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In Rule Document 2023-19269, appearing on pages 62445 through 62460 in the issue of Tuesday, September 12, 2023, make the following corrections:
(2) Failure to respond to an argument or assertion raised by the other party may, in the Authority's discretion, be treated as conceding such argument or assertion.
(e)
Agricultural Marketing Service, USDA.
Final rule.
This final rule implements a recommendation from the California Olive Committee (Committee) to increase the assessment rate established for the 2023 fiscal year and subsequent fiscal years. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Effective November 9, 2023.
Jeremy Sasselli, Marketing Specialist, or Gary Olson, Chief, West Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (559) 487-5901 or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Order No. 932, as amended (7 CFR part 932), regulating the handling of olives grown in California. Part 932 referred to as the “Order” is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee administers the Order and is comprised of producers and handlers of olives operating within the area of production and may have one public member.
The Agricultural Marketing Service (AMS) is issuing this final rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies
This final rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have Tribal implications. AMS has determined that this rule is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, California olive handlers are subject to assessments. Funds to administer the Order are derived from such assessments. The assessment rate established herein will be applicable to all assessable olives beginning on January 1, 2023, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with the United States Department of Agriculture (USDA) a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the District Court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
The Order provides authority for the Committee, with the approval of AMS, to formulate an annual budget of expenses and to collect assessments from handlers to administer the program. The members are familiar with the Committee's needs and with the costs of goods and services in their local area, and can formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.
This final rule increases the assessment rate from $16 per ton of assessed olives, the rate that was established for the 2022 and subsequent fiscal years, to $35 per ton of assessed olives for the 2023 and subsequent fiscal years. The higher rate is the result of the significantly lower crop size in 2022 (fruit that is marketed over the course of the 2023 fiscal year) and the need to maintain the Committee's financial reserve.
The Committee met on December 13, 2022, and unanimously recommended 2023 fiscal year expenditures of $1,154,412 and an assessment rate of $35 per ton of assessed olives. In comparison, last year's budgeted expenditures were $1,245,085. The assessment rate of $35 is $19 higher than the rate currently in effect. Producer receipts show a yield of 19,912 tons of assessable olives from the 2022 crop year, which is substantially less than the quantity of olives harvested in the 2021 crop year, in which 46,359 tons of assessable olives were produced.
Olives harvested in 2022 will be marketed over the course of the 2023 fiscal year, which begins on January 1, 2023. The 19,912 tons of assessable olives from the 2022 crop should generate $696,920 in assessment revenue at the $35 per ton assessment rate. The balance of funds needed to cover budgeted expenditures will come from interest income, Federal grants, and the Committee's financial reserve. The 2023 fiscal year assessment rate increase is appropriate to ensure the Committee has sufficient revenue to fund the recommended 2023 fiscal year budgeted expenditures. Funds in the reserve are expected to remain within the Order's requirement of no more than approximately one fiscal year's budgeted expenses.
The Order has a fiscal year and a crop year that are independent of each other. The crop year is a 12-month period that begins on August 1 of each year and ends on July 31 of the following year. The fiscal year is the 12-month period that begins on January 1 and ends on December 31 of each year. Olives are an alternate-bearing crop, with a large crop (2021) followed by a small crop (2022). For this assessment rate rule, the actual 2022 crop year receipts are used to determine the assessment rate for the 2023 fiscal year.
The major expenditures recommended by the Committee for the 2023 fiscal year include $547,700 for program administration, $193,000 for marketing activities, $325,712 for research, and $88,000 for inspection. Budgeted expenses for these items during the 2022 fiscal year were $538,700; $284,000; $379,485; and $42,900, respectively.
The assessment rate recommended by the Committee resulted from consideration of anticipated fiscal year expenses, actual olive tonnage received by handlers during the 2022 crop year, and the amount in the Committee's financial reserve. Income derived from handler assessments and other revenue sources is expected to be adequate to cover budgeted expenses. The assessment rate established in this rulemaking will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or AMS. Committee meetings are open to the public and interested persons may express their views at these meetings. AMS will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's budget for subsequent fiscal years will be reviewed and, as appropriate, approved by AMS.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this final rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
There are approximately 800 producers of olives in the production area and 2 handlers subject to regulation under the Order. Small agricultural producers of olives are defined by the Small Business Administration (SBA) as those having annual olive receipts of less than $3.5 million (NAICS code 111339, Other Noncitrus Fruit Farming), and small agricultural service firms are defined as those whose annual receipts are less than $34 million (NAICS code 115114, Postharvest Crop Activities) (13 CFR 121.201).
Because of the large year-to-year variation in California olive production, it is helpful to use two-year averages of seasonal average grower price when undertaking calculations relating to average grower revenue. The National Agricultural Statistics Service (NASS) reported season average grower prices of olives utilized for canning for 2020 and 2021 of $1,060 and $1,110 per ton, respectively, with a two-year average price of $1,085.
The appropriate quantities to consider are the annual assessable olive quantities, which were 19,912 tons in 2022 and 43,336 tons in 2021, with two-year average production of 31,624 tons. Multiplying 31,624 tons by the two-year average grower price of $1,085 yields a two-year average crop value of $34.312 million. Dividing the crop value by the number of olive producers (800) yields calculated annual average revenue per producer of $42,890, much less than SBA's size standard of $3.5 million. Thus, the majority of olive producers may be classified as small entities.
Dividing the $34.312 million average crop value by 2 (the number of handlers) equals $17.156 million, which is the annual average olive crop value processed by each of the 2 handlers over the two-year period. Subtracting $17.156 million average crop value from the large handler size threshold of $34 million yields a difference of $16.844 million. Dividing the $16.844 million difference by $17.156 average crop value processed by each of the handlers yields an average manufacturing margin of 98 percent to be considered large handlers. A key question is whether 98 percent is a reasonable estimate of a manufacturing margin for the olive canning process.
A review of economic literature on canned food manufacturing margins found no recent published estimates. A series of Economic Research Service reports on cost components of farm to retail price spreads, published in the late 1970s and early 1980s, found that margins above crop value for a canned vegetable product were in the range of 76 to 85 percent. These margins are somewhat below the computed margin estimate of 98 percent to reach the $34 million SBA threshold to be a large, canned olive handler. Although the studies are not recent, key observations are that canning technology has not changed significantly in that time period, but canning costs may have risen somewhat. Therefore, the conclusion to be drawn from these computations is that the two handlers are slightly below the large handler threshold of $34 million in annual canned olive sales, using two-year average data, and assuming that the 2 handlers are about the same size.
In a large crop year, one or both handlers could be considered large handlers, depending on the proportion of the olive crop that each of the handlers processed. For example, the 2021 quantity of assessable olives was 43,336 tons, and half of that quantity was 21,668 tons. Multiplying that tonnage by the average grower price of $1,085 per ton yields a crop value per handler estimate of $23.51 million. To reach the $34 million size threshold would mean canning costs of at least $10.49 million, which would be a manufacturing margin of 45 percent ($10.49/$23.51)—well below the range of canning margins shown above.
The contrasting examples presented here show that in terms of canned olive sales, the processors can be viewed as either being above or below the SBA large handler size threshold, depending on the assumptions used in alternative calculations.
This final rule increases the assessment rate collected from handlers for the 2023 and subsequent fiscal years from $16 to $35 per ton of assessable olives. The Committee unanimously recommended 2023 expenditures of $1,154,412 and an assessment rate of $35 per ton. The increased assessment rate of $35 is $19 higher than the 2022 rate. The quantity of assessable olives harvested in the 2022 crop year was 19,912 tons, as compared to 46,359 tons in 2021. Olives are an alternate-bearing crop, with a large crop (2021) followed by a small crop (2022). Income derived from the $35 per ton assessment rate, along with interest income, Federal grants, and funds from the authorized reserve, should be adequate to meet this fiscal year's budgeted expenditures.
The Committee's financial reserve is projected to be sufficient to partially fund 2023 fiscal year budgeted expenditures and remain within the requirements of § 932.40(a)(2) of the Order. The major expenditures recommended by the Committee for the 2023 fiscal year include $547,700 for program administration, $193,000 for marketing activities, $325,712 for research, and $88,000 for inspection. Budgeted expenses for these items during the 2022 fiscal year were $538,700; $284,000; $379,485; and $42,900 respectively. The Committee deliberated on many of the expenses, weighed the relative value of various programs or projects, and decreased the budgeted expenses for research and marketing activities, while increasing the budget for administration and inspection program costs. Overall, the 2023 fiscal year budget of $1,154,412 is $90,673 less than the $1,245,085 budgeted for the 2022 fiscal year.
Prior to arriving at the budget and recommended assessment rate, the Committee considered information from various sources including the Committee's Executive, Marketing, Inspection, and Research Subcommittees. Alternate expenditure levels were discussed by these groups, based upon the relative value of various projects to the olive industry and the decreased olive production. The assessment rate of $35 per ton of assessable olives was derived by considering anticipated expenses, the relatively low volume of assessable olives, the current balance in the monetary reserve, and additional pertinent factors.
A review of NASS information indicates that the average producer price for the 2021 crop year, the most recent crop year surveyed by NASS, was $851 per ton. The quantity of assessable olives harvested during the 2022 crop year was 19,912 tons, which makes estimated total producer revenue $16,945,112 ($851 multiplied by 19,912 tons). Therefore, using the assessment rate of $35 per ton, the assessment revenue for the 2023 fiscal year as a percentage of estimated total producer revenue is expected to be approximately 4.1 percent ($35 multiplied by 19,912 tons divided by $16,945,112 multiplied by 100).
This action increases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, these costs are expected to be offset by
The Committee's meetings are widely publicized throughout the production area. The olive industry and all interested persons are invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the December 13, 2022, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. In addition, interested persons were invited to submit comments on this rule, including the regulatory and information collection impacts of this action on small businesses.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes are necessary in those requirements as a result of this action. Should any changes become necessary, they will be submitted to OMB for approval.
This final rule will not impose any additional reporting or recordkeeping requirements on either small or large California olive handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this action.
A proposed rule concerning this action was published in the
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendations submitted by the Committee and other available information, AMS has determined that this rule tends to effectuate the declared policy of the Act.
Marketing agreements, Olives, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 932 as follows:
7 U.S.C. 601-674.
On and after January 1, 2023, an assessment rate of $35.00 per ton is established for California olives.
Agricultural Marketing Service, USDA.
Final rule.
This rule implements a recommendation from the Walla Walla Sweet Onion Marketing Committee (Committee) to increase the assessment rate established for the 2023 and subsequent fiscal periods. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Effective November 9, 2023.
Dale Novotny, Marketing Specialist, or Gary Olson, Chief, West Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724, or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order No. 956, both as amended (7 CFR part 956), regulating the handling of sweet onions grown in the Walla Walla Valley of southeast Washington and northeast Oregon. Part 956 referred to as the “Order” is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers and handlers of Walla Walla sweet onions operating within the area of production, and a public member.
The Agricultural Marketing Service (AMS) is issuing this rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.
This rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have Tribal implications.
This rule has been reviewed under Executive Order 12988—Civil Justice Reform. Under the Order now in effect, Walla Walla sweet onion handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate will be applicable to all assessable Walla Walla sweet onions for the 2023 fiscal period, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with the USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
This rule increases the assessment rate for Walla Walla sweet onions handled under the Order from $0.15 per 50-pound bag or equivalent, the rate that was established for the 2020 and subsequent fiscal periods, to $0.20 per 50-pound bag or equivalent for the 2023 and subsequent fiscal periods.
The Order authorizes the Committee, with the approval of AMS, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are familiar with the Committee's needs and with the costs of goods and services in their local area and are able to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.
For the 2020 and subsequent fiscal periods, the Committee recommended, and AMS approved, an assessment rate of $0.15 per 50-pound bag or equivalent of Walla Walla sweet onions. That rate continues in effect from fiscal period to fiscal period until modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other information available to AMS.
The Committee met on December 5, 2022, and unanimously recommended 2023 fiscal period expenditures of $70,400 and an assessment rate of $0.20 per 50-pound bag or equivalent of Walla Walla sweet onions handled for the 2023 and subsequent fiscal periods. In comparison, last year's budgeted expenditures were $85,270. The proposed assessment rate of $0.20 per 50-pound bag or equivalent is $0.05 higher than the rate currently in effect. The Committee recommended increasing the assessment rate to better fund operations using assessment revenue and reduce the reliance on reserve funds. The Committee has drawn down its financial reserve in recent years to cover Committee expenses and to reduce the reserve to not exceed approximately two fiscal periods' budgeted expenses, in conformance with the Order (7 CFR 956.44(a)). The Committee projects handler receipts of 262,500 50-pound bags or equivalent of assessable Walla Walla sweet onions for the 2023 fiscal period, which is 16,150 50-pound bags or equivalent more than was projected for the 2022 fiscal period.
The major expenditures budgeted by the Committee for the 2023 fiscal period include $43,400 for administrative expenses, $17,000 for promotions, $5,000 for research, and $5,000 for Committee travel. Budgeted expenditures for the 2022 fiscal period were $43,400, $31,870, $5,000, and $4,000, respectively.
Walla Walla sweet onions harvested in 2023 will be marketed mostly in the spring and summer of the 2023 fiscal period, which follows the calendar year. The expected 262,500 50-pound bags or equivalent of Walla Walla sweet onions from the 2023 crop will generate $52,500 in assessment revenue at the increased assessment rate (262,500 50-pound bags or equivalent of Walla Walla sweet onions multiplied by $0.20 assessment rate). The remaining $17,900 needed to cover budgeted expenditures will come from reserve funds carried over from previous fiscal periods. The 2023 fiscal period assessment rate increase will be appropriate to ensure the Committee has sufficient revenue, along with its reserve, to fully fund its 2023 fiscal period budgeted expenditures and maintain a level of reserve funds that the Committee believes is appropriate.
The Committee derived the recommended assessment rate by considering anticipated fiscal period expenses, an estimated 2023 crop volume of 262,500 50-pound bags or equivalent of assessable Walla Walla sweet onions, and the amount of funds available in the authorized reserve. Income derived from handler assessments ($52,500) and funds from the Committee's authorized reserve ($17,900) will be adequate to cover budgeted expenses ($70,400).
The assessment rate will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or AMS. Committee meetings are open to the public and interested persons may express their views at these meetings. AMS would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken, as necessary. The Committee's 2023 budget, and those for subsequent fiscal periods, will be reviewed and, as appropriate, approved by AMS.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this rule on small entities. Accordingly, AMS prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 15 producers of Walla Walla sweet onions in the production area and 11 handlers subject to regulation under the Order. Small agricultural producers of Walla Walla sweet onions are defined by the Small
According to the National Agricultural Statistics Service (NASS), the average annual producer price received for dry and fresh market onions sold in Washington between 2018 and 2021 ranged from $9.13 to $13.30 per hundredweight. The average over those years was approximately $10.88 per hundredweight, or $5.44 per 50-pound bag or equivalent. Total production of Walla Walla sweet onions for the 2022 season was reported by the Committee to be 299,993 50-pound bags or equivalent. Using the average price from 2018-2021, the most recent years for which there is NASS data, the total 2022 crop value of Walla Walla sweet onions could therefore be estimated to be $1,631,962 (299,993 50-pound bags or equivalent multiplied by $5.44 per 50-pounds). Dividing the crop value by the estimated number of producers (15) yields an estimated average receipt per producer of $108,797, which is well below the SBA threshold for small producers.
In addition, according to USDA Market News data, the reported average 2021 terminal market price for Walla Walla sweet onions was $35 per 40-pound carton. Multiplying this figure by 1.25 to adjust for a 50-pound bag or equivalent yields an average 2021 terminal market price of $43.75 per 50-pound bag or equivalent. Multiplying the 2022 Walla Walla sweet onion production of 299,993 50-pound bags or equivalent by the estimated average price per 50-pound bag or equivalent of $43.75 equals $13,124,694. Dividing this figure by the 11 regulated handlers yields estimated average annual handler receipts of $1,193,154 ($13,124,694 divided by 11 handlers), which is below the SBA threshold for small agricultural service firms. Therefore, using the above data, all of the producers and handlers of Walla Walla sweet onions may be classified as small entities.
This final rule increases the assessment rate collected from handlers for the 2023 and subsequent fiscal periods from $0.15 to $0.20 per 50-pound bag or equivalent of Walla Walla sweet onions. The Committee unanimously recommended 2023 fiscal period expenditures of $70,400 and an assessment rate of $0.20 per 50-pound bag or equivalent of Walla Walla sweet onions. The assessment rate of $0.20 is $.05 higher than the current rate. The Committee expects the industry to handle 262,500 50-pound bags or equivalent of Walla Walla sweet onions during the 2023 fiscal period. Thus, the $0.20 per 50-pound bag or equivalent rate will provide $52,500 in assessment income (262,500 50-pound bags or equivalent multiplied by $0.20). The Committee also expects to use $17,900 from its financial reserve to cover remaining expenses. Income derived from handler assessments, along with reserve funds, will be adequate to meet budgeted expenditures for the 2023 fiscal period.
The major expenditures budgeted by the Committee for the 2023 fiscal period include $43,400 for administrative expenses, $17,000 for promotions, $5,000 for research, and $5,000 for Committee travel. Budgeted expenditures for the 2022 fiscal period were $43,400, $31,870, $5,000 and $4,000, respectively.
In recent years, the Committee has utilized reserve funds to partially fund its budgeted expenditures. The Committee recommended increasing the assessment rate to better fund 2023 fiscal period budgeted expenditures and refrain from excessively drawing down the funds held in its reserve. This action will maintain the Committee's reserve balance at a level that the Committee believes is appropriate and is compliant with the provisions of the Order.
Prior to arriving at this budget and the current assessment rate, the Committee discussed various alternatives, including maintaining the current assessment rate of $0.15 per 50-pound bag or equivalent and increasing the assessment rate by different amounts. The Committee determined that the recommended increased assessment rate will be able to fund most of the budgeted expenses and avoid drawing down reserves at an unsustainable rate. The assessment rate of $0.20 per 50-pound bag or equivalent of Walla Walla sweet onions was derived by considering anticipated expenses, the projected volume of assessable Walla Walla sweet onions, the projected monetary balance held in reserve, and additional pertinent factors.
A review of NASS information indicates that the average producer price for the 2018-21 fiscal period was $5.44 per 50-pound bag or equivalent. Further, the Committee reported the quantity of assessable Walla Walla sweet onions harvested in the 2022 fiscal period was 299,993 50-pound bags or equivalent, which yields estimated total producer revenue for 2022 of $1,631,962 ($5.44 per 50-pound bag or equivalent multiplied by 299,993). Therefore, utilizing the assessment rate of $0.20 per 50-pound bag or equivalent, assessment revenue for the 2022 fiscal period, as a percentage of total producer revenue, will be approximately 3.68 percent ($0.20 multiplied by 299,993 per 50-pound bags or equivalent divided by $1,631,962 and multiplied by 100).
This action increases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, these costs are expected to be offset by the benefits derived by the operation of the Order.
The Committee's meetings are widely publicized throughout the production area. The Walla Walla sweet onion industry and all interested persons are invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the December 5, 2022, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons were invited to submit comments on this rule, including the regulatory and information collection impacts of this action on small businesses.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes in those requirements will be necessary as a result of this rule. Should any changes become necessary, they would be submitted to OMB for approval.
This rule will not impose any additional reporting or recordkeeping requirements on either small or large Walla Walla sweet onion handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.
A proposed rule concerning this action was published in the
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendations submitted by the Committee and other available information, AMS has determined that this rule tends to effectuate the declared policy of the Act.
Marketing agreements, Onions, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 956 as follows:
7 U.S.C. 601-674.
On and after January 1, 2023, an assessment rate of $0.20 per 50-pound bag or equivalent is established for Walla Walla sweet onions.
Drug Enforcement Administration, Department of Justice; Substance Abuse and Mental Health Services Administration, Department of Health and Human Services.
Temporary rule.
On March 1, 2023 the Drug Enforcement Administration (DEA), in concert with the Department of Health and Human Services (HHS), promulgated two notices of proposed rulemakings (NPRMs) soliciting comments on proposals to allow for prescribing of controlled medications pursuant to the practice of telemedicine in instances where the prescribing practitioner has never conducted an in-person medical evaluation of the patient. On May 10, 2023, following initial review of the comments received, DEA, jointly with HHS, issued a temporary rule (First Temporary Rule) extending certain exceptions granted to existing DEA regulations in March 2020 as a result of the COVID-19 Public Health Emergency (COVID-19 PHE). These exceptions were granted in order to avoid lapses in care for patients. In particular, with respect to practitioner-patient relationships formed after the May 11, 2023, expiration of the COVID-19 PHE, the First Temporary Rule extended the temporary exceptions until November 11, 2023. In this second temporary rule, as DEA and HHS continue to consider revisions to the proposed rules set forth in the March 1, 2023 NPRMs and in light of Telemedicine Listening Sessions that DEA hosted on September 12 and 13, 2023, DEA and HHS are further extending such exceptions to existing DEA regulations for new practitioner-patient relationships through December 31, 2024.
As of November 11, 2023, the end of the effective period for the temporary rule published at 88 FR 30037 on May 10, 2023, is extended from November 11, 2024, to December 31, 2024. This rule is effective November 11, 2023.
Scott A. Brinks, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, VA 22152, Telephone: (571) 776-3882.
Under the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (the Ryan Haight Act), a prescribing practitioner—subject to certain exceptions—may prescribe controlled medications to a patient only after conducting an in-person evaluation of that patient. In response to the COVID-19 Public Health Emergency (COVID-19 PHE), as declared by the Secretary (the Secretary) of the Department of Health and Human Services (HHS) on January 31, 2020, pursuant to the authority under section 319 of the Public Health Service Act (42 U.S.C. 247), the Drug Enforcement Administration (DEA) granted temporary exceptions to the Ryan Haight Act and DEA's implementing regulations under 21 U.S.C. 802(54)(D).
In order to prevent lapses in care, these exceptions allowed for the prescribing of controlled medications via telemedicine encounters even when the prescribing practitioner had not conducted an in-person medical evaluation of the patient. These telemedicine flexibilities authorized practitioners to prescribe schedule II-V controlled medications via audio-video telemedicine encounters, including schedule III-V narcotic controlled medications approved by the Food and Drug Administration (FDA) for maintenance and withdrawal management treatment of opioid use disorder via audio-only telemedicine encounters, provided that such prescriptions otherwise comply with the requirements outlined in DEA guidance documents, DEA regulations, and applicable Federal and State law. DEA granted those temporary exceptions to the Ryan Haight Act and DEA's implementing regulations via two letters published in March 2020:
• A March 25, 2020 “Dear Registrant” letter signed by William T. McDermott, DEA's then-Assistant Administrator, Diversion Control Division (the McDermott Letter);
• A March 31, 2020 “Dear Registrant” letter signed by Thomas W. Prevoznik, DEA's then-Deputy Assistant Administrator, Diversion Control Division (the Prevoznik Letter).
On March 1, 2023, DEA, in concert with HHS, promulgated two notices of proposed rulemaking (NPRMs) in the
On May 10, 2023 DEA, jointly with HHS (with the Substance Abuse and Mental Health Services Administration (SAMHSA) acting on behalf of HHS), issued the First Temporary Rule, which extended the full set of telemedicine flexibilities regarding the prescribing of controlled medications, as had been in place under the COVID-19 PHE, through November 11, 2023.
On August 7, 2023, DEA announced that it would host Telemedicine Listening Sessions on September 12 and 13, 2023 to receive additional input concerning the practice of telemedicine with regards to prescribing controlled medications and potential safeguards that could effectively prevent and detect diversion of controlled substances prescribed via telemedicine. DEA is carefully evaluating the information and perspectives presented at the Telemedicine Listening Sessions, as well as the comments received in response to the NPRMs, as DEA and HHS develop regulations providing access to the practice of telemedicine when consistent with public health and safety, and that also effectively mitigate the risk of possible diversion.
In light of the need to further evaluate the best course of action given the comments received in response to the NPRMs and the presentations at the Telemedicine Listening Sessions, DEA, jointly with HHS, is issuing this second temporary rule (“Second Temporary Rule”) extending the full set of telemedicine flexibilities regarding prescription of controlled medications as were in place during the COVID-19 PHE, through December 31, 2024. This extension authorizes all DEA-registered practitioners to prescribe schedule II-V controlled medications via telemedicine through December 31, 2024, whether or not the patient and practitioner established a telemedicine relationship on or before November 11, 2023. In other words, the grace period provided in the First Temporary Rule is effectively subsumed by this Second Temporary Rule, which continues the extension of the current flexibilities for all practitioner-patient relationships—not just those established on or before November 11, 2023—until the end of 2024.
The purpose of this Second Temporary Rule, like the one before it, is to ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled medication prescriptions, as well as allowing adequate time for providers to come into compliance with any new standards or safeguards. DEA is working to promulgate new standards or safeguards by the fall of 2024.
The Ryan Haight Act amended the Controlled Substances Act (CSA) to generally require that the dispensing of controlled medications by means of the internet be predicated on a valid prescription involving at least one in-person medical evaluation.
One of these categories authorizes the Attorney General and the Secretary to jointly promulgate rules that would allow practitioners to prescribe medications for patients via telemedicine without having had an in-person evaluation when such telemedicine practice is in accordance with applicable Federal and State laws, uses an approved telecommunications system, and is “conducted under . . . circumstances that the[y have] . . . determined to be consistent with effective controls against diversion and otherwise consistent with the public health and safety.”
Pursuant to this authority, DEA, jointly with HHS, is hereby promulgating this Second Temporary Rule specifying certain circumstances under which practitioners may prescribe controlled medications, for the time period described above, to patients whom the practitioner has never evaluated in person. This Second Temporary Rule, like the First Temporary Rule, covers the portions of the NPRM related to extensions of the telemedicine flexibilities in place during the COVID-19 PHE, and it extends, through December 31, 2024, the telemedicine flexibilities that have been in place since March 2020 for prescribing controlled medications via the practice of telemedicine.
As noted previously, DEA and/or HHS anticipate implementing a final set of regulations providing access to the practice of telemedicine when consistent with public health and safety, and that also effectively mitigate the risk of possible diversion. However, given the impending expiration of the flexibilities provided in the First Temporary Rule and the additional
As explained further below, because this is an extension of limited duration of flexibilities that existed during the COVID-19 PHE, and because there are legitimate concerns regarding patient access to care following the expiration the practitioner-patient relationship aspect of the First Temporary Rule on November 11, 2023, DEA and HHS have determined that this Second Temporary Rule is consistent “with effective controls against diversion and otherwise consistent with the public health and safety” as required under 21 U.S.C. 802(54)(G). DEA, jointly with HHS, is promulgating this temporary rule pursuant to 21 U.S.C. 802(54)(G).
HHS also has advised DEA that no additional rulemaking by HHS is necessary as it pertains to the promulgation of these provisions pursuant to 21 U.S.C. 802(54)(G).
The purpose of this rulemaking is to further extend, for a limited period of time, the telemedicine flexibilities that existed during the COVID-19 PHE in order to:
• Prevent a reduction in access to care for patients who do not yet have an existing telemedicine relationship with their practitioners pending promulgation of a final rule or rules addressing telemedicine more generally.
• For relationships established both during the COVID-19 PHE and those established shortly after, prevent backlogs with respect to in-person medical evaluations in the months shortly before and after the expiration of the telemedicine flexibilities and ensure the availability of telemedicine for practitioners and patients who have come to rely on it;
• Address the urgent public health need for continued access to the initiation of buprenorphine as medication for opioid use disorder in the context of the continuing opioid public health crisis;
• Allow patients, practitioners, pharmacists, service providers, and other stakeholders sufficient time to prepare for the implementation of any future regulations that apply to prescribing of controlled medications via telemedicine;
• Enable DEA and potentially HHS to thoroughly consider the presentations made at the Telemedicine Listening Sessions;
• Enable DEA, jointly with HHS, to conduct a thorough evaluation of regulatory alternatives in order to promulgate regulations that most effectively expand access to telemedicine encounters in a manner that is consistent with public health and safety, while also effectively mitigating against the risk of possible diversion; and
• Avoid incentivizing the investment necessary to develop new telemedicine companies that might encourage or enable problematic prescribing practices by limiting the second extension of flexibilities to a short, time-limited period.
This Second Temporary Rule amends portions of 21 CFR 1307.41 and 42 CFR 12.1 through December 31, 2024.
Paragraph (a) is amended to state that the authorization granted in the amended paragraph (c) expires at the end of
Paragraph (c) is amended to extend the COVID-19 telemedicine prescribing flexibilities from May 12, 2023 through
DEA and HHS are issuing this rule without prior notice and an opportunity to comment pursuant to the Administrative Procedure Act's (APA's) “good cause” exception. In certain circumstances, agencies may forgo notice-and-comment rulemaking when a rulemaking is published in the
As discussed earlier, DEA, jointly with HHS, is publishing this second temporary extension of certain exceptions granted to existing DEA regulations in March 2020 as a result of the COVID-19 PHE in order to prevent a reductionin access to care for patients that do not yet have an existing telemedicine relationship with their practitioners pending promulgation of a final rule or rules addressing telemedicine more generally. It would be impracticable for DEA and HHS to publish a notice of proposed rulemaking; await, review, and respond to new comments; and issue a rule in the time remaining before the first extension expires on November 11, 2023. Further, the reduction in access to care that patients would experience if the existing telemedicine flexibilities ended on November 11, 2023 would be contrary to the public interest, as it could lead to potential patient harm—due to an inability to access appropriate care—in some instances.
As noted above, earlier this year DEA received 38,369 comments on two proposed rules regarding the flexibilities to be extended by this rule. DEA considered those comments in publishing the First Temporary Rule.
For these reasons, each of which individually constitutes good cause, DEA, jointly with HHS, finds that notice and public comment on this rule are impracticable, unnecessary, and contrary to the public interest.
This Second Temporary Rule was developed in accordance with the principles of Executive Orders (E.O.) 12866, as amended by E.O. 14094 and E.O. 13563. E.O. 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). E.O. 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review established in E.O. 12866.
The economic, interagency, budgetary, legal, and policy implications of this proposed rule have been examined, and DEA has determined that it is a significant regulatory action under E.O. 12866, but not a Section 3(f)(1) significant regulatory action. Accordingly, this rule has been submitted to the Office of Management and Budget (OMB) for review.
DEA, jointly with HHS, is publishing this Second Temporary Rule to further extend certain exceptions DEA granted to its existing regulations in March 2020 as a result of the COVID-19 PHE in order to avoid a lapse of care for patients. The additional extension until December 31, 2024, of the COVID-19 flexibilities is necessary to thoroughly consider the presentations made at the Telemedicine Listening Sessions, as well as the comments made to the proposed rules set forth in the NPRMs.
Without this Second Temporary Rule, COVID-19 PHE telemedicine flexibilities are scheduled to expire on November 11, 2023, with respect to practitioner-patient relationships established after that date. This rule extends the expiration of those flexibilities for new practitioner-patient relationships through December 31, 2024. Because this rule does not create or remove any regulatory requirements, DEA and HHS estimate that there is no cost associated with this Second Temporary Rule. However, DEA and HHS believe this extension creates a benefit in form of cost savings to prescribers and patients and reduced transfer payments to the Federal Government, similar to those described in the General Telemedicine Rule.
However, due to the nature of this rule, differing policies between the flexibilities being extended with this Second Temporary Rule and the flexibilities still proposed in the General Telemedicine Rule, and any additional policy that may be addressed in one or more final rules, DEA is unable to quantify the cost savings and reduction in transfer payments.
The Second Temporary Rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.
This Second Temporary Rule does not have federalism implications warranting the application of E.O. 13132. The rule does not have substantial direct effects on the states, on the relationship between the National Government and the States, or the distribution of power and responsibilities among the various levels of government.
This Second Temporary Rule does not have substantial direct effects on the Tribes, on the relationship between the National Government and the Tribes, or the distribution of power and responsibilities between the Federal Government and Indian Tribes.
The Administrator, in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA), has reviewed this Second Temporary Rule and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. This Second Temporary Rule, as discussed above, merely extends for a limited time the status quo with respect to the current flexibilities allowed during the COVID-19 PHE, in order to avoid lapses in coverage for patients.
Without this Second Temporary Rule, COVID-19 PHE telemedicine flexibilities would expire on November 11, 2023, with respect to practitioner-patient relationships established after that date. While this Second Temporary Rule does not create or remove any regulatory requirements, this Second Temporary Rule extends the expiration of those flexibilities through December 31, 2024. DEA and HHS believe this extension create a benefit in form of cost savings to prescribers and patients and reduced transfer payments to the Federal Government.
In accordance with the RFA, DEA will be evaluating the impact on small entities at the time the final rule or rules are issued as part of these rulemakings.
This temporary rule will not impose a new collection or modify an existing collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). Also, this temporary rule does not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or other organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number.
This temporary rule is not a major rule as defined by Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act or CRA).
This document of the Drug Enforcement Administration and the Department of Health and Human Services was signed on October 4, 2023, by DEA Administrator Anne Milgram. Those documents with the original signatures and dates is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the
Administrative practice and procedure, Drug traffic control, Prescription drugs.
Administrative practice and procedure, Drug traffic control, Prescription drugs.
For the reasons set out above, the Drug Enforcement Administration amends 21 CFR part 1307 as follows:
21 U.S.C. 821, 822(d), 871(b), unless otherwise noted.
(a) This section is in effect until the end of the day December 31, 2024. The authorization granted in paragraph (c) of this section expires at the end of December 31, 2024.
(c) During the period May 12, 2023, through December 31, 2024, a DEA-
For the reasons set out above, the Department of Health and Human Services amends 42 CFR part 12 as follows:
21 U.S.C. 802(54)(G).
(a) This section is in effect until the end of the day December 31, 2024. The authorization granted in paragraph (c) of this section expires at the end of December 31, 2024.
(c) During the period May 12, 2023, through December 31, 2024, a Drug Enforcement Administration (DEA)-registered practitioner is authorized to prescribe schedule II-V controlled substances via telemedicine, as defined in 21 CFR 1300.04(i), to a patient without having conducted an in-person medical evaluation of the patient if all of the conditions listed in paragraph (e) of this section are met.
Federal Communications Commission.
Final rule; announcement of compliance dates.
In this document, the Commission announces the compliance dates for the rules implementing the Infrastructure Investment and Jobs Act per the
Erica H. McMahon of the Consumer and Governmental Affairs Bureau, Consumer Policy Division, at (202) 418-0346 or
This document announces that the Office of Management and Budget approved the information collection requirements in §§ 8.1(a)(1) through (a)(6) and (b) on September 19, 2023. The Commission publishes this document as an announcement of the compliance dates of the rules. In an
National Aeronautics and Space Administration (NASA).
Final rule.
NASA is finalizing amendments to the NASA Federal Acquisition Regulation Supplement (NFS)to reflect updates to NASA's Small Business Mentor Protégé Program (MPP).
Effective November 9, 2023.
R. Todd Lacks, NASA HQ, Office of
NASA published a proposed rule in the
NASA received no public comments and is finalizing this rule with no changes.
The final rule implements updates to NASA's MPP. Subpart 1819.72 does not limit the application of the program requirements to non-commercial contracts or contracts above the simplified acquisition threshold. Consistent with 41 U.S.C. 1905, 1906 and 1907, the NASA Assistant Administrator for Procurement has determined that it is in the best interest of NASA to apply this policy change to the acquisition of commercial items, including COTS items, and those requirements below the SAT.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is not a significant regulatory action as defined in E.O. 12866 and was not reviewed by the Office of Management and Budget (OMB).
NASA does not expect this rule to have a significant economic impact on small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601
The final rule will apply to all current and future participants of the MPP. While the final rule will apply to all classes of small business, it will not necessarily affect all those businesses because the final rule only applies to those that are a part of the MPP. As reported by NASA's Office of Small Business Programs (OSBP), NASA has entered 6, 1, and 3 mentor protégé agreements in 2018, 2019, and 2020, respectively. Therefore, this policy will have minimal impact on small businesses at large.
This rule contains information collection requirements requiring the approval of OMB under the Paperwork Reduction Act (44 U.S.C. chapter 35). As part of the proposed rule, NASA requested comments on a reinstatement with change for OMB 2700-0078,
Government procurement.
Accordingly, NASA amends 48 CFR parts 1801, 1819, and 1852 as follows:
51 U.S.C. 20113(a) and 48 CFR chapter 1.
The following OMB control numbers apply:
(a) * * *
(ii) NASA annually negotiates Agency small business prime and subcontracting goals with the Small Business Administration pursuant to section 15(g) of the Small Business Act (15 U.S.C. 644). In addition, representatives from the Office of Small Business Programs, Office of Procurement, and Program Offices will collaborate to reduce barriers to entry and to increase opportunities for small business concerns, identified in paragraph (a)(i) of this section, and Historically Black Colleges and Universities or Minority Institutions.
The revision reads as follows:
(a) This subpart implements the NASA Mentor-Protégé Program (hereafter referred to as the Program) as authorized by the Small Business Administration in accordance with 13 CFR 125.10. The purpose of the program is to:
(a) To be eligible as a mentor, an entity must be—
(1) A large business prime contractor or research institution performing with at least one approved subcontracting plan (other than a commercial plan) negotiated with NASA, pursuant to FAR subpart 19.7. A contractor may apply to become a mentor if they currently are not performing under a NASA contract, as long as they are currently performing another Federal agency contract with an approved subcontracting plan. However, the NASA MPA will not be approved until the mentor company is performing under a NASA contract with an approved subcontracting plan.
(2) Eligible for receipt of Government contracts. An entity will not be approved for participation in the program if, at the time of submission of the application to the NASA Mentor Protégé Program Office (MPPO), the entity is debarred or suspended from contracting with the Federal Government pursuant to FAR subpart 9.4.
(b) To be eligible to participate as a protégé, an entity must be eligible for award of Federal contracts in accordance with FAR subpart 9.4,
(1) Small disadvantaged business;
(2) Women-owned small or economically disadvantaged women-owned concern;
(3) Veteran-owned or service-disabled veteran-owned small business concern;
(4) Historically underutilized business zone concern;
(5) Historically Black College and University or Minority-Serving Institution;
(6) Current NASA Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) Phase II Company; or
(7) An entity participating in the AbilityOne Program.
(c) A protégé firm may self-certify to a mentor firm that it meets the requirements set forth in paragraph (b) of this section. Mentors may rely in good faith on written representations by potential protégés that they meet the specified eligibility requirements.
If advance payments are contemplated, the mentor must first have the advance payments approved by the contracting officer in accordance with FAR subpart 32.4.
The revisions and addition read as follows:
(a) To participate in the Program, entities approved as mentors, will submit a complete agreement package to the contracting officer, contracting officer's representative (COR), and the cognizant Small Business Specialist (SBS) at the NASA Center. The submission package must include the following:
(1) A signed MPA;
(3) The estimated cost of the developmental assistance to be provided, broken out per year and per task, in a separate cost volume; and
(b) The NASA MPPO may require additional information as requested upon agreement submission.
The revisions read as follows:
(a) Mentors may be eligible to earn a separate award fee associated with the provision of developmental assistance to NASA SBIR/STTR Phase II Protégés only. The award fee will be assessed at each award fee determination period.
(d) The Award Fee Program is an addition to the credit agreement, reference 1819.7206. Participants that are eligible for award fee may also receive credit under their individual contract's award fee plan.
In a MPA (as referenced in section 6 “Agreements” of the MPP Guidebook), a mentor receives credit toward its subcontracting goals. The credit agreement only applies to mentors with an Individual Subcontract Plan.
(a) Costs incurred under a credit agreement are applied on a one-to-one basis toward applicable subcontracting goals, under a Federal agency subcontracting plan (FAR subpart 19.7).
(b) The credit is reported on the mentor's individual subcontracting report (ISR) in the comments section twice a year and in the Summary Subcontract Report (SSR) once a year. The MPPO will verify the dollars contained in the annual reports.
(a) Mentors must report on the progress made under active MPA annually throughout the term of the agreement.
(b) Reports are due 30 days after the end of each 12-month period of performance commencing with the start of the agreement.
(c) Each annual report must include the following data on performance under the MPA:
(d) Annually the protégé must provide an independently developed progress report using the annual report template, on the progress made during the prior twelve months by the protégé in employment, revenues, and participation in NASA contracts during each year of the Program participation term. The protégé must also provide an additional post-agreement report for each of the two years following the expiration of the Program participation term.
(e) The protégé annual report required by paragraph (d) of this section must be submitted separately from the mentor's annual report submission.
(f) Reports for all agreements must be submitted to the NASA Mentor Protégé Program Manager, the mentor's cognizant administrative Contracting Officer, and their Small Business Specialist.
(g) Templates for the annual report and the Post-Agreement report and
The mentor may include its developmental expenditures from the annual report, reference 1819.7212, in its reported dollars in its Summary Subcontracting Report (SSR) in the Electronic Subcontracting Reporting System (eSRS).
(a) If the protégé is also the mentor's immediate next-tier subcontractor under a NASA contract that contains a subcontracting plan, the mentor may also include its developmental expenditures in its Individual Subcontracting Report (ISR) for that contract. Expenditures may be applied to each socio-economic subcategory on the SSR and ISR for which the protégé qualifies.
(b) Developmental expenditures included in SSR's and ISR's must also be separately reported and explained (including the actual dollar amount) in the “Remarks” section of each report.
(c) Expenditures for AbilityOne protégés cannot be included in SSR's or ISR's since there is no such reporting category for SSR's or ISR's.
(a) The contracting officer shall insert the clause at 1852.219-77, NASA Mentor-Protégé Program, in any contract that includes the clause at FAR 52.219-9, Small Business Subcontracting Plan.
(b) The Program consists of—
(1) Mentors, which are large business prime or research institution with at least one approved NASA subcontracting plan;
(2) Protégés, which qualify as one or more of the following:
(i) Small Business Concern, as defined in FAR part 2, Definitions of Parts and Terms, including: Women-Owned or Economically-Owned Concern; Veteran-Owned or Service-Disabled Veteran-Owned Small Business Concern; Historically Underutilized Business Zone Concern;
(ii) Historically Black College and University or Minority-Serving Institution;
(iii) Current NASA SBIR/STTR Phase II Company; or
(iv) An Entity Participating in the AbilityOne Program;
(3) MPA endorsed by the cognizant NASA centers and approved by the NASA MPPO; and
(4) In contracts with award fee incentives, potential for payment of an award fee for voluntary participation and successful performance in the Mentor-Protégé Program, in accordance with NFS 1819.7205.
(c) Mentor participation in the program, described in NFS 1819.72, means providing technical, managerial, and financial assistance to aid protégés in developing requisite high-tech expertise and business systems to compete for and successfully perform NASA, as well as other Federal and commercial contracts and subcontracts.
(d) Eligible businesses and research institutions interested in participating in the program are encouraged to contact the NASA MPPO.
The revisions and addition read as follows:
(a) The purpose of the NASA Mentor-Protégé Program is for a NASA prime contractor to provide developmental assistance to:
(1) Provide incentives to NASA contractors, performing under at least one active approved subcontracting plan negotiated with NASA to assist protégés in enhancing their capabilities to perform as viable NASA, other Government, and commercial suppliers on contract and subcontract requirements;
(2) Increase the overall participation of protégés as subcontractors and suppliers under NASA contracts, other Federal agency contracts, and commercial contracts; and
(3) Foster the establishment of long-term business relationships between protégés and mentors.
(b) The Mentor shall comply with the annual reporting requirements detailed in NASA FAR Supplement 1819.7212.
(c) NASA will evaluate the Mentor's performance on the following factors in the subcontracting element of the annual Contractor Performance Assessment Report (CPAR). If this contract includes an award fee incentive, this evaluation will also be included as part of the subcontracting element in the award fee evaluation process.
(3) The extent to which the mentor and protégé have met the developmental milestones outlined in the agreement; and
(4) The extent to which the mentor has contributed to advancing the protégé's technical readiness level. This factor only applies if the protégé is a current NASA SBIR/STTR Phase II contractor.
(d) Annual reports shall be submitted by the Mentor and the Protégé to the MPPO, following the annual report template found on the website at
(1) Except for as noted in paragraph (d)(4) of this section, the Mentor may include its developmental expenditures from the annual report, reference 1819.7212, Reporting Requirements, in its reported dollars in its Summary Subcontracting Report (SSR) in eSRS.
(2) If the protégé is also the mentor's immediate next-tier subcontractor under a NASA contract that contains a subcontracting plan, the Mentor may also include its developmental expenditures in its Individual Subcontracting Report (ISR) for that contract. Expenditures may be applied to each socio-economic subcategory on the SSR and ISR for which the protégé qualifies.
(3) Developmental expenditures included in SSR's and ISR's must also be separately reported and explained (including the actual dollar amount) in the “Remarks” section of each report.
(4) Expenditures for AbilityOne protégés cannot be included in SSR's or ISR's, since there is no such reporting category for SSR's or ISR's.
(e) The mentor will notify the cognizant NASA center and NASA OSBP in writing, at least 30 days in advance of the Mentor's intent to voluntarily withdraw from the program or upon receipt of a protégé's notice to withdraw from the Program.
(f) Every six months, the Mentor and Protégé, as appropriate, will formally brief the MPPO, and the contracting officer during a formal program review regarding program accomplishments, as it pertains to the approved agreement.
(g) NASA may terminate MPA for good cause, thereby excluding mentors or protégés from participating in the program. These actions shall be approved by the MPPO. NASA shall terminate an agreement by delivering to the contractor a letter specifying the reason for termination and the effective date. Termination of an agreement does not constitute a termination of the subcontract between the mentor and the protégé. A plan for accomplishing the subcontract effort should the agreement be terminated shall be submitted with the agreement.
Agricultural Marketing Service, Department of Agriculture (USDA).
Proposed rule.
This document invites comments on a proposed amendment to Marketing Order No. 927, which regulates the handling of pears grown in Oregon and Washington. The proposed amendment would revise the Fresh Pear Committee's approval requirement for recommending modifications to the marketing order's fresh pear handling regulations from 80 to 75 percent.
Comments must be received by December 11, 2023 to be assured consideration.
Interested persons are invited to submit written comments concerning this proposed rule. Comments can be sent to the Docket Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. Comments can also be submitted to the Docket Clerk electronically by Email at:
Geronimo Quinones, Marketing Specialist, or Matthew Pavone, Chief, Rulemaking Services Branch, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
This action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposal is issued under Marketing Order No. 927, as amended (7 CFR part 927), regulating the handling of pears grown in Oregon and Washington. Part 927 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Fresh Pear Committee (“Committee”) administers the Order's provisions relating to the handling of pears for the fresh market. The Committee comprises growers and handlers of pears operating within Oregon and Washington, and a public member.
Section 608c(17) of the Act (7 U.S.C. 608c(17)) and the applicable rules of practice and procedure at 7 CFR 900.43 authorize amendment of the Order through this informal rulemaking action. The Agricultural Marketing Service (“AMS”) will consider comments received in response to this proposed rule and, based on all the information available, will determine if the amendment is warranted. If AMS determines amendment of the Order is warranted, a subsequent proposed rule and notice of referendum would be issued, and growers would be allowed to vote for or against the proposed amendment. AMS would then issue a final rule effectuating any amendments favored in the referendum.
AMS is issuing this proposed rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This proposed rule is not a significant regulatory action within the meaning of Executive Order 12866. Accordingly, this action has not been reviewed by the Office of Management and Budget (“OMB”) under section 6 of the Executive Order.
This proposed rule has been reviewed under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have Tribal implications. AMS has determined this proposed rule is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is not intended to have retroactive effect.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act (7 U.S.C. 608c(15)(A)), any handler subject to a marketing order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and requesting a modification of the order or to be exempted therefrom. The handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The handler may then seek judicial review of the ruling by filing suit in the U.S. district
Section 608c(17) of the Act (7 U.S.C. 608c(17)) and the supplemental rules of practice at 7 CFR 900.43 authorize the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit, vegetable, and nut marketing agreements and orders. In determining whether informal rulemaking is appropriate, USDA is required to consider the nature and complexity of the proposed amendments, the potential regulatory and economic impacts on affected entities, and any other relevant matters.
AMS has considered these factors and has determined that the amendment proposed herein is not unduly complex and the nature of the proposed amendment is appropriate for utilizing the informal rulemaking process to amend the Order. This proposed rule would revise the approval requirement for recommending modifications to the Order's fresh pear handling regulations. In addition, as discussed in the Initial Regulatory Flexibility Analysis section below, the proposed rule is not anticipated to have any significant economic impact on affected entities. Further, the proposed amendment would not impose any new reporting, record-keeping, or compliance costs on businesses.
The Committee recommended the proposed amendment to the Order following deliberations at a public meeting held on June 2, 2022. The Committee recommended this change by vote of nine in favor and two opposed, with one abstention. The two opposing voters did not feel the proposed change was necessary, and the abstention voter wanted an even lower requirement. The Committee submitted its formal recommendation to amend the Order through the informal rulemaking process on August 23, 2022, and subsequently provided AMS clarification about the recommendation on December 1, 2022.
Currently, sections 927.33(a) and 927.52(a) of the Order provide that all decisions of the Committee require a supporting vote of 75 percent or greater; except that a decision to recommend changes to the regulations concerning the shipment of fresh pears requires a supporting vote of 80 percent or greater. The voting requirements in section 927.52 of the Order utilize a weighted calculation of votes based on the handling of specific pear varieties. The Committee recommended modifying the current 80-percent voting requirement to 75 percent to align these voting requirements, mitigate confusion, and simplify the Order.
In 2020, the Committee recommended a regulation change to the Anjou pear variety in three separate motions, each receiving a separate vote. A subcommittee was formed to investigate how the proposed modification to the voting requirement might have affected the 2020 voting outcomes. The subcommittee analyzed the three motions by comparing each voting outcome at 75- and 80-percent vote requirement levels. Of the three, two motions did not have enough Committee support at either voting level and received only 52 percent and 66 percent of the vote. The third motion for the regulation change received 86 percent affirmative support by vote. Therefore, the subcommittee concluded that changing the requirement to 75 percent would not have altered the outcome of those votes.
While most of the Committee believes the current 80-percent voter affirmation requirement is too high, two members believe the change to 75 percent is not necessary, and one member believes the change is not impactful enough.
The Committee considered alternatives, including a 70-percent requirement. However, after running simulations with historical data to assess the impact of a 70- or 75-percent requirement, the Committee determined 75 percent to be optimal in that it did not materially affect vote outcomes for recommendations. Additionally, the adjustment from an 80- to 75-percent voting requirement establishes regulatory consistency with other Committee recommendations that have a 75-percent voting requirement. As such, the Committee believes this proposal would provide more continuity to all Committee voting procedures without materially changing voting outcomes, thereby mitigating confusion and improving the efficiency of its operations.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order to ensure that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 708 growers of fresh pears in the production area and 27 handlers subject to regulation under the Order. At the time this analysis was prepared, small agricultural producers of pears were defined by the Small Business Administration (“SBA”) as those having annual receipts equal to or less than $3,500,000 (North American Industry Classification System code 111339, Other Noncitrus Fruit Farming), and small agricultural service firms were defined as those whose annual receipts are equal to or less than $34,000,000 (North American Industry Classification System Code 115114, Postharvest Crop Activities) (13 CFR 121.201).
According to the National Agricultural Statistics Service, the 2020 average grower price received for fresh pears produced in Oregon and Washington was $11.39 per standard 44-pound box or equivalent. Committee data indicates total production was 16,290,225 44-pound standard boxes or equivalent in the 2019-20 fiscal period. The total 2019-20 fiscal period value of assessable fresh “summer/fall” and “winter” pears grown in Oregon and Washington was $185,545,663 (16,290,225 44-pound standard boxes or equivalent multiplied by $11.39 per box equals $185,545,663). Dividing the crop value by the estimated number of growers (708), yields an estimated average receipt per grower of $262,070.
According to USDA Market News data, the reported average terminal price for 2020 Oregon and Washington fresh pears was $34.87 per 44-pound standard box or equivalent (data reported in
This proposed rule would revise a provision in the Order's subpart regulating handling of pears grown in Oregon and Washington. This proposal would align the approval requirement for recommending modifications to the Order's fresh pear handling regulations,
The proposed amendment has no anticipated impact on the reporting, record-keeping, or compliance costs of small businesses.
The proposed amendment would not directly increase or decrease costs to members of the pear industry.
Alternatives to the proposed amendment were considered, including making no changes at this time. However, the Committee believes it is necessary to bring all voting requirements in-line for clarity and understanding to ensure the efficient execution of the Order.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0189, Fruit Crops. No changes in those requirements would be necessary because of this proposed rule. Should any changes become necessary, they would be submitted to OMB for approval.
This proposed rule would impose no additional reporting or recordkeeping requirements on either small or large pear handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public-sector agencies.
AMS is committed to complying with the E-Government Act to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.
The Committee's meetings are widely publicized throughout the pear production area. All interested persons are invited to attend the meetings and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the meeting held on June 2, 2022, was open to the public, and all entities, both large and small, were encouraged to express their views on the proposed amendment.
Interested persons are invited to submit comments on the proposed amendment to the Order, including comments on the regulatory and information collection impacts of the proposed rule on small businesses.
Following analysis of any comments received on the amendment in this proposed rule, AMS will evaluate all available information and determine whether to proceed. If appropriate, a proposed rule and notice of referendum would be issued, and growers would be provided the opportunity to vote for or against the proposed amendment. Information about the referendum, including dates and voter eligibility requirements, would be published in a future issue of the
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
The findings hereinafter set forth are supplementary to the findings and determinations which were previously made in connection with the issuance of Marketing Order 927; and all said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.
1. Marketing Order 927 as hereby proposed to be amended and all the terms and conditions thereof, would tend to effectuate the declared policy of the Act;
2. Marketing Order 927 as hereby proposed to be amended regulates the handling of pears grown in Oregon and Washington and is applicable only to persons in the respective classes of commercial and industrial activity specified in the Order;
3. Marketing Order 927 as hereby proposed to be amended is limited in application to the smallest regional production area which is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several marketing orders applicable to subdivisions of the production area would not effectively carry out the declared policy of the Act;
4. Marketing Order 927 as hereby proposed to be amended prescribes, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of pears produced or packed in the production area; and
5. All handling of pears grown or handled in the production area, as defined in Marketing Order 927, is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.
A 60-day comment period is provided to allow interested persons to respond to this proposal. Any comments received on the amendment proposed in this rule will be analyzed and, if AMS determines to proceed based on all the information presented, a producer referendum would be conducted to determine industry support for the proposed amendment. If appropriate, a final rule would then be issued to effectuate the amendments favored by producers participating in the referendum.
Marketing agreements, Pears, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service proposes to amend 7 CFR part 927 as follows:
7 U.S.C. 601-674.
(a) Decisions of the Fresh Pear Committee or the Processed Pear Committee with respect to any recommendations to the Secretary pursuant to the establishment or modification of a supplemental rate of assessment for an individual variety or subvariety of pears shall be made by affirmative vote of not less than 75 percent of the applicable total number of votes, computed in the manner described in paragraph (b) of this section, of all members. Decisions of the Fresh Pear Committee pursuant to the provisions of § 927.50 shall be made by an affirmative vote of not less than 75 percent of the applicable total number of votes, computed in the manner
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for various airplanes modified with a certain configuration of the Garmin GFC 500 Autopilot System installed per Supplemental Type Certificate (STC) No. SA01866WI. This proposed AD was prompted by a report of an un-commanded automatic pitch trim runaway when the autopilot was first engaged. This proposed AD would require updating the applicable Garmin GFC 500 Autopilot System software for your airplane and would prohibit installing earlier versions of that software. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by November 24, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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Christopher Withers, Aviation Safety Engineer, FAA, 1801 S Airport Road, Wichita, KS 67209; phone: (316) 946-4190; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Christopher Withers, Aviation Safety Engineer, FAA, 1801 S Airport Road, Wichita, KS 67209. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The FAA received a report of an incident involving a Textron Aviation Inc. (type certificate previously held by Beech Aircraft Corporation, Raytheon Aircraft Company, Hawker Beechcraft Corporation, and Beechcraft Corporation) Model F33A Bonanza airplane having an un-commanded automatic pitch trim runaway when the autopilot was first engaged. The airplane was equipped with a Garmin GFC 500 Autopilot System that included an optional GSA 28 pitch trim servo. The affected Garmin GFC 500 Autopilot System includes G5, G3X Touch, or GI 275 software and was installed per STC No. SA01866WI using Master Drawing List 005-01264-00, Revisions 1 through 76.
The affected autopilot system software does not properly handle certain hardware failures of the pitch trim servo. This could result in an automatic un-commanded pitch trim runaway, and loss of control of the airplane.
An investigation by Garmin International and the National Transportation Safety Board (NTSB) determined this condition could exist on various Textron Aviation, Inc., Piper Aircraft, Inc., Commander Aircraft Corporation, Mooney International Corporation, and DAHER AEROSPACE airplane models equipped with a Garmin GFC 500 Autopilot System that includes an optional GSA 28 pitch trim servo.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require updating the applicable Garmin GFC 500 Autopilot System software for your airplane and would prohibit installing earlier versions of that software.
The FAA estimates that this AD, if adopted as proposed, would affect 5,900 airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by November 24, 2023.
None.
This AD applies to all airplane models specified in Table 1 to paragraph (c) of this AD, certificated in any category, having a Garmin GFC 500 Autopilot System that includes an optional GSA 28 pitch trim servo installed per Supplemental Type Certificate No. SA01866WI using Master Drawing List 005-01264-00, Revisions 1 through 76.
Joint Aircraft System Component (JASC) Code 2210, Autopilot System.
This AD was prompted by a report of an un-commanded automatic pitch trim runaway when the autopilot was first engaged. The FAA is issuing this AD to address autopilot software that does not properly handle certain hardware failures of the pitch trim servo. The unsafe condition, if not addressed, could result in un-commanded automatic pitch trim runaway and loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 12 months after the effective date of this AD, update the Garmin GFC 500 Autopilot System software applicable to your airplane to a version that is not 8.01 or earlier for the G5, not version 9.01 or earlier for the G3X Touch, and not version 2.59 or earlier for the GI 275.
As of the effective date of this AD, do not install Garmin GFC 500 Autopilot System Software that is version 8.01 or earlier for the G5, version 9.01 or earlier for the G3X Touch, or version 2.59 or earlier for the GI 275, on any airplane.
(1) The Manager, Central Certification Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the Central Certification Branch, send it to the attention of the person identified in paragraph (j) of this AD. Information may be emailed to
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Christopher Withers, Aviation Safety Engineer, FAA, 1801 S Airport Road, Wichita, KS 67209; phone: (316) 946-4190; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E airspace at Lajitas, TX. The FAA is proposing this action to support new instrument procedures at this airport.
Comments must be received on or before November 24, 2023.
Send comments identified by FAA Docket No. FAA-2023-1614 and Airspace Docket No. 23-ASW-14 using any of the following methods:
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FAA Order JO 7400.11H, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Raul Garza Jr., Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5874.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace extending upward from 700 feet above the surface at Lajitas International Airport, Lajitas, TX, to support instrument flight rule (IFR) operations at this airport.
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental,
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it received on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or dely. The FAA may change this proposal in light of the comments it receives.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
Class E airspace is published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. These updates would be published subsequently in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the
FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
The FAA is proposing to amend 14 CFR part 71 by:
Establishing Class E airspace extending upward from 700 feet above the surface within a 3.4-mile radius of Lajitas International Airport, Lajitas, TX.
This action is to support new instrument procedures and IFR operations at this airport.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 3.4-mile radius of the airport beginning at the 226° bearing clockwise to the 123° bearing, thence to the point of beginning, within 2 miles north and south of the airport's 076° bearing extending to 10.2 miles east, and within 2.2 miles north and 2.1 miles south of the airport's 265° bearing extending to 7.8 miles west, excluding that airspace within Mexico and the sensitive bird nesting area south and east of the airport.
Agricultural Marketing Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Agricultural Marketing Service's (AMS) intention to request approval from the Office of Management and Budget (OMB) for an extension of a currently approved information collection for the Reporting and Recordkeeping Requirements Under Regulations Under the Perishable Agricultural Commodities Act (PACA), 1930, as amended.
Comments on this notice must be received by December 11, 2023 to be assured of consideration.
Interested persons are invited to submit comments concerning this notice by using the electronic process available at
Natalie Worku, Program Analyst; Fair Trade Practices Program, PACA Division; Telephone: (202) 205-4887; or Email:
The law provides a forum for resolving contract disputes, and a mechanism for the collection of damages from anyone who fails to meet contractual obligations. In addition, the PACA provides for prompt payment to fruit and vegetable sellers and for revocation of licenses and sanctions against firms or principals found to have violated the law's standards for fair business practices. The PACA also imposes a statutory trust that attaches to perishable agricultural commodities received by regulated entities, products derived from the commodities, and any receivables or proceeds from the sale of the commodities. The trust exists for the benefit of produce suppliers, sellers, or agents that have not been paid, and continues until they have been paid in full.
The PACA is enforced through a licensing system. All commission merchants, dealers, and brokers engaged in business subject to the PACA must be licensed. Retailers and grocery wholesalers must renew their licenses every three years. All other licensees renew yearly. License applications and renewals may be submitted electronically through the ePACA online portal, sent by email or facsimile, or submitted in paper form. Those who engage in practices prohibited by the PACA may have their licenses suspended or revoked.
The information collected pursuant to OMB Number 0581-0031 is used to administer licensing provisions under the PACA, to adjudicate contract disputes, and to enforce the PACA and the regulations. The purpose of this notice is to solicit comments from the public concerning our information collection.
We estimate the paperwork and time burden of the above referenced information collection to be as follows:
All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record.
Agricultural Marketing Service, Department of Agriculture (USDA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Agricultural Marketing Service's (AMS) intention to request approval from the Office of Management and Budget for an extension of and revision to the currently approved information collection for the Child Nutrition Labeling Program.
Comments on this notice must be received by December 11, 2023 to be assured of consideration.
Interested persons are invited to submit comments concerning this notice by using the electronic process available at
Patricia Tung-Tayman, Senior Food Technologist, Telephone: (202) 720-0367, or Email:
To participate in the CN Labeling Program, a manufacturer submits a label application to AMS for evaluation. AMS reviews the product formulation to determine the contribution a serving of the product makes towards the food-based meal pattern requirements. The application form submitted to AMS is the same form that a manufacturer submits to the USDA's Food Safety and Inspection Service (FSIS) Labeling and Program Delivery Division for review of meat and poultry labels. Participation in the CN Labeling Program is voluntary; manufacturers who wish to place a CN label on their products must comply with CN Labeling Program requirements.
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Food Safety and Inspection Service (FSIS), U.S. Department of Agriculture (USDA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 and the Office of Management and Budget (OMB) regulations, FSIS is announcing its intention to renew the approved information collection regarding the
Submit comments on or before December 11, 2023.
FSIS invites interested persons to submit comments on this
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Gina Kouba, Office of Policy and Program Development, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW, Mailstop 3758, South Building, Washington, DC 20250-3700; (202) 937-4272.
FSIS is requesting renewal of the approved information collection regarding the
Through SIP, FSIS offers incentives to meat and poultry slaughter establishments to control
FSIS has made the following estimates based upon an information collection assessment:
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Copies of this information collection assessment can be obtained from Gina Kouba, Office of Policy and Program Development, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW, Mailstop 3758, South Building, Washington, DC 20250-3700; (202) 937-4272.
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
FSIS will also announce and provide a link to this
In accordance with Federal civil rights law and USDA civil rights regulations and policies, USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD-3027,
(1)
(2)
(3)
USDA is an equal opportunity provider, employer, and lender.
Food Safety and Inspection Service (FSIS), U.S. Department of Agriculture (USDA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 and the Office of Management and Budget (OMB) regulations, FSIS is announcing its intention to request a new information collection to solicit feedback from small and very small establishment owners. FSIS plans to use a multi-language survey to ascertain how FSIS can better service the needs of small and very small establishments and improve outreach to them. This is a new information collection with 417 hours.
Submit comments on or before December 11, 2023.
FSIS invites interested persons to submit comments on this
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Gina Kouba, Office of Policy and Program Development, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW, Mailstop 3758, South Building, Washington, DC 20250-3700; (202) 937-4272.
FSIS plans to use a multi-language survey to solicit feedback from small and very small establishment owners to ascertain how FSIS can better service the needs of small and very small establishments and improve outreach to them. This is a new information collection with 417 hours.
This survey is one of many ways FSIS is working to bring equity—that is, consistent and systematic treatment of all individuals in a fair, just, and impartial manner, including individuals who belong to communities that often have been denied such treatment—to small and very small establishments. Results will inform the Agency on ways to improve engagement with, and outreach to, small and very small establishments, particularly those in underrepresented communities.
FSIS has made the following estimates based upon an information collection assessment:
All responses to this notice will be summarized and included in the request
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
FSIS will also announce and provide a link to this
In accordance with Federal civil rights law and USDA civil rights regulations and policies, USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD-3027,
(1)
(2)
(3)
USDA is an equal opportunity provider, employer, and lender.
On June 6, 2023, Derecktor Fort Pierce, LLC submitted a notification of proposed production activity to the FTZ Board for its facility within Subzone 218A, in Fort Pierce, Florida.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
Enforcement & Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily determines that the respondents selected for individual examination, Ceuta Produce S de R.L. de C.V. and its affiliate, Rancho la Memoria, S. de R.L. de C.V. (collectively, Ceuta) and Valores Horticolas Del Pacifico S.A. De C.V. (VALHPAC), complied with the Agreement Suspending the Antidumping Duty (AD) Investigation on Fresh Tomatoes from Mexico (2019 Agreement), for the period of review (POR) September 1, 2021, through August 31, 2022, except for certain instances of inconsequential and/or inadvertent noncompliance. We preliminarily determine that such
Applicable October 10, 2023.
David Cordell or Walter C. Schaub, Enforcement & Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-0408 or (202) 482-0907, respectively.
On September 19, 2019, Commerce signed an agreement under section 734(c) of the Act, with representatives of Mexican fresh tomato producers/exporters accounting for substantially all imports of fresh tomatoes from Mexico,
On September 29, 2022, the Florida Tomato Exchange (FTE), a member of the U.S. petitioning industry, filed a request for an administrative review of the 2019 Agreement. Commerce published notice of its initiation of the review on November 3, 2022.
Merchandise covered by the 2019 Agreement is typically classified under the following subheading of the Harmonized Tariff Schedules of the United States (HTSUS), according to the season of importation: 0702. The tariff classification is provided for convenience and customs purposes; however, the written description of the scope of this 2019 Agreement is dispositive.
Commerce has conducted this review in accordance with section 751(a)(1)(C) of the Act, which specifies that Commerce shall “review the current status of, and compliance with, any agreement by reason of which an investigation was suspended.” In this case, Commerce and representatives of the Mexican tomato producers/exporters accounting for substantially all imports of fresh tomatoes from Mexico signed the 2019 Agreement, which suspended the underlying AD investigation, on September 19, 2019. Pursuant to the 2019 Agreement, the Mexican Signatories agreed to sell subject merchandise at or above certain minimum reference prices, and that their pricing would eliminate at least 85 percent of the dumping determined in the AD investigation.
After reviewing the information received to date from the respondent companies in their questionnaire and supplemental questionnaire responses, we preliminarily determine that the respondents have adhered to the terms of the 2019 Agreement, except for certain instances of inconsequential and/or inadvertent noncompliance that do not materially frustrate the purposes of the 2019 Agreement. We also preliminarily determine that the 2019 Agreement functioned as intended and that the 2019 Agreement continued to meet the statutory requirements under sections 734(c) and (d) of the Act during the POR.
For a full description of the analysis underlying our conclusions,
Case briefs are due 30 days from the publication of these preliminary results in the
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce within 30 days after the date of publication of this notice.
Commerce intends to issue the final results of this administrative review, including the results of its analysis of the issues raised in any written briefs, not later than 120 days after the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Act, unless extended.
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
International Trade Administration, Department of Commerce.
The United States Department of Commerce, International Trade Administration (ITA), is announcing one upcoming trade mission that will be recruited, organized, and implemented by ITA. This mission is: U.S. Environmental Technologies Business Development Mission to IFAT (Internationale Fachausstellung fuer Abwasser Technologie)—May 8-15, 2024. A summary of the mission is found below. Application information and more detailed mission information, including the commercial setting and sector information, can be found at the trade mission website:
Jeffrey Odum, Events Management Task Force, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6397 or email
Applicants must submit a completed and signed mission application and supplemental application materials, including adequate information on their products and/or services, primary market objectives, and goals for participation that is adequate to allow the Department of Commerce to evaluate their application. If the Department of Commerce receives an incomplete application, the Department of Commerce may either: reject the application, request additional information/clarification, or take the lack of information into account when evaluating the application. If the requisite minimum number of participants is not selected for a particular mission by the recruitment deadline, the mission may be cancelled.
Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the United States, or, if not, are marketed under the name of a U.S. firm and have at least fifty-one percent U.S. content by value. In the case of a trade association or organization, the applicant must certify that, for each firm or service provider to be represented by the association/organization, the products and/or services the represented firm or service provider seeks to export are either produced in the United States or, if not, marketed under the name of a U.S. firm and have at least 51% U.S. content.
A trade association/organization applicant must certify and agree to the above for every company it seeks to represent on the mission. In addition, each applicant must:
• Certify that the products and services that it wishes to market through the mission would be in compliance with U.S. export controls and regulations;
• Certify that it has identified any matter pending before any bureau or office in the Department of Commerce;
• Certify that it has identified any pending litigation (including any administrative proceedings) to which it is a party that involves the Department of Commerce; and
• Sign and submit an agreement that it and its affiliates (1) have not and will not engage in the bribery of foreign officials in connection with a company's/participant's involvement in this mission, and (2) maintain and enforce a policy that prohibits the bribery of foreign officials.
In the case of a trade association/organization, the applicant must certify that each firm or service provider to be represented by the association/organization can make the above certifications.
Targeted mission participants are U.S. firms, services providers and trade associations/organizations providing or promoting U.S. products and services that have an interest in entering or expanding their business in the mission's destination country. The following criteria will be evaluated in selecting participants:
• Suitability of the applicant's (or in the case of a trade association/organization, represented firm's or service provider's) products or services to these markets;
• The applicant's (or in the case of a trade association/organization, represented firm's or service provider's) potential for business in the markets, including likelihood of exports resulting from the mission; and
• Consistency of the applicant's (or in the case of a trade association/organization, represented firm's or service provider's) goals and objectives with the stated scope of the mission.
Balance of company size and location may also be considered during the review process. Referrals from a political party or partisan political group or any information, including on the application, containing references to political contributions or other partisan political activities will be excluded from the application and will not be considered during the selection process. The sender will be notified of these exclusions. The Department of Commerce will evaluate applications and inform applicants of selection decisions on a rolling basis until the maximum number of participants has been selected.
For purposes of assessing participation fees, an applicant is a small or medium-sized enterprise (SME) if it qualifies as a “small business” under the Small Business Administration's (SBA) size standards (
The United States Department of Commerce, International Trade Administration (ITA), is organizing an Environmental Technologies Business Development Mission to the IFAT environmental technologies trade show in Munich, Germany, from May 13-15, 2024, with an optional program to the Czech Republic and Slovakia from May 8-10, 2024.
The U.S. Environmental Technologies Trade Mission to IFAT will promote U.S. exports in a range of environmental technology industries, including water and wastewater management, solid waste management and recycling, and air pollution monitoring and control. The trade mission will take place directly preceding and alongside the IFAT trade show in Munich, Germany—the largest trade show in the world for environmental technologies. The trade mission will introduce participants to commercial opportunities in the region and connect them with prospective partners, distributors, service providers, end-users, and foreign government decision makers who are seeking U.S. environmental solutions. Participating in an official U.S. industry delegation, rather than traveling to IFAT individually, will enhance the participants' ability to secure key business and government meetings where applicable and to promote their goods and services to a wider, more targeted, audience.
Participation in the trade mission will include entrance tickets to IFAT for one delegate from each participating company and tailored assistance to help delegates connect with participating international buyers from across Europe and other foreign markets. IFAT presents a unique opportunity for participants to learn more about the European market, gain awareness of trends and innovation in the environmental technologies sector, and meet with prospective business partners and customers from across the globe. IFAT is a large show, with 18 exhibition halls, an outside live demonstration area, thematic solutions tours centered around specific technologies and topics, and a start-up area to spotlight innovative technologies. In 2022, the show attracted 119,000 visitors from 155 countries and regions and hosted nearly 3,000 exhibitors. The show also includes a robust conference program, and along with its innovation spotlights and live demonstrations, is a leading venue in showcasing the latest trends and emerging issues in the environmental technologies sector. Trade mission participants will receive assistance in tailoring a schedule that will allow them to target the components of the show that are of most interest to them and connect with potential business partners in various markets in Europe. Participants will also be able to participate in exclusive trade mission programming such as networking receptions, briefings with U.S. Embassy staff, promotional events, and ad-hoc meetings with potential business partners on the show floor.
The trade mission will include an optional program to Slovakia and the Czech Republic the week before IFAT for participants interested in exploring opportunities in those markets via business-to-business matchmaking meetings and meetings with relevant public sector entities to learn about commercial opportunities in water, wastewater treatment, solid waste management and recycling, and air pollution monitoring and control. According to Environment Business International, the European market for environmental goods and services was valued at $387 billion in 2022.
The below list, while not exhaustive, identifies key products, services, and technologies that would be an appropriate fit for the trade mission. ITA is committed to assembling a trade mission delegation that is representative of a broad range of environmental technology sectors.
Applications from companies exporting products or services within the scope of this mission, but not specifically identified, will be considered and evaluated by the U.S. Department of Commerce. Companies whose products or services do not fit the scope of the mission may contact their local U.S. Commercial Service office to learn about other business development missions and services that may provide more targeted export opportunities. Companies may visit
All parties interested in participating in the trade mission must complete and submit an application package for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. A minimum of 10 and maximum of 15 firms and/or trade associations will be selected to participate in the core mission at IFAT in Munich, Germany on a rolling basis. When applying to the mission, applicants will be able to indicate their interest in participating in the optional program to Czech Republic and Slovakia. A minimum of 3 and maximum of 5 firms and/or trade associations will be selected to participate in the optional program based on their expressed interest and market suitability.
After a firm or trade association has been selected to participate in the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee for the U.S. Environmental Technologies Business Development Mission will be $850 for SMEs and $1,600 for large firms or trade associations. The fee to participate in the optional program to Czech Republic and Slovakia will be $2,350 for SMEs and $5,000 for large firms or trade associations. The fee for each additional firm representative (large firm or SME/trade organization) to participate in any portion of the mission is $1,000. Expenses for travel, lodging, meals, and incidentals will be the responsibility of each mission participant. Interpreter and driver services can be arranged for additional cost.
If and when an applicant is selected to participate on a particular mission, a payment to the Department of Commerce in the amount of the designated participation fee above is required. Upon notification of acceptance to participate, those selected have 5 business days to submit payment or the acceptance may be revoked.
Participants selected for a trade mission will be expected to pay for the cost of personal expenses, including, but not limited to, international travel, lodging, meals, transportation, communication, and incidentals, unless otherwise noted. Participants will, however, be able to take advantage of U.S. Government-negotiated rates for hotel rooms during the optional program to Czech Republic and Slovakia. Due to high demand for hotel space in Munich during the IFAT show, participants may not have access to U.S. Government-negotiated rates for that portion of the mission. Applicants who are selected to the trade mission before December 15, 2023 may be able to participate in the U.S. Department of Commerce's reserved block of hotel rooms in Munich, Germany. Applicants selected after this date will be responsible for arranging their own accommodation in Munich. In the event that a mission is cancelled, no personal expenses paid in anticipation of a mission will be reimbursed. However, participation fees for a cancelled mission will be reimbursed to the extent they have not already been expended in anticipation of the mission.
If a visa is required to travel on a particular mission, applying for and obtaining such a visa will be the responsibility of the mission participant. Government fees and processing expenses to obtain such a visa are not included in the participation fee. However, the Department of Commerce will provide instructions to each participant on the procedures required to obtain business visas.
Trade Mission members participate in trade missions and undertake mission-related travel at their own risk. The nature of the security situation in a given foreign market at a given time cannot be guaranteed. The U.S. Government does not make any representations or guarantees as to the safety or security of participants. The U.S. Department of State issues U.S. Government international travel alerts and warnings for U.S. citizens available at
Travel and in-person activities are contingent upon the safety and health conditions in the United States and the mission countries. Should safety or health conditions not be appropriate for travel and/or in-person activities, the Department will consider postponing the event or offering a virtual program in lieu of an in-person agenda. In the event of a postponement, the Department will notify the public and applicants previously selected to participate in this mission will need to confirm their availability but need not reapply. Should the decision be made to organize a virtual program, the Department will adjust fees accordingly, prepare an agenda for virtual activities, and notify the previously selected applicants with the option to opt-in to the new virtual program.
Mission recruitment will be conducted in an open and public manner, including publication in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) received scope ruling applications, requesting that scope inquiries be conducted to determine whether identified products are covered by the scope of antidumping duty (AD) and/or countervailing duty (CVD) orders and that Commerce issue scope rulings pursuant to those inquiries. In accordance with Commerce's regulations, we are notifying the public of the filing of the scope ruling applications listed below in the month of August 2023.
Applicable October 10, 2023.
Terri Monroe, AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-1384.
In accordance with 19 CFR 351.225(d)(3), we are notifying the public of the following scope ruling applications related to AD and CVD orders and findings filed in or around the month of August 2023. This notification includes, for each scope application: (1) identification of the AD and/or CVD orders at issue (19 CFR 351.225(c)(1)); (2) concise public descriptions of the products at issue, including the physical characteristics (including chemical, dimensional and technical characteristics) of the products (19 CFR 351.225(c)(2)(ii)); (3) the countries where the products are produced and the countries from where the products are exported (19 CFR 351.225(c)(2)(i)(B)); (4) the full names of the applicants; and (5) the dates that the scope applications were filed with Commerce and the name of the ACCESS scope segment where the scope applications can be found.
Passenger Vehicle and Light Truck Tires from Thailand (A-549-842); certain light truck spare tires;
Circular Welded Carbon Quality Steel Pipe from the People's Republic of China (China) (A-570-910/C-570-911); 15 models of torque tubes (torque tubes);
Glycine from India, Japan, Thailand, and China (A-533-883/C-533-884/A-588-878/A-549-837/C-570-081); calcium glycinate;
Common Alloy Aluminum Sheet from Germany (A-428-849); heat-treatable clad aluminum aircraft sheet, Aluminum Association series 2XXX (
This list of scope ruling applications is not an identification of scope inquiries that have been initiated. In
In accordance with 19 CFR 351.225(m)(2), if there are companion AD and CVD orders covering the same merchandise from the same country of origin, the scope inquiry will be conducted on the record of the AD proceeding. Further, please note that pursuant to 19 CFR 351.225(m)(1), Commerce may either apply a scope ruling to all products from the same country with the same relevant physical characteristics, (including chemical, dimensional, and technical characteristics) as the product at issue, on a country-wide basis, regardless of the producer, exporter, or importer of those products, or on a company-specific basis.
