bird surveys and the procedures for establishing annual migratory bird hunting seasons under the following OMB control numbers:

• 1018-0019, “North American Woodcock Singing Ground Survey” (expires 02/29/2024).

• 1018-0023, “Migratory Bird Surveys, 50 CFR 20.20” (expires 05/31/2026). Includes Migratory Bird Harvest Information Program, Migratory Bird Hunter Surveys, Sandhill Crane Survey, and Parts Collection Survey.

• 1018-0171, “Establishment of Annual Migratory Bird Hunting Seasons, 50 CFR part 20” (expires 10/31/2024).

You may view the information collection request(s) at http://www.reginfo.gov/public/do/PRAMain. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

We have determined and certify, in compliance with the requirements of the Unfunded Mandates Reform Act, 2 U.S.C. 1501 et seq., that this final rulemaking does not include 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 million or more (adjusted for inflation) in any one year.

The Department, in promulgating this final rule, has determined that this rule will not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of E.O. 12988.

In accordance with E.O. 12630, this final rule, authorized by the Migratory Bird Treaty Act, does not have significant takings implications and does not affect any constitutionally protected property rights. This rule would not result in the physical occupancy of property, the physical invasion of property, or the regulatory taking of any property. In fact, this rule would allow hunters to exercise otherwise unavailable privileges and, therefore, would reduce restrictions on the use of private and public property.

E.O. 13211 requires agencies to prepare statements of energy effects when undertaking certain actions. This final rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy and is not a significant energy action. Therefore, no statement of energy effects is required.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), E.O. 13175, and 512 DM 2, we have evaluated possible effects on federally recognized Indian Tribes and have determined that there are de minimis effects on Indian trust resources. Through the process to establish annual hunting regulations, we regularly coordinate with Tribes, and we coordinated with Tribes on the development of this new regulatory process.

Due to the migratory nature of certain species of birds, the Federal Government has been given responsibility over these species by the Migratory Bird Treaty Act. We annually prescribe Federal limits from which Tribes and States may establish hunting seasons for migratory game birds, and we employ guidelines to establish special regulations on Federal Indian reservations and ceded lands. This process preserves the ability of the States and Tribes to determine which seasons meet their individual needs. Any State or Tribe may be more restrictive in its regulations than the Federal limits. The Federal limits are developed annually in a cooperative process with the Tribes, States, and Flyway Councils. This process allows Tribes and States to participate in the development of Federal limits from which they will make selections, thereby having an influence on their own regulations. These rules do not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with E.O. 13132, these regulations do not have federalism implications and do not warrant the preparation of a federalism summary impact statement.

Shannon Estenoz, Assistant Secretary for Fish and Wildlife and Parks, approved this action on August 7, 2023, for publication. On August 24, 2023, Shannon Estenoz authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of the Interior.

Accordingly, for the reasons described in the preamble, we hereby amend title 50, chapter I, subchapter B, part 20, of the Code of Federal Regulations as set forth below:

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The 2023 Pacific cod total allowable catch (TAC) apportioned to trawl catcher vessels in the Western Regulatory Area of the GOA is 1,956 metric tons (mt), as established by the final 2023 and 2024 harvest specifications for groundfish of the GOA (88 FR 13238, March 2, 2023).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the 2023 Pacific cod TAC apportioned to trawl catcher vessels in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 1,356 mt and is setting aside the remaining 600 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher vessels using trawl gear in the Western Regulatory Area of the GOA. While this closure is effective the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of Pacific cod by catcher vessels using trawl gear in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 28, 2023.

The Assistant Administrator for Fisheries, NOAA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2023 Pacific cod total allowable catch (TAC) apportioned to catcher vessels greater than or equal to 50 feet (15.2 m) length overall using HAL gear in the Central Regulatory Area of the GOA is 738 metric tons (mt) as established by the final 2023 and 2024 harvest specifications for groundfish in the GOA (88 FR 13238, March 2, 2023).

In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS has determined that the 2023 Pacific cod TAC apportioned to catcher vessels greater than or equal to 50 feet (15.2 m) length overall using HAL gear in the Central Regulatory Area of the GOA has been reached. Therefore, NMFS is requiring that Pacific cod caught by catcher vessels greater than or equal to 50 feet (15.2 m) length overall using HAL gear in the Central Regulatory Area of the GOA be treated as prohibited species in accordance with § 679.21(a).

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion, and would delay prohibiting the retention of Pacific cod by catcher vessels greater than or equal to 50 feet (15.2 m) length overall using HAL gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 25, 2023.

The Assistant Administrator for Fisheries, NOAA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.