For further information on procedures for filing information with Commerce through ACCESS and participating in scope inquiries, please refer to the Filing Instructions section of the Scope Ruling Application Guide, at
Please note that this notice of scope ruling applications filed in AD and CVD proceedings may be published before any potential initiation, or after the initiation, of a given scope inquiry based on a scope ruling application identified in this notice. Therefore, please refer to the case segment on ACCESS to determine whether a scope ruling application has been accepted or rejected and whether a scope inquiry has been initiated.
Interested parties who wish to be served scope ruling applications for a particular AD or CVD order may file a request to be included on the annual inquiry service list during the anniversary month of the publication of the AD or CVD order in accordance with 19 CFR 351.225(n) and Commerce's procedures.
Interested parties are invited to comment on the completeness of this monthly list of scope ruling applications received by Commerce. Any comments should be submitted to James Maeder, Deputy Assistant Secretary for AD/CVD Operations, Enforcement and Compliance, International Trade Administration, via email to
This notice of scope ruling applications filed in AD and CVD proceedings is published in accordance with 19 CFR 351.225(d)(3).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that companies in the People's Republic of China (China) made sales of subject merchandise at less than normal value (NV) during the period of review (POR) September 10, 2020, through February 28, 2022.
Applicable October 10, 2023.
Hermes Pinilla or Dusten Hom, AD/CVD Operations, Office I, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3477 and (202) 482-5075, respectively.
On April 6, 2023, Commerce published the preliminary results of this review in the
The products covered by the
All issues raised in the case and rebuttal briefs by parties in this administrative review are addressed in the Issues and Decision Memorandum and are listed in the appendix to this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on the comments received, we made no changes to the
The statute and our regulations do not address the establishment of a rate to be assigned to respondents not selected for individual examination when we limit our examination of companies subject to the administrative review pursuant to section 777A(c)(2)(B) of the Act. Generally, we look to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation, for guidance when calculating the rate for respondents not individually examined in an administrative review. Under section 735(c)(5)(A) of the Act, the all-others rate is normally “an amount equal to the weighted average of the estimated weighted average dumping margins established for exporters and producers individually investigated, excluding any zero and
Commerce determines that the following estimated weighted-average dumping margins exist for the period September 10, 2020, through February 28, 2022:
Because we have not modified our analysis to the
Pursuant to section 751(a)(2)(A) of the Act, and 19 CFR 351.212(b)(1), Commerce intends to determine, and U.S. Customs and Border Protections (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. Pursuant to 19 CFR 351.212(b)(1), for Anhui and Botao, we calculated importer-specific
For all non-selected separate rate applicants subject to this review, we will instruct CBP to liquidate all entries of subject merchandise that entered the United States during the POR at the average of the rates calculated for Anhui and Botao as listed above. For entries of subject merchandise during the POR produced by Anhui and Botao for which they did not know their merchandise was destined for the United States, we intend to instruct CBP to liquidate such entries at the China-wide rate if there is no rate for the intermediate company or companies involved in the transaction.
Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the final results of this review in the
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for the companies subject to this review will be the rate established in these final results of the review; (2) for previously investigated or reviewed Chinese and non-Chinese exporters not listed above that have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recently completed segment of this proceeding in which they were reviewed; (3) for all Chinese exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be equal to the weighted-average dumping margin for the China-wide entity (
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping and/or countervailing duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping and/or countervailing duties has occurred and the subsequent assessment of double antidumping duties, and/or an increase in the amount of antidumping duties by the amount of countervailing duties.
This notice also serves as a final reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This determination is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily finds that producers/exporters of emulsion styrene-butadiene rubber (ESB rubber) from Mexico did not make sales at prices below normal value during the period of review (POR) September 1, 2021, through August 31, 2022. We also preliminarily find that Dynasol Elastomeros S.A. de C.V. (Dynasol Elastomeros) had no shipments during the POR. We invite interested parties to comment on these preliminary results.
Applicable October 10, 2023.
Christopher Maciuba, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0413.
On September 12, 2017, Commerce published in the
On May 18, 2023, Commerce extended the deadline for issuance of the preliminary results until September 29, 2023.
The merchandise subject to the
On November 4, 2022, we received a letter from Dynasol Elastomeros notifying Commerce that it had no exports, sales, or entries of subject merchandise during the POR.
Commerce initiated this review with respect to six companies, including Dynasol.
Commerce is conducting this review in accordance with section 751(a) of the Act. We have calculated constructed export price in accordance with section 772 of the Act. Normal value is calculated in accordance with section 773 of the Act.
For a full description of the methodology underlying these preliminary results,
We did not select Continental Tires, Hyundai Glovis, and Pirelli Neumaticos for individual examination in this review. The Act and Commerce's regulations do not address the rate to be applied to companies not selected for individual examination when Commerce limits its examination in an administrative review pursuant to section 777A(c)(2) of the Act. Generally, Commerce looks to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in a less-than-fair value (LTFV) investigation, for guidance when calculating the rate for companies which were not selected for individual examination in an administrative review. Under section 735(c)(5)(A) of the Act, the all-others rate is normally an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero or
However, pursuant to section 735(c)(5)(B) of the Act, if the estimated weighted-average dumping margins established for all exporters and producers individually examined are zero,
Negromex is the sole mandatory respondent in this administrative review, and its weighted-average dumping margin is zero. Accordingly, we preliminarily assign to the non-selected companies the dumping margin of 0.00 percent in accordance with section 735(c)(5)(B) of the Act.
For these preliminary results, Commerce has calculated the following estimated weighted-average dumping margins for the period September 1, 2021, through August 31, 2022:
Upon completion of this administrative review, Commerce shall determine, and CBP shall assess, antidumping duties on all appropriate entries. If Negromex's weighted-average dumping margin is not zero or
In accordance with Commerce's “automatic assessment” practice, for entries of subject merchandise during the POR produced by Negromex for which the company did not know that the merchandise was destined for the United States, we will instruct CBP to liquidate those entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction.
For the companies which were not selected for individual review, we intend to assign an assessment rate based on the review-specific average rate, as noted in the “Preliminary Results of the Review” section, above. If this rate is zero or
The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by this review and for future deposits of estimated duties, where applicable.
Commerce intends to issue assessment instructions to CBP no earlier than 41 days after the date of publication of the final results of this review in the
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for the companies under review will be equal to the weighted-average dumping margin established in the final results of this administrative review, except if the rate is less than 0.50 percent and, therefore,
We intend to disclose the calculations performed to parties within five days after publication of the preliminary results in the
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, filed electronically via ACCESS, within 30 days after the date of publication of this notice. An electronically filed document must be received successfully in its entirety by 5:00 p.m. Eastern Time. Hearing requests should contain: (1) the party's name, address, and telephone number; (2) the number of participants; and (3) a list of issues to be discussed. Issues raised in the hearing will be limited to those raised in the respective case and rebuttal briefs. If a request for a hearing is made, Commerce intends to hold the hearing at a date and time to be determined.
Unless otherwise extended, Commerce intends to issue the final results of this administrative review, including the results of any analysis of the issues raised in any written briefs, not later than 120 days after the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Act and 19 CFR 351.213(h)(1).
This notice also serves as a reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
We are issuing and publishing these results in accordance with section 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that certain carbon steel butt-weld pipe fittings (butt-weld pipe fittings) exported from the Socialist Republic of Vietnam (Vietnam) to the United States that were produced using fittings from the People's Republic of China (China) that undergo the first stage of production in China (rough fittings) and the second and third stages of production in Vietnam are not subject to the scope of the antidumping duty order on butt-weld pipe fittings from China based on the evidence on the record in this inquiry. Additionally, Commerce determines that butt-weld pipe fittings from China that undergo the first and second stages of production in China (unfinished fittings) and the third stage of production in Vietnam are subject to the scope of the antidumping duty order.
Applicable October 10, 2023.
Miranda Bourdeau, AD/CVD Operations Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2021.
On June 23, 2023, Commerce published in the
For a complete description of the events that followed the
The merchandise covered by the
The products subject to this inquiry are rough and unfinished fittings originating in China and processed into butt-weld pipe fittings through two production scenarios in Vietnam.
All issues raised in the case and rebuttal briefs that were submitted by parties in this inquiry are addressed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
We determine, pursuant to 19 CFR 351.227(e)(2), that rough fittings originating from China that undergo the second and third stages of production in Vietnam are not subject to the scope of the
As stated above, Commerce has made an affirmative finding that unfinished fittings originating from China that undergo the third stage of production in Vietnam, which were the subject of this referral from CBP, are subject to the scope of the
In accordance with section 517(b)(4)(B) of the Act, we will notify CBP of the final results of this covered merchandise inquiry. Commerce will direct CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of unfinished fittings from China that undergo the third stage of production in Vietnam entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This notice is issued and published pursuant to section 517 of the Act and 19 CFR 351.227(e)(2).
The Coral Reef Conservation Program, Office for Coastal Management, National Ocean Service, National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice of meeting; request for comments.
NOAA and the Department of Interior (DOI) will hold the 47th meeting of the U.S. Coral Reef Task Force (USCRTF). NOAA and DOI will be accepting oral and written comments.
NOAA and DOI will hold a public meeting on Thursday, October 26, 2023, from 8:30 a.m. to 5 p.m. Eastern Time (ET) at the Westin Frenchman's Reef Hotel, 5 Estate Bakkeroe, St. Thomas 00802, U.S. Virgin Islands. Written comments must be received before 8 a.m. ET on October 25, 2023.
Comments may be submitted by the following methods:
The oral and written comments NOAA and DOI receive are considered part of the public record, and the entirety of the comment, including the name of the commenter, email address, attachments, and other supporting materials, will be publicly accessible. Sensitive personally identifiable information, such as account numbers and Social Security numbers, should not be included with the comment. Comments that are not related to the U.S. Coral Reef Task Force or that contain profanity, vulgarity, threats, or other inappropriate language will not be considered.
Michael Lameier, NOAA USCRTF Steering Committee Point of Contact, NOAA Coral Reef Conservation Program, (410) 267-5673,
The meeting provides a forum for coordinated planning and action among Federal agencies, State and Territorial governments, and non-governmental partners. Registration is requested to participate in the meeting. This meeting has time allotted for public oral comment from 12:30 p.m. to 1 p.m. ET. A written summary of the meeting will be posted on the USCRTF website within two months of occurrence. For more information about the meeting, registering for the meeting, and submitting public comments,
Wednesday, October 11, 2023—10:00 a.m. (See
Room 420, Bethesda Towers, 4330 East West Highway, Bethesda, MD.
Commission Meetings—Open to the Public.
A live webcast of the meetings can be viewed at the following link:
Alberta E. Mills, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, 301-504-7479 (Office) or 240-863-8938 (Cell).
Defense Acquisition Regulations System, Department of Defense (DoD).
Notice and request for public comments.
On behalf of the U.S. Government, DoD is contemplating negotiating and concluding a new Reciprocal Defense Procurement Agreement with the Republic of India. DoD is requesting industry feedback regarding its experience in public defense procurements conducted by or on behalf of the Indian Ministry of Defence or Armed Forces.
Comments must be received November 9, 2023.
Submit comments by email to
Mr. Greg Snyder, telephone +1-571-217-4920.
DoD has concluded Reciprocal Defense Procurement (RDP) Agreements with 28 qualifying countries, as defined in the Defense Federal Acquisition Regulation Supplement (DFARS) 225.003, at the level of the Secretary of Defense and his counterpart. The purpose of an RDP Agreement is to promote rationalization, standardization, interchangeability, and interoperability of conventional defense equipment with allies and other friendly governments. These Agreements provide a framework for ongoing communication regarding market access and procurement matters that enhance effective defense cooperation.
RDP Agreements generally include language by which the Parties agree that their defense procurements will be conducted in accordance with certain implementing procedures. These procedures relate to—
• Publication of notices of proposed purchases;
• The content and availability of solicitations for proposed purchases;
• Notification to each unsuccessful offeror;
• Feedback, upon request, to unsuccessful offerors concerning the reasons they were not allowed to participate in a procurement or were not awarded a contract; and
• Provision for the hearing and review of complaints arising in connection with any phase of the procurement process to ensure that, to the extent possible, complaints are equitably and expeditiously resolved.
Based on the Agreement, each country affords the other country certain benefits on a reciprocal basis consistent with national laws and regulations. The benefits that the United States accords to the products of qualifying countries include—
• Offers of qualifying country end products are evaluated without applying the price differentials otherwise required by the Buy American statute and the Balance of Payments Program;
• The chemical warfare protection clothing restrictions in 10 U.S.C. 4862 and the specialty metals restriction in 10 U.S.C. 4863 do not apply to products manufactured in a qualifying country; and
• Customs, taxes, and duties are waived for qualifying country end products and components of defense procurements.
If DoD (for the U.S. Government) concludes a new RDP Agreement with the Republic of India and DoD executes
While DoD is evaluating India's laws and regulations in this area, DoD would benefit from U.S. industry's experience in participating in Indian public defense procurements. DoD is, therefore, asking U.S. firms that have participated or attempted to participate in procurements by or on behalf of India's Ministry of Defence and Armed Forces to let us know if the procurements were conducted with transparency, integrity, fairness, and due process in accordance with published procedures, and if not, the nature of the problems encountered.
DoD is also interested in comments relating to the degree of reciprocity that exists between the United States and India when it comes to the openness of defense procurements to offers of products from the other country. Further, DoD would like to understand the degree to which U.S. industry feels that it would have equal and proportional access to the Indian market as India would have under an RDP Agreement.
Joint Rules of Appellate Procedure for Courts of Criminal Appeals (JRAP) Committee, Department of Defense.
Notice of availability; changes to the JRAP.
This notice announces proposed changes to the JRAP, which prescribe uniform rules of procedure for Courts of Criminal Appeals. Although these rules of practice and procedure fall within the Administrative Procedure Act's exemptions for notice and comment, the Department, as a matter of policy, has decided to make these changes available for public review and comment before they are implemented. The proposed changes are a refinement of the JRAP effective January 1, 2019 and implement statutory changes expanding the jurisdiction of Courts of Criminal Appeals and creating special trial counsel. The approval authorities for these changes are the Judge Advocates General of the Army, Navy, Air Force, and Coast Guard.
Comments on the proposed changes must be received no later than November 9, 2023.
The changes to the JRAP are available for review on
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Christopher Robin Jaramillo, (202) 685-7695,
The National Defense Authorization Act (NDAA) for Fiscal Year 2022 included several significant amendments to the Uniform Code of Military Justice (UCMJ), 10 U.S.C. 801
• Added 10 U.S.C. 824a, creating the Office of the Special Trial Counsel, with exclusive authority over certain victim-centric offenses, known as “covered offenses.”
• Amended 10 U.S.C. 866 to expand the jurisdiction of the Courts of Criminal Appeals to all courts-martial resulting in a guilty verdict.
The Joint Rules of Appellate Procedure for Courts of Criminal Appeals (JRAP) Committee convened and suggested numerous changes to the JRAP, both to reflect these changes to the UCMJ and to clarify several issues that have been raised by practitioners since the previous version of the JRAP became effective on January 1, 2019.
Beyond incorporating the role of the Office of the Special Trial Counsel in appellate procedure, some of the more significant changes to the JRAP include:
○ Changes to Rule 5 to reflect the Courts' expanded jurisdiction.
○ Changes to Rule 6 to reflect what the record on appeal will be for the new types of appeals.
○ Changes to Rule 16 to clarify procedures for waiver or withdrawal of appellate review.
○ Changes to Rule 18:
To expand on what is required for
To create procedures for new types of appeals under the Courts' expanded jurisdiction.
○ Changes to Rule 23 to clarify when the Court will consider factual material not otherwise in the record.
○ Changes to Rule 31 to clarify what is required for a Motion for Reconsideration.
Public participation is essential to effective governance and all comments and material received during the comment period will be considered. Your comment can help shape the outcome of the changes to the JRAP. If you submit a comment, please include the docket number for this document, indicate the specific section of this JRAP to which each comment applies, and provide a reason for each suggestion or recommendation.
Submitting comments. You may submit comments through the Federal Docket Management Portal at
To view the JRAP mentioned in this notice of availability as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in the online docket and can be viewed by following instructions on the
Comments posted to
U.S. Election Assistance Commission (EAC).
Notice; request for comment.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the U.S. Election Assistance Commission (EAC) gives notice that it is requesting from the Office of Management and Budget (OMB) approval for the information collection EAC Help America Vote College Program (HAVCP) Poll Worker and Service Day Mini-grant Program Applications.
Comments must be received by 5 p.m. Eastern on Monday, November 6, 2023.
To view the proposed EAC HAVCP application forms and reporting instruments, see:
Written comments and recommendations for the proposed information collection should be sent to
This proposed information collection was previously published in the
The EAC Office of Grants Management (EAC/OGM) is responsible for distributing, monitoring and providing technical assistance to states and grantees on the use of federal funds. EAC/OGM also reports on how the funds are spent to Congress, negotiates indirect cost rates with grantees, and resolves audit findings on the use of Help America Vote Act of 2002 (HAVA) funds.
The U.S. Election Assistance Commission (EAC) anticipates the availability of $1 million dollars in discretionary grant funding to support the Help America Vote College Program (HAVCP). The HAVCP grant competition is split into two separate grant programs: the HAVCP Poll Worker Grant and the HAVCP Service Day Mini-Grant. Applicant organizations may only apply for one of the two programs. The purpose of the HAVCP Poll Worker Grant is to encourage college students to assist state and local governments in the administration of elections by serving as nonpartisan poll workers or assistants, and to encourage jurisdictions to utilize these efforts. The purpose of the HAVCP Service Day Mini-Grant is to elevate civic participation on college campuses through a day of service and inspire college students to volunteer their time and talents to ensure safe, secure, accessible, and transparent elections. Each program within the EAC Help America Vote College Program has a tailored set of application packages and progress reports based on the needs and aims of the program. A list of documents covered in this information collection for each program is included below.
These application packages provide the instruments necessary to collect competitive applications with program-specific information necessary for the College Program. Supporting guidance and instructions are included as applicant resources and to reduce the administrative burden of applying for federal funds.
We are soliciting public comments to permit the EAC to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Office of Grants Management.
• Evaluate the accuracy of our estimate of burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
OMB approval is requested for 3 years.
The estimated cost of the annualized cost of this burden is: $26,762.10, which is calculated by taking the annualized burden (1,110 hours) and multiplying by an hourly rate of $24.11 (GS-8/Step 5 hourly basic rate).
U.S. Department of Energy.
Notice of request for comments.
The Department of Energy (DOE) invites public comment on a proposed collection of information that DOE is developing for submission to the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act of 1995.
Comments regarding this proposed information collection must be received on or before December 11, 2023. If you anticipate any difficulty in submitting comments within that period, contact the person listed in the
Written comments may be sent to Bonneville Power Administration, Attn: Stephanie Noell, Privacy Program, CGI-7, P.O. Box 3621, Portland, OR 97208-3621, or by email at
Stephanie Noell, Privacy Program, CGI-7, P.O. Box 3621, Portland, OR 97208-3621, (503) 230-3881, or
This information collection request contains:
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This document of the Department of Energy was signed on September 25, 2023, by Rachel L. Hull, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Take notice that on September 22, 2023, El Paso Natural Gas Company, L.L.C. (EPNG) filed a prior notice request for authorization, in accordance with sections 157.205, 157.208 and 157.210, of the Federal Energy Regulatory Commission's (Commission) regulations under the Natural Gas Act and Discovery's blanket certificate
In addition to publishing the full text of this document in the
Any questions concerning this request should be directed to: Francisco Tarin Director, Regulatory, El Paso Natural Gas Company, L.L.C., Two North Nevada Avenue, Colorado Springs, Colorado 80903, or call (719) 667-7515, or via email to
There are three ways to become involved in the Commission's review of this project: you can file a protest to the project, you can file a motion to intervene in the proceeding, and you can file comments on the project. There is no fee or cost for filing protests, motions to intervene, or comments. The deadline for filing protests, motions to intervene, and comments is 5:00 p.m. Eastern Time on December 1, 2023. How to file protests, motions to intervene, and comments is explained below.
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Pursuant to section 157.205 of the Commission's regulations under the NGA,
Protests must comply with the requirements specified in section 157.205(e) of the Commission's regulations,
Any person has the option to file a motion to intervene in this proceeding. Only intervenors have the right to request rehearing of Commission orders issued in this proceeding and to subsequently challenge the Commission's orders in the U.S. Circuit Courts of Appeal.
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
All timely, unopposed motions to intervene are automatically granted by operation of Rule 214(c)(1). Motions to intervene that are filed after the intervention deadline are untimely and may be denied. Any late-filed motion to intervene must show good cause for being late and must explain why the time limitation should be waived and provide justification by reference to factors set forth in Rule 214(d) of the Commission's Rules and Regulations. A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies (paper or electronic) of all documents filed by the applicant and by all other parties.
Any person wishing to comment on the project may do so. The Commission considers all comments received about the project in determining the appropriate action to be taken. To ensure that your comments are timely and properly recorded, please submit your comments on or before December 1, 2023. The filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding.
There are two ways to submit protests, motions to intervene, and comments. In both instances, please reference the Project docket number CP23-546-000 in your submission.
(1) You may file your protest, motion to intervene, and comments by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your submission by mailing it to the address below. Your submission must reference the Project docket number CP23-546-000.
The Commission encourages electronic filing of submissions (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail or email (with a link to the document) at: Francisco Tarin Director, Regulatory, El Paso Natural Gas Company, L.L.C., Two North Nevada Avenue, Colorado Springs, Colorado 80903, or call (719) 667-7515, or via email to
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
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k. With this notice, we are initiating informal consultation with the U.S. Fish and Wildlife Service and National Marine Fisheries Service under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR part 402; and National Marine Fisheries Service under section 305(b) of the Magnuson-Stevens Fishery Management and Conservation Act and implementing regulations at 50 CFR part 600.920. We are also initiating consultation with the Idaho State Historic Preservation Officer, as required by section 106, National Historic Preservation Act, and the implementing regulations of the Advisory Council on Historic Preservation at 36 CFR part 800.2.
l. With this notice, we are designating Idaho Falls Power as the Commission's non-Federal representative for carrying out informal consultation pursuant to section 7 of the Endangered Species Act, the Magnuson-Stevens Fishery Management and Conservation Act, and section 106 of the National Historic Preservation Act.
m. Idaho Falls Power filed with the Commission a Pre-Application Document (PAD; including a proposed process plan and schedule), pursuant to 18 CFR part 5.6 of the Commission's regulations.
n. A copy of the PAD may be viewed on the Commission's website (
You may register online at
o. With this notice, we are soliciting comments on the PAD and Commission staff's Scoping Document 1 (SD1), as well as study requests. All comments on the PAD and SD1, and study requests should be sent to the address above in paragraph h. In addition, all comments on the PAD and SD1, study requests, requests for cooperating agency status, and all communications to and from Commission staff related to the merits of the potential application must be filed with the Commission.
The Commission strongly encourages electronic filing. Please file all documents using the Commission's eFiling system at
All filings with the Commission must bear the appropriate heading: “Comments on Pre-Application Document,” “Study Requests,” “Comments on Scoping Document 1,” “Request for Cooperating Agency Status,” or “Communications to and from Commission Staff.” Any individual or entity interested in submitting study requests, commenting on the PAD or SD1, and any agency requesting cooperating status must do so by November 30, 2023.
p. The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202)502-6595 or
q. The Commission's scoping process will help determine the required level of analysis and satisfy the National Environmental Policy Act (NEPA) scoping requirements, irrespective of whether the Commission prepares an environmental assessment or environmental impact statement.
Commission staff will hold two scoping meetings in the vicinity of the project at the time and place noted below. The daytime meeting will focus on resource agency, Indian tribes, and non-governmental organization concerns, while the evening meeting is primarily for receiving input from the public. We invite all interested individuals, organizations, and agencies to attend one or both of the meetings, and to assist staff in identifying particular study needs, as well as the scope of environmental issues to be addressed in the environmental document. The times and locations of these meetings are as follows:
Scoping Document 1 (SD1), which outlines the subject areas to be addressed in the environmental document, was mailed to the individuals and entities on the Commission's mailing list. Copies of SD1 will be available at the scoping meetings, or may be viewed on the web at
The applicant and Commission staff will conduct an environmental site review of the project on Wednesday, October 25, 2023, starting at 1 p.m. (MDT).
All interested individuals, agencies, tribes, and NGOs are invited to attend. All participants are responsible for their own transportation to/from the project and during the site visit. Participants should meet at 1 p.m. at the Idaho Falls Power offices at 140 S Capital Avenue, Idaho Falls, ID 83402. Please contact Richard Malloy with Idaho Falls Power at (208) 612-8428, or via email at
At the scoping meetings, staff will: (1) initiate scoping of the issues; (2) review and discuss existing conditions and resource management objectives; (3) review and discuss existing information and identify preliminary information and study needs; (4) review and discuss the process plan and schedule for pre-filing activity that incorporates the time frames provided for in part 5 of the Commission's regulations and, to the extent possible, maximizes coordination of Federal, State, and Tribal permitting and certification processes; and (5) discuss the appropriateness of any Federal or State agency or Indian Tribe acting as a cooperating agency for development of an environmental document.
Meeting participants should come prepared to discuss their issues and/or concerns. Please review the PAD in preparation for the scoping meetings. Directions on how to obtain a copy of the PAD and SD1 are included in item n. of this document.
Commission staff are moderating the scoping meetings. The meetings are recorded by an independent stenographer and become part of the formal record of the Commission proceeding on the project. Individuals, NGOs, Indian tribes, and agencies with environmental expertise and concerns are encouraged to attend the meeting and to assist the staff in defining and clarifying the issues to be addressed in the NEPA document.
Take notice that on September 15, 2023, Bison Pipeline LLC (Bison), 700 Louisiana Street, Suite 1300, Houston, Texas 77002-2700, filed an application, in Docket No. CP23-543-000, under section 7(b) of the Natural Gas Act (NGA) and part 157 of the Commission's regulations requesting authorization to abandon 300,000 dekatherms per day (Dth/day) of existing unsubscribed capacity by lease to Wyoming Interstate Company, LLC (WIC) pursuant to the terms of a capacity lease agreement between Bison and WIC.
Also, take notice that on September 15, 2023, Northern Border Pipeline Company (Northern Border), 700 Louisiana Street, Suite 1300, Houston, Texas 77002-2700, filed an application, in Docket No. CP23-544-000, under sections 7(b) and 7(c) of the NGA and part 157 of the Commission's regulations requesting authorization for its Bison XPress Project, located in McKenzie, Dunn, and Morton Counties, North Dakota. The proposed Bison XPress Project consists of the replacement and expansion of compression facilities at Northern
Finally, take notice that on September 18, 2023, WIC, Post Office Box 1087, Colorado Springs, Colorado, 80944, and Fort Union Gas Gathering, LLC (FUGG), 569 Brookwood Village, Suite 749, Birmingham, Alabama 35209 filed a joint application, in Docket No. CP23-545-000, under section 7(c) of the NGA and part 157 of the Commission's regulations requesting authorization for WIC to lease 300,000 Dth/day of capacity on the Northern Border, Bison, and FUGG pipeline systems. Additionally, FUGG requests a limited jurisdiction certificate authorizing it to allow WIC to transport interstate natural gas on FUGG's gathering system without subjecting FUGG's gathering operations to the Commission's NGA jurisdiction, all as more fully set forth in these applications which are on file with the Commission and open for public inspection.
In addition to publishing the full text of this document in the
Any questions regarding the proposed projects in Docket Nos. CP23-543-000 and CP23-544-000 should be directed to David A. Alonzo, Manager, Project Authorizations, Bison Pipeline LLC and Northern Border Pipeline Company, 700 Louisiana Street, Suite 1300, Houston, Texas 77002-2700, by phone at (832) 320-5477, or by email at
Pursuant to section 157.9 of the Commission's Rules of Practice and Procedure,
There are three ways to become involved in the Commission's review of this project: you can file comments on the project, you can protest the filing, and you can file a motion to intervene in the proceeding. There is no fee or cost for filing comments or intervening. The deadline for filing a motion to intervene is 5:00 p.m. Eastern Time on October 23, 2023. How to file protests, motions to intervene, and comments is explained below.
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Any person wishing to comment on the project may do so. Comments may include statements of support or objections, to the project as a whole or specific aspects of the project. The more specific your comments, the more useful they will be.
Pursuant to sections 157.10(a)(4)
To ensure that your comments or protests are timely and properly recorded, please submit your comments on or before October 23, 2023.
There are three methods you can use to submit your comments or protests to the Commission. In all instances, please reference the Project docket numbers CP23-543-000, CP23-544-000, and CP23-545-000 in your submission.
(1) You may file your comments electronically by using the eComment feature, which is located on the Commission's website at
(2) You may file your comments or protests electronically by using the eFiling feature, which is located on the Commission's website (
(3) You can file a paper copy of your comments or protests by mailing them to the following address below. Your written comments must reference the Project docket numbers (CP23-543-000, CP23-544-000, and CP23-545-000).
The Commission encourages electronic filing of comments (options 1 and 2 above) and has eFiling staff
Persons who comment on the environmental review of this project will be placed on the Commission's environmental mailing list, and will receive notification when the environmental documents (EA or EIS) are issued for this project and will be notified of meetings associated with the Commission's environmental review process.
The Commission considers all comments received about the project in determining the appropriate action to be taken. However, the filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding. For instructions on how to intervene, see below.
Any person, which includes individuals, organizations, businesses, municipalities, and other entities,
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
There are two ways to submit your motion to intervene. In both instances, please reference the Project docket numbers CP23-543-000, CP23-544-000, and CP23-545-000 in your submission.
(1) You may file your motion to intervene by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your motion to intervene, along with three copies, by mailing the documents to the address below. Your motion to intervene must reference the Project docket numbers CP23-543-000, CP23-544-000, and CP23-545-000.
The Commission encourages electronic filing of motions to intervene (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail or email at: David A. Alonzo, Manager, Project Authorizations, Bison Pipeline LLC and Northern Border Pipeline Company, 700 Louisiana Street, Suite 1300, Houston, Texas 77002-2700, or at
Any subsequent submissions by an intervenor must be served on the applicant and all other parties to the proceeding. Contact information for parties can be downloaded from the service list at the eService link on FERC Online. Service can be via email with a link to the document.
All timely, unopposed
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
This is a supplemental notice in the above-referenced proceeding of Toms River Net Meter Solar, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426,
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is October 23, 2023.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically may mail similar pleadings to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Hand delivered submissions in docketed proceedings should be delivered to Health and Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852.
In addition to publishing the full text of this document in the
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following Complaints and Compliance filings in EL Dockets:.
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Take notice that the Commission has received the following Natural Gas and Oil Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful
Notice of Open Meeting of the Advisory Committee of the Export-Import Bank of the United States (EXIM).
Wednesday, October 18 from 4:00-4:30 p.m. EDT. A joint meeting of the EXIM Advisory Committee, Sub-Saharan Africa Advisory Committee, and EXIM Advisory Councils will be held from 4:00-4:30 p.m. EDT.
The Washington Hilton Hotel, 1919 Connecticut Ave. NW, Washington, DC 20009 and Virtual. The meeting will be held in person for committee members, EXIM's Board of Directors and support staff, and virtually for all other participants.
Virtual Public Participation: The meeting will be open to public participation virtually and time will be allotted for questions or comments submitted online. Members of the public may also file written statements before or after the meeting to
Interested parties may register for the meeting at:
Discussion of EXIM policies and programs to provide competitive financing to expand United States exports and comments for inclusion in EXIM's Report to the U.S. Congress on Global Export Credit Competition.
For further information, contact India Walker, External Engagement Specialist, at 202-480-0062 or
Notice of Open Meeting of the Advisory Committee of the Export-Import Bank of the United States (EXIM).
Wednesday, October 18, 2023, from 4:30-6:00 p.m. EDT.
Washington Hilton Hotel, 1919 Connecticut Ave. NW, Washington, DC 20009.
Discussion of EXIM policies and programs to provide competitive financing to expand United States exports and comments for inclusion in EXIM's Report to the U.S. Congress on Global Export Credit Competition.
For further information, contact India Walker, External Enagagement Specialist, at 202-480-0062 or at
Notice of Open Meeting of the Sub-Saharan Africa Advisory Committee of the Export-Import Bank of the United States (EXIM).
Wednesday, October 18th from 4:30 p.m.-6:00 p.m. EDT.
Hybrid meeting—Washington Hilton Hotel, 1919 Connecticut Ave. NW, Washington, DC 20009 and Virtual. The meeting will be held in person for committee members, EXIM's Board of Directors and support staff, and virtually for all other participants.
Virtual Public Participation: The meeting will be open to public participation virtually and time will be allotted for questions or comments submitted online. Members of the public may also file written statements before or after the meeting to
Interested parties may register for the meeting at:
Discussion of EXIM policies and programs designed to support the expansion of financing support for U.S. manufactured goods and services in Sub-Saharan Africa.
For further information, contact India Walker, External Engagement Specialist, at 202-480-0062 or
Export Import Bank of the United States.
Notice of a new system of records.
Pursuant to the Privacy Act of 1974, the Export Import Bank of the United States (“EXIM”, “EXIM Bank”, or “The Bank”) is proposing a new system of records notice (“SORN”). EXIM Bank is proposing a new system of records—EXIM AgilQuest. This new SORN will include the authorities for maintenance of the system, the purposes of the system, and the categories of entities and individuals covered by the system. The new system of records described in this notice, EXIM AgilQuest, will collect information for current employees and contractors of the Bank to support a hybrid (onsite & telework) working environment.
The system of records described herein will become effective October 10, 2023. The deadline to submit comments on this system of records, as well as the date on which the below routine uses will become effective, will be 30 days after
You may submit written comments to EXIM Bank by any of the following methods:
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Commenters are strongly encouraged to submit public comments electronically. EXIM Bank expects to have limited personnel available to process public comments that are submitted on paper through mail. Until further notice, any comments submitted on paper will be considered to the extent practicable.
All submissions must include the agency's name (Export Import Bank of the United States, or EXIM Bank) and reference this notice. Comments received will be posted without change to EXIM Bank's website. Do not submit comments that include any Personally Identifiable Information (PII) or confidential business information. Copies of comments may also be obtained by writing to the Freedom of Information Act Office and the Office of Information Management and Technology, Export Import Bank of the United States, 811 Vermont Ave. NW, Washington, DC 20571.
The Office of the General Counsel, Administrative Law Group at
The new system of records described in this notice, EXIM AgilQuest, will store certain information of current employees and contractors of the Bank to support a hybrid (onsite & telework) working environment. The report of a new system of records has been submitted to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Office of Management and Budget, pursuant to OMB Circular A-108, “Federal Agency Responsibilities for Review, Reporting, and Publication under the Privacy Act” (Dec. 2016) and the Privacy Act, 5 U.S.C. 552a(r).
System Name: EXIM AgilQuest, System Number: N/A
Unclassified.
This electronic system will be used via a web interface and mobile application by the Export Import Bank of the United States, 811 Vermont Avenue NW, Washington, DC 20571. The physical location and technical operation of the system is at the FedRAMP Authorized Amazon Web Services (AWS) cloud services facility at 410 Terry Ave N, Seattle, WA 98109-5210.
Tomeka Wray, Vice President of Operations, EXIM Bank, 811 Vermont Avenue NW, Washington, DC 20571,
Export-Import Bank Act of 1945, as amended (12 U.S.C. 635
The purpose of this system of records is to facilitate the hybrid workforce environment by allowing EXIM employees and contractors to reserve agency workspaces such as “Touchdown Spaces”, “Collaboration Spaces/Meeting Rooms”, and Information Technology (IT) assets. The system will provide employees with increased flexibility and access to workspaces while providing the agency with space utilization information to make data-driven decisions for facilities operations and capital planning.
The EXIM AgilQuest system will contain information on EXIM current employees and contractors.
The EXIM AgilQuest system will contain Personally Identifiable Information (PII) of EXIM current employees and contractors, necessary to obtain an account and reserve workspaces relevant to their division and job functions. Records maintained in this system may contain employee and contractor information including, but not limited to, name, agency email address, agency phone number, location (
Information in this system is obtained using one of three methods: manual entry by an administrator user, direct database connection to supply the required information, and through employee or contractor entry of optional data to their individual profile.
In addition to those disclosures that are generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed to authorized entities, as is determined to be relevant and necessary, outside EXIM as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
1. Appropriate agencies, entities, and persons when (a) the Bank suspects or has confirmed that there has been a breach of the system of records; (b) the Bank has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the Bank (including its information systems, programs, and operations), the Federal Government, or national security; and (c) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the Bank's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
2. Another Federal agency or Federal entity, when the Bank determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (a) responding to a suspected or confirmed breach or (b) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
3. The Office of the President in response to an inquiry from that office made at the request of the subject of a record or a third party on that person's behalf.
4. Congressional offices in response to an inquiry made at the request of the individual to whom the record pertains.
5. Contractors or other authorized individuals performing work on a contract, service, cooperative agreement, job, or other activity on behalf of the
6. The U.S. Department of Justice (DOJ) for its use in providing legal advice to the Bank or in representing the Bank in a proceeding before a court, adjudicative body, or other administrative body, where the use of such information by the DOJ is deemed by the Bank to be relevant and necessary to the advice or proceeding, and in the case of a proceeding, such proceeding names as a party in interest: (a) The Bank; (b) Any employee of the Bank in his or her official capacity; (c) Any employee of the Bank in his or her individual capacity where DOJ has agreed to represent the employee; or (d) The United States, where the Bank determines that litigation is likely to affect the Bank or any of its components.
7. A court, magistrate, or administrative tribunal during an administrative proceeding or judicial proceeding, including disclosures to opposing counsel or witnesses (including expert witnesses) during discovery or other pre-hearing exchanges of information, litigation, or settlement negotiations, where relevant and necessary to a proceeding, or in connection with criminal law proceedings.
8. Appropriate Federal, State, local, foreign, tribal, or self-regulatory organizations or agencies responsible for investigating, prosecuting, enforcing, implementing, issuing, or carrying out a statute, rule, regulation, order, policy, or license if the record indicates a violation or a potential violation of civil or criminal law, rule, regulation, order, policy, or license.
The records are stored digitally in encrypted format in the AgilQuest Amazon Web Services (AWS) FedRAMP authorized cloud environment. AgilQuest encrypts EXIM's sensitive information (such as employee or contractor first name, last name, and email address) at rest and stores it in Amazon Relational Database Service (RDS) AWS databases. Data in transit is encrypted via TLS. AgilQuest also leverages AWS Key Management Service (KMS) to encrypt data and restrict access based on user roles and job functions. AgilQuest complies with EXIM policy which stipulates that sensitive data generated from AgilQuest must be stored on EXIM's Microsoft OneDrive and SharePoint site that are managed and protected by EXIM's Infrastructure General Support System administrative, technical, and physical controls.
Records may be retrieved by other users by using the employee's name. Records may be retrieved by administrator/superusers by the following: first or preferred name, last name, email address, Location (
Records are archived/disposed of during the routine data sync for individuals who are no longer employees or contractors of EXIM. Otherwise, records are maintained and destroyed in accordance with the National Archives and Record Administration's (“NARA”) Basic Laws and Authorities (44 U.S.C. 3301,
Information will be stored in electronic format within the AgilQuest Cloud Service Provider (CSP) Amazon Web Service (AWS). EXIM AgilQuest has configurable, layered user accounts and permissions features to ensure users have only the proper access necessary to perform their duties. Access to EXIM AgilQuest is restricted to EXIM employees and contractors who need it for their job functions. Authorized users have access only to the data and functions required to perform their job functions. AgilQuest uses AWS Key Management Service (KMS), a managed service for AgilQuest to create and control the cryptographic keys that are used to protect EXIM data. AWS KMS uses hardware security modules (HSM) to protect and validate AWS KMS keys under the FIPS 140-2 Cryptographic Module Validation Program (
AgilQuest CSP, is compliant with the Federal Risk and Authorization Management Program (FedRAMP). The PII information in EXIM AgilQuest is encrypted and stored in AWS, and the Hypertext Transfer Protocol Secure (HTTPS) protocol is used to access EXIM AgilQuest.
Requests to access records under the Privacy Act must be submitted in writing and must be signed by the requestor. Requests should be addressed to the Freedom of Information Act Office and the Office of Information Management and Technology, Export Import Bank of the United States, 811 Vermont Ave. NW, Washington, DC 20571. The request must comply with the requirements of 12 CFR 404.14.
Individuals seeking to contest and/or amend records under the Privacy Act must submit a request in writing. The request must be signed by the requestor and should be addressed to the Freedom of Information Act Office and the Office of Information Management and Technology, Export Import Bank of the United States, 811 Vermont Ave. NW, Washington, DC 20571. The request must comply with the requirements of 12 CFR 404.14.
Individuals wishing to determine whether this system of records contains information about them may do so by submitting a written request to the Freedom of Information Act Office and the Office of Information Management and Technology, Export Import Bank of the United States, 811 Vermont Ave. NW, Washington, DC 20571. The written request must include the following:
1. Name.
2. Type of information requested.
3. Address to which the information should be sent.
4. Signature.
None.
None.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
Written PRA comments should be submitted on or before December 11, 2023. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele, (202) 418-2991.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
Written PRA comments should be submitted on or before December 11, 2023. If you anticipate that you will be submitting comments but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
The Commission adopted rules to implement the reforms it adopted in the
Section 1.21004(a) of the Commission's rules requires each winning bidder in an auction for universal service support to apply for the support it won by the applicable deadline. Sections 54.1005(b) and 54.1006 require a winning bidder to submit, using FCC Form 680, ownership information, proof of its status as an Eligible Telecommunications Carrier, a description of its spectrum access, a detailed project description, any guarantee of performance that the Commission may require, and various certifications. Sections 54.1004(d)(3) and 54.1008(d) require a winning bidder to certify in its application that it has substantively engaged appropriate Tribal officials. In addition, sections 54.1007(a) and (b) require a winning bidder to obtain and submit to the Commission an irrevocable standby letter of credit, which the winning bidder must maintain until at least 120 days after the winning bidder receives its final distribution of support.
The information collection requirements ensure that a winning bidder submits an application for the universal service support it won, and the Commission uses the information submitted in the application to determine whether the applicant is legally, technically, and financially qualified to receive such support. The requirement that a winning bidder obtain, submit, and maintain a letter of credit will secure a return of universal service funds from a winning bidder that defaults on its obligations and will protect the integrity of the universal service programs. Without such information, the Commission could not determine whether to disburse universal service support to a winning bidder or protect the government's interest in the funds allocated for Mobility Fund Phase I and Tribal Mobility Fund Phase I.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
Written PRA comments should be submitted on or before December 11, 2023. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele, (202) 418-2991.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
This study's collection of information on actual speeds and performance of fixed and mobile broadband connections delivered to consumers by ISPs has been reported to be of great value to academic researchers, manufacturers and technology providers, broadband providers, public interest groups and other diverse stakeholders. Validation of fixed broadband subscribed speeds as opposed to actual speeds by participating ISPs remains unique to this program and provides a context for measured speeds. Mobile broadband performance information is measured using the FCC Speed Test app for Android and iOS devices to test the upload and download speeds, latency and packet loss, as well as the wireless performance characteristics of the broadband connection and the kind of handsets and versions of operating systems tested. Information the FCC Speed Test App (“Application”) collects is limited to information used to measure volunteers' mobile broadband service and no personally identifiable information, such as subscribers' name, phone number or unique identifiers associated with a device is collected. Software-based tools and online tools exist that can test consumer's broadband connections, including a set of consumer tools launched by the FCC in conjunction with the National Broadband Plan. However, these tools track speeds experienced by consumers, rather than speeds delivered directly to a consumer by an ISP. The distinction is important for supporting Agency broadband policy analysis, as ISPs advertise speeds and performance delivered rather than speeds experienced, which suffers from degradation outside of an ISP's control. No other dedicated panel of direct fixed and mobile broadband performance measurement using publicly documented methodologies using free and add-free technologies exists today in the country. The program will continue to support existing software-based tools and online tools but the focus of the program will remain the direct measurement of broadband performance delivered to the consumer. The collection effort also has specific elements focused on further network performance statistics, time of day parameters, and other elements affecting consumers' broadband experience that are not tracked elsewhere. The information to be confirmed by ISP Partners about their subscribers or technical and market data regarding the broadband services they provide is unavailable from other sources.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before November 9, 2023.
Comments should be sent to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
On February 2, 2011, the FCC released a Report and Order and Further Notice of Proposed Rulemaking, GC Docket Number 10-43, FCC 11-11, which amended and reformed the Commission's rules on ex parte presentations (47 CFR 1.1206(b)(2)) made in the course of Commission rulemakings and other permit-but-disclose proceedings. The modifications to the existing rules adopted in this Report and Order require that parties file more descriptive summaries of their ex parte contacts, by ensuring that other parties and the public have an adequate opportunity to review and respond to information submitted ex parte, and by improving the FCC's oversight and enforcement of the ex parte rules. The modified ex parte rules which contain information collection requirements which OMB approved on December 6, 2011, are as follows: (1) Ex parte notices will be required for all oral ex parte presentations in permit-but-disclose proceedings, not just for those presentations that involve new information or arguments not already in the record; (2) If an oral ex parte presentation is limited to material already in the written record, the notice must contain either a succinct summary of the matters discussed or a citation to the page or paragraph number in the party's written submission(s) where the matters discussed can be found; (3) Notices for all ex parte presentations must include the name of the person(s) who made the ex parte presentation as well as a list of all persons attending or otherwise participating in the meeting at which the presentation was made; (4) Notices of ex parte presentations made outside the Sunshine period must be filed within two business days of the presentation; (5) The Sunshine period will begin on the day (including business days, weekends, and holidays) after issuance of the Sunshine notice, rather than when the Sunshine Agenda is issued (as the current rules provide); (6) If an ex parte presentation is made on the day the Sunshine notice is released, an ex parte notice must be submitted by the next business day, and any reply would be due by the following business day. If a permissible ex parte presentation is made during the Sunshine period (under an exception to the Sunshine period prohibition), the ex parte notice is due by the end of the same day on which the presentation was made, and any reply would need to be filed by the next business day. Any reply must be in writing and limited to the issues raised in the ex parte notice to which the reply is directed; (7) Commissioners and agency staff may continue to request ex parte presentations during the Sunshine period, but these presentations should be limited to the specific information required by the Commission; (8) Ex parte notices must be submitted electronically in machine-readable format. PDF images created by scanning a paper document may not be submitted, except in cases in which a word-processing version of the document is not available. Confidential information may continue to be submitted by paper filing, but a redacted version must be filed electronically at the same time the paper filing is submitted. An exception to the electronic filing requirement will be made in cases in which the filing party claims hardship. The basis for the hardship claim must be substantiated in the ex parte filing; (9) To facilitate stricter enforcement of the ex parte rules, the Enforcement Bureau is authorized to levy forfeitures for ex parte rule violations; (10) Copies of electronically filed ex parte notices must also be sent electronically to all staff and Commissioners present at the ex parte meeting so as to enable them to review the notices for accuracy and completeness. Filers may be asked to submit corrections or further information as necessary for compliance with the rules; and (11) Parties making permissible ex parte presentations in restricted proceedings must conform and clarify rule changes when filing an ex parte notice with the Commission.
The information is used by parties to permit-but-disclose proceedings, including interested members of the public, to respond to the arguments made and data offered in the presentations. The responses may then be used by the Commission in its decision-making.
The availability of the ex parte materials ensures that the Commission's decisional processes are fair, impartial, and comport with the concept of due process in that all interested parties can know of and respond to the arguments made to the decision-making officials.
The information will be collected by the Public Safety and Homeland Security Bureau, FCC, for review and analysis, to verify that covered 911 service providers are taking reasonable measures to maintain reliable 911 service. In certain cases, based on the information included in the certifications and subsequent coordination with the provider, the Commission may require remedial action to correct vulnerabilities in a service provider's 911 network if it determines that (a) the service provider has not, in fact, adhered to the best practices incorporated in the FCC's rules, or (b) in the case of providers employing alternative measures, that those measures were not reasonably sufficient to mitigate the associated risks of failure in these key areas. The Commission delegated authority to the Bureau to review certification information and follow up with service providers as appropriate to address deficiencies revealed by the certification process.
The purpose of the collection of this information is to verify that covered 911 service providers are taking reasonable measures such that their networks comply with accepted best practices, and that, in the event they are not able to certify adherence to specific best practices, that they are taking reasonable alternative measures. The Commission adopted these rules in light of widespread 911 outages during the June 2012 derecho storm in the Midwest and Mid-Atlantic states, which revealed that multiple service providers did not take adequate precautions to maintain reliable service.
ELAP required the one-time collection of location information for eligible locations within the state where the participant sought an adjustment to its defined deployment obligation. Eligible locations included both locations that qualify for support (qualifying locations), which the ELAP participant was required to report, and any additional location(s) (prospective location(s)) within eligible areas of the state that the participant wanted to reserve as part of its defined deployment obligation. The total number of eligible locations reported by the participant could not exceed the participant's defined deployment obligation for the state.
In addition, ELAP participants had to submit a description of the method(s) used to identify all qualifying locations, as well as some supporting evidence, such as copies of public records, aerial photography, location information for non-eligible locations, or similar evidence. Participants had to certify the truth and accuracy of this information.
The Bureau announced which participants had met their prima facie evidentiary standard, and the Universal Service Administrative Company (USAC) used certain location information (address, geocoordinates, number of units) filed by these participants to populate a publicly available map (public ELAP Map), which was removed from public inspection at the conclusion of the ELAP process.
Other interested parties deemed eligible to participate in ELAP (stakeholders) had the opportunity to challenge the accuracy and completeness of any relevant participant's eligible location information, although none did. To file such a challenge, stakeholders were required to submit alternative location information (of the same kind and in the same format as required of the participant), a brief description of the methods used to identify the location as an eligible location, and supporting evidence. Parties eligible to participate as stakeholders included government entities (state, local, and Tribal) as well as individuals or non-governmental entities with a legitimate and verifiable interest in ensuring broadband service in the relevant areas but excluded any entity or individual with a controlling interest in a competitor of the participant(s) being challenged.
The Bureau committed to using a third-party commercial verifier to confirm the eligibility of any stakeholder who challenged a participant's location information. The Bureau required certification that the stakeholder (exclusive of governmental entities) did not hold a controlling interest in a direct competitor of the relevant participant. The Bureau also separately gathered certain limited
All ELAP information was filed and is maintained in a new module within the High-Cost Universal Service Broadband Portal (HUBB) (OMB Control No. 3060-1228). The module had integrated instructions and guidance for submitting information. This module incorporated several features similar to those associated with the reporting of deployed location information in the HUBB. For example, the module had an automated validation system that generated error messages when the location information submitted by ELAP parties failed to meet reporting parameters (such as redundancies, required file type) as specified in the
Unlike deployed location information collected pursuant to OMB Control No. 3060-1228, all ELAP information, including the description of methods and supporting documentation as well as location data, except the location data published in the public ELAP Map, has been and will continue to be treated as presumptively confidential.
Federal Deposit Insurance Corporation.
Notice; correction.
The FDIC published a document in the
Debra A. Decker, Committee Management Officer of the FDIC, 202-898-8748.
In the
Thursday, November 2, 2023, from 9:00 a.m. to 4:00 p.m.
October 19, 2023 at 10:00 a.m.
Telephonic. Dial-in (listen only) information: Number: 1-202-599-1426, Code: 370 114 217#; or via web:
Kimberly Weaver, Director, Office of External Affairs, (202) 942-1640.
Government Publishing Office.
Notice of meeting.
The Depository Library Council (DLC) will meet virtually in conjunction with the Federal Depository Library Conference from Monday, October 16, 2023, through Wednesday, October 18, 2023. The sessions will take place from 12 p.m. to 5:30 p.m. (EDT). The meetings will take place online, and anyone can register to attend at
October 16-18, 2023.
U.S. Government Publishing Office.
Notice: Federal agencies can register for congressionally mandated reports submission portal & begin submitting reports to GPO.
The U.S. Government Publishing Office (GPO) has moved to the next phase of accepting submissions of congressionally mandated reports from Federal agencies during the month of October 2023. Agencies can now sign up for a submission portal account. Beginning on October 16th, agencies can start submitting their reports to GPO through their portal accounts. Sign up for a portal account:
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
In accordance with regulatory provisions, the Centers for Disease Control and Prevention (CDC) announces the following meeting of the Healthcare Infection Control Practices Advisory Committee (HICPAC). This is a virtual meeting. The public is welcomed to listen to the meeting live via webcast on the World Wide Web. The webcast link can be found on the HICPAC website at
The meeting will be held on November 2, 2023, 9 a.m. to 5 p.m., EDT, and November 3, 2023, 9 a.m. to 12 p.m., EDT.
The meeting will be webcast live via the World Wide Web. The webcast link can be found on the HICPAC website at
Sydnee Byrd, M.P.A., HICPAC, Division of Healthcare Quality Promotion, NCEZID, CDC, l600 Clifton Road NE, Mailstop H16-3, Atlanta, Georgia 30329, Telephone (404) 718-8039. Email:
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
The Administration for Children and Families (ACF) intends to request from the Office of Management and Budget (OMB) an extension of approval for an umbrella generic clearance for information collections related to ACF program office monitoring activities. ACF programs promote the economic and social well-being of families, children, individuals, and communities. The Generic for ACF Program Monitoring Activities allows ACF program offices to collect standardized information from recipients that receive federal funds to ensure oversight, evaluation, support purposes, and stewardship of federal funds. There are no changes proposed to
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Program offices use information collected under this generic clearance to monitor funding recipient activities and to provide support or take appropriate action, as needed. The information gathered is or will be used primarily for internal purposes, but aggregate data may be included in public materials such as Reports to Congress or program office documents. Following standard OMB requirements, ACF will submit a request for each individual data collection activity under this generic clearance. Each request will include the individual form(s) or instrument(s), a justification specific to the individual information collection, and any supplementary documents. OMB is requested to review requests within 10 days of submission.
This request will extend approval of currently approved monitoring forms. Currently approved forms and related burden can be found here:
Burden estimates for the next three years have been updated to reflect trends in use over the past three years. These are based on averages and actual individual requests will vary based on program office need.
Food and Drug Administration, HHS.
Notice; correction.
The Food and Drug Administration (FDA or Agency) is correcting a notice entitled “Food and Drug Administration Information Technology Strategy; Request for Comments” that appeared in the
Casi Alexander, Office of Digital Transformation, Food and Drug Administration, FDA Library, 5630 Fishers Lane, Rm. 1087, Rockville, MD 20857, 240-402-5171, email:
In the
On page 64436, in the third column, in the second paragraph, “Fiscal Years 2024-2026” is corrected to read “Fiscal Years 2024-2027.”
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the revocations of the Emergency Use Authorizations (EUAs) (the Authorizations) issued to Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.), for the TaqPath Monkeypox/Orthopox Virus DNA Kit, and Becton, Dickinson and Co., for the VIASURE Monkeypox virus Real Time PCR Reagents for BD MAX System. FDA revoked these Authorizations under the Federal Food, Drug, and Cosmetic Act (FD&C Act) as requested by these Authorization holders. The revocations, which include an explanation of the reasons for each revocation, are reprinted in this document.
The Authorization for the Life Technologies Corp. (a part of Thermo
Submit written requests for a single copy of the revocations to the Office of Policy, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5431, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your request or include a Fax number to which the revocations may be sent. See the
Kim Sapsford-Medintz, Office of Product Evaluation and Quality, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 3216, Silver Spring, MD 20993-0002, 301-796-0311 (this is not a toll-free number).
Section 564 of the FD&C Act (21 U.S.C. 360bbb-3) as amended by the Project BioShield Act of 2004 (Pub. L. 108-276) and the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 (Pub. L. 113-5) allows FDA to strengthen the public health protections against biological, chemical, radiological, or nuclear agent or agents. Among other things, section 564 of the FD&C Act allows FDA to authorize the use of an unapproved medical product or an unapproved use of an approved medical product in certain situations. On December 13, 2022, FDA issued the Authorization to Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.) for the TaqPath Monkeypox/Orthopox Virus DNA Kit, subject to the terms of the Authorization. Notice of the issuance of this Authorization was published in the
In a request received by FDA on April 13, 2023, Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.), requested the revocation of, and on April 18, 2023, FDA revoked, the Authorization for the Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.)'s TaqPath Monkeypox/Orthopox Virus DNA Kit. Because Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.), notified FDA that it is not commercially supporting the TaqPath Monkeypox/Orthopox Virus DNA Kit and no kit reagents were distributed in the United States and requested FDA revoke the Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.)'s TaqPath Monkeypox/Orthopox Virus DNA Kit, FDA has determined that it is appropriate to protect the public health or safety to revoke this Authorization.
In a request received by FDA on May 22, 2023, Becton, Dickinson and Co., requested the withdrawal of, and on May 24, 2023, FDA revoked, the Authorization for the Becton, Dickinson and Co.'s VIASURE Monkeypox virus Real Time PCR Reagents for BD MAX System. Because Becton, Dickinson and Co., notified FDA that it is not commercially manufacturing the VIASURE Monkeypox virus Real Time PCR Reagents for BD MAX System and no reagents were distributed in the United States and requested FDA revoke the Becton, Dickinson and Co.'s VIASURE Monkeypox virus Real Time PCR Reagents for BD MAX System, FDA has determined that it is appropriate to protect the public health or safety to revoke this Authorization.
An electronic version of this document and the full text of the revocations are available on the internet at
Having concluded that the criteria for revocation of the Authorization under section 564(g)(2)(C) of the FD&C Act are met, FDA has revoked the EUA of Life Technologies Corp. (a part of Thermo Fisher Scientific Inc.)'s TaqPath Monkeypox/Orthopox Virus DNA Kit, and Becton, Dickinson and Co.'s VIASURE Monkeypox virus Real Time PCR Reagents for BD MAX System. The revocations in their entirety follow and provide an explanation of the reasons for revocations, as required by section 564(h)(1) of the FD&C Act.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
U.S. Coast Guard, Department of Homeland Security.
Notice of Federal advisory committee meeting.
The National Chemical Transportation Safety Advisory Committee (Committee) will conduct a series of meetings over three days in League City, TX, to discuss matters relating to the safe and secure marine transportation of hazardous materials. The subcommittee meetings will also be available by videoconference for those unable to attend in person, however the full committee meeting will be held in person only. All meetings will be open to the public.
The meeting will be held at INEOS Oligomers USA, 2600 South Shore Boulevard, Suite 400, League City, TX 77573.
The National Chemical Transportation Safety Advisory Committee is committed to ensuring all participants have equal access regardless of disability status. If you require reasonable accommodation due to a disability to fully participate, please email Lieutenant Ethan Beard at
Lieutenant Ethan T. Beard, Alternate Designated Federal Officer of the National Chemical Transportation Safety Advisory Committee, telephone 202-372-1419, or email
Notice of the meeting of the National Chemical Transportation Safety Advisory Committee is in compliance with the
Two subcommittees will meet to discuss the following task statements:
(1)
(2)
Two subcommittees will meet to discuss the following task statements:
(1)
(2)
The task statements and other subcommittee information are located at Homeport at the following address:
(1) Introduction and review subcommittee task statement.
(2) Public comment period.
(3) Subcommittee discussion and preparation of any proposed recommendations for the Committee meeting on November 30, 2023.
(4) Adjournment of meeting.
The agenda for the National Chemical Transportation Safety Advisory Committee meeting on Thursday, November 30, 2023 is as follows:
(1) Call to order.
(2) Roll call and determination of quorum.
(3) Remarks from U.S. Coast Guard leadership.
(4) Chairman and Designated Federal Officer's remarks.
(5) Acceptance of June 15, 2023 meeting minutes and status of task items.
(6) Committee will review, discuss, and formulate recommendations on the following items:
a.
b.
c.
d.
(7) Subcommittee recommendation discussion.
(8)
(9) Task statement tracking discussion.
(10) Public comment period.
(11) Set next meeting date and location.
(12) Adjournment of meeting.
A copy of all meeting documentation will be available at:
Public comments or questions will be taken throughout the meetings as the Committee discusses the issues and prior to deliberations and voting. There will be a public comment period at the end of meetings. Speakers are requested to limit their comments to two minutes. Contact the individual listed in the
U.S. Customs and Border Protection, Department of Homeland Security.
General notice.
This notice advises the public that the quarterly Internal Revenue Service interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties will increase from the previous quarter. For the calendar quarter beginning October 1, 2023, the interest rates for underpayments will be 8 percent for both corporations and non-corporations. The interest rate for overpayments will be 8 percent for non-corporations and 7 percent for corporations. This notice is published for the convenience of the importing public and U.S. Customs and Border Protection personnel.
The rates announced in this notice are applicable as of October 1, 2023.
Bruce Ingalls, Revenue Division, Collection Refunds & Analysis Branch, 6650 Telecom Drive, Suite #100, Indianapolis, Indiana 46278; telephone (317) 298-1107.
Pursuant to 19 U.S.C. 1505 and Treasury Decision 85-93, published in the
The interest rates are based on the Federal short-term rate and determined by the Internal Revenue Service (IRS) on behalf of the Secretary of the Treasury on a quarterly basis. The rates effective for a quarter are determined during the first-month period of the previous quarter.
In Revenue Ruling 2023-17, the IRS determined the rates of interest for the calendar quarter beginning October 1, 2023, and ending on December 31, 2023. The interest rate paid to the Treasury for underpayments will be the Federal short-term rate (5%) plus three percentage points (3%) for a total of eight percent (8%) for both corporations and non-corporations. For overpayments made by non-corporations, the rate is the Federal short-term rate (5%) plus three percentage points (3%) for a total of eight percent (8%). For corporate overpayments, the rate is the Federal short-term rate (5%) plus two percentage points (2%) for a total of seven percent (7%). These interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties increased from the previous quarter. These interest rates are subject to change for the calendar quarter
For the convenience of the importing public and U.S. Customs and Border Protection personnel, the following list of IRS interest rates used, covering the period from July of 1974 to date, to calculate interest on overdue accounts and refunds of customs duties, is published in summary format.
U.S. Immigration and Customs Enforcement; Department of Homeland Security.
Notice.
This notice announces that the Secretary of Homeland Security (Secretary) is suspending certain regulatory requirements for F-1 nonimmigrant students whose country of citizenship is Cameroon, regardless of country of birth (or individuals having no nationality who last habitually resided in Cameroon), and who are experiencing severe economic hardship as a direct result of the current armed conflict and current humanitarian crisis in Cameroon. The Secretary is taking action to provide relief to these Cameroonian students who are in lawful F-1 nonimmigrant student status, so the students may request employment authorization, work an increased number of hours while school is in session, and reduce their course load while continuing to maintain their F-1 nonimmigrant student status. The U.S. Department of Homeland Security (DHS) will deem an F-1 nonimmigrant student granted employment authorization by means of this notice to be engaged in a “full course of study” for the duration of the employment authorization, if the nonimmigrant student satisfies the minimum course load requirement described in this notice.
This action is effective December 8, 2023, through June 7, 2025.
Sharon Snyder, Unit Chief, Policy and Response Unit, Student and Exchange Visitor Program, MS 5600, U.S. Immigration and Customs Enforcement, 500 12th Street SW, Washington, DC 20536-5600. email:
The Secretary is exercising authority under 8 CFR 214.2(f)(9) to temporarily suspend the applicability of certain requirements governing on-campus and off-campus employment for F-1 nonimmigrant students whose country of citizenship is Cameroon regardless of country of birth (or individuals having no nationality who last habitually resided in Cameroon), who are present in the United States in lawful F-1 nonimmigrant student status on the date of publication of this notice, and who are experiencing severe economic hardship as a direct result of the current armed conflict and current humanitarian crisis in Cameroon. The original notice, which suspended certain regulatory requirements for F-1 nonimmigrant students experiencing severe economic hardship as a direct result of the crisis at that time was effective from June 7, 2022, through December 7, 2023.
This notice applies exclusively to F-1 nonimmigrant students who meet all of the following conditions:
(1) Are a citizen of Cameroon regardless of country of birth (or an individual having no nationality who last habitually resided in Cameroon);
(2) Were lawfully present in the United States on the date of publication of this notice in F-1 nonimmigrant status under section 101(a)(15)(F)(i) of the Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(15)(F)(i);
(3) Are enrolled in an academic institution that is Student and Exchange Visitor Program (SEVP)-certified for enrollment for F-1 nonimmigrant students;
(4) Are currently maintaining F-1 nonimmigrant status; and
(5) Are experiencing severe economic hardship as a direct result of the current armed conflict and current humanitarian crisis in Cameroon.
This notice applies to F-1 nonimmigrant students in an approved private school in kindergarten through grade 12, public school grades 9 through 12, and undergraduate and graduate education. An F-1 nonimmigrant student covered by this notice who transfers to another SEVP-certified academic institution remains eligible for the relief provided by means of this notice.
DHS is taking action to provide relief to Cameroonian F-1 nonimmigrant students experiencing severe economic hardship due to the current armed conflict and current humanitarian crisis in Cameroon. Based on its review of country conditions in Cameroon and input received from the U.S. Department of State (DOS), DHS is taking action to allow eligible F-1 nonimmigrant students from Cameroon to request employment authorization, work an increased number of hours while school is in session, and reduce their course load while continuing to maintain F-1 nonimmigrant status.
In Cameroon's Far North region, attacks from Boko Haram and the Islamic State West Africa Province (ISWAP, aka IS-WA, aka ISIS-WA) are becoming more frequent as part of the armed conflict in that region.
According to the International Crisis Group, armed separatists continue to ambush security forces and harass aid workers in their fight to secede from the majority-Francophone country.
Armed separatists have restricted the movements of persons and goods in the Northwest and Southwest Regions, sometimes in a deliberate attempt to harass and intimidate the local population.
According to the World Bank, Cameroon suffers from weak governance, hindering its development and ability to attract investors.
According to the African Development Bank, real GDP growth decreased to 3.4 percent in 2022 from 3.6 percent in 2021. Inflation increased to 6.2 percent in 2022 from 2.3 percent in 2021, which exceeds the Central African Economic and Monetary Community (CEMAC) goal of 3 percent.
Cameroon faces a humanitarian crisis due to multiple factors including the violence in the English-speaking regions and the conflict in the Far-North region. Islamist armed groups like Boko Haram and ISWAP have continued attacks in this region, killing many civilians, and further contributing to the internal displacement of over 378,000 of Cameroonians by July 2022 alone.
According to the United Nations, “in 2023, one out of six people living in Cameroon needs humanitarian assistance and protection, a total of 4.7 million people. More than 3.2 million people are projected to face acute food insecurity in 2023.”
According to the UN OCHA, in 2023, 3 million people are estimated to be facing acute food insecurity in Cameroon.
The humanitarian situation continues to deteriorate due to the activities of armed groups that have obstructed aid agencies' access to areas they control.
As of September 19, 2023, approximately 1,160 F-1 nonimmigrant students from Cameroon are enrolled at SEVP-certified academic institutions in the United States. Given the extent of the current armed conflict and current humanitarian crisis in Cameroon, affected students whose primary means of financial support comes from Cameroon may need to be exempt from the normal student employment requirements to continue their studies in the United States. The current armed conflict and current humanitarian crisis has made it unfeasible for many students to safely return to Cameroon for the foreseeable future. Without employment authorization, these students may lack the means to meet basic living expenses.
Undergraduate F-1 nonimmigrant students who receive on-campus or off-campus employment authorization under this notice must remain registered for a minimum of six semester or quarter hours of instruction per academic term. Undergraduate F-1 nonimmigrant students enrolled in a term of different duration must register for at least one half of the credit hours normally required under a “full course of study.”
In addition, an F-1 nonimmigrant student (either undergraduate or graduate) granted on-campus or off-campus employment authorization under this notice may count up to the equivalent of one class or three credits per session, term, semester, trimester, or quarter of online or distance education toward satisfying this minimum course load requirement, unless their course of study is in an English language study program.
Yes. An F-1 nonimmigrant student who is a Cameroonian citizen, regardless of country of birth (or an individual having no nationality who last habitually resided in Cameroon), who already has on-campus or off-campus employment authorization and is otherwise eligible may benefit under this notice, which suspends certain regulatory requirements relating to the minimum course load requirement under 8 CFR 214.2(f)(6)(i) and certain employment eligibility requirements under 8 CFR 214.2(f)(9). Such an eligible F-1 nonimmigrant student may benefit without having to apply for a new Form I-766, Employment Authorization Document (EAD). To benefit from this notice, the F-1 nonimmigrant student must request that their designated school official (DSO) enter the following statement in the remarks field of the student's Student and Exchange Visitor Information System (SEVIS) record, which the student's Form I-20, Certificate of Eligibility for Nonimmigrant (F-1) Student Status, will reflect:
Approved for more than 20 hours per week of [DSO must insert “on-campus” or “off-campus,” depending upon the type of employment authorization the student already has] employment authorization and reduced course load under the Special Student Relief authorization from [DSO must insert the beginning date of the notice or the beginning date of the student's employment, whichever date is later] until [DSO must insert either the student's program end date, the current EAD expiration date (if the student is currently authorized for off-campus employment), or the end date of this notice, whichever date comes first].
No. DHS will deem an F-1 nonimmigrant student who receives and comports with the employment authorization permitted under this notice to be engaged in a “full course of study”
No. An F-2 spouse or minor child of an F-1 nonimmigrant student is not authorized to work in the United States and, therefore, may not accept employment under the F-2 nonimmigrant status, consistent with 8 CFR 214.2(f)(15)(i).
No. The suspension of the applicability of the standard regulatory requirements only applies to certain F-1 nonimmigrant students who meet the following conditions:
(1) Are a citizen of Cameroon regardless of country of birth (or an individual having no nationality who last habitually resided in Cameroon);
(2) Were lawfully present in the United States on the date of publication of this notice in F-1 nonimmigrant status, under section 101(a)(15)(F)(i) of the INA, 8 U.S.C. 1101(a)(15)(F)(i);
(3) Are enrolled in an academic institution that is SEVP-certified for enrollment of F-1 nonimmigrant students;
(4) Are maintaining F-1 nonimmigrant status; and
(5) Are experiencing severe economic hardship as a direct result of the current armed conflict and current humanitarian crisis in Cameroon.
An F-1 nonimmigrant student who does not meet all these requirements is ineligible for the suspension of the applicability of the standard regulatory requirements (even if experiencing severe economic hardship as a direct result of the current armed conflict and current humanitarian crisis in Cameroon).
Yes. This notice applies to such an F-1 nonimmigrant student, but only if the DSO has properly notated the student's SEVIS record, which will then appear on the student's Form I-20. The normal rules for visa issuance remain applicable to a nonimmigrant who needs to apply for a new F-1 visa to continue an educational program in the United States.
Yes. However, this notice does not by itself reduce the required course load for F-1 nonimmigrant students from Cameroon enrolled in kindergarten through grade 12 at a private school, or grades 9 through 12 at a public high school. Such students must maintain the minimum number of hours of class attendance per week prescribed by the academic institution for normal progress toward graduation, as required under 8 CFR 214.2(f)(6)(i)(E). The suspension of certain regulatory requirements related to employment through this notice is applicable to all eligible F-1 nonimmigrant students regardless of educational level. Eligible F-1 nonimmigrant students from Cameroon enrolled in an elementary school, middle school, or high school may benefit from the suspension of the requirement in 8 CFR 214.2(f)(9)(i) that limits on-campus employment to 20 hours per week while school is in session.
Yes. For an F-1 nonimmigrant student covered in this notice, the Secretary is suspending the applicability of the requirement in 8 CFR 214.2(f)(9)(i) that limits an F-1 nonimmigrant student's on-campus employment to 20 hours per week while school is in session. An eligible F-1 nonimmigrant student has authorization to work more than 20 hours per week while school is in session if the DSO has entered the following statement in the remarks field of the student's SEVIS record, which will be reflected on the student's Form I-20:
Approved for more than 20 hours per week of on-campus employment and reduced course load, under the Special Student Relief authorization from [DSO must insert the beginning date of this notice or the beginning date of the student's employment, whichever date is later] until [DSO must insert the student's program end date or the end date of this notice, whichever date comes first].
To obtain on-campus employment authorization, the F-1 nonimmigrant student must demonstrate to the DSO that the employment is necessary to avoid severe economic hardship directly resulting from the current armed conflict and current humanitarian crisis in Cameroon. An F-1 nonimmigrant student authorized by the DSO to engage in on-campus employment by means of this notice does not need to file any applications with U.S. Citizenship and Immigration Services (USCIS). The standard rules permitting full-time employment on-campus when school is not in session or during school vacations apply, as described in 8 CFR 214.2(f)(9)(i).
Yes. DHS will deem an F-1 nonimmigrant student who receives on-campus employment authorization under this notice to be engaged in a “full course of study”
For an F-1 nonimmigrant student covered by this notice, as provided under 8 CFR 214.2(f)(9)(ii)(A), the Secretary is suspending the following regulatory requirements relating to off-campus employment:
(a) The requirement that a student must have been in F-1 nonimmigrant student status for one full academic year to be eligible for off-campus employment;
(b) The requirement that an F-1 nonimmigrant student must demonstrate that acceptance of employment will not interfere with the student's carrying a full course of study;
(c) The requirement that limits an F-1 nonimmigrant student's employment authorization to no more than 20 hours per week of off-campus employment while the school is in session; and
(d) The requirement that the student demonstrate that employment under 8 CFR 214.2(f)(9)(i) is unavailable or otherwise insufficient to meet the needs that have arisen as a result of the unforeseen circumstances.
Yes. DHS will deem an F-1 nonimmigrant student who receives off-campus employment authorization by means of this notice to be engaged in a “full course of study”
An F-1 nonimmigrant student must file a Form I-765, Application for Employment Authorization, with USCIS to apply for off-campus employment authorization based on severe economic hardship directly resulting from the current armed conflict and current humanitarian crisis in Cameroon.
(1) This employment is necessary to avoid severe economic hardship; and
(2) The hardship is a direct result of the current armed conflict and current humanitarian crisis in Cameroon.
If the DSO agrees that the F-1 nonimmigrant student is entitled to receive such employment authorization, the DSO must recommend application approval to USCIS by entering the following statement in the remarks field of the student's SEVIS record, which will then appear on that student's Form I-20:
Recommended for off-campus employment authorization in excess of 20 hours per week and reduced course load under the Special Student Relief authorization from the date of the USCIS authorization noted on Form I-766 until [DSO must insert the program end date or the end date of this notice, whichever date comes first].
The F-1 nonimmigrant student must then file the properly endorsed Form I-20 and Form I-765 according to the instructions for the Form I-765. The F-1 nonimmigrant student may begin working off campus only upon receipt of the EAD from USCIS.
(a) The F-1 nonimmigrant student is in good academic standing and is carrying a “full course of study”
(b) The F-1 nonimmigrant student is a citizen of Cameroon, regardless of country of birth (or an individual having no nationality who last habitually resided in Cameroon), and is experiencing severe economic hardship as a direct result of the current armed conflict and current humanitarian crisis in Cameroon, as documented on the Form I-20;
(c) The F-1 nonimmigrant student has confirmed that the student will comply with the reduced course load requirements of this notice and register for the duration of the authorized employment for a minimum of six semester or quarter hours of instruction per academic term if at the undergraduate level, or for a minimum of three semester or quarter hours of instruction per academic term if the student is at the graduate level;
(d) The off-campus employment is necessary to alleviate severe economic hardship to the individual as a direct result of the current armed conflict and current humanitarian crisis in Cameroon.
(a) Ensure that the application package includes the following documents:
(1) A completed Form I-765 with all applicable supporting evidence;
(2) The required fee or properly documented fee waiver request as defined in 8 CFR 103.7(c) (Oct. 1, 2020); and
(3) A signed and dated copy of the student's Form I-20 with the appropriate DSO recommendation, as previously described in this notice; and
(b) Send the application in an envelope which is clearly marked on the front of the envelope, bottom right-hand side, with the phrase “SPECIAL STUDENT RELIEF.”
If USCIS approves the student's Form I-765, USCIS will send the student a Form I-766 EAD as evidence of employment authorization. The EAD will contain an expiration date that does not exceed the end of the granted temporary relief.
Yes. An F-1 nonimmigrant student who has not yet applied for TPS or for other relief that reduces the student's course load per term and permits an increased number of work hours per week, such as Special Student Relief,
Under the first option, the F-1 nonimmigrant student may apply for TPS according to the instructions in the USCIS notice designating Cameroon for TPS elsewhere in this issue of the
Under the second option, the F-1 nonimmigrant student may apply for an EAD under Special Student Relief by filing Form I-765 with the location specified in the filing instructions. At the same time, the F-1 nonimmigrant student may file a separate TPS application but must submit the Form I-821 according to the instructions provided in the
The F-1 nonimmigrant student must maintain normal course load requirements for a “full course of study”
There is no further application process with USCIS if a student has been approved for a TPS-related EAD. The F-1 nonimmigrant student must demonstrate and provide documentation to the DSO of the direct economic hardship resulting from the current armed conflict and current humanitarian crisis in Cameroon. The DSO will then verify and update the student's record in SEVIS to enable the F-1 nonimmigrant student with TPS to reduce the course load without any further action or application. No other EAD needs to be issued for the F-1 nonimmigrant student to have employment authorization.
Yes. Regulations permit certain students who fall out of F-1 nonimmigrant student status to apply for reinstatement.
This notice grants temporary relief until June 7, 2025,
An F-1 nonimmigrant student seeking off-campus employment authorization due to severe economic hardship resulting from the current armed conflict and current humanitarian crisis in Cameroon must demonstrate to the DSO that this employment is necessary to avoid severe economic hardship. A DSO who agrees that a nonimmigrant student should receive such employment authorization must recommend an application approval to USCIS by entering information in the remarks field of the student's SEVIS record. The authority to collect this information is in the SEVIS collection of information currently approved by the Office of Management and Budget
This notice also allows an eligible F-1 nonimmigrant student to request employment authorization, work an increased number of hours while the academic institution is in session, and reduce their course load while continuing to maintain F-1 nonimmigrant student status.
To apply for employment authorization, certain F-1 nonimmigrant students must complete and submit a currently approved Form I-765 according to the instructions on the form. OMB has previously approved the collection of information contained on the current Form I-765, consistent with the PRA (OMB Control No. 1615-0040). Although there will be a slight increase in the number of Form I-765 filings because of this notice, the number of filings currently contained in the OMB annual inventory for Form I-765 is sufficient to cover the additional filings. Accordingly, there is no further action required under the PRA.
U.S. Citizenship and Immigration Services (USCIS), Department of Homeland Security (DHS).
Notice of Temporary Protected Status (TPS) extension and redesignation.
Through this notice, the Department of Homeland Security (DHS) announces that the Secretary of Homeland Security (Secretary) is extending the designation of Cameroon for Temporary Protected Status (TPS) for 18 months, beginning on December 8, 2023, and ending on June 7, 2025. This extension allows existing TPS beneficiaries to retain TPS through June 7, 2025, so long as they otherwise continue to meet the eligibility requirements for TPS. Existing TPS beneficiaries who wish to extend their status through June 7, 2025, must re-register during the 60-day re-registration period described in this notice. The Secretary is also redesignating Cameroon for TPS. The redesignation of Cameroon allows additional Cameroonian nationals (and individuals having no nationality who last habitually resided in Cameroon) who have been continuously residing in the United States since October 5, 2023, to apply for TPS for the first time during the initial registration period described under the redesignation information in this notice. In addition to demonstrating continuous residence in the United States since October 5, 2023, and meeting other eligibility criteria, initial applicants for TPS under this designation must demonstrate that they have been continuously physically present in the United States since December 8, 2023, the effective date of this redesignation of Cameroon for TPS.
• You may contact Rená Cutlip-Mason, Chief, Humanitarian Affairs Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, by mail at 5900 Capital Gateway Drive, Camp Springs, MD 20746, or by phone at 800-375-5283.
• For further information on TPS, including guidance on the registration process and additional information on eligibility, please visit the USCIS TPS web page at
• If you have additional questions about TPS, please visit
• Applicants seeking information about the status of their individual cases may check Case Status Online, available on the USCIS website at
• Further information will also be available at local USCIS offices upon publication of this notice.
Through this notice, DHS sets forth procedures necessary for nationals of Cameroon (or individuals having no nationality who last habitually resided in Cameroon) to (1) re-register for TPS and to apply for renewal of their EADs with USCIS or (2) submit an initial registration application under the redesignation and apply for an EAD.
Re-registration is limited to individuals who have previously registered for TPS under the prior designation of Cameroon and whose applications have been granted. Failure to re-register properly within the 60-day re-registration period may result in the withdrawal of your TPS following appropriate procedures.
For individuals who have already been granted TPS under Cameroon's designation, the 60-day re-registration period runs from October 10, 2023 through December 11, 2023. USCIS will issue new EADs with a June 7, 2025, expiration date to eligible Cameroonian TPS beneficiaries who timely re-register and apply for EADs. Given the time frames involved with processing TPS re-registration applications, DHS recognizes that not all re-registrants may receive new EADs before their current EADs expire. Accordingly, through this
Individuals who have a Cameroon TPS application (Form I-821) and/or Application for Employment Authorization (Form I-765) that was still pending as of October 10, 2023 do not need to file either application again. If USCIS approves an individual's pending Form I-821, USCIS will grant the individual TPS through June 7, 2025. Similarly, if USCIS approves a pending TPS-related Form I-765, USCIS will issue the individual a new EAD that will be valid through the same date. There are currently approximately 2,090 beneficiaries under Cameroon's TPS designation.
Under the redesignation, individuals who currently do not have TPS may submit an initial application during the initial registration period that runs from October 10, 2023 and runs through the full length of the redesignation period ending June 7, 2025. In addition to demonstrating continuous residence in the United States since October 5, 2023, and meeting other eligibility criteria, initial applicants for TPS under this redesignation must demonstrate that they have been continuously physically present in the United States since December 8, 2023,
• TPS is a temporary immigration status granted to eligible nationals of a foreign state designated for TPS under the INA, or to eligible individuals without nationality who last habitually resided in the designated foreign state, regardless of their country of birth.
• During the TPS designation period, TPS beneficiaries are eligible to remain in the United States, may not be removed, and are authorized to obtain EADs so long as they continue to meet the requirements of TPS.
• TPS beneficiaries may also apply for and be granted travel authorization as a matter of DHS discretion.
• To qualify for TPS, beneficiaries must meet the eligibility standards at INA section 244(c)(1)-(2), 8 U.S.C. 1254a(c)(1)-(2).
• When the Secretary terminates a foreign state's TPS designation, beneficiaries return to one of the following:
○ The same immigration status or category that they maintained before TPS, if any (unless that status or category has since expired or terminated); or
○ Any other lawfully obtained immigration status or category they received while registered for TPS, as long as it is still valid beyond the date TPS terminates.
Cameroon was initially designated on the basis of ongoing armed conflict and extraordinary and temporary conditions in Cameroon that prevented nationals of Cameroon from returning in safety.
Section 244(b)(1) of the INA, 8 U.S.C. 1254a(b)(1), authorizes the Secretary, after consultation with appropriate agencies of the U.S. Government, to designate a foreign state (or part thereof) for TPS if the Secretary determines that certain country conditions exist.
At least 60 days before the expiration of a foreign state's TPS designation or extension, the Secretary, after consultation with appropriate U.S. Government agencies, must review the conditions in the foreign state designated for TPS to determine whether they continue to meet the conditions for the TPS designation.
In addition to extending an existing TPS designation, the Secretary, after consultation with appropriate Government agencies, may redesignate a country (or part thereof) for TPS.
When the Secretary designates or redesignates a country for TPS, the Secretary also has the discretion to establish the date from which TPS applicants must demonstrate that they have been “continuously resid[ing]” in the United States.
DHS has reviewed country conditions in Cameroon. Based on the review, including input received from DOS and other U.S. Government agencies, the Secretary has determined that an 18-month TPS extension is warranted because ongoing armed conflict and extraordinary and temporary conditions supporting Cameroon's TPS designation remain. The Secretary has further determined that redesignating Cameroon for TPS under INA section 244(b)(3)(C), 8 U.S.C. 1254a(b)(3)(C) is warranted and is changing the “continuous residence” and “continuous physical presence” dates that applicants must meet to be eligible for TPS. The “continuous residence” date now being October 5, 2023, and the “continuous physical presence” date now being December 8, 2023, the effective date of this redesignation of Cameroon for TPS.
Since 2014, ongoing armed conflict between the Government of Cameroon and nonstate armed groups in the Far North Region, specifically Boko Haram and the Islamic State West Africa Province (ISWAP), has resulted in killings, kidnappings, displacement, and destruction of civilian infrastructure. While battling these nonstate armed groups, the Government of Cameroon is also attempting to control the continuing secessionist crisis in the Northwest and Southwest Regions. Extraordinary and temporary conditions, including the secessionist crisis, human rights abuses by members of armed groups and forces, food insecurity, spread of disease, and mass displacement continue to prevent Cameroonian nationals (and those who last habitually resided in Cameroon) from returning to Cameroon in safety.
In 2014, Boko Haram launched its first attacks in the Far North Region of Cameroon, and in 2015, a splinter group ISWAP established itself as a highly active and violent Islamic State affiliate.
The Far North has also seen violence between fishing, farming, and herding
Cameroon is a majority French-speaking (Francophone) nation with two majority English-speaking (Anglophone) regions.
Anglophone separatists continue to commit human rights abuses against both government forces and civilians, engaging in killings, kidnappings, and other means of forceful control over large parts of the Anglophone regions.
Reports indicate that Cameroonian government security forces have engaged in human rights violations, often in areas where they are engaged in separatist clashes. Reportedly, “Security forces have perpetrated extrajudicial killings and widespread sexual and gender-based violence, burned Anglophone villages and subjected individuals with suspected separatist ties to arbitrary detention, torture and ill-treatment.”
The humanitarian situation in Cameroon is serious, with one out of every six people in Cameroon needing humanitarian assistance and protection, amounting to 4.7 million people.
The ongoing regional crises, intercommunal violence, and floods have worsened food insecurity in recent years.
Additionally, Cameroon is experiencing an outbreak of cholera. The number of reported cases had been relatively low but increased significantly in March 2023, and new cases have been reported in 29 of 58 districts nationwide.
As of May 2023, there were more than one million internally displaced persons in Cameroon, concentrated primarily in and around the Anglophone regions and the Far North Region.
In summary, the ongoing armed conflict between Boko Haram, ISWAP, and the Government of Cameroon alongside extraordinary and temporary conditions, including the secessionist crisis, has led to significant civilian casualties and major disruptions in security and stability. This has also contributed to other extraordinary and temporary conditions that prevent Cameroonian nationals from returning to Cameroon in safety, namely the current humanitarian crisis, including human rights abuses, food insecurity, spread of disease, and mass displacement.
Based upon this review and after consultation with appropriate U.S. Government agencies, the Secretary has determined that:
• The conditions supporting Cameroon's designation for TPS continue to be met.
• There continues to be an ongoing armed conflict in the Far North region of Cameroon and, due to such conflict, requiring the return to Cameroon of Cameroonian nationals (or individuals having no nationality who last habitually resided in Cameroon) would pose a serious threat to their personal safety.
• There continue to be extraordinary and temporary conditions in Cameroon that prevent Cameroonian nationals (or individuals having no nationality who last habitually resided in Cameroon) from returning to Cameroon in safety, and it is not contrary to the national interest of the United States to permit Cameroonian TPS beneficiaries to remain in the United States temporarily.
• The designation of Cameroon for TPS should be extended for an 18-month period, beginning on December 8, 2023, and ending on June 7, 2025.
• Due to the conditions described above, Cameroon should be simultaneously extended and redesignated for TPS beginning on December 8, 2023, and ending on June 7, 2025.
• For the redesignation, the Secretary has determined that TPS applicants must demonstrate that they have continuously resided in the United States since October 5, 2023.
• Initial TPS applicants under the redesignation must demonstrate that they have been continuously physically present in the United States since December 8, 2023, the effective date of the redesignation of Cameroon for TPS.
• There are approximately 2,090 current Cameroon TPS beneficiaries who are expected to be eligible to re-register for TPS under the extension.
• It is estimated that approximately 7,900 additional individuals may be eligible for TPS under the redesignation of Cameroon. This population includes Cameroonian nationals in the United States in nonimmigrant status or without immigration status.
By the authority vested in me as Secretary under INA section 244, 8 U.S.C. 1254a, I have determined, after consultation with the appropriate U.S. Government agencies, the statutory conditions supporting Cameroon's designation for TPS on the basis of ongoing armed conflict and extraordinary and temporary conditions are met and it is not contrary to the national interest of the United States to permit Cameroonian TPS beneficiaries to remain in the United States temporarily.
To register for TPS based on the designation of Cameroon, you must submit a Form I-821, Application for Temporary Protected Status, and pay
TPS beneficiaries are eligible for an Employment Authorization Document (EAD), which proves their authorization to work in the United States. You are not required to submit Form I-765, Application for Employment Authorization, or have an EAD to be granted TPS, but see below for more information if you want an EAD to use as proof that you can work in the United States.
Individuals who have a Cameroon TPS application (Form I-821) that was still pending as of October 10, 2023 do not need to file the application again. If USCIS approves an individual's Form I-821, USCIS will grant the individual TPS through June 7, 2025.
For more information on the application forms and fees for TPS, please visit the USCIS TPS web page at
Everyone must provide their employer with documentation showing that they have the legal right to work in the United States. TPS beneficiaries are eligible to obtain an EAD, which proves their legal right to work. Those who want to obtain an EAD must file a Form I-765 and pay the Form I-765 fee (or request a fee waiver, which you may submit on Form I-912, Request for Fee Waiver). TPS applicants may file this form along with their TPS application, or at a later date, provided their TPS application is still pending or has been approved. Beneficiaries with a Cameroonian TPS-related Form I-765 that was still pending as of October 10, 2023 do not need to file the application again. If USCIS approves a pending TPS-related Form I-765, USCIS will issue the individual a new EAD that will be valid through June 7, 2025.
If USCIS denies your fee waiver request, you can resubmit your TPS application. The fee waiver denial notice will contain specific instructions about resubmitting your application.
USCIS offers the option to applicants for TPS under Cameroon's designation to file Form I-821 and related requests for EADs online or by mail. When filing a TPS application, applicants can also request an EAD by submitting a completed Form I-765, with their Form I-821.
Mail your completed Form I-821, Application for Temporary Protected Status; Form I-765, Application for Employment Authorization, if applicable; Form I-912, Request for Fee Waiver (if applicable); and supporting documentation to the proper address in Table 1.
If you were granted TPS by an immigration judge (IJ) or the Board of Immigration Appeals (BIA) and you wish to request an EAD, please mail your Form I-765 application to the appropriate mailing address in Table 1. When you are requesting an EAD based on an IJ/BIA grant of TPS, please include a copy of the IJ or BIA order granting you TPS with your application. This will help us verify your grant of TPS and process your application.
The filing instructions on the Form I-821 list all the documents needed to establish eligibility for TPS. You may also find information on the acceptable documentation and other requirements for applying (
TPS beneficiaries may also apply for and be granted travel authorization as a matter of discretion. You must file for travel authorization if you wish to travel outside of the United States. If granted, travel authorization gives you permission to leave the United States and return during a specific period. To request travel authorization, you must file Form I-131, Application for Travel Document, available at
• Select Item Number 1.d. in Part 2 on the Form I-131; and
• Submit the fee for the Form I-131, or request a fee waiver, which you may submit on Form I-912, Request for Fee Waiver.
If you are filing Form I-131 together with Form I-821, send your forms to the address listed in Table 1. If you are filing Form I-131 separately based on a pending or approved Form I-821, send your form to the address listed in Table 2 and include a copy of Form I-797 for the approved or pending Form I-821.
Biometrics (such as fingerprints) are required for all applicants 14 years of age and older. Those applicants must submit a biometric services fee. As previously stated, if you are unable to pay the biometric services fee, you may request a fee waiver, which you may submit on Form I-912, Request for Fee Waiver. For more information on the application forms and fees for TPS, please visit the USCIS TPS web page at
To get case status information about your TPS application, as well as the status of your TPS-based EAD request, you can check Case Status Online at uscis.gov, or visit the USCIS Contact Center at
Yes. Regardless of your country of birth, provided that you currently have a Cameroon TPS-based EAD that has the notation A-12 or C-19 under Category and a “Card Expires” date of December 7, 2023, this
You can find the Lists of Acceptable Documents on Form I-9, Employment Eligibility Verification, as well as the Acceptable Documents web page at
You may present any document from List A (which provides evidence of both identity and employment authorization) or one document from List B (which provides evidence of your identity) together with one document from List C (which provides evidence of employment authorization), or you may present an acceptable receipt as described in the Form I-9 Instructions. Employers may not reject a document based on a future expiration date. You can find additional information about Form I-9 on the I-9 Central web page at
Even though we have automatically extended your EAD, your employer is required by law to ask you about your continued employment authorization. Your employer may need to re-examine your automatically extended EAD to check the “Card Expires” date and Category code if your employer did not keep a copy of your EAD when you initially presented it. Once your employer has reviewed the Card Expiration date and Category code, your employer should update the EAD expiration date in Section 2 of Form I-9. See the section “What updates should my current employer make to Form I-9 if my EAD has been automatically extended?” of this
Your employer may not specify which List A or List C document you must present and cannot reject an acceptable receipt.
Yes, if you are eligible for TPS, you can obtain a new TPS-based EAD, regardless of whether you have an EAD or work authorization based on another immigration status. If you want to obtain a new TPS-based EAD valid through June 7, 2025, then you must file Form I-765, Application for Employment Authorization, and pay the associated fee (unless USCIS grants your fee waiver request).
No. When completing Form I-9, employers must accept any documentation you choose to present from the Form I-9 Lists of Acceptable Documents that reasonably appears to be genuine and that relates to you, or an acceptable List A, List B, or List C receipt. Employers may not request other documentation, such as proof of Cameroonian citizenship or proof of registration for TPS when completing Form I-9 for new hires or reverifying the employment authorization of current employees. If you present an EAD that USCIS has automatically extended, employers should accept it as a valid List A document so long as the EAD reasonably appears to be genuine and to relate to you. Refer to the “Note to Employees” section of this
When using an automatically extended EAD to complete Form I-9 for a new job before December 8, 2024:
1. For Section 1, you should:
a. Check “A noncitizen authorized to work until” and enter December 7, 2024, as the “expiration date”; and
b. Enter your USCIS number or A-Number where indicated. (Your EAD or other document from DHS will have your USCIS number or A-Number printed on it; the USCIS number is the same as your A-Number without the A prefix.)
2. For Section 2, employers should:
a. Determine if the EAD is auto-extended by ensuring it is in category A-12 or C-19 and has a “Card Expires” date of December 7, 2023;
b. Write in the document title;
c. Enter the issuing authority;
d. Provide the document number; and
e. Write December 7, 2024, as the expiration date.
Before the start of work on December 8, 2024, employers must reverify the employee's employment authorization on Form I-9.
If you presented a TPS-related EAD that was valid when you first started your job and USCIS has now automatically extended your EAD, your employer may need to re-examine your current EAD if they do not have a copy of the EAD on file. Your employer should determine if your EAD is automatically extended by ensuring that it contains Category A-12 or C-19 and has a “Card Expires” date of December 7, 2023. Your employer may not rely on the country of birth listed on the card to determine whether you are eligible for this extension.
If your employer determines that USCIS has automatically extended your EAD, your employer should update Section 2 of your previously completed Form I-9 as follows:
1. Write EAD EXT and December 7, 2024, as the last day of the automatic extension in the Additional Information field; and
2. Initial and date the correction.
This is not considered a reverification. Employers do not reverify the employee until either the automatic extension has ended, or the employee presents a new document to show continued employment authorization, whichever is sooner. By December 8, 2024, when the employee's automatically extended EAD has expired, employers are required by law to reverify the employee's employment authorization on Form I-9.
Employers may create a case in E-Verify for a new employee by entering the number from the Document Number field on Form I-9 into the document number field in E-Verify. Employers should enter December 7, 2024, as the expiration date for an EAD that has been extended under this
E-Verify automated the verification process for TPS-related EADs that are automatically extended. If you have employees who provided a TPS-related EAD when they first started working for you, you will receive a “Work Authorization Documents Expiring” case alert when the auto-extension period for this EAD is about to expire. Before this employee starts work on December 8, 2024, you must reverify their employment authorization on Form I-9. Employers may not use E-Verify for reverification.
Employers are reminded that the laws requiring proper employment eligibility verification and prohibiting unfair immigration-related employment practices remain in full force. This
For general questions about the employment eligibility verification process, employees may call USCIS at 888-897-7781 (TTY 877-875-6028) or email USCIS at
To comply with the law, employers must accept any document or combination of documents from the Lists of Acceptable Documents if the documentation reasonably appears to be genuine and to relate to the employee, or an acceptable List A, List B, or List C receipt as described in the Form I-9 Instructions. Employers may not require extra or additional documentation beyond what is required for Form I-9 completion. Further, employers participating in E-Verify who receive an E-Verify case result of “Tentative Nonconfirmation” (mismatch) must promptly inform employees of the mismatch and give such employees an opportunity to take action to resolve the mismatch. A mismatch means that the information entered into E-Verify from Form I-9 differs from records available to DHS.
Employers may not terminate, suspend, delay training, withhold or lower pay, or take any adverse action against an employee because of a mismatch while the case is still pending with E-Verify. A Final Nonconfirmation (FNC) case result is received when E-Verify cannot confirm an employee's employment eligibility. An employer may terminate employment based on a case result of FNC. Work-authorized employees who receive an FNC may call USCIS for assistance at 888-897-7781 (TTY 877-875-6028). For more information about E-Verify-related discrimination or to report an employer for discrimination in the E-Verify process based on citizenship, immigration status, or national origin, contact IER's Worker Hotline at 800-255-7688 (TTY 800-237-2515). Additional information about proper nondiscriminatory Form I-9 and E-Verify procedures is available on the IER website at
For Federal purposes, if you present an automatically extended EAD referenced in this
• Your current EAD with a TPS category code of A-12 or C-19, even if your country of birth noted on the EAD does not reflect the TPS designated country of Cameroon;
• Your Form I-94, Arrival/Departure Record;
• Your Form I-797, Notice of Action, reflecting approval of your Form I-765; or
• Form I-797 or Form I-797C, Notice of Action, reflecting approval or receipt of a past or current Form I-821, if you received one from USCIS.
Check with the government agency requesting documentation regarding which document(s) the agency will accept. Some state and local government agencies use the SAVE program to confirm the current immigration status of applicants for public benefits.
While SAVE can verify that an individual has TPS, each agency's procedures govern whether they will accept an unexpired EAD, Form I-797, Form I-797C, or Form I-94, Arrival/Departure Record. If an agency accepts the type of TPS-related document you present, such as an EAD, the agency should accept your automatically extended EAD, regardless of the country of birth listed on the EAD. It may assist the agency if you:
a. Give the agency a copy of the relevant
b. Explain that SAVE will be able to verify the continuation of your TPS using this information; and
c. Ask the agency to initiate a SAVE query with your information and follow through with additional verification steps, if necessary, to get a final SAVE response verifying your TPS.
You can also ask the agency to look for SAVE notices or contact SAVE if they have any questions about your immigration status or automatic extension of TPS-related documentation. In most cases, SAVE provides an automated electronic response to benefit-granting agencies within seconds, but occasionally verification can be delayed.
You can check the status of your SAVE verification by using CaseCheck at
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email;
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) Ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) Ways to minimize the burden of the collection of information on those who to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Office of the Chief Procurement Officer, HUD.
Notice.
This notice advises of the availability to the public of service contracts awarded by HUD in Fiscal Year (FY) 2021.
Dr. Akinsola A. Ajayi, Assistant Chief Procurement Officer, Office of Policy, Systems and Risk Management, Office of the Chief Procurement Officer, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; telephone number 202-402-6728 (this is not a toll-free number) and fax number 202-708-8912. HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit
In accordance with section 743 of Division C of the Consolidated Appropriations Act of 2010 (Pub. L. 111-117, approved December 16, 2009, 123 Stat. 3034, at 123 Stat. 3216), HUD is publishing this notice to advise the public of service contracts inventories that were awarded in FY 2021. The inventories are organized by function and are reviewed by HUD to better understand how contracted services are used to support HUD's primary mission, to insure HUD maintains an adequate workforce for operations and to research whether contractors were performing inherently governmental functions.
The inventory was developed in accordance with guidance issued on November 5, 2010 by the Office of Management and Budget's Office Federal Procurement Policy (OFPP). OFPP's guidance is available at
HUD has posted its inventory and a summary of the inventory on the Department of Housing and Urban Development's homepage at the following link:
Office of Policy Development and Research, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Fish and Wildlife Service, Interior.
Notice of meeting.
The U.S. Fish and Wildlife Service gives notice of a public meeting of the Theodore Roosevelt Genius Prize Advisory Council (Council), in accordance with the Federal Advisory Committee Act.
The Council will meet Tuesday, November 14, 2023, through Thursday, November 16, 2023, from 9 a.m. to 4 p.m. (eastern time).
The meeting will be held in Room 5160 of the Stewart Lee Udall Department of the Interior Building, 1849 C Street NW, Washington, DC 20240. Virtual participation will also be available via broadcast over the internet. To register, contact the Designated Federal Officer (see
Stephanie Rickabaugh, Designated Federal Officer, by email at
The Theodore Roosevelt Genius Prize Advisory Council (Council) was established by the John D. Dingell, Jr., Conservation, Management, and Recreation Act (Pub. L. 116-9, as amended by the America's Conservation Enhancement Act (Pub. L. 116-188)); and authorized by the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3719). The Council's purpose is to advise the Secretary of the Interior regarding any opportunities for technological innovation in six focus areas: preventing wildlife poaching and trafficking, promoting wildlife conservation, managing invasive species, protecting endangered species, non-lethally managing human-wildlife conflict, and reducing human-predator conflict.
This meeting is open to the public. The meeting agenda will include presentations from the 2023 Theodore Roosevelt Genius Prize winners, possible reports from subcommittees, and other business. The Council will also hear public comment if members of the public request to comment. The agenda and other related meeting information will be posted on the Council's website at
If you wish to provide oral public comment or provide a written comment for the Council to consider, contact the Council's Designated Federal Officer (see
Depending on the number of people who want to comment and the time available, the amount of time for individual oral comments may be
Please make requests in advance for sign language interpreter services, assistive listening devices, or other reasonable accommodations. Please contact the Designated Federal Officer (see
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission (“Commission”) is correcting two typos in its confidential Opinion of September 14, 2023, in the above-captioned investigation.
Carl P. Bretscher, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2382. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
On page 40, line 2 and page 43, line 13 of its confidential Opinion, the Commission replaces “Amoji” with “La Modish” for La Modish Boutique of West Covina, California, one of four respondents previously found to be in default.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
On September 29, 2023 the Department of Justice lodged a proposed Consent Decree with the United States District Court for the District of Utah in the lawsuit entitled
The United States filed this lawsuit under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, 42 U.S.C. 9607, for the recovery of costs incurred or to be incurred by the United States in response to the release or threatened release of hazardous substances at the Ogden Swift Building Superfund Site located in Ogden, Utah (the “Site”). The proposed complaint and consent decree seek to recover, under section 107(a) of CERCLA, EPA's unreimbursed response costs in connection with an emergency removal action at the Ogden Swift Building Superfund Site in Ogden, Utah. The proposed Consent Decree resolves all claims in the proposed Complaint against two potentially responsible parties, Smith and Edwards (“S&E”) and the Ogden City Redevelopment Agency (“RDA”) (collectively, the “Defendants”), as well as a potential counterclaim against the Settling Federal Agencies (comprised of the Defense Logistics Agency, DLA Disposition Services, the Department of the Army, the Department of the Navy and the Department of the Air Force).
Under the proposed Consent Decree, S&E will pay $2,290,065 and RDA will pay $300,000. The Settling Federal Agencies will pay $2,290,065 to resolve a potential counterclaim against the United States. Together, these amounts represent approximately 96% of EPA's unreimbursed response costs through June 2022.The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Consent Decree may be examined and downloaded at this Justice Department website:
Consent Decree Library, U.S. DOJ—ENRD, P.O. Box 7611, Washington, DC 20044-7611.
Please enclose a check or money order for $8.25 (25 cents per page
Office on Violence Against Women, Department of Justice.
30-Day notice.
The Office on Violence Against Women, Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until November 9, 2023.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact: Catherine Poston, Office on Violence Against Women, at 202-514-5430 or
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOJ notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218 Washington, DC 20530.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Office of Workers' Compensation Programs (OWCP)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before November 9, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Michelle Neary by telephone at 202-693-6312, or by email at
Form LS-1 is used by employers to authorize medical treatment for injured workers and by claimants to report findings of physical examinations and treatment recommended. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
National Aeronautics and Space Administration (NASA).
Notice of a modified system of records.
Pursuant to the provisions of the Privacy Act of 1974, the National Aeronautics and Space Administration is issuing public notice of its proposal to modify a previously noticed system of records NASA Health Information Management System/NASA 10HIMS. Modifications are described below under the caption
Submit comments within 30 calendar days from the date of this publication. The changes will take effect at the end of that period, if no adverse comments are received.
Bill Edwards-Bodmer, Privacy Act Officer, Office of the Chief Information Officer, National Aeronautics and Space Administration Headquarters, Washington, DC 20546-0001, (757) 864-7998,
NASA Privacy Act Officer, Bill Edwards-Bodmer, (757) 864-7998,
This notice incorporates revised NASA Standard Routine Uses, removes two electronic system locations, and includes minor editorial changes.
Health Information Management System, NASA 10HIMS.
Unclassified.
Records of Medical Clinics/Units and Environmental Health Offices are maintained at:
• Mary W. Jackson NASA Headquarters, National Aeronautics and Space Administration (NASA), Washington, DC 20546-0001
• Ames Research Center (NASA), Moffett Field, CA 94035-1000
• Armstrong Flight Research Center (NASA), PO Box 273, Edwards, CA 93523-0273
• John H. Glenn Research Center at Lewis Field (NASA), 21000 Brookpark Road, Cleveland, OH 44135-3191
• Goddard Space Flight Center (NASA), Greenbelt, MD 20771-0001
• Lyndon B. Johnson Space Center (NASA), Houston, TX 77058-3696
• John F. Kennedy Space Center (NASA), Kennedy Space Center, FL 32899-0001
• Langley Research Center, (NASA), Hampton, VA 23681-2199
• George C. Marshall Space Flight Center (NASA), Marshall Space Flight Center, AL 35812-0001
• John C. Stennis Space Center (NASA), Stennis Space Center, MS 39529-6000
• Michoud Assembly Facility (NASA), PO Box 29300, New Orleans, LA 70189
• Wallops Flight Facility (NASA), Wallops Island, VA 23337
Electronic records are also hosted at:
• CORITY Amazon Web Services (AWS) US East region, 410 Terry Avenue North, Seattle, WA 98109
Chief Health and Medical Officer at NASA Headquarters (see System Location above for address).
Subsystem Managers:
• Director Health and Medical Systems, Occupational Health at NASA Headquarters (see System Location above for address);
• Chief, Space Medicine Division at NASA Johnson Space Center (see System Location above for address);
• Occupational Health Contracting Officer Representatives at NASA Ames Research Center, (see System Location above for address);
• NASA Armstrong Flight Research Center (see System Location above for address);
• NASA Goddard Space Flight Center (see System Location above for address);
• NASA Kennedy Space Center (see System Location above for address);
• NASA Langley Research Center (see System Location above for address);
• NASA Glenn Research Center (see System Location above for address);
• NASA Marshall Space Flight Center (see System Location above for address);
• NASA Jet Propulsion Laboratory (see System Location above for address);
• NASA Stennis Space Center (see System Location above for address);
• Michoud Assembly Facility (NASA) (see System Location above for address); and
• Wallops Flight Facility (NASA) (see System Location above for address).
• 5 U.S.C. 7901—Health service programs;
• 51 U.S.C. 20113 (a)—Powers of the Administration in performance of functions to make and promulgate rules and regulations;
• 44 U.S.C. 3101—Records management by agency heads; general duties;
• 42 CFR part 2—Confidentiality of substance use disorder patient records.
In order to ensure a healthy environment and workforce, information in this system of records is maintained on anyone receiving (1) exams for general wellness, (2) occupational clearances or determination of fitness for duty, (3) behavioral health assistance, (4) workplace surveillance for potential human exposure within NASA to communicable diseases and hazards such as noise and chemical exposure, repetitive motion, and (5) first aid or medical care for onsite illness or injuries through a NASA clinic outreach.
This system contains information on (1) NASA employees and applicants; (2) employees from other agencies and military detailees working at NASA; (3) active or retired astronauts and active astronaut family members; (4) other space flight personnel on temporary or extended duty at NASA; (5) contractor personnel; (6) Space Flight Participants and those engaged in commercial use of NASA facilities, (7) civil service and contractor family members; and (8) visitors to NASA Centers who use clinics or ambulance services for emergency or first-aid treatment.
Records in this system contain demographic data and private health information:
(1) Wellness records including but not limited to exams provided for continuing healthcare, documentation of immunizations and other outreach records.
(2) Fitness for duty and/or exposure exams/surveillance including but not limited to ergonomics, hazardous materials, radiation, noise, communicable diseases and other applicable longitudinal surveillance.
(3) Qualification records including the use of offsite or onsite exams to determine suitability for duties.
(4) Behavioral health and employee assistance records.
(5) Records of first aid, contingency response, or emergency care, including ambulance transportation.
The information in this system of records is obtained from individuals themselves, physicians, and previous medical records of individuals.
Any disclosures of information will be compatible with the purpose for which the Agency collected the information. Under the following routine uses that are unique to this system of records, information in this system may be disclosed: (1) to external medical professionals and independent entities to support internal and external reviews for purposes of medical quality assurance; (2) to private or other government health care providers for consultation, referral, or mission medical contingency support; (3) to the Office of Personnel Management, Occupational Safety and Health Administration, and other Federal or State agencies as required in accordance with the Federal agency's special program responsibilities; (4) to insurers for referrals or reimbursement; (5) to employers of non-NASA personnel in support of the Mission Critical Space Systems Personnel Reliability Program; (6) to international partners for mission support and continuity of care for their employees pursuant to NASA Space Act agreements; (7) to non-NASA personnel performing research, studies, or other activities through arrangements or agreements with NASA; (8) to the public of pre-space flight information having mission impact concerning an individual crewmember, limited to the crewmember's name and the fact that a medical condition exists; (9) to the public, limited to the crewmember's name and the fact that a medical condition exists, if a flight crewmember is, for medical reasons, unable to perform a scheduled public event following a space flight mission/landing; and (10) to the public to advise
In addition, information may be disclosed under the following NASA Standard Routine Uses, which are standard for many NASA systems and are compatible with the purpose for which the Agency collected the information:
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Records are stored in multiple formats including paper, digital, micrographic, photographic, and as medical recordings such as electrocardiograph tapes, x-rays and strip charts.
Records are retrieved from the system by the individual's name, date of birth, or unique assigned Patient Identification Numbers.
Records are maintained in Agency files and destroyed in accordance with NASA Records Retention Schedule 1, Items 126 and 127, and NASA Records Retention Schedule 8, Item 57.
Records are maintained on secure servers and protected in accordance with all Federal standards and those established in NASA regulations at 14 CFR 1212.605. Additionally, server and data management environments employ infrastructure encryption technologies both in data transmission and at rest on servers. Electronic messages sent within and outside of the Agency that convey sensitive data are encrypted and transmitted by staff via pre-approved electronic encryption systems as required by NASA policy. Approved security plans are in place for information systems containing the records in accordance with the Federal Information Security Management Act
In accordance with 14 CFR part 1212, Privacy Act—NASA Regulations, information may be obtained by contacting in person or in writing the system or subsystem manager listed above at the location where the records are created and/or maintained. Requests must contain the identifying data concerning the requester,
In accordance with 14 CFR part 1212, Privacy Act—NASA Regulations, information may be obtained by contacting in person or in writing the system or subsystem manager listed above at the location where the records are created and/or maintained. Requests must contain the identifying data concerning the requester,
In accordance with 14 CFR part 1212, Privacy Act—NASA Regulations, information may be obtained by contacting in person or in writing the system or subsystem manager listed above at the location where the records are created and/or maintained. Requests must contain the identifying data concerning the requester,
None.
2020-27051, 85 FR 79224, pp. 79224-79227.
National Endowment for the Arts.
Notice of meetings.
Pursuant to the Federal Advisory Committee Act, as amended, notice is hereby given that 44 meetings of the Arts Advisory Panel to the National Council on the Arts will be held by teleconference or videoconference.
See the
National Endowment for the Arts, Constitution Center, 400 7th St. SW, Washington, DC 20506.
Further information with reference to these meetings can be obtained from David Travis, Office of Guidelines & Panel Operations, National Endowment for the Arts, Washington, DC 20506;
The closed portions of meetings are for the purpose of Panel review, discussion, evaluation, and recommendations on financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including information given in confidence to the agency. In accordance with the determination of the Chair of March 11, 2022, these sessions will be closed to the public pursuant to 5 U.S.C. 10.
Federal Council on the Arts and the Humanities; National Foundation on the Arts and the Humanities.
Notice of meeting.
Pursuant to the Federal Advisory Committee Act, notice is hereby given that the Federal Council on the Arts and the Humanities will hold a meeting of the Arts and Artifacts International Indemnity Panel.
The meeting will be held on Thursday, November 16, 2023, from 12:00 p.m. until adjourned.
The meeting will be held by videoconference originating at the National Endowment for the Arts, Washington, DC 20506.
Elizabeth Voyatzis, Committee Management Officer, 400 7th Street SW, Room 4060, Washington, DC 20506, (202) 606-8322;
The purpose of the meeting is for panel review, discussion, evaluation, and recommendation on applications for Certificates of Indemnity submitted to the Federal Council on the Arts and the Humanities, for exhibitions beginning on or after January 1, 2024. Because the meeting will consider proprietary financial and commercial data provided in confidence by indemnity applicants, and material that is likely to disclose trade secrets or other privileged or confidential information, and because it is important to keep the values of objects to be indemnified and the methods of transportation and security measures confidential, I have determined that that the meeting will be closed to the public pursuant to subsection (c)(4) of section 552b of Title 5, United States Code. I have made this determination under the authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee Meetings, dated April 15, 2016.
National Science Foundation.
Notice of permit applications received.
The National Science Foundation (NSF) is required to publish a notice of permit applications received to conduct activities regulated under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act in the Code of Federal Regulations. This is the required notice of permit applications received.
Interested parties are invited to submit written data, comments, or views with respect to this permit application by November 9, 2023. This application may be inspected by
Comments should be addressed to Permit Office, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314.
Andrew Titmus, ACA Permit Officer, at the above address, 703-292-4479, or
The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Public Law 95-541, 45 CFR 671), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas a requiring special protection. The regulations establish such a permit system to designate Antarctic Specially Protected Areas.
Robin West, VP & GM Expeditions, Seabourn Quest, Seabourn Cruise Line Ltd., 450 Third Ave. W., Seattle, WA 98119.
Waste Management. The applicant proposes to operate small, battery-operated remotely piloted aircraft systems (RPAS) consisting, in part, of a quadcopter equipped with cameras to collect commercial and educational footage of the Antarctic. The quadcopter would not be flown over concentrations of birds or mammals, or over Antarctic Specially Protected Areas or Historic Sites and Monuments. The RPAS would only be operated by pilots with extensive experience, who are pre-approved by the Expedition Leader. Several mitigation measures to reduce environmental impacts and prevent against loss of the quadcopter include painting the them a high-visibility color; only flying when the wind is less than 25 knots; flying for only 15 minutes at a time to preserve battery life; having prop guards on propeller tips, a flotation device if operated over water, and an “auto go home” feature in case of loss of control link or low battery; having an observer on the lookout for wildlife, people, and other hazards; ensuring that the separation between the operator and quadcopter does not exceed an operational range of 500 meters; and implementing biosecurity measures by using disinfecting agents before and after each flight. The applicant is seeking a Waste Permit to cover any accidental releases that may result from operating the RPAS.
Antarctic Peninsula Region.
November 1, 2023-March 31, 2024.
Daniel Villa, Sea Shepherd Global, 1217 S 9th St, Tacoma, WA 98405.
Antarctic Peninsula Region.
January 5, 2023-February 15, 2024.
Week of October 2, 2023.
Via Teleconference.
Open.
By a vote of 4-0 on October 4, 2023, the Commission determined pursuant to 5 U.S.C. 552b(e)(1) and 10 CFR 9.107 that this item be affirmed with less than one week notice to the public. The item will be affirmed in the meeting being held on October 5, 2023. The public is invited to attend the Commission's meeting live; via teleconference. Details for joining the teleconference in listen only mode at
For more information or to verify the status of meetings, contact Wesley Held at 301-287-3591 or via email at
The NRC Commission Meeting Schedule can be found on the internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings or need this meeting notice or the transcript or other information from the public meetings in another format (
Members of the public may request to receive this information electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555, at 301-415-1969, or by email at
The NRC is holding the meetings under the authority of the Government in the Sunshine Act, 5 U.S.C. 552b.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Intent to conduct scoping process and prepare environmental impact statement; public scoping meeting and request for comment.
The U.S. Nuclear Regulatory Commission (NRC) will conduct a scoping process to gather information necessary to prepare an environmental impact statement (EIS) to evaluate the environmental impacts for the license renewal of the Facility Operating License No. NPF-58 for Perry Nuclear Power Plant, Unit 1. The NRC is seeking public comment on this action and has scheduled an in-person public scoping meeting, followed by a virtual one.
The NRC will hold two public scoping meetings, one through online webinar and teleconference call and one in-person near the facility, including a presentation on the license renewal process and a transcribed public comment session. The virtual meeting will be held October 19, 2023, at 2 p.m. eastern time (ET). The in-person meeting will be held October 25, 2023, at 6:30 p.m. ET at the Perry Public Library, 3753 Main St., Perry, OH 44081. Details on both meetings can be found on the NRC's Public Meeting Schedule at:
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Lance Rakovan, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2589, email:
Please refer to Docket ID NRC-2023-0136 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
By letter dated July 3, 2023 (ADAMS Accession No. ML23184A081), Energy Harbor Nuclear Corp. (Energy Harbor or the applicant), doing business as Energy Harbor Nuclear Generation LLC., submitted to the NRC an application for license renewal of Facility Operating License No. NPF-58 for Perry Nuclear Power Plant, Unit 1, for an additional 20 years of operation. This submission initiated the NRC's proposed action of determining whether to grant the license renewal application. Perry is a boiling water reactor designed by General Electric and is located 35 miles NE of Cleveland, OH on the banks of Lake Erie. The current facility operating license for Unit 1 expires at midnight on November 7, 2026. The license renewal application was submitted pursuant to part 54 of title 10 of the
This notice informs the public of the NRC's intention to conduct environmental scoping and prepare an EIS related to the license renewal application for Perry, and to provide the public an opportunity to participate in the environmental scoping process, as defined in 10 CFR 51.29, “Scoping-environmental impact statement and supplement to environmental impact statement,” and 10 CFR 51.116 “Notice of Intent.”
The regulations in 36 CFR 800.8, “Coordination with the National Environmental Policy Act,” allow agencies to use their National Environmental Policy Act of 1969 (42 U.S.C. 4321,
In accordance with 10 CFR 51.53(c) and 10 CFR 54.23, Perry submitted an ER as part of the license renewal application. The ER was prepared pursuant to 10 CFR part 51, “Environmental Protection Regulations for Domestic Licensing and Related Regulatory Functions,” and is publicly available in ADAMS under Accession No. ML23184A081. The ER will also be available for viewing at
The NRC intends to gather the information necessary to prepare a plant-specific supplement to NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants” (ADAMS Package Accession No. ML13107A023) (GEIS), related to the license renewal application for Perry. The NRC is required by 10 CFR 51.95 to prepare a plant-specific supplement to the GEIS in connection with the renewal of an operating license. This notice is being published in accordance with NEPA and the NRC's regulations at 10 CFR part 51.
The supplement to the GEIS will evaluate the environmental impacts of license renewal for Perry, and reasonable alternatives thereto. Possible alternatives to the proposed action include the no action alternative and reasonable alternative energy sources.
As part of its environmental review, the NRC will first conduct a scoping process for the plant-specific supplement to the GEIS and, as soon as practicable thereafter, will prepare a draft supplement to the GEIS for public comment. Participation in this scoping process by members of the public and local, State, Tribal, and Federal government agencies is encouraged. The scoping process for the supplement to the GEIS will be used to accomplish the following:
a. Define the proposed action that is to be the subject of the supplement to the GEIS;
b. Determine the scope of the supplement to the GEIS and identify the significant issues to be analyzed in depth;
c. Identify and eliminate from detailed study those issues that are peripheral or are not significant or that have been covered by prior environmental review;
d. Identify any environmental assessments and other ElSs that are being or will be prepared that are related to, but are not part of, the scope of the supplement to the GEIS under consideration;
e. Identify other environmental review and consultation requirements related to the proposed action;
f. Indicate the relationship between the timing of the preparation of the environmental analyses and the NRC's tentative planning and decision-making schedule;
g. Identify any cooperating agencies and, as appropriate, allocate assignments for preparation and schedules for completing the supplement to the GEIS to the NRC and any cooperating agencies; and
h. Describe how the supplement to the GEIS will be prepared, including any contractor assistance to be used.
The NRC invites the following entities to participate in scoping:
a. The applicant, Energy Harbor Nuclear Corp. (Energy Harbor or the applicant), doing business as Energy Harbor Nuclear Generation LLC.;
b. Any Federal agency that has jurisdiction by law or special expertise with respect to any environmental impact involved or that is authorized to develop and enforce relevant environmental standards;
c. Affected State and local government agencies, including those authorized to develop and enforce relevant environmental standards;
d. Any affected Indian Tribe;
e. Any person who requests or has requested an opportunity to participate in the scoping process; and
f. Any person who has petitioned or intends to petition for leave to intervene under 10 CFR 2.309.
In accordance with 10 CFR 51.26(b), the scoping process for an EIS may include a public scoping meeting to help identify significant issues related to the proposed action and to determine the scope of issues to be addressed in the EIS.
The NRC is announcing that it will hold an online webinar and teleconference call and an in-person near the facility, including a presentation on the license renewal process and a transcribed public comment session. The virtual meeting will be held October 19, 2023, at 2 p.m. ET. The in-person meeting will be held October 25, 2023, at 6:30 p.m. ET at the Perry Public Library, 3753 Main St., Perry, OH 44081. Details on both meetings can be found on the NRC's Public Meeting Schedule at:
The public scoping meetings will include: (1) an overview by the NRC staff of the environmental and safety review processes, the proposed scope of the supplement to the GEIS, and the proposed review schedule; and (2) the opportunity for interested government agencies, organizations, and individuals to submit comments or suggestions on environmental issues or the proposed scope of the Perry license renewal supplement to the GEIS.
Participation in the scoping process for the Perry license renewal
For the Nuclear Regulatory Commission.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the NYSE Arca Options Fee Schedule (“Fee Schedule”) regarding the Options Regulatory Fee (“ORF”). The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Fee Schedule to decrease the ORF from $0.0055 per contract to $0.0038 per contract, effective on January 1, 2024, and to provide for a temporary waiver of the ORF for the three months leading up to such change, from October 1, 2023 through December 31, 2023 (the “Waiver Period”).
As a general matter, the Exchange may only use regulatory funds such as the ORF “to fund the legal, regulatory, and surveillance operations” of the Exchange.
The ORF is assessed on OTP Holders for options transactions that are cleared by the OTP Holder through the Options Clearing Corporation (“OCC”) in the Customer range regardless of the exchange on which the transaction occurs and is collected from OTP Holder clearing firms by the OCC on behalf of NYSE Arca.
Exchange rules establish that market participants must be notified of any
Because the ORF is based on options transactions volume, the amount of ORF collected is variable. For example, if options transactions reported to OCC in a given month increase, the ORF collected from OTP Holders will likely increase as well. Similarly, if options transactions reported to OCC in a given month decrease, the ORF collected from OTP Holders will likely decrease as well. Accordingly, the Exchange monitors the amount of ORF collected to ensure that it does not exceed the ORF Costs. If the Exchange determines the amount of ORF collected exceeds ORF Costs, the Exchange will adjust the ORF by submitting a fee change filing to the Securities and Exchange Commission (the “Commission”).
The Exchange currently assesses an ORF of $0.0055 per contract. Based on the Exchange's recent review of regulatory costs, ORF collections, and options transaction volume, the Exchange proposes to decrease the ORF from the current rate of $0.0055 per contract to $0.0038 per contract effective January 1, 2024 and, in concert with the proposed reduction of the ORF, to waive the ORF from October 1, 2023 through December 31, 2023 in order to help ensure that the amount collected from the ORF, in combination with other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. The Exchange notified OTP Holders of the proposed temporary waiver of the ORF via Trader Update on September 1, 2023 (which was at least 30 calendar days prior to the proposed operative date of the waiver, October 1, 2023)
The proposed modification of the ORF and accompanying waiver are informed by the Exchange's analysis of recent options volumes. The Exchange proposes to reduce the ORF because it believes that options transaction volume has increased to a level that if the ORF is not adjusted, the ORF revenue to the Exchange year-over-year could exceed a material portion of the Exchange's ORF Costs.
For example, although customer average daily volume decreased slightly from 2021 to 2022, both total average daily volume and customer average daily volume in 2023 increased over the already elevated levels in 2021 and 2022.
The below industry data from OCC demonstrates the high options trading volumes and volatility that the industry has continued to experience in 2023:
The persisting increased options volumes have, in turn, impacted the amount of ORF collected. To determine whether ORF fees should be adjusted, the Exchange reviewed options transaction volume from 2021 through August 2023. Based on the Exchange's review and analysis of historical options transaction volume and predictions regarding future options transaction volume, the Exchange projects that options transaction volume is likely to continue to remain high into 2024.
The Exchange believes that it has sufficient information based on recent options transaction volume to determine how to adjust the ORF for 2024. Taking into consideration both the sustained increase in options transaction volume, which has persisted into 2023 (and which has translated to increased ORF collection), the Exchange proposes to decrease the ORF from $0.0055 to $0.0038 per contract. The Exchange further proposes to make this change effective on January 1, 2024 and to not assess any ORF during the Waiver Period, rather than further adjusting the ORF for the duration of the Waiver Period, as the Exchange believes this proposal would most efficiently accomplish the goals of ensuring that ORF collection does not exceed ORF Costs for 2023 and modifying the ORF rate so that the Exchange may assess an ORF that is designed to recover a material portion, but not all, of the Exchange's projected ORF Costs when the Exchange resumes assessing ORF on January 1, 2024.
The proposed decrease in ORF is based on the Exchange's estimated projections for its regulatory costs, balanced with the observed increase in options volumes. The Exchange cannot predict whether options volume will remain at the current level going forward and projections for future regulatory costs are estimated, preliminary, and may change. However, the Exchange believes that amounts collected from assessment of the ORF (as modified) will continue to cover a material portion, but not all, of the
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)
The Exchange believes the proposed reduction of ORF and accompanying temporary waiver of the ORF is reasonable because it would help ensure that collections from the ORF do not exceed a material portion of the Exchange's ORF Costs. As noted above, the ORF is designed to recover a material portion, but not all, of the Exchange's ORF Costs.
Although there can be no assurance that the Exchange's final costs for 2023 will not differ materially from its expectations and prior practice, nor can the Exchange predict with certainty whether options volume will remain at current or similar levels going forward, the Exchange believes that the amount collected based on the current ORF rate, when combined with regulatory fees and fines, may result in collections in excess of the estimated ORF Costs for the year and going forward. Particularly, as noted above, the options market has continued to experience elevated volumes and volatility in 2023, thereby resulting in substantially higher ORF collections than projected. The Exchange therefore believes that it would be reasonable to decrease the ORF from $0.0055 per contract to $0.0038 per contract effective January 1, 2024, and, in connection with that change, to waive ORF from October 1, 2023 through December 31, 2023. The Exchange believes the proposed change is reasonable because it would help the Exchange ensure that ORF collection does not exceed a material portion of the ORF Costs for 2023 and facilitate the efficient implementation of a revised ORF rate designed to recover a material portion, but not all, of the Exchange's projected ORF Costs. The Exchange proposes to make the new ORF rate effective on January 1, 2024 and to not assess any ORF during the Waiver Period, rather than further adjusting the ORF for the duration of the Waiver Period, as the Exchange believes this proposal would most efficiently accomplish these objectives. The Exchange believes that not assessing ORF during the Waiver Period and taking into account all of the Exchange's other regulatory fees and fines would allow the Exchange to continue covering a material portion of ORF Costs, while lessening the potential for generating excess funds that may otherwise occur using the current rate. The Exchange also believes that it is reasonable to resume ORF at the decreased rate of $0.0038 on January 1, 2024. The proposed rate of $0.0038 per contract is based on the Exchange's estimated projections for its regulatory costs, balanced with the increase in options volumes that has persisted into 2023 and that is likely to continue into 2024; the Exchange thus believes that resumption of the ORF at this rate on January 1, 2024 is reasonable because it would permit the Exchange to resume assessing an ORF that is designed to recover a material portion, but not all, of the Exchange's projected ORF Costs. The Exchange would continue monitoring ORF Costs in advance of the resumption of the ORF and when it resumes assessing ORF on January 1, 2024 and, if the Exchange determines that, in light of projected volumes and ORF Costs, the ORF rate should be further modified to help ensure that ORF collections would not exceed a material portion of ORF Costs, further adjust the ORF by submitting a proposed rule change and notifying OTP Holders of such change by Trader Update.
The Exchange believes its proposal is an equitable allocation of fees among its market participants. The Exchange believes that the proposed waiver would not place certain market participants at an unfair disadvantage because all options transactions must clear via a clearing firm. Such clearing firms can then choose to pass through all, a portion, or none of the cost of the ORF to its customers,
The Exchange believes that the proposal is not unfairly discriminatory. The Exchange believes that the proposed waiver of the ORF would not place certain market participants at an unfair disadvantage because all options transactions must clear via a clearing firm. Such clearing firms can then choose to pass through all, a portion, or none of the cost of the ORF to its customers,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The municipal advisors whose names appear in the attached Appendix, hereinafter referred to as the “registrants,” are registered as municipal advisors pursuant to Sections 15B(a)(1)(B) and 15B(a)(2) of the Securities Exchange Act of 1934 (the “Act”).
On August 29, 2023, a Notice of Intention to Cancel Registration of Certain Municipal Advisors, including the registrants, was published in the
Pursuant to Section 15B(c)(3) of the Act, the Commission has found that each of the registrants is no longer in existence or has ceased to do business as a municipal advisor.
Accordingly,
For the Commission, by the Office of Municipal Securities, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the NYSE American Options Fee Schedule (“Fee Schedule”) regarding the Options Regulatory Fee (“ORF”). The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Fee Schedule to decrease the ORF from $0.0055 per contract to $0.0038 per contract, effective on January 1, 2024, and to provide for a temporary waiver of the ORF for the three months leading up to such change, from October 1, 2023 through December 31, 2023 (the “Waiver Period”).
As a general matter, the Exchange may only use regulatory funds such as the ORF “to fund the legal, regulatory, and surveillance operations” of the Exchange.
The ORF is assessed on ATP Holders for options transactions that are cleared by the ATP Holder through the Options Clearing Corporation (“OCC”) in the Customer range regardless of the exchange on which the transaction occurs and is collected from OTP Holder clearing firms by the OCC on behalf of NYSE American.
Exchange rules establish that market participants must be notified of any change in the ORF via Trader Update at least 30 calendar days prior to the effective date of the change.
Because the ORF is based on options transactions volume, the amount of ORF collected is variable. For example, if options transactions reported to OCC in a given month increase, the ORF collected from ATP Holders will likely increase as well. Similarly, if options transactions reported to OCC in a given month decrease, the ORF collected from ATP Holders will likely decrease as well. Accordingly, the Exchange monitors the amount of ORF collected to ensure that it does not exceed the ORF Costs. If the Exchange determines the amount of ORF collected exceeds ORF Costs, the Exchange will adjust the ORF by submitting a fee change filing to the Securities and Exchange Commission (the “Commission”).
The Exchange currently assesses an ORF of $0.0055 per contract. Based on the Exchange's recent review of regulatory costs, ORF collections, and options transaction volume, the Exchange proposes to decrease the ORF from the current rate of $0.0055 per contract to $0.0038 per contract effective January 1, 2024 and, in concert with the proposed reduction of the ORF, to waive the ORF from October 1, 2023 through December 31, 2023 in order to help ensure that the amount collected from the ORF, in combination with other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. The Exchange notified ATP Holders of the proposed temporary waiver of the ORF via Trader Update on September 1, 2023 (which was at least 30 calendar days prior to the proposed operative date of the waiver, October 1, 2023)
The proposed modification of the ORF and accompanying waiver are informed by the Exchange's analysis of recent options volumes. The Exchange proposes to reduce the ORF because it believes that options transaction volume has increased to a level that if the ORF is not adjusted, the ORF revenue to the Exchange year-over-year could exceed a material portion of the Exchange's ORF Costs.
For example, although customer average daily volume decreased slightly from 2021 to 2022, both total average daily volume and customer average daily volume in 2023 increased over the already elevated levels in 2021 and 2022.
The below industry data from OCC demonstrates the high options trading volumes and volatility that the industry has continued to experience in 2023:
The persisting increased options volumes have, in turn, impacted the amount of ORF collected. To determine whether ORF fees should be adjusted, the Exchange reviewed options transaction volume from 2021 through August 2023. Based on the Exchange's review and analysis of historical options transaction volume and predictions regarding future options transaction volume, the Exchange projects that options transaction volume is likely to continue to remain high into 2024.
The Exchange believes that it has sufficient information based on recent options transaction volume to determine how to adjust the ORF for 2024. Taking into consideration both the sustained increase in options transaction volume, which has persisted into 2023 (and which has translated to increased ORF collection), the Exchange proposes to decrease the ORF from $0.0055 to $0.0038 per contract. The Exchange further proposes to make this change effective on January 1, 2024 and to not assess any ORF during the Waiver Period, rather than further adjusting the ORF for the duration of the Waiver Period, as the Exchange believes this proposal would most efficiently accomplish the goals of ensuring that ORF collection does not exceed ORF Costs for 2023 and modifying the ORF rate so that the Exchange may assess an ORF that is designed to recover a material portion, but not all, of the Exchange's projected ORF Costs when the Exchange resumes assessing ORF on January 1, 2024.
The proposed decrease in ORF is based on the Exchange's estimated projections for its regulatory costs, balanced with the observed increase in options volumes. The Exchange cannot predict whether options volume will remain at the current level going forward and projections for future regulatory costs are estimated, preliminary, and may change. However, the Exchange believes that amounts collected from assessment of the ORF (as modified) will continue to cover a material portion, but not all, of the Exchange's ORF Costs. In addition, because of the sustained impact of the elevated trading volumes that have persisted into 2023, along with the difficulty of predicting when volumes may return to more normal levels, the Exchange believes that waiving ORF from October 1, 2023 to December 31, 2023 and implementing the reduced ORF rate of $0.0038 on January 1, 2024 (rather than reducing ORF more drastically in the interim) would lessen the potential for generating excess funds and help ensure that the ORF is designed to recover a material portion, but not all, of the Exchange's projected ORF Costs. The Exchange will continue monitoring ORF Costs in advance of the resumption of the ORF and when it resumes assessing ORF on January 1, 2024, and, if the Exchange determines that, in light of projected volumes and ORF Costs, the ORF rate should be further modified to help ensure that ORF collections would not exceed a material portion of ORF Costs, adjust the ORF by submitting a proposed rule change and notifying ATP Holders of such change by Trader Update.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)
The Exchange believes the proposed reduction of ORF and accompanying temporary waiver of the ORF is reasonable because it would help ensure that collections from the ORF do not exceed a material portion of the Exchange's ORF Costs. As noted above, the ORF is designed to recover a material portion, but not all, of the Exchange's ORF Costs.
Although there can be no assurance that the Exchange's final costs for 2023 will not differ materially from its expectations and prior practice, nor can the Exchange predict with certainty whether options volume will remain at current or similar levels going forward, the Exchange believes that the amount collected based on the current ORF rate, when combined with regulatory fees and fines, may result in collections in excess of the estimated ORF Costs for the year and going forward. Particularly, as noted above, the options market has continued to experience elevated volumes and volatility in 2023, thereby resulting in substantially higher ORF collections than projected. The Exchange therefore believes that it would be reasonable to decrease the ORF from $0.0055 per contract to $0.0038 per contract effective January 1, 2024, and, in connection with that change, to waive ORF from October 1,
The Exchange believes its proposal is an equitable allocation of fees among its market participants. The Exchange believes that the proposed waiver would not place certain market participants at an unfair disadvantage because all options transactions must clear via a clearing firm. Such clearing firms can then choose to pass through all, a portion, or none of the cost of the ORF to its customers,
The Exchange believes that the proposal is not unfairly discriminatory. The Exchange believes that the proposed waiver of the ORF would not place certain market participants at an unfair disadvantage because all options transactions must clear via a clearing firm. Such clearing firms can then choose to pass through all, a portion, or none of the cost of the ORF to its customers,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for the State of Georgia (FEMA-4738-DR), dated 09/07/2023.
Issued on 10/02/2023.
Submit completed loan applications to: U.S. Small Business
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of GEORGIA, dated 09/07/2023, is hereby amended to include the following areas as adversely affected by the disaster:
All other information in the original declaration remains unchanged.
Pursuant to the authority granted to the United States Small Business Administration under the Small Business Investment Act of 1958, as amended, (“Act”) under Section 309 of the Act and the Small Business Administration Rules and Regulations under 13 CFR 107.1900 to function as a small business investment company under the Small Business Investment Company License No. 01/01-0422 issued to New Canaan Funding Mezzanine V SBIC, LP, said license is hereby declared null and void.
Pursuant to the authority granted to the United States Small Business Administration under the Small Business Investment Act of 1958, as amended, (“Act”), under section 309 of the Act, and 13 CFR 107.1900 of the Code of Federal Regulations, to function as a small business investment company under the Small Business Investment Company License No. 02/02-0643 issued to Hudson Ferry Capital II, L.P., said license is hereby declared null and void.
Office of Capital Access, U.S. Small Business Administration.
Notice of a new matching program waiver.
Pursuant to section 552da€(12) of the Privacy Act of 1974, as amended, and the Office of Management and Budget (OMB) Guidelines on the Conduct of Matching Programs, and the Payment Integrity Information Act of 2019 (PIIA), notice is hereby given of the conduct of the Computer Matching Program pertaining to the Do Not Pay (DNP) Working System's support of the Small Business Administration's (SBA) programs are the Disaster Home Loan program, Business and Economic Injury Disaster Loan (EIDL) programs, 7(a) Loan programs, and 504 loan programs. This matching program will provide SBA with information that will help it identify potentially improper payments in these SBA Loan Programs.
Submit comments on or before November 9, 2023. This new matching agreement will be effective upon publication and expires 36 months from the date of publication.
Inquiries and comments on this proposed matching program can be addressed to U.S. Small Business Administration, Attn: Sheri McConville, (Acting) Director, Office of Performance and Systems Management, Office of Capital Access, 409 3rd St. SW, Washington, DC 20416, or by email:
Kelvin L. Moore, Chief Information Security Officer, Office of the Chief Information Officer, Telephone (202-921-6273),
David J. Ambrose, Chief Security Officer/Chief Privacy Officer, Bureau of the Fiscal Service, Telephone (202-874-6488),
The Computer Matching and Privacy Protection Act of 1988 (Pub. L. 101-503), amended the Privacy Act (5 U.S.C. 552a) by describing the way computer matching involving Federal agencies could be performed and adding certain protections for individuals applying for and receiving Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such individuals. Moreover, PIIA, (31 U.S.C. 3351
U.S. Small Business Administration as the recipient agency, will match against the Bureau of the Fiscal Service, U.S. Department of the Treasury.
In accordance with 31 U.S.C. 3354, executive agencies are required to “review prepayment and pre-award procedures and ensure that a thorough
The Debt Collection Improvement Act of 1996, 31 U.S.C. 3325(d) and 7701(c)(1).
The purpose of this program is to assist SBA in the identification of potentially improper payments by allowing SBA access to four restricted databases in DNP's Working System to screen SBA guaranteed and direct loan applications for eligibility, and to conduct analyses to prevent fraud and improper payments.
Individuals/entities applying for or receiving the Disaster Home Loan program; Business and Economic Injury Disaster Loan (EIDL) programs; 7(a) Loan programs; and 504 loan programs.
SBA is also functioning as the source agency and will furnish information to the DNP Working System regarding SBA Program applicants or benefit recipients. The requests from the SBA may include: The loan applicant's name (which may include their individual name and/or business/trading names, if applicable), Taxpayer Identification Number (TIN), type of TIN, Unique Entity Identifier (UEI), address, date of birth, sex, telephone number(s), email address(es), payment information, associated banking information, and associated payment/transaction information. The Bureau of the Fiscal Service will provide a response record for each individual/entity identified by the source agency. When there is a match between a record provided by the SBA and one or more of the databases contained in the DNP Working System, the DNP Working System will disclose to the source agency the presence of a potentially matching record in the DNP Working System and the database(s) that contain the potentially matching record(s).
SBA 20 Disaster Loans Case File, 86 FR 64979 (Nov 19, 2021); SBA 21 Loan Systems, 86 FR 23026 (April 30, 2021); and Treasury/Fiscal Service .017—Do Not Pay Payment Verification Records, 85 FR 11776 (Feb. 27, 2020).
Pursuant to the authority granted to the United States Small Business Administration under the Small Business Investment Act of 1958, as amended, under section 309 of the Act and 13 CFR 107.1900 of the Code of Federal Regulations to function as a small business investment company under the Small Business Investment Company License No. 06/06-0347 issued to Escalate Capital Partners SBIC III, LP said license is hereby declared null and void.
Notice is hereby given that Everside SBIC I, L.P., 1290 Avenue of the Americas, 34th Floor, New York, NY 10104, an applicant to become a Federal Licensee under the Small Business Investment Act of 1958, as amended (“Act”), in connection with the financing of a small concern, has sought an exemption under Section 312 of the Act and 13 CFR 107.730 of the Code of Federal Regulations,
The proposed transaction is brought within the purview of 13 CFR 107.730 because Resolute Capital Partners Fund V-A, L.P., Resolute Capital Partners Fund V-B, L.P. and Resolute Capital Partners Fund IV, L.P (collectively, “Resolute”), Associates of Everside SBIC I, L.P., as defined in 13 CFR 107.50, hold a 10% or greater equity interest in the Company. By virtue of Resolute's equity ownership of the Company, the Company is also considered an Associate of the Licensee.
Therefore, the proposed transaction requires a regulatory exemption pursuant to 13 CFR 107.730. Notice is hereby given that any interested person may submit written comments on the transaction within fifteen days of the date of this publication to the Associate Administrator, Office of Investment and Innovation, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416.
Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Colorado (FEMA-4731-DR), dated 08/25/2023.
Issued on 10/02/2023.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Colorado, dated 08/25/2023, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Georgia (FEMA-4738-DR), dated 09/09/2023.
Issued on 10/02/2023.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Georgia, dated 09/09/2023, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Florida (FEMA-4734-DR), dated 09/09/2023.
Issued on 10/02/2023.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Florida, dated 09/09/2023, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
Small Business Administration.
Amendment 4.
This is an amendment of the Presidential declaration of a major disaster for the State of Florida (FEMA-4734-DR), dated 08/31/2023.
Issued on 10/02/2023.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of Florida, dated 08/31/2023, is hereby amended to include the following areas as adversely affected by the disaster:
All other information in the original declaration remains unchanged.
Notice is hereby given that HCAP Partners V, L.P., 4250 Executive Square, Suite 500, La Jolla, CA 92037, a Federal Licensee under the Small Business Investment Act of 1958, as amended (“the Act”), in connection with the financing of a small concerns, has sought an exemption under section 312 of the Act and Section 107.730, Financings which Constitute Conflict of Interest of the Small Business Administration (“SBA”) Rules and Regulations (13 CFR 107.730). HCAP Partners V, L.P. (“HCAP V”) is proposing to provide financing to Cubex
The proposed transaction is brought within the purview of § 107.730 of the Regulations because HCAP Partners III, L.P. (“HCAP III”), an Associate of HCAP V by virtue of Common Control as defined in § 107.50, holds a 21% of equity interest in the Company. By virtue of HCAP III's equity ownership, the Company and HCAP V are also Associates. HCAP III expects to receive $18.6 million from the proposed transaction.
Therefore, the proposed transaction requires a regulatory exemption pursuant to 13 CFR 107.730. Notice is hereby given that any interested person may submit written comments on the transaction within fifteen days of the date of this publication to Associate Administrator for Investment, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416.
On January 3, 2023, notice was published on page 125 of the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to an agreement with their foreign owner or custodian for temporary exhibition or display in the Department of European Paintings of The Metropolitan Museum of Art, New York, New York, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
On June 3, 2022, notice was published on page 33866 of the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to an agreement with their foreign owner or custodian for temporary display in the exhibition “Beyond the Great Wave: Works by Hokusai from the British Museum” at the Bowers Museum, Santa Ana, California, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Federal Aviation Administration (FAA), DOT.
Request for public comment.
Notice is being given that the FAA is considering a request from the Jacksonville Aviation Authority (JAA) to change 79.23 acres of airport property from aeronautical use to non-aeronautical use for commercial development at Jacksonville Executive at Craig Airport in Jacksonville, Florida. The surplus property land is no longer required for aviation use. The land has been designated for non-aeronatucal use on the Airport Layout Plan. JAA will enter into a land lease agreement with a commercial developer, which will generate non-aeronautical revenue to be used for the operation and maintenance of the airport.
Comments are due on or before November 9, 2023.
Documents are available for review at the FAA Orlando Airports District Office, 8427 SouthPark Circle, Suite 524, Orlando, FL 32819. Written comments on the Sponsor's request must be delivered or mailed to: Ryan Allen, Community Planner, Orlando Airports District Office, 8427 SouthPark Circle, Suite 524, Orlando, FL 32819.
Ryan Allen, Community Planner, Orlando Airports District Office, 8427 SouthPark Circle, Suite 524, Orlando, FL 32819, or by telephone at (407) 487-7086.
Section 125 of The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) requires the FAA to provide an opportunity for public notice and comment prior to the “waiver” or “modification” of a Sponsor's Federal obligation to use certain airport land for non-aeronautical purposes.
Federal Highway Administration (FHWA), Department of Transportation (DOT).
Notice of limitations on claims for judicial review of action by FHWA and other Federal agencies.
This notice announces actions taken by FHWA and other Federal agencies that are final. This final agency action relates to a proposed new interchange project, the I-20 at Old Mill Road Interchange Project, along I-20 at Old Mill Road beginning approximately 0.38 mile south of I-20 on Old Mill Road and ending approximately 0.27 mile north of I-20 at a signalized intersection with a newly constructed frontage road. The length of the proposed project is approximately 0.73 mile. The I-20 at Old Mill Road Interchange Construction Project is located in Morgan and Walton Counties, Georgia. The FHWA's Finding of No Significant Impact (FONSI) provides details on the Selected Alternative for the proposed interchange. Those actions grant licenses, permits, and approvals for the project.
By this notice, FHWA is advising the public of the final agency actions subject to 23 U.S.C. 139(
For FHWA: Ms. Sabrina David, Division Administrator, Georgia Division, Federal Highway Administration, 75 Ted Turner Drive, Suite 1000, Atlanta, Georgia 30303; telephone 404-562-3630; email:
Notice is hereby given that FHWA has taken a final agency action on GDOT Project PI 0018361 by issuing a FONSI for the following new interchange project in the State of Georgia: The I-20 at Old Mill Road Interchange Construction Project located in Morgan and Walton Counties, Georgia. The Selected Alternative will construct a new interchange along I-20 at Old Mill Road. Old Mill Road in the vicinity of the new interchange will be widened from a two-lane section to a four-lane section with a 20-foot grassed median with bike lanes (north of I-20) and sidewalks and realigned to the west of its current location. The project will begin approximately 0.38 mile south of I-20 on Old Mill Road, construct a new bridge over I-20 to the west of the existing bridge, and terminate approximately 0.27 mile north of I-20 at a signalized intersection with a newly constructed frontage road. The length of the proposed construction is approximately 0.73 mile. The purpose of the project is listed below:
• Provide new, direct vehicular access to I-20, which will serve current and projected future vehicular and truck traffic;
• Provide congestion relief for the existing I-20/US 278 interchange to the west, which is not anticipated to have sufficient capacity to accommodate projected traffic volumes by 2045;
• Accelerate project delivery.
The FHWA's action, related actions by other Federal Agencies, and the laws under which such actions were taken are described in the Environmental Assessment (EA) for the project, approved on March 8, 2023, the FONSI issued on October 3, 2023, and other documents in the project file. The EA, FONSI and other project records are available by contacting FHWA or GDOT at the addresses listed in the
This notice applies to all Federal agency decisions as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to:
Federal Transit Administration (FTA), Department of Transportation (DOT).
Notice of Funding Opportunity (NOFO).
The Federal Transit Administration (FTA) announces the opportunity to apply for $196,906,663 in competitive grants under the fiscal year (FY) 2024 Competitive Grants for Rail Vehicle Replacement Program (Rail Vehicle Replacement Program). As required by Federal public transportation law, Rail Vehicle Replacement Program funds will be allocated competitively to assist in the funding of capital projects to replace rail rolling stock. FTA may allocate additional funding made available to the program prior to the announcement of project selections.
Complete proposals must be submitted electronically through the
Donna Iken, Competitive Grants for Rail Vehicle Replacement Program Manager, FTA Office of Program Management, 202-366-0876, or
Federal public transportation law (49 U.S.C. 5337(f)) authorizes FTA to award grants for the replacement of rail rolling stock through a competitive process, as described in this notice. The Rail Vehicle Replacement Program provides funding to State and local governmental authorities. The Federal Assistance Listing for the program is 20.525.
Passenger rail service provides critical and cost-effective transportation links throughout the United States and faces a critical backlog of state of good repair and safety investments. FTA seeks to fund projects to all populations in a project area that create proportional impacts, remove transportation related disparities, and increase equitable access to project benefits, consistent with
Federal public transportation law (49 U.S.C. 5338(a)(2)(L)) authorizes $300,000,000 in contract authority funds for FY 2024 for competitive grants under the Rail Vehicle Replacement Program. A portion of this FY 2024 funding was committed in the FY 2022 and FY 2023 Competitive Grants for Rail Vehicle Replacement Program Project Selections, thus the remaining funding available for FY 2024 totals $196,906,663. FTA may also commit up to $600,000,000 in FY 2025 and FY 2026 funding towards projects selected in FY 2024.
For the FY 2023 NOFO, FTA received 18 eligible proposals from 13 states requesting over $3.5 billion in Federal funds. FTA selected six projects in six states, allocating $703,093,337.
FTA will grant pre-award authority to incur costs for selected projects beginning on the date this FY 2024 NOFO is published in the
FTA may select projects to receive multi-year grant agreements. If a project is selected to receive a multi-year grant agreement, that agreement will establish the maximum amount of Federal financial assistance for the project that may be provided in not more than three consecutive fiscal years. A multi-year grant agreement will obligate an amount of available budget authority and include a contingent commitment to obligate an additional amount from future available budget authority. The contingent commitment under a multi-year agreement is not an obligation of the Federal Government.
Eligible applicants for the Competitive Grants for Rail Vehicle Replacement Program are States and local governmental authorities.
Per 49 U.S.C. 5337(f)(5), the Competitive Grants for Rail Vehicle Replacement funding may be up to 50 percent of the total eligible project cost. Other Federal funding, including FTA funding, such as State of Good Repair Program formula funding, may be applied for the project up to a maximum 80 percent Federal share of eligible project costs, per 49 U.S.C. 5337(f)(6). For example, a rail vehicle replacement project with a total eligible cost of $100,000,000 may receive up to $50,000,000 from this program. The remaining $50,000,000 could be provided from a combination of non-Federal and other Federal funds, up to $30,000,000 of which could be other Federal funding. For a $100,000,000 project, at least $20,000,000 (20 percent) must be non-Federal funds.
Eligible sources of non-Federal matching funds include:
i. Cash from non-governmental sources other than revenues from providing transit services (such as fare revenues);
ii. Non-farebox revenues from the operation of public transportation service, such as the sale of advertising and concession.
iii. Monies received under a service agreement with a State or local social service agency or private social service organization;
iv. Undistributed cash surpluses, replacement or depreciation cash funds, reserves available in cash, or new capital;
v. In-kind contributions integral to the project. Revenue bond proceeds for a capital project, with prior FTA approval; and
vi. Transportation Development Credits (formerly referred to as Toll Revenue Credits).
The focus of the grant program is to modernize America's transit system, focusing on maintaining a State of Good Repair for fixed-guideway rail transit. Under the Competitive Grants for Rail Vehicle Replacement Program (49 U.S.C. 5337(f)), eligible projects are the replacement of rail rolling stock. For the purposes of this program, rail rolling stock is defined as revenue service, passenger carrying vehicles, or propulsion (locomotives) vehicles necessary for the provision of rail public transportation. Replacement is defined as the number of vehicles required to replace the number of vehicles to be removed from service that are substantially the same type. If changing vehicle type (
As required by Federal public transportation law (49 U.S.C. 5337(f)(4)), FTA will consider the size of the rail system of the applicant, the amount of funds available to the applicant from this program, the age and condition of the rail rolling stock of the applicant that has exceeded or will exceed the useful service life in the five-year period following a grant award, and whether the applicant has identified replacement of the rail vehicles as a priority in the investment prioritization portion of the transit asset management plan of the recipient pursuant to part 625 of title 49 of the Code of Federal Regulations. Evaluation criteria are described in detail in Section E of this notice.
Applications may be accessed, and must be submitted, electronically through
A complete proposal submission consists of two forms: (1) the SF-424 Application for Federal Assistance; and (2) the supplemental form for the FY 2024 Rail Vehicle Replacement Program. The supplemental form and any supporting documents must be attached to the “Attachments” section of the SF-424. The application must include responses to all sections of the SF-424 Application for Federal Assistance and the supplemental form, unless designated as optional. The information on the supplemental form will be used to determine applicant and project eligibility for the program, and to evaluate the proposal against the selection criteria described in part E of this notice. Failure to submit the information as requested can delay review or disqualify the application.
FTA will accept only one supplemental form per SF-424 submission. FTA encourages applicants to consider submitting a single supplemental form that includes multiple activities as one project to be evaluated as a consolidated proposal. If an applicant chooses to submit separate proposals for individual consideration by FTA, each proposal must be submitted using a separate SF-424 and supplemental form.
Applicants may attach additional supporting information to the SF-424 submission, including but not limited to documentation supporting the applicant's eligibility for the grant programs, letters of support, project budgets, fleet status reports, or excerpts from relevant planning documents. Supporting documentation should be described and referenced by file name in the appropriate response section of the supplemental form, or it may not be reviewed.
Information such as applicant name, Federal amount requested, local match amount, and description of areas served may be requested in varying degrees of detail on both the SF-424 and supplemental form. Applicants must fill in all fields unless otherwise stated on the forms. Applicants should not place N/A or “refer to attachment” in lieu of typing in responses in the field sections. If information is copied into the supplemental form from another source, applicants should verify that pasted text is fully captured on the supplemental form and has not been truncated by the character limits built into the form. Applicants should use both the “Check Package for Errors” and the “Validate Form” validation buttons on both forms to check all required fields on the forms, and to ensure that the Federal and local amounts specified are consistent. Applicants should enter their information in the supplemental form (fillable PDF) that is made available on FTA's website or through the
The SF-424 Application for Federal Assistance and the supplemental form will prompt applicants for the required information:
Applicants should reference the criteria described in Section E of this NOFO for further description of the content applicants should address in their applications.
Each applicant is required to: (1) be registered in
All applicants must provide a unique entity identifier provided by SAM. Registration in SAM may take as little as 3-5 business days, but since there could be unexpected steps or delays (for example, if there is a need to obtain an Employer Identification Number), FTA recommends allowing ample time, up to several weeks, for completion of all steps. For additional information on obtaining a unique entity identifier, please visit
Project proposals must be submitted electronically through
FTA urges applicants to submit applications at least 72 hours prior to the deadline to allow time to correct any problems that may have caused either
Within 48 hours after submitting an electronic application, the applicant should receive an email message from
Applicants are encouraged to begin the process of registration on the
Funds made available under this NOFO cannot be used to reimburse applicants for otherwise eligible expenses incurred prior to the publication of this NOFO in the
Applicants are encouraged to identify scaled funding options in case insufficient funding is available to fund a project at the full requested amount. If an applicant advises that a project is scalable, the applicant must provide an appropriate minimum funding amount that will fund an eligible project that achieves the objectives of the program and meets all relevant program requirements. The applicant must provide a clear explanation of how the project budget would be affected by a reduced award. FTA may award a lesser amount whether or not a scalable option is provided. FTA may award funds using a multi-year grant agreement of up to three years, as described in Section B of this notice.
Projects will be evaluated primarily on the responses provided in the supplemental form. Additional information may be provided to support the responses; however, any additional documentation must be directly referenced on the supplemental form, including the file name where the additional information can be found. FTA will evaluate project proposals based on the criteria described in this notice.
As the purpose of this program is to fund rail rolling stock and maintain public transportation systems in a state of good repair, applications will be evaluated based on the quality and extent to which they demonstrate how the proposed project will address an unmet need for capital investment in rail vehicles.
Applicants must provide information on the age, condition, and performance of the rail vehicles to be replaced. The law requires FTA to consider the age and condition of the rail rolling stock of the applicant that has exceeded or will exceed the useful service life of the rail rolling stock in the 5-year period following the grant. FTA will define that five years as starting one year after the date applications are due. FTA will provide higher priority for rolling stock already past its useful life. The proposal must address how the project conforms to the applicant's spare ratio guidelines and provide the rationale.
FTA will evaluate the potential for projects to improve the condition of the transit system by replacing rail vehicles that are in poor condition or have surpassed their minimum or intended useful life benchmarks. Additionally, applicants should specifically identify and address in their application one or more of the following:
Applicants must demonstrate how the proposed project is consistent with local and regional planning documents and identified priorities. This will involve assessing whether the project is consistent with the transit priorities identified in the long-range transportation plan and the State and Metropolitan Transportation Improvement Program (STIP/TIP). Applicants should note if the project could not be included in the financially constrained STIP or TIP due to lack of funding, and if selected that the project can be added to the federally approved STIP before grant award.
FTA will evaluate applications based on the quality and extent to which they assess whether the project is consistent with the investment priorities identified in the applicant's Transit Asset Management (TAM) Plan, pursuant to 49 CFR part 625. Applicants should also describe how replacing the vehicle will help them meet the state of good repair performance targets set in their Transit Asset Management (TAM) Plan.
FTA encourages applicants to demonstrate State or local support by including letters of support from State departments of transportation, local transit agencies, local government officials and public agencies, local non-profit or private sector organizations, and other relevant stakeholders. Applications that include letters of support will be viewed more favorably than those that do not. For FTA to fully consider a letter of support, the letter must be included in the application package. In an area with both rail and other public transit operators, FTA will evaluate whether project proposals demonstrate coordination with and support of other related projects within the applicant's Metropolitan Planning Organization (MPO) or the geographic region within which the proposed project will operate.
Applicants must identify the sources of funding for the total eligible vehicle replacement project cost, including other Federal funding if applicable, and the non-Federal cost share, and describe whether such funds are currently available for the project or will need to be secured if the project is selected for funding. FTA will consider the availability of the non-Federal cost share as evidence of local financial commitment to the project. Additional consideration will be given to those projects for which non-Federal funds have already been made available or reserved. Applicants should submit evidence of the availability of funds for the project, by including, for example, a board resolution, letter of support from the State, a budget document highlighting the line item or section committing funds to the proposed project, or other documentation of the source of other non-Federal funds.
An applicant may provide documentation of previous and recent local investments in the project, which cannot be used to satisfy non-Federal matching requirements, as evidence of local financial commitment.
Projects will be evaluated based on the extent to which the project is ready to implement within a reasonable period of time and whether the applicant's proposed implementation plans are reasonable and complete. Applicants should discuss and include any supporting information demonstrating that the proposed project is compatible with the existing system and takes into account any adjustments that need to be made to complete successful implementation.
In assessing whether the project is ready to implement within a reasonable period of time, FTA will consider whether the project qualifies for a Categorical Exclusion, or whether the required environmental work has been initiated or completed for projects that require an Environmental Assessment or Environmental Impact Statement under the National Environmental Policy Act of 1969. As such, applicants should submit information describing the project's anticipated path and timeline through the environmental review process. If the project will qualify as a Categorical Exclusion, the applicant must say so explicitly in the application. The proposal must also state whether grant funds can be obligated within 12 months from time of award, if selected, and if necessary, the timeframe under which the Metropolitan TIP and STIP can be amended to include the proposed project. Additional consideration will be given to projects for which grant funds can be obligated within 12 months from time of award. The applicant must also include the date the rail vehicle procurement Notice to Proceed has been or is intended to be issued to the manufacturer if proposing to utilize an existing contract.
In assessing whether the proposed implementation plans are reasonable and complete, FTA will review the proposed project implementation plan, including all necessary project milestones and the overall project timeline. For projects that will require formal coordination, approvals, or permits from other agencies or project partners, the applicant must demonstrate coordination with these organizations and their support for the project, such as through letters of support.
Applicants must demonstrate that they have the technical, legal, and financial capacity to undertake the project. FTA will review relevant oversight assessments and records to determine whether there are any outstanding legal, technical, or financial issues with the applicant that would affect the outcome of the proposed project. Additional information on the compliance requirements for these grants appears later in this notice.
Applicants with outstanding legal, technical, or financial compliance issues from an FTA compliance review or FTA grant-related Single Audit finding must explain how corrective actions taken will mitigate negative impacts on the project.
FTA technical evaluation committees will evaluate proposals using the project evaluation criteria. FTA staff may request additional information from applicants, if necessary. After consideration of the findings of the technical evaluation committees, the FTA Administrator will determine the final selection of projects for program funding. In determining the allocation of program funds, FTA may consider geographic diversity, the age and condition of the vehicles to be replaced, diversity in the size of the transit systems receiving funding, and the availability to the applicant of State of Good Repair Formula funding or other competitive awards. FTA may consider capping the amount a single applicant may receive.
Prior to making an award with a total amount of Federal share greater than the simplified acquisition threshold (currently $250,000), FTA is required to review and consider any information about the applicant that is in the Federal Awardee Performance and Integrity Information Systems (FAPIIS) accessible through SAM. An applicant may review and comment on information about itself that a Federal awarding agency previously entered. FTA will consider any comments by the applicant, in addition to the other information in FAPIIS, in making a judgment about the
Final project selections will be posted on the FTA website. Only proposals from eligible recipients for eligible activities will be considered for funding. There is no minimum or maximum grant award amount; however, FTA intends to fund up to three meritorious projects per year of funding. FTA may also award multi-year grant agreements of up to three years. Due to funding limitations, projects that are selected for funding may receive less than the amount originally requested. In those cases, applicants must be able to demonstrate that the proposed projects are still viable and can be completed with the amount awarded.
Pre-award authority for the selected projects is available beginning on the date that this Rail Vehicle Replacement Program NOFO is published in the
If selected, awardees will apply for a grant through FTA's Transit Award Management System (TrAMS). All recipients are subject to the grant requirements of the State of Good Repair program (49 U.S.C. 5337), FTA's Master Agreement for financial assistance awards, the annual Certifications and Assurances required of applicants, and FTA Circular “State of Good Repair Grant Program” (FTA.C.5300.1E). All recipients must also follow the Award Management Requirements (FTA.C.5010.1) and the labor protections required by Federal public transportation law (49 U.S.C. 5333(b)). All of these documents are available on FTA's website. Technical assistance regarding these requirements is available from each FTA regional office.
A project funded under this NOFO must comply with FTA's Buy America (49 U.S.C. 5323(j)) and the Build America, Buy America Act's domestic preference requirements for infrastructure projects (§§ 70901-70953 of the Infrastructure Investment and Jobs Act, Pub. L. 117-58), which together require that all iron, steel, manufactured goods, and construction materials used in the project be produced in the United States and set minimum domestic content and final assembly requirements for rolling stock.
Any proposal that will require a waiver of any domestic preference standard must identify the items for which a waiver will be sought in the application. Applicants should not proceed with the expectation that waivers will be granted.
Applications should demonstrate that the recipient has a plan for compliance with civil rights obligations and nondiscrimination laws, including Title VI of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and Section 504 of the Rehabilitation Act, and accompanying regulations. This should include a current Title VI program plan and a completed Community Participation Plan (alternatively called a Public Participation Plan), if applicable. Applicants who have not sufficiently demonstrated the conditions of compliance with civil rights requirements will be required to do so before receiving funds.
Recipients of Federal transportation funding will be required to comply fully with regulations and guidance for the ADA, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and all other civil rights requirements. The Department's and FTA's Office of Civil Rights may work with awarded grant recipients to ensure full compliance with Federal civil rights requirements.
Projects for railcar acquisitions are subject to the transit vehicle manufacturer (TVM) rule of the USDOT's Disadvantaged Business Enterprise (DBE) program regulation (49 CFR 26.49). The TVM rule requires recipients procuring transit vehicles to limit eligible bidders to certified TVMs. To become a certified TVM, a manufacturer of transit vehicles must submit a DBE program plan and annual goal to FTA for approval. A list of certified TVMs is posted on FTA's web page at
In lieu of restricting eligibility to certified TVMs, a recipient may, with FTA's approval, establish project-specific goals for DBE participation in the procurement of transit vehicles.
FTA encourages applicants to notify the appropriate State Departments of Transportation and MPOs in areas likely to be served by the project funds made available under these initiatives and programs. Selected projects must be incorporated into the long-range plans and transportation improvement programs of States and metropolitan areas before they are eligible for FTA funding. As described under the evaluation criteria, FTA may consider whether a project is consistent with or already included in these plans when evaluating a project.
The applicant assures that it will comply with all applicable Federal statutes, regulations, executive orders, directives, FTA circulars, and other Federal administrative requirements in carrying out any project supported by the FTA grant. The applicant acknowledges that it is under a continuing obligation to comply with the terms and conditions of the grant agreement issued for its project with FTA. The applicant understands that Federal laws, regulations, policies, and administrative practices might be modified from time to time and may affect the implementation of the project. The applicant agrees that the most recent Federal requirements will apply to the project, unless FTA issues a written determination otherwise. The applicant must submit the Certifications and Assurances before receiving a grant if it does not have current certifications on file.
As a condition of grant award, grant recipients may be required to participate in an evaluation undertaken by DOT or another agency or partner. The evaluation may take different forms such as an implementation assessment across grant recipients, an impact and/or outcomes analysis of all or selected sites within or across grant recipients, or a benefit/cost analysis or assessment of return on investment. As a part of the evaluation, as a condition of award, grant recipients must agree to: (1) make records available to the evaluation contractor or DOT staff; (2) provide access to program records, and any other relevant documents to calculate costs and benefits; (3) in the case of an impact analysis, facilitate the access to
Recipients and subrecipients are also encouraged to incorporate program evaluation including associated data collection activities from the outset of their program design and implementation to meaningfully document and measure their progress towards meeting an agency priority goal(s). Title I of the Foundations for Evidence-Based Policymaking Act of 2018 (Evidence Act), (Pub. L. 115-435) urges Federal awarding agencies and Federal assistance recipients and subrecipients to use program evaluation as a critical tool to learn, to improve equitable delivery, and to elevate program service and delivery across the program lifecycle. Evaluation means “an assessment using systematic data collection and analysis of one or more programs, policies, and organizations intended to assess their effectiveness and efficiency.” 5 U.S.C. 311. Credible program evaluation activities are implemented with relevance and utility, rigor, independence and objectivity, transparency, and ethics (OMB Circular A-11, Part 6, Section 290).
Post-award reporting requirements include the electronic submission of Federal Financial Reports and Milestone Progress Reports. Applicant should include goals, targets, and indicators referenced in their application to the project in the Executive Summary of the TrAMS application. Recipients or beneficiaries of funds made available through this NOFO are also required to regularly submit data to the National Transit Database. National Transit Database reports include total sources of revenue and complete expenditure reports for all public transportation operations, not just those funded by this project.
FTA is committed to making evidence-based decisions guided by the best available science and data. In accordance with the Evidence Act, FTA may use information submitted in discretionary funding applications; information in FTA's Transit Award Management System (TrAMS), including grant applications, Milestone Progress Reports (MPRs), Federal Financial Reports (FFRs); transit service, ridership and operational data submitted in FTA's National Transit Database; documentation and results of FTA oversight reviews, including triennial and state management reviews; and other publicly available sources of data to build evidence to support policy, budget, operational, regulatory, and management processes and decisions affecting FTA's grant programs.
As part of completing the annual certifications and assurances required of FTA grant recipients, a successful applicant must report on the suspension or debarment status of itself and its principals. If the award recipient's active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of an award made pursuant to this Notice, the recipient must comply with the Recipient Integrity and Performance Matters reporting requirements described in Appendix XII to 2 CFR part 200.
For further information concerning this notice, please contact the Competitive Grants for Rail Vehicle Replacement Program manager, Donna Iken, by phone at 202-366-8076, or by email at
This program is not subject to Executive Order 12372, “Intergovernmental Review of Federal Programs.” FTA will consider applications for funding only from eligible recipients for eligible projects listed in Section C.
All information submitted as part of or in support of any application shall use publicly available data or data that can be made public and methodologies that are accepted by industry practice and standards, to the extent possible. If an applicant submits information the applicant considers to be a trade secret or confidential commercial or financial information, the applicant must provide that information in a separate document, which the applicant may reference from the application narrative or other portions of the application. For the separate document containing confidential information, the applicant must do the following: (1) state on the cover of that document that it “Contains Confidential Business Information (CBI);” (2) mark each page that contains confidential information with “CBI;” (3) highlight or otherwise denote the confidential content on each page; and (4) at the end of the document, explain how disclosure of the confidential information would cause substantial competitive harm. FTA will protect confidential information complying with these requirements to the extent required under applicable law. If FTA receives a Freedom of Information Act (FOIA) request for the information that the applicant has marked in accordance with this section, FTA will follow the procedures described in DOT's FOIA regulations at 49 CFR 7.29. Only information that is in the separate document, marked in accordance with this section, and ultimately determined to be confidential will be exempt from disclosure under FOIA.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the name of 11 individuals that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these individuals are blocked, and U.S. persons are generally prohibited from engaging in transactions with these individuals.
See Supplementary Information section for effective date(s).
OFAC: Andrea Gacki, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Compliance, tel.: 202-622-2490.
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On September 7, 2023, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following individuals are blocked under the relevant sanctions authorities listed below.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Bradley T. Smith, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Compliance, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On October 3, 2023, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below:
Under the authority granted to me as Acting Chief Counsel of the Internal Revenue Service by the General Counsel of the Department of the Treasury by General Counsel Directive 15, pursuant to the Civil Service Reform Act, I have appointed the following persons to the Legal Division Performance Review Board, Internal Revenue Service Panel:
This publication is required by 5 U.S.C. 4314(c)(4).
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently, the IRS is soliciting comments concerning the burden associated with the rules for group health plans and health insurance coverage relating to status as a grandfathered health plan under the patient protection and affordable care act.
Written comments should be received on or before December 11, 2023 to be assured of consideration.
Direct all written comments to Andrés Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of the form and instructions should be directed to Ronald J. Durbala, at (202) 317-5746, at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at
The following paragraph applies to all the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.
Books or records relating to a collection of information must be retained if their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the ICR for OMB approval of the extension of the information collection; they will also become a matter of public record.
Under the authority granted to me as Acting Chief Counsel of the Internal Revenue Service by the General Counsel of the Department of the Treasury by General Counsel Directive 15, pursuant
This publication is required by 5 U.S.C. 4314(c)(4).
Veterans Health Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Health Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden, and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Avenue NW, Washington, DC 20420, (202) 266-4688 or email
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. The
By direction of the Secretary.
Office of Postsecondary Education, Department of Education.
Final regulations.
The Secretary establishes and amends regulations related to gainful employment (GE) to address ongoing concerns about educational programs designed to prepare students for gainful employment in a recognized occupation, but that instead leave them with unaffordable amounts of student loan debt in relation to their earnings, or with no gain in earnings compared to others with no more than a high school education. The Secretary separately seeks to enhance transparency by providing information about financial costs and benefits to students at nearly all academic programs at postsecondary institutions that are eligible to participate in title IV of the Higher Education Act of 1965, as amended (HEA).
These regulations are effective July 1, 2024.
Joe Massman. Telephone: (202) 453-7771. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
The Federal Government makes significant annual investments under title IV of the HEA through programs that provide financial assistance to help students pay for postsecondary education and training. This includes both Federal grants and Federal loans, with the largest amount of such aid flowing through Pell Grants and Direct Loans. These investments in education amount to well over $100 billion in new Pell Grants and Direct Loans in total made each year.
The Federal Government's commitment to postsecondary education and training is well-justified. Postsecondary education and training generate important benefits both to the students pursuing new knowledge and skills and to the Nation overall. Higher education increases wages and lowers unemployment risk,
These benefits are not guaranteed, however. Research has demonstrated that the returns, especially the gains in earnings students enjoy as a result of their education, vary dramatically across institutions and among programs within those institutions.
While increased borrowing is indicative of higher education costs-of-attendance, financing the costs of postsecondary education and training with Federal student loans creates significant risk for borrowers and the Federal Government (as well as taxpayers). In particular, if students' earnings after college are low, then they are likely to face difficulty in repaying their loans and will be more likely to default. The associated penalties and delays in repayment make the student loan more costly to repay, and, by damaging the borrower's credit, may also increase costs of other borrowing considerably.
With college tuition consistently rising faster than inflation, and given the growing necessity of a postsecondary credential to compete in today's economy, it is critical for students, families, and taxpayers alike to have accurate and transparent information about the possible financial consequences of their postsecondary program options. Providing information on the typical earnings outcomes, borrowing amounts, costs of attendance, and sources of financial aid—and providing it directly to prospective students in a salient way at a key moment in their decision-making process—would help students make more informed choices. The same information will also allow taxpayers and college stakeholders to better assess whether public and private resources are being effectively used. For many students, and for many stakeholders, these financial considerations would, appropriately, be just one of many factors used in deciding whether and where to enroll. But as noted throughout this final rule including the RIA, it is clear that both prospective students and the population in general consider these financial factors as among the most important in assessing postsecondary education performance.
For programs that consistently produce graduates with very low earnings, or with earnings that are too low to repay the amount the typical graduate borrows to complete a credential, additional measures are needed to protect students from financial harm. Making information available has been shown to improve consequential financial choices across a variety of settings. But it has also been shown to be a limited remedy, especially for more vulnerable populations who may struggle to access the information, or who have less support in interpreting and acting upon the relevant information.
To address these issues, the Department establishes subparts Q and S of part 668, and makes supporting amendments to §§ 600.10, 600.21, 668.2, 668.13, 668.43, and 668.91.
(1) In subpart Q, we establish a financial value transparency framework. That framework will increase the quality and availability of information provided directly to students about the costs, sources of financial aid, and outcomes of students enrolled in all eligible programs. In part, the transparency framework establishes measures of enhanced earnings and affordable debt—more specifically, the earnings premium (EP measure) that typical program graduates experience relative to the earnings of typical high school graduates, as well as the debt service burden (debt-to-earnings ratio or D/E rates measure) for typical graduates. It further establishes performance benchmarks for each measure, denoting a threshold level of performance below which the program may have adverse financial consequences to students. This information will be made available to all students via a program information website maintained by the Department and described in amended § 668.43. For programs that do not meet the performance benchmarks for the D/E rates measure, prospective students will be required to acknowledge having viewed these disclosures before entering into enrollment agreements with an institution. Further, the Department's program information website will provide the public, taxpayers, and the Government with relevant information with which they may act to better safeguard the Federal investment in these programs. The transparency framework will also provide institutions with meaningful information that they can use to compare their performance to other institutions and improve student outcomes in these programs.
(2) In subpart S, we establish an accountability and eligibility framework for gainful employment programs. This GE program accountability framework is specific to educational programs that, as a statutory condition of eligibility to participate in title IV, HEA, are required to provide training that prepares students for gainful employment in a recognized occupation or profession (GE programs). GE programs include nearly all educational programs at for-profit institutions of higher education, as well as non-degree programs at public and private nonprofit institutions such as community colleges. The GE program eligibility framework will use the same earnings premium and debt-burden measures from the transparency framework to determine whether a GE program remains eligible for title IV, HEA participation. The GE eligibility criteria define what it means to prepare students for gainful employment in a recognized occupation, and they tie program eligibility to whether GE programs provide education and training to their title IV, HEA students that lead to earnings beyond those of high school graduates and sufficient to allow students to repay their student loans. GE programs that fail the same measure in any two out of three consecutive years for which the measure is calculated will not be eligible to participate in title IV, HEA programs.
The Department has previously issued regulations on these issues three times. We refer to those regulatory actions as the 2011 Prior Rule (76 FR 34385), the 2014 Prior Rule (79 FR 64889), and the 2019 Prior Rule (84 FR 31392), which rescinded the 2014 Prior Rule. For a detailed discussion of the history of these regulations, please see the
The financial value transparency framework covers all programs that participate in the title IV, HEA programs, and it will dramatically enhance the quality of information available to all students so that they may better assess the financial consequences of their education choices. As explained in the NPRM and elaborated below, the framework will improve on the information currently available to students by generating program-level information on cost of attendance and available aid for all types of students and by ensuring the information is delivered to students. The acknowledgment requirements ensure this information is viewed before students enroll when performance measures indicate a heightened risk of adverse borrowing outcomes for students.
With respect to GE programs, the Department remains concerned about the same problems that motivated our 2011 and 2014 Prior Rules. These included the growth in student loan debt generally, and especially increased borrowing at private for-profit colleges, increasingly high rates of default, higher costs, and lawsuits and investigations into the deceptive practices of many institutions.
Overall, the amount of outstanding student loan debt is even higher than it was at the time of the 2014 Prior Rule. Then we cited a total portfolio of $1,096.5 billion. It is now 49 percent larger—at $1,634 billion outstanding. The number of individuals with outstanding student loans is also 3.5 million higher.
The 2011 and 2014 rules were issued during a time of growth at private for-profit colleges when the Department was concerned about the effects of such growth. While the sector is not currently growing at the rates it did at that time, its 12-month full-time-equivalent enrollment in 2020-21 was above its levels in 2017-18.
Loan usage at private for-profit colleges also remains high. In the 2014 Prior Rule we noted concerns that the borrowing rate in 2011-12 among less-than-two-year institutions was 60 percent at private for-profit institutions versus 10 percent at public institutions.
Issues with default rates also did not abate between 2014 and the national pause on student loan payments and interest in 2020 due to the COVID-19 national emergency. From 2015 to 2019 there were still more than 1 million new Direct Loan defaults a year. And the number of new Direct Loan defaults in the 2019 fiscal year was higher than in 2015.
Regarding lawsuits and investigations, the Department notes that these actions still continue today. Just last year the California Department of Justice won its case against Ashford University, and the Secretary has concluded substantial misrepresentations brought to light in that case continued until 2020.
According to the Department's data and analyses, which are presented in the RIA of this final rule,
In light of the HEA differentiation between career training (GE) programs and other eligible programs, through statutory language that defines title IV-eligible career training programs as those that prepare students for gainful employment, the Department has different responsibilities with respect to GE programs and different tools available in administering the title IV, HEA programs. For these programs, where labor market outcomes are central to their mission, the Department establishes a clear and administrable GE program accountability framework based on the EP and D/E measures, which the Department will use to evaluate what it means to prepare students for gainful employment in a recognized occupation and whether a GE program is eligible to participate in title IV, HEA.
While the financial value transparency framework and the GE program accountability framework are both designed to improve student financial outcomes, they differ in scope and approach, derive from the Department's exercise of different regulatory authorities. The two frameworks are intended to function independently, and their respective components are intended to be severable. Elsewhere we discuss the complementary nature of the two frameworks as well as their severability,
To address the need for regulatory action, the Department amends §§ 600.10, 600.21, 668.2, 668.13, 668.43, and 668.91, and establishes subparts Q and S of part 668.
The Department's authority to establish the financial value transparency framework and the GE program accountability framework is derived primarily from: first, the Secretary's generally applicable rulemaking authority, which includes but is not limited to provisions regarding data collection and dissemination; second, authorizations and directives within title IV of the HEA regarding the collection and dissemination of potentially useful information about higher education programs, as well as provisions regarding institutional eligibility to benefit from title IV; and third, the further provisions within title IV, HEA that address the eligibility of GE programs.
As for general and crosscutting rulemaking authority, section 410 of the General Education Provisions Act (GEPA) grants the Secretary authority to make, promulgate, issue, rescind, and amend rules and regulations governing the manner of operation of, and governing the applicable programs administered by, the Department.
Section 431 of GEPA grants the Secretary additional authority to require institutions to make data available to the public about the performance of their programs and about students enrolled in those programs. That section directs the Secretary to collect data and information on applicable programs for the purpose of obtaining objective measurements of the effectiveness of such programs in achieving their intended purposes, and also to inform the public about federally supported education programs.
As for provisions within title IV, HEA, several of them address the effective delivery of information about postsecondary education programs. For example, section 131 of the Higher Education Act of 1965, as amended (HEA), provides that the Department's websites should include information regarding higher education programs, including college planning and student financial aid,
The GE program accountability framework also is supported by the Department's statutory responsibilities to observe eligibility limits in the HEA. Section 498 of the HEA requires institutions to establish eligibility to provide title IV, HEA funds to their students. Eligible institutions must also meet program eligibility requirements for students in those programs to receive title IV, HEA assistance.
One type of program for which certain categories of institutions must establish program-level eligibility is, in the words of section 101 and section 102 of the HEA, a “program of training to prepare students for gainful employment in a
The statutory eligibility criteria for GE programs are one part of the foundation of authority for warnings from institutions to prospective and enrolled GE students. In the GE context, the Department has not only a statutory basis for pursuing the effective dissemination of information to students about a range of GE program attributes and performance metrics,
The above authorities collectively empower the Secretary to promulgate regulations to (1) require institutions to report information about their programs to the Secretary; (2) require prospective students, with respect to certificate programs and graduate degree programs that do not meet certain financial value measures established by the Department, to acknowledge having viewed the information on the Department's program information website before entering into an enrollment agreement; (3) establish measures to determine the eligibility of GE programs for participation in title IV, HEA; and (4) require institutions to provide warnings to students and prospective students with respect to GE programs that may lose their title IV, HEA eligibility in the next year, and require the students to acknowledge having viewed the warning through the Department's program information website. We provide additional detail on these provisions in the discussions below.
As discussed under “Purpose of This Regulatory Action,” these regulations establish a financial value transparency framework and a GE program accountability framework.
Through this regulatory action, the Department establishes the following:
(1) In subpart Q, a financial value transparency framework that will increase the quality and availability of information provided directly to students about the costs, sources of financial aid, and outcomes of students enrolled in all title IV, HEA eligible programs. As part of this framework, we establish a measure of the earnings premium that typical program graduates experience relative to the earnings of typical high school graduates. As part of this framework, we also establish a mechanism for measuring the debt service burden for typical graduates. Further, we establish performance benchmarks for each measure, denoting a threshold level of performance below which students' enrollment in the program may have adverse financial consequences. This information will be made available via a program information website maintained by the Department, and, for certificate programs and graduate degree programs with poor outcomes under the debt-burden measures, prospective students will be required to acknowledge viewing this information before entering into enrollment agreements with an institution. Further, through the Department's program information website, we will provide the public, taxpayers, and the Government with relevant information which they can use to better safeguard the Federal investment in these programs. Finally, the financial value transparency framework will provide institutions with meaningful information that they can use to compare the performance of the programs to that of other institutions and improve student outcomes in these programs. For a detailed discussion of the financial transparency framework, see the “Financial Value Transparency Framework” section of the NPRM.
(2) In subpart S, we create an accountability framework for career training programs (also referred to as gainful employment programs or GE programs) that uses the same earnings premium and debt-burden measures as subpart Q to determine whether a GE program remains eligible for participation in title IV, HEA. The GE eligibility criteria are used to identify those programs that prepare students for gainful employment in a recognized occupation, as that language is used in the HEA, and they tie program eligibility to whether GE programs provide education and training to their title IV, HEA students that lead to earnings beyond those of high school graduates and sufficient to allow students to repay their student loans. GE programs that fail the same measure in any two out of three consecutive years for which the measure is calculated will lose eligibility for participation in title IV, HEA programs. Relatedly, for GE programs that may lose their title IV, HEA eligibility in the next year, institutions must provide warnings to those programs' enrolled and prospective students, and those students must acknowledge having viewed the warning through the Department's program information website before certain specified events occur, including the signing of an enrollment agreement or the disbursement of title IV funds. For a detailed discussion of the GE program accountability framework, see the “Gainful Employment Criteria” section of the NPRM.
Specifically, the final regulations adopt the following changes.
• Amend § 600.10 to require an institution seeking to establish the eligibility of a GE program to add the program to its application.
• Amend § 600.21 to require an institution to notify the Secretary within 10 days of any update to information included in the GE program's certification.
• Amend § 668.2 to define certain terminology used in subparts Q and S, including “annual debt-to-earnings rate,” “classification of instructional
• Amend § 668.43 to establish a Department website with program-level financial information, and to require institutions to inform a prospective student how to access that website before the student enrolls, registers, or makes a financial commitment to the institution.
• Amend § 668.91 to provide that a hearing official must terminate the eligibility of a GE program that fails to meet the GE program accountability metrics established in this rule, unless the hearing official concludes that the Secretary erred in the calculation.
• Add § 668.401 to identify the scope and purpose of the newly established financial value transparency regulations in subpart Q.
• Add § 668.402 to provide a framework for the Secretary to determine whether a program leads to high debt burden or low earnings, including establishing annual and discretionary D/E rate metrics and associated outcomes, and establishing an earnings premium metric and associated outcomes.
• Add § 668.403 to establish a methodology to calculate annual and discretionary D/E rates, including parameters to determine annual loan payment, annual earnings, loan debt, and assessed charges, as well as to provide exclusions, and specify when D/E rates will not be calculated.
• Add a new § 668.404 to establish a methodology to calculate a program's earnings premium measure, including parameters to determine median annual earnings, as well as to provide exclusions, and specify when the earnings threshold measure will not be calculated.
• Add § 668.405 to establish a process by which the Secretary will obtain administrative and earnings data to issue D/E rates and the earnings premium measure.
• Add § 668.406 to require the Secretary to notify institutions of their financial value transparency metrics and outcomes.
• Add § 668.407 to require current and prospective students to acknowledge having seen the information on the website maintained by the Secretary if a program has failed the D/E rates measure, to specify the content and delivery parameters of such acknowledgments, and to require that students must provide the acknowledgment before entering an enrollment agreement with an institution.
• Add § 668.408 to establish institutional reporting requirements for students who enroll in, complete, or withdraw from a program and to define the timeframe for institutions to report this information.
• Add § 668.409 to establish severability protections ensuring that if any provision in subpart Q is held invalid, the remaining provisions of that subpart and other subparts would continue to apply.
• Add § 668.601 to identify the scope and purpose of newly established GE regulations under subpart S.
• Add § 668.602 to establish criteria for the Secretary to determine whether a GE program prepares students for gainful employment in a recognized occupation.
• Add § 668.603 to define the conditions under which a failing GE program would lose title IV, HEA eligibility, to provide the opportunity for an institution to appeal a loss of eligibility solely on the basis of a miscalculated D/E rate or earnings premium, and to establish a period of ineligibility for failing GE programs that lose eligibility or voluntarily discontinue eligibility.
• Add § 668.604 to require institutions to provide the Department with transitional certifications, as well as to certify, when seeking recertification or the approval of a new or modified GE program, that each eligible GE program offered by the institution is included in the institution's recognized accreditation or, if the institution is a public postsecondary vocational institution, that the program is approved by a recognized State agency.
• Add § 668.605 to require warnings to current and prospective students if a GE program is at risk of a loss of title IV, HEA eligibility, to specify the content and delivery requirements for such warnings, and to provide that students must acknowledge having seen the warning before the institution may disburse any title IV, HEA funds.
• Add § 668.606 to establish severability protections ensuring that if any GE provision under subpart S is held invalid, the remaining provisions of that subpart and of other subparts would continue to apply.
The Department estimates that the final regulations will generate benefits to students, postsecondary institutions, and the Federal Government that exceed the costs. The Department also estimates substantial transfers, primarily in the form of title IV, HEA aid shifting between students, postsecondary institutions, and the Federal Government, generating a net budget savings for the Federal Government. Net benefits are created primarily by shifting students from low-financial-value to high-financial-value programs or, in some cases, away from low-financial-value postsecondary programs to non-enrollment. These shifts would be due to improved and standardized market information about all postsecondary programs that would facilitate better decision making by current and prospective students and their families; the public, taxpayers, and the Government; and institutions. Furthermore, the GE program accountability framework will improve the quality of student options by directly eliminating the ability of low-financial-value GE programs to receive title IV, HEA funds. This enrollment shift and improvement in program quality will result in higher earnings for students, which will generate additional tax revenue for Federal, State, and local governments. Students will also benefit from lower accumulated debt and lower risk of default.
The primary costs of the final regulations related to the financial value transparency and GE accountability requirements are the additional reporting required by institutions and the time for students to acknowledge having seen the program information website. The final regulations may also result in some students at failing programs deciding to end their educational pursuits, even if they would benefit from re-enrollment. See “Discussion of Costs, Benefits, and Transfers” in the RIA in this document for a more complete discussion of the costs and benefits of the regulations.
The NPRM included proposed regulations on five topics—Financial Value Transparency and Gainful Employment, Financial Responsibility, Administrative Capability, Certification Procedures, and Ability to Benefit. These final regulations contain only provisions on Financial Value Transparency and GE. We will publish another final rule with the remaining four topics at a later date. The later rule will include summaries and responses
In response to our invitation in the NPRM, 7,583 parties submitted comments on the proposed regulations. While the majority of respondents commented on the provisions we address in this final rule, the number includes all who commented on any of the five topics addressed in the NPRM.
In the NPRM, we discussed the background of the regulations,
We discuss substantive issues under the sections of the proposed regulations to which they pertain. Generally, we do not address technical or other minor changes or recommendations that are out of the scope of this regulatory action or that would require statutory changes.
As for the latter, Federal statutes grant the Secretary general crosscutting rulemaking authority that includes and extends beyond title IV of the HEA. Section 410 of the General Education Provisions Act (GEPA) provides the Secretary with authority to make, promulgate, issue, rescind, and amend rules and regulations governing the manner of operations of, and governing the applicable programs administered by, the Department.
As for title IV of the HEA and its eligibility requirements, institutions must meet institution-level as well as program-level eligibility requirements for students in those programs to receive title IV assistance in the form of loans or grants. HEA sections 101 and 102 state that one type of program for which certain categories of institutions must establish program-level eligibility is a “program of training to prepare students for gainful employment in a recognized occupation.”
The Department has increased its focus on these eligibility requirements over time as key circumstances have changed. College tuition levels have continued to rise relative to inflation, and student borrowing levels have reached very high levels. The earnings of college graduates have not risen apace, however, and earnings outcomes are not tightly correlated with borrowing levels. Moreover, cases of institutions using deceptive recruiting and advertising practices to lure students into postsecondary programs with little return on investment remain too common. All of these factors combine to strand many graduates with unaffordable education debt and little enhancement to their earnings—too often leaving them worse off financially than if they had not pursued postsecondary education at all. While the financial returns to college remain high overall for the average student, in recent years these trends have contributed to increased skepticism about the value of going to college
We recognize that these forces are an issue across sectors. However, by defining GE programs as programs that prepare students for gainful employment, Congress indicated that the value of adding such programs to the Federal student loan program and to title IV of the HEA more broadly lies in their financial outcomes. Yet, despite that statutory focus, GE programs account for a disproportionate share of students who complete programs with very low earnings and unmanageable debt. An essentially transparency-only approach to GE programs, which is reflected in the 2019 Prior Rule, has not substantially improved the most troubling trends. To address both the Department's obligation to oversee that the statutory eligibility requirements are met and to address the specific need for regulatory action within the sector, the GE program accountability framework specifies what it means to prepare students for gainful employment in a recognized occupation. The framework does so by establishing clear and administrable measures that are tied to student financial outcomes and that the Department will use to evaluate whether a GE program is eligible for title IV, HEA program funds. One measure focuses on manageable debt (the D/E rates measure), the other on enhanced earnings (the EP measure).
The GE accountability rules effectuate core statutory provisions in practical and administrable ways. The definitions of “gainful employment” programs are central to the statutory scheme regarding GE programs, and those provisions establish limits on the programs that may receive taxpayer support through title IV, HEA loans and grants to students in those programs. The measures adopted in the GE program eligibility framework are designed to ensure eligible programs leave students with affordable debt and enhanced earnings, consistent with the ordinary meaning of the operative words in the statute. It is not only reasonable but also in accord with all indications of Congress's intent to conclude that a program does not prepare students for gainful employment in a recognized occupation if typical program graduates are left with unaffordable debt, or if they earn no more than comparable high school graduates.
Moreover, in past litigation involving affordable debt metrics, courts have accepted that reasonable performance measures may be used to evaluate the eligibility of GE programs for title IV, HEA participation. Those courts based those decisions on the text, structure, and purposes of the relevant statutory provisions. Thus, in reviewing previous GE rules, courts have examined the GE provisions of the HEA and explained, for example, that “train” and “prepare” are terms that “suggest elevation to something more than just any paying job. They suggest jobs that students would less likely be able to obtain without that training and preparation.”
The foregoing points and discussion elsewhere in this document and the NPRM are sufficient to establish the Department's authority to adopt the GE program eligibility framework. If additional support were needed, statutory history and legislative history confirm that program performance, including performance related to enhanced earnings and affordable debt, has been a focus of the relevant statutory provisions from the beginning. Such program performance was addressed in legislative history of the National Vocational Student Loan Insurance Act (NVSLIA), Public Law 89-287 (1965)—which is the statute that first permitted students to obtain federally financed loans to enroll in vocational programs. Both the ability of students to repay loans and the benefits to students from training were identified as principal issues during the development of that legislation.
The statutory framework has not changed in relevant part, and the taxpayer interest in safeguarding the use of Federal funds persists today. Under the loan insurance program enacted in the NVSLIA, the specific potential loss to taxpayers of concern was the need to pay default claims to banks and other lenders if the borrowers defaulted on
With regard to the earnings premium measure, we offer further discussion below. We note here that, to receive title IV funds, section 484 of the HEA generally requires that students already have a high school diploma or recognized equivalent. That requirement makes high-school-level achievement the presumptive starting point for title IV, HEA funds. The EP measure adopts that statutory starting point by comparing the earnings of typical program completers with those of comparable high school graduates. As with the debt-to-earnings measure, the earnings premium measure is consistent with the text, structure, and purposes of the statute.
We disagree with the commenters who contended that the differences between the 2014 Prior Rule and the GE program accountability framework in these regulations suggest a lack of statutory authority. In the NPRM, we discussed the background of the regulations,
The Department, therefore, disagrees with commenters who believe that the GE program accountability framework is not within the Department's statutory authority, and further disagrees with claims that GE program results are not relevant to GE program eligibility for title IV, HEA funding. The Department also disagrees with suggestions that we should implement the statute without clear and administrable rules for evaluating whether GE programs are meeting statutory eligibility requirements. Without relatively specific rules, the Department could not adequately ensure that title IV, HEA funds are properly channeled to students attending programs that prepare students for gainful employment; institutions would not have clarity as to the standards for GE programs that the Department applies; and we would not be able to address the need for regulatory action in the sector.
We note, finally, that all or nearly all of the commenters' arguments against any GE performance measure have been raised and rejected during previous rulemaking efforts and in litigation over previous versions of the Department's GE program accountability rules. The statutory arguments against considering GE program outcomes of any kind are not more persuasive now than they were in past years. In fact, new data, data analysis, and the Department's experience in attempting to enforce the statutory limits on GE programs have convinced us that these performance measures are more, not less, urgently needed.
First of all, the Department's careful review of applicable law and public comments leave us convinced that the EP measure is within the Department's statutory authority. Statutory text, structure, and purpose support that conclusion. If program completers' earnings fall below those of students who never pursue postsecondary education in the first place, programs cannot fairly be said to “train” postsecondary students to “prepare” them for “gainful employment” in recognized professions or occupations.
Importantly, the overall structure of the applicable statutes reinforces our adoption of the EP measure. The basic starting point for students at eligible GE programs is a high school education or its equivalent, as we pointed out in the NPRM.
The discussions in this document and in the NPRM are more than sufficient to establish the Department's authority to adopt the GE eligibility rules, including the EP measure.
The Department recognizes again, as we did in the NPRM,
An EP measure for GE eligibility finds support in recent evidence and studies. Within the last several years, a number of researchers have recommended that the Department reinstate the 2014 GE rule with an added layer of accountability through a high school earnings metric.
Furthermore, the EP measure that we adopt will set only minimal and reasonable expectations for programs that are supposed to help students move beyond a high school baseline. The rule marks an incremental and commonsense change that we are confident is within the Department's authority. In particular, we observe that the median earnings of high school graduates is about $25,000 nationally, which corresponds to the earnings of a full-time worker who makes about $12.50 per hour.
Although modest in several respects, the EP measure for GE program eligibility is nonetheless likely to deliver important benefits and substantially further statutory purposes. We are convinced of these prospective gains by recent evidence. For example, recent research indicates that the EP measure will help protect students from the adverse borrowing outcomes prevalent among programs with very low earnings. Research conducted since the 2014 Prior Rule as well as new data analyses shown in this RIA illustrate that, for borrowers with low earnings, even small amounts of debt—including levels of debt that would not trigger failure of the D/E rates—can be unmanageable. We now can be reasonably confident that default rates tend to be especially high among borrowers with lower debt levels and very low earnings, because at low earnings levels any amount of debt in unaffordable.
In addition, we reaffirm that the EP measure will help protect taxpayers.
Thus, the EP and D/E measures serve some of the same purposes, but we observe again that they measure importantly distinct dimensions of
Accordingly, we disagree with commenters who argue that the Department either generally lacks authority to adopt the EP measure for GE program eligibility, or that the Department chose the wrong time to adopt that measure. We understand the opinions of those who prefer that the Department not adopt administrable and clear rules to test GE program performance. Unlike the rules as they stood after the 2019 rescission, these final rules will demand that GE programs not have a track record of failure on certain basic measures of performance if they seek to benefit from title IV, HEA taxpayer funds. Some GE programs will repeatedly fail those measures, although we point out that some of those programs will survive without support from the Federal Government through title IV, HEA. Regardless, we are convinced that these rules are within the Department's statutory authority, and that recent events and new information confirm the importance of acting now. If the Department does not act effectively at the front end to screen out the subset of GE programs that do not meet minimal performance standards of enhanced earnings and affordable debt, students and taxpayers will continue to suffer the consequences at the back end. Those consequences have grown larger and clearer, and the Department has decided to respond decisively yet reasonably. A clear earnings premium rule for GE program eligibility is one part of that measured response.
As discussed above and in the NPRM,
And far from taking any step toward mandating specific curricula when institutions prefer other educational strategies,
In addition, available data indicate that the GE program accountability framework will have important yet limited effects. The available data, presented in RIA Tables 4.8 and 4.9, indicate that most existing GE programs will not fail the D/E rates or EP measure when they are applied, let alone fail two out of three years for which program results are issued. Our estimates suggest about 1,700 GE programs will fail the D/E rates or EP measure—representing about 5.3 percent of all GE programs, and only 1.1 percent of all higher education programs attended by federally aided students. While the share of students currently enrolled in such programs is higher—23.7 percent of federally aided students in career training programs, and 3.6 percent of all federally aided students—it is important to note these students have other options. Analyses presented in Tables 4.25 and 4.26 of the RIA show that the majority of students have similar program options that do not fail the D/E rates or EP measure and are nearby, or even at the same institution. These analyses are supported by external research, suggesting that most students in institutions closed by accountability provisions successfully reenroll in higher performing colleges.
Those predicted effects do not establish the kind of transformation or upheaval in higher education that might trigger the major questions doctrine.
Of course, the GE program accountability framework is not irrelevant as a matter of economics or politics. Every student who ends up with enhanced earnings or more affordable debt is important, in the Department's view, as is every Federal dollar saved from expenditure on poorly performing GE programs. And we acknowledge that there is disagreement among those who are engaged in the relevant policy debates about the appropriate content for the GE rules. We likewise acknowledge that the precise content of the GE rules and their effects are important to institutions, students, and taxpayers. In fact, the HEA requires that limits on GE programs be recognized and enforced; the Department is not free to ignore those limits as if the applicable sections were surplusage, and that point is not insignificant to the statutory scheme. But in this instance, the Department is adopting relatively modest, commonsense, minimum performance standards that most GE programs seeking government support can and should pass without trouble, and that do not preempt, through agency action, any widespread political controversy that Congress intended to reserve for itself. Although the Department must make judgments about the details of performance measures to make the rules clear and easily administrable, those choices of detail are, by definition, not subject to the major questions doctrine.
We also observe that the Department has followed and benefitted from an extensive process before issuing these final rules on GE accountability. The Department used the negotiated rulemaking provisions in the HEA, with notice and comment rulemaking, which is the process that was created for the Department to consider the interests of title IV, HEA participants, among others. In this context, reestablishing an eligibility framework for GE programs fits well with the financial value transparency framework for all programs while setting an outcome-based limit for GE programs.
The Department accordingly disagrees with the commenters' assertions that the HEA's provisions on CDR, student borrowing, and other financial aid matters prevent the Department from implementing the specific HEA provision limiting title IV eligibility to programs that provide training that prepares students for gainful employment in a recognized occupation. The different Department rules implement different statutory provisions. For example, the CDR and GE regulations serve related but different purposes. Congress enacted the CDR provision, which measures loan defaults from all programs at the institutional level, as one mechanism—not the sole, exclusive mechanism—for dealing with abuses in Federal student aid programs.
The GE program accountability rules are also consistent with other provisions of the HEA aimed at curbing abuses in the title IV, HEA programs. For example, Congress capped the amount of title IV revenues that proprietary institutions could receive at 85 percent in the 1992 HEA reauthorization as a condition of institutional eligibility, with subsequent changes that increased the percentage to 90 percent and that tied a loss of eligibility to two years of failing the 90 percent measure instead of one year. More recently, Congress also expanded the definition of Federal education funds to include military benefits to service members and families as a part of the funds included in the 90 percent limit. The 90/10 provisions were put in place to require proprietary institutions to generate some revenue from non-Federal sources. Those changes fit within a larger framework where Congress also specified that a participating “institution will not provide any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission activities or in making decisions regarding the award of student financial assistance.”
Furthermore, the rules adopted here allow for new as well as existing GE programs. Although parts of the GE rules are performance-based, these rules will not exclude programs from title IV, HEA eligibility until they build a track record to evaluate them. The Department must have student outcomes data to measure program performance, which can only come after a period of time. Moreover, the rules are designed as reasonable, minimum standards whereby title IV, HEA eligibility as a GE program is not precluded until a program fails one of the two GE metrics in two out of three consecutive years for which the Department can issue results. Under these rules, new programs that otherwise qualify as GE programs do not have to show performance results that are not yet available.
We further disagree that a previous administrative decision on GE program eligibility forecloses the adoption of these final rules. The Department would not be prevented from changing its position in this rulemaking, of course, even if an older agency decision during an administrative adjudication conflicted with our decision here. We provide numerous and extensive reasons for the rules that we are adopting. But in this instance, no such conflict exists. The argument was vetted and rejected more than 10 years ago. Challenging the 2011 Prior Rule and referring to a decision by an administrative law judge (ALJ), the Association of Private Colleges and Universities contended that the Department previously defined gainful employment in a recognized occupation in a manner that conflicted with those outcome-based rules. The adjudication involved the question whether a program in Jewish culture prepared students enrolled in the program for gainful employment in a recognized occupation. As the court understood, the ALJ did not purport to comprehensively decide what it means to prepare a student for gainful employment in a recognized occupation; instead the ALJ merely stated that any preparation must be for a specific area of employment.
We understand that some students may be committed to pursuing a particular field and may not be swayed by information about other fields. But as the data in this RIA demonstrate, there are vast differences in earnings and debt outcomes for programs with the same credential level and field, and we anticipate that students already committed to a particular degree will benefit from being able to find programs with the best outcomes.
Similarly, the EP threshold is based on the median earnings of high school graduates in the labor force in the institution's State. When the median earnings for graduates from a postsecondary program are lower than this threshold, terming the program, for example, “low earning” is appropriate. The Department views these terms as examples of clear and transparent descriptors for potential students; we believe that less direct phrasing would make it harder for students to interpret the information. However, while the Department believes that students should be informed about the consequences of their choices in programs, we will consider adding language to the Department's program information website noting that the debt and earnings outcomes of programs are a subset of the myriad of factors students may consider important in deciding where to attend.
One commenter further cited a study
Noting the numerous non-pecuniary benefits of postsecondary education, several commenters expressed concern that the nature of the D/E rates and EP measures is too simple to adequately reflect the full value of an education and one commenter opined that measuring a program's value based solely on the D/E rates and EP measures would be arbitrary and capricious. Many commenters noted that the D/E rates measure is not the only metric that can be used to assess the value of
Further, while the Department agrees there are aspects of job quality that are distinct from earnings, we believe that earnings, which unlike non-monetary compensation can be calculated consistently for most graduates through administrative data sources, is the best way to capture the employment outcomes of program graduates for purposes of implementing the gainful employment statutory requirement. For instance, in most cases non-monetary compensation does not aid in assessing the ability of graduates to afford repayment of student debt.
The financial value transparency framework aims to provide transparency to students about dimensions of the financial consequences of attending postsecondary programs. In particular, these measures will be used to convey information to students about the typical costs, borrowing, and earnings outcomes for students who graduate from a program, and whether typical students who complete the program end up with high-debt-burdens, and therefore may be at elevated risk for associated adverse borrower outcomes. On the Department's program information website, a program's outcomes under the D/E rates and EP metrics will be provided to students alongside other financial value information to help students understand how the program may help in achieving their goals. As a steward of taxpayer funds charged with ensuring the proper administration of the title IV, HEA programs, the Department seeks to require that students are aware of such information before they enroll in programs with high-debt burdens. For non-GE programs, we do not limit aid or eligibility for such programs but allow students to decide whether, upon considering this information, the program has value to them.
As we demonstrate in Table 4.11 in the RIA, most programs in most fields pass the D/E rates measure, including programs that provide training for occupations in healthcare. In healthcare (Health Professions and Related)—the program cited by the commenters—8.2 percent of GE programs did not pass the D/E rates or the EP measure and 2.0 percent of non-GE programs did not pass the D/E rates or the EP measure. Similarly, education training programs (
The Department fundamentally disagrees that ignoring the financial implications of students' college choices is an acceptable or necessary strategy to ensure that students pursue jobs in critical fields to society.
Arts programs that fall under GE regulation have a failure rate that is similar to GE programs overall. According to the Program Performance Data (PPD) described in Table 4.11 of
Although commenters acknowledged that arts careers are financially undercompensated relative to other career paths, federally aided students enrolled in arts programs tend to come from backgrounds similar to students enrolled in other programs, indicating that, among federally aided students, students from economically disadvantaged backgrounds are not currently dissuaded from pursuing a career in the arts. For example, the share of students who are Pell recipients within arts programs is broadly similar to the share of recipients overall across programs (Table 1.1). Institutions that are concerned that financial transparency will dissuade students from lower-income backgrounds from pursuing arts degrees could take steps such as packaging additional aid for students pursuing arts programs. This would decrease the risk of a high DTE and potentially mitigate the effect of lower typical salaries in the first few years of an arts career.
These data indicate that workers within a given degree level tend to have relatively similar earnings across private sector, government, and nonprofit employers. And for those with an associate degree, employment within a Federal, State, or local government yields higher median earnings than employment in the private sector. While working in the private sector is more lucrative, at the median, for bachelor's degree and graduate degree holders, these differences are much smaller than the difference relative to the earnings premium threshold at the national level.
Graduate students are eligible to borrow up to the cost of attendance for their program, while undergraduates are subject to substantially lower limits on borrowing, depending on their enrollment level and status as a
The Department believes that the D/E metric is valid across both undergraduate and graduate programs. As noted above, few graduate programs have median earnings below the typical high school student, but many programs have very high debt levels due to the lack of loan limits. This can make debt unaffordable even on a middle-class salary. Moreover, from a taxpayer perspective, as shown in Table 2.10 of the RIA, D/E is highly correlated with the taxpayer subsidy on student loans—if debt is high relative to earnings, it is unlikely a borrower will fully payoff their loans while on an income driven repayment plan.
The Department also notes aspects of the rule that are favorable to graduate programs. First, the debt used in the actual D/E calculations will be capped at the total net cost for tuition, fees, and books. This cap particularly affects graduate programs, as many graduate students borrow substantially for living costs in addition to direct costs of the program. As we note in the RIA, we do not have data reported by institutions to estimate directly how this cap will affect the share of programs that pass the D/E rates. An analysis by New America, however, suggests that the debt cap might reduce the number of graduate programs projected to fail in the RIA substantially by about 50 percent.
At present, program-level graduation rates are not consistently measured or collected by the Department. Measurement of program graduation rates raises several measurement challenges.
Although the cohort default rate (CDR) is an important measure of institutional accountability in ensuring that students do not experience exceptionally high default rates after leaving a program, an overall CDR does not measure outcomes of a given program. Moreover, graduate PLUS loans are not included as part of the CDR calculation, so these rates do not capture borrowers' outcomes even for broad sets of graduate programs. The Department will carefully consider what borrower outcome information will provide students with the clearest sense of the financial risks of their program choices, including whether institution level measures may be appropriate to provide where program level measures may be unavailable.
While these regulations do not replace other robust Department efforts aimed at ensuring program compliance and program integrity, the rule should make predatory behavior less attractive and less lucrative if poorly performing GE programs are not eligible to participate in title IV, HEA.
Several other commenters expressed support for the GE accountability provisions, noting that most borrower defense loan discharges have been for students who attended for-profit institutions, and said that most accountability measures should focus on the institutions where large costs to the taxpayers have been incurred. Commenters noted that many completers from some for-profit institutions have incomes that would qualify them to make zero payments under the Department's recently proposed income-driven repayment plan and create additional costs for taxpayers.
We underscore that the rule sets minimum standards of performance for career training programs, and for informing students in non-GE programs about potential financial risk. It does not attempt to distinguish among or rate programs based on their earnings above these standards beyond providing students with information. As such, we expect that programs meeting these minimum thresholds of financial outcomes for their students will still need to demonstrate how they help students in pursuing other goals that may be important to them.
Other commenters viewed the distinction between GE and non-GE programs as unclear, and argued that instituting sanctions for some programs, but not for others, based on sector or credential type is not appropriate. Commenters highlighted that an institution's tax status was not a good reason to treat programs differently under the proposed eligibility measures and voiced some concern that institutions with failing programs could change their tax status to avoid being held accountable under the eligibility provisions. Some commenters said the proposed regulations were politically motivated to target the career training programs and suggested that more emphasis should be placed on removing Federal funds from programs that pushed false information or promoted activism and political agendas. The regulations were described by these commenters as an effort to quickly eradicate the proprietary school sector instead of proposing a set of guardrails that would have encouraged institutions to operate within that system.
In addition to being statutorily obligated to confirm whether GE programs are eligible for HEA assistance, we believe that it is appropriate to protect students in GE programs in all sectors, to help protect students pursuing career training through such programs from being left with unaffordable debt or with no improvement in their labor market prospects beyond what they might have achieved without earning a postsecondary credential. The GE accountability framework is based on objective and evidence-based measures of student outcomes and, rather than being a one-size-fits-all approach, its impact on institutions is directly in proportion to the number of students they have enrolled in programs that are not serving students well based on the D/E rates and EP measures. The GE framework, applied as a measure of a program's continuing title IV, HEA eligibility, will be similarly applied to all GE programs, regardless of location or student demographics. GE programs will be held to the standards for GE programs uniformly, regardless of whether they are taught at public, proprietary, or nonprofit private institutions.
The Department does not have authority to expand the definition of a GE program to include non-GE programs. The financial value transparency framework is the Department's attempt to account for
One commenter emphasized the ways in which earnings measurement issues are more a particular concern given the unique challenges facing Puerto Rico, stating that the justifications offered by the Department for not including an alternate earnings appeal fail to acknowledge the unique nature of Puerto Rico's economy. Citing the Department's claim that making accommodation for under-reporting of income would “differentially reward programs,” the commenter submitted that the desire to be evaluated based on accurate data is not a desire to be rewarded but to address the fact that nonreporting and underreporting of income are widely recognized challenges facing Puerto Rico.
Through this investigation, we identified several concerns with data elements used in the rule with regard to their application to programs at institutions in U.S. Territories and freely associated states. First, there is no robust source of earnings information in most U.S. Territories that would allow us to measure high school earnings. While we considered using a different threshold, such as 150 percent of the Federal Poverty Level, available data (data on high school earnings from the Puerto Rico Community Survey) suggested this approach would yield a threshold that is dramatically higher than high school earnings. While data do exist for Puerto Rico, the coverage rate of the Puerto Rico Community Survey (PRCS) is significantly lower than that of the ACS.
Because of these concerns, the Department will exempt all programs located in the Territories or freely associated states from most of the requirements in the transparency framework under subpart Q, and from the GE accountability provisions under subpart S. We will still require such programs to comply with the reporting requirements in § 668.408, will still follow the procedures in §§ 668.403(b) and (d) and 668.405(b) and (c) to calculate median debt and obtain earnings information, and will include debt, earnings, and price information on the Department's program information website established in § 668.43.
We disagree that such programs should be exempted from the GE framework. If a student does take several intermediate credentials before obtaining a higher degree, then the student's cumulative debt and earnings outcomes are all, appropriately, associated with the higher credential. If they complete an intermediate credential but do not obtain the ultimate intended degree, then their debt and earnings outcomes are attributed to the last or highest credential they obtained.
Moreover, we believe that the program information website is of interest to current and prospective students, even when based on historical data, and provides helpful insight to students when comparing and selecting among program offerings. We further maintain that the transparency framework will be immediately useful to students, prospective students, institutions, and the public, by filtering out low-financial-value programs and enhancing competition among other programs.
Several other commenters also suggested that students dependent upon Federal student aid could be harmed if some institutions continued to offer programs that lost eligibility to students that could afford them without Federal student aid. Some commenters noted that programs at risk of losing Federal student aid might also lose access to State grants and further erode student access to some lower earnings programs.
Commenters suggested that a better approach would be to provide more guidance and accept alternate measures of success for a GE program, such as graduation and placement rates, or establish more stringent requirements for those institutions with higher cohort default rates. Commenters asserted that graduation rates reported by the National Center for Educational Statistics (NCES) show that proprietary schools have higher graduation rates for first-time, full-time students for two-year programs of over 60 percent, compared to 52 percent for private nonprofits and 29 percent for public institutions.
For several reasons, the Department does not agree that the rule will cause increases in tuition by reducing the number of educational options available to students. The GE accountability provisions of the rule, in part, target programs with high debt relative to earnings. We expect the primary impacts of the rule to be (1) encouraging institutions with high D/E programs to reduce their tuition or arrange for their students to receive greater grant support to reduce borrowing, and (2) making ineligible for participation in title IV, HEA student aid those GE programs that have particularly high costs to students, leaving more affordable options in other programs with better outcome measures. More generally, the fact that so much variation in debt exists across programs that are in similar fields with similar earnings levels suggests strongly that competition across such programs for students may play a limited role in keeping tuition low.
We expect that programs that are low performing under the framework will take steps to improve, to avoid a loss of title IV, HEA eligibility. As shown in the RIA (see Tables 4.25 and 4.26), most students who enroll in a GE program projected to fail the D/E rates or EP measure have better options available to them in a similar field nearby or, possibly, at the same institution. On average, these alternative options leave graduates with 43 percent higher earnings and 21 percent less debt.
Nor has the Department ignored the value of student choice. The financial value transparency framework will provide average education debt and earnings information about degree programs offered at nonprofit and public institutions to help students and families make informed choices, while the GE program accountability framework will ensure that GE programs are meeting eligibility thresholds in accord with applicable statutes. Again, the GE program accountability framework is based on the GE provisions of the HEA that differentiate between career training programs and other eligible programs by conditioning the title IV eligibility of career training programs on their meeting the gainful employment requirement. We believe it is appropriate to set eligibility thresholds for these programs to ensure they meet the HEA requirements, and that these thresholds will promote better outcomes for students and encourage institutions to improve the outcome measures for marginal programs. By providing equivalent information about programs not subject to the GE eligibility requirements, the financial value transparency framework will promote better comparisons of comparable programs offered at different institutions for students looking at multiple institutions.
We also disagree with suggestions by commenters to adopt measures such as graduation or placement rates instead of the D/E rates and EP measures or to create stronger conditions around cohort default rates. While we agree that graduation rates are an important piece of information, they are insufficient for ensuring that programs prepare students for gainful employment in a recognized occupation. The measures in the GE
Placement rates exhibit similar shortfalls. While they can be useful indicators of results, not every program is directly tied to a specific set of occupations and, thus, such measures may not always be appropriate. Moreover, calculating placement rates is burdensome and time consuming for institutions compared to the GE program accountability metrics. Further, we do not believe that job placement is proof that a program is preparing students for gainful employment in a recognized occupation, if graduate earnings are no better than if they had never attended postsecondary education or if they nonetheless have debts they cannot afford.
Regarding default rates, the Department is concerned about the negative effects of default on borrowers, so we are taking steps to lessen the likelihood of default, even if the institution does nothing to improve its offerings. For instance, in the final rule improving income-driven repayment,
The Department addresses this concern in the RIA, the basic points of which we reiterate and discuss here. In the RIA, the Department provides evidence indicating that programs and institutions play an important causal role in determining student outcomes, more so than student demographics. We first present regression analysis (Tables 4.22 and 4.23) showing that institutional and program factors (credential level, control, institution fixed effects) explain a great deal of the variation in program outcomes. Adding student demographics on top of these variables does not explain much additional variation in outcome (as measured by increase in R-squared) (Tables 4.22-4.23). Second, we show that program-level differences in students' family income background is only modestly correlated with the EP measure, and that there are many programs that pass at every level of family income (Figure 4.3). The same is true among programs with similar gender and racial composition (Table 4.24). Third, evidence from our compliance oversight activities indicates that some institutions aggressively recruit women or students of color into programs of substandard quality and claim that the resulting poor outcomes are because of the alleged “access” the program provides to their students. Finally, the closure of a poor-performing program is not likely to affect students' access to a similar program with better outcomes. More than 90 percent of students have at least one transfer option within the same two-digit CIP code, credential level, and geographic area (Table 4.25). We also note that the research literature on this topic likewise concludes that factors related to institutions and programs are stronger predictors of student outcomes than the demographic characteristics of students. On that score, please consult the numerous citations to this literature in the “Need for Regulatory Action” section of the RIA.
Furthermore, in designing the D/E rates and EP measures, the Department included several features to limit the influence of student demographics on these financial value metrics. In the measurement of program debt under § 668.401(b)(1)(i), for example, we cap individual student borrowing at the direct costs charged by the program excluding borrowing for living costs. Low-income students tend to borrow more for non-tuition and fee expenses than do high-income students; therefore, this cap at the total cost for tuition, fees, and books should mitigate concerns that programs will be penalized for enrolling large numbers of low-income students.
Even using the data in the 2022 PPD, which does not have that cap applied (since the cap will rely on institution-level reporting not yet available to the Department), programs with small proportions of students who receive Pell Grants (which proxies for socioeconomic status) have median student debt levels that are similar to programs serving large shares of Pell students. In Figure 1.1, we show the relationship between median program debt and the share of Pell students using the PPD. As the share of Pell students increases (moving from left to right on the graph), the average median program debt does not increase (the average of the individual programs' median debt levels is shown in the dark line); rather, it remains similar. To illustrate that institutions do influence borrowing levels, in the same figure we show the average median debt levels for institutions with higher tuition levels (the highest quartile of tuition, with the average depicted by the dotted line) versus those with lower levels of tuition (those in the lowest quartile of tuition, depicted by the dashed line). The figure shows that tuition levels affect borrowing levels substantially, whereas the family income background (proxied by the percent of student receiving Pell grants) of students does not.
Related to potential issues raised about differences in the gender compositions of programs and high school graduates in the State, adjusting thresholds poses several challenges, including practical feasibility. As described in more detail below, attempting to create program-specific metrics would be very complex and lead to inconsistent standards across programs. As well, standards might need to continually change as the gender composition of programs change, potentially adding undesirable volatility to program outcomes.
Related to high school earnings, the EP threshold is based on an estimate of State-level median earnings of individuals aged 25 to 34 who have only a high school diploma or GED. Further adjustment to this threshold, such as using a program-specific statistical adjustment to better match the demographics of students completing a given program to the composition of high school graduates in a given State, poses several challenges. An important constraint on this approach is its practical feasibility. To implement the approach, one would need to measure high school median earnings separately for each demographic subgroup of interest. If we only started with the five race and ethnicity groups on which the Office of Management and Budget (OMB) requires reporting and added two sex-at-birth categories, we would need to estimate median earnings for ten subgroups within each State. In many States there would be too few individuals in ACS data to produce a reliable measure, so different groups would need to be combined or other methods of adjustment would need to be employed, thereby requiring potentially arbitrary methodological choices. To compute a program-specific threshold, presumably one would create a weighted average of these subgroups, where the weights would correspond to the share of completers in the program. Again, this could be quite complex and create different standards that programs must meet for eligibility. Especially in small programs, changes in the demographic composition of programs could result in different earnings thresholds from year to year. This could add undesirable volatility to program outcomes under the rule.
With respect to establishing a 15 percent variance to account for disadvantaged groups, we appreciate the suggestion, but there are numerous issues with the commenter's methodology that preclude a sound basis for adjusting the rule by an amount generated by that analysis. This includes several self-acknowledged reasons why the commenter's methodology systematically overestimates or underestimates ROI for different types of programs, and makes assumptions that students' earnings trajectories relative to their peers do not change over time. In addition, the commenter's attempt to create counterfactual wages relies on adjustments made on very broad educational credential by field of study groups that do not reflect specific programs well.
The Department has considered different methodologies for calculating a median high school earnings threshold in each State, including an option (using only those individuals with a high school degree working year-round) that would have used an earnings threshold approximately 20 percent higher.
The BPC's ROI model includes a “discrimination adjustment” based on earnings gaps in the overall population of college graduates. Earnings of female graduates, and graduates from underrepresented minority racial or ethnic groups, are adjusted upward to match the earnings of white male college graduates. If applied to a program's earnings outcome measure, this statistical adjustment would misrepresent the true median earnings of graduates from a given program by inflating the median salary for programs enrolling large shares of women and underrepresented minorities. Such an adjustment could potentially misrepresent a student's potential earnings, and ability to repay their debt, for a given program, which are important datapoints within the financial value transparency framework. If applied to State-level EP thresholds of median high school earnings, this statistical adjustment is again likely to cause more year-over-year uncertainty for programs serving a demographic population that is dissimilar from the State-level population of high school graduates in the labor force, due to small n-sizes of these groups.
Finally, we note again that as shown in Tables 4.22 and 4.23 of the RIA and elsewhere in this rule, program demographics do not play an outsized role in influencing the debt and earnings-based outcomes measured in the final rule. In light of these factors, we believe the methodology for setting thresholds based on State-level high school earnings described in this rule is better than alternative approaches and sets a reasonable benchmark for the earnings outcomes of all programs.
Moreover, the Department believes that the GE program accountability framework will help protect all individuals including women, people of color, people with disabilities, and LGBTQ+ individuals from entering programs that do not prepare students for gainful employment. The lack of title IV, HEA aid at such programs will help students to avoid failing GE programs, which will ultimately help maximize their educational investment. To help prevent institutions from encouraging students to substitute private loans for Federal loans, the D/E rates measure counts all student borrowing including institutional and private loans in the median debt measure. In effect, then, institutions do not receive an advantage on that metric for concentrating on students with access to private lending, which was a matter of concern to some commenters.
On the other hand, other commenters suggested the definition of a CIP code should consist of four-digits to increase the number of students covered by metrics under the rule, or alternatively to use the six-digit CIP but to “roll-up” programs to the four-digit level when doing so would avoid too few students at the six-digit level programs. Some commenters noted that few four-digit programs had multiple six-digit programs within them, and in those cases, the different six-digit programs rarely had different financial value outcomes. This, they said, suggested there would be little granularity lost in using the four-digit CIP level to define programs, and would increase coverage of the rates. Finally, one commenter
Although the Department considered treating each additional location offering the same combination of six-digit CIP code and credential level as a separate program, we determined that doing so would further reduce the number of programs with a sufficient number of completers to be evaluated, and the gains in granular coverage may not be justified. This is, in part, due to an added dimension of complexity that not all locations are well aligned with the organizational units of institutions with which students engage in pursuing an education, and the mapping between locations and such units differs widely across States. The Department might revisit the issue of program classification in the future, for example to assess student outcomes more granularly across different campuses in some State systems or in online programs.
The Department does not anticipate being able to rerelease the information published with the NPRM at the six-digit CIP level due to constraints in our ability to obtain earnings data.
The commenter proposed adding a new paragraph to the definition of “cohort period” that reads: “For a program whose students are required to complete post-graduation flight hours pursuant to the Federal Aviation Administration (FAA) standards to qualify as an Airline Transport Pilot (ATP) and where a majority of the graduates are pursuing an FAA ATP certification, the sixth and seventh award years prior to the award year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings threshold measure are calculated. For this purpose, the institution must provide a certification that a majority of its graduates pursue completion of the required FAA certified flight hours to work as an FAA Certified ATP.”
The commenter also recommended adding another paragraph to the same definition of “cohort period” that reads: “For a program whose students are required to complete post-graduation flight hours pursuant to the Federal Aviation Administration standards to qualify as an Airline Transport Pilot (`ATP') and where a majority of the graduates are pursuing an FAA ATP certification, the sixth, seventh, eighth, and ninth award years prior to the award year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings threshold measure are calculated. For this purpose, the institution must provide a certification that a majority of its graduates pursue completion of the required FAA certified flight hours to work as an FAA Certified ATP.”
By contrast, others argued that this three-year lag between when students graduate and when their earnings are measured is too long to fairly characterize the current quality of the program at the moment any sanctions might be levied.
We believe a three-year lag in measuring earnings, with longer periods for programs documented to have exceptionally high earnings growth due to government-imposed limits on early career earnings capacity, strikes this balance. Data from the Census' Postsecondary Employment Outcomes (PSEO) project shows that earnings levels measured shortly after graduation are very highly correlated with longer term measures.
One commenter suggested that, in determining which programs should be eligible for a longer earnings horizon, the Department should consider whether (1) the relevant field requires multiyear post-degree supervision for licensure (noting the possibility of creating competing State and Federal regulatory frameworks); and (2) a large increase in the earnings of program graduates follows licensure.
Moreover, we note that a student's earnings three years after graduation might govern their loan payments for up to five years after the student graduates if they enroll in income driven repayment plans. That is between 20 and 25 percent of the full time that students will be required to make payments on such plans, so the Department has a responsibility to taxpayers to hold institutions accountable in providing quality programs that produce graduates that earn enough to repay their loans at that point.
The Department is sympathetic to the argument that some programs may have lower earnings three years after graduation due to government-imposed post-graduate training requirements necessary to earn a license before an individual can practice independently. To assess the commenters' claims that these programs see substantial earnings gains just outside the measurement window used in the rule, we used program-level PSEO data. These administrative data are based on individual records that match program graduates to their annual earnings from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics program at one, five, and 10 years after completion. The PSEO reports program-level median earnings at these three intervals, linked to 2-digit or 4-digit Classification of Instructional Program (CIP) codes for a large number of institutions and State public higher education systems throughout the United States. This is the only dataset we know of that currently includes program-level earnings for programs from a broad selection of institutions, credential levels, and fields of study with such long follow-up.
We limited the dataset to programs and cohorts that had non-missing median earnings at all three intervals. We then grouped programs by credential level and focused here on graduate programs, where commenters noted post-graduate training requirements.
The PSEO data do have some important limitations. First, they cover a subset of States and not all sectors within each State (
The commenters raise the concern that some programs will have particularly fast earnings growth after the third year after completion, suggesting that prior to earning their independent license their earnings three years after graduation were suppressed by the government-imposed requirement. In the PSEO data, we estimate 3-year median earnings as the average of the 1-year and 5-year median earnings available in PSEO.
Some commenters pointed to programs that prepare students to become mental health clinicians, including Clinical Psychology and Marriage and Family Counseling, which require post-graduate work to obtain a license. We have limited ability to analyze these programs in the PSEO data since the master's and doctoral research and scholarship programs for these fields are lumped with other health and psychology programs in those broader 2-digit CIP categories. The PSEO data does have data for Clinical, Counseling, and Applied Psychology professional doctorate programs in the PSEO data, but there are only a very small number of these programs in the data, preventing a robust view of the earnings growth of these programs.
Social Work is somewhat different from the other programs in that graduates with a master's in Social Work (MSW) pursue a variety of fields, and not all of them require a clinical license.
In summary, there appears to be some possibility that, similar to programs in medicine, some other programs that provide training to licensed mental health professions may also generate significant earnings growth following a post-graduate training period. At present, detailed data do not exist to evaluate which groups of programs by credential and CIP code are likely to
In light of the evidence presented by commenters and the Department's analyses, we adopt a data driven process to identify qualifying graduate programs where we will use a longer cohort period to measure the earnings of graduates six years, rather than three, after they graduate. The Department selected an initial set of these fields based on evidence currently available to the Department suggesting that graduates of such programs may have constrained earnings three years after graduation as a result of government imposed postgraduation training requirements. Data in the College Scorecard will eventually allow more accurate assessments of which programs experience atypically high growth in graduates' earnings that are potentially due to postgraduation training requirements. Going forward, the Department will use these data, combined with an information request to the field to identify groups of programs (at the credential level and CIP code level) where A) state or other government postgraduation requirements exist that are likely to lead to delays in program graduates being able to practice independently; and B) programs are outliers with regard to their earnings growth relative to programs at the same credential level.
The Department will use a standard statistical procedure to determine whether groups of programs (graduate fields of study, defined by their credential level and CIP codes) are outliers with regard to their earnings growth. The Department will use College Scorecard measures to calculate the percent growth in the median earnings of program graduates between one- (or three-) and five-years (or ten-years) postgraduation. Lastly, a qualifying graduate program must have at least half of its graduates obtain licensure in a State where the postgraduation requirements apply. Since the rule is based on measuring the earnings of the median graduate, this requirement means that the student with median level of earnings is likely to have their earnings outcomes influenced by the training requirement.
We then add to § 668.2 and define a “qualifying graduate program,” which (a) establishes an initial list of graduate degree fields (defined by their credential level and CIP code) that potentially qualify for this longer cohort period used for earnings measurement for the first three years after the effective date of this rule; (b) establishes a regular data driven process the Department will use to update that list after the initial period; and (c) specifies further criteria that institutions must attest apply to a program to deem it a qualifying graduate program.
We define an initial list of potentially qualifying graduate programs whose students are generally required to complete a postgraduation training program to obtain a license to practice independently in the following fields: medicine, osteopathy, dentistry, clinical psychology, marriage and family therapy, clinical social work, and clinical counseling. These fields were selected based on credible evidence presented to the Department that program graduates are subject to lengthy, government-imposed, postgraduation training requirements; and graduates' earnings may be constrained by these requirements for at least three years after they graduate from a program.
A program is considered to be an outlier in terms of its earnings growth if its growth is more than two standard deviations higher than the average earnings growth among programs with the same credential level. A graduate degree field (defined by credential level and CIP code) will be considered to have outlier earnings growth if at least half of the individual programs in the field have outlier earnings growth.
In using the College Scorecard data to determine which graduate fields are outliers in terms of earnings growth, we seek to identify programs that have atypically high earnings growth between the first three years after they graduate, and subsequent years. In practice, the College Scorecard measures earnings 1-, 3-, 5-, and 10-years (the 5- and 10-year measures are planned, but not yet available, though will be after the initial period) after graduation. Accordingly, to measure whether programs have outlier earnings growth we will base our assessment on the comparisons available in these data. Defining a program as an outlier based on whether its earnings growth is two standard deviations above the mean is rooted in a common statistical approach for defining outliers.
We will conduct this process every three years to balance a desire to stay up to date with current practices around licensure and training requirements, while ensuring institutions have stability in how the metrics of the rule will be calculated for their programs. In identifying postgraduate training requirements, we limit the rule to those that typically take at least three years to complete. This accommodation is meant to apply to programs where graduates' earnings capacity three years after graduation is constrained due to not yet having a required license. If training requirements took only one or two years to complete, graduates' earnings would not be constrained at the point when earnings are typically measured three years after graduation and the accommodation would not be necessary.
Programs with a credential level and CIP code included in the list of potentially qualifying graduate degree fields are eligible to have their earnings calculated under the extended cohort period (with a six-year lag before earnings are measured) if the institution attests that A) if necessary for the license for which the postgraduate training is necessary, that it is accredited by an agency that meets State requirements; and B) at least half of the program's graduates obtain licensure in a State where the postgraduation requirements apply.
We have also made conforming changes to refer to a “qualifying graduate program” in § 668.408.
As the Department explained in the NPRM, individuals who fail to report taxable income in a manner consistent with Federal law are subject to considerable legal penalties.
In the NPRM, the Department also explained that administrative earnings data from the IRS play a crucial role in the HEA framework for determining Pell grant and other aid eligibility, as well as monthly loan payments on income-driven repayment plans. Income information provided from official filings to the IRS are one of the primary ways that borrowers document their income to the Department to qualify for critical student or borrower benefits. It would be inconsistent and imprudent for the Department to use different earnings data for similar purposes related to the administration of title IV, HEA student aid. In these regulations, earnings data are employed so that students might avoid programs that leave them with very low earnings or unaffordable debt, in part to protect taxpayer investments in the title IV, HEA programs. More specifically, these regulations represent front-end safeguards on the use of title IV, HEA support, which will reduce Federal investments in ineffectual programs through loans and other student aid and, likewise, will reduce back-end liabilities for the Department and taxpayers when program completers default or make reduced Federal loan payments. It would undermine the goals of taxpayer protection if we allow borrowers to qualify for lower or zero loan payments due to low reported earnings to the IRS, but ignore these low reported earnings when providing students with information or determining whether a program prepares students for gainful employment.
The Department's experience with the earnings appeal process also cautions against making accommodations for the possibility of income underreporting. Because institutions were permitted to offer alternative measures of earnings through an appeals process under the 2014 Prior Rule, the Department has direct experience with the challenge of trying to measure earnings more accurately than the information available through administrative wage records. As the Department noted in the NPRM, the goal of more accurate earnings data through the earnings appeal process in the 2014 Prior Rule was ultimately frustrated by implausibly high earnings reported through the survey measures. Problems of accurate recall and selection bias (
The Department notes that commenters' concerns with earnings reporting (
Finally, as we explained in the NPRM, new research is now available. A 2022 study shows that earnings underreporting is likely to be small—about 8 percent—in contrast to previous estimates that formed part of the record for the 2014 GE rule and was a basis for arguments in litigation over that rule.
The recent study that we reference in the text of this final rule and that we discussed in the 2023 NPRM is Cellini, Stephanie Riegg & Blanchard, Kathryn J. (2022). Hair and Taxes: Cosmetology Programs, Accountability Policy, and the Problem of Underreported Income. Geo. Wash. Univ. (
The 2022 Cellini and Blanchard study critiques the earlier May 26, 2014, study by Bettinger, which had estimated a much higher level of underreported earnings for cosmetologists. See
We further observe that, according to a report sponsored by Wella Company and others—with listed supporters including John Paul Mitchell Systems, the Professional Beauty Systems, and others, and submitted or referenced by numerous commenters during the public comment period for this final rule, including AACS-salon owners reported a “high rate of tip compliance.” Qnity Institute (2023). A Career in Pro Beauty, at 8 (
Finally, we note again that tips included on credit card payments to a business are more likely to be reported, as we have discussed above in the text, and it is reasonable to expect that many workers are complying with the law to include tips in their reported income.
In addition, as we emphasized in the NPRM, the timing for measuring earnings in this final rule differs from the timing in the 2014 Prior Rule.
We also seek to avoid the perverse incentives that would be created by making the rule's application more lenient for programs in proportion to how commonly their graduates unlawfully underreport their incomes. We do not believe that taxpayer-supported educational programs where benefits are provided based on reported income to the IRS should, in effect, receive credit when their graduates fail to report income for tax purposes. All things equal, earnings underreporting will tend to have borrowers repay less of their loans under income driven repayment plans. If the Department ignores lower reported earnings among some programs, it would effectively be supporting greater taxpayer investments in those programs. Even if that position were fiscally sustainable, it would incentivize institutions to discourage accurate reporting of earnings among program graduates—at the ultimate expense of taxpayers. It could also potentially invite private investment in training programs aimed at exploiting this weakness in accountability for student loans that are unlikely to have to be repaid, thereby increasing the amount of Federal funds going to programs like these.
Given these considerations, the Department reaffirms its decision to rely on administrative earnings reported to a Federal agency, comparable in quality to earnings data from the IRS, without an opportunity to appeal these earnings estimates or accommodation for the possibility of income underreporting. To the extent that institutions believe that underreporting is negatively affecting their program's performance on the D/E rates and EP metrics, the Department continues to believe that institutions are well positioned to counsel their students on the importance of tax compliance. Indeed, many commenters noted the role that cosmetology programs play in training their students to run their own small businesses, including managing their finances. Though individuals are certainly the most responsible party for decisions about tax compliance, programs are as well positioned as any party to inform students about the requirements and benefits of tax compliance. Therefore, it is also important in the Department's view to maintain incentives for programs to deliver this message as effectively as possible.
One commenter presented a simple example, if a program had five earners (putting to one side the fact that such a program's earnings would be privacy suppressed) whose earnings were $0, $0, $0, $50,000, and $50,000, their median earnings would be $0. However, if just one of those $0 estimates switched to $50,000, the median would switch to $50,000 as well. The question presented by such a case is whether the mean earnings ($20,000 in the first case, $30,000 in the second) better conveys what graduates typically earn at such a program than the $0 median.
The 2014 Prior Rule argued that in such cases the mean is the better reflection of what students can expect than the median. It concluded that in cases where the median is the higher of the two statistics, the mean should be preferred because it reflects high levels of employment in higher earning jobs. Such an example is evident in our second case above, where the median earnings would be $50,000, but the mean is $30,000.
The Department notes that the commenter's example with just five earnings estimates provides some useful insight into potential limitations of the use of median earnings, but gives an overly dramatic sense of the stakes between the mean and median in the context of the rule. Under these rules, the Department only calculates earnings when there is a minimum of 30 completers in a cohort. With more observations, the difference in earnings among observations near the median is likely to be much smaller than in the commenter's example and so additions of one higher or lower earner will tend to change the median only slightly. On the other hand, an addition of a single extremely high earner could influence the mean substantially, even though outcomes for nearly all students are left unchanged. We view the potential of this latter type of distortion as much more likely and therefore prefer the median.
The Department also believes it is important to be consistent across measures by using same statistic to measure both program graduates' earnings and to construct the earnings thresholds to calculate the earnings premium. The Department cited evidence in the NPRM that mean earnings levels among high school graduates in a State are always higher than median earnings levels because of the large rightward skew of the earnings distribution created by very high earners in income distributions. Using the higher of mean and median earnings in the construction of each State's high school earnings threshold would thus result in a much higher EP threshold for programs to meet. Given our concerns with the representativeness of the mean in the earnings context, we believe such a standard would be an inappropriate comparator for programs. Taken as a whole, we believe the correct choice for both setting an earnings threshold and measuring program graduates' typical earnings against that threshold is to use median earnings.
Websites such as those mentioned by commenters use a variety of methods to estimate earnings for a field, but none of these methods come close to the coverage of the IRS data used to obtain program-level earnings. Instead, they rely on sources such as job listings or self-reported income from website users or other survey sources. By their nature, these methods try to estimate the data we directly obtain from Federal administrative sources. In addition, these external sources provide industry-wide estimates of earnings, regardless of worker experience or background, and often miss the earnings of program graduates who work in a different occupation than that the program intends to train students for, as well as students who may not find work altogether. We do not believe that these sources provide any reason to doubt the accuracy of Federal administrative data, and more broadly believe they are not an appropriate data source to assess the performance of particular programs for our present purposes.
We note that some lag in the metrics between when students complete a program and when the data is produced is inevitable if we wait several years to measure the earnings of program completers. As discussed elsewhere we believe the 3-year lag to measure earnings is appropriate to allow graduates a period to find employment and settle into their early careers, and the broader lag stems from this choice.
For a period after the effective date of the rule, however, institutions can choose to report data for transitional rates on more recent cohorts' information for calculating median debt levels. During this transition period, changes to programs' borrowing outcomes will be reflected more rapidly in the D/E rates published by the Department.
We do not agree that the Department arbitrarily chose which types of debt to include in the D/E rates calculation. For most borrowers, we measure substantially all of their debt, including private and institutional loans. We exclude parent PLUS loans because
Two other commenters suggested that the Department deduct “outside scholarships and grants intended for direct costs from the capped tuition and fees” in the D/E metrics, recommending that the Department net-out both institutional and external grant aid.
Additionally, under § 668.403, median debt is calculated by capping the total amount of each student's borrowing at the charges for direct costs (tuition, fees, books, and supplies), minus any institutional grant aid the student receives. Therefore, the Department does not hold institutions accountable for loans taken out in excess of direct costs as the commenters suggest. One way that programs can lower their D/E metric is by controlling their net direct program costs—that is, by lowering tuition or providing greater institutional aid.
Another reason to cap the measurement of debt at direct charges is that it mitigates the influence of differences in students' family income background on measured median debt levels across programs, since some of the additional borrowing of low-income students relative to higher income students is due to borrowing for living costs.
Another commenter noted that when students transfer between programs, or when a student enters an institution and does not declare a major, attributing debt to a particular program becomes complex.
A few commenters suggested that the Department include all student debt incurred as of graduation, not just debt incurred for a particular program. These commenters recommended that we hold institutions accountable for the overall financial well-being of their students. The commenters also noted that many programs admit students knowing that they incurred debt from other programs at the same institution or at other institutions. The commenters also highlighted the relevance of the inclusion of all debt for stackable credentials.
The commenter contended that not including parent PLUS loans increases debt for programs serving primarily independent students. This statement is not accurate, because including parent Plus loans would not impact (positively or negatively) the median debt for a program that serves predominantly independent students who are ineligible for parent PLUS loans. By not including parent PLUS loans, the median debt is not increased as the commenter suggests. Rather, exclusion of parent PLUS loans creates an accurate assessment of the student's ability to repay loans as discussed above.
We remain concerned, however, about the potential for an institution to steer families away from less costly Direct Subsidized and Unsubsidized Loans towards parent PLUS in an attempt to manipulate its D/E rates. We have addressed this concern, in part, by proposing changes to the administrative capability regulations at § 668.16(h), which would require institutions to adequately counsel students and families about the most favorable aid options available to them.
While distinct from the rationale for excluding parent PLUS loans, we note that, for the vast majority of programs, a minority of students are recipients of parent PLUS loans and so their inclusion would affect the median debt of a program only infrequently.
However, consistent with the 2014 GE rule, the Department will exclude students with one or more loans discharged or under consideration for discharge based on the borrower's total and permanent disability or if the borrower dies. We exclude these students (from both the numerator and denominator of the D/E and EP measures) because under the HEA a student with a total and permanent disability is unable to engage in substantial gainful activity for a period of at least 60 consecutive months and thus their ability to work and have earnings or repay a loan could be diminished under these circumstances, which could adversely affect a program's results, even though the circumstances are the result of student events that have nothing to do with program performance. Similarly, an institution would not be able to anticipate if a borrower passes away.
A couple of commenters noted that the interest rates used to calculate D/E rates do not correlate with the actual interest rates of the student loan portfolio. The commenters recommended that the Department revise the annual loan payment calculation to reflect the actual repayment terms of the individual student, including the amortization period and interest rate.
A few other commenters argued that the availability of income-based and income-driven repayment programs makes all student debt affordable. The same commenters argued that as long as these programs exist (and students enroll in these programs) the D/E metric is not necessary because all student debt is affordable to students through these repayment plans. One of these commenters argued that use of the D/E rates to indicate affordability is therefore arbitrary and capricious because loan payments for students in repayment plans do not the measures of debt used in the D/E metric. Several commenters noted that the availability of the Revised Pay as You Earn (REPAYE) program renders the D/E rates misleading since no borrower is actually required to pay off loans under a standard repayment plan.
Similarly, another commenter suggested that the D/E measure should incorporate loan repayment programs such as the National Health Service Corps Loan Repayment Program (LRP), Indian Health Service LRP, Health Professions LRP, and the Veterans Affairs Specialty Education LRP. According to this commenter, failure to consider these repayment programs may adversely affect medical schools whose students commit to public service.
As explained in the NPRM, the purpose of the D/E rates is to assess whether program completers are able to afford their debt, including program completers who do not enroll in IDR or other repayment plans intended to help protect students from excessive payments. The Department recognizes that some repayment plans we offer allow borrowers to repay their loans as a fraction of their income, and that this fraction is lower for some plans than the rate used to calculate the D/E rates. However, we decline to set acceptable program standards at a rate that would allow institutions to encumber students with even more debt while expecting taxpayers to pay more for poor outcomes related to the educational programs offered by institutions. Instead, we view the D/E rates as an appropriate measure of what students can borrow and feasibly repay. Put another way, under the D/E rates calculation, the maximum amount of borrowing is a function of students' earnings that would leave the typical program graduate in a position to pay off their debt without having to rely on payment programs like income-driven repayment plans.
The Department understands that other debt repayment plans for particular fields exist as well, but views these analogously to the Department's own IDR plans. Moreover, these loan repayment programs, while generous, affect only a small fraction of borrowers. For example, in fiscal year 2021, the National Health Service Corps made fewer than 7,000 new Loan Repayment Program awards and the Nurse Corps made about 1,600 LRP awards.
Another commenter suggested that the D/E measure should not apply to graduate programs, since their undergraduate experiences affect future earnings.
With respect to the influence of undergraduate experiences, students pursue graduate education expecting that they will benefit from additional education. The rule requires measurement only of the debt students acquire at the graduate level when measuring the D/E rates of graduate programs yet credits the program with the entirety of a students' earnings (as opposed to the increment to those earnings added by attending the graduate program). Regardless of the extent to which students' undergraduate experience influences their earnings, their graduate debt should be affordable given what they can earn following program completion.
Another commenter contended that the Department should not penalize an institution if it responsibly ends a program that produces failing D/E rates in its final years.
If a program loses eligibility under the rule or if an institution voluntarily discontinues a failing program, the institution may not launch a similar program for 3 years. As we discussed in the NPRM, we intend for this waiting period to protect the interests of students and taxpayers by requiring that institutions with failing GE programs take meaningful corrective actions to improve program outcomes before reintroducing a similar program with
The Department believes, however that most students will be better served by transferring to a better performing program rather than further accumulating debt or spending time in a program where they will be unlikely to earn enough to manage it, or not accumulate skills to earn more than a high school graduate. Analyses presented in the RIA suggest that most students will have other better options to which to transfer.
However, we cannot now conclude with confidence that the earnings of military personnel are unrelated to the postsecondary programs that they completed. First, the latest Quadrennial Review of Military Compensation (QRMC) shows how strongly correlated educational attainment is with pay grade for both enlisted personnel and officers. For example, in 2017 while none of the enlisted personnel at the lowest reported pay grade (E-2) had a bachelor's degree or more, 55 percent of those in the highest pay grade for enlisted personnel had at least a B.A. Similarly, virtually all officers (91 percent) at the lowest pay grade had a bachelor's degree, while 80-100 percent of the officers in the top pay grades had an advanced degree, with that share increasing with the pay grade. Educational attainment is clearly a key component of pay grade in the military, and program quality is a key factor in attainment.
More broadly, program quality determines the skills a student will receive and have available to them on the job. Whether that job is in the military or in some other field with a
Furthermore, including these earners would likely raise the median income measured for their particular program because this group of program completers are demonstrably employed, and because, as the latest QRMC demonstrates, the military has long sought to (and surpassed) a goal of paying service members at a level equivalent to the 70th percentile of comparably educated and experienced civilians. Nevertheless, there is still a possibility that this group of program completers may have earnings that do not otherwise support the debt they incurred. Servicemembers should receive the same consumer protections afforded to other student borrowers from their GE program completer cohort. Accordingly, the Department has concluded that their earnings should be reflected in the data that we use to provide information about and evaluate GE programs supported by title IV, HEA student assistance. This conclusion is reasonable and, as we explained in the “Reliance Interests” section of the NPRM, this approach does not implicate any significant reliance interests.
Several other commenters objected to the lack of inclusion of the “zone” as in the 2014 Prior Rule, asserting that without the zone, programs could fail because of fractions of a dollar in the GE calculation or that programs do not have the space to make necessary program changes.
In the final rule, the Department has adopted a transition period where institutions can report debt information for more recent completion cohorts. This provision is similar to a transition provision that was included in the 2014 Prior Rule under 34 CFR 668.404(g) that permitted institutions to use updated program costs in the outcome calculations for 5 to 7 award years, depending upon the length of the program. The transition period for these regulations will allow any improvements in the cost structure of programs to more rapidly be reflected in institutions' D/E rates.
The same OMB bulletin further warns that, in keeping with the Metropolitan Areas Protection and Standardization (MAPS) Act of 2021, agencies should be hesitant to use CBSA designations for the administration or regulation of non-statistical programs and policies. Our view is that while MSAs provide a useful approximation to major and minor urban centers in a State, they do not measure a relevant unit for the purposes of this regulation. This is especially true in the context of postsecondary education, where students often travel outside of their home MSA to attend school and, as a result, are likely to have considerable cross-MSA mobility after graduation.
Our view is informed by an analysis the Department conducted to assess the viability of measuring earnings at the metropolitan area level. To understand the implications of such a change, we first examined how the earnings threshold would vary across each State if it varied for metropolitan and non-metropolitan areas. The IPUMS USA version of the ACS 5-year sample for 2019 adds the necessary information to the PUMS data to divide households into different geographic classifications based on the metropolitan status of the area they live in, which the IPUMS USA describes in this way: “[the relevant field] indicates whether the household resided within a metropolitan area and, for households in metropolitan areas, whether the household resided within or outside of a central/principal city.” Table 1.4 below shows how earnings thresholds would vary if they were set at the median earnings for the same population (high school graduates aged 25-34 who were in the labor force in the previous year), divided by which type of metropolitan area those individuals live in.
Table 1.4 illustrates the challenge of this approach. To the extent that the commenters' main concern about State-level earnings thresholds is that institutions located outside of metropolitan areas would be disadvantaged, the data does not bear this out. In many instances, such as Alabama, Colorado, and Illinois, the earnings threshold outside of metropolitan areas would be higher than the current statewide standard (displayed in the “Overall” column). Because many low-income people live in cities, it is not consistently the case that metropolitan areas or central cities have higher median incomes for high school graduates than non-metropolitan areas. What is more, this pattern is not consistent across States, suggesting there is not a systematic disadvantage for non-metropolitan areas that would justify switching to another standard that would have its own disadvantages.
This list is a clear signal that the Persistent Poverty County exemption would be poorly targeted from the perspective of identifying institutions facing insurmountable economic conditions that would merit exemption from the general standard laid out in the NPRM. A number of the institutions on this list are major State flagship institutions with a strong track record of graduating large numbers of students into stable and well-remunerated employment, suggesting that being located in these counties is not in fact outcome determinative for students in such institutions. The exercise reveals a limitation of the approach more generally, which is that these institutions draw on students from a variety of different locations, and their graduates go on to work in many different places outside the county where the institution is located.
An additional datapoint that reveals that this measure of county poverty may not well capture economic conditions that dramatically impede labor market success for college graduates is the list of the 15 cities in Persistent Poverty Counties with the largest enrollment across all institutions and programs located there:
This list includes a number of the country's largest cities, as well as a number of college towns. This gives us pause for two reasons: first, the inclusion of major cities with both a high incidence of poverty and vibrant economies suggests that the Persistent Poverty County construct is not designed to capture the kind of within-county inequality that allows deep poverty to coexist with strong labor markets for college graduates. Second, the existence of so many college towns suggests that the measurement of Persistent Poverty Counties may partly be picking up places where a large fraction of the area's residents are students who are in school and therefore not in the labor force or working only part time, perhaps exaggerating the true extent of poverty in the area, or at least not reflecting its likely transience for the individuals being measured, who can expect a significant increase in their standard of living once they graduate from college.
The EP threshold is well suited to adjust to State or national disruptions to the labor market. The earnings of high school graduates tend to be much more pro-cyclical than those of college graduates. That suggests that the EP threshold will tend to fall more in economic downturns than will the median earnings of college graduates, therefore buffering the impact on program outcomes. It is possible that the EP threshold may not adjust for more localized labor market shocks at the sub-State level. The Secretary may, however, have authority under statute to waive or modify regulatory provisions that apply to institutions in disaster areas or that are significantly affected by disasters.
The Department recognizes the logic of this approach, but also has identified some substantial disadvantages. For example, the data do not have enough individuals in the sample to provide robust State-level estimates of median earnings for all fields of study. Further, the use of comparable undergraduate earnings relies on the assumption that those who seek a post-baccalaureate credential have a bachelor's degree in a similar field. This may not be the case, however, particularly for degrees that are less reliant on the attainment of a specific set of undergraduate prerequisites. We currently lack comprehensive information on the bachelor's degrees typically obtained by graduate students in each field. The Department believes that using the same standard for the EP for graduate programs provides some degree of protection from programs not meeting even this low bar.
A couple of commenters also suggested that the programs could choose between being measured on the EP threshold or on the growth measure. Other commenters noted that students in cosmetology programs are often coming from very low wage jobs before entering school, so such a pre-post comparison would reflect favorably on these programs.
For many programs, a large number of students have low pre-period earnings because, for example, they either do not work or work a limited number of hours, often because many are still enrolled in high school, prior to enrollment. All else equal, programs that enroll larger numbers of students without substantial prior attachment to the labor force (
One way to address this would be to measure earnings gains only for workers who appear to have high labor force attachment in the pre-period, as evident by exceeding some minimum earnings threshold. In practice, however, this would result in dramatically smaller numbers of completers that could be used to measure earnings gains, and dramatic reductions in the share of programs and enrollment covered by an earnings gain metric. Based on analysis of administrative data, we approximate that at least half of programs that had sufficient student volume to calculate median student earnings would no longer have sufficient data if students without labor force attachment were excluded. These limitations make an earnings-gain measure infeasible, at least give current enrollment patterns.
We have carefully reviewed all of the required reporting elements and have determined that the benefits of the transparency and accountability frameworks made possible through the reported data sufficiently justify the associated reporting costs and burden for institutions. We further note that institutions will benefit from the reporting because the information will allow them to make targeted changes to improve their program offerings, benchmark their tuition pricing against similar programs at other institutions, and better promote their positive outcomes to potential students.
In terms of staffing limitations, we have not estimated whether or how many new personnel may be needed to comply with the reporting requirements. Allocating resources to meet the reporting requirements is an individual institution's administrative decision. Some institutions may need to hire new staff, others will redirect existing staff, and still others will not need to make staffing changes because they have highly automated reporting systems. We expect these costs to be modest since, as noted in the RIA, most institutions have experience with the data reporting for the rule for at least some of their programs under the 2014 Prior Rule or in responding to recent NCES surveys.
The Department will provide institutions with guidance and training on the new reporting requirements, provide a format for reporting, and enable our systems to accept reporting from institutions beginning several months prior to the July 31, 2024, deadline so that institutions have sufficient time to submit their data for the first reporting period. The Department will also continue to look at ways this information can be routinely updated in the systems to reduce separate reporting burdens on institutions and will consider additional ways to simplify our reporting systems, as appropriate.
We are also exempting from these regulations, including the reporting requirements, institutions offering any group of substantially similar programs, defined as all programs in the same four-digit CIP code at an institution with less than 30 completers in total during the four most recently completed award years. While these metrics are calculated at the six-digit CIP code level, for the purposes of qualifying for this exemption, we measure completers among all such programs at the four-digit CIP code level to avoid incentives for institutions to create new, smaller programs that are substantially similar in order to avoid being covered by these rules. Although this change will result in the loss of some beneficial information from these institutions independent of the D/E rates and earnings premium metrics, such as net pricing at specific credential levels, we believe this loss is acceptable when balanced against the alleviated reporting burden for many institutions. Approximately 700 institutions will benefit from this exemption, including about 85 percent of participating foreign
A few commenters recommended that the data reported under § 668.408 be open, interoperable, and available for integration into State longitudinal data systems. One commenter noted that additional investments in State data systems will be necessary to ensure accurate reporting on the proposed metrics and requested that the Department encourage States to invest more resources into linked and integrated longitudinal data systems to reduce reporting burdens on institutions.
We will also provide training and technical resources prior to the implementation of the Financial Value Transparency and Gainful Employment frameworks set forth in this final rule, which will address the handling of situations involving students simultaneously enrolled in multiple GE programs. We appreciate the request for a clearer explanation of how institutions should handle reporting requirements for a student enrolled simultaneously in a GE program and an eligible non-GE degree program. We will provide further clarification in sub-regulatory guidance and training in advance of the effective date of the reporting requirements under this final rule, and we will consider the request that eligible non-GE degree programs take precedence.
The Department agrees that data published under these provisions should be as transparent and interoperable as possible, while recognizing the necessary constraints to protect student privacy. We will continue to evaluate ways to make the published data as valuable as possible to researchers and State policymakers. We also agree that wise investments in State data systems may increase the value of data reporting requirements, and we encourage States to support linked and integrated longitudinal data systems as appropriate.
While we acknowledge that institutions may pass administrative costs on to students through increased tuition and fees, we note that the transparency framework will increase the availability of cost information available to students and prospective students in comparing programs and institutions, and we expect that market forces will mitigate this practice to some extent through increased pricing competitiveness among institutions.
We note that any future modifications to reporting requirements in the
A few commenters remarked that efforts necessary to comply with the initial reporting deadline for the 2014 Prior Rule were harmful to other institutional operations that had to be postponed. These commenters suggested revising the initial reporting deadline from July 31, 2024, to October 1, 2024, which would be consistent with the reporting deadline for all subsequent years. Several commenters more broadly suggested that the initial reporting deadline should be a minimum of 90 to 120 days after the later of the effective date of the final rule or the date that the Department makes available the full reporting format and process. These commenters recommended further extensions if we modify or supplement reporting guidance after releasing it.
We respectfully decline the commenters' suggestions to extend the initial reporting period through October 1, 2024, or for an initial reporting deadline 90 to 120 days after the effective date of this final rule. As discussed above, we maintain that institutions have sufficient advance notice between the publication of this final rule and the initial reporting deadline of July 31, 2024, to comply, especially given the anticipated option for advanced reporting. If the Department significantly modifies or supplements the reporting requirements after the effective date of this rule, we will consider further extending the deadline.
Nonetheless, we are sensitive to institutions' concerns about the initial reporting burden. To address these concerns, we have extended the transitional reporting period option initially proposed for non-GE programs to GE programs as well, as further discussed under “Transitional Period” below.
One commenter suggested that the Department postpone any sanctions where data prior to 2022 is used in determination of eligibility, due to the broad impact of the COVID-19 pandemic on workers, graduates, and the postsecondary education industry. A commenter suggested extending the initial reporting requirements by one to two years to better account for the economic effects of the pandemic.
Additionally, we are unconvinced by arguments that data from prior to 2020 represent a pre-pandemic reality that no longer exists. Recent data show that overall labor force participation is back to its pre-pandemic forecasted level, and the prime-age (25-54) labor force participation rate is now slightly above pre-pandemic levels.
A few commenters requested further explanation of the Department's reasoning for the difference in initial reporting requirements.
A few commenters recommended extending the transitional reporting period option to GE programs that do not offer loans. These commenters noted that many GE programs—particularly at community colleges—do not offer loans, yet we would require them to report seven years of institutional data to facilitate D/E rates that we would ultimately not calculate for those programs.
With regard to concerns about reporting requirements for institutions and programs that do not offer loans, we note that the Department would nonetheless calculate the EP measure for such institutions and programs.
While we maintain that the initial reporting requirements are reasonable, in the interests of more equitable treatment of programs and institutions, and to facilitate smoother and less burdensome implementation for institutions, we extend the transitional reporting option to all programs in this final rule. We believe that this change will alleviate many commenters' concerns about fairness, cost, and burden, and that these considerations justify the brief period for which the D/E rate data will be impacted.
Several commenters noted that institutions are already required to publish graduation and placement rates through accrediting agency requirements. A few commenters opined that it is difficult for career training programs to comply with overlapping transparency requirements. These commenters suggested that the Department thoroughly review the annual requirements for reporting, accountability, and transparency.
With regard to accrediting agency requirements concerning the publishing of graduation and placement rates, we remind commenters that we do not include placement rates among the reporting requirements in this rule. Accrediting agency requirements and methodologies vary, and inconsistencies in how institutions currently calculate job placement rates limit their usefulness in comparing institutions and programs.
As previously noted, the Department has carefully considered the reporting requirements that support the transparency and accountability frameworks of this rule. We believe them to provide the most appropriate and helpful information for students, families, and the public at this time balanced with the needs of institutions. The Department will nonetheless review the data institutions currently report and will work to mitigate duplicative reporting to the greatest extent possible.
One commenter proposed removing the requirement to report institutional debt. This commenter argued that the institutions collect these debts directly from the student, they are not tied to Federal investment, and they typically result from student withdrawals. As an alternative, this commenter suggested using return of title IV, HEA funds (R2T4) record submission to estimate the average institutional debt.
Another commenter noted that reporting debt due at time of exit from the program presents unique programming challenges that would require manually fixing a significant portion of records, suggesting that institutions be exempted from reporting this data element if the median value is less than $200.
While we appreciate the suggestion to use R2T4 reporting as a proxy to estimate institutional debt, doing so would overlook other sources of institutional debt such as gap loans, emergency loans, and payment plans. We believe it is necessary to capture all such sources of educational debt to calculate and provide D/E rates that are sufficiently accurate.
We also appreciate the commenter's suggestion that institutions be exempted from reporting institutional debt if the median value is less than $200. While we recognize the technical concerns, we believe that this burden is outweighed by the benefit of accurate debt information. While $200 may appear to be a reasonable
One commenter opined that reporting State-specific licensure preparation requirements exceeds the limits of what institutions can reasonably accomplish.
One commenter noted that the Florida Education & Training Place Information Program does not disaggregate wage and employment data for private nonprofit institutions, further noting that student and employer surveys are unreliable and suffer from poor response rates.
One commenter posited that reporting program costs including books, supplies, and equipment would be burdensome for community colleges because those elements can frequently change. This commenter instead suggested that we require institutions to report a good-faith estimate.
With regard to the request to consider BLS data, we do not believe that BLS data reflect program-level student outcomes. The average or percentile earnings gathered and reported by BLS for an occupation include all earnings gathered by BLS in its survey, but do not show the specific earnings of the individuals who completed a particular program at an institution and, therefore, would not provide useful information about whether the program prepared students for gainful employment in that occupation.
With regard to concern about the disaggregated Florida earnings data, we note that institutions do not report wage and employment data under this rule. A Federal agency with earnings data provides aggregate earnings data directly to the Department.
We believe that institutions are capable of collecting and reporting State licensure information, and the importance of State licensure information to students justifies any burden to institutions in collecting and reporting such data. We do not believe that allowing institutions to report a good-faith estimate would result in accurate and comparable information, in part because whether an estimate was provided in good faith would be subjective and difficult if not impossible to define.
We believe it is more appropriate for institutions to report the annual allowance for housing, rather than the amount of title IV, HEA funds a student obtained specifically for housing. Not all institutions offer institutional housing, nor do all students partake of institutional housings at institutions that offer it. It would be both burdensome and unreliable to require institutions to divine which specific educationally related indirect costs each student covers using title IV, HEA credit balances.
While we recognize that some students obtain employment that is unpaid or subsidized through a government program with housing, meal, or other non-income benefits, we believe this would apply to only a small portion of postsecondary graduates. While unpaid or subsidized programs may provide meaningful personal fulfilment and valuable societal benefits, financial concerns weigh more heavily in most students' decision to go to college, with the top three reasons identified being “to improve my employment opportunities,” “to make more money,” and “to get a good job.”
The commenters further noted that this information may help to prevent harm to vulnerable populations. Additionally, these commenters suggested that this information can encourage schools to operate more efficiently and devote more resources to providing career services and job development resources to students. The commenters further highlighted that the program information website provides other State, local, and Federal stakeholders with information to monitor and guide the improvement of student outcomes.
One commenter noted that borrowers with defaulted loans interviewed in focus groups expressed a desire for more information about loans and college outcomes.
One commenter observed that financial value transparency information relating to cost of attendance, majors of interest, residence, and post-graduation earnings can impact a student's enrollment decisions.
Another commenter cited the Department's Direct Loan entrance counseling as an example of consumer information transparency where the organization, length, and language impede students' interest and understanding of the information, leading students to only skim the material to meet the requirement to enable disbursement of pending loan funds.
Additionally, the rules aim to protect the use of taxpayer funds and facilitate program innovation, not only to enhance informed student choice and public information more generally. To the extent some commenters suggest the rules will require institutions or programs to include such information on their own websites, they are incorrect. To clarify, the Department will collect information and data from institutions and other sources, conduct certain calculations in accordance with the rules, and post results on the Department's website. The material posted on the Department's website will be the government's speech, and clearly so, not any institution or program's speech,
Moreover, the information available on the Department's program information website will consist of accurate factual, uncontroversial information regarding an institution's programs. Courts have upheld the provision of factual information against First Amendment challenge even when, unlike the situation here, the government has required disclosures to be made by private parties.
As for the rules adopted here regarding the Department's program information website and the institutional reporting of information on which it will be based, we believe the rules will directly advance important government interests in informed student choice and protection of tax-financed resources, as well as innovation in educational programs, by making comparable information on program features and results readily available.
Furthermore, the rules will not interfere with institutions' ability to convey their own messages about program performance and much else. Students and others will be free to evaluate the content of the Department's website as they make educational decisions. And we emphasize that the rules apply only to institutions that
Therefore, the program information website directly advances compelling government interests—preventing deceptive advertising about postsecondary programs, providing consumers information about an institution's educational benefits and the outcomes of its programs, protecting taxpayer interests in the careful use of title IV, HEA funds, and improving program performance, which often comes from better and more accessible information about results. Furthermore, as we noted in the preamble to the 2014 Prior Rule, the program information website builds on significant Federal interests in consumer information that are evidenced in decades of statutory disclosure requirements for institutions that receive title IV, HEA program funds.
The Department is confident in the quality of information to be presented on the Department's program information website, and confident that it will significantly improve what is easily available today. The individual items of information listed in § 668.43—including completion and withdrawal rates, D/E rates, EP measure, loan repayment rates, median loan debt, and median earnings—have been narrowly tailored to provide students and prospective students with the information the Department considers most critical in their educational decision making and in protecting taxpayer interests in the use of title IV, HEA aid, and in promoting improvement in education programs. Moreover, the Department intends to use consumer testing to further inform its determination of any additional items it will include on the program information website. We expect that this consumer testing will highlight the information that students find particularly critical in helping them make informed choices, which will in turn help the Department protect tax-financed resources.
One commenter argued that developing a separate program information website would be duplicative, confusing to students, and increase costs to taxpayers when the College Scorecard is already available.
Consumer information is most likely to impact choice when tailored to the applicant's personal context. We seek to improve the information available to students with several refinements relative to information available on the College Scorecard, including debt measures that are inclusive of private education loans and other institutional loans (including income sharing agreements or tuition payment plans), as well as measures of institutional, State, and private grant aid. This information will enable the calculation of both the net price to students as well as total amounts paid from all sources. We believe these improvements will better capture the program's costs to students, families, and taxpayers, and we maintain that these benefits sufficiently outweigh the costs of developing the new program information website.
Another commenter requested that the Department consider a disclosure template similar to the GE disclosure template featured in the 2014 Prior Rule, noting that it would provide clear, concise, and uniform information from institutions to students.
Several additional commenters opined that the information should not include median loan debt and median earnings for non-completers because it would have no bearing on the expected earnings of a student who completes the program.
We further note that the outcomes of students who do not complete a program nonetheless reflect, at least to some extent, upon the quality of the program. It can be reasonably inferred that the capability of an institution to recruit students likely to succeed, to support and retain those students once enrolled, and to provide outreach and support (such as career services and information about loan repayment) to students who withdraw is indeed related to the overall quality of the program.
The Department disagrees with the commenters' assertion that labeling programs as high debt burden or low earnings would discourage students from pursuing fields such as teaching. While we expect that the high-debt-burden and low-earnings labels will discourage enrollment in particular programs at particular institutions that lead to poor outcomes, we do not expect the financial value transparency framework to discourage enrollment more broadly in those fields of study. With regard to the field of education cited by commenters as an area of concern, as further discussed under “Impact on Enrollment in Lower Earning Fields” above, our analysis reveals that education training programs are less likely to fail the D/E rates or EP measure than other programs. Although a career in education may be less lucrative than other professions within the same credential level, evidence suggests that programs that prepare graduates for a career in teaching easily pass the EP threshold for earnings, and even States with lower salaries have average starting salaries well above the State's EP threshold.
As discussed under “Geographic Variation in Earnings” above, our analysis suggests that being located in persistent poverty counties is not outcome determinative for students at such institutions.
One commenter posited that the Department should provide disclaimers and supplemental information where appropriate, such as a disclaimer if a program is disproportionally affected by unreported income. One additional commenter recommended including a disclaimer addressing programs with small cohort sizes.
Another commenter asserted that information such as licensure passage rates and residency placement rates are necessary to guard against deceptive recruitment tactics.
One commenter expressed support for providing the typical employment outcomes for a program.
Another commenter opined that the Department should not only require job placement rates to be provided, but also regulate how such placement rates are calculated, citing the collapse of Corinthian as one example of why providing consistently calculated placement rates is essential to protect students and the public. This commenter contended that in the 2014 Prior Rule preamble, the Department cited a 2011 technical review panel, which concluded a uniform job placement methodology could not be developed without further study because of data limitations. The commenter noted that the NPRM preceding this final rule did not mention this study or discuss whether it should be updated in light of any advances in the available data systems since 2011. The commenter further questioned why the Department's policies requiring placement rates for certain short-term programs under § 668.8(g) could not be applied for purposes of financial value transparency.
Though we agree that licensure passage and residency placement rates would be useful to students, a substantial portion of postsecondary programs do not prepare students to enter a field requiring licensure, and many programs do not entail any residency requirements. In the interest of focusing on the most relevant, comparable, and broadly applicable information, we do not anticipate including licensure passage and residency placement rates on the program information website at this time. We note that the list of information items at § 668.43(d)(1) is not all-inclusive and the Department could add these additional items in the future, particularly if consumer testing supports doing so.
We note that providing the “typical employment outcomes” for a program could mean a variety of things depending upon the audience—for example, the number of graduates who find employment in a specific field, the number of graduates who find employment in any field, the number of graduates who remain employed for a specific length of time, the job satisfaction of graduates, or any number of other measurements related in some way to employment. We therefore believe the suggestion to provide typical employment outcomes is too broad and imprecise to implement.
While we concur that job placement rates would be beneficial to most students, we note that accrediting agency methodologies and requirements for placement rates vary, and inconsistencies in how institutions currently calculate job placement rates limit their usefulness in comparing institutions and programs. The placement rate requirement for short-term programs under § 668.8(g) relies upon auditor attestations of institutional calculations, which again can vary amongst institutions and auditors. Developing a uniform Federal standard for the calculation of placement rates would be a complex and extensive undertaking surpassing the scope of this rulemaking. Nonetheless, should the Department introduce such a standard through future rulemaking, we could add placement rates to the program information website in the future.
Several commenters suggested that the Department explore including an estimate of State and local taxpayer support for programs at public institutions, arguing that doing so would provide the public and policymakers a more accurate understanding of program cost, with one commenter noting that the Department has access to such information through The Digest of Higher Education Statistics.
The goals of this rule are to provide increased transparency of program outcomes and improved oversight of Federal taxpayer funds. While public institutions often benefit from State and local appropriations, we maintain that monitoring, providing, and otherwise overseeing such sources of institutional revenue falls outside the scope of this rule. We further note that non-Federal funding is not exclusive to public institutions and could include any number of sources such as endowments, research grants, charitable donations, private equity, fees from publicly offered services, and so forth. Requiring institutions to report all such sources of funding would be unduly burdensome, and the inclusion of all such sources of funding on the Department's website would likely overwhelm many students and distract from the core information provided under these regulations.
A few commenters expressed concern about requiring institutions to post a link to the Department's program information website on every institutional web page containing information about a program or institution's academics, cost, financial aid, or admissions. One commenter likened this requirement to the requirement in the FAFSA Simplification Act for institutions to provide all elements of the cost of attendance on any portion of the institution's website that describes tuition and fees. This commenter noted that while it appears to be a simple requirement, it has already generated numerous inquiries from institutions about how to comply.
Several commenters noted that although adding links to the Department's program information website to institutions' websites would be a one-time cost and burden, large institutions may have hundreds of web pages requiring these links. These commenters advised that such a requirement could lead to compliance issues if such an institution inadvertently neglected to post the required link on one or a few web pages.
One commenter further noted that monitoring and enforcing such a broad requirement could divert the Department's resources away from more impactful issues and urged the
Furthermore, we do not believe the requirement for institutions to post a link to the Department's program information website on every institutional web page containing information about a program or institution's academic, cost, financial aid, or admissions is confusing or unclear. The requirements pertaining to the posting of Cost of Attendance information under the FAFSA Simplification Act are unrelated to the financial value transparency information established under this rule, and many of the inquiries concerning those Cost of Attendance posting requirements were about the specific content of the information that must be posted to meet FAFSA Simplification Act requirements. We note that for the required financial value transparency information, institutions must post the link to the Department's program information website on all relevant web pages. We believe that institutions can reasonably meet this requirement and, as noted in the RIA, we believe that this activity will require an estimated 50 hours per institution. We expect to provide sub-regulatory guidance and training to institutions in advance of the effective date of these provisions to minimize this burden. With regard to the argument about the potential for inadvertent noncompliance with the posting requirements, we note that an institution could inadvertently fail to comply with any of our regulatory provisions, and it remains the institution's responsibility to have the necessary staff, systems and processes to be able to comply with all of our regulatory requirements. We do not expect that monitoring and enforcing this requirement will require significant resources and hinder the Department's other compliance monitoring and enforcement efforts.
Another commenter expressed support for ensuring students receive the information before enrolling or making a financial commitment, agreeing with the Department that information on program value should be provided at relevant points of entry. This commenter further suggested that the Department consider providing access to this information through the FAFSA portal to provide the information to students earlier in the decision-making process in a manner that would not rely on institutional compliance.
We do not agree that providing information to prospective students during high school or earlier would be more beneficial than providing it closer to when the student makes the decision to enroll. We, however, appreciate the commenter's suggestion to provide information about the program information website to students through the FAFSA portal. While it would not be possible to incorporate this change to the 2024-25 FAFSA portal at this stage of development, we will consider adding it in a future award year.
Under the transparency framework's student acknowledgment rule, in certain circumstances the Department will require prospective students to acknowledge to the Department that they have viewed relevant information on the Department's program information website before signing an enrollment agreement with an institution regarding a certificate program or graduate degree program. The acknowledgment will be made electronically on the Department's website. In itself, this step toward enrollment and title IV, HEA aid is not onerous for students. Moreover, we will except undergraduate degree programs in this final rule (see § 668.407(a)), for reasons explained elsewhere in this document, thus avoiding undue burden for programs where prospective students may not generally apply to a particular major (but rather “declare” a major after being enrolled for some time in the institution). Furthermore, and also as explained below, this final rule states that only prospective students,
We explained in the NPRM our decision to limit the transparency framework's student acknowledgment requirement to programs with high debt burdens under the D/E rates measure,
Moreover, acknowledgments are a traditional, typical, and simple method of enhancing awareness of information before decisions are made. In this instance, the online mechanism for the acknowledgment will be relatively simple, and the decision in question involves both a student's education and Government support for that education. When programs fail certain performance metrics, the Department will protect prospective students and taxpayers by asking those students to pause and acknowledge information on the Department's program information website before they enter into an enrollment agreement for that program.
We agree that institutions may not add eligibility requirements that would prevent students or groups of students from receiving title IV, HEA aid for
We recognize that requiring prospective students to acknowledge the program information prior to an enrollment agreement means that some students will have to take that step before course registration and disbursement of aid. We understand students' need for timely access to title IV, HEA funds not only to cover direct institutional costs but also to cover indirect educationally related expenses. We note again, however, that the acknowledgment process will not be lengthy or particularly burdensome to students. And the adjustments to the rule that we have made in light of commenter concerns should minimize disruption while enhancing informed choice. We believe that such information is necessary to make an informed decision about whether to enroll in a program, and that the urgency of a student's need for this information warrants the potential delay, which again should not be excessive or disruptive.
Moreover, in part to reduce burden for institutions and students, we will limit the acknowledgment requirement in § 668.407 to programs that do not lead to an undergraduate degree. We believe this change will better target the acknowledgment requirements to programs to which students tend to directly apply. In addition, our empirical analysis shows that high-debt-burden programs are relatively rare among undergraduate degree programs outside the proprietary sector.
Commenters are correct in observing that the website for delivering financial value transparency information and administering acknowledgments is not yet developed. As we develop the website and its underlying processes, we will consider ways to efficiently and timely transmit confirmation of completed acknowledgments to institutions. Nevertheless, we recognize the potential for delays and uncertainty as the Department designs and deploys new systems to implement these requirements. To minimize disruption and facilitate a smoother implementation of the Department's program information website and acknowledgment requirements, the Department has specified that the requirements under § 668.43(d) and the acknowledgment requirements under §§ 668.407 and 668.605 are not applicable until July 1, 2026.
We appreciate the commenter's suggestion to administer the acknowledgment requirements through the FAFSA. However, administering the acknowledgment process through the FAFSA would not reach prospective students who have not yet applied for title IV, HEA funds. The acknowledgment requirement in § 668.407 is limited to prospective students and does not apply to enrolled students. We believe that administering the acknowledgment process through the Department's program information website is the most efficient and effective approach, but we will continue to analyze ways of most seamlessly delivering information to students.
The student warning will provide currently enrolled students with important information about program outcomes and the potential effect of those outcomes on the program's future eligibility for title IV, HEA program funds. This information will also help prospective students make informed decisions about where to pursue their postsecondary education. Some students who receive a warning may decide to transfer to another program or choose not to enroll in such a program. Other students may decide to continue or enroll even after being made aware of the program's poor performance. In either case, students will have received the information needed to make an informed decision.
We believe that ensuring that students have this information is necessary, even if it may be more difficult for programs that must issue student warnings to attract and retain students, and even in cases where an institution only offers a single program of study. Institutions may mitigate the impact of the warnings on student enrollment by offering meaningful assurances and alternatives to the students who enroll in, or remain enrolled in, a program subject to the student warning requirements.
We disagree with the arguments from commenters about the effects of licensing changes. The Department does not dictate how many hours States require for students to sit for licensing tests. And since States dictate the required program lengths for licensure or certification, we think it is reasonable to assume States have considered the hours needed for someone to then be able to pass any necessary tests. As noted already in this discussion, to the extent there are changes in passage rates, the fact that programs have to fail more than once will mitigate this issue by giving institutions time to improve. Commenters raised the issue of potential changes to the length of GE programs in a part of the NPRM that will be addressed in a separate final rule.
One commenter maintained that establishing acceptable levels of performance regarding debt and earnings exceeds the role of government because the Department would substitute its own judgment of acceptability thresholds for those of prospective students whose risk tolerances could potentially differ. This commenter further postulated that some students could rely on the Department's assessment and still realize poor results, misinterpret “no results” as an absence of risk, or unnecessarily forego opportunities because the Department's information increased their risk aversion.
We further disagree with the contention that the requirement in § 668.43(d)(2) for institutions to post links to the Department's program information website renders both the acknowledgment and warning requirements unnecessary. As discussed above, the timing of the delivery of relevant information significantly affects the impact of that information on students. Absent acknowledgment and warning requirements, even students who may have carefully reviewed information about their program of study on the Department's program information website before enrolling may be unaware of changes in that information that may have occurred since they first accessed the website. The Department seeks to require that, for programs where acknowledgments or warnings are required and before certain specified events such as the signing of an enrollment agreement, students have reviewed up-to-date information including information that may implicate the student's access to title IV, HEA funds in future years to complete the program.
With regard to the commenter's claim that establishing acceptable levels of performance regarding debt and earnings exceeds the role of government, the Department disagrees with the commenter's conclusions. As discussed in more detail under “Authority for this Regulatory Action” in this document, this framework is supported in principal part by the Secretary's generally applicable rulemaking authority, which includes provisions regarding data collection and dissemination, and which applies in part to title IV of the HEA, as well as authorizations and directives within title IV of the HEA regarding the collection and dissemination of potentially useful information about higher education programs. We also disagree with the notion that the Department may not seek to inform students about program outcomes as they evaluate programs within a lawful range of options for Federal Government support. Existing law and sensible policy indicate that the Department's role in supporting the interests of students, taxpayers, and others is more meaningful than some commenters suppose.
As further discussed above under “Statutory Authority for GE Framework,” the basic question of whether the HEA authorizes GE performance measures has been resolved repeatedly in the Department's favor. Questions of how exactly to specify the GE performance metrics involve matters of detail, which the Department is statutorily authorized and well-positioned to resolve. It is not only reasonable but also in accord with all indications of Congress's intent to conclude that a program does not prepare students for gainful employment in a recognized occupation if typical program graduates are left with unaffordable debt, or if they earn no more than comparable high school graduates. In addition, the Department is fully authorized to share information about the debt and earnings outcomes of a program with students, institutions, and the public to the extent that such information is available. In whatever manner the information is labeled, providing this information to students will allow them to make better informed enrollment and borrowing decisions.
In contrast, a few commenters urged the Department to exempt all non-GE programs from student acknowledgment requirements because of the time and burden associated with identifying relevant students and ensuring that they complete the acknowledgments, or because many non-GE programs are intended as only the first steps of a student's education and necessarily lead to graduate or doctoral studies or clinical work requirements. One commenter theorized that borrowers would likely ignore warnings associated with non-GE program as a result of the REPAYE income-driven repayment plan. One commenter suggested that the Department consider a tiered approach applying acknowledgment requirements to GE programs as well as a subset of low-earning non-GE programs, opining that such an approach would recognize the interests of students who prioritize earnings potential while reducing burden on institutions.
We also disagree with the requests to entirely exempt non-GE programs from student acknowledgment requirements. As further discussed under “Burden” below, we believe that the burden associated with identifying relevant students and ensuring that they complete the acknowledgments is reasonable considering the benefit of providing relevant and timely information to students who enroll or continue in non-GE programs that do not lead to an undergraduate degree and are associated with high debt burden. We concur that many non-GE programs are intended as the initial stage of a student's education leading to further graduate or doctoral studies or clinical work requirements, but that does not obviate the relevance of information about debt outcomes in better informing students' enrollment choices, nor does the possibility that borrowers might ignore warnings associated with non-GE program as a result of the REPAYE income-driven repayment plan take away the relevance of this information.
A reduction in the number of completers at a program is very unlikely to be indicative of improvement in its performance. As a result, a program that fails the D/E rates measure in one year, and then experiences a decline in the number of completers leading its D/E rates not to be issued, is still likely to be failing the D/E rates measure. At the same time, we do not believe it fair to keep the acknowledgment requirement indefinitely if new rates are not calculated. After several years, continuing to base student acknowledgments on earlier calculated rates yet without confirmation of substandard program performance becomes less helpful to students and ultimately unreasonable. After considering the relevant factors and the importance of an administrable rule, we have chosen a period of three years as a reasonable and balanced intermediate option. That option falls between maintaining the student acknowledgment requirement for a single year (which is the minimum-length option and which would provide the least protection for students under the acknowledgment rule) and the lengthier five-year look-back period (which we will apply under § 668.602(c) for determining whether a GE program has failed a GE measure in two of the three most recent years when the GE measures were calculated). Since GE program eligibility is based on outcomes over three consecutive years in which metrics were calculated, the longer five-year period is apt for that purpose. We are not using the same duration set out in § 668.605 for GE student warnings and acknowledgments because the duration in § 668.605 is based on when an institution mitigates the risk of losing title IV, HEA eligibility for a GE program, which is not a factor for non-GE programs.
Students enrolled in multiple majors that do not lead to an undergraduate degree will complete acknowledgments for each program for which acknowledgment requirements would otherwise apply. For changes of program, acknowledgment requirements will begin when the student changes to a program for which acknowledgments are required. The Department intends to provide further sub-regulatory guidance and training prior to the effective date of the acknowledgment requirements.
Additionally, we disagree that a requirement to provide GE warnings any time before the GE program loses eligibility is premature. A GE program that has failed the D/E rates or EP measure is at risk for loss of title IV, HEA eligibility. Such a loss of eligibility would significantly impact students, who may be unable to complete their program of study and may need to transfer to another program or institution. Given the seriousness of these consequences to students, we believe it is imperative that students are alerted without delay and provided information to better inform their decision making.
The Department disagrees with the suggestion to allow the GE warning to merely be posted as a general disclaimer on admissions and enrollment materials. We want students to view any required GE warnings and have the opportunity to act upon the information. The timing and manner of information delivery can greatly affect whether the information is received and understood, such that audiences may use the information in their decisions. We believe the GE warning must be distributed directly to students, not provided as a general disclaimer. As discussed further below, the information at issue is critical for students when a GE program is at risk of losing eligibility to participate in title IV, HEA.
As discussed above, the unavailability of title IV, HEA assistance is an undeniably serious consequence for students who are enrolled in or considering whether to enroll in a GE program. In addition, the Department has an overwhelming interest in enabling informed student decisions before government resources are directed toward at-risk programs. And the communicative burden on institutions will be minor at worst, given that they will remain free to deliver their own messages to students. A responsible institution would strive to warn students of the potential loss of eligibility in these circumstances, and the rule aims to require participating institutions to act responsibly. The GE warning rule is an entirely reasonable and constitutional requirement for institutions that benefit from title IV, HEA aid to students. Such rules are consistent with the First Amendment's guarantee of the freedom of speech.
The justifications for a warning are especially strong in these circumstances—situations involving the need to inform students about the risk to student aid before Federal funds are used in programs that are supposed to train and prepare students for gainful employment in a recognized occupation or profession—not education of all kinds. In commercial speech cases, courts have asked whether a regulation directly advances a significant government interest and is a reasonable fit between means and ends.
The Department's interests in informed student decisions and protection of tax-supported government resources are obviously important, and warnings will directly advance those interests. The rule applies to institutions that operate at-risk GE programs and that have established relationships with their enrolled students, and that have contact with prospective students. The Department understands the obvious threat to students and taxpayers when the former enroll in programs that turn out losing eligibility under title IV, HEA. But the Department does not have the advantages of institutions in their ability to deliver necessary warnings to both enrolled and prospective students, who are in the process of making decisions about higher education. And institutions should understand why students need to obtain the information at issue. Given the stakes for students and taxpayers, the College Scorecard does not provide a direct warning to students and, therefore, is not an adequate substitute for warnings from participating institutions that their GE programs are at risk.
In addition, the GE warning rule is carefully tailored to the Department's interests, while the burden on participating institutions' speech will be minimal. As described in § 668.605(a) and (b), the warning is a one-time obligation, with a narrow exception for students who seek to enroll 12 months after a warning. Furthermore, § 668.605(e) and (f) allows institution to choose among more than one method of delivering the warning, including an email or other electronic means. It is true that, when a warning is delivered in a written form, § 668.605(e) and (f)
Other features of this GE warning rule likewise moderate any burden on participating institutions' preferred messages. In § 668.605(c), the Department selected carefully a list of factual, objective, and commonsense items to include in warnings to students when their GE programs are at risk: notification that the GE program has not passed the Department's standards, and that the program could lose access to Federal grants and loans when the next round of results are available; a link to the Department's program information website along with notification that the student must acknowledge having viewed the warning through the Department's website before disbursement of title IV, HEA funds; and, in the event that the program does lose eligibility to participate in the title IV, HEA programs, a description of options within the institution, an indication of what the institution plans to do regarding teaching and refunds, and an explanation of whether students may transfer credits to other institutions. Each of these items is independently valuable. Notably, however, the rules do not require participating institutions to adopt the Department's view on program value, as one commenter feared.
Certain details for warnings will be specified in a future notice in the
This is not the first instance in which regulations have required individual, direct communication by institutions with consumers about Federal aid. Apart from the 2014 Prior Rule, section 454(a)(2) of the HEA
Although we thoroughly considered the commenters' concerns regarding the First Amendment, we are convinced that the final regulations are constitutional. Additionally, we took into account a range of concerns expressed by commenters regarding disclosures and warnings, along with the Government interests in providing students an effective warning regarding a program's performance and eligibility status. Our judgment, in sum, is that the GE warning rule is both sound policy and constitutional.
Finally, the Department disagrees with a commenter's suggestion that the final rules are impermissible because any regulation of GE programs is content-based and subject to strict judicial scrutiny. The commenter's source of concern appears to be the GE statutes that create the distinctions between types of institutions and programs that prepare students for gainful employment. Regardless, we reiterate that the D/E rates and EP metrics focus on completer outcomes rather than program curriculum. We also observe that institutions have the option of not participating in title IV, HEA student aid programs. Title IV offers eligible institutions the option to participate in student aid programs. It does not compel institutions to prefer one curriculum over another.
A few other commenters suggested instead that the Department address program transfers and undeclared majors by listing all of a school's programs on the program information website, with failing programs in the credential level of the student at the top of the list, and clearly marking all programs as passing or failing, or noting where no information is available. One commenter added that we could use the College Scorecard for this purpose, provided it included the relevant information.
The December 31, 2024, deadline for GE program certification is entirely reasonable, especially given our decision to extend the transitional data reporting option to GE programs, as discussed under “Reporting” above, which already provides a more generous transition period.
Another commenter discussed the lesser options for education in their field if their institution were to close, commenting that community colleges offer less in-depth programs in their field of study, located in areas with more limited housing options.
Commenters then proceeded to raise concerns about multiple follow-on negative effects from these closures. They raised the possibility of negative effects on students, including reduced opportunities for women, people of color, immigrants, persons with disabilities, and other groups that are traditionally underrepresented in postsecondary education. Commenters also raised concerns about students losing access to Federal aid in the middle of programs, which would discourage continued enrollment.
Commenters also argued that community colleges and high schools would not be able to accommodate the influx of students interested in attending cosmetology programs after many private cosmetology schools closed. They also claimed schools would not be able to meet the demand for massage therapists.
Commenters further cited the effects of closure on unemployment and local communities. Commenters particularly emphasized the effects of businesses hiring graduates of programs, and the inability to fill in-demand jobs if programs and institutions close. They also said unemployment would increase from students who would otherwise have found jobs after attending cosmetology schools. Others claimed thousands of employees from these schools would lose their jobs.
Commenters also expressed concern that closures would have negative effects on health, safety, and sanitary conditions as more services would be provided in homes and in unlicensed or uninspected facilities.
Regarding the extent of closures, commenters did not consider the large numbers of students attending cosmetology schools but not receiving Federal aid under title IV, HEA, as well as the significant number of cosmetology schools that do not participate in title IV at all. For example, across all institutions that participate in the title IV, HEA programs that award cosmetology certificate programs, we estimate the average institution awarded about 38 percent of its credentials to students who did not receive any Federal aid.
We also emphasize that the Federal financial aid programs are entitlements for students, not institutions of higher education. The GE accountability framework is designed to protect both Federal investment and student investment in programs of higher education. Students pursuing higher education are not just investing taxpayer and personal funds to attend a GE program, but are also incurring opportunity costs. The GE eligibility rules that we adopt here do not assess whether a program or a school is in some general sense “good” or “bad,” which are labels the commenters did not define. More concretely, a student directing their limited title IV, HEA aid to a GE program that does not prepare them for gainful employment in a recognized occupation has lost the opportunity to use those funds to attend a different educational program that would better serve their goals. The D/E rates and earnings premium measures provide objective and evidence-based metrics to direct Federal funds to programs that do not saddle students with more debt than they can afford or leave them with earnings prospects no better than they would have had with only a high school diploma.
We also disagree with the arguments from commenters about the effects of closures. First, as we note above, there is a possibility of enrollment moving into programs that are still eligible for title IV, HEA funds or those that operate solely on the private market. Second, commenters did not consider the potential responses from programs that do pass the GE program accountability framework. For instance, a passing program may choose to expand its enrollment and meet any excess demand. Students may also choose to enroll in different types of programs, which are likely to provide them better economic benefits since passing programs generally have a combination of higher earnings and lower debt. The Department thus believes commenters overstate the potential loss of postsecondary opportunities.
We also disagree with comments about the negative effects of closures on particular groups of students, such as women and students of color. The Department has already provided an extensive discussion of the effects of these rules on women and students of
We also disagree with commenters' arguments about the effects of closure on local communities and businesses. The Department does not believe that a shortage of programs of study within a field is adequate justification for directing title IV, HEA funds to programs that do not lead to adequate student outcomes. If there is a shortage of eligible programs in a high-demand field, this provides an opening for institutions to expand the capacity of existing high-quality programs or to create new high-quality programs to meet that need. Moreover, employers also have tools available to them if they have jobs they cannot fill, such as increasing wages and benefits. Given that the beauty industry is predicated on charging clients for their services, they could also choose to either reduce their profit margins or pass some of these increased costs on to their clientele. We also reiterate that commenters have not considered the presence of a significant number of schools in these areas that do not participate in the title IV, HEA programs.
Finally, regarding concerns about the effects of the rules on health and safety, we note that cosmetologist licensure and facility inspection are areas regulated and enforced at the State and local levels, not at the Federal level. The Department trusts the appropriate State and local entities to maintain appropriate standards for health and safety within their jurisdiction.
It is also possible that if the institution became ineligible to participate in the Direct Loan program, but Pell funding continued, students would merely replace their Federal student loans with private loans. Continuing in a failing program without Direct Loans would leave students in a worse position than if we took no action.
It would be mathematically unworkable to lower limits on Direct Loans to amounts that would cause a failing program to pass D/E rates. D/E rates are calculated across a student's entire enrollment in a program and different students may take a different number of years to complete a program, so annual borrowing could not be precisely adjusted. Additionally, since students could potentially replace lowered Direct Loan amounts with private loan debt, keeping their debt
In contrast, many commenters objected to the Department's decision not to include review, challenge, and appeal opportunities in the proposed rule that were present in the 2014 Prior Rule, primarily on the grounds of due process and fairness. These commenters maintained that the Department cannot reasonably remove the eligibility of a program, potentially resulting in the closure of an institution, based on calculations derived from certain data without providing institutions a mechanism to review or challenge the data and offer other evidence, as well as appeal D/E and EP outcomes.
Referencing language from the preamble to the notice of proposed rulemaking for the 2014 Prior Rule, in which the Department stated that “[t]he proposed regulations are intended to provide institutions, in the interest of fairness and due process, with an adequate opportunity to challenge the completion, withdrawal, and repayment rates and median loan debt determined by the Department,”
The threshold question for procedural due process purposes is whether a person has been or will be deprived of a property interest protected by the U.S. Constitution.
Additionally, the final rule's appeal process is fair. The risk of error is low in the first place because the Department will use quality data on earnings from a Federal agency combined with other reliable information, including information supplied by institutions themselves. We have explained those choices at length in the NPRM and in this document. The calculations in question, moreover, are not fairly subject to open-ended debate or significant discretion. Regarding GE program accountability, the rules for calculating D/E and EP results specify clear formulas, thereby diminishing the value of additional procedures. On the flipside, and in view of the Department's experience with appeals under prior GE rules, we are convinced that adding such procedures will not improve decisions but will increase delays, expenditures, and other burdens. The rules will give adequate assurance of accurate decisions, while serving the Department's important interests in supporting career training that results in enhanced earnings and affordable debt.
Although the Department concluded that the alternate earnings appeals available under the 2014 Prior Rule were not effective, these rules will provide appeals that are meaningful and manageable. Section 668.603(b) states that if the Secretary terminates a program's eligibility, the institution may initiate an appeal under subpart G of this part if it believes the Secretary erred in the calculation of the program's D/E rates under § 668.403 or the earnings premium measure under § 668.404. Subpart G of part 668, specifically § 668.86(b), outlines the procedure for institutions to challenge decisions to limit or terminate a program. These procedures are designed to provide an opportunity to correct any errors in the calculation of a program's D/E rates under § 668.403 or the earnings premium measure under § 668.404. These procedures include issuance by a designated Department official of notice informing the institution of the intent to limit or terminate that institution's participation, through a possible appeal of the initial decision of the hearing official to the Secretary. In addition, under § 668.405, institutions will be provided a “completer list” of all students who completed each program during the cohort period and given an opportunity to correct the information about students on the list.
It is true that, unlike the 2014 Prior Rule, the rules adopted here will not allow for institution-by-institution challenges to draft D/E rates based on evidence provided by the institution that loan debt information used to calculate the median loan debt for a program is incorrect. However, median loan debt for a program is not a statistic that the Department creates on its own, but rather is derived from student enrollment, disbursement, and program data, or other data the institution is required to report to the Secretary to support its administration of, or participation in, title IV, HEA. We expect that institutions will review these data and confirm they are correct at the time of reporting. Should any reported data contain inaccuracies, the institution must timely correct that data. The Department provides ample opportunity for an institution to evaluate the accuracy of its data through reconciliation and closeout procedures at the end of each award year. Section 668.405 will require that, in accordance with procedures established by the Secretary, the institution update or otherwise correct any reported data no later than 60 days after the end of an award year. Inasmuch as participating institutions have access in real time to Department systems through which relevant data are reported—that is, COD and NSLDS—plus an appropriate period of time to correct any erroneous data, the presumption of accuracy with respect to such institution-provided information is fair and reasonable. Accordingly, these regulations do not establish a protocol for the publication of draft rates and an institutional challenge to those rates based on incorrect data being used to calculate median loan debt.
We acknowledge the references to fairness and due process in the preamble of the Department's 2014 Prior Rule. We remain committed to making decisions based on sufficiently reliable information that is relevant to the GE program accountability framework. We disagree, however, that due process or fairness requires the Department to adopt precisely the same appeals processes as in 2014, regardless of current circumstances and other rules that affect the reliability of the information needed to apply these rules. To the extent that constitutionally protected interests are implicated when institutions seek to benefit from government support, we observe that due process remains a flexible concept that accounts for considerations that include a relatively low probability of significant error and the Government's interest in reducing fiscal and administrative burdens.
As explained above, institutions with programs that are not eligible to participate in title IV, HEA as the result of failing GE rates can appeal under subpart G of part 668 if they believe the Secretary erred in the calculation of the program's D/E rates under § 668.403 or the earnings premium measure under § 668.404. We also note that some commenters mischaracterized these rules in asserting that the Department will limit institutions to a review of completer lists without an opportunity to make appropriate corrections. As previously discussed, § 668.405 will allow institutions to correct information about students on the list. Median loan debt challenges also are discussed
We acknowledge that the COVID-19 pandemic likely affected the earnings of workers in salons, spas, the beauty industry, and many other industries besides. However, we do not find a basis for offering special appeals to any one field of programs or more broadly. As explained elsewhere in this document, the Department is not postponing action until such time as no earnings data through 2022 is included in D/E rate or EP calculations. Accordingly, and in consideration of the fact that most industries employing the graduates of GE programs were, to some extent, affected by the pandemic, permitting appeals based on this circumstance would effectively obviate the full effect of the rule until at least the 2026-2027 award year. We do not view the effects of the pandemic as being germane to the discussion of alternate earnings appeals.
We agree with the commenter who asserted that ROI is not the only standard by which the benefits of an education should be measured, and that professions that help people have value beyond any remuneration that can be expected. Elsewhere in this document and in the NPRM, we have affirmed that students rely on a variety of appropriate considerations in choosing among postsecondary education options and that postsecondary education programs may reflect and serve a range of values.
A number of commenters objected to the appeal process in subpart G being limited to fully certified institutions. Commenters acknowledged that procedural rights for provisionally certified institutions differ from those of fully certified institutions with respect to institutional eligibility but argued that (unlike for institutional eligibility) certification status has no bearing on program-level GE outcomes or the resulting eligibility status of those programs. The commenters further argued that inasmuch as fewer procedural protections would be accorded provisionally certified institutions and opportunities to challenge underlying data are absent, the proposed rules effectively create two separate sets of analysis for GE programs that share the same outcome.
Some commenters suggested the introduction of an appeal based on recalculating GE metrics using an eight-digit OPEID number. The commenters
We agree with the commenter who noted that in taking an action to terminate the eligibility of a failing program, the Department is bound by all of the provisions of subpart G related to due process—that is, delivery of notice to the institution with an opportunity to request a hearing, as well as the opportunity to submit written materials to the designated Department official, and, finally, the institution's right to appeal the initial decision of the hearing officer to the Secretary. Section 668.91(a)(3)(vi) does, as noted by another commenter, require the hearing official to terminate the program's eligibility unless they conclude that the Secretary erred in the applicable calculation. However, we do not agree with that commenter that this provision either removes the official's discretion to make an eligibility determination based on the facts and circumstances before them or violates the institution's due process rights by requiring the Department official to terminate a program's eligibility without the opportunity for presentation of the case before a hearing official.
Unlike with a similar action taken as the result of serious program violations, termination proceedings to end the participation of a failing GE program would be based solely on the regulatory loss of eligibility prescribed in § 668.603. Such loss of eligibility can only result from failing D/E rates or EP measures as objectively calculated using the formulas prescribed in §§ 668.403 and 668.404, respectively. Therefore, a conclusion by the hearing official that the Department erred in the applicable calculation is, appropriately, the only basis on which that individual may decline to terminate the program's participation. However, within the context of determining whether errors were made in calculating the D/E rates or EP measures, the hearing official is not constrained when considering the facts and circumstances before them. It is also not the case that these rules will mandate that the Department official terminate a program's eligibility without the opportunity for the institution to present its case before a hearing official. Under § 668.86(b)(1)(iii), the Department official must inform the institution that termination will not be effective on the date specified in the notice if the designated Department official receives from the institution by that date a request for a hearing.
Regarding the objections of some commenters that limiting the basis for any appeal to a calculation error on the part of the Department unfairly denies institutions any opportunity to present data that are potentially more accurate than the data on which the Department based its calculations, we have addressed the substance of that concern in the NPRM and we elaborate on due process concerns elsewhere in this document. Here we reiterate that, earnings data notwithstanding, the information used by the Department to calculate D/E rates is reported by institutions and presumed to be accurate. As discussed above, moreover, institutions are provided an opportunity to correct completer lists and to update or otherwise correct any reported data. Finally, we believe that the question of whether to identify programs based on the six-digit CIP, six-digit OPEID, or eight-digit OPEID is most appropriately addressed in the discussion of the definition of a GE program and not germane to a discussion of appeals. We address the substance of that suggestion elsewhere in this document.
Many of the commenters writing in opposition to the lack of an earnings appeal objected to the Department's assertion (in the NPRM) that alternate earnings data for cosmetology schools filed under the previous earnings appeal (as permitted in the 2014 Prior Rule) were “implausibly high.” This statement was characterized by one commenter as implying that cosmetology schools altered or manipulated earnings data obtained from surveys to ensure D/E rates passed upon appeal. A few commenters questioned the Department's position expressed in the NPRM that it is unlikely any earnings appeal process would generate a better estimate of graduates' median earnings. One of those commenters offered that whether the alternate earnings appeal process would frequently change the estimate of median earnings at issue is irrelevant to whether the Department is providing institutions with due process as required by the Constitution. Another commenter added that the Department's conclusions regarding the likely merit of such appeals are based on a single round of alternate earnings appeals in which only institutions offering GE programs participated. Yet another commenter rejected the Department's assertion that, to date, it has identified no other data source that could be expected to yield data of higher quality and reliability than the data available from the IRS, inquiring why the Department asks for flexibility in seeking a source for earnings data, why any other source would be considered, and how the availability of appeals might be affected should the Department opt for an alternate source that is more available but less reliable.
Some commenters questioned the Department's lack of confidence in the results of earnings surveys, in view of the 2014 regulations then in effect requiring an attestation from the institution's chief operating officer, as well as an examination-level attestation engagement report prepared by an independent public accountant or independent government auditor that the survey was conducted in accordance with NCES. One commenter asked whether the Department has considered that perhaps the reported Social Security Administration (SSA) earnings data might be the data set that is suspect. Two more commenters related the success their respective institutions had in mounting successful alternate earnings appeals, with one example offered where average reported income was 65.5 percent higher than reported SSA earnings. Both commenters expressed confidence that the surveys were conducted in full compliance with applicable standards and produced accurate results. Finally, two commenters disputed the notion that an appeal process creates adverse incentives for programs to encourage underreporting, inasmuch as institutions do not instruct students on how to complete their taxes. These commenters also expressed the opinion that there would be no benefit in encouraging students to underreport their income since graduates' underreporting of tip and other income will always harm an institution that is subject to the GE rule.
These commenters contended that, despite expressing serious misgivings as to the veracity of earnings surveys, the Department presented no evidence of wrongdoing or overstating of income and displayed an unwarranted bias against the appeal process. One commenter summarized the Department's arguments as largely tracking those that were rejected by the district court in
Various commenters claimed that the decision of the district court in
Several of the commenters argued that the Department must, out of consideration for the district court's decision, principles of fairness, or both, restore the alternate earnings appeal contained in the 2014 Prior Rule (as modified by the court's order in
We disagree, first of all, with suggestions that the Department's 2014 Prior Rule locked in a position on appeals today. We repeat that agencies may lawfully alter positions based on nonarbitrary grounds, which we supplied in the NPRM and further address in this document. Furthermore, we observe that the commenters who referenced the preamble to the 2014 Prior Rule NPRM do not appear to support the rules on earnings appeals that were proposed and adopted in 2014. Those provisions limited alternate earnings appeals to complaints that were supported by a State-sponsored earnings database or an earnings survey conducted in accordance with certain requirements established by NCES.
In any event, the reasons for alternate earnings appeals do not hold as they did in 2014. We have explained the Department's position in this document and in the NPRM. Now-familiar arguments about unreported income have become less persuasive based on further review and a number of considerations including: current Federal requirements for the accurate reporting of income and increased use of electronic transactions, which makes underreporting income more difficult; the fact that IRS income data are used without adjustment for determining student and family incomes for purposes of establishing student title IV, HEA eligibility, and determining loan payments under income-driven repayment plans; the relatively low quality of past data submitted by institutions in alternate earnings appeals, including submissions after litigation over the 2014 Prior Rule, along with the problems associated with processing those appeals; and new research on unreported income. We reiterate as well that we designed the metrics to be commonsense and modest standards of enhanced earnings and affordable debt, and that a GE program will have to fail the D/E or EP metric multiple times before the program is ineligible to participate in the title IV, HEA programs. Therefore, GE programs that are ineligible based on their repeated failure to meet the metrics will not be on the margin in a substantive sense, but instead will be demonstrably unable to satisfy modest expectations with a built-in margin for error. Moreover, compared to the 2014 Prior Rule, these rules allow additional time for program completers to establish earnings—effectively increasing program-level calculated earnings far beyond any estimated effects of statistical noise in privacy-protected data, and providing further assurance that programs will not inadvertently fail the D/E rates measure or the EP measure. As a result of the Department's thorough review and in light of the particular features of these rules, we conclude that it is neither necessary nor appropriate to include a similar alternate earnings appeal process. We respect the objections offered by commenters, but we are not persuaded to alter this position.
Regarding the argument made by some commenters that it would be unfair to determine program eligibility unless institutions may submit earnings surveys, again we refer to preamble language from the 2023 NPRM. There we explained that, to date, the Department has identified no other earnings data source that could be expected to yield higher quality and reliability than the data available to the Department from the IRS. We believe that alternative sources of earnings data such as graduate earnings surveys would be more prone to issues such as low or selective (
Moreover, we have thoroughly considered the issue of statistical noise in IRS earnings data. As explained in the NPRM, we understand that the IRS would use a privacy-protective algorithm to add a small amount of statistical noise to its estimates before providing median earnings information to the Department. The Department recognizes this creates a small risk of inaccurate determinations, in both directions, including a very small likelihood that a failing program could have passed if its unadjusted median
Assuming that such statistical noise would be introduced, the Department plans to counteract this already small risk of improper classification in several ways. First, we include a minimum n-size threshold as discussed under § 668.403 to avoid providing median earnings information for smaller cohorts, where statistical noise would have a greater impact on the earnings measure. The n-size threshold will effectively cap the influence of the noise on D/E and EP results. In addition, a program is not ineligible under the GE program accountability rules until that GE program fails the accountability measures multiple times. Furthermore, the rules will establish an earnings calculation methodology that is more generous to title IV, HEA supported programs than what the Department adopted in the 2014 Prior Rule for GE programs. The rules will measure the earnings of program completers approximately one year later (relative to when they complete their credential) than under the 2014 Prior Rule. This will yield substantially higher measured program earnings than under the Department's previous methodology—on the order of $4,000 (about 20 percent) higher for GE programs with earnings between $20,000 and $30,000, which are the programs most at risk for failing the earnings premium threshold. This will be more generous to programs under both the EP and D/E metrics because the higher measured program earnings will be used in both calculations. The increase in earnings from this later measurement of income will provide a buffer more than sufficient to counter possible error introduced by statistical noise added by the IRS. Together, these features of the rules safeguard against artificially low earnings results, and they do not suggest the need for further measures such as an earnings appeal process that would rely on survey earnings far less reliable than those provided by the IRS.
Although the Department currently prefers to rely on IRS earnings data, the rules also will allow the Department to obtain earnings data from another Federal agency if unforeseen circumstances arise. That provision of the rules will give the Department flexibility to work with another Federal agency to secure data of adequate quality and in a form that adequately protects the privacy of individual graduates. Despite suggestions by one commenter, the flexibility to use other data is no indication that the Department will use inferior data that are insufficiently accurate and reliable for purposes of these rules. We have confidence in the accuracy and reliability of all Federal agency sources under consideration. In any case, the Department's NPRM informed the public about the kind of data needed for the rules, as well as the sources from which those data might be drawn.
In response to those commenters who viewed as pejorative the Department's assertion that alternate earnings data for cosmetology schools filed under the 2014 Prior Rule were implausibly high, we intended no offense. This statement does not seek to imply that cosmetology schools altered or manipulated earnings data obtained from surveys to inflate D/E rates as to pass upon appeal. Rather, we sought to convey our misgivings over what appeared to have been an excessive amount of earnings reported by survey respondents. This may have resulted from a number of factors that are difficult to control when using such surveys. Those challenges in producing accurate and reliable survey results on completer earnings are not special to cosmetology schools.
Moreover, we disagree with some commenters' suggestions that infrequency of errors under the rules and administrative burdens from the alternatives that the commenters prefer are irrelevant to the Due Process Clause. Those assertions are incorrect. To the extent that constitutionally protected interests are even implicated when institutions seek to benefit from government support, we reiterate that due process remains a flexible concept that accounts for considerations that include a relatively low probability of significant error and the Government's interest in reducing fiscal and administrative burdens.
We also disagree with the other arguments that commenters raised for creating an earnings appeal in these rules. The 2014 Prior Rule did allow for institution-sponsored surveys that met National Center for Education Statistics (NCES) standards. However, adherence to NCES standards in this context, even when confirmed by an examination-level attestation engagement report prepared by an independent auditor, does not mitigate the potential for misreporting of earnings by program graduates participating in the earnings survey. There are inherent biases for survey respondents to inflate their earnings and little incentive for institutions to encourage accurate survey responses. Additionally, the amounts reported on such instruments cannot be substantiated in any other way than to accept at face value the information supplied by a survey respondent. The Department's reservations about the use of earnings data surveys are already addressed above and discussed at greater length in the 2023 NPRM. As for whether the SSA earnings data used under the 2014 Prior Rule were “suspect,” we are aware of no evidence to suggest that was the case. We do not imply that the commenters who related their own success in alternate earnings appeals under the 2014 Prior Rule were noncompliant with NCES standards. Again, however, the degree to which any earnings survey was conducted in accordance with those standards is not responsive to the Department's reservations, given experience and new evidence, about the use of earnings data obtained in that way for calculating D/E rates and the EP metric.
In response to the commenters who maintained that institutions do not instruct students on how to complete their taxes, we have not suggested that institutions regularly offer students tax advice. In addition, we have concluded that the available evidence, taken as a whole, indicates that underreporting is modest in size for graduates of GE programs and other programs that are eligible to participate in the title IV, HEA programs. We do, however, believe that adding an earnings appeal process that is aimed at capturing unreported income could encourage a culture of underreporting. The practical concern is that a significant fraction of tax-
The Department disagrees with the commenters who argued that the decision of the district court in
The Department followed the district court's opinion when the 2014 Prior Rule was in effect. The opportunity to submit a Notice of Intent to Appeal was re-opened and institutions were permitted to submit alternate earnings appeals for programs with overall “zone” or fail ratings regardless of whether the 50 percent minimum response rate or 30-response minimum were met, with the Department agreeing to review the earnings appeals on a case-by-case basis. Indeed, the Department allowed these case-by-case earnings appeals for all institutions, not only AACS members. And we have taken care to examine the court's opinion again during this rulemaking. We understand the concerns expressed in the opinion, as well as the hope for a workable even if open-ended earnings appeals process, given the record evidence that was available and the reasoning in the 2014 rulemaking proceedings. We appreciate as well that the court expressed concern for administrability.
In this document and the accompanying NPRM, we have explained at length our rationale for relying on a Federal agency with earnings data as a source of reliable, verifiable, and accurate earnings information to use in the calculation of debt-to-earnings rates and the earnings premium. We have similarly explained the Department's decision not to include an alternate earnings appeal in this final rule. The Department's position here is not based on unexplained assumptions about tax law compliance or the value of certain survey response rates. Instead our conclusions are based on considerations such as new data on unreported income that indicate its modest size for the program graduates who are relevant to this rule; new laws on reported income and the increased use of electronic payments expected to further reduce underreporting; a longer earnings period in these rules that safeguards against programs failing the D/E or EP metrics in ways that concern various commenters; the use of reported income in other Department operations as well as the problematic incentives arising from crediting programs with unreported income; and the
We are establishing at § 668.2 that two programs are substantially similar to one another if they share the same four-digit CIP code. Institutions may not establish a new GE program that shares the same four-digit CIP code as a program that became ineligible or was voluntarily discontinued when it was failing within the last three years. An institution may establish a new GE program with a different four-digit CIP code that is not substantially similar to an ineligible or discontinued GE program and provide an explanation of how the new program is different when it submits the certification for the new program. We presume based on that submission that the new program is not substantially similar to the ineligible or discontinued program, but the information may be reviewed on a case-by-case basis so a new program is not substantially similar to the other program.
We believe that this revision strikes an appropriate balance between preventing institutions from closing and restarting a poorly performing program to avoid accountability and ensuring that institutions are not prevented from establishing different programs to provide training in fields where there is demand. We believe that it is appropriate to require an institution that is establishing a new program to provide a certification under § 668.604 that includes an explanation of how the new GE program is not substantially similar to each program offered by the institution that, in the prior three years, became ineligible under the regulations' accountability provisions or was voluntarily discontinued by the institution when the program was failing the D/E rates or EP measure. In the first instance, the institution will possess information on the programs in question, and the rule still will provide a safeguard in the form of an opportunity for the Department to evaluate such submissions when appropriate.
This assessment is bolstered by analysis of College Scorecard data. The Department does not have earnings measures for programs yet for 2021. But comparing College Scorecard earnings measures based on the year 2020—as noted above, by a large margin the year with the greatest elevation in unemployment due to the pandemic—suggests the pandemic may not have had a dramatic impact on measured earnings. Comparing 3-years earnings estimates based on earnings measured in 2018-2019 to those based on 2019-2020 (in real dollars), shows that the pandemic did not lead to systematically lower measured median earnings for all or even most programs. The middle 50 percent of programs ranged from a decline in earnings of 4.2 percent to an increase in earnings of 4.0 percent, with the median program experiencing no change in earnings across the two periods. Since the labor market had recovered considerably by 2021, we do not anticipate program earnings data based on earnings in 2021 and 2022 to be overly influenced by the pandemic for most programs.
Under Executive Order 12866, the Office of Management and Budget (OMB) must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by OMB. Section 3(f) of Executive Order 12866, as amended by Executive Order 14094, defines a “significant regulatory action” as an action likely to result in a rule that may—
(1) Have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of the Office of Information and Regulatory Affairs (OIRA) for changes in gross domestic product), or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities;
(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4) Raise novel legal or policy issues for which centralized review would meaningfully further the President's priorities, or the principles stated in the Executive order, as specifically authorized in a timely manner by the Administrator of OIRA in each case.
The Department estimates the quantified annualized economic and net budget impacts to be in excess of $200 million. Annualized transfers between institutions and the Federal Government through borrowers are estimated to be $1.2 billion at a 7 percent discount rate and $1.3 billion at a 3 percent discount rate in reduced Pell grants and loan volume. This analysis also estimates additional annualized transfers of $747 million (at a 3 percent discount rate; $732 million at 7 percent discount rate) among institutions as students shift programs and estimated annualized paperwork and compliance burden of $105.6 million (at a 3 percent discount rate; $109.5 million at a 7 percent discount rate) are also detailed in this analysis. Therefore, this final action is subject to review by OMB under section 3(f) of Executive Order 12866 (as amended by Executive Order 14094). Pursuant to the Congressional Review Act (5 U.S.C. 801
We have also reviewed these regulations under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—
(1) Propose or adopt regulations only on a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and
(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.
Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”
We are issuing these final regulations to address inadequate protections for students and taxpayers in the current regulations and to implement recent changes to the HEA. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that these regulations are consistent with the principles in Executive Order 13563.
We have also determined that this regulatory action would not unduly interfere with State, local, territorial, and Tribal governments in the exercise of their governmental functions.
As required by OMB Circular A-4, we compare these final regulations to the current regulations. In this regulatory impact analysis, we discuss the need for regulatory action, potential costs and benefits, net budget impacts, and the regulatory alternatives we considered.
Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, also known as the Congressional Review Act (5 U.S.C. 801
The title IV, HEA student financial assistance programs are a significant annual expenditure by the Federal Government. When used well, Federal student aid for postsecondary education can help boost student outcomes and economic mobility. But the Department is concerned that there are too many instances in which the financial returns of programs leave students with debt they cannot afford or with earnings that leave students no better off than similarly aged students who never pursued a postsecondary education.
The final regulations will provide stronger protections for current and prospective students of programs that typically leave graduates with high debt burdens or low earnings. Under a program-level transparency and accountability framework, the Department will assess a program's debt and earnings outcomes based on debt-to-earnings (D/E) and earnings premium (EP) metrics. These regulations will require institutions to provide current and prospective students with a link to a Department website providing the debt and earnings outcomes of all programs. Students considering enrolling in all eligible programs, other than undergraduate degree programs, that have failed D/E metrics must acknowledge they have viewed the information prior to entering into an enrollment agreement with an institution. Students enrolled or considering enrollment in GE programs
The regulations will, therefore, increase transparency and strengthen accountability for postsecondary institutions and programs in several critical ways. All institutions will be required to provide students a link to access information about debt and earnings outcomes. Non-GE certificate and graduate programs not meeting the D/E standards will be required to have students acknowledge viewing this information before entering enrollment agreements, and career training programs failing either the D/E or EP metrics will need to warn students about the possibility that they would lose eligibility for Federal aid. Some institutions will have to improve their offerings or lose access to Federal aid. As a result, students and taxpayers will have greater assurances that their money is spent at institutions that deliver value and merit Federal support.
The Financial Value Transparency and GE eligibility provisions in subparts Q and S of the final regulations are intended to address the problem that many programs are not delivering sufficient financial value to students and taxpayers, and students and families often lack the information on the financial consequences of attending different programs needed to make informed decisions about where to attend. These issues are especially prevalent among programs that, as a condition of eligibility for title IV, HEA program funds, are required by statute to provide training that prepares students for gainful employment in a recognized occupation. Currently, many of these programs leave the typical graduate with unaffordable levels of loan debt in relation to their income, earnings that are no greater than what they would reasonably expect to receive if they had not attended the program, or both.
Through this regulatory action, the Department establishes: (1) A Financial Value Transparency framework that will increase the quality, availability, and salience of information about the outcomes of students enrolled in all title IV, HEA programs and (2) an accountability framework for GE programs that will define what it means to prepare students for gainful employment in a recognized occupation by establishing standards by which the Department would evaluate whether a GE program remains eligible for title IV, HEA program funds. As noted in the preamble to this regulation, there are different statutory grounds for the transparency and accountability frameworks.
The transparency framework (subpart Q and § 668.43) will establish reporting and program information website requirements that will increase the transparency of student outcomes for all programs. This will provide the most accurate and comparable information possible to students, prospective students, and their families to help them make better informed decisions about where to invest their time and money in pursuit of a postsecondary degree or credential. Institutions will be required to provide information about program characteristics, outcomes, and costs and the Department will assess a program's debt and earnings outcomes based on debt-to-earnings and earnings premium metrics, using information reported by institutions and information otherwise obtained by the Department. The final rule seeks to provide salient information to students by requiring that institutions provide current and prospective students with a link to view cost, debt, and earnings outcomes of their chosen program on the Department's website. For non-GE programs (excepting undergraduate degree programs where students commonly do not apply to a particular program) failing the debt-to-earnings metrics, the Department will require an acknowledgment that the enrolled or prospective student has viewed the information. Further, the website will provide the public, taxpayers, and the Government with relevant information to help understand the outcomes of these programs receiving Federal investment.
Finally, the transparency framework will provide institutions with meaningful information that they can use to improve the outcomes for students and guide their decisions about program offerings.
The accountability framework (subpart S) defines what it means to prepare students for gainful employment by establishing standards that assess whether typical students leave programs with reasonable debt burdens and earn more than the typical worker who completed no more education than a high school diploma or equivalent. GE programs that repeatedly fail to meet these criteria will lose eligibility to participate in title IV, HEA student aid programs.
Under subpart Q, we will, among other things, assess debt and earnings outcomes for students in all programs participating in title IV, HEA programs, including both GE programs and eligible non-GE programs. Under subpart S, we will, among other things, establish title IV, HEA eligibility requirements for GE programs. In assessing the need for these regulatory actions, the Department analyzed program performance. The Department's analysis of program performance is based on data assembled for all title IV, HEA postsecondary programs operating as of March 2022 that also had completions reported in the 2015-16 and 2016-17 award years (AY). This data, referred to as the “2022 Program Performance Data (2022 PPD),” is described in detail in the “Data Used in this RIA” section below, though we draw on it in this section to describe outcome differences across programs.
Table 2.1 reports the number of programs and average title IV, HEA enrollment for all institutions in our data for AY 2016 and 2017. Throughout this RIA, we provide analysis separately for programs that will be affected only by subpart Q and those that will additionally be affected by subpart S (GE programs).
There are 123,524 degree programs at public or private nonprofit institutions (hereafter, “eligible non-GE programs” or “non-GE programs”) in the 2022 PPD that will be subject to the transparency regulations in subpart Q but not the GE regulations in subpart S.
GE programs are non-degree programs, including diploma and certificate programs, at public and private nonprofit institutions and educational programs at for-profit institutions of higher education regardless of program length or credential level.
Tables 2.6 and 2.7 show the student characteristics of title IV, HEA students in non-GE and GE programs, respectively, by institutional control, predominant degree of the institution, and credential level. In all three types of institutional control, the majority of students served by the programs are female students. At public non-GE programs, out of all enrolled title IV, HEA students: 58 percent received a Pell grant, 31 percent are 24 years or older, 36 percent are independent, and 43 percent non-white. At non-GE programs at nonprofit private institutions, 43 percent of students received a Pell Grant, 37 percent are 24 years or older, 44 percent are independent, and 43 percent are non-white. Sixty-eight percent of students in the average public GE program ever received a Pell grant, 44 percent are 24 years or older, 50 percent are independent, and 46 percent are non-white. At for-profit GE programs, 67 percent of students received a Pell grant, 66 percent are 24 years or older, 72 percent are independent, and 59 percent are non-white.
A large body of research provides strong evidence of the many significant benefits that postsecondary education and training confers, both private and social. Private pecuniary benefits include higher wages and lower risk of unemployment.
However, there is also substantial heterogeneity in earnings and other outcomes for students who graduate from different types of institutions and programs. Table 2.8 shows the enrollment-weighted average borrowing and default by control and credential level. Mean borrowing amounts are for title IV, HEA recipients who completed their program in AY 2016 or 2017, with students who did not borrow counting as having borrowed $0. For borrowing, our measure is the average for each institutional control type and credential level combination of program average debt. For default, our measure is, among borrowers (regardless of completion status) who entered repayment in 2017, the fraction of borrowers who have ever defaulted three years later. The cohort default rate measure follows the methodology for the official institutional cohort default rate measures calculated by the Department, except done at the program level. Though average debt tends to be higher for higher-level credential programs, default rates tend to be lower. At the undergraduate level, average debt is much lower for public programs than private nonprofit and for-profit programs and default rates are lower for public and nonprofit programs than those at for-profit institutions.
Table 2.9 shows median earnings (in 2019 dollars) for graduates (whether or not they borrow) along these same dimensions. Similar patterns hold for earnings, with lower earnings in proprietary programs than in public and nonprofit programs for almost all types of credential level.
A growing body of research, described below, shows that differences in institution and program quality are important contributors to the variation in borrowing and earnings outcomes described above. That is, differences in graduates' outcomes across programs are not fully (or primarily) explained by the characteristics of the students that attend. Differences in program quality—measured by the causal effect of attending the program on its students' outcomes—are important.
A recent study computed productivity—value-added per dollar of social investment—for 6,700 undergraduate programs across the United States.
The finding of substantial variation in student outcomes across programs serving similar students or at similar types of institutions or in similar fields has been documented in many other more specific contexts. These include community colleges in California,
The wide range of performance across programs and institutions means that prospective students face a daunting information problem. The questions of where to go and what to study are key life choices with major consequences. But without a way to discern the differences between programs through comparable, reliably reported measures of quality, students may ultimately have to rely on crude signals about the caliber of education a school offers.
Recent evidence demonstrates that information about colleges, delivered in a timely and relevant way, can shape students' choices. Students at one large school district were 20 percent more likely to apply to colleges that have information listed on a popular college search tool, compared with colleges whose information is not displayed on the tool. A particularly important finding of the study is that for Black, Hispanic, and low-income students, access to information about local public four-year institutions increases overall attendance at such institutions. This, the author argues, suggests “that students may have been unaware of these nearby and inexpensive options with high admissions rates.”
This evidence reveals both the power of information to shape student choices at critical moments in the decision process and how a patchwork of information about colleges may result in students missing out on opportunities. Given the variation in quality across programs apparent in the research evidence outlined above, these missed opportunities can be quite costly.
Unfortunately, the general availability of information does not always mean students are able to find and use it. Indeed, evidence on the initial impact of the Department's College Scorecard college comparison tool found minimal effects on students' college choices, with any possible effects concentrated among the highest achieving students.
To that end, the transparency component of these regulations attempts to improve not only the quality of information available to students (by newly collecting key facts about colleges), but also its salience, relevance, and timing. Because this information will be delivered directly to students who are reviewing financial aid packages from colleges and programs which they are considering, students would be likely to see the information and understand its credibility at a time when they are likely to find it most useful for deciding if and where to attend. Better still, the information would not be ambiguous when the message is most critical: if a school is consistently failing to put graduates on better financial footing, students are informed of that fact before they make a financial commitment.
The Department has concluded that relying on just market-disciplining role of information is not sufficient, and that regulation beyond information provision alone is warranted. This conclusion is based on evidence, reviewed below, that such regulations could reduce the risk that students and taxpayers spend money toward programs that will leave them worse off. Program performance is particularly varied and concerning among the non-degree certificate programs offered by all types of institutions, as well as at proprietary degree programs. These are the programs where the Department's concerns about quality are at their height, especially given the narrower career-focused nature of the credentials offered in this part of the system.
Certificate programs are intended to prepare students for specific vocations and have, on average, positive returns relative to not attending college at all. Yet this aggregate performance masks considerable variability: certificate program outcomes vary greatly across programs, States, fields of study, and institutions,
In addition to non-degree programs at all types of institutions, the final rule will subject for-profit degree programs to the transparency framework in § 668.43 and subpart Q, and the GE program-specific eligibility requirements in subpart S. This additional scrutiny, based in the requirements of the HEA, is warranted because for-profit programs have demonstrated particularly poor outcomes, as was shown in Tables 2.8 and 2.9 above. A large body of research provides causal evidence on the many ways students at for-profit colleges are at an economic disadvantage upon exiting their institutions. This research base includes studies showing that students who attend for-profit programs are significantly more likely to suffer from poor employment prospects,
Particularly strong evidence comes from a recent study that found that the average undergraduate certificate-seeking student that attended a for-profit institution did not experience any earnings gains relative to the typical worker in a matched sample of high school graduates. They also had significantly lower earnings gains than students who attended certificate programs in the same field of study at public institutions.
Attending a postsecondary education or training program where the typical student takes on debt that exceeds their capacity to repay can cause substantial harm to borrowers. For instance, high debt may cause students to delay certain milestones; research shows that high levels of debt decreases students' long-term probability of marriage.
Unmanageable debt can also have adverse financial consequences for borrowers, including default on their student loans. For those who do not complete a degree, more student debt may raise the probability of bankruptcy.
Research shows that borrowers who attend for-profit institutions have higher student loan default rates than students with similar characteristics who attend public institutions.
Low loan repayment also has consequences for taxpayers. Calculating the precise magnitude of these costs would require decades of realized repayment periods for millions of borrowers. However, Table 2.10 shows estimates of the share of disbursed loans that will not be repaid based on simulated debt and earnings trajectories at each program in the 2022 PPD under the income-driven repayment Saving on a Valuable Education (SAVE) plan announced in June 2023.
Using U.S. Census Bureau (Census) microdata on earnings and family formation for a nationally representative sample of individuals, the Department projected the likely repayment experience of borrowers at each program assuming all were enrolled in the SAVE plan (which can be found at 88 FR 43820).
Table 2.10 shows that, among all programs, students who attend programs that fall below the debt-to-earnings standard are consistently projected to repay less on their loans, in present value terms, than they borrowed.
Our analysis, provided in more detail in “Analysis of the Regulations,” shows that for many GE programs, the typical graduate earns less than the typical worker with only a high school diploma or has debt payments that are higher than is considered manageable given typical earnings. As we show below, high rates of student loan default are especially common among GE programs that are projected to fail either the D/E rates or the earnings premium metric. Furthermore, low earnings can cause problems in aspects of a graduate's financial life beyond those related to loan repayment. In 2019, US individuals between ages 25 and 34 who had any type of postsecondary credential reported much higher rates of material hardship if their annual income was below the high school earnings threshold, with those below the threshold reporting being food insecure and behind on bills at more than double the rate of those with earnings above the threshold.
In light of the low earnings, high debt, and student loan repayment difficulties for students in some GE programs, the Department has identified a risk that students may be spending their time and money and taking on Federal debt to attend programs that do not provide sufficient value to justify these costs. While even very good programs will have some students who struggle to obtain employment or repay their student loans, the metrics identify programs where the majority of students experience adverse financial outcomes upon completion.
Although enrollment in for-profit and sub-baccalaureate programs has declined following the Great Recession, past patterns suggest that future economic downturns could reverse this trend. For-profit institutions have shown to be more responsive than public and nonprofit institutions to changes in economic conditions
For-profit institutions that participate in title IV, HEA programs are also more reliant on Federal student aid than public and nonprofit institutions. In recent years, around 70 percent of revenue received by for-profit institutions came from Pell grants and Federal student loans.
A commonly expressed concern with past GE regulations is that if programs lose title IV, HEA aid eligibility due to the rule's sanctions this might result in a loss of education options for disadvantaged students. Past research has shown that for-profit institutions do indeed disproportionately enroll students with barriers to postsecondary access—low-income, non-white, and older students, as well as students who are veterans, single parents, or have a
For example, in the 1990s, sanctions related to high cohort default rates led a large number of for-profit institutions to close, significantly reducing enrollment in this sector.
The other commenter noted that the PPD file contains fewer programs than the equivalent College Scorecard program file, even though they measure the same cohort. The same commenter opined that the PPD was not a valid source of data, because for programs that exist in both data sources, the earnings data are substantially different.
The Department is aware of the differences in how the PPD and the College Scorecard universes of programs and data are constructed. As noted in the rule and in the RIA, the coverage of programs is different, and the two datasets should not be expected to be the same. A primary reason why the PPD has fewer programs is that the sample frame is different: the PPD is limited to programs with completers in the 2015-2017 academic years and who are currently in operation based on the Postsecondary Education Participation System (PEPS) data as of March 25, 2022.
The methodology for calculating median debt differ in the two data sources because in the College Scorecard, median debt is measured only among borrowers, whereas in the PPD programs that have completers who graduate with debt have those students' lack of debt factored into their median debt amounts.
The Department disputes the fact that the earnings measures differ substantially between the College Scorecard and the PPD. The same data file forms the basis of both the Scorecard and the PPD earnings measures for 3-year earnings among students who are not enrolled. It is worth noting that the not-enrolled population that forms the basis of the 3-year program-level measure in the Scorecard is a different sample of students than the 1- and 4-year measures at the program level, which are calculated only for the working and not-enrolled population of graduates from each program. This may explain any confusion commenters have about comparability of measures, as commenters noted inconsistency across earnings horizons (arguing that the data showed an implausible jump from the three- to four-year measurement period. This disparity results from different measurement populations and is not a sign of mismeasurement. When examining program earnings for the same cohorts and measurement periods for the programs present in both samples, they differ only by a small inflation adjustment that serves to construct the GE measures properly to best approximate the true structure of the rule when implemented. For reasons explained in the NPRM, median debt in the rule (and hence the PPD) is based on all graduates regardless of whether they borrow. Similarly, median earnings are measured using all graduates regardless of whether they are employed.
This section presents a detailed analysis of the likely consequences of the Financial Value Transparency and GE provisions of the final regulations.
This section describes the data referenced in this regulatory impact analysis. To generate information on the performance of different postsecondary programs offered in different higher education sectors, the Department relied on data on the program enrollment, demographic characteristics, borrowing levels, post-completion earnings, and borrower outcomes of students who received title IV, HEA aid for their studies. The Department produced program performance information, using measures based on the typical debt levels and post-enrollment earnings of program completers, from non-public records contained in the administrative systems the Department uses to administer the title IV, HEA programs along with earnings data produced by
The final rule relies on non-public measures of the cumulative borrowing and post-completion earnings of federally aided title IV, HEA students, including both grant and loan recipients. The Department has information on all title IV, HEA grant and loan recipients at all institutions participating in the title IV, HEA programs, including the identity of the specific programs in which students are enrolled and whether students complete the program. This information is stored in the National Student Loan Data System (NSLDS), maintained by the Department's Office of Federal Student Aid (FSA).
Using this enrollment and completion information, in conjunction with non-public student loan information also stored in NSLDS, and earnings information obtained from Treasury, the Department calculated annual and discretionary debt-to-earnings (D/E) ratios, or rates, for all title IV, HEA programs. The Department also calculated the median earnings of high school graduates aged 25 to 34 in the labor force in the State where the program is located using public data, which is referred to as the Earnings Threshold (ET). This ET is compared to a program's graduates' annual earnings to determine the Earnings Premium (EP), the extent to which a programs' graduates earn more than the typical high school graduate in the same State. The methodology that was used to calculate D/E rates, the ET, and the EP is described in further detail below. In addition to the D/E rates and earnings data, we also calculated informational outcome measures, including program-level cohort default rates, to evaluate the likely consequences of the final rule.
In our analysis, we identify a program by a unique combination consisting of the first six digits of its institution's Office of Postsecondary Education Identification (OPEID) number, also referred to as the six-digit OPEID, the program's 2010 Classification of Instructional Programs (CIP) code, and the program's credential level. The terms OPEID number, CIP code, and credential level are defined below. Throughout, we distinguish “GE Programs” from those that are not subject to the GE provisions of the final rule, referred to as “non-GE Programs.” The 2022 PPD includes information for 155,582 programs that account for more than 19 million title IV, HEA enrollments annually in award years 2016 and 2017. This includes 2,931,000 enrollments in 32,058 GE Programs (certificate programs at all institution types, and degree programs at proprietary institutions) and 16,337,000 enrollments in 123,524 non-GE Programs (degree programs at public and private not-for-profit institutions).
We calculated the performance measures in the 2022 PPD for all programs based on the debt and earnings of the cohort of students who both received title IV, HEA program funds, including Federal student loans and Pell grants, and completed programs during an applicable two-year cohort period. Consistent with the final rule, students who do not complete their program are not included in the calculation of the metrics. The annual loan payment component of the debt-to-earnings formulas for the 2022 PPD D/E rates was calculated for each program using student loan information from NSLDS for students who completed their program in award years 2016 or 2017 (
Programs were excluded from the 2022 PPD if they were operated by an institution that was not currently active in the Department's PEPS system as of March 25, 2022, if the program did not have a valid credential type, or if the program did not have title IV, HEA completers in both the 15/16 and 16/17 completer cohorts.
Consistent with the regulations, the Department computed D/E and EP metrics in the 2022 PPD only for non-exempted programs with 30 or more students who completed the program during the applicable two-year cohort period—that is, those programs that met the minimum cohort size requirements. A detailed analysis of the likely coverage rate under the rule and of the number and characteristics of programs that met the minimum size in the 2022 PPD is included in “Analysis of Data Coverage” below.
We determined, under the provisions in the final regulations for the D/E rates and EP measures, whether each program would “Pass D/E,” “Fail D/E,” “Pass EP,” and “Fail EP” based on its 2022 PPD results, or “No data” if it did not meet the cohort size requirement, was located in Puerto Rico, U.S. Territories and freely associated states, or was a program for which we do not have data because the program has post-graduation residency requirements such that it is evaluated based on a longer earnings periods.
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Under the final regulations, a GE program will become ineligible for title IV, HEA program funds if it fails the D/E rates measure for two out of three consecutive years or fails the EP measure for two out of three consecutive years. GE programs will be required to provide warnings in any year in which the program could lose eligibility based on the next D/E rates or earnings premium measure calculated by the Department. Students at such programs would be required to acknowledge having seen the warning and information about debt and earnings before receiving title IV, HEA funds. Eligible programs (excepting undergraduate degree programs) not meeting the D/E standards would need to have students acknowledge viewing this information before students sign enrollment agreements. These acknowledgment requirements will apply until the program passes the D/E measure, or for three years from the last published rate, whichever is earlier.
The Department analyzed the estimated impact of the final regulations on GE and non-GE programs using the following data elements defined below:
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The information contained in the 2022 PDD and used in the analysis necessarily differs from what will be used to evaluate programs under the final rule in a few ways due to certain information not being currently collected in the same form as it would under the final rule. These include:
• 4-digit CIP code is used to define programs in the 2022 PPD, rather than 6-digit CIP code. Program earnings are not currently collected at the 6-digit CIP code level, but will be under the final rule. Furthermore, the 2022 PPD use 2010 CIP codes to align with the completer cohorts used in the analysis, but programs will be defined using the 2020 CIP codes under the final rule;
• Unlike the final rule, the total loan debt associated with each student is not capped at an amount equivalent to the program's tuition, fees, books, and supplies in the 2022 PPD, nor does debt include institutional and other private debt. Doing so requires additional institutional reporting of relevant data items not currently available to the Department. In the 2014 Prior Rule, using information reported by institutions, the tuition and fees cap was applied to approximately 15 percent of student records for the 2008-2009 2012 D/E rates cohort, though this does not indicate the share of programs whose median debt would be altered by the cap.
• D/E rates using earnings levels measured in calendar years 2018 and 2019 would ideally use debt levels measured for completers in 2015 and 2016. Since program level enrollment data are more accurate for completers starting in 2016, we use completers in 2016 and 2017 to measure debt. We measure median debt levels and assume completers in the 2015 and 2016 cohorts would have had total borrowing that was the same in real terms (
• Medical and dental professional programs, and graduate mental health programs that lead to licensure, are not evaluated because earnings six years after completion are not available. The earnings and debt levels of these programs are set to missing and not included in the tabulations presented here;
• 150 percent of the Federal Poverty Guideline is used to define the ET for institutions in foreign institutions in the 2022 PPD, rather than a national ET;
• The final rule will use a national ET if more than half of a program's students are out-of-state, but the 2022 PPD uses an ET determined by the State an institution is located;
• Programs at institutions that have merged with other institutions since
• Under the final rule, if the two-year completer cohort has too few students to publish debt and earnings outcomes, but the four-year completer cohort has a sufficient number of students, then debt and earnings outcomes would be calculated for the four-year completer cohort. This was not possible for the 2022 PPD, so some programs with no data in our analysis would have data to evaluate performance under the rule.
The 2022 PPD also differ from those published in the Negotiated Rulemaking data file in several ways. The universe of programs in the previously published Negotiated Rulemaking data file were based, in part, on the College Scorecard universe which included programs as they are reported to IPEDS, but not necessarily to NSLDS. IPEDS is a survey, so institutions may report programs (degrees granted by credential level and CIP code) differently in IPEDS than is reflected in NSLDS. To reflect the impact of the rule more accurately, the universe of the 2022 PPD is based instead on NSLDS records because NSLDS captures programs as reflected in the data systems used to administer title IV, HEA aid. Nonetheless, the 2022 PPD accounts for the same loan volume reflected in the Negotiated Rulemaking data file. In addition, the Negotiated Rulemaking data file included programs that were based on a previous version of College Scorecard prior to corrections made to resolve incorrect institution-reported information in underlying data sources.
The D/E rates measure is comprised of two debt-to-earnings ratios, or rates. The first, the annual earnings rate, is based on annual earnings, and the second, the discretionary earnings rate, is based on discretionary earnings. These two components together define a relationship between the maximum typical amount of debt program graduates should borrow based on the programs' graduates' typical earnings. Both conceptually and functionally the two metrics operate together, and so should be thought of as one “debt to earnings (D/E)” metric. The formulas for the two D/E rates are:
A program's annual loan payment, the numerator in both rates, is the median annual loan payment of the 2016-2017 completer cohort. This loan payment is calculated based on the program's cohort median total loan debt at program completion, including non-borrowers, subject to assumptions on the amortization period and interest rate. Cohorts' median total loan debt at program completion were computed as follows.
• Each student's total loan debt includes both FFEL and Direct Loans. Loan debt does not include PLUS Loans made to parents, Direct Unsubsidized Loans that were converted from TEACH Grants, private loans, or institutional loans that the student received for enrollment in the program.
• In cases where a student completed multiple programs at the same institution, all loan debt is attributed to the highest credentialed program that the student completed, and the student is not included in the calculation ofD/E rates for the lower credentialed programs that the student completed.
• The calculations exclude students whose loans were in military deferment, or who were enrolled at an institution of higher education for any amount of time in the earnings calendar year, or whose loans were discharged because of disability or death.
The median annual loan payment for each program was derived from the median total loan debt by assuming an amortization period and annual interest rate based on the credential level of the program. The amortization periods used were:
• 10 years for undergraduate certificate, associate degree, post-baccalaureate certificate programs, and graduate certificate programs;
• 15 years for bachelor's and master's degree programs;
• 20 years for doctoral and first professional degree programs.
The amortization periods account for the typical outcome that borrowers who enroll in higher-credentialed programs (
• 4.27 percent for undergraduate programs;
• 5.82 percent for graduate programs.
For both undergraduate and graduate programs, the rate used is the average interest rate on Federal Direct Unsubsidized loans over the three years prior to the end of the applicable cohort period, in this case, the average rate for loans disbursed between the beginning of July 2013 and the end of June 2016.
The denominators for the D/E rates are two different measures of student earnings. Annual earnings are the median total earnings in the calendar year three years after completion, obtained from the U.S. Treasury. Earnings were measured in calendar years 2018 and 2019 for completers in award years 2014-2015 and 2015-2016, respectively, and were converted to 2019 dollars using the Consumer Price Index for all Urban Consumers (CPI-U). Earnings are defined as the sum of wages and deferred compensation for all W-2 forms plus self-employment earnings from Schedule SE.
Professional programs in Medicine (MD) and Dentistry (DDS), and mental health graduate programs that lead to clinical licensure will have earnings measured over a longer time horizon to accommodate lengthy post-graduate internship training, where earnings are likely much lower three years after graduation than they would be even a few years further removed from completion.
The EP measures the extent to which a program's graduates earn more than the typical high school graduate in the same State. The Department first calculated the ET, which is the median
The EP is computed as the difference between Annual Earnings and the ET:
Where the Annual Earnings is computed as above, and the ET is assigned for the State in which the program is located. For foreign institutions, 150 percent of the Federal Poverty Guideline for the given year is used as the ET because comparable information about high school graduate earnings is not available.
The Department conducted several analyses to support the decision of the particular ET chosen. The discussion here focuses on undergraduate certificate programs, which our analysis below suggests is the sector where program performance results are most sensitive to the choice of ET.
First, based on student age information available from students' Free Application for Federal Student Aid (FAFSA) data, we estimate that the typical undergraduate program graduate three years after completion, when their earnings are measured, would be 30 years old. The average age of students three years after completion for undergraduate certificate programs is 31 years, while for associate programs it is 30, bachelor's 29, master's 33, doctoral 38, and professional programs 32. There are very few Post-BA and Graduate Certificate programs (162 in total) and the average ages when their earnings are measured are 35 and 34, respectively.
Figure 4.1 shows the average estimated age for for-profit certificate holders 3 years after completion, when earnings would be measured, for the 10 most common undergraduate certificate programs (and an aggregate “other” category). All credentials have an average age that falls within or above the range of ages used to construct the earnings threshold. In cases where the average age falls above this range, our earnings threshold is lower than it would be if we adjusted the age band use to match the programs' completers ages.
Second, the ET is typically less than the average pre-program income of program entrants, as measured in their FAFSA. Figure 4.2 shows average pre-program individual income for students at these same types of certificate programs, including any dependent and independent students that had previously been working.
We view this as suggestive evidence that the ET chosen provides a reasonable, but conservative, guide to the minimum earnings that program graduates should be expected to obtain.
This section begins with a presentation of the Department's estimate of the share of enrollment and programs that would meet the n-size requirement and be evaluated under the rule. We assembled data on the number of completers in the two-year cohort period (AYs 2016-2017) and total title IV, HEA enrollment for programs defined at the six-digit OPEID, credential level, and six-digit CIP code from NSLDS. This is the level of aggregation that will be used in the final rule. Total title IV, HEA enrollment at this same level of disaggregation was also collected. Deceased students and students enrolled during the earnings measurement rule will be excluded from the earnings sample under the final rule. We therefore impute the number of completers in the earning sample by multiplying the total completer count in our data by 82 percent, which is the median ratio of non-enrolled earning count to total completer count derived from programs defined at a four-digit CIP code level.
Table 4.2 below reports the share of title IV, HEA enrollment and programs that would have metrics computed under an n-size of 30 and using six-digit CIP codes to define programs. We estimate that 75 percent of GE enrollment and 15 percent of GE programs would have sufficient n-size to have metrics computed with a two-year cohort. An additional 8 percent of enrollment and 11 percent of programs have an n-size of between 15 and 29 and would be likely have metrics computed using a four-year completer cohort. The comparable rates for eligible non-GE programs are 69 percent of enrollment and 19 percent of programs with a n-size of 30 and using two-year cohort metrics, with the use of four-year cohort rates likely increasing these coverage rates of enrollment and programs by 13 and 15 percent, respectively.
Table 4.2 also reports similar estimates aggregating programs to a four-digit CIP code level. Coverage does not diminish dramatically (3-5 percentage points) when moving from four-digit CIP codes, as presented in the 2022 PPD, to six-digit CIP codes to define programs.
We note that the high coverage of title IV, HEA enrollment relative to title IV, HEA programs reflects the fact that there are many very small programs with only a few students enrolled each year. For example, based on our estimates, more than half of all programs (defined at six-digit CIP code) have fewer than five students completing per year and about twenty percent have fewer than five students enrolled each year. The Department believes that the coverage of students based on enrollment is sufficiently high to generate substantial net benefits and government budget savings from the policy, as described in “Net Budget Impacts” and “Accounting Statement” below. We believe that the extent to which enrollment is covered by the final rule is the appropriate measure on which to focus coverage analysis on because the benefits, costs, and transfers associated with the policy almost all scale with the number of students (enrollment or completions) rather than the number of programs.
The rest of this section describes coverage rates for programs as they appear in the 2022 PPD to give context for the numbers presented in the RIA. Again, the analyses above are the better guide to the coverage of metrics we are publishing under the rule. The coverage in the 2022 PPD is lower than that reported in Table 4.2, due to differences in data used and because the 2022 PPD does not apply the four-year cohort period “look back” provisions and instead only uses two-year cohorts.
Tables 4.3a and 4.3b report the share of non-GE and GE enrollment and programs with valid D/E rates and EP rates in the 2022 PPD, by control and credential level.
Overall, about 66 percent of title IV, HEA enrollment is in GE programs that have a sufficient number of completers to allow the Department to construct both valid D/E and EP rates in the 2022 PPD. This represents about 13 percent of GE programs. Note that a small number of programs have an EP metric computed but a D/E metric is not available because there are fewer than 30 completers in the two-year debt cohort. Coverage is typically higher in the proprietary sector—we are able to compute D/E or EP metrics for programs accounting for about 87 percent of enrollment in proprietary undergraduate certificate programs. Comparable rates are about 62 percent and 22 percent of enrollment in the nonprofit and public undergraduate certificate sectors, respectively.
While most analysis will be simple cross-tabulations by two or more variables, we use linear regression analysis (also referred to as “ordinary least squares”) to answer some questions about the relationship between variables holding other factors constant. Regression analysis is a statistical method that can be used to measure relationships between variables. For instance, in the demographic analysis, the demographic variables we analyze are referred to as “independent” variables because they represent the potential inputs or determinants of outcomes or may be proxies for other factors that influence those outcomes. The annual debt to earnings (D/E) rate and earnings premium (EP) are referred to as “dependent” variables because they are the variables for which the relationship with the independent variables is examined. The output of a regression analysis contains several relevant points of information. The “coefficient,” also known as the point estimate, for each independent variable is the average amount that a dependent variable is estimated to change with a one-unit change in the associated independent variable, holding all other independent variables included in the model constant. The standard error of a coefficient is a measure of the precision of the estimate. The ratio of the coefficient and standard error, called a “t-statistic” is commonly used to determine whether the relationship between the independent and dependent variables is “statistically significant” at conventional levels.
In this subsection we examine the results of the analysis of the transparency provisions of the final regulations for the 123,524 non-GE programs. The analysis is focused on results for a single set of financial-value measures—approximating rates that would have been released in 2022 (with some differences, described above). Though programs with fewer than 30 completers in the cohort are not subject to the D/E and EP tests and would not have these metrics published, we retain these programs in our analysis and list them in the tables as “No Data” to provide a more complete view of the
Tables 4.4 and 4.5 report the results for non-GE programs by control and credential level. Graduate programs with failing D/E metrics are required to have students acknowledge having seen the program outcome information before prospective students can sign enrollment agreements with an institution. Students at non-GE programs that do not pass the earnings premium metric are not subject to the student acknowledgment requirement, however, for informational purposes, we report rates of passing this metric for non-GE programs as well. We expect performance on the EP metric contained on the ED-administered program information website to be of interest to students even if it is not part of the acknowledgment requirement. This analysis shows that:
• 842 public and 640 nonprofit degree programs (representing 1.2 and 1.5 percent of programs and 4.6 and 6.6 percent of enrollment, respectively) would fail at least one of the D/E or EP metrics.
• At the undergraduate level, failure of the EP metric is most common at associate degree programs, whereas failure of the D/E metric is relatively more common among public bachelor's degree programs and at nonprofit associate degree programs.
• Failure for graduate programs is almost exclusively due to the failure of the D/E metric and is most prominent for professional programs at private, nonprofit institutions.
• In total, 125,600 students (1.1 percent) at public institutions and 231,100 students (5.8 percent) at nonprofit institutions are in programs with failing D/E metrics.
Tables 4.6 and 4.7 report results by credential level and 2-digit CIP code for non-GE programs. This analysis shows that—
• Rates of not passing at least one of the metrics are particularly high for professional programs in law (CIP 22, about 19 percent of law programs representing 29 percent of enrollment in law programs), theology (CIP 39, about 7 percent, 25 percent) and health (CIP 51, about 10 percent, 19 percent). Recall that for graduate degrees, failure is almost exclusively due to the D/E metric, which would trigger the acknowledgment requirement.
This analysis is based on the 2022 PPD described in the “Data Used in this RIA” above. In this subsection, we examine the combined results of the analysis of the final regulations for the 32,058 GE Programs. The analysis is primarily focused on GE metric results for a single year, though continued eligibility depends on performance in multiple years. The likelihood of repeated failure is discussed briefly below and is incorporated into the budget impact and cost-benefit analyses. Though programs with fewer than 30 completers in the cohort are not subject to the D/E and EP tests, we retain these programs in our analysis to provide a more complete view of program passage than if they were excluded.
Tables 4.8 and 4.9 report D/E and EP results by control and credential level for GE programs. This analysis shows that:
• About 64 percent of enrollment is in the 3,937 GE programs for which rates can be calculated.
• 40 percent of enrollment is in 2,228 programs (about 7 percent of all GE programs) that meet the size threshold and would pass both the D/E measure and EP metrics.
• About 24 percent of enrollment is in 1,709 programs (about 5 percent of all GE programs) that would fail at least one of the two metrics.
• Failure rates are significantly lower for public certificate programs (about 4
• Across all proprietary certificate and degree programs, about 33 percent of enrollment is in programs that fail one of the two metrics, representing about 22 percent of programs. Degree programs that fail typically fail the D/E metric, with only associate degree programs having a noticeable number of programs that fail the EP metric.
Tables 4.10 and 4.11 report the results by credential level and 2-digit CIP code. This analysis shows—
• The highest rate of failure is undergraduate certificate in Personal and Culinary Services (CIP2 12), where about 73 percent of enrollment, representing 37 percent of undergraduate certificate programs in that field, have failing metrics. This is primarily due to failing the EP metric.
• In Health Professions and Related Programs (CIP2 51), where allied health, medical assisting, and medical administration are the primary specific fields, 28 percent of enrollment is in an undergraduate certificate program that fails at least one of the two metrics, representing 8 percent of programs.
For GE programs, title IV, HEA ineligibility is triggered by two years of failing the same metric within a three-year period. Years when a program does not meet the n-size requirement are not counted towards those three years. The top panel of Table 4.12 shows the share of GE enrollment and programs in each result category in a second year as a function of the result in the first year, along with the rate of becoming ineligible. Failure rates are quite persistent, with failure in one year being highly predictive of failure in the next year, and therefore ineligibility for title IV, HEA funds. Among programs that fail only the D/E metric in the first year, 69.6 percent of enrollment is in programs that also fail D/E in year 2 and would be ineligible for title IV, HEA participation the following year. The comparable rates for programs that fail EP only or both D/E and EP in the first year are 86.6 and 96.3 percent, respectively. The share of programs (rather than enrollment in such programs) that become ineligible conditional on first year results is similar, as shown in the bottom panel of Table 4.12. These rates understate the share of programs that would ultimately become ineligible when a third year is considered.
Many institutions have few programs that are subject to the accountability provisions of GE, either because they are nonproprietary institutions with relatively few certificate programs or because their programs tend to be too small in size to have published median debt or earnings measures. Characterizing the share of GE programs that have reported debt and earnings metrics that fail in particular postsecondary sectors can therefore give a distorted sense for the effect the rule might have on institutions in that sector. For example, a college (or group of colleges) might offer a single GE program that fails the rule and so appear to have 100 percent of its GE programs fail the rule. But if that program is a very small share of the institution's overall enrollment (or its title IV, HEA enrollment) then even if every student in that program were to stop enrolling in the institution—an unlikely scenario as discussed below—the effect on the institution(s) would be much less than would be implied by the 100 percent failure rate among its GE programs. To provide better context for evaluating the potential effect of the GE rule on institutions or sets of institutions, we describe the share of all title IV, HEA supported enrollment—including enrollment in both GE and non-GE programs—that is in a GE program and that fails a GE metric and, therefore, is at risk of losing title IV, HEA eligibility.
Table 4.13 reports the distribution of institutions by share of enrollment that is in a failing GE program, by control and institution type. It shows that about 91 percent of public institutions and 95 percent of nonprofit institutions have no enrollment in GE programs that fail the GE metric. This rate is much lower-about 44 percent -for proprietary institutions, where all types of credential programs are covered by GE accountability and failure rates tend to be higher.
Very few public community or technical colleges (CCs) have considerable enrollment in programs that would fail GE. About 6 percent of the predominant 2-year public colleges have any of their enrollment in certificate programs that would fail, and about 5 percent of the predominantly less than two-year technical colleges have more than 20 percent of enrollment that does.
The share of enrollment in failing GE programs for Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and other minority-serving institutions is even smaller, as shown in Table 4.14.
As noted above, these estimates cannot assess the impact of the GE provisions on total enrollment at these institutions. Especially at institutions with diverse program offerings, many students in failing programs can be expected to transfer to other non-failing programs within the institution (as opposed to exiting the institution). Moreover, many institutions are likely to admit additional enrollment into their programs from failing programs at other (especially for-profit) institutions. We quantify the magnitude of this enrollment shift and revisit the
The Department conducted an analysis on which specific GE programs fail the metrics. The analysis concludes that the metrics target programs where students earn little, borrow more, and default at higher rates on their student loans than similar programs providing the same credential.
Table 4.15 reports the average program-level cohort default rate for GE programs, separately by result, control, and credential level. Programs are weighted by their average title IV, HEA enrollment in AY 2016 and 2017 to better characterize the outcomes experienced by students. The overall 3-year program default rate is 12.9 percent but is higher for certificate programs and for programs offered by proprietary schools. The average default rate is higher for programs that fail the EP threshold than for programs that fail the D/E metric, despite debt being lower for the former. This is because even low levels of debt are difficult to repay when earnings are very low. Programs that pass the metrics, either with data or without, have lower default rates than those that fail.
To better understand the specific types of programs that underpin the aggregate patterns described above, Table 4.16 lists the 20 most common types of programs (the combination of field and credential level) by enrollment count in the 2022 PPD. The programs with the highest enrollments are undergraduate certificate programs in cosmetology, allied health, liberal arts, and practical nursing, along with bachelor's programs in business and nursing. These 20 most common types of programs represent more than half of all enrollments in GE programs. Table 4.17 provides the average program annual loan payment (weighted by the number of students completing a program), the average program earnings (weighted by the number of students completing a program), the average annual D/E rate, and the average cohort default rate (weighted by the number of students completing a program). This shows quite a bit of variability in debt, loan service, earnings, and default across different types of programs.
Table 4.18 lists the most frequent types of failing GE programs (by enrollment in failing programs). Failing programs are disproportionately in a small number of types of programs. About 22 percent of enrollment in failing programs is in UG Certificate Cosmetology programs alone, reflecting both high enrollment and high failure rates. Another 20 percent are in UG Certificate programs in Health/Medical administration and assisting, dental support, and massage, reflecting large enrollment and moderate failure rates. These 20 categories account for about 72 percent of all enrollments in programs that fail at least one GE metric. Table 4.19 provides the average program annual loan payment, the average program earnings, and the average default rate (all weighted by title IV, HEA enrollment) for the most frequent types (by field and credential) of GE programs that fail at least one GE metric (by enrollment count), separately for failing and passing programs. Within each type of program, failing programs have much higher loan payments, lower earnings, and higher default rates than programs that pass the GE metrics. This demonstrates that higher-performing GE programs exist even within the same
The Department conducted analyses of the 2022 PPD to assess the role of student demographics as a factor in program performance. Our analysis demonstrates that GE programs that fail the metrics have particularly bad outcomes that are not explained by student demographics alone. We examined the demographic composition of program enrollment, comparing the composition of programs that pass, fail, or did not have data. We also conducted regression analysis, which permits us to hold constant several factors at once. This analysis focuses on GE programs since non-GE programs are not at risk of becoming ineligible for title IV, HEA aid.
For the race and ethnicity variables, we used the proportion of individuals in each race and ethnicity category among all completers of each certificate or
We aggregated the number of completions in each race/ethnicity category reported for each program in IPEDS to the corresponding GE program definition of six-digit OPEID, CIP code, and credential level. While D/E and EP rates measure only the outcomes of students who completed a program and received title IV, HEA program funds, IPEDS completions data include both title IV, HEA graduates and non-title IV, HEA graduates. Race and ethnicity data is not available separately for title IV, HEA completers. We believe the IPEDS data provides a reasonable approximation of the proportion, by race and ethnicity, of title IV, HEA graduates completing GE programs. We determined percent of each race and ethnicity category for 25,278 of the 32,058 programs. Many smaller programs could not be matched primarily because, as stated above, IPEDS and NSLDS use different program categorization systems, and the two sources at times are not sufficiently consistent to match data at the GE program-level. Nonetheless, we do not believe this will substantially affect our results since programs that do not match are less likely to meet the n-size criteria and would be likely excluded from our analysis of program performance.
Percent Pell for this analysis is the percentage of title IV, HEA completers during award years 2015, 2016, and 2017 who received a Pell grant at any time in their academic career. Because Pell status is being used as a proxy for socioeconomic background, we counted students if they had received a Pell grant at any time in their academic career, even if they did not receive it for enrollment in the program. For instance, students that received Pell at their initial undergraduate institution but not at another institution they attended later would be considered a Pell grant recipient at both institutions.
Several other background variables were collected from students' Free Application for Federal Student Aid (FAFSA) form. For all students receiving title IV, HEA aid in award years 2015, 2016, and 2017, the Department matched their enrollment records to their latest FAFSA filed associated with their first award year in the program in which they were enrolled. First-generation status, described below, is taken from students earliest received FAFSA. From these, the Department constructed the following:
• Percent of students that are male.
• Percent of students that are first-generation, defined as those who indicated on the FAFSA not having a parent that had attended college. Children whose parents completed college are more likely to attend and complete college.
• Average family income in 2019 dollars. For dependent students, this includes parental income and the students' own income. For independent students, it includes the student's own income and spousal income.
• Average expected family contribution. We consider EFC as an indicator of socioeconomic status because EFC is calculated based on household income, other resources, and family size.
• Average age at time of FAFSA filing.
• Percent of students aged 24 or older at time of FAFSA filing.
• Share of students that are independent. Independent status is determined by a number of factors, including age, marital status, having dependents, and veteran status.
• Median student income prior to program enrollment among students whose income is greater than or equal to three-quarters of a year of earnings at Federal minimum wage. We only compute this variable for programs where at least 30 students meet this requirement, this variable should be viewed as a rough indicator of students' financial position prior to program entry. The average percentage of enrollees covered by this variable is 57.6 across all programs.
Based on these variables, we determined the composition of over 23,907 of the 32,058 programs in our data, though some demographic variables have more non-missing observations. Unless otherwise stated, our demographic analysis treats programs (rather than students) as the unit of analysis. The analysis, therefore, does not weight programs (and their student characteristics) by enrollment.
Table 4.20 provides program-level descriptive statistics for these demographic variables in the GE program dataset. The typical (median) program has 6 percent completers that are Black, 6 percent Hispanic, 0 percent Asian (program mean is 3 percent), and 38 percent non-White. At the median program, sixty-one percent are independent, half are over the age 24, and 31 percent are male. Half are first-generation college students and 77 percent have ever received a Pell Grant. Average family income at time of first FAFSA filing is $38,000 and the typical student who is attached to the labor force earns $29,900 before enrolling in the program.
Table 4.21 reports average demographic characteristics of GE programs separately by GE result. Programs that fail at least one GE metric have a higher share of students that are female, higher share of students that are Black or Hispanic, lower student and family income, and higher share of students that have ever received the Pell grant. Average student age and dependency status is similar for passing and failing programs.
One limitation of the descriptive tabulations presented above is that it is difficult to determine which factors, whether they be demographics or program characteristics, explain the higher failure rate of programs serving certain groups of students. To further examine the relationship between student demographics and program results under the regulations, we analyzed the degree to which specific demographic characteristics might be associated with a program's annual D/E rate and EP, while holding other characteristics constant.
For this analysis, the Department estimated the parameters of ordinary least squares (OLS) linear regression models with annual debt-to-earnings or the earnings premium as the dependent (outcome) variables and indicators of student, program, and institutional characteristics as independent variables.
Table 4.22 reports estimates from the D/E rate regressions described above, with each column representing a different regression model that includes different sets of independent variables. Comparing the R-squared across different columns demonstrates the degree to which different factors explain variation in the outcome. The first three columns quantify the extent to which variation in D/E rates are accounted for by program and institutional characteristics. The institutional control alone (column 1) explains 22 percent of the variation in D/E and adding credential level increases the R-squared to 33 percent (column 2). D/E rates are 2.5 to 3.9 percentage points higher for private nonprofit and for-profit institutions than public institutions (the omitted baseline category) after controlling for credential level. This may reflect the much higher tuition prices charged by private institutions, which can result in higher debt service. Graduate credential levels also have much higher debt-to-earnings ratios than undergraduate credentials, reflecting the typically higher tuition costs associated with graduate programs.
Almost all programs are in institutions with multiple GE programs, so column 3 includes institution fixed effects in place of indicators for control.
Table 4.23 reports estimates from identical regression models, but instead using EP as the outcome. Again, each column represents a different regression model that includes different sets of independent variables. Program and institutional characteristics still matter greatly to earnings outcomes. Institutional effects and credential level together explain 77 percent of the variation in program-level earnings outcomes (column 3). Adding demographic variables explains an additional 7 percentage points of the variation in program-level earnings (column 4). Note that the estimated regression coefficients will likely overstate the effect of the baseline characteristics on outcomes if these characteristics are correlated with differences in program quality not captured by the crude institution and program characteristics included in the regression.
Conclusions about the extent to which different factors explain variation in program outcomes can be sensitive to the order in which factors are entered into regressions. However, a variance decomposition analysis (that is insensitive to ordering) demonstrates that program and institutional factors explain the majority of the variance in both the D/E and EP metrics across programs when student characteristics are also included.
Figure 4.3 provides another view, demonstrating that many successful programs exist and enroll similar shares of low-income students. It shows the distribution of raw Eps for undergraduate certificate programs (the y-axis is in $1,000s) grouped by the average FAFSA family income of the program. Programs are placed in 20 equally sized groups from lowest to highest FAFSA family income.
The analysis above showed that programs failing the EP threshold have a higher share of female students. In Table 4.24, we show descriptively that there are many programs that have similar gender composition but have much higher rates of passage than programs in cosmetology and massage, where failure rates are comparatively higher. Other programs, such as practical nursing and dental support, are similar in terms of their gender and racial balance but have much higher passage rates.
On several dimensions, programs that have higher enrollment of underserved students have worse outcomes—lower completion, higher default, and lower post-college earnings levels—due to a myriad of challenges these students face, including fewer financial resources and structural discrimination in the labor market.
One concern with limiting title IV, HEA eligibility for low-performing GE programs is that such measures could reduce postsecondary opportunities for some students. The Department conducted an analysis to estimate the short-term alternative options that are available to students that might, in the absence of these regulations, enroll in failing programs. The scope of alternative options in the longer term is likely to be broader than the results of this analysis, as other institutions can expand their program offerings and failing programs can improve their performance.
Students deterred from attending a specific program because of a loss of title IV, HEA aid eligibility at that program have several potential alternatives. For programs that are part of a multi-program institution, many may choose to remain at the same institution, but attend a different program in a related subject that did not lose access to title IV, HEA aid and, therefore, likely offers better outcomes for students in terms of student debt, earnings, or both. Some would stay in their local area and attend a nearby institution that offers a program in the same or related subject. Still others would attend an institution further away, but perhaps in the same State or online.
Table 4.25 reports the distribution of the number of transfer options available to the students who would otherwise attend GE programs that fail at least one of the two metrics. We present estimates for four different ways of conceptualizing and measuring these transfer options. We assume students have more flexibility over the specific field and institution attended than credential level, so all four measures assume students remain in the same credential level. While not captured in this analysis, it is possible that some students would pursue a credential at a higher level in the same field, thereby further increasing their available options. Half of students in failing GE programs (in 41 percent of failing programs) have at least one alternative non-failing program of the same credential level at the same institution, but in a related field (as indicated by being in the same 2-digit CIP code). More than a quarter have more than one additional option. Two-thirds of students (at 60 percent of the failing programs) have a transfer option passing the GE measures within the same geographic area (ZIP3), credential level, and narrow field (4-digit CIP code). More than 90 percent of students have at least one transfer option within the same geographic area and credential level when the field is broadened to include programs in the same 2-digit CIP code. Finally, all students have at least one transfer option in the same State, credential level, and 2-digit CIP code. While this last measure includes options that may not be viable for currently enrolled students—requiring moving across the State or attending virtually—it does suggest that at least some options are available for all students, both current and prospective, who would otherwise attend failing GE programs.
Table 4.26 repeats this analysis for non-GE programs with at least one failing GE metric. Students considering non-GE programs with D/E or EP metrics that do not meet Department standards may choose to enroll elsewhere. More than half of students at failing non-GE programs have a non-failing program in the same 4-digit CIP code, credential level, and geographic area that they could choose to enroll in. This share approaches three-quarters if the field is broadened to include programs in the same two-digit CIP code. Therefore, while the alternative options for non-GE programs are not as numerous as for GE programs, the number of alternatives is still quite high.
This analysis likely understates the transfer options available to students for three reasons. First, as stated above, it does not consider programs of a different credential level. For example, students who would have pursued a certificate program might opt for an associate degree program that shows higher earnings. Second, it does not consider the growth of online/distance education programs now available in most fields of study, from both traditional schools and primarily on-line institutions.
Third, we do not consider non-title IV, HEA institutions. Undergraduate certificate programs in cosmetology represent the largest group of programs without nearby passing options in the same four-digit CIP code, in large part because many of these programs do not pass the GE metrics. Nonetheless, recent data from California and Texas suggest that many students successfully pass
A key motivation for more accountability via this rule is to steer students to higher value programs. As mentioned previously, research has shown that when an institution closed after failing accountability measures based on Cohort Default Rates, students were diverted to schools with better outcomes.
Table 4.27 reports the estimated percent difference in earnings between alternative program options and failing programs, separately by two-digit CIP and credential level. Across all subjects, the difference in earnings at passing undergraduate certificate programs and failing programs is about 50 percent. This is unsurprising, given that the EP metric explicitly identifies programs with low earnings, which in practice are primarily certificate programs. Encouragingly, many passing programs exist in the same subject, level, and market that result in much higher earnings than programs that fail. Failing associate degree programs also have similar non-failing programs with much higher earnings. Earnings differences are still sizable and positive, though not quite as large for higher credentials. Passing GE bachelor's degree programs have 31 percent higher earnings than bachelor's degree programs that fail the GE metrics.
Table 4.28 reports similar estimates for non-GE programs. The earnings difference between failing and passing non-GE programs is more modest than for GE programs, but still significant: 21 percent across all credential levels, ranging from close to zero for Doctoral programs to 30 percent for bachelor's degree programs.
We use a similar process to compute the percent change in average program-level median debt between failing GE or non-GE programs and alternative programs.
While these differences do not necessarily provide a completely accurate estimate of the actual earnings gain or debt reduction that students would experience by shifting programs, they suggest alternative options exist that provide better financial outcomes than programs that fail the D/E and EP metrics.
The aggregate change in enrollment overall, by sector, and by institution would likely be less than that implied by the program- and institution-level results presented in the “Results of GE Accountability” section above because those do not consider that many students would likely transfer to passing programs or even remain enrolled at failing programs in response to a program losing title IV, HEA eligibility. The Department simulated the likely destinations of students enrolled in failing GE programs. Based on the research literature and described more fully in “Student Response Assumptions” subsection in Section 5 below, we use assumptions about the share of students that transfer to another program, remain enrolled in the original program, or drop out entirely if a program loses title IV, HEA eligibility. These student mobility assumptions differ according to the number of alternative options that exist and are the same assumptions used in the Net Budget Impact section.
Using these assumptions, for every failing GE program, we estimate the title IV, HEA enrollment from that program that would remain, dropout, or transfer to another program. Our notion of “transfers” includes both current students and future students who attend an alternative program instead of one that fails the GE metrics. The number of transfers is then reallocated to specific other non-failing GE and non-GE programs in the same institution (OPEID6), credential level, and 2-digit CIP code. If multiple such programs exist, transfer enrollment is allocated based on the share of initial title IV, HEA enrollment in these programs. If no alternative options exist using this approach, the transfer enrollment is allocated to non-failing GE and non-GE programs in the same geographic area (ZIP3), credential level, and 4-digit CIP code. Again, initial title IV, HEA enrollment shares are used to allocate transfer enrollment if multiple such alternative programs exist. These two approaches reallocate approximately 80 percent of the transfer enrollments we would expect from failing GE programs. Finally, new title IV, HEA enrollment is computed for each program that sums existing enrollment (or retained enrollment, in the case of failing GE programs) and the allocated transfer enrollment.
Table 4.31 summarizes these simulation results, separately by type of institution.
In absence of the final regulations, many students enroll in low-financial-value programs where they either end up not being able to secure a job that leads to higher earnings, take on unmanageable debt, or both. Many of these students default on their student loans, with negative consequences for their credit and financial security and at substantial costs to the taxpayers. Many students with insufficient earnings to repay their debts would be eligible to have their payments reduced and eventually have their loans forgiven through income-driven repayment (IDR). This shields low-income borrowers from the consequences of unaffordable debts but shifts the financial burden onto taxpayers.
We have considered the primary costs, benefits, and transfers for the following groups or entities that will be affected by the final regulations:
We first discuss the anticipated benefits of the final regulations, including improved market information. We then assess the expected costs and transfers for students, institutions, the Federal Government, and State and local governments. Table 5.1 below summarizes the major benefits, costs, and transfers and whether they are quantified in our analysis or not.
We expect the primary benefits of both the accountability and transparency components of the final regulation to derive from a shift of students from low-value to high-value programs or, in some cases, a shift away from low-value postsecondary programs to non-enrollment. This shift will be
Under the final regulation, students, prospective students, and their families will have extensive, comparable, and reliable information about the outcomes of students who enroll in GE and non-GE programs such as cost, debt, earnings, completion, and repayment outcomes. This information should assist them in choosing institutions and programs where they believe they are most likely to complete their education and achieve the earnings they desire, while having debt that is manageable. This information should result in more informed decisions based on reliable information about a program's outcomes.
Students will potentially benefit from this information via higher earnings, lower costs and less debt, and better program quality. This can happen through three channels. First, students benefit by transferring to passing programs. Second, efforts to improve programs should lead to better labor market outcomes, such as improved job prospects and higher earnings, by offering better student services, working with employers so graduates have needed skills, improving program quality, and helping students with career planning. This may happen as institutions improve programs to avoid failing the D/E or EP measures or simply from programs competing more for students based on quality, with the rule providing greater transparency about program quality. As a result of these enrollment shifts, students who graduate with manageable debts and adequate earnings should be more likely to pay back their loans, marry, buy a home, and invest in their futures.
Mezza, A., Ringo, D., Sherlund, S. & Sommer, K. (2020). Student Loans and Homeownership.
Institutions offering high-performing programs to students are likely to see growing enrollment and revenue and to benefit from additional market information that permits institutions to demonstrate the value of their programs without excessive spending on marketing and recruitment. Additionally, institutions that work to improve the quality of their programs could see increased revenues from improved retention and completion and therefore, additional tuition revenue.
We believe the information transparency will increase enrollment and revenues in well-performing programs. Improved information should increase market demand for programs that produce good outcomes. While the increases or decreases in revenues for institutions are benefits or costs from the institutional perspective, they are transfers from a social perspective. However, any additional demand for education due to overall program quality improvement would be considered a social benefit.
The improved information that will be available as a result of the regulations will also benefit institutions' planning and improvement efforts. Information about student outcomes will help institutions determine whether it would be prudent to expand, improve quality, reduce costs, or eliminate various programs. Institutions may also use this information to offer new programs in fields where students are experiencing positive outcomes, including higher earnings and steady employment. Additionally, institutions will be able to identify and learn from programs that produce exceptional results for students.
State and local governments will benefit from additional tax revenue associated with higher student earnings and students' increased ability to spend money in the economy. They are also likely to benefit from reduced costs because, as institutions improve the quality of their programs, their graduates are likely to have improved job prospects and higher earnings, meaning that governments are likely to be able to spend less on unemployment benefits and other social safety net programs. State and local governments will also experience improved oversight of their investments in postsecondary education. Additionally, State, and local postsecondary education funding could be allocated more efficiently to higher-performing programs. State and local governments would also experience a better return on investment on their dollars spent on financial aid programs as postsecondary program quality improves or if students reallocate to higher-performing programs.
The Federal Government should benefit from additional tax revenue associated with higher student earnings and students' increased ability to spend money in the economy. Another primary benefit of the regulations will be improved oversight and administration of the title IV, HEA programs, particularly the new data reported by institutions. Additionally, Federal taxpayer funds should be allocated more efficiently to higher-performing programs, where students are more likely to graduate with manageable amounts of debt and gain stable employment in a well-paying field, increasing the positive benefits of Federal investment in title IV, HEA programs.
The taxpayers and the Government will also benefit from improved information about GE programs. As the funders and stewards of the title IV, HEA programs, these parties have an interest in knowing whether title IV, HEA program funds are benefiting students. The information provided will allow for more effective monitoring of the Federal investment in GE programs.
Students may incur some costs as a result of the final regulations. One cost is that all title IV, HEA students attending eligible non-GE programs that fail the D/E metric will be required to acknowledge having seen information about program outcomes before students
Under the regulations, institutions will incur costs as they make changes needed to comply, including costs associated with the reporting, disclosure, and acknowledgment requirements. These costs could include (1) Training of staff for additional duties, (2) potential hiring of new employees, (3) purchase of new, or modifications to existing, software or equipment, and (4) procurement of external services.
As described in the Preamble, much of the necessary information required from GE programs would already have been reported to the Department under the 2014 Prior Rule, and as such we believe the added burden of this reporting relative to existing requirements will be reasonable. Furthermore, 88 percent of public and 47 percent of private nonprofit institutions operated at least one GE program and have experience with similar data reporting for the subset of their students enrolled in certificate programs under the 2014 Prior Rule. Moreover, many institutions report more detailed information on the components of cost of attendance and other sources of financial aid in the Federal National Postsecondary Student Aid Survey (NPSAS) administered by the National Center for Education Statistics. Finally, for the first six years after the effective date of the rule, the Department provides flexibility for institutions to avoid reporting data on students who completed programs in the past, and instead to use data on more recent completer cohorts to estimate median debt levels. In part, this is intended to ease the administrative burden of providing this data for programs that were not covered by the 2014 Prior Rule reporting requirements, especially for the small number of institutions that may not previously have had any programs subject to these requirements.
Our initial estimate of the time cost of these reporting requirements for institutions is 5.0 million hours initially and then 1.4 million hours annually after the first year. The Department recognizes that institutions may have different approaches and processes for record-keeping and administering financial aid, so the burden of the GE and financial transparency reporting could vary by institution. Many institutions may have systems that can be queried or existing reports that can be adapted to meet these reporting requirements. On the other hand, some institutions may still have data entry processes that are very manual in nature and generating the information for their programs could involve many more hours and resources. Institutions may fall in between these poles and be able to automate the reporting of some variables but need more effort for others. The total reporting burden will be distributed across institutions depending on the setup of their systems and processes. We believe that, while the reporting relates to program or student-level information, the reporting process is likely to be handled at the institutional level.
Table 5.2 presents the Department's estimates of the hours associated with the reporting requirements. The reporting process will involve staff members or contractors with different skills and levels of responsibility. We have estimated this using Bureau of Labor statistics median hourly wage for Education Administrators, Post-Secondary of $48.05.
The ability to set up reports or processes that can be rerun in future years, along with the fact that the first reporting cycle includes information from several prior years, means that the expected burden should decrease significantly after the first reporting cycle. We estimate that the hours associated with reviewing systems,
These burden estimates are not reduced for the exemption that allows institutions to not report on programs with less than thirty completers across the most recent four award years. We expect this provision would reduce the burden on foreign institutions and others across a variety of fields and institutional characteristics.
As described in the section titled “Paperwork Reduction Act of 1995,” the final estimates of reporting costs will be cleared at a later date through a separate information collection. Institutions' share of the annual costs associated with disclosures, acknowledgment for all programs, and warnings and acknowledgment for GE programs are estimated to be $12 million, $0.05 million, and $0.76 million, respectively. Note that most of the burden associated acknowledgments will fall on students, not institutions. These costs are discussed in more detail in the section titled “Paperwork Reduction Act of 1995.”
Institutions that make efforts to improve the outcomes of failing programs could face additional costs. For example, institutions that reduce the tuition and fees of programs would see decreased revenue. For students who are currently enrolled in a program, the reduced price would be a transfer to them in the form of a lower cost of attendance. In turn, some of this price reduction would be a transfer to the government if the tuition was being paid for with title IV, HEA funds. An institution could also choose to spend more on curriculum development to, for example, link a program's content to the needs of in-demand and well-paying jobs in the workforce, or allocate more funds toward other functions. These other functions could include hiring better faculty; providing training to existing faculty; offering tutoring or other support services to assist struggling students; providing career counseling to help students find jobs; acquiring more up-to-date equipment; or investing in other areas where increased spending could yield improved performance. However, as mentioned in the benefits section, institutions that improve program quality could see increased tuition revenue with improved retention and completion.
The costs of program changes in response to the regulations are difficult to quantify generally, as they would vary significantly by institution and ultimately depend on institutional behavior. For example, institutions with all passing programs could elect to commit only minimal resources toward improving outcomes. On the other hand, they could instead make substantial investments to expand passing programs and meet increased demand from prospective students, which could result in an attendant increase in enrollment costs. Institutions with failing programs could decide to devote significant resources toward improving performance, depending on their capacity, or could instead elect to discontinue one or more of the programs. However, as mentioned previously, some of these costs might be offset by increased revenue from improved program quality. Given these ambiguities, we do not quantify costs (or benefits) associated with program quality improvements.
Finally, some poorly performing programs will experience a reduction in enrollment that is not fully offset by gains to other institutions (which will experience increased enrollment) or the Federal Government (which will experience lower spending on Title IV, HEA aid). These losses should be considered as costs for institutions.
State and local governments may experience increased costs as enrollment in well-performing programs at public institutions increases as a result of some students transferring from failing programs, including those offered by for-profit institutions.
The Department recognizes that a shift in students to public institutions could result in higher State and local government costs, but the extent of this is dependent on student transfer patterns, State and local government choices, and the existing capacity of public programs. If States choose to expand the enrollment capacity of passing programs at public institutions, it is not necessarily the case that they would face marginal costs that are similar to their average cost or that they would only choose to expand through traditional brick-and-mortar institutions. The Department continues to find that many States across the country are experimenting with innovative models that use different methods of instruction and content delivery, including online offerings, that allow students to complete courses faster and at lower cost. Furthermore, enrollment shifts would likely be towards community colleges, where declining enrollment has created excess capacity. An under-subscribed college may see greater efficiency gains from increasing enrollment and avoid other costly situations such as unused classroom space or unsustainably low enrollment. Forecasting the extent to which future growth would occur in traditional settings versus online education or some other model is outside the scope of this analysis. Nonetheless, we do include the additional instructional cost associated with a shift from failing to passing programs in our analysis, some of which will fall on State and local governments.
The main costs to the Federal Government involve setting up the infrastructure to handle and process additional information reported by institutions, compute rates and other information annually, and maintain a program information website and acknowledgment process. Most of these activities will be integrated into the Department's existing processes. We estimate that the total implementation cost will be $30 million.
Enrollment shifts between programs, and potentially to non-enrollment, will transfer resources between students, institutions, State and local governments, and the Federal Government. We model three main transfers. First, if some students drop out of postsecondary education or remain in programs that lose eligibility for title IV, HEA Federal student aid, there would be a transfer of Federal student aid from those students to the Federal Government. Second, if students change institutions based on program performance, or title IV, HEA eligibility, revenues and expenses associated with students would transfer between postsecondary institutions. Finally, additional earnings associated with movement from low- to high-value programs would result in greater loan repayment by borrowers. This is through both lower default rates and a lower likelihood of loan forgiveness through existing IDR plans. This represents a transfer from students to the Federal Government. We do not quantify the transfers between students and State governments associated with changes in State-financed student aid, as such programs differ greatly across States. Transfers between students and States could be net positive for States if fewer students apply for, or need, State aid programs or they could be negative if enrollment shifts to State programs results in greater use of State aid.
In this section we describe the methodology used to estimate the budget impact as well as the main costs, benefits, and transfers. Our modeling and impact only include the Financial Value Transparency and GE parts of the final rule.
The main behaviors that drive the direction and magnitudes of the budget impacts of the rule and the quantified costs, benefits, and transfers are the performance of programs and the enrollment and borrowing decisions of students. The Department developed a model based on assumptions regarding enrollment, program performance, student response to program performance, and average amount of title IV, HEA funds per student to estimate the budget impact of these regulations. Additional assumptions about the earnings outcomes and instructional spending associated with program enrollment and tax revenue from additional earnings were used to quantify costs, benefits, and transfers. The model (1) takes into account a program's past results under the D/E and EP rates measure to predict future results, and (2) tracks a GE program's cumulative results across multiple cycles of results to determine title IV, HEA eligibility.
We made assumptions in four areas in order to estimate the budget impact of the rule: (1) Program performance under the rule; (2) Student behavior in response to program performance; (3) Borrowing of students under the rule; and (4) Enrollment growth of students in GE and non-GE programs. Table 6.1 below provides an overview of the main categories of assumptions and the sources. Assumptions that are included in our sensitivity analysis are also highlighted. Wherever possible, our assumptions are based on past performance and student enrollment patterns in data maintained by the Department or documented by scholars in prior research. Additional assumptions needed to quantify costs, benefits, and transfers are described later when we describe the methodology for those calculations.
For AYs 2023 to 2034, the budget model assumes a constant yearly rate of growth or decline in enrollment of students receiving title IV, HEA program funds in GE and non-GE programs in absence of the rule.
The methodology, described in more detail below, models title IV, HEA enrollment over time not for specific programs, but rather by groupings of programs by broad credential level and control, the number of alternative programs available, whether the program is GE or non-GE, and whether the program passes or fails the D/E and EP metrics. The model estimates the flow of students between these groups due to changes in program performance over time and reflects assumptions for the share of enrollment that would transition between the following four performance categories in each year:
A GE program becomes ineligible if it fails either the D/E or EP rate measures in two out of three consecutive years. We assume that ineligible programs remain that way for all future years and, therefore, do not model performance transitions after ineligibility is reached. The model applies different assumptions for the first year of transition (from year 2025 to 2026) and subsequent years (after 2026). It assumes that the rates of program transition reach a steady state in 2027. We assume modest improvement in performance, indicated by a reduction in the rate of failing and an increase in the rate of passing, among programs that fail one of the metrics, and an increase in the rate of passing again, among GE programs that pass the metrics. All transition probabilities are estimated separately for GE and non-GE programs and for four aggregate groups: proprietary 2-year or less; public or nonprofit 2-year or less; 4-year programs; graduate programs.
The assumptions for the 2025 to 2026 transition are taken directly from an observed comparison of actual rates results for two consecutive cohorts of students. The initial assignment of performance categories in 2025 is based on the 2022 PPD for students who completed programs in award years 2015 and 2016, whose earnings are measured in calendar years 2018 and 2019. The program transition assumptions for 2025 to 2026 are based on the outcomes for this cohort of students along with the earnings outcomes of students who completed programs in award years 2016 and 2017 (earnings measured in calendar years 2019 and 2020) and debt of students who completed programs in award years 2017 and 2018. A new set of D/E and EP metrics was computed for each program using this additional two-year cohort. Programs with fewer than 30 completers or with fewer than 30 completers with earnings records are determined to be passing, though can transition out of this category between years. The share of enrollment that transitions from each performance
The left panels of Tables 6.3 and 6.4 report the program transition assumptions from 2025 to 2026 for non-GE and GE programs, respectively. Program performance for non-GE is quite stable, with 95.8 percent of passing enrollment in two-year or less public and nonprofit expected to remain in passing programs. Persistence rates are even higher among 4-year and graduate programs. Among programs that fail the EP threshold, a relatively high share—more than one-third among 2-year and less programs—would be at passing programs in a subsequent year. The performance of GE programs is only slightly less persistent than that of non-GE programs. Note that GE programs would become ineligible for title IV, HEA funds the following year if they fail the same metric two years in a row. Among enrollment in less than two-year proprietary programs that fail the EP metric in 2025, 21.7 percent would pass in 2026 due to a combination of passing with data and no data.
The observed results also serve as the baseline for each subsequent transition of results (2026 to 2027, 2027 to 2028, etc.). The model applies additional assumptions from this baseline for each transition beginning with 2026 to 2027. Because the baseline assumptions are the actual observed results of programs based on a cohort of students that completed programs prior to the Department's GE rulemaking efforts, these transition assumptions do not account for changes that institutions have made to their programs in response to the Department's regulatory actions or would make after the final regulations are published.
As done with analysis of the 2014 rule, the Department assumes that institutions at risk of warning or sanction would take at least some steps to improve program performance by improving program quality, job placement, and lowering prices (leading to lower levels of debt), beginning with the 2026 to 2027 transition. There is evidence that institutions have responded to past GE measures by aiming to improve outcomes or redirecting enrollment from low-performing programs. Institutions subject to GE regulations have experienced slower enrollment and those that pass GE thresholds tend to have a lower likelihood of program or institution closure.
We assume the same rates of transition between performance categories for subsequent years as we do for the 2026 to 2027 transitions.
Since the budget impact and net costs, benefits, and transfers depend on assumptions about institutional performance after the rule is enacted, we incorporate alternative assumptions about these transitions in our sensitivity analysis.
The Department's model applies assumptions for the probability that a current or potential student would transfer or choose a different program, remain in or choose the same program, or withdraw from or not enroll in any postsecondary program in reaction to a program's performance. The model assumes that student response would be greater when a program becomes ineligible for title IV, HEA aid than when a program has a single year of inadequate performance, which initiates warnings and the acknowledgment requirement for GE programs, an acknowledgment requirement non-GE programs that fail D/E, and publicly reported performance information in the ED portal for both GE and non-GE programs. We also let the rates of transfer and withdrawal or non-enrollment differ with the number of alternative transfer options available to students enrolled (or planning to enroll) in a failing program. Specifically, building on the analysis presented in “Measuring Students' Alternative Options” above, we categorize individual programs into one of four categories:
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For each of the four categories above, we make assumptions for each type of student transition. Programs with passing metrics are assumed to retain all of their students.
Students that transfer are assumed to transfer to passing programs, and for the purposes of the budget simulation this includes programs with an insufficient n-size. We assume that rates of withdrawal (or non-enrollment) and transfer are higher for ineligible programs than those where only the warning/acknowledgment is required (GE programs with one year of a failing metric and non-GE programs with a failing D/E metric). We also assume that rates of transfer are weakly decreasing (and rates of dropout and remaining in program are both weakly increasing) as programs have fewer transfer options. These assumptions regarding student responses to program results are provided in Tables 6.5 and 6.6. Coupled with the scenarios presented in the “Sensitivity Analysis,” these assumptions are intended to provide a reasonable estimation of the range of impact that the regulations could have on the budget and overall social costs, benefits, and transfers.
The assumptions above are based on our best judgment and from extant research that we view as reasonable guides to the share of students likely to transfer to or choose another program when their program loses title IV, HEA eligibility. For instance, a 2021 GAO report found that about half of non-completing students who were at closed institutions transferred.
Data from the Beginning Postsecondary Students Longitudinal 2012/2017 study provides further information on students' general patterns through and across postsecondary institutions (not specific to responses to sanctions or closures). Of students that started at a public or private nonprofit 4-year institution, about 3 percent shifted to a for-profit institution within 5 years. Of those that began at a public or private nonprofit 2-year institution, about 8 percent shifted to a for-profit institution within 5 years.
The attestations for non-GE programs are scheduled to begin the year following the attestations for GE programs. Therefore, we delay applying transfer rates to non-GE programs in the first year of our budget analysis. Additionally, since undergraduate associate and bachelor's degree programs will not have an attestation requirement, we decrease the rate of transfer out by one quarter for these programs.
In Table 6.6, we provide detail of the assumptions of the destinations among students who transfer, separately for the following groups:
As we describe below, the assumptions for student responses are applied to the estimated enrollment in each aggregate group after factoring in enrollment growth.
Analyses in the Regulatory Impact Analysis of the 2014 Prior Rule assumed that student debt was unchanged if students transferred from failing to passing programs, but we believe this assumption to be too conservative given that one goal of the GE rule is to reduce the debt burden of students. Recall that Tables 4.29 and 4.30 above reported the percent difference in mean debt between failing GE and non-GE programs and their transfer options, by credential level and 2-digit CIP code. Across all subjects and credential levels, debt is 22 percent lower at alternative programs than at failing GE programs. At non-GE programs, there is no aggregate debt difference between failing programs and their alternatives, though this masks heterogeneity across credential levels. For graduate degree programs, movement to alternative programs from failing programs is associated with lower debt levels while movement from failing to passing Associate programs is associated with an increase in debt. Students that drop out of (or decline to enroll in) failing programs are assumed to acquire no educational debt.
To incorporate changes in average loan volume associated with student transitions, we compute average subsidized and unsubsidized direct loan, Grad PLUS, and Parent PLUS per enrollment separately for GE and non-GE programs by risk group and program performance group. These averages are then applied to shifts in enrollment to generate changes in the amount of aid.
The budget model estimates a yearly enrollment for AYs 2023 to 2034 and the distribution of those enrollments in programs characterized by D/E and EP performance, risk group, transfer category, and whether it is a GE program. This enrollment is projected for a baseline (in absence of the rule) and under the final rule. The net budget impact for each year is calculated by applying assumptions regarding the average amount of title IV, HEA program funds received by this distribution of enrollments across groups of programs. The difference in these two scenarios provides the Department's estimate of the impact of the final rule. We do not simulate the impact on the rule at the individual program level because doing so would necessitate very specific assumptions about which programs' students transfer to in response to the regulations. While we made such assumptions in the “Measuring Students' Alternatives” section above, we do not think it is analytically tractable to do for all years. Therefore, for the purposes of budget modeling, we perform analysis with aggregations of programs into groups defined by the following:
• Five student loan model risk groups: (1) 2-year (and below) for-profit; (2) 2-year (and below) public or nonprofit; (3) 4-year (any control) lower division, which is students in their first two years of a bachelor's program; (4) 4-year (any control) upper division, which is students beyond their first two years of a bachelor's program; (5) Graduate student (any control).
• Four transfer categories (high, medium, low, few alternatives) by which the student transfer rates are assumed to differ. This is a program-level characteristic that is assumed not to change.
• Two GE program categories (GE and eligible non-GE) by which the program transitions are assumed to differ.
• Six performance categories: Pass, Fail D/E, Fail EP, Fail Both, Pre-ineligible (a program's current enrollment is Title IV, HEA eligible, but next year's enrollment would not be), Ineligible (current enrollment is not Title IV, HEA eligible).
We refer to groups defined by these characteristics as “program aggregate” groups.
We first generate a projected baseline (in absence of the final rule) enrollment, Pell grant volume, and loan volume for each of the program aggregate groups from AYs 2023 to 2034. This baseline projection includes several steps. First, we compute average annual growth rate for each control by credential level from 2016 to 2022. These growth rates are presented in Table 6.2. We then apply these annual growth rates to the actual enrollment by program in 2022 to forecast enrollment in each program in 2023. This step is repeated for each year to get projected enrollment by program through 2034. We then compute average Pell, subsidized and unsubsidized direct loan, Grad PLUS, and Parent PLUS per enrollment by risk group, program performance group, and GE vs. non-GE for 2022. These averages are then adjusted according to the PB2024 loan volume and Pell grant baseline assumptions for the change in average loan by loan type and the change in average Pell grant. We then multiply the projected enrollment for each program by these average aid amounts to get projected total aid volume by program through 2034. Finally, we sum the enrollment and aid amounts across programs for each year to get enrollment and aid volume by program aggregate group, AYs 2023 to 2034, and shift the baseline Pell and loan volume from AYs 2023 to 2034 to FYs 2023 to 2033 for calculating budget cost estimates.
The most significant task is to generate projected enrollment, Pell volume, and loan volume for each of the program aggregate groups from 2023 to 2033 with the rule in place. We assume the first set of rates would be released in 2025 award year, so this is starting year for our projections. Projecting counterfactual enrollment and aid volumes involves several steps:
S
A net savings for the title IV, HEA programs comes through four mechanisms. The primary source is from students who drop out of postsecondary education in the year after their program receives a failing D/E or EP rate or becomes ineligible. The second is for the smaller number of students who remain enrolled at a program that becomes ineligible for title IV, HEA program funds. Third, we assume a budget impact on the title IV, HEA programs from students who transfer from programs that are failing to better-performing programs because the typical aid levels differ between programs according to risk group and program performance. For instance, subsidized Direct Loan borrowing is 24 percent less ($2044 vs. $1547) for students at GE programs failing the D/E metric in risk group 1 than in passing programs in the same risk group in 2026.
Finally, consistent with the requirements of the Credit Reform Act of 1990, budget cost estimates for the title IV, HEA programs also reflect the estimated net present value of all future non-administrative Federal costs associated with a cohort of loans. To determine the estimated budget impact from reduced loan volume, the difference in yearly loan volumes between the baseline and policy scenarios were calculated as a percent of baseline scenario volumes. This generated an adjustment factor that was applied to loan volumes in the Student Loan Model (SLM) for each cohort, loan type, and risk group combination in the President's Budget for FY2024 (PB2024). The reduced loan volumes are also expected to result in some decrease in future consolidations which is also captured in the model run. Since the implied subsidy rate for each loan type differs by risk group, enrollment shifts to risk groups with greater expected repayment would generate a net budget savings. Since our analysis does not incorporate differences in subsidy rates between programs in the same risk group, such as between programs passing and failing the D/E or EP metrics, these estimates potentially understate the increase in expected repayment resulting from the regulations.
The estimated enrollment in each aggregate program group is used to quantify the costs, benefits, and transfers resulting from the regulations for each year from 2023 to 2033. As described in the Discussion of Costs, Benefits, and Transfers, we quantify an earnings gain for students from attending higher financial value programs and the additional tax revenue that comes from that additional earnings. We quantify the cost associated with additional instructional expenses to educate students who shift to different types of programs and the transfer of instructional expenses as students shift programs. We also estimate the transfer of title IV, HEA program funds from programs that lose students to programs that gain students.
A major goal of greater transparency and accountability is to shift students towards higher financial value programs—those with greater earnings potential, lower debt, or both. To quantify the earnings gain associated with the final rule, we estimate the aggregate annual earnings of would-be program graduates under the baseline and policy scenarios and take the difference. For each risk group and program performance group, we compute the enrollment-weighted average of median program earnings. Average earnings for programs that have become ineligible is assumed to be the average of median earnings for programs in the three failing categories, weighted by the enrollment share in these categories. This captures, for instance, that the earnings of 2-year programs that become ineligible are quite lower than those that enroll graduate students. Since we have simulated enrollment, but not completion, annual program enrollment is converted into annual program completions by applying a ratio that differs for 2-year programs or less, bachelor's degree programs, or graduate
Students experience earnings gain each year they work following program completion. We compute the earnings benefit over the analysis window by giving 2026 completers 7 years of earnings gains, 2027 completers 6 years of earnings gains, and so on. The earnings gain of students that graduate during 2033 are only measured for one year. In reality program graduates would experience an earnings gain annually over their entire working career; our estimates likely understate the total likely earnings benefit of the policy.
However, our approach can overstate the earnings gain of students that shift programs if students experience a smaller earnings gain than the average difference between passing and failing programs within each GE-by-risk group in Table 6.7. To account for this, we apply an additional adjustment factor to the aggregate earnings difference to quantify how much of the earnings difference is accounted for by programs.
There is no consensus in the research literature on the magnitude of this parameter, with some studies finding very large impacts of specific programs or institutions on earnings
To select the value used for this adjustment factor, we compared the average earnings difference between passing and failing programs (conditional on credential level) before versus after controlling for the rich demographic characteristics described in “Student Demographic Analysis” (specifically, the share of students in each race/ethnic category, the share of students that are male, independent, first-generation, and a Pell grant recipient, and the average family income of students).
In the analysis of alternative options above, we showed the expected change in earnings for students that transfer from failing programs for each credential-level by 2-digit CIP code. Across all credential levels, students that shift from failing GE programs were expected to increase annual earnings by about 43 percent and those transferring from failing non-GE programs were expected to increase annual earnings by about 21 percent. These estimates are in line with those from Table 6.7 and used in the benefit impact.
The increased earnings of program graduates would generate additional Federal and State tax revenue and reductions in transfer program expenditure. To the earnings gain, we multiply an average marginal tax and transfer rate of 18.6 percent to estimate the fiscal benefit. This rate was computed in Hendren and Sprung-Keyser (2020) specifically to estimate the fiscal externality of earnings gains stemming from improvement in college quality, so it is appropriate for use in our setting.
To determine the additional cost of educating students that shift from one type of program to another or the cost savings from students who chose not to enroll, we estimate the aggregate annual instructional spending under the baseline and policy scenarios and take the difference. We used the instructional expense per FTE enrollee data from IPEDS to calculate the enrollment-weighted average institutional-level instructional expense per FTE student for programs by risk group and performance result, separately for GE programs and non-GE programs. Average spending for programs that have become ineligible is assumed to be the average of the three failing categories, weighted by the enrollment share in these categories. These estimates are reported in Table 6.8. We estimate aggregate spending by program group by multiplying enrollment from 2023 through 2033 by average spending.
Note that since we are using institution-level rather than program-level spending, this will not fully capture spending differences between undergraduate and graduate enrollment, between upper and lower division, and across field of study.
To calculate the transfer of instructional expenses from failing to passing programs, we multiply the average instructional expense per enrollee shown in Table 6.7 by the estimated number of annual student transfers for 2023 to 2033 from each risk group and failing category.
To calculate the amounts of student aid that could transfer with students each year, we multiply the estimated number of students receiving title IV, HEA program funds transferring from ineligible or failing GE and non-GE programs to passing programs in each risk category each year by the average Pell grant, Stafford subsidized loan, unsubsidized loan, PLUS loan, and GRAD PLUS loan per enrollment in the same categories.
To annualize the amount of benefits, costs, and title IV, HEA program fund transfers from 2023 to 2033, we calculate the net present value (NPV) of the yearly amounts using a discount rate of 3 percent and a discount rate of 7 percent and annualize it over 10 years.
These final regulations are estimated to have a net Federal budget impact of $−13.8 billion, consisting of $−7.4 billion in reduced Pell grants and $−6.4 billion for loan cohorts 2024 to 2033.
The final regulations are estimated to shift enrollment towards programs with lower debt-to-earnings or higher median earnings or both, and away from programs that fail either of the two performance metrics. The vast majority of students are assumed to resume their education at the same or another program in the event they are warned about poor program performance or if their program loses eligibility. The final regulations are also estimated to reduce overall enrollment, as some students decide to not enroll. Table 7.1 summarize the main enrollment results for non-GE programs. Enrollment in non-GE programs is expected to increase by about 0.6 percent relative to baseline over the budget period. There is a modest enrollment shift towards programs that pass both metrics, with a particularly large (proportionate) reduction in the share of enrollment in programs that fail D/E. By the end of the analysis window, 96.0 percent of enrollment is expected to be in passing programs.
Table 7.2 reports comparable estimates for GE programs. Note that for GE programs we estimate enrollment in two additional categories: Pre-Ineligible,
For non-GE programs, these shifts occur primarily across programs that have different performance in the same loan risk category, with a very modest shift from public and nonprofit two-year and less programs to lower-division 4-year programs. This is shown in Table 7.3. Shifts away from the public and nonprofit two-year sector within non-GE programs is partially offset from shifts into these programs from failing GE programs. Recall that in “Transfer Causes Net Enrollment Increase in Some Sectors” above we showed that the vast majority of community colleges would gain enrollment from the regulations.
Table 7.4—reports a similar breakdown for GE programs. Shifts to passing programs are accompanied by a shift away from proprietary two-year and below programs and towards public and nonprofit programs of similar length, along with a more modest shift towards lower-division 4-year programs.
As reported in Tables 7.5 and 7.6, we estimate that the regulations would result in a reduction of title IV, HEA aid between fiscal years 2025 and 2033.
Table 7.7 reports the annual net budget impact after accounting for estimated loan repayment. We estimate a net Federal budget impact of $−13.8 billion, consisting of $−7.4 billion in reduced Pell grants and $−6.4 billion for loan cohorts 2024 to 2033.
The Department's calculations of the net budget impacts represent our best estimate of the effect of the regulations on the Federal student aid programs. As noted in the NPRM published June, realized budget impacts will be heavily influenced by actual program performance, student response to program performance, student borrowing and repayment behavior, and changes in enrollment because of the regulations. For example, if students, including prospective students, react more strongly to the warnings, acknowledgment requirement, or potential ineligibility of programs than anticipated and, if many of these students leave postsecondary education, the impact on Pell grants and loans could increase. Similarly, if institutions react to the regulations by improving performance, the assumed enrollment and aid amounts could be overstated, though this would be very beneficial to
As required by OMB Circular A-4, we have prepared an accounting statement showing the classification of the benefits, costs, and transfers associated with the provisions of these regulations.
We estimate that by shifting enrollment to higher financial-value programs, the regulations would increase student's earnings, resulting in net after-tax gains to students and benefits for taxpayers in the form of additional tax revenue. Table 8.1 reports the estimated aggregate earnings gain for each cohort of completers, separately for GE and non-GE programs, and the cumulative (not discounted) earnings gain over the budget window. The regulation is estimated to generate $32.3 billion of additional earnings gains over the budget window, both from GE and non-GE programs. Using the approach described in “Methodology for Costs, Benefits, and Transfers,” we expect $26.3 billion to benefit students and $6.0 billion to benefit Federal and State governments and taxpayers.
The final rule could also alter aggregate instructional spending, by shifting enrollment to higher-cost institutions (an increase in spending) or by reducing aggregate enrollment (a decrease in spending). Table 8.2 reports estimated annual and cumulative changes in instructional spending, overall and separately for GE and non-GE programs. The net effect is an increase in aggregate cumulative instructional spending of $2.7 billion (not discounted), though this masks differences between non-GE programs (net increase in spending) and GE programs (net decrease in spending). Spending is reduced in the first year of the policy due to the decrease in enrollment, but then increases as more students transfer to more costly programs.
The rule would create transfers between students, the Federal Government, and among postsecondary institutions by shifting enrollment between programs, removing title IV, HEA eligibility for GE programs that fail a GE metric multiple times, and causing some students to choose non-enrollment instead of a low value program. Table 8.3 reports the number of enrolments that transfer programs, remain enrolled at ineligible programs, or decline to enroll in postsecondary education altogether. We estimate that almost 1.5 million enrollments would transfer from low financial value programs to better programs over the decade. A more modest number would remain enrolled at programs that are no longer eligible for title IV, HEA aid.
The resulting reductions in expenditures on title IV, HEA program funds from enrollment declines and continued enrollment at non-eligible institutions are classified as transfers from affected student loan borrowers and Pell grant recipients to the Federal Government. The combined reduction in title IV, HEA expenditures was presented in the Net Budget Impacts section above. Transfers also include title IV, HEA program funds that follow students as they shift from low-performing programs to higher-performing programs, which is presented in Table 8.4.
Transfers are neither costs nor benefits, but rather the reallocation of resources from one party to another. Table 8.5 provides our best estimate of the changes in annual monetized benefits, costs, and transfers as a result of these regulations. Our baseline estimate with a discount rate of 3 percent is that the regulation would generate $3.0 billion of annualized benefits against $0.4 billion of annualized costs and $1.3 billion of transfers to the Federal Government and $0.7 billion transfers from failing programs to passing programs. A discount rate of 7 percent results in $2.7 billion of benefits against $0.4 billion of annualized costs and $1.2 billion of transfers to the Federal Government and $0.7 billion transfers from failing programs to passing programs. Note that the accounting statement does not include benefits that are unquantified, such as benefits for students associated with lower default and better credit and benefits for institutions from improved information about their value.
We conducted the simulations of the rule while varying several key assumptions. Specifically, we provide estimates of the change in title IV, HEA volumes using varied assumptions about student transitions, student dropout, program performance, and the earnings gains associated with enrollment shifts. We believe these to be the main sources of uncertainty in our model.
Our primary analysis assumes rates of transfer and dropout for GE programs based on the research literature, but these quantities are uncertain. The alternative models adjust transfer and dropout rates for all transfer groups to the rates for high alternatives and few alternatives, respectively, as shown in Table 6.5. As reported in Tables 8.6 and 8.7, we estimate that the regulations
Our primary analysis assumes that both non-GE and GE programs improve performance after failing either the D/E or EP metric and that GE programs that pass both metrics still improve performance in response to the rule. We incorporate this by increasing the fail to pass program transition rate by 5 percentage points for each type of program failure after 2026 for GE and non-GE programs, by reducing the rate of repeated failure by 5 percentage points for GE and non-GE programs, and by increasing the rate of a repeated passing result by two and a half percentage points for GE programs. The alternative model will assume no program improvement in response to failing metrics.
As reported in Table 8.8, we estimate that the regulations would result in a reduction of title IV, HEA aid between fiscal years 2025 and 2033, regardless of if programs show improvement.
Our primary analysis assumes that the earnings change associated with shifts in enrollment is equal to the difference in average earnings between groups defined by loan risk group, program performance category, and whether the program is a GE program or not, multiplied by an adjustment factor equal to 0.75. This adjustment factor was derived from regression models where we compared the earnings difference between passing and failing programs conditional on credential level with and without a rich set of student characteristics controls. The estimated earnings gain associated with the rule scales directly with the value of this adjustment factor. A value of 1.0 (all of the difference in average earnings between groups would manifest as earnings gain) would increase the total annualized earnings gain for students from $2.4 billion up to $3.3 billion (3 percent discount rate).
A value of 0.40 reduces it to $1.3 billion; a value of 0.20 reduces it to $0.7 billion. The net fiscal externality increases or decreases proportionately. Each of these two scenarios would involve more of the raw earnings difference between passing and failing programs of the same credential level being explained by factors we are not able to measure (such as student academic preparation) than those that we are able to measure (such as race, gender, parent education, family income, and Pell receipt).
The final regulations advance distributional equity aims because the benefits of the regulation—better information, increased earnings, and more manageable debt repayment—would disproportionately be realized by students who otherwise would have low earnings. Students without access to good information about program performance tend to be more disadvantaged; improved transparency about program performance would be particularly valuable to these students. The final regulations improve program quality in the undergraduate certificate sector in particular, which, as documented above, disproportionately enrolls low-income students. Students already attending high-quality colleges, who tend to be more advantaged, would be relatively unaffected by the regulation. The major costs of the program involve additional paperwork and instructional spending, which are not incurred by students directly.
As part of the development of these regulations, the Department engaged in a negotiated rulemaking process in which we received comments and proposals from non-Federal negotiators representing numerous impacted constituencies. These included higher education institutions, consumer advocates, students, financial aid administrators, accrediting agencies, and States. Non-Federal negotiators submitted a variety of proposals relating to the issues under discussion. Information about these proposals is available on our negotiated rulemaking website at
In response to comments received and further internal consideration of these final regulations, the Department reviewed and considered various changes to the proposed regulations detailed in the NPRM. We described the changes made in response to public comments in the Analysis of Comments and Changes section of this preamble. We summarize below the major proposals that we considered but ultimately chose not to implement in these regulations. In developing these final regulations, we contemplated the budgetary impact, administrative burden, and anticipated effectiveness of the options we considered.
The Department considered using only the D/E rates metric, consistent with the 2014 Prior Rule. Tables 10.1 and 10.2 show the share of GE and non-GE programs and enrollment that would fail under only the D/E metric compared to our preferred rule that considers both D/E and EP metrics. A greater number of programs do not meet standards when considering both D/E and EP instead of D/E only, especially among certificate programs.
As discussed earlier at length, the D/E and EP measure distinct outcomes of gainful employment, and the EP adds an important protection for students and taxpayers. Even small amounts of debt can be unmanageable borrowers with low earnings, as shown in the RIA and in research.
The Department examined the consequences of two different ways of computing the earnings threshold. For the first, we computed the earnings threshold as the annual earnings among all respondents aged 25-34 in the ACS who have a high school diploma or GED, but no postsecondary education. The second is the median annual earnings among respondents aged 25-34 in the ACS who have a high school diploma or GED, but no postsecondary education, and who worked a full year prior to being surveyed. These measures, which are included in the 2022 PPD, straddle our preferred threshold, which includes all respondents in the labor force, but excludes those that are not in the labor force.
Tables 10.3 and 10.4 reports the share of programs and enrollment that would pass GE metrics under three different earnings threshold methods, with our approach in the middle column. The share of enrollment in undergraduate proprietary certificate programs that would fail ranges from about 30 percent under the lowest threshold up to 61 percent under the highest threshold. The failure rate for public undergraduate certificate programs is much lower than proprietary programs under all three scenarios, ranging from about 2 percent for the lowest threshold to 9 percent under the highest. The earnings threshold chosen would have a much smaller impact on failure rates for degree programs, which range from about 34 percent to 42 percent of enrollment for associate programs and essentially no impact for bachelor's degree or higher programs.
Tables 10.5 and 10.6 illustrate this for non-GE programs. As with GE programs, the earnings threshold chosen would have a relatively small impact on the share of Bachelors' or higher programs that fail but would impact failure rates for associate degree programs at public institutions, where the share of enrollment in failing programs ranges from about 2 percent at the lowest threshold to 23 percent at the highest. Our measure would result in 8 percent of enrollment in public failing programs.
The Department considered proposing to apply the reporting and acknowledgment requirements only to GE programs, and calculating D/E rates and the earnings premium measure only for these programs, similar to the 2014 Prior Rule. This approach, however, would fail to protect students, families, and taxpayers from investing in non-GE programs that deliver low value and poor debt and earnings outcomes. As higher education costs and student debt levels increase, students, families, institutions, and the public have a commensurately growing interest in ensuring their higher education investments are justified through positive career, debt, and earnings outcomes for graduates, regardless of the sector in which the institution operates or the credential level of the program. Furthermore, comprehensive performance information about all programs is necessary to guide students that would otherwise choose failing GE programs to better options.
While we believe the D/E rates and earnings premium measure are reasonable and useful metrics for assessing debt and earnings outcomes, we acknowledge that the minimum n-size of 30 completers would exempt small programs from these Financial Value Transparency measures. In our initial proposals during negotiated rulemaking, the Department considered calculating small program rates in such instances. These small program rates would have been calculated by combining all of an institution's small programs to produce the institution's small program D/E rates and earnings premium measure, which would be used for informational purposes only. In the case of GE programs, these small program rates would not have resulted in program eligibility consequences. Several negotiators questioned the usefulness of the small program rates because they would not provide information specific to any particular program, and because an institution's different small programs in various disciplines could lead to vastly different debt and earnings outcomes. In addition, several negotiators expressed concerns about the use of small program rates as a supplementary performance measure under proposed § 668.13(e). Upon consideration of these points, and in the interest of simplifying the final rule, the Department has opted to omit the small program rates.
The Department considered alternative ways of computing the D/E rates measure, including:
We concluded that the parameters used in the D/E rates and earnings premium calculations were most consistent with best practices identified in prior analysis and research.
The Department considered simplifying the D/E rates metric by only including a discretionary earnings rate. We believe that using only the discretionary earnings rate would be insufficient because there may be some instances in which a borrower's annual earnings would be sufficient to pass an 8 percent annual debt-to-earnings threshold, even if that borrower's discretionary earnings are insufficient to pass a 20 percent discretionary debt-to-earnings threshold. Utilizing both annual and discretionary D/E rates would provide a more complete picture of a program's true debt and earnings outcomes and would be more generous to institutions because a program that passes either the annual earnings rate or the discretionary earnings rate would pass the D/E rates metric.
A standard practice for evaluating the effectiveness of postsecondary programs is to compare the earnings of students after program completion to earnings before program enrollment, to control for any student-specific factors that determine labor market success that should not be attributed to program performance. While the Department introduced limited analysis of pre-program earnings from students' FAFSA data into the evidence above, it is not feasible to perform such comparisons on a wide and ongoing scale in the regulation. Pre-program earnings data is only available for students who have labor market experience prior to postsecondary enrollment, which excludes many students who proceed directly to postsecondary education from high school. Furthermore, earnings data from part-time work during high school is mostly uninformative for earnings potential after postsecondary education. Although some postsecondary programs enroll many students with informative pre-program earnings, many postsecondary programs would lack sufficient numbers of such students to reliably incorporate pre-program earnings from the FAFSA into the regulation.
This section considers the effects that the final regulations may have on small entities in the Educational Sector as required by the Regulatory Flexibility Act (RFA, 5 U.S.C.
The Secretary is establishing new regulations to address concerns about the rising cost of postsecondary education and training and increased student borrowing by establishing a final financial value transparency framework to encourage eligible postsecondary programs to produce acceptable debt and earnings outcomes, apprise current and prospective students of those outcomes, and provide better information about program price. In these final regulations, the Secretary also adopts a GE program accountability framework that establishes eligibility and certification requirements tied to the debt-to-earnings and median earnings (relative to high school graduates) of program graduates. The GE program accountability framework will address ongoing concerns about educational programs that are required by statute to provide training that prepares students for gainful employment in a recognized occupation, but instead are leaving students with unaffordable levels of loan debt in relation to their earnings or earnings lower than that of a typical high school graduate. These programs often lead to default or provide no earnings benefit beyond that provided by a high school education, failing to fulfill their intended goal of preparing students for gainful employment.
The regulations will provide a needed framework for oversight around title IV, HEA institutional eligibility for GE programs and increased transparency for all programs. The regulations will also clarify how the Department will determine whether a program is of reasonable length. The effect on small entities will vary by the extent that they currently participate in such programs or that they choose to do so going forward. Small entities could be vulnerable to program closure of poorly performing programs.
These final regulations amend the Student Assistance General Provisions regulations issued under the HEA in 34 CFR part 668. The changes to part 668 are authorized by 20 U.S.C. 1001-1003, 1070a, 1070g, 1085, 1087b, 1087d, 1087e, 1088, 1091, 1092, 1094, 1099c, 1099c-1, 1221e-3, and 3474.
The regulations are also designed to protect students and taxpayers from unreasonable risks. Inadequate consumer information could result in students enrolling in programs that will not help them benefit them financially. In addition, institutions may use taxpayer funds in ways that were not what Congress or the Department intended, resulting in greater risk to the taxpayers of waste, fraud, and abuse and to the institution of undeserved negative program review or audit findings that could result in liabilities. These regulations attempt to limit risks to students and taxpayers resulting by enhancing our oversight of GE programs and providing additional transparency for all programs.
The Small Business Administration (SBA) defines “small institution” using data on revenue, market dominance, tax filing status, governing body, and population. The majority of entities to which the Office of Postsecondary Education's (OPE) regulations apply are postsecondary institutions, however, which do not report such data to the Department. As a result, for purposes of these final regulations, the Department continues to define “small entities” by reference to enrollment, to allow meaningful comparison of regulatory impact across all types of higher education institutions. The enrollment standard for small less-than-two-year institutions (below associate degrees) is less than 750 full-time-equivalent (FTE) students and for small institutions of at least two but less-than-4-years and 4-year institutions, less than 1,000 FTE students.
Table 11.1 summarizes the number of institutions potentially affected by these final regulations. As seen in Table 11.2, the average total revenue at small institutions ranges from $3.0 million for proprietary institutions to $16.5 million at private institutions.
These final regulations require additional reporting and compliance by title IV, HEA participating postsecondary institutions, including small entities, and will have a significant impact on a substantial number of small entities. As described in a previous section, institutions are exempt from the reporting requirements if none of their groups of substantially similar programs have more than 30 completers in total during the four most recently completed award years. Furthermore, GE programs at small institutions could be at risk of losing the ability to distribute title IV, HEA funds under the GE program accountability framework if they fail either the debt-to-earnings (D/E) rate measure or earnings premium (EP) measure. Non-GE programs at small institutions, excluding undergraduate associate and bachelor's degree programs, that fail the D/E metric would be required to have students acknowledge having seen this information prior to entering into enrollment agreements.
Therefore, many small entities will be impacted by the reporting and compliance aspects of the rule, which we quantify below. As we describe in more detail below, the Department estimates that 1.4 percent of non-GE programs at small institutions would fail the D/E metric, therefore triggering the acknowledgment requirement. The Department also estimates that 12.8 percent of GE programs at small institutions would fail either the D/E or EP metric, therefore, being at risk of losing title IV, HEA eligibility. GE programs represent 46 percent of enrollment at small institutions.
The Department's analysis shows programs at small institutions are much more likely to have insufficient sample size to compute and report D/E and EP metrics, though the rate of failing to pass both metrics is higher for programs at such institutions.
Table 11.3 and 11.4 show the number and percentage of non-GE enrollees and non-GE programs at small institutions in each status relative to the performance standard. The share of non-GE programs that have sufficient data and fail the D/E metric is higher for programs at small institutions (1.4 percent) than it is for all institutions (0.8 percent, Table 4.5). Failing the D/E metric for non-GE programs initiates a requirement that the institution must have title IV, HEA students acknowledge having seen the information before an enrollment agreement can be signed. The share of title IV, HEA enrollment in such programs is also higher at small institutions (8.6 percent for small institutions vs. 2.1 percent for all institutions, Table 4.4).
Tables 11.5 and 11.6 report similar tabulations for GE programs at small institutions. GE programs include non-degree certificate programs at all institutions and all degree programs at proprietary institutions. GE programs at small institutions are more likely to have a failing D/E or EP metrics (12.8 percent of all GE programs at small institutions, compared to 5.4 percent for all institutions in Table 4.9) and have a greater share of enrollment in such programs (40.5 percent vs. 23.8 percent for all institutions in Table 4.8). GE programs that fail the same performance metric in two out of three consecutive years will become ineligible to administer Federal title IV, HEA student aid.
As noted in the Paperwork Reduction Act section, burden related to the final regulations will be assessed in a separate information collection process and that burden is expected to involve individuals more than institutions of any size.
The final rule involves four types of reporting and compliance requirements for institutions, including small entities. First, under § 668.43, institutions will be required to provide additional programmatic information to the Department and make this and additional information assembled by the Department available to current and prospective students by providing a link to a Department-administered program information website. Second, under § 668.407, the Department will require acknowledgments from current and prospective students if an eligible non-
Initial estimates of the reporting and compliance burden for these four items for small entities are provided in Table 11.7, though these are subject to revision as the content of the required reporting is refined.
As described in this preamble, much of the necessary information for GE programs would already have been reported to the Department under the 2014 Prior Rule, and as such we believe the added burden of this reporting relative to existing requirements would be reasonable. Furthermore, 88 percent of public and 47 percent of private nonprofit institutions operated at least one GE program and, therefore, have experience with similar data reporting for the subset of their students enrolled in certificate programs under the 2014 Prior Rule. Moreover, many institutions report more detailed information on the components of cost of attendance and other sources of financial aid in the Federal National Postsecondary Student Aid Survey (NPSAS) administered by the National Center for Education Statistics. Finally, the Department proposes flexibility for institutions to avoid reporting data on students who completed programs in the past for the first year of implementation, and instead to use data on more recent completer cohorts to estimate median debt levels. In part, we intend to ease the administrative burden of providing this data for programs that were not covered by the 2014 Prior Rule reporting requirements, especially for the small number of institutions that may not previously have had any programs subject to these requirements.
The Department recognizes that institutions may have different processes for record-keeping and administering financial aid, so the burden of the GE and financial transparency reporting could vary by institution. As noted previously, a high percentage of institutions have already reported data related to the 2014 Prior Rule or similar variables for other purposes. Many institutions can query systems or adapt existing reports to meet these requirements. On the other hand, some institutions may still have data entry processes that are very manual, and generating the information for their programs could involve many more hours and resources. Small entities may be less likely to have invested in systems and processes that allow easy data reporting because it is not needed for their operations. Institutions may fall in between these poles and be able to automate the reporting of some variables but need more effort for others.
We believe that, while the reporting relates to program or student-level information, the reporting process is likely to be handled at the institutional level. There would be a cost to establish the query or report and validate it upfront, but then the marginal increase in costs to process additional programs or students should not be too significant. The reporting process will involve personnel with different skills and responsibility levels. We estimated this using Bureau of Labor statistics median hourly wage rates for postsecondary administrators of $48.05.
The ability to set up reports or processes that can be rerun in future years, along with the fact that the first reporting cycle includes information from several prior years, should significantly decrease the expected burden after the first reporting cycle. We estimate that the hours associated with reviewing systems, developing or updating queries, and reviewing and validating the test queries or reports will be reduced by 35 percent after the first year. The institution would need to run and validate queries or reports to make sure no system changes have affected them and confirm there are no program changes in CIP code, credential level, preparation for licensure, accreditation, or other items, but we expect that would be less burdensome than initially establishing the reporting. Table 11.9 presents estimates of reporting burden for small entities for the initial year and subsequent years under § 668.408 on an overall and a per institution average basis.
The regulations are unlikely to conflict with or duplicate existing Federal regulations.
As described in section 10 of the Regulatory Impact Analysis above, “Alternatives Considered”, we evaluated several alternative provisions and approaches including using D/E rates only, alternative earnings thresholds, no reporting or acknowledgment requirements for non-GE programs, and several alternative ways of computing the performance metrics (smaller n-sizes and different interest rates or amortization periods). Most relevant to small entities was the alternative of using a lower n-size, which would result in larger effects on programs at small entities, both in terms of risk for loss of eligibility for GE programs and greater burden for providing warnings and/or acknowledgment. The alternative of not requiring reporting or acknowledgments in the case of failing metrics for non-GE programs would result in lower reporting burden for small institutions but was deemed to be insufficient to achieve the goal of creating greater transparency around program performance. However, for the final regulations the Department did remove the reporting obligation for programs that have fewer than thirty completers in the previous four award years, which does reduce the burden for institutions with very small programs.
The Department sought to limit the number of hours for occupationally related educational programs to the amount that States require to obtain licensure, where applicable. We believe that this change would particularly benefit students by keeping tuition costs, as well as related non-institutional expenses, lower.
As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA).
Under the PRA, the Department has or will at the required time submit a copy of these sections and an Information Collections Request to OMB for its review.
A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number.
We believe these rules will also protect taxpayer dollars by eliminating poor performing programs prior to the need for reactive actions like closed school discharges or borrower defense to repayment discharges. Further the public deserves access to more information and more data regarding the postsecondary institutions and programs that they are supporting through their tax dollars.
This information could include, but will not be limited to, as reasonably available, the primary occupations that the program prepares students to enter, along with links to occupational profiles on O*NET or its successor site; the program's or institution's completion rates and withdrawal rates for full-time and less-than-full-time students, as reported to or calculated by the Department; the length of the program in calendar time; the total number of individuals enrolled in the program during the most recently completed award year; the total cost of tuition and fees, and the total cost of books, supplies, and equipment, that a student would incur for completing the program within the length of the program; the percentage of the individuals enrolled in the program during the most recently completed award year who received a title IV, HEA loan, a private education loan, or both; and whether the program is programmatically accredited and the name of the accrediting agency.
The institution will be required to provide a prominent link and any other needed information to access the website on any web page containing academic, cost, financial aid, or admissions information about the program or institution. The Department could require the institution to modify a web page if the information about how to access the Department's website is not sufficiently prominent, readily accessible, clear, conspicuous, or direct.
In addition, the Department will require the institution to provide the relevant information to access the website to any prospective student or third party acting on behalf of the prospective student before the prospective student signs an enrollment agreement, completes registration, or makes a financial commitment to the institution.
We believe that this reporting activity will require an estimated 50 hours per institution. We estimate that it will take private nonprofit institutions 70,500 hours (1,410 × 50 = 70,500) to complete the required reporting activity. We estimate that it will take proprietary institutions 68,600 hours (1,372 × 50 = 68,600) to complete the required reporting activity. We estimate that it will take public institutions 86,800 hours (1,736 × 50 = 86,800) to complete the required reporting activity.
The total estimated increase in burden to OMB Control Number 1845-0022 for § 668.43 is 225,900 hours with a total rounded estimated cost of $10,854,495.
In the burden calculation for § 668.407 here, we account for burden for non-GE programs. We account for all burden related to GE programs, including where such burden comes from provisions that apply to all programs, as in 668.407, under our discussion of 668.605. We believe that most institutions will develop the notice directing impacted students to the Department's program information website and make it available electronically to current and prospective students. We believe that this action will require an estimated 1 hour per affected program. We estimate that it would take private institutions 670 hours (670 programs × 1 hour = 670) to develop and deliver the required notice based on the information provided by the Department. We estimate that it will take public institutions 109 hours (109 programs × 1 hour = 109) to develop and deliver the required notice based on the
The changes in § 668.407(a) will require institutions to direct prospective and students enrolled in programs that failed the D/E rates for the year in which the D/E rates were most recently calculated by the Department to the Department's program information website. We estimate that it will take the 88,000 students 10 minutes to read the notice and go to the program information website to acknowledge receiving the information for a total of hours (88,000 students × .17 hours = 14,960).
The total estimated increase in burden to OMB Control Number 1845-0174 for § 668.407 is 15,739 hours with a total rounded estimated cost of $370,441.
Based on projected data provided earlier in the RIA, the Department anticipates that approximately 4,518 institutions will be required to provide the data specified in § 668.408. We anticipate there will be initial estimated reporting year's burden of 5,078,259 hours total for all institutions. This estimate incorporates establishing required data routines, testing of reports and returned data, and ultimately submission of the data to the Department. It is anticipated that once these data routines and reporting mechanism are established, subsequent year estimated reporting will decrease to 1,459,603 hours total for all institutions.
In addition, warnings provided to students enrolled in GE programs will include a description of the academic and financial options available to continue their education in another program at the institution in the event that the program loses eligibility, including whether the students could transfer academic credit earned in the program to another program at the institution and which course credit would transfer; an indication of whether, in the event of a loss of eligibility, the institution would continue to provide instruction in the program to allow students to complete the program, and refund the tuition, fees, and other required charges paid to the institution for enrollment in the program; and an explanation of whether, in the event that the program loses eligibility, the students could transfer credits earned in the program to another institution through an established articulation agreement or teach-out.
The institution will be required to provide alternatives to an English-language warning for current and prospective students with limited English proficiency.
We account for all burden related to GE programs, including where such burden comes from provisions that apply to all programs, as in § 668.407, under our discussion of § 668.605. We believe that most institutions will develop the warning and make it available electronically to current and prospective students. We believe that this action will require an estimated 1 hour per affected program. We estimate that it will take private institutions 9 hours (9 programs × 1 hour = 9) to develop and deliver the required warning based on the information provided by the Department. We estimate that it will take proprietary institutions 71 hours (71 programs × 1 hour = 71) to develop and deliver the required warning based on the information provided by the Department. We estimate that it will take public institutions 2 hours (2 programs × 1 hour = 2) to develop and deliver the required warning based on the information provided by the Department.
The changes in § 668.605(d) will require institutions to provide alternatives to the English-language warning notices to enrolled and prospective students with limited English proficiency.
We estimate that it will take private institutions 72 hours (9 programs × 8 hours = 72) to develop and deliver the required alternate language the required warning based on the information provided by the Department. We estimate that it will take proprietary institutions 568 hours (71 programs × 8
The final changes in § 668.605(e) will require institutions to provide the warning notices to students enrolled in the GE programs with failing metrics. We estimate that it will take the 60,700 students 10 minutes to read the warning and go to the program information website to acknowledge receiving the information for a total of 10,319 hours (60,700 students × .17 hours = 10,319).
The changes in § 668.605(f) will require institutions to provide the warning notices to prospective students who express interest in the effected GE programs. We estimate that it will take the 69,805 prospective students 10 minutes to read the warning and go to the program information website to acknowledge receiving the information for a total of 11,867 hours (69,805 students × .17 hours = 11,867).
The total estimated increase in burden to OMB Control Number 1845-0173 for § 668.605 is 22,924 hours with a total rounded estimated cost of $529,322.
Consistent with the discussions above, the following chart describes the sections of the final regulations involving information collections, the information being collected and the collections that the Department will submit to OMB for approval and public comment under the PRA, and the estimated costs associated with the information collections. The monetized net cost of the increased burden for institutions, lenders, guaranty agencies and students, using wage data developed using Bureau of Labor Statistics (BLS) data. For individuals, we have used the median hourly wage for all occupations, which is $22.26 per hour according to BLS (
The total burden hours and change in burden hours associated with each OMB Control number affected by the final regulations follows: 1845-0022, 1845-0173, 1845-0174.
If you want to comment on the final information collection requirements, please send your comments to the Office of Information and Regulatory Affairs in OMB, Attention: Desk Officer for the U.S. Department of Education. Send these comments by email to
We have prepared the Information Collection Request (ICR) for these collections. You may review the ICR which is available at
This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.
This document provides early notification of our specific plans and actions for this program.
Executive Order 13132 requires us to provide meaningful and timely input by State and local elected officials in the development of regulatory policies that have federalism implications. “Federalism implications” means 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. The final regulations do not have federalism implications.
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Colleges and universities, Foreign relations, Grant programs—education, Loan programs-education, Reporting and recordkeeping requirements, Selective Service System, Student aid, Vocational education.
Administrative practice and procedure, Aliens, Colleges and universities, Consumer protection, Grant programs-education, Loan programs—education, Reporting and recordkeeping requirements, Selective Service System, Student aid, Vocational education.
For the reasons discussed in the preamble, the Secretary amends parts 600 and 668 of title 34 of the Code of Federal Regulations as follows:
20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, and 1099c, unless otherwise noted.
(c) * * *
(3) For a gainful employment program under 34 CFR part 668, subpart S, subject to any restrictions in 34 CFR 668.603 on establishing or reestablishing the eligibility of the program, an eligible institution must update its application under § 600.21.
The revisions and addition read as follows:
(a)
(11) * * *
(v) Changing the program's name, classification of instructional program (CIP) code, or credential level; or
(vi) Updating the certification pursuant to 34 CFR 668.604(b).
20 U.S.C. 1001-1003, 1070g, 1085, 1088, 1091, 1092, 1094, 1099c, 1099c-1, 1221e-3, and 1231a, unless otherwise noted.
Section 668.14 also issued under 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099a-3, 1099c, and 1141.
Section 668.41 also issued under 20 U.S.C. 1092, 1094, 1099c.
Section 668.91 also issued under 20 U.S.C. 1082, 1094.
Section 668.171 also issued under 20 U.S.C. 1094 and 1099c and 5 U.S.C. 404.
Section 668.172 also issued under 20 U.S.C. 1094 and 1099c and 5 U.S.C. 404.
Section 668.175 also issued under 20 U.S.C. 1094 and 1099c.
(b) * * *
(1) For the 2-year cohort period—
(i) The third and fourth award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated, pursuant to §§ 668.403 and 668.404; or
(ii) For a qualifying graduate program, the sixth and seventh award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated.
(2) For the four-year cohort period—
(i) The third, fourth, fifth, and sixth award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated, pursuant to §§ 668.403 and 668.404; or
(ii) For a qualifying graduate program, the sixth, seventh, eighth, and ninth award years prior to the year for which the most recent earnings data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated.
(1) In the State in which the institution is located; or
(2) Nationally, if fewer than 50 percent of the students in the program are from the State where the institution is located, or if the institution is a foreign institution.
(i) Whose students must complete required postgraduation training programs to obtain licensure in one of the following fields: medicine, osteopathy, dentistry, clinical psychology, marriage and family counseling, clinical social work, and clinical counseling; and
(ii) For which the institution attests, in the manner established by the Secretary, that—
(A) If necessary for licensure, the program is accredited by an accrediting agency that meets State requirements; and
(B) At least half of the program's graduates obtain licensure in a State where the postgraduation training requirements apply.
(2)(i) After the initial period, the graduate programs that are on the list described in paragraph (2)(ii) of this definition and for which the Secretary has received an attestation that meets the requirements in paragraph (1)(ii) of this definition.
(ii) For the first award year following the initial period, and every three years thereafter, using publicly available information and information received in response to a request for information, the Secretary publishes in the
(A) That lead to a graduate (master's, first-professional, or doctoral) degree;
(B) For which the Department determines that graduates must complete a required postgraduate training program that takes, on average, three or more years to complete; and
(C) For which, based on College Scorecard data, the Secretary determines that a majority of programs with the same credential level and CIP code have outlier earnings growth. An individual program has outlier earnings growth if the percent change in median earnings between its earnings measured one or three years post-completion and its earnings measured either five or ten years post-completion is more than two standard deviations above the average earnings growth for other programs with the same credential level.
(3) For the purpose of this definition, a “required postgraduation training program” is a supervised training program that—
(i) Requires the student to hold a degree in one of the listed fields in paragraph (1)(i) of this definition or one of the fields identified in the list described in paragraph (2)(ii) of this definition; and
(ii) Must be completed before the student may be licensed by a State and board certified for professional practice or service.
The revisions and addition read as follows:
(d)(1)
(i) The website must include, but is not limited to, the following items, to the extent reasonably available:
(A) The published length of the program in calendar time (
(B) The total number of individuals enrolled in the program during the most recently completed award year.
(C) The total cost of tuition and fees, and the total cost of books, supplies, and equipment, that a student would incur for completing the program within the published length of the program.
(D) Of the individuals enrolled in the program during the most recently completed award year, the percentage who received a Direct Loan Program loan, a private loan, or both for enrollment in the program.
(E) As calculated by the Secretary, the median loan debt of students who completed the program during the most recently completed award year or for all students who completed or withdrew from the program during that award year.
(F) As provided by the Secretary, the median earnings of students who completed the program or of all students who completed or withdrew from the program, during a period determined by the Secretary.
(G) Whether the program is programmatically accredited and the name of the accrediting agency, as reported to the Secretary.
(H) As calculated by the Secretary, the program's debt-to-earnings rates.
(I) As calculated by the Secretary, the program's earnings premium measure.
(A) The primary occupations (by name, SOC code, or both) that the program prepares students to enter, along with links to occupational profiles on O*NET (
(B) As reported to or calculated by the Secretary, the program or institution's completion rates and withdrawal rates for full-time and less-than-full-time students.
(C) As calculated by the Secretary, the medians of the total cost of tuition and fees, and the total cost of books, supplies, and equipment, and the total net cost of attendance paid by students completing the program.
(D) As calculated by the Secretary, the loan repayment rate for students or graduates who entered repayment on Direct Loan Program loans during a period determined by the Secretary.
(E) Whether students who graduate from a program are required to complete postgraduation training program to obtain licensure before eligible for independent practice.
(2)
(3)
(4)
The addition reads as follows:
(a) * * *
(3) * * *
(vi) In a termination action against a GE program based upon the program's failure to meet the requirements in § 668.403 or § 668.404, the hearing official must terminate the program's eligibility unless the hearing official concludes that the Secretary erred in the applicable calculation.
(a)
(1) An institution reports information about the program to the Secretary; and
(2) Except as provided in paragraph (b)(1) of this section, the Secretary assesses the program's debt and earnings outcomes.
(b)
(2) For each award year that the Secretary calculates D/E rates or the earnings premium measure under § 668.402, this subpart does not apply to an institution if, over the most recently completed four award years, it offered no groups of substantially similar programs, defined as all programs in the same four-digit CIP code at an institution, with 30 or more completers.
(a)
(b)
(c)
(i) Its discretionary debt-to-earnings rate is less than or equal to 20 percent;
(ii) Its annual debt-to-earnings rate is less than or equal to 8 percent; or
(iii) The denominator (median annual or discretionary earnings) of either rate is zero and the numerator (median debt payments) is zero.
(2) A program fails the D/E rates if—
(i) Its discretionary debt-to-earnings rate is greater than 20 percent or the income for the denominator of the rate (median discretionary earnings) is negative or zero and the numerator (median debt payments) is positive; and
(ii) Its annual debt-to-earnings rate is greater than 8 percent or the denominator of the rate (median annual earnings) is zero and the numerator (median debt payments) is positive.
(d)
(e)
(2) A program fails the earnings premium measure if the median annual earnings of the students who completed the program are equal to or less than the earnings threshold.
(a)
(1) Discretionary debt-to-earnings rate = annual loan payment/(the median annual earnings—(1.5 x Poverty Guideline)). For the purposes of this paragraph (a)(1), the Secretary applies the Poverty Guideline for the most recent calendar year for which annual
(2) Annual debt-to-earnings rate = annual loan payment/the median annual earnings.
(b)
(1)(i) Determining the median loan debt of the students who completed the program during the cohort period, based on the lesser of the loan debt incurred by each student as determined under paragraph (d) of this section or the total amount for tuition and fees and books, equipment, and supplies for each student, less the amount of institutional grant or scholarship funds provided to that student;
(ii) Removing, if applicable, the appropriate number of largest loan debts as described in § 668.405(d)(2); and
(iii) Calculating the median of the remaining amounts; and
(2) Amortizing the median loan debt—
(i)(A) Over a 10-year repayment period for a program that leads to an undergraduate certificate, a post-baccalaureate certificate, an associate degree, or a graduate certificate;
(B) Over a 15-year repayment period for a program that leads to a bachelor's degree or a master's degree; or
(C) Over a 20-year repayment period for any other program; and
(ii) Using an annual interest rate that is the average of the annual statutory interest rates on Federal Direct Unsubsidized Loans that were in effect during—
(A) The three consecutive award years, ending in the final year of the cohort period, for undergraduate certificate programs, post-baccalaureate certificate programs, and associate degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to undergraduate students;
(B) The three consecutive award years, ending in the final year of the cohort period, for graduate certificate programs and master's degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to graduate students;
(C) The six consecutive award years, ending in the final year of the cohort period, for bachelor's degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to undergraduate students; and
(D) The six consecutive award years, ending in the final year of the cohort period, for doctoral programs and first professional degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to graduate students.
(c)
(2) The Secretary uses the median annual earnings to calculate the D/E rates.
(d)
(i) The amount of Direct Loans that the student borrowed (total amount disbursed less any cancellations or adjustments except for those related to false certification, borrower defense discharges, or categorical debt relief initiated under the Secretary's statutory authority) for enrollment in the program, excluding Direct PLUS Loans made to parents of dependent students and Direct Unsubsidized Loans that were converted from TEACH Grants;
(ii) Any private education loans as defined in 34 CFR 601.2, including private education loans made by the institution, that the student borrowed for enrollment in the program and that are required to be reported by the institution under § 668.408; and
(iii) The amount outstanding, as of the date the student completes the program, on any other credit (including any unpaid charges) extended by or on behalf of the institution for enrollment in any program attended at the institution that the student is obligated to repay after completing the program, including extensions of credit described in paragraphs (1) and (2) of the definition of, and excluded from, the term “private education loan” in 34 CFR 601.2;
(2) The Secretary attributes all the loan debt incurred by the student for enrollment in any—
(i) Undergraduate program at the institution to the highest credentialed undergraduate program subsequently completed by the student at the institution as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section; and
(ii) Graduate program at the institution to the highest credentialed graduate program subsequently completed by the student at the institution as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section; and
(3) The Secretary excludes any loan debt incurred by the student for enrollment in any program at any other institution. However, the Secretary may include loan debt incurred by the student for enrollment in programs at other institutions if the institution and the other institutions are under common ownership or control, as determined by the Secretary in accordance with 34 CFR 600.31.
(e)
(1) One or more of the student's Direct Loan Program loans are under consideration by the Secretary, or have been approved, for a discharge on the basis of the student's total and permanent disability, under 34 CFR 674.61, 682.402, or 685.212;
(2) The student was enrolled full time in any other eligible program at the institution or at another institution during the calendar year for which the Secretary obtains earnings information under paragraph (c) of this section;
(3) For undergraduate programs, the student completed a higher credentialed undergraduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section;
(4) For graduate programs, the student completed a higher credentialed graduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section;
(5) The student is enrolled in an approved prison education program;
(6) The student is enrolled in a comprehensive transition and postsecondary program; or
(7) The student died.
(f)
(1) After applying the exclusions in paragraph (e) of this section, fewer than 30 students completed the program during the two-year or four-year cohort period; or
(2) The Federal agency with earnings data does not provide the median earnings for the program as provided under paragraph (c) of this section.
(a)
(b)
(2) The Secretary uses the median annual earnings of students with a high school diploma or GED using data from the Census Bureau to calculate the earnings threshold described in § 668.2.
(3) The Secretary determines the earnings thresholds and publishes the thresholds annually through a notice in the
(c)
(1) One or more of the student's Direct Loan Program loans are under consideration by the Secretary, or have been approved, for a discharge on the basis of the student's total and permanent disability, under 34 CFR 674.61, 682.402, or 685.212;
(2) The student was enrolled full-time in any other eligible program at the institution or at another institution during the calendar year for which the Secretary obtains earnings information under paragraph (b)(1) of this section;
(3) For undergraduate programs, the student completed a higher credentialed undergraduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the earnings premium measure under this section;
(4) For graduate programs, the student completed a higher credentialed graduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the earnings premium measure under this section;
(5) The student is enrolled in an approved prison education program;
(6) The student is enrolled in a comprehensive transition and postsecondary program; or
(7) The student died.
(d)
(1) After applying the exclusions in paragraph (c) of this section, fewer than 30 students completed the program during the two-year or four-year cohort period; or
(2) The Federal agency with earnings data does not provide the median earnings for the program as provided under paragraph (b) of this section.
(a)
(b)
(1) Compile a list of students who completed each program during the cohort period. The Secretary—
(i) Removes from those lists students who are excluded under § 668.403(e) or § 668.404(c);
(ii) Provides the list to institutions; and
(iii) Allows the institution to correct the information reported by the institution on which the list was based, no later than 60 days after the date the Secretary provides the list to the institution;
(2) Obtain from a Federal agency with earnings data the median annual earnings of the students on each list, as provided in paragraph (c) of this section; and
(3) Calculate the D/E rates and the earnings premium measure and provide them to the institution.
(c)
(1) The median annual earnings of the students on the list whom the Federal agency with earnings data has matched to earnings data, in aggregate and not in individual form; and
(2) The number, but not the identities, of students on the list that the Federal agency with earnings data could not match.
(d)
(2) If the Federal agency with earnings data reports that it was unable to match one or more of the students on the final list, the Secretary does not include in the calculation of the median loan debt for D/E rates the same number of students with the highest loan debts as the number of students whose earnings the Federal agency with earnings data did not match. For example, if the Federal agency with earnings data is unable to match three students out of 100 students, the Secretary orders by amount the debts of the 100 listed students and excludes from the D/E rates calculation the three largest loan debts.
(a) For each award year for which the Secretary calculates D/E rates and the earnings premium measure for a program, the Secretary issues a notice of determination.
(b) The notice of determination informs the institution of the following:
(1) The D/E rates for each program as determined under § 668.403.
(2) The earnings premium measure for each program as determined under § 668.404.
(3) The determination by the Secretary of whether each program is passing or failing, as described in § 668.402, and the consequences of that determination.
(4) Whether the student acknowledgment is required under § 668.407.
(5) For GE programs, whether the institution is required to provide the student warning under § 668.605.
(6) For GE programs, whether the program could become ineligible under subpart S of this part based on its final D/E rates or earnings premium measure for the next award year for which D/E rates or the earnings premium measure are calculated for the program.
(a) Beginning on July 1, 2026, if an eligible program, other than an undergraduate degree program, has failing D/E rates, the Secretary notifies the institution under § 668.406(b)(4) that student acknowledgments are required for such program in the manner specified in this section.
(b)(1) If student acknowledgements are required, prospective students must acknowledge that they have viewed the information provided through the program information website established and maintained by the Secretary described in § 668.43(d).
(2) The Department will administer and collect the acknowledgment from
(3) Prospective students must provide such acknowledgments until:
(i) The Secretary notifies the institution pursuant to § 668.406 that the program has passing D/E rates; or
(ii) Three years after the institution was last notified that the program had failing D/E rates, whichever is earlier.
(c)(1) A prospective student must provide the acknowledgment before the institution enters into an agreement to enroll the student.
(2) The Secretary monitors the institution's compliance with the requirements in paragraph (c)(1) of this section through audits, program reviews, or other investigations.
(d) The acknowledgment required in paragraph (c)(1) of this section does not mitigate the institution's responsibility to provide accurate information to students concerning program status, nor will it be considered as dispositive evidence against a student's claim if applying for a loan discharge.
(a)
(1) For each GE program and eligible non-GE program, for its most recently completed award year—
(i) The name, CIP code, credential level, and length of the program;
(ii) Whether the program is programmatically accredited and, if so, the name of the accrediting agency;
(iii) Whether the program meets licensure requirements or prepares students to sit for a licensure examination in a particular occupation for each State in the institution's metropolitan statistical area;
(iv) The total number of students enrolled in the program during the most recently completed award year, including both recipients and non-recipients of title IV, HEA funds; and
(v) Whether the program is a qualifying graduate program whose students are required to complete postgraduate training programs, as described in the definition under § 668.2;
(2) For each student—
(i) Information needed to identify the student and the institution;
(ii) The date the student initially enrolled in the program;
(iii) The student's attendance dates and attendance status (
(iv) The student's enrollment status (
(v) The student's total annual cost of attendance (COA);
(vi) The total tuition and fees assessed to the student for the award year;
(vii) The student's residency tuition status by State or district;
(viii) The student's total annual allowance for books, supplies, and equipment from their COA under HEA section 472;
(ix) The student's total annual allowance for housing and food from their COA under HEA section 472;
(x) The amount of institutional grants and scholarships disbursed to the student;
(xi) The amount of other State, Tribal, or private grants disbursed to the student; and
(xii) The amount of any private education loans disbursed to the student for enrollment in the program that the institution is, or should reasonably be, aware of, including private education loans made by the institution;
(3) If the student completed or withdrew from the program during the award year—
(i) The date the student completed or withdrew from the program;
(ii) The total amount the student received from private education loans, as described in § 668.403(d)(1)(ii), for enrollment in the program that the institution is, or should reasonably be, aware of;
(iii) The total amount of institutional debt, as described in § 668.403(d)(1)(iii), the student owes any party after completing or withdrawing from the program;
(iv) The total amount of tuition and fees assessed the student for the student's entire enrollment in the program;
(v) The total amount of the allowances for books, supplies, and equipment included in the student's title IV, HEA COA for each award year in which the student was enrolled in the program, or a higher amount if assessed the student by the institution for such expenses; and
(vi) The total amount of institutional grants and scholarships provided for the student's entire enrollment in the program; and
(4) As described in a notice published by the Secretary in the
(b)
(i) For programs other than qualifying graduate programs, July 31, following July 1, 2024, for the second through seventh award years prior to July 1, 2024;
(ii) For qualifying graduate programs, July 31, following July 1, 2024, for the second through eighth award years prior to July 1, 2024; and
(iii) For subsequent award years, October 1, following the end of the award year, unless the Secretary establishes different dates in a notice published in the
(2) For any award year, if an institution fails to provide all or some of the information required under paragraph (a) of this section, the institution must provide to the Secretary an explanation, acceptable to the Secretary, of why the institution failed to comply with any of the reporting requirements.
(c)
(i) For the time periods described in paragraphs (b)(1)(i) and (ii) of this section; or
(ii) For only the two most recently completed award years.
(2) If an institution provides transitional reporting under paragraph (c)(1)(ii) of this section, the Department will calculate transitional D/E rates and earnings premium measures using the median debt for the period reported and the earnings for six years.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of this part and subpart, and the application of this subpart's provisions to any other person, act, or practice, will not be affected thereby.
(a)
(b)
(2) For each award year that the Secretary calculates D/E rates or the earnings premium measure under § 668.402, this subpart does not apply to an institution if, over the most recently completed four award years, it offered no groups of substantially similar programs, defined as all programs in the same four-digit CIP code at an institution, with 30 or more completers in total.
(a) A GE program provides training that prepares students for gainful employment in a recognized occupation if the program—
(1) Satisfies the applicable certification requirements in § 668.604;
(2) Is not a failing program under the D/E rates measure in § 668.402 in two out of any three consecutive award years for which the program's D/E rates are calculated; and
(3) Is not a failing program under the earnings premium measure in § 668.402 in two out of any three consecutive award years for which the program's earnings premium measure is calculated.
(b) If the Secretary does not calculate or issue D/E rates for a program for an award year, the program receives no result under the D/E rates for that award year and remains in the same status under the D/E rates as the previous award year.
(c) In determining a program's eligibility, the Secretary disregards any D/E rates that were calculated more than five calculation years prior.
(d) If the Secretary does not calculate or issue earnings premium measures for a program for an award year, the program receives no result under the earnings premium measure for that award year and remains in the same status under the earnings premium measure as the previous award year.
(e) In determining a program's eligibility, the Secretary disregards any earnings premium that was calculated more than five years prior.
(a)
(1) The issuance of a new Eligibility and Certification Approval Report that does not include that program;
(2) The completion of a termination action of program eligibility, if an action is initiated under subpart G of this part; or
(3) A revocation of program eligibility if the institution is provisionally certified.
(b)
(c)
(2)
(3)
(a)
(2) If an institution makes the certification in its program participation agreement pursuant to paragraph (b) of this section between July 1 and December 31, 2024, it is not required to provide the transitional certification under this paragraph (a).
(b)
As a condition of its continued participation in the title IV, HEA programs, an institution must certify in its program participation agreement with the Secretary under § 668.14 that each of its currently eligible GE programs included on its Eligibility and Certification Approval Report meets the requirements of paragraph (d) of this section. As provided under 34 CFR 600.21(a)(11)(vi), an institution must update the certification within 10 days if there are any changes in the approvals for a program, or other changes for a program that render an existing certification no longer accurate.
(c)
(2) An institution may not update its list of eligible programs to include a GE program, or a GE program that is substantially similar to a failing program that the institution voluntarily discontinued or became ineligible as described in § 668.603(c), that was
(d)
(a)
(b)
(c)
(1) A warning, as specified by the Secretary in a notice published in the
(i) The program has not passed standards established by the U.S. Department of Education based on the amounts students borrow for enrollment in the program and their reported earnings, as applicable; and
(ii) The program could lose access to Federal grants and loans based on the next calculated program metrics;
(2) The relevant information to access the program information website maintained by the Secretary described in § 668.43(d);
(3) A statement that the student must acknowledge having viewed the warning through the program information website before the institution may disburse any title IV, HEA funds to the student;
(4) A description of the academic and financial options available to students to continue their education in another program at the institution, including whether the students could transfer credits earned in the program to another program at the institution and which course credits would transfer, in the event that the program loses eligibility for title IV, HEA program funds;
(5) An indication of whether, in the event that the program loses eligibility for title IV, HEA program funds, the institution will—
(i) Continue to provide instruction in the program to allow students to complete the program; and
(ii) Refund the tuition, fees, and other required charges paid to the institution by, or on behalf of, students for enrollment in the program; and
(6) An explanation of whether, if the program loses eligibility for title IV, HEA program funds, the students could transfer credits earned in the program to another institution in accordance with an established articulation agreement or teach-out plan or agreement.
(d)
(e)
(f)
(i) Hand-delivering the warning as a separate document to the prospective student or third party, individually or as part of a group presentation;
(ii) Sending the warning to the primary email address used by the institution for communicating with the prospective student or third party about the program, provided that the warning is the only substantive content in the email and that the warning is sent by a different method of delivery if the institution receives a response that the email could not be delivered; or
(iii) Providing the warning orally to the student or third party if the contact is by telephone.
(2) An institution may not enroll, register, or enter into a financial commitment with the prospective student with respect to the program earlier than three business days after the institution delivers the warning as described in this paragraph (f).
(g)
(h)
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of this part and subpart, and the application of this subpart's provisions to any other person, act, or practice, will not be affected thereby.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of proposed rulemaking and announcement of public meeting.
The Energy Policy and Conservation Act, as amended (“EPCA”), prescribes energy conservation standards for various consumer equipment and certain commercial and industrial equipment, including commercial refrigerators, freezers, and refrigerator-freezers (“commercial refrigeration equipment” or “CRE”). EPCA also requires the U.S. Department of Energy (“DOE” “the Department”) to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking (“NOPR”), DOE proposes new and amended energy conservation standards for CRE, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results.
Comments regarding the likely competitive impact of the proposed standard should be sent to the Department of Justice contact listed in the
The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 6E-069, 1000 Independence Avenue SW, Washington, DC 20585. See section VII of this document, “Public Participation,” for further details, including procedures for attending the in-person meeting, webinar registration information, participant instructions, and information about the capabilities available to webinar participants.
Interested persons are encouraged to submit comments using the Federal Rulemaking Portal at
(1)
(2)
(3)
No telefacsimiles (“faxes”) will be accepted. For detailed instructions on submitting comments and additional information on this process, see section VII of this document.
The docket web page can be found at
EPCA requires the Attorney General to provide DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standards. Interested persons may contact the Division at
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-9870. Email:
Ms. Kristin Koernig, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-3593. Email:
The Energy Policy and Conservation Act, Public Law 94-163, as amended (“EPCA”),
Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)). EPCA also provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a notice of proposed rulemaking including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
In accordance with these and other statutory provisions discussed in this document, DOE analyzed the benefits and burdens of six trial standard levels (“TSLs”) for CRE. The TSLs and their associated benefits and burdens are discussed in detail in sections V.A through V.C of this document. As discussed in section V.C, DOE has tentatively determined that TSL 5 represents the maximum improvement in energy efficiency that is technologically feasible and economically justified and to establish new energy conservation standards for covered equipment not yet subject to energy conservation standards. The proposed standards, which are expressed in maximum daily energy consumption (“MDEC”), are shown in table I.1. These proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is (1) 3 years after the date on which the final new and amended standards are published or (2) if the Secretary determines, by rule, that 3 years is inadequate, not later than 5 years after the date on which the final
DOE notes that the U.S. Environmental Protection Agency (“EPA”) proposed refrigerant restrictions pursuant to the American Innovation and Manufacturing Act (“AIM Act”)
DOE requests comments on its proposal to require that the proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is 3 years after the date on which the final new and amended standards are published. More generally, DOE requests comment on whether it would be beneficial to CRE manufacturers to align the compliance date of any DOE amended or established standards as closely as possible with the refrigerant prohibition dates proposed by the December 2022 EPA NOPR.
Table I.3 presents DOE's evaluation of the economic impacts of the proposed standards—represented by TSL 5—on consumers of CRE, as measured by the average life-cycle cost (“LCC”) savings and the simple payback period (“PBP”).
DOE's analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document.
The industry net present value (“INPV”) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023-2057). Using a real discount rate of 10.0 percent, DOE estimates that the INPV for manufacturers of CRE in the case without new and amended standards is $3,286.4 million. Under the proposed standards, the change in INPV is estimated to range from −4.8 percent to −0.9 percent, which is approximately −$159.3 million to −$30.9 million. In order to bring equipment into compliance with new and amended standards, it is estimated that the industry would incur total conversion costs of $226.4 million.
DOE's analysis of the impacts of the proposed standards on manufacturers is described in section IV.J of this document. The analytic results of the manufacturer impact analysis (“MIA”) are presented in section V.B.2 of this document.
DOE's analyses indicate that the proposed energy conservation standards for CRE would save a significant amount of energy. Relative to the case without new and amended standards, the lifetime energy savings for CRE purchased in the 30-year period that begins in the anticipated year of compliance with the new and amended standards (2028-2057) amount to 3.11 quadrillion British thermal units (“Btu”), or quads.
The cumulative net present value (“NPV”) of total consumer benefits of the proposed standards for CRE ranges from $2.4 billion (at a 7-percent discount rate) to $7.1 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased equipment costs for CRE purchased in 2028-2057.
In addition, the proposed standards for CRE are projected to yield significant environmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings) of 55.8 million metric tons (“Mt”)
DOE estimates the value of climate benefits from a reduction in greenhouse gases (“GHG”) using four different estimates of the social cost of CO
DOE estimated the monetary health benefits of SO
Table I.4 summarizes the monetized benefits and costs expected to result from the proposed standards for CRE. There are other important unquantified effects, including certain unquantified climate benefits, unquantified public health benefits from the reduction of toxic air pollutants and other emissions, unquantified energy security benefits, and distributional effects, among others.
The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer operating costs, minus (2) the increase in equipment purchase prices and installation costs, plus (3) the value of climate and health benefits of emission reductions, all annualized.
The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered equipment and are measured for the lifetime of CRE shipped in 2028-2057. The benefits associated with reduced emissions achieved as a result of the proposed standards are also calculated based on the lifetime of CRE shipped in 2028-2057. Total benefits for both the 3-percent and 7-percent cases are presented using the average GHG social costs with 3-percent discount rate. Estimates of SC-GHG values are presented for all four discount rates in section V.L of this document.
Table I.5 presents the total estimated monetized benefits and costs associated with the proposed standard, expressed in terms of annualized values. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NO
Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards is $329.8 million per year in increased equipment costs, while the estimated annual benefits are $737.7 million in reduced operating costs, $174.4 million in climate benefits, and $341.3 million in health benefits. In this case, the net benefit would amount to $923.5 million per year.
DOE's analysis of the national impacts of the proposed standards is described in sections V.H, V.K, and V.L of this document.
DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. Specifically, with regards to technological feasibility, design options used to achieve these standard levels are already commercially available for all equipment classes covered by this proposal. As for economic justification, DOE's analysis shows that the benefits of the proposed standard exceed, to a great extent, the burdens of the proposed standards.
Using a 7-percent discount rate for consumer benefits and costs and NO
The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.
As previously mentioned, the standards are projected to result in estimated national energy savings of 3.11 quad FFC, the equivalent of the primary annual energy use of 33 million homes. The NPV of consumer benefit for these projected energy savings is $2.38 billion using a discount rate of 7 percent, and $7.10 billion using a discount rate of 3 percent. The cumulative emissions reductions associated with these energy savings are 55.8 Mt of CO
DOE also considered more stringent energy efficiency levels as potential standards and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more stringent energy efficiency levels would outweigh the projected benefits.
Based on consideration of the public comments DOE receives in response to this document and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this document that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part.
The following section briefly discusses the statutory authority underlying this proposed rule, as well as some of the relevant historical background related to the establishment of standards for CRE.
EPCA authorizes DOE to regulate the energy efficiency of a number of consumer equipment and certain industrial equipment. Title III, part C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42 U.S.C. 6311-6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This equipment includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E))
EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B))
EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), energy conservation standards (42 U.S.C. 6313), and the authority to require information and reports from manufacturers (42 U.S.C. 6316; 42 U.S.C. 6296).
Federal energy efficiency requirements for covered equipment established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (
Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered equipment must use the Federal test procedures as the basis for: (1) certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)), and (2) making representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must use these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) The DOE test procedures for CRE appear at title 10 of the Code of Federal Regulations (“CFR”) part 431, subpart C, appendix B (“appendix B”).
DOE must follow specific statutory criteria for prescribing new or amended standards for covered equipment, including CRE. Any new or amended standard for a covered equipment must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain equipment, including CRE, if no test procedure has been established for the equipment, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and consumers of the equipment subject to the standard;
(2) The savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered equipment that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered equipment likely to result from the standard;
(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (“Secretary”) considers relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing an equipment complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1)) Also, the Secretary
Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered equipment that has two or more subcategories. DOE must specify a different standard level for a type or class of equipment that has the same function or intended use, if DOE determines that equipment within such group: (A) consume a different kind of energy from that consumed by other covered equipment within such type (or class); or (B) have a capacity or other performance-related feature which other equipment within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of equipment, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate. (
On March 28, 2014, DOE published a final rule in the
For CRE with two or more compartments (
On July 16, 2021, DOE published a request for information (“RFI”) in the
On June 28, 2022, DOE published in the
DOE received comments in response to the June 2022 Preliminary Analysis from the interested parties listed in table II.1.
A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.
In accordance with 10 CFR 431.4 and section 3(a) of 10 CFR part 430, subpart C, appendix A (“Process Rule”), DOE notes that it is deviating from the provision in the Process Rule regarding the pre-NOPR and NOPR stages for an energy conservation standard rulemaking.
Section 6(a)(2) of the Process Rule states that if DOE determines it is appropriate to proceed with a rulemaking, the preliminary stages of a rulemaking to issue or amend an energy conservation standard that DOE will undertake will be a framework document and preliminary analysis, or an advance notice of proposed rulemaking. While DOE published a preliminary analysis for this rulemaking (
Section 6(f)(2) of the Process Rule specifies that the length of the public comment period for a NOPR will be not less than 75 calendar days. For this NOPR, DOE is instead providing a 60-day comment period, consistent with EPCA requirements. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(p).
As noted previously, DOE requested comment in the July 2021 RFI on the analysis conducted in support of the last energy conservation standard rulemaking for CRE and provided a 45-day comment period. (
Section 8(d)(1) of the Process Rule specifies that test procedure rulemakings establishing methodologies used to evaluate proposed energy conservation standards will be finalized prior to publication of a NOPR proposing new or amended energy conservation standards. Additionally, new test procedures and amended test procedures that impact measured energy use or efficiency will be finalized at least 180 days prior to the close of the comment period for (1) a NOPR proposing new or amended energy conservation standards or (2) a notice of proposed determination that standards do not need to be amended.
On September 26, 2023, DOE published a
DOE developed this proposal after considering oral and written comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters.
This section summarizes general comments received from interested parties regarding rulemaking timing and process.
NEEA generally supported the process outlined in the June 2022 Preliminary Analysis. (NEEA, No. 47 at p. 5) NEEA commented that DOE's analysis in the June 2022 Preliminary TSD showed a strong standard for CRE equipment would be economically justified and deliver significant energy savings to the Nation. (
Other commenters expressed concern with the rulemaking timeline. NAFEM commented that it had previously requested a comment period extension, which was denied, and requested to see the CRE engineering spreadsheets, which were provided on August 18, 2022, leaving an 11-calendar-day review period. (NAFEM, No. 40 at p. 2) NAFEM acknowledged that DOE had initiated multiple energy efficiency rulemakings on a compressed schedule, but NAFEM stated that this did not serve as justification for neglecting to provide important information and adequate time for review. (
Hussmann commented that it supports the comments provided by AHRI and NAFEM and noted that it and other commenters were denied extensions to the August 29, 2022, comment deadline. (Hussmann, No. 45 at p. 1). Hussmann stated that it hopes discussions with DOE will improve this rulemaking. (
NAMA shared its view that, despite this CRE rulemaking being one of the most complex DOE has undertaken within EERE, DOE reduced the time for public comment. (NAMA, No. 37 at p. 4) NAMA additionally commented that DOE released the engineering spreadsheets on August 8, 2022, leaving only 7 working days for review prior to the comment receipt deadline, and that this limited notice violated all elements of the notice and comment in the Administrative Procedure Act.
ITW commented that the June 2022 Preliminary TSD made clear the importance of the CRE engineering spreadsheet, prompting ITW to request that DOE grant access to the spreadsheet. (ITW, No. 41 at p. 1). ITW stated that DOE provided the spreadsheet but did not extend the comment period to allow adequate time for review of information ITW considered critical. (
In response to comments regarding timing and the 2022 Engineering Spreadsheet Related to the Preliminary Analysis for Commercial Refrigerators, Refrigerator-Freezers and Freezers Standards (“engineering spreadsheet”), DOE published this document in the rulemaking docket on August 18, 2022 after commenters requested its publication. This practice was consistent with prior rulemakings conducted for CRE, such as when DOE did not include an engineering spreadsheet with the notice of availability of preliminary technical support document published on March 30, 2011 (“March 2011 Preliminary Analysis”). Instead, DOE published the engineering spreadsheet with its NOPR on September 11, 2013. Similarly, in this rulemaking, DOE did not publish the engineering spreadsheet used for the preliminary analysis at the time of the June 2022 Preliminary Analysis publication. Consistent with past practice, DOE is publishing the engineering spreadsheet that supports this NOPR analysis along with this NOPR.
With respect to comments regarding the comment-period, DOE discusses deviations from the Process Rule, and the justifications for such deviations, in section II.C of this NOPR.
In response to comments regarding the Administrative Procedure Act, 5 U.S.C. 553 provides requirements for a notice of proposed rulemaking. The June 2022 Preliminary Analysis was not a notice of proposed rulemaking as it was a notification that announced the availability of the preliminary analysis DOE had conducted for purposes of evaluating the need for amended energy conservation standards for CRE. However, DOE provided notice of that preliminary analysis and sought comment on the analysis.
Other commenters had general comments regarding the June 2022 Preliminary Analysis, the accompanying June 2022 Preliminary TSD, and the rulemaking process. NAMA commented that the June 2022 Preliminary TSD is flawed and should be re-written, with CRE categories split into ranges by size. (NAMA, No. 37 at p. 8) NAMA stated that if the engineering analysis were to be incorrect, then the technology screening would be incorrect also, which means the baseline machine design was incorrect and the rest of the report could not be used. (
NAMA commented that while it appreciated DOE's willingness to hold a hearing on the proposed energy efficiency standards levels, it believed that the August 8, 2022, public meeting was rushed and abruptly terminated before all questions were answered. (NAMA, No. 37 at p. 4) NAMA requested that DOE return to “in-person” meetings to support dialogue on these subjects. (
NAMA commented that the market dynamic was currently distorted due to the COVID-19 pandemic and a lack of available equipment, making efficiency a secondary priority to availability. (
NAMA recommended that DOE should cease the rulemaking on this category of CRE until after the beverage vending machines rulemaking is in the final rule stage and until the test procedure for CRE equipment is finalized. (
Finally, NAMA commented that it does not believe the June 2022 Preliminary TSD or other documents for this rulemaking reflect the state of the CRE industry in 2022 or the projections for equipment manufactured after this rule becomes effective. (
In response to NAMA's comments, DOE is maintaining the current equipment class structure in this NOPR, except for the new equipment classes which are proposed and discussed in section IV.A.1.c of this document. In accordance with section 6(d)(3) of the Process Rule, DOE may make any necessary changes to the engineering analysis or the candidate standard levels based on consideration of the comments received. DOE notes that it considered CRE that are currently available on the market when developing the NOPR engineering analysis. DOE acknowledges and accounts for the December 2022 EPA NOPR in this NOPR analysis. As noted in section I of this document, the December 2022 EPA NOPR would prohibit manufacture or import of such CRE starting January 1, 2025, and would ban sale, distribution, purchase, receipt, or export of such CRE starting January 1, 2026. 87 FR 76809. The December 2022 EPA NOPR compliance date would occur prior to the expected the compliance date of any DOE amended or established standards (
In response to the comments about the August 8, 2022, public meeting, DOE notes that it responded to all questions asked during the August 8, 2022, public meeting.
DOE notes that section 8(d)(1) of the Process Rule specifies that test procedure rulemakings establishing methodologies used to evaluate proposed energy conservation standards will be finalized prior to publication of a NOPR proposing new and amended energy conservation standards. Additionally, energy conservation standards for refrigerated bottled or canned beverage vending machines are separate from CRE, and evaluated through a separate rulemaking process, and are located at 10 CFR 431.296.
AHT stated that there is a high risk of eliminating the entire equipment class if DOE were to further increase restrictions for horizontal closed transparent self-contained low temperature (“HCT.SC.L”), horizontal closed transparent self-contained medium temperature (“HCT.SC.M”), horizontal closed transparent self-contained ice-cream freezer (“HCT.SC.I”), and vertical closed transparent self-contained low temperature (“VCT.SC.L.”) equipment classes and recommended that DOE maintain the current regulatory framework in design options and efficiency standards for these equipment classes. (AHT, No. 48 at p. 6)
In response to AHT's comments, DOE has revised the components considered in the engineering analysis baseline in this NOPR as discussed in section IV.C.1.a of this document and presented the results of this NOPR analysis in section V of this document. DOE also notes that it observed CRE models currently available and rated to the DOE Compliance Certification Database (“CCD”) that currently comply with the proposed energy conservation standards in this NOPR for the equipment classes listed in AHT's comment.
This NOPR covers those commercial refrigeration equipment that meet the definition of “commercial refrigerators, refrigerator-freezers, and freezers,” as codified at 10 CFR 431.62.
A “commercial refrigerator, freezer, and refrigerator-freezer” means refrigeration equipment that—(1) is not consumer equipment (as defined in § 430.2); (2) is not designed and marketed exclusively for medical, scientific, or research purposes; (3) operates at a chilled, frozen, combination chilled and frozen, or variable temperature; (4) displays or stores merchandise and other perishable
However, this NOPR does not include some types of commercial refrigerators, refrigerator-freezers, and freezers that meet the definition at 10 CFR 431.62. These include blast chillers, blast freezers, buffet tables or preparation tables, and mobile refrigerated cabinets.
See section IV.A.1 of this document for discussion of the equipment classes analyzed in this NOPR.
EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) Manufacturers of covered equipment must use these test procedures to certify to DOE that their equipment complies with energy conservation standards and to quantify the efficiency of their equipment. (42 U.S.C. 6314(d); 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) DOE's current energy conservation standards for CRE are expressed in terms of maximum daily energy consumption as measured using appendix B. (
In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially-available equipment or in working prototypes to be technologically feasible. 10 CFR 431.4; sections 6(b)(3)(i) and 7(b)(1) of the Process Rule.
After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on equipment utility or availability; (3) adverse impacts on health or safety, and (4) unique-pathway proprietary technologies. 10 CFR 431.4; sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the Process Rule. Section IV.B of this document discusses the results of the screening analysis for CRE, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD.
When DOE proposes to adopt a new or amended standard for a type or class of covered equipment, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for CRE, using the design parameters for the most efficient equipment available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.1.b of this proposed rule and in chapter 5 of the NOPR TSD.
For each TSL, DOE projected energy savings from application of the TSL to CRE purchased in the 30-year period that begins in the year 2028 with the proposed standards (2028-2057).
DOE used its national impact analysis (“NIA”) spreadsheet model to estimate national energy savings (“NES”) from potential amended and new standards for CRE. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by equipment at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. DOE also calculates NES in terms of FFC energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (
To adopt any new or amended standards for covered equipment, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.
As stated, the standard levels proposed in this document are projected to result in national energy savings of 3.11 quad FFC, the equivalent of the primary annual energy use of 33 million homes. Based on the amount of FFC savings, the corresponding reduction in emissions, and the need to confront the global climate crisis, DOE has initially determined the energy savings from the proposed standard levels are “significant” within the meaning of 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B).
As noted previously, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has addressed each of those seven factors in this proposed rulemaking.
In determining the impacts of a potential new or amended standard on manufacturers, DOE conducts an MIA, as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include (1) INPV, which values the industry on the basis of expected future cash flows, (2) cash flows by year, (3) changes in revenue and income, and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the changes in LCC and PBP associated with new and amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard; for CRE, DOE evaluated the impacts on small businesses.
DOE requests comment on the impacts to CRE manufacturers and consumers from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA).
EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered equipment that are likely to result from a standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase price of equipment (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment. The LCC analysis requires a variety of inputs, such as equipment prices, equipment energy consumption, energy prices, maintenance and repair costs, equipment lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of more-efficient equipment through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered equipment in the first full year of compliance with new and amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new and amended standards. DOE's LCC and PBP analysis is discussed in further detail in section IV.F of this document.
Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.E of this document, DOE uses the NIA spreadsheet models to project national energy savings.
In establishing equipment classes and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the equipment under consideration in this proposed rulemaking.
EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (“DOJ”) provide its determination on this issue. DOE will publish and respond to the Attorney General's determination in the final rule. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the
DOE also considers the need for national energy and water conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the Nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation's needed power generation capacity, as discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The proposed standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the estimated emissions impacts are reported in section V.B.6 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document.
In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding economic justification that does not fit into the other categories described previously, DOE could consider such information under “other factors.”
EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the equipment that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. (42 U.S.C. 6316(e(1)); 42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section V.B.1.c of this proposed rule.
This section addresses the analyses DOE has performed for this rulemaking with regard to CRE. Separate subsections address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the standards proposed in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended and new energy conservation standards. The national impacts analysis uses a second spreadsheet set that provides shipments projections and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (“GRIM”), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE website for this proposed rulemaking:
DOE develops information in the market and technology assessment that provides an overall picture of the market for the equipment concerned, including the purpose of the equipment, the industry structure, manufacturers, market characteristics, and technologies used in the equipment. This activity includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include (1) a determination of the scope of the rulemaking and equipment classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends; and (6) technologies or design options that could improve the energy efficiency of CRE. The key findings of DOE's market assessment are summarized in the following sections. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment.
When evaluating and establishing energy conservation standards, DOE may establish separate standards for a group of covered equipment (
DOE currently separates CRE into 49 equipment classes, which are categorized according to the following performance-related features: (1) operating temperature—refrigerator (≥32 °F), freezer (<32 °F), or ice-cream freezer (≤−5 °F); (2) presence of doors—open or closed; (3) door type—solid or transparent; (4) condensing unit—remote or self-contained; (5) configuration—horizontal, vertical, semi-vertical, or service over counter; (6) temperature pull-down capability. Definitions supporting the equipment classes are as follows:
(2) Is not designed and marketed exclusively for medical, scientific, or research purposes;
(3) Operates at a chilled, frozen, combination chilled and frozen, or variable temperature;
(4) Displays or stores merchandise and other perishable materials horizontally, semi-vertically, or vertically;
(5) Has transparent or solid doors, sliding or hinged doors, a combination of hinged, sliding, transparent, or solid doors, or no doors;
(6) Is designed for pull-down temperature applications or holding temperature applications; and
(7) Is connected to a self-contained condensing unit or to a remote condensing unit.
(1) Prior to the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below −5.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts; or
(2) Upon the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below −13.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts.
10 CFR 431.62.
On March 28, 2014, DOE published in the
In the June 2022 Preliminary TSD, DOE sought comment on whether updates to the existing equipment class structure are appropriate. In response, ITW commented that DOE failed to recognize that manufacturers might use other options to produce cabinets with increased heat loads due to their physical features (other than those required by a simple reach-in refrigerator), citing the following applications as examples: (1) pass-through refrigerators—cabinets with doors on both sides, providing access to stored items from either side; (2) roll-in refrigerators—cabinets with ramps and door sweeps that allow for loading of bakery carts; and (3) roll-through refrigerators—cabinets with ramps and door sweeps on both sides that allow for bakery carts to move in and out from one side to the other. (ITW, No. 41 at p. 33)
NAFEM stated that it and other commenters recommended separating forced-air and cold-wall refrigeration systems into different categories in response to the July 2021 RFI, yet it appeared that DOE deferred making a decision until a future proposed rule. (NAFEM, No. 40 at p. 3)
Continental commented that DOE should provide separate equipment classes and standard levels to segregate forced-air from cold-wall models, as well as roll-in from reach-in models, and pass-through from non-pass-through models, because these equipment types have differentiating characteristics that impact energy consumption, and separate energy standard levels are needed to avoid weighting standards in an unfair manner. (Continental, No. 38 at p. 2)
In response to commenter's suggestions and after a review of similar terms defined by the California Code of Regulations,
In addition to proposing to define the terms “cold-wall evaporator,” “forced-air evaporator,” “pass-through doors,” “roll-in door,” “roll-through doors,” and “sliding door,” DOE is proposing to allow certain equipment classes that contain CRE with forced-air evaporators, CRE with pass-through doors, CRE with roll-in doors, CRE with roll-through doors, and CRE with sliding doors to use a higher amount of energy use than the proposed standards, if the standard has been proposed to be amended for an equipment class, while also complying with EPCA's “anti-backsliding” provision. This proposal recognizes the unique utility and different energy use characteristics of certain types of CRE. DOE discusses these unique utility and different energy use characteristics in further detail in section IV.C.1.a.
DOE has also reviewed the current definitions for CRE at 10 CFR 431.62 and is proposing to revise the definition for “rating temperature” to update the reference to the required integrated average temperature (“IAT”) or lowest application product temperature (“LAPT”), as applicable, as follows:
DOE requests comment on the proposed definitions for “cold-wall evaporator,” “forced-air evaporator,” “pass-through doors,” “roll-in door,” “roll-through doors,” “sliding door,” and “rating temperature.”
In the June 2022 Preliminary TSD, DOE had initially determined that additional equipment classes may be appropriate to address certain CRE available on the market. Specifically, DOE initially determined to split several commercial refrigerator equipment classes and establish separate classes for high-temperature refrigerators. Also, DOE initially determined to establish standards for chef bases or griddle stands with operating temperatures of ≥32 °F or <32 °F (10 CFR 431.66(f) currently excludes chef bases or griddle stands from energy conservation standards). See chapter 3 of the June 2022 Preliminary TSD for additional details.
In the September 2023 Test Procedure Final Rule, DOE established and amended definitions and test procedures for high-temperature refrigerators, medium-temperature refrigerators, and chef bases or griddle stands. 88 FR 66152, 66154-66155. Specifically, DOE established definitions for “high-temperature refrigerators” and “medium-temperature refrigerators,” amended the definition for “chef bases or griddle stands,” and incorporated by reference AHRI Standard 1200-2023 (I-P), which provides a IAT of 55 °F ±2.0 °F for which high-temperature refrigerators may be tested.
(1) Prior to the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below −5.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts; or
(2) Upon the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below −13.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts.
88 FR 66152, 66223-66224.
Based on CRE models certified to DOE's Compliance Certification Management System (“CCMS”) under the LAPT designation for commercial refrigerators, DOE has tentatively determined that high-temperature refrigerators can be categorized under the self-contained and remote condensing unit configurations and under the vertical closed transparent (“VCT”), vertical closed solid (“VCS”), service over counter (“SOC”), vertical open (“VOP”), semi-vertical open (“SVO”), and horizontal open (“HZO”) equipment families. For these equipment families with high-temperature equipment, DOE proposes to sub-categorize them as high-temperature refrigerators (operating temperature greater than 40.0 °F) and medium-temperature refrigerators (operating temperature greater than or equal to 32.0 °F and less than or equal to 40.0 °F). DOE proposes to maintain the categorization of commercial refrigerator (operating temperature greater than or equal to 32.0 °F) for the remaining equipment families (
DOE has also tentatively determined that chef bases or griddle stands can be categorized under the self-contained condensing unit configuration and the ≥32 °F or <32 °F operating temperatures (
Accordingly, DOE is considering potential equipment classes for high-temperature refrigerators and chef bases or griddle stands and is proposing potential equipment class structure modifications as presented in table IV.2.
DOE received several comments in response to the June 2022 Preliminary Analysis regarding the amendments to the equipment classes for CRE.
NEEA supported DOE's proposed definitions in the June 2022 CRE Test Procedure NOPR for blast chillers and blast freezers, buffet tables and preparation tables, and high-temperature CRE, noting that these definitions allowed consideration of potential standards, categorization of equipment classes, and testing of the equipment separate from other CRE. (NEEA, No. 47 at p. 2)
The Joint Commenters supported DOE's consideration of potential standards for additional equipment categories. (Joint Commenters, No. 39 at p. 1) The Joint Commenters stated that DOE found cost-effective potential energy savings for chef bases/griddle stands and high-temperature refrigerators in the June 2022 Preliminary TSD and commented that they support DOE setting standards for these equipment classes. (
The CA IOUs commended DOE for proposing to expand the scope of the energy conservation standards for CRE to include chef bases or griddle stands and high-temperature refrigeration. (CA IOUs, No. 43 at p. 1) The CA IOUs stated that these added product classes constitute a significant inventory of equipment with a substantial cumulative energy load that were previously outside the scope of DOE's regulation. (
AHRI commented that it has no objection to the added equipment classes detailed in the June 2022 Preliminary TSD. (AHRI, No. 46 at p. 2) However, Continental recommended that DOE delay inclusion of any new categories until applicable industry standard test procedures are published and have been thoroughly evaluated. (Continental, No. 38 at p. 2)
DOE has proposed standards for new equipment classes (
NEEA recommended that DOE analyze the new equipment classes and consider adopting efficiency standards that would better reflect the specific energy consumption of equipment subclasses, resulting in more significant energy savings. (NEEA, No. 47 at p. 4) NEEA commented that DOE had analyzed two of the four new product classes and, as was shown in the CRE June 2022 Preliminary TSD analysis, energy conservation standards were viable for high-temperature CRE and chef bases and griddle stands. (
Similarly, the Joint Commenters commented that DOE stated DOE lacked sufficient information to fully analyze buffet/preparation tables and blast chillers/freezers in the June 2022 Preliminary TSD, but the Joint Commenters noted that the California Energy Commission (“CEC”) Modernized Appliance Efficiency Database System (“MAEDbS”) includes over 100 buffet/preparation tables with a broad range of energy usage. (Joint Commenters, No. 39 at p. 1) The Joint Commenters requested that DOE further investigate the energy usage and savings potential for these products. (
However, Continental agreed with DOE that a preliminary analysis of energy consumption for buffet tables and preparation tables is not appropriate until a standard test procedure is established for these equipment types. (Continental. No. 38 at p. 2).
Consistent with comments from NEEA and based on the new rating temperature in the September 2023 Test Procedure Final Rule for high-temperature refrigerators, DOE is proposing to amend the energy conservation standards for high-temperature refrigerators and to establish energy conservation standards for chef bases or griddle stands in this NOPR. See table IV.2.
With respect to the comments from NEEA and the Joint Commenters regarding blast chillers and blast freezers, DOE notes that it lacks sufficient data and information regarding blast chillers and blast freezer performance, and related design options, for units tested via the DOE test procedure. As stated in the September 2023 Test Procedure Final Rule, blast chillers and blast freezers are designed for “rapid temperature pull-down” capable of reducing the internal temperature from 135 °F to 40 °F within a period of 4 hours. 88 FR 66152, 66189. Therefore, in this NOPR, DOE is not currently able to model expected performance of this equipment because the established test procedure is significantly different from the test procedure applicable to other CRE categories, which are intended for “holding temperature application”. Due to a lack of data and information regarding performance of blast chillers and blast freezers, DOE has not conducted an analysis of potential energy conservation standards for these equipment categories.
DOE requests comment on blast chiller or freezer design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix D of 10 CFR 431.64.
With respect to the comments from NEEA and the Joint Commenters regarding buffet tables and preparation tables, while DOE acknowledges that
DOE requests comment on refrigerated buffet/preparation table design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix C of 10 CFR 431.64.
The CA IOUs supported creating a separate equipment class for customer-order refrigerated storage lockers. (CA IOUs, No. 43 at p. 10) The CA IOUs commented that they expect the refrigerated storage locker market to increase as grocery delivery and pick up continues to be a growing segment of grocery sales. (
The CA IOUs recommended that DOE analyze the individual refrigerator, freezer, and refrigerator/freezer compartments in customer-order refrigerated storage lockers as a separate equipment family as noted in the CA IOUs comments on DOE's July 2021 CRE Test Procedure RFI. (
In response to the CA IOUs comments, DOE has not conducted an analysis specifically for customer order storage cabinets in this NOPR.
The Joint Commenters recommended that DOE analyze additional equipment classes and stated that DOE did not directly analyze the vertical closed solid remote condensing medium temperature (“VCS.RC.M”), vertical closed solid remote condensing low temperature (“VCS.RC.L”), horizontal closed transparent remote condensing medium temperature (“HCT.RC.M”), or horizontal closed transparent remote condensing low temperature (“HCT.RC.L”) equipment classes in the June 2022 Preliminary TSD. (Joint Commenters, No. 39 at p. 2) The Joint Commenters commented that the number of models for each of these classes in the CCD suggests their market share could be larger than the estimated volume of shipments for these classes in the analysis for the March 2014 Final Rule. (
AHRI asked that DOE clarify whether DOE removed the vertical self-contained class from the June 2022 Preliminary TSD. (AHRI, No. 46 at p. 2) And Zero Zone commented that it did not see any evaluation of solid-door remote commercial refrigerators and inquired whether DOE is dropping that equipment class or has no plans to change the energy requirements. (Zero Zone, No. 44 at p. 5)
With respect to the comments from the Joint Commenters, AHRI, and Zero Zone, DOE notes that the equipment classes mentioned by the Joint Commenters were not directly analyzed as primary equipment classes in the June 2022 Preliminary Analysis, but are analyzed as secondary equipment classes in this NOPR using DOE's primary to secondary equipment class multipliers. See chapter 5 of the NOPR TSD for additional details on secondary equipment classes. Additionally, DOE notes that in the June 2022 Preliminary Analysis, DOE analyzed vertical closed solid, self contained equipment, as well as other vertical self-contained equipment (
AHRI commented that breaking equipment classes into smaller (under 30 cubic feet) and larger units (over 30 cubic feet) could be beneficial. (AHRI, No. 46 at p. 7) Additionally, NAMA commented that DOE appeared to have overlooked or not fully recognized the existence of smaller refrigerated single- and double-door beverage (and food) coolers. (NAMA, No. 37 at p. 5) NAMA stated that energy efficiency analyses of larger (
In response to the June 2021 Test Procedure RFI, True Manufacturing Company, Inc. (“True”) commented that there are examples where the ice-cream freezer maximum allowable energy consumption is less than for an equivalent commercial freezer.
Additionally, in response to the July 2021 RFI, Glastender, Inc. (“Glastender”) provided a chart and commented that the energy allowance for VCT.SC.M CRE is less than the energy allowance for VCS.SC.M CRE when the refrigerated volume is less than 10 cubic feet. (Glastender, No. 4 at p. 1). Glastender commented that it believed the requirement curves were generated from primarily larger volume models and smaller volume refrigerators need to be considered when generating new curves. (
In response to comments from AHRI and NAMA, DOE is maintaining the current equipment class structure in this NOPR, except for the new equipment classes which are proposed and discussed in section IV.A.1.c of this document. DOE considers all volumes and TDAs when developing the proposed standards in this NOPR in addition to the representative volume or TDA for each directly analyzed equipment class. Based on market research and feedback received during manufacturer interviews, DOE expects the use of sliding and pass-through doors represent equipment utilities that have unique energy use characteristics that differentiate CRE in the VCT.SC.M equipment class and that beverage coolers are a common type of equipment in the VCT.SC.M equipment class that use sliding and pass-through doors. Therefore, based on market research and feedback received during manufacturer interviews, DOE has proposed separate energy use equations based on an energy consumption multiplier for CRE with sliding and pass-through doors.
In response to comments from AHRI, NAMA, True, and Glastender, DOE considered all volumes and TDAs when developing the proposed standards in this NOPR in addition to the representative volume or TDA for each directly analyzed equipment class. When developing the proposed standards in this NOPR, DOE generally applied the energy use reduction percentage selected in section V.C of this document to the baseline energy use equation's slope and intercept. However, in three directly analyzed equipment classes, VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE has tentatively determined that, based on the efficiency distribution of the market across the equipment classes, additional consideration is necessary. For these three classes, DOE maintained the current standard equation intercept and calculated a slope based on the current intercept and the proposed energy use level at the representative volume or TDA. This approach addresses the standard line crossover that True and Glastender mentioned in their comments and better represents the energy use characteristics of CRE at volumes and TDAs that are smaller than the representative volume or TDA for these three classes. Additionally, DOE reviewed the proposed standard for VCT.SC.I and VCT.SC.L and observed that the standard lines do not have the crossover that True mentioned in its comment.
See section IV.C.1 of this document and chapter 5 of the NOPR TSD for additional details.
The Joint Commenters recommended that DOE eliminate the equipment class for pull-down CREs. (Joint Commenters, No. 39 at p. 2) The Joint Commenters stated that while there are currently no pull-down models certified in DOE's CCD, the Joint Commenters are concerned that models could be certified as pull-down CRE in the future in order to be subject to a less-stringent standard. (
In response to the Joint Commenters, DOE notes that the “pull-down temperature application” is defined in 42 U.S.C. 6311(9)(d) and the equipment class was established by the Energy Policy Act of 2005 (Pub. L. 109-58).
The CA IOUs recommended changing the key metric for service over the counter (“SOC”) refrigeration from total display area (“TDA”) to either refrigerated volume or refrigerated floor area. (CA IOUs, No. 43 at pp. 9-10). The CA IOUs commented that the current energy conservation standard for SOC is based on TDA, which incentivizes the use of more glass to increase the TDA and the corresponding maximum daily energy consumption. (
However, in response to the July 2021 RFI, other commenters indicated that TDA is the appropriate metric for the respective equipment classes, and the industry has adapted to the use of TDA or volume and that no change is necessary (see chapter 2 of the June 2022 Preliminary TSD for additional information). Therefore, in this NOPR, DOE has not evaluated revising the capacity metrics for any equipment classes.
The CA IOUs commented that they support the proposal to rate equipment capable of operating at temperatures of multiple equipment classes at all relevant temperature conditions. (CA IOUs, No. 43 at p. 8-9)
Consistent with the CA IOUs comment, in the September 2023 Test Procedure Final Rule, DOE specified in 10 CFR 429.42 that basic models of CRE that operate in multiple equipment classes must be certified and comply with the energy conservation standards for each applicable equipment class. 88 FR 66152, 66162.
In response to the June 2022 Preliminary Analysis, DOE received
NAMA commented that it was not listed in the proposed regulation or list of manufacturers. (NAMA, No. 37 at p. 4) NAMA added that the names of CRE manufacturers represented by NAMA, which were filed in the DOE's CCMS, were not mentioned. (
In response to this comment from NAMA, for this NOPR, DOE updated its assessment of manufacturer trade groups to include NAMA and reviewed the list of CRE manufacturers based on the list of supporters on NAMA's website.
Continental commented that relying on manufacturer model counts in the CCD is not an accurate way of approximating company market share and stated that model counts in DOE's CCD reflect the variety of models offered, but do not represent the sales or market share of a company. (Continental, No. 38, p. 2)
In the June 2022 Preliminary TSD, DOE used manufacturer model counts to identify key CRE OEMs operating in the United States. DOE presented an abridged list of OEMs with more than 1-percent share of basic model listings in chapter 3 of the June 2022 Preliminary TSD. DOE understands that model counts do not reflect company market shares. For this NOPR, DOE conducted confidential manufacturer interviews. During these interviews, DOE asked manufacturers about their estimated CRE market share, annual shipments by equipment class, and the estimated market shares of other CRE manufacturers. DOE used the information from confidential interviews, data from the shipments analysis, and model listings from CCD to estimate manufacturer market shares, which were then used to weight certain inputs used in the MIA (
DOE requests comment on publicly available market data on CRE manufacturers or identification of any CRE manufacturers with large market shares not identified in Chapter 3 of the NOPR TSD.
In the preliminary market analysis and technology assessment, DOE identified technology options that would be expected to improve the efficiency of CRE, as measured by the DOE test procedure and shown in table IV.3.
DOE received several comments in response to the June 2022 Preliminary Analysis regarding the technology options.
NEEA referred to its previous comment to the July 2021 RFI that DOE consider the energy-use impact of compressor technologies like scroll compressors and variable-speed compressors. (NEEA No. 47 at pp. 4-5) NEEA commented that DOE had expressed agreement with NEEA in the June 2022 Preliminary TSD that variable-speed compressors represented an energy-saving technology and estimated that implementing variable-speed compressors could save 3-38 percent of energy consumption, depending on equipment class. (
Consistent with the preliminary analysis, DOE has included R-290 variable-speed compressors as a technology option in this NOPR. Due to the refrigerant transition in response to the December 2022 EPA NOPR, DOE has analyzed R-290 compressors (single and variable speed) for all self-contained equipment classes. See section IV.C.1 of this document and chapter 5 of the NOPR TSD for additional details on the refrigerant transition and analyzed compressors. Additionally, scroll compressors have not been included as a design option in this NOPR. While DOE has not observed scroll compressors in any directly analyzed models, DOE is aware that scroll compressors may be used on very large, self-contained CRE. Based on market research, DOE observed that fixed-speed scroll compressors have similar efficiencies to hermetic, reciprocating compressors; therefore, DOE has not considered scroll compressors in this analysis.
Continental commented that variable-speed compressors hold promise for reducing energy consumption of self-contained CRE, but the increased technical complexity and related increases in material and service costs have thus far limited use of this technology. (Continental, No. 38 at p. 2) Similarly, AHRI commented that variable-speed compressors do not
To estimate the performance impacts of transitioning to a variable-speed compressor, DOE incorporated the performance data for variable-speed R-290 compressors currently available on the market into DOE's engineering spreadsheet. DOE assumed that variable-speed compressors would operate at the minimum speed under steady-state operation. DOE also assumed that the fan motors would operate during the compressor run time (
NAMA stated that it began evaluating the changes necessary for CRE to utilize lower GWP refrigerants, such as R-290, in 2018, and NAMA pointed out that the ASHRAE 15 standard was changed in the summer of 2020 to allow CRE using up to 114 grams of A-3 refrigerants to be placed in public places and that CRE with A-3 refrigerants began to appear in the U.S. market in the first quarter of 2021. (NAMA, No. 37 at p. 6) NAMA stated that manufacturers had to re-design heat exchangers, use new compressors and expansion valves, and make all switches, electrical components, motors, wiring, connectors, and larger electrical components (
Similarly, AHRI commented that the June 2022 Preliminary TSD cited an example of a transition from an R-134a (ASHRAE Class A1) to an R-290 (propane or an ASHRAE Class A3) compressor as the only required change, but AHRI added that compressors, switches, and other components in the system must also be upgraded to comply with UL60335-2-89 requirements to reduce the risk of ignition. (AHRI, No. 46 at p. 13)
The CA IOUs noted that their comments to the July 2021 RFI stated that since energy conservation standards were last analyzed, the market has developed higher-efficiency compressors, and self-contained CRE has increasingly shifted to R-290. (CA IOUs, No. 43 at pp. 4-6) While the CA IOUs thanked DOE for analyzing these technology advances, they noted that the June 2022 Preliminary TSD analyzes the refrigerant propane as a technology option for nearly all self-contained refrigeration categories except for vertical open self-contained medium temperature (“VOP.SC.M”), semi-vertical self-contained medium temperature (“SVO.SC.M”), and horizontal glass self-contained ice cream (“HCT.SC.I”) categories. (
NEEA stated support for DOE's consideration of propane refrigerants as an energy-saving technology option in the technology assessment and engineering analysis for CRE, but NEEA noted that table 5.5.18 in the June 2022 Preliminary TSD showed that DOE had not considered propane as an option for all CRE equipment classes. (NEEA, No. 47 at p. 4) NEEA commented that CRE refrigerants are transitioning from hydrofluorocarbons (“HFC”) refrigerants to alternative options like propane (R-290) and NEEA anticipated an increase in the use of propane in other equipment classes. (
Similarly, the Joint Commenters commented that DOE excluded propane compressors as a design option for some equipment classes due to propane charge limits, but the Joint Commenters further commented that ASHRAE 15 is proposing to increase the charge limits for higher-flammability refrigerants. (Joint Commenters, No. 39 at p. 2) Additionally, the Joint Commenters stated that models are available on the market in some of the equipment classes for which DOE excluded propane technology options, including the VOP.SC.M, SVO.SC.M, and HCT.SC.I categories. (
In the June 2022 Preliminary Analysis, DOE considered only CRE that could meet the 150-gram charge limit for R-290, per the EPA's SNAP regulations.
Additionally, based on information gathered from interviews, component data, and teardowns, DOE has reevaluated the cost associated with the switch to R-290 on self-contained units. Because DOE has analyzed R-290 as the baseline for all self-contained classes in response to the December 2022 EPA NOPR, the costs associated with additional components necessary to comply with safety standards for R-290 are incorporated into the core case cost.
AHT commented that the combination of an additional half inch of insulation and vacuum-insulated panels (“VIPs”) does not make sense and should not be included as two cumulative potential savings. (AHT, No. 48 at p. 6)
Based on feedback from manufacturers, DOE has not analyzed increased insulation thickness or VIPs as a design option in this NOPR. See section IV.B.1 of this document and chapters 3 and 4 of the NOPR TSD for additional information.
ITW commented that, in terms of improved resistivity of insulation, some manufacturers have introduced new hydrofluorolefin (“HFO”) low-GWP blowing agents with claims of improved efficiencies and thermal resistivities from 2 to 11 percent compared to the previous typical HFC-245fa blowing agents and that DOE expected that manufacturers had already incorporated these new agents into models currently available on the market. (ITW, No. 41 at p. 25) ITW commented that, in fact, such claims for HFOs were “marketing hype” and without much promised improvement in thermal performance. (
Regarding ITW's comment on foam blowing agents, DOE calibrated its engineering analysis based on directly analyzed units, and, therefore, DOE expects that the analysis represents the foam blowing agents currently in use for units available on the market.
AHT commented that the best design option to save energy for open CRE is to add transparent doors. (AHT, No. 48 at p. 1) AHT noted that the existing equipment class definitions and corresponding energy conservation standards permit manufacturers that cannot reach the energy limits for closed transparent units to remove the transparent doors, which would then require compliance with the increased energy limits of open units. (
AHRI commented that efficient doors are generally used today, but there remain instances where charge sizes are insufficient and may only be allowed to be increased sufficiently if doors are not present on equipment. (AHRI, No. 46 at p. 13)
Zero Zone commented that a commenter referenced Zero Zone marketing literature for customer preference on certain types of cases with doors in section 2.3.2.5 of the June 2022 Preliminary TSD. (Zero Zone, No 44 at p. 5). Zero Zone stated that an interview with two grocers is not an exhaustive industry study and also noted that, since that marketing literature was published, Zero Zone has developed an open-case product line. (
With respect to the comment from AHT, AHRI, and Zero Zone, DOE notes that open cases provide distinct utility with respect to features such as unobstructed view and access to product, as well as simplified stocking, cleaning, and maintenance. While DOE understands there are different charge size limitations for refrigerant safety for open and closed CRE, DOE has tentatively determined to not analyze the addition of doors to open cases or the removal of doors on closed cases due to the distinct utility differences between open and closed CRE.
Continental commented that larger evaporator coils take up more internal space, reducing product storage and utility of the equipment. (Continental, No. 38 at p. 2)
Zero Zone disagreed with DOE's evaluation of the high-performance coil. (Zero Zone, No. 44 at p. 4) Zero Zone commented that using wavy fins without changing the fin pitch in an application with high-glide refrigerants can lead to a build up of frost and ice across the evaporator coil. (
Based on feedback from manufacturer interviews and commenters, DOE has not considered increased evaporator or condenser sizes in this NOPR. DOE has tentatively determined that manufacturers have maximized the heat exchanger size without reducing internal storage or increasing the external dimensions of the unit, both of which would impact product utility. In addition, due to refrigerant transition in response to the December 2022 EPA NOPR, DOE has analyzed refrigerants with charge size limitations in this NOPR. Because manufacturers have only partially converted to refrigerants that would be allowed per the December 2022 EPA NOPR, there is still uncertainty in refrigerant charge size, and therefore the evaporator and condenser design, required for all sizes of CRE.
In the June 2022 Preliminary Analysis, DOE analyzed “baseline” and “high efficiency” evaporator and condenser design options. While DOE understands the exact characteristics of the evaporator or condenser may change depending on equipment class, the evaporator and condenser design options normalize the overall conductance-area (“UA”) based on the design load. Based on stakeholder comments, interviews with manufacturers, and CoilDesigner
Zero Zone commented that it believes one CRE manufacturer holds a patent on split-circuit evaporators. (Zero Zone, No. 44 at p. 5) Zero Zone stated that
Based on a limited review of patents listed for split-circuit evaporators, DOE was able to find several patents for dual circuit evaporators, which are all either expired or abandoned.
Zero Zone commented that it already uses electronically commutated motors (“ECM”) fan motors to meet the current energy standard and stated that it believes most of industry is also using this style of motor. (Zero Zone, No. 44 at p. 5) Zero Zone requested that DOE include the ECM motor in the base model. (
DOE has maintained fan motor improvements as a technology option in this NOPR. As indicated by Zero Zone, DOE has observed that ECM fan motors are incorporated to a large extent in CRE. While DOE has observed ECMs incorporated in baseline equipment for multiple analyzed equipment classes, DOE has tentatively determined that certain baseline equipment still incorporates other less-efficient motor types. For these classes, DOE has maintained a transition to ECMs as a design option change. DOE has also updated its motor costs relative to the June 2022 Preliminary Analysis in this analysis to reflect current pricing. See chapter 3 and 5 of the NOPR TSD for additional details.
Zero Zone commented that DOE suggested using permanent magnet synchronous motors for CRE. (Zero Zone, No. 44 at p. 6) Zero Zone noted that the study DOE references was completed in 2019, and the motors have not permeated the market since that time. (
In response to Zero Zone, DOE has observed that permanent magnet synchronous motors are available on the market for CRE. However, DOE has not identified specific commercialized designs of permanent magnet synchronous motors with the appropriate size and rated airflow for the equipment analyzed in this NOPR. Based on these observations along with further discussions with manufacturers, DOE has not considered permanent magnet synchronous motors as a design option in this NOPR, as discussed further in section IV.C.1 of this document and chapter 5 of the NOPR TSD.
Continental commented that, to its knowledge, variable defrost controls have not proven to reduce energy consumption in CRE. (Continental, No. 38 at p. 2)
Zero Zone commented that variable defrost is an unreliable option that results in lost food product and therefore a monetary impact when it does not operate as intended. (Zero Zone, No. 44 at p. 4) Zero Zone commented that the potential energy savings of variable defrost are outweighed by the potential loss of product. (
While DOE considered variable defrost as a design option in the preliminary analysis, DOE has tentatively determined to not consider this design option in the NOPR. For further discussion, see section IV.C.1.b of this document and chapter 5 of the NOPR TSD.
DOE uses the following five screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:
(1)
(2)
(3)
(4)
(5)
(
In summary, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed in the following sections.
The subsequent sections include comments from interested parties pertinent to the screening criteria, DOE's evaluation of each technology option against the screening analysis criteria, and whether DOE determined that a technology option should be excluded (“screened out”) based on the screening criteria.
DOE received the following comments in response to the June 2022 Preliminary Analysis regarding the screening analysis.
ITW listed six design options that ITW stated sounded good but proved problematic: variable-speed
AHRI provided feedback on Table 4.3.1 “Retained Design Options,” stating that improved transparent doors; higher efficiency lighting; ECM motors; evaporator and condenser fans, motors, blades and controls (closed self-contained cases); compressors; and variable-speed compressor horizontal closed transparent self-contained ice cream freezer (“HCT.SCI”) (specific to some specific smaller self-contained equipment) were already in use to meet the current standard. (AHRI, No. 46 at p. 15) AHRI stated vacuum-insulated glass (“VIG”) was not economically viable. (
Zero Zone commented that vacuum-insulated glass is not a viable design option. (Zero Zone, No. 44 at p. 6) Zero Zone stated that its door supplier reported that the one vacuum-insulated glass supplier in the United States no longer offers the product because its high cost prevented customers from using it. (
NAMA commented that several of the design options shown in the June 2022 Preliminary TSD could reduce the overall machine capacity, such as larger condensers or evaporators, more insulation, and changes to the type of glass that require new structural components. (NAMA, No. 37 at p. 15) NAMA commented that the external dimensions of a CRE appliance are limited by the height of breakrooms and built-in areas, and the width and length are limited by the machine's integration with other machines with which CRE are paired. (
NAMA also commented that several of the design options suggested by DOE (
Based on these comments, DOE has tentatively determined to screen out two technology options mentioned by commenters, increased insulation thickness and vacuum-insulated panels, which are discussed in more detail in section IV.B.1 of this document.
However, DOE disagrees with commenters that permanent magnet synchronous motors meet the criteria of “impacts on product utility” because, although the permanent magnet synchronous motors currently available on the market are not optimized for size and rated airflow of CRE,
DOE also disagrees with commenters that microchannel condensers, evaporator fan controls, variable defrost systems, expansion valve improvements, and increased evaporator surface area meet the criteria of “technological feasibility.” Microchannel heat exchangers are often used in the automobile industry, and the stationary air conditioning and refrigeration markets have seen recent increases in implementation of microchannel heat exchangers. As noted by commenters and based on feedback during manufacturer interviews, DOE only considered evaporator fan controls as a design option on closed self-contained CRE equipment classes. DOE notes that the amount of energy saved for each design option is not a criterion for the screening analysis and is discussed in the engineering analysis. For increased evaporator surface area, DOE considered the limitations due to flammable refrigerants (
Additionally, DOE disagrees with commenters that vacuum-insulated glass is not a viable design option. DOE is aware of vacuum-insulated glass door suppliers outside of the United States and notes that that “not economically viable” is not one of the screening criteria specified in the Process Rule. DOE considered the cost of each design option in the engineering analysis.
Finally, in response to commenters, DOE notes that “high-tech defrost fans,” “lower-wattage refrigeration systems,” and “lower-wattage fan motors” are not technology options DOE has analyzed in the preliminary or NOPR analysis.
DOE discusses the screened-out technologies in section IV.B.1 of this document, lists the remaining technology options in section IV.B.2 of this document, and discusses the design options in section IV.C of this document and chapter 5 of the NOPR TSD.
For CRE, the screening criteria were applied to the technology options to either retain or eliminate technology for consideration in the engineering analysis. The screened-out technology options and the rationale for screening out each technology option considered in this analysis is detailed below.
In response to the June 2022 Preliminary Analysis, Continental commented that increasing insulation thickness, even by half an inch as
Zero Zone commented that DOE's expectation that manufacturers will increase the thickness of insulation does not take into account the importance of physical dimensions in CRE equipment. (Zero Zone, No. 44 at p. 4) Zero Zone added that customers need replacement equipment that will fit in the existing available space and fit through 80-inch doorways. (
As discussed in chapter 3 of the NOPR TSD, increasing insulation thickness increases the thermal resistivity of the exterior of the unit, which in turn reduces the heat load that must be removed by the CRE's refrigeration system. However, to increase insulation thickness, either an increase to the size of the unit or a decrease to the refrigerated volume of the unit must occur. Because CRE is typically required to meet standard dimensions to fit into a fixed amount of space, the refrigerated volume of the unit may need to be decreased to accommodate increased insulation thickness, thus limiting the capacity of the unit. As a result, DOE has tentatively determined that increased insulation thickness meets the screening criterion of “impacts on product utility.” In this NOPR, DOE has screened out increased insulation thickness as a design option for improving the energy efficiency of CRE.
In response to the June 2022 Preliminary Analysis, Continental commented that vacuum-insulated panels are relatively expensive, introduce significant complexity to manufacturing, reduce equipment structural stability, are subject to damage, and are not easily replaceable, requiring replacement of the entire unit. (Continental, No. 38 at p. 2)
AHRI commented that cost estimates in the June 2022 Preliminary TSD were significantly underestimated related to pandemic-related scarcity pricing. (AHRI, No. 46 at pp. 14-15) AHRI stated it planned to complete a survey to clarify the cost of vacuum panels (estimated by DOE to be considerably less expensive than is accurate) among other components, but could not do so within the 30-day deadline, especially given that the comment period for the test procedure and the walk-in cooler and walk-in freezer Preliminary TSD overlapped. (
Zero Zone commented that vacuum-insulation panels are insufficiently robust and can lose their vacuum through bending or flexing. (Zero Zone, No 44 at p. 6) Zero Zone commented also that it can be difficult to determine the vacuum has been lost until the final product operation reveals condensation. (
As discussed in chapter 3 of the NOPR TSD, VIPs allow reduction in insulation thickness while maintaining or increasing thermal resistivity, due to the reduced conductivity that occurs in a low vacuum. Because VIPs consist of an outer airtight membrane surrounding a core material to form a cavity, any puncture to a panel renders the VIP ineffective. This may prevent customers from being able to install any screws or fasteners into the panel. VIPs cannot be repaired once a leak is detected in the field and would require replacement upon puncture or failure. In the June 2022 Preliminary Analysis TSD, DOE stated that it had not observed VIPs incorporated in CRE but had observed VIPs used in other refrigeration products (
Based on comments received and feedback during manufacturer interviews, DOE has tentatively determined that because of the significant difference in shelf loads between commercial and consumer refrigeration units, CRE may require brackets or other supporting structures to accommodate the heavier shelf loads, installed with screws or fasteners that could puncture the VIP. As a result, DOE has tentatively determined that vacuum-insulated panels meet the screening criterion of “impacts on product utility.” In this NOPR, DOE has screened out vacuum-insulated panels as a design option for improving the energy efficiency of CRE.
As discussed in chapter 3 of the June 2022 Preliminary TSD and chapter 3 of the NOPR TSD, linear compressors use a linear rather than rotary motion to reduce the need for a crankshaft and linkage, resulting in reduced friction and side forces. Most linear compressors use a free-piston arrangement and can be controlled for a range of capacities. Compressor manufacturers had begun development on linear compressors for residential refrigerators. However, a lack of availability on the market of linear compressors with a large enough cooling capacity for commercial refrigeration sizes has prevented further development of this technology for commercial refrigeration applications and, therefore, DOE has tentatively determined that linear compressors meet the screening criterion of “practicability to manufacture, install, and service.” DOE did not receive any comments on its tentative determination to screen out linear compressors in response to the June 2022 Preliminary Analysis, and, in this NOPR, DOE has screened out linear compressors as a design option for improving the energy efficiency of CRE.
As discussed in chapter 3 of the June 2022 Preliminary TSD and chapter 3 of the NOPR TSD, an air curtain is a fan-powered device that creates a moving wall (curtain) of air, which separates two spaces of different temperatures. Air curtains are used in CRE to minimize the infiltration of warmer external air into the refrigerated space. DOE's research had presented the possibility of advanced air-curtain designs with levels of performance beyond the traditional air curtains generally employed in open display cases being used in the CRE industry.
Through a review of each technology, DOE tentatively concludes that all of the other identified technologies listed in section IV.A.2 of this document met all five screening criteria to be examined further as design options in DOE's NOPR analysis. In summary, DOE did not screen out the following technology options presented in table IV.4.
DOE has initially determined that these technology options are technologically feasible because they are being used or have previously been used in commercially available equipment or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria (
DOE requests comment on the decision to screen out increased insulation thickness, vacuum-insulated panels, linear compressors, and air curtain design as design options for improving the energy efficiency of CRE.
The purpose of the engineering analysis is to establish the relationship between the efficiency and cost of CRE. There are two elements to consider in the engineering analysis: the selection of efficiency levels to analyze (
DOE typically uses one of two approaches to develop energy efficiency levels for the engineering analysis: (1) relying on observed efficiency levels in the market (
In this rulemaking, DOE relies on a design-option approach, supported with the testing and reverse engineering of directly analyzed CRE. The design options were incrementally added to the baseline configuration and continued through the “max-tech” configuration (
Consistent with the March 2014 Final Rule analysis (see chapter 5 of the
In the March 2014 Final Rule analysis, DOE selected 25 high shipment volume equipment classes, referred to as “primary” classes, to analyze directly in the engineering analysis (see chapter 5 of the March 2014 Final Rule TSD
For each equipment class, DOE generally selects a baseline model as a reference point for each class, and measures changes resulting from potential energy conservation standards against the baseline. The baseline model in each equipment class represents the characteristics of equipment typical of that class (
In the June 2022 Preliminary TSD, DOE utilized the current standards for CRE for classes with current standards and the energy consumption based on the assumed baseline specifications modeled in the engineering analysis spreadsheet for classes without current standards as the baseline energy use for each analyzed equipment class. For higher efficiency levels, DOE assessed CRE efficiencies as a percent improvement relative to the baseline model. This provided a consistent efficiency comparison across each equipment class. DOE considered the efficiency improvements associated with implementing available design options beyond the baseline to the max-tech efficiency level. See chapter 5 of the June 2022 Preliminary TSD for additional details.
In response to the June 2022 Preliminary Analysis, Zero Zone commented that, while it believes DOE is developing models and setting energy levels based on average energy values, no data were provided to confirm or deny that suspicion. (Zero Zone, No. 44 at p. 2) Zero Zone stated that setting energy values at an average expected level and requiring manufacturers to have all products meet the average energy level is incorrect, and such approach necessitates that manufacturers develop equipment with low enough average energy levels that the worst measured performance of any product is less than DOE's average value. (
Zero Zone additionally commented that DOE's proposed CRE test procedure requires manufacturers to calculate the uncertainty level and apply it to their rating, but DOE does not appear to apply the test requirements for uncertainty to its own work. (
In response to the comment from Zero Zone, DOE notes that the engineering spreadsheet model that is used to develop the baseline and efficiency levels is calibrated using publicly available CCD data, which are subject to the requirements of the determination of represented value at 10 CFR 429.42(a), as well as ENERGY STAR data and manufacturer-submitted data. The DOE requirements specify that manufacturers must determine the represented value, which includes the certified rating, for each basic model of commercial refrigerator, freezer, or refrigerator-freezer either by testing, in conjunction with the applicable sampling provisions, or by applying an alternative efficiency determination method (“AEDM”). In the case where the reported value is derived from testing, at least two or more units should be tested pursuant to 10 CFR 429.42 and the appropriate sampling statistics must be applied in order to develop the represented value. 79 FR 22277, 22296. Any represented value of energy consumption or other measure of energy use of a basic model for which consumers would favor lower values shall be greater than or equal to the higher of: (1) the mean of the sample or, (2) the upper 95 percent confidence limit (UCL) of the true mean divided by 1.10. 10 CFR 429.42(a)(1)(ii)(A). These requirements provide a statistical assessment of test results used to determine the represented value for a basic model which indicates a high level of confidence that the model population average energy use is less than or equal to the standard. DOE did not consider additional uncertainty in the proposed maximum daily energy consumption standard equation in this NOPR analysis.
DOE expects that Zero Zone is referring to section J., Enforcement Provisions, of the June 2022 Test Procedure NOPR and the respective proposed regulatory text at 10 CFR 429.134. As stated in the June 2022 Test Procedure NOPR, product-specific enforcement provisions specify which ratings or measurements DOE will use to determine compliance with applicable energy or water conservation standards. 87 FR 39164, 39211. Generally, DOE provides that the certified metric is used for enforcement purposes (
AHRI commented that many states that adopted the SNAP Rules do not allow the use of the refrigerant R404A. (AHRI, No. 46 at p. 3) AHRI requested clarification regarding whether this addresses self-contained cases. (
NAFEM expressed concern about DOE's position not to account for future refrigerant regulatory changes by the EPA. (NAFEM, No. 40 at p. 3). NAFEM stated its concern that DOE had not analyzed refrigerant transitions of remote condensing systems in the June 2022 Preliminary TSD and had declined to evaluate alternative refrigerants as a design option for remote CRE due to the lack of a test procedure. (
The Joint Commenters requested that DOE analyze propane refrigerant for additional equipment classes. (Joint Commenters, No. 39 at p. 1)
AHRI commented that a preliminary transition was in process from R-404A to refrigerants with a global warming potential of approximately 1500 and refrigerants used in colder temperature applications have a GWP of 2200. (AHRI, No. 46 at p. 12) AHRI noted that most lower-GWP refrigerants were limited by building codes because the necessary standard, UL 60335-2-89, was just published recently in October 2021. (
AHRI commented that EPA does not yet allow for R-290 or an ASHRAE Class A3 refrigerant to be used and few of the thousands of State and local building codes have been updated to charge refrigeration equipment and store necessary quantities to supply end-user needs. (
AHRI pointed out that manufacturers are still testing refrigerants for the 2026 transition, and that because refrigerant and component manufacturers have largely been focused on larger markets than many of the equipment types sold in the CRE space, not all of the details are known about the impact of specific refrigerants to energy efficiency. (
AHRI commented that most lower-GWP refrigerants have a different flammability classification than those currently used today and cost estimates must also include new electrical components required to be “spark-proof” to eliminate the risk of ignition in case of a leak. (
NAMA stated that several of the design options mentioned in the June 2022 Preliminary TSD are either not available or not realistic in NAMA equipment, such as the change to an A-3 refrigerant that would require nearly a dozen other components to also be changed. (NAMA, No. 37 at p. 7).
NAMA commented that DOE failed to mention the CRADA between the NAMA Foundation, DOE, and Oak Ridge National Laboratory (“ORNL”) in the June 2022 Preliminary TSD. (
Zero Zone commented that DOE asserted multi-circuit evaporators are a design option that would allow larger pieces of equipment to use propane in multiple small systems. (Zero Zone, No. 44 at p. 5) Zero Zone commented that using propane in systems over 150 grams requires additional leak-mitigation equipment. (
As recommended by stakeholders, DOE is considering the impact of the December 2022 EPA NOPR on CRE in this NOPR. As described in section I of this document, DOE understands that it would be beneficial to CRE equipment
Refrigerants not prohibited from use in CRE in the December 2022 EPA NOPR are presumed to be permitted for use in CRE. Table IV.5 summarizes the relevant provisions from the December 2022 EPA NOPR.
In the December 2022 EPA NOPR, self-contained CRE (EPA refers to self-contained CRE as “stand-alone equipment”) are limited to a GWP of 150 for all DOE self-contained equipment classes. Commercial refrigeration equipment has typically used R-404A or R-134a refrigerant, which have a GWP above 150. Because of the high GWP of R-404A and R-134a, significant research has been conducted to find alternative refrigerants with less or no GWP. Naturally occurring substances such as carbon dioxide, ammonia, and hydrocarbons (specifically propane (
DOE expects that the use of R-290 generally will improve efficiency as compared with the refrigerants currently in use (
DOE considered the requirement for components to be “spark-proof” for use with the R-290 refrigerant (
In chapter 2 of the June 2022 Preliminary TSD, DOE stated that DOE has not observed any additional leak monitoring or ventilation components for leak mitigation in any analyzed self-contained equipment that currently incorporates R-290 refrigerant.
In response to the comment from NAMA, DOE acknowledges the ongoing research at ORNL under the CRADA. DOE recognizes that leak mitigation technologies are still under development and requests comment and data on the use of such technologies, how they may impact CRE energy use as measured according to the DOE test procedure, and the associated cost of such technologies. DOE welcomes any additional comments and supporting data, including any additional results of the CRADA, in response to this NOPR.
DOE is also aware of small CRE equipment using R-600a, which is a similar refrigerant to R-290. DOE has tentatively determined that R-600a has similar refrigeration-cycle efficiency as R-290 and that the performance of CRE using R-290 is representative of CRE using R-600a.
As discussed in section IV.C.1.a, remote condensing CRE have proposed GWP limits of either 150 or 300, depending on the refrigerant system charge size or refrigerant system type. In chapter 2 of the June 2022 Preliminary TSD, DOE noted that the current and proposed DOE test procedures account for the refrigeration load of remote cases plus any energy consumed by components within the equipment.
DOE's analysis considers that these efficiency improvements, equipment costs, and manufacturer investments required to comply with the December 2022 EPA NOPR will be in effect prior to the time of compliance for the proposed amended DOE CRE standards for all CRE equipment classes and sizes. DOE has updated its baseline equipment costs to reflect current costs based on feedback received during manufacturer interviews, information collected during CRE teardowns, and market research.
The expected energy efficiency improvement associated with the change to R-290 is based on R-290 single-speed compressors currently available on the market suitable for CRE equipment. In this NOPR, DOE did not consider additional single-speed compressor efficiency improvements beyond the baseline because DOE expects that the single-speed compressors currently available on the market for refrigerants that comply with the December 2022 EPA NOPR represent the maximum single-speed compressor efficiency achievable for each respective equipment class.
DOE requests comment on its proposal to use baseline levels for CRE equipment based upon the anticipated design changes that will be made by manufacturers in response to the December 2022 EPA NOPR.
DOE further requests comment on its estimates of energy-use reduction associated with the design changes made by manufacturers in response to the December 2022 EPA NOPR.
NAMA stated that DOE's design changes, project energy efficiency improvements, and cost data on the 12 design options under consideration appeared outdated by 10 years and applicable only to very large machines greater than 50 cubic feet in volume. (
NAFEM and NAMA commented that the design options in the 2014 TSD were so stringent that industry had to go beyond DOE's standards and incorporate features such as LED lighting, brushless DC evaporator fan motors, high-performance doors, and brushless DC condenser fan motors. (NAFEM, No. 40 at pp. 5-6; NAMA, No. 37 at p. 5)
Zero Zone similarly stated that it disagrees with the design options that fall above the 2017 equipment class maximum daily energy consumption standard level and that LED lighting, high-efficiency fan motors (like ECM), and high-performance doors are already employed to meet current maximum energy consumption levels. (Zero Zone, No. 44 at p. 3) Zero Zone commented that this information is available on company specification sheets and that an analysis using this available information would show that the slope
ITW recommended adding technologies to the baseline as they were applied by industry, citing examples including ECM fans, high-efficiency compressors, and evaporator fan controls. (ITW, No. 41 at p. 34)
NAFEM and NAMA stated that because these and other technologies were already necessary to meet the 2014 standard, DOE should not be able to claim any new energy efficiency benefits when incorporating such technologies into the June 2022 Preliminary TSD. (NAFEM, No. 40 at p. 6; NAMA, No. 37 at p. 5) Zero Zone similarly commented that DOE's graph in the June 2022 Preliminary TSD indicates that using high-performance doors would reduce the calculated daily energy use from 35.14 kWh/day to 26.60 kWh/day, but Zero Zone stated that this design option is already employed by manufacturers, and that DOE is therefore double counting the impact of high-performance doors. (Zero Zone, No. 44 at p. 3).
AHRI commented that design options included in the June 2022 Preliminary TSD—such as high efficiency doors, fans, motors, and ECM in self-contained cases—are largely already incorporated by manufacturers to meet current standards and that counting them a second time will not cause the equipment to meet the proposed energy efficiency levels. (AHRI, No. 46 at p. 3) AHRI noted that vacuum-packed doors and insulation are a few of the recommended design options that are not already in use by manufacturers. (
AHRI commented that many potential energy saving scenarios in the June 2022 Preliminary TSD contain elements that are already in use or are technically impractical for refrigeration equipment. (
Continental stated that some selections in the June 2022 Preliminary TSD technology options have not been sufficiently evaluated for their current usage, anticipated contribution to energy reduction, technological viability, cost impact, and/or bearing on the utility of the equipment. (Continental, No. 38 at p. 2) Continental noted that many manufacturers already use improved transparent doors, high-efficiency LED lighting, and high-efficiency ECM fans to meet current standards for DOE and/or ENERGY STAR. (
Zero Zone commented that DOE did not conduct manufacturer interviews. (Zero Zone, No. 44 at p. 5) Zero Zone stated that each of its models in the compliance database uses a unique code to identify the components provided. (
With respect to comments from NAMA, NAFEM, ITW, AHRI, Continental, and Zero Zone, DOE followed a similar approach to the March 2014 Final Rule analysis in the June 2022 Preliminary Analysis but incorporated additional design options and updated the design option assumptions based on publicly available manufacturer specifications and preliminary test data. In support of this NOPR, manufacturer interviews were conducted and interviews yielded feedback on several aspects of the June 2022 Preliminary Analysis, including typical CRE baseline components. Further, DOE has reviewed the current CRE market, incorporated feedback from the June 2022 Preliminary Analysis, and incorporated information gathered during manufacturer interviews to update the baseline components in this NOPR to reflect current designs and ensure that design options have not already been implemented in a representative baseline CRE for each equipment class.
For the June 2022 Preliminary Analysis, DOE directly analyzed multiple equipment classes intended to represent the majority of industry shipments for CRE. Within each analyzed equipment class, DOE also selected a volume or TDA for the analysis to best represent the range of equipment available in that equipment class. For currently covered equipment classes, the representative volumes and TDAs selected were consistent with those analyzed for the March 2014 Final Rule. DOE has retained the June 2022 Preliminary Analysis approach in this NOPR. Although the NOPR analysis is conducted at one representative volume or TDA for each directly analyzed class, DOE considers the components, design options, costs, and energy use characteristics of CRE across the entire equipment class.
See chapter 5 of the NOPR TSD for additional details on the baseline components in each equipment class.
AHT commented that internal LED lighting is a common characteristic in all closed transparent equipment classes, yet in the June 2022 Preliminary Analysis, DOE does not indicate lights for the baseline design options for horizontal closed transparent self-contained equipment classes (HCT.SC.M, HCT.SC.L, HCT.SC.I). (AHT, No. 48 at p. 1) AHT stated that good internal illumination is of high importance for these units because their purpose is to display refrigerated or frozen food to the end consumer, whereas open units may be sufficiently illuminated with external ceiling lights. (
AHT commented that manufacturers have already incorporated many of the proposed design options to meet current limits for HCT.SC.M/L/I and provided the example of a unit from the HCT.SC.M equipment class with around 25 ft
Based on a review of these comments, manufacturer feedback, and the available equipment on the market, DOE has included lighting and additional components at the baseline for horizontal closed transparent CRE equipment in this NOPR. See chapter 5 of the NOPR TSD for additional details.
Regarding fan motors, the CA IOUs referred DOE to their comments on the July 2021 RFI in which they stated that there has been continued improvement in fan motors since energy conservation standards were last analyzed. (CA IOUs, No. 43 at p. 2) The CA IOUs expressed gratitude that DOE included electronically commutated permanent magnet motors, also known as brushless permanent magnet motors or brushless DC motors and synchronous motors; however, the CA IOUs also commented that the list of fan motor technology options analyzed for the closed-door refrigeration categories is incomplete, as shown in the CA IOUs Table 1, which lists all analyzed fan types alongside all self-contained equipment families. (
The Joint Commenters recommended that DOE analyze evaporator technologies for horizontal, closed CREs as DOE had done for the majority of CRE equipment classes. (Joint Commenters, No. 39 at p. 2) The Joint Commenters stated that DOE's analysis found that these evaporator-related technology options result in significant energy savings for other equipment classes analyzed. (
In response to the comments from the CA IOUs and the Joint Commenters, DOE notes that the horizontal closed category (horizontal closed transparent or solid equipment classes) consists of CRE that utilize either cold-wall or forced-air evaporators depending on the equipment class. DOE observed that each primary equipment class that utilizes forced air evaporators has an evaporator fan and motor and each primary equipment class that utilizes cold-wall evaporators does not have an evaporator fan and motor. Therefore, classes with a cold-wall evaporator did not have an evaporator fan motor design option. See chapter 5 of the NOPR TSD for additional details.
The CA IOUs commented that the June 2022 Preliminary TSD analysis for several equipment categories (
With respect to the comment from the CA IOUs, for chef bases or griddle stands, DOE has tentatively determined that, based on teardowns conducted in support of this NOPR, shaded-pole motors (“SPMs”) are used for fan motors in baseline equipment. See chapter 5 of the NOPR TSD for additional details.
Regarding the equipment noted by commenters, DOE has also updated baseline components in this NOPR for all equipment classes (including those components and classes mentioned by commenters) to better reflect baseline CRE. See chapter 5 of the NOPR TSD for additional detail.
NAFEM stated that it and other commenters recommended separating forced-air and cold-wall refrigeration systems into different categories, yet DOE deferred making a decision until a future proposed rule. (NAFEM, No. 40 at p. 3) NAFEM commented that the preliminary TSD stage is the appropriate stage to adopt a position on these categories and that DOE's deferral missed an opportunity for DOE to work with NAFEM members to fully understand the issues. (
NAFEM also commented that DOE's decision to defer accounting for different door configurations (roll-in, roll-through, and pass-through doors) presented a similar missed opportunity for DOE to work with NAFEM members. (
With respect to the comments from ITW and NAFEM, DOE recognizes that certain CRE equipment classes may contain equipment that utilize either forced-air evaporators or cold-wall evaporators and that certain CRE equipment classes may contain equipment that have different door configurations (
In section IV.A.1.b of this NOPR, DOE proposes definitions for pass-through, roll-in, roll-through, and sliding doors. Based on CCD data, information from commenters and manufacturer interviews, and DOE's directly analyzed units showing an energy use difference between certain types of CRE, DOE has tentatively developed an energy use multiplier for equipment classes that DOE observed CRE with pass-through, roll-in, roll-through, or sliding doors on the market. DOE has tentatively developed multipliers for pass-through, sliding, and roll-in doors (roll-through is a combination of pass-through and roll-in), which in combination account for all the different door designs currently observed on the market. See table IV.7 for additional details.
In section IV.A.1.b of this NOPR, DOE additionally proposes definitions for cold-wall and forced-air evaporators. Based on CCD data, information from commenters and manufacturer interviews, and DOE's directly analyzed units showing an energy use difference between certain types of CRE, DOE has tentatively developed an energy use multiplier for equipment classes that were directly analyzed in this NOPR as CRE with a cold-wall evaporator and which DOE observed CRE with forced-air evaporators in those equipment classes on the market. DOE has tentatively developed this multiplier to account for the additional energy use associated with a forced-air evaporator as compared to a cold-wall evaporator. See table IV.8 for additional details.
DOE requests comment on its proposal to apply an energy use multiplier to certain equipment classes that contain CRE with unique utility and energy use characteristics. DOE additionally requests comment on the proposed multiplier values and equipment classes for which these multipliers would be applied.
As part of DOE's analysis, the maximum available efficiency level is the highest efficiency unit currently available on the market. DOE also defines a “max-tech” efficiency level to represent the maximum possible efficiency for a given equipment.
After conducting the screening analysis described in section IV.B of this document and chapter 4 of the NOPR TSD, DOE considered the remaining design options in the engineering analysis to achieve higher efficiency levels. See chapter 5 of the NOPR TSD for additional detail on the design options.
With respect to the recommendation from the CA IOUs, DOE has not considered variable-speed fan technology as a design option for this NOPR. For open cases, the evaporator fan must run continuously to maintain the air curtain so any variable-speed function could disrupt the air curtain. For closed cases, DOE did not receive any data to show energy use savings associated with variable-speed fan control and has tentatively determined that variable-speed fan control would not reduce energy use according to the DOE test procedure. DOE notes that it did consider evaporator fan control (
NAFEM commented that DOE should make it easier for the public to understand how it calculates possible improvements that reduce energy consumption, providing the example of the efficiency of permanent-magnet synchronous motors (also known as synchronous-reluctance motors). (NAFEM, No. 40 at p. 6) NAFEM commented that these motors, for which NAFEM stated DOE claimed a theoretical efficiency of 75 percent, are not available in the rated wattages found in the 2022 spreadsheet, despite being the basis for two design-level options. (
Based on feedback during manufacturer interviews, feedback from commenters, and a review of the current market, DOE has tentatively determined to remove permanent-magnet synchronous motors (previously referred to as synchronous-reluctance motors) from the NOPR analysis because motors currently available on the market
The CA IOUs commented that the June 2022 Preliminary TSD inconsistently considered variable defrost for certain low- and medium-temperature categories. (CA IOUs, No. 43 at p. 6) As an example, the CA IOUs stated that the June 2022 Preliminary TSD analyzed variable defrost for horizontal open self-contained cases—medium temperature (“HZO.SC.M”) but not horizontal open self-contained cases—low temperature (“HZO.SC.L”). (
While DOE considered variable defrost as a design option in the June 2022 Preliminary Analysis, DOE has tentatively determined to remove this design option in the NOPR. Based on manufacturer feedback and test data, DOE has tentatively determined that there is variation across equipment classes and defrost types that would not allow for a variable-defrost control design option that is representative of each class. And based on discussions with manufacturers, all manufacturers are already controlling the defrost period on a time- or temperature-based defrost specific to each individual model to minimize the defrost time and energy consumption. For further discussion, see chapter 5 of the NOPR TSD.
AHT commented that it is unable to comprehend the listed energy-saving potentials for the different temperature classes and the values seem incorrect. (AHT, No. 48 at p. 6) AHT asked why the potential savings for variable-speed compressors, for example, are rated at 20 percent in the ice cream class, 35 percent in the low-temperature class, and zero percent in the medium-temperature class. (
DOE reviewed its engineering spreadsheet model and compressors analyzed and tentatively determined the discrepancy noted by AHT occurs because of the energy efficiency ratios (“EERs”) for single-speed and variable-speed compressors available on the market. Based on compressors analyzed from several manufacturers of CRE compressors, single-speed compressors available on the market, operating at medium back pressure (“MBP”) (medium-temperature refrigerators), typically have EERs more similar to those of variable-speed compressors available on the market, operating at MBP, when compared to compressors operating at low back pressure (“LBP”) (low-temperature freezers and ice-cream freezers). This means that there is less potential energy savings for medium-temperature refrigerators that use variable-speed compressors. The difference in EERs is based on the operation of a single-speed vs variable-speed compressor, which has a significant decrease in cooling capacity as the operating temperature decreases. See chapter 5 of the NOPR TSD for additional details on the compressor analysis.
NAMA commented that DOE should reduce the demands to make additional changes and acknowledge that manufacturers have already made changes that would contribute significantly to the Administration's climate change initiatives. (NAMA, No. 37 at p. 8) NAMA stated that the actual energy savings that can be attributed to DOE's design options in the June 2022 Preliminary TSD engineering analysis are closer to a 5-10-percent reduction from baseline energy usage after removing design options that are not technically feasible or that were accomplished years ago. (
DOE has considered commenters' feedback, information gathered through manufacturer interviews, and additional testing of analysis units to update the analysis, including the efficiency levels and max tech. See chapters 3 and 5 of the NOPR TSD for a description of each design option and how each is incorporated into the NOPR analysis.
AHT commented that the limits from the March 2014 Final Rule have almost eliminated the equipment classes HCT.SC.M, HCT.SC.L, and HCT.SC.I. (AHT, No. 48 at p. 2) AHT stated that the closed units within these classes are among the most efficient food display equipment in retail stores and corresponding open units consume far more energy while being regulated less strictly. (
DOE has considered commenters' feedback, information gathered through manufacturer interviews, and additional testing of analysis units to update the analysis for horizontal closed transparent equipment. See chapter 5 of the NOPR TSD for additional details on the baseline specifications and design options analyzed for these equipment classes.
The Joint Commenters stated that, for several of the equipment classes analyzed, multiple models at comparable sizes in DOE's CCD exceed the max-tech efficiency level in the engineering analysis. (Joint Commenters, No. 39 at p. 3) The Joint Commenters provided an example that DOE's max-tech level for the representative service over counter remote condensing medium temperature (“SOC.RC.M”) unit is 14.7 kWh/day, yet there are multiple models in the CCD at a comparable size with energy consumption as low as about 10 kWh/day. (
While DOE considers the maximum efficiency level for CRE available on the market, there are certain components or technologies for equipment classes that manufacturers may choose to implement that are not directly analyzed as a design option. For example, some manufacturers may have different airflow designs for open cases that affect energy use, which are calibrated specific to a CRE model, referred to as an “air curtain”. Air curtains are only applicable on open units (such as the VOP.SC.M equipment class mentioned by the Joint Commenters) and are intended to mitigate heat infiltration into the CRE. See section IV.B.1.d of this NOPR or chapters 3 and 4 of the NOPR TSD for additional details on air curtains. DOE analyzes design options that pass the
In performing the engineering analysis in the March 2014 Final Rule, DOE selected representative units for each primary equipment class to serve as analysis points in the development of cost-efficiency curves. 79 FR 17726, 17746. In selecting these units, DOE researched the offerings of major manufacturers to select models that were generally representative of the typical offerings produced within the given equipment class.
As noted in the Executive Summary of the June 2022 Preliminary Analysis, DOE analyzed the same representative volumes and TDAs developed in the March 2014 Final Rule.
NAFEM stated that, as demonstrated in its 2015 brief,
NAFEM stated that ITW compared the March 2014 Final Rule engineering spreadsheet to the 2022 engineering spreadsheet related to the preliminary analysis for CRE. (NAFEM, No. 40 at p. 4) NAFEM commented that the equipment classes subject to review were VCT.SC.M, VCT.SC.L, VCS.SC.M, and VCS.SC.L, which included self-contained refrigerators and freezers at medium and low temperatures with both solid and transparent vertical closed doors. (
ITW commented that the CRE engineering spreadsheet made generalized assumptions that could be considered opinion versus facts and all product types in an equipment class are not reflected. (ITW, No. 41 at p. 2) ITW commented that the spreadsheet requires validation, that costs are inaccurate to the point of being useless, that more collaboration with manufacturers is needed, and that DOE should build confidence in the spreadsheet by making it more visible. (
Zero Zone commented that some of DOE's models have errors and asked that DOE share the raw data for these models, including, at minimum, the type and number of models that were reverse engineered and/or lab tested. (Zero Zone, No. 44 at p. 1)
With respect to the comments from NAFEM, ITW, and Zero Zone, DOE developed and calibrated the engineering spreadsheet model based on test data from directly analyzed units, feedback from manufacturer interviews, and market data from the CCD. DOE has also published the engineering spreadsheet model for the June 2022 Preliminary Analysis and for this NOPR. In support of this NOPR, DOE tested 70 CRE models and reverse engineered 47 CRE models. These models consisted of all equipment families within the scope of this NOPR except pull-down temperature applications, and all temperature classes. The volume range of these models is 3 ft
NAFEM requested an explanation regarding the 75-percent reduction in “Infiltrated Air Mass Flow (lb/hr)” on the 2022 engineering spreadsheet under “Design Specifications” when compared with the 2014 spreadsheet. (NAFEM, No. 40 at p. 6)
ITW similarly commented that DOE failed to provide any supporting documentation, calculations, or impact analysis for updates from the 2013 and 2014 CRE engineering spreadsheets to the 2022 revision used to estimate performance in terms of Infiltrated Air Mass Flow [lb/hr] and Polyurethane Foam K-Factor [Btu*in/ft
ITW added that DOE spent considerable time in 2013 and 2014 developing the energy consumption model and calculating the right values for Infiltrated Air Mass Flow [lb/hr], working with manufacturers' detailed specifications, calculating sensible and latent heat loads due to infiltration, and reviewing and revising the infiltrated air mass flow values for certain equipment classes, including VCT and VCS based on stakeholder feedback. (
ITW commented that DOE discarded specific data when faced with energy consumption values above the MDEC for the baseline unit in the 2022 engineering spreadsheet, instead calculating new values for the baseline unit and not DOE's own energy model. (
Based on comments received from NAFEM and ITW, DOE has re-evaluated the infiltrated air-mass flow and insulation design specifications in this NOPR. Based on feedback provided from manufacturers during manufacturer interviews, DOE updated the infiltrated air-mass flow and insulation design specifications in this NOPR to be more consistent with the March 2014 Final Rule. See chapter 5 of the NOPR TSD for additional details.
Zero Zone commented that the fraction of power into case for evaporator motors is missing. (Zero Zone, No. 44 at p. 3) Zero Zone stated that this heat load is illustrated in the component load in the model diagram tab but not included in the daily energy consumption calculations. (
DOE reviewed the engineering spreadsheet model published to the docket
ITW commented that to review data in the CRE engineering spreadsheets, the Excel macros needed to function, but the 2013 and 2014 CRE engineering spreadsheet macros were not found to be executable in Excel using a 64-bit Windows 10 computer and instead required Excel running on a 32-bit WindowsNT machine. (ITW, No. 41 at p. 6)
In response to the comment from ITW, DOE notes that the data and formulas are reviewable regardless of the version of the Windows operating system being used because the macros do not affect the underlying data and formulas.
In response to the June 2022 Preliminary Analysis, three industry trade associations surveyed their members to provide feedback to DOE on the June 2022 Preliminary Analysis. The survey is located on the docket,
AHRI, NAMA, and NAFEM stated that more than 50 percent of the data in the survey was shared by small businesses (<1250 employees). (Trade Associations Survey, No. 50 at p. 8) The manufacturers surveyed manufacture all equipment types (to varying degrees) directly analyzed in the June 2022 Preliminary Analysis, besides VCT.SC.I equipment. (
The survey provided a heat map of design options currently used across different equipment classes. (
AHRI, NAMA, and NAFEM provided a chart asking manufacturers why certain design options were not used. (
AHRI, NAMA, and NAFEM stated that some manufacturers identified ways to use design options to meet EL 1-3 proposed in the June 2022 Preliminary Analysis; however, no manufacturers thought EL 4-6 was feasible for any equipment class. (
AHRI, NAMA, and NAFEM commented that manufacturers reported using the most energy-efficient foam insulation available, with an average K factor of 0.15. (
AHRI, NAMA, and NAFEM noted that survey respondents indicated that VIPs could not be incorporated into the foam matrix without early failures, raising concerns that VIPs are not a viable design option. (
DOE has considered the results of this survey as part of its NOPR engineering analysis.
The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of cost approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the regulated equipment, and the availability and timeliness of purchasing the equipment on the market. The cost approaches are summarized as follows:
•
•
•
In the present case, DOE conducted the analysis using physical and catalog teardowns. See chapter 5 of the NOPR TSD for additional details.
DOE received several comments in response to the June 2022 Preliminary Analysis related to the manufacturer production costs (“MPCs”).
NAFEM commented that it compared inflation index and cost model values in DOE's engineering spreadsheets with ITW's own calculations for the same values. (NAFEM, No. 40 at p. 5) NAFEM stated that significant discrepancies existed between DOE's and ITW's calculations of the inflation index for evaporator and condenser fan motors, evaporator coil, condenser coil, insulation, and core case cost. (
NAFEM commented also that it found inaccuracies in DOE's calculations used for a cost analysis of design-level technology options. (
NAFEM commented that it reviewed the calculations and assumptions for DOE's energy analysis at the 16 design option levels, and NAFEM noted that ITW would supply DOE with a current inflation rate for review as a cost structure update for 2022. (
NAMA commented that it conducted an analysis of the effect of present inflation levels on the cost of components, summarizing the results of its analysis in a table showing the major components in efficiency compared with cost increases from October 2020 to April 2021 and from October 2021 to April 2022. (NAMA, No. 37 at pp. 13-14) NAMA recommended that DOE factor in the unprecedented inflation of basic constituents in CRE machines into the costs shown for design options and into the economic analysis. (
ITW presented several examples of spreadsheet data comparing the 2014 TSD and June 2022 Preliminary TSD engineering spreadsheets. (ITW, No. 41 at pp. 36-47) ITW noted that, for all evaluations, MPC appeared to be down in 2022 relative to the 2014 reference, but the 2022 engineering spreadsheet did not reflect actual market changes, and when specifications and ordering were held to the 2014 reference, energy was up. (
AHRI commented that the baseline case should be modified to reflect current market prices, including the use of LEDs and energy-efficient doors, enhanced frames, and ECM fan motors. (AHRI, No. 46 at p. 6) AHRI commented that components were incorporated and upgraded to meet DOE's previous CRE energy-efficiency requirements and that the no-standards-case efficiency distribution will need to be amended based on those corrections. (
ITW commented that, in DOE's engineering analysis in the June 2022 Preliminary TSD, DOE failed to establish an accurate baseline cost and, as a result, justification for any change to the MDEC was suspect to bias and/or error. (ITW, No. 41 at pp. 27-28) ITW commented that costs have not fallen by 12.4 percent or even remained flat as stated in the June 2022 Preliminary TSD, section 5.6 Core Case Costs, and that, in fact, costs have risen by up to 24.9 percent. (
In response to these comments, DOE has updated the NOPR analysis to reflect current inflation rates (
NAFEM commented that DOE should make it easier for the public to understand how it calculates possible improvements that reduce energy consumption. (NAFEM, No. 40 at p. 6) NAFEM identified the costs of microchannel condenser coils as an example where it believes improved clarity would be beneficial. (
With respect to the comment from NAFEM, DOE has further described the cost and efficiency assumptions for each design option, including microchannel condensers, in chapter 5 of the NOPR TSD.
NAMA commented that it found errors in the June 2022 Preliminary TSD for design options as follows: (a) high-efficiency reciprocating compressor for VCS.SC.M is shown at a cost of $9.23 but for VCT.SC.M it is shown as $4.01; (b) UA evaporator coil is shown for VCT.SC.H at $16.01 but for VCT.RC.M is $65.84, for VCS.SC.M is $14.33 and for VCT.SC.M is $22.90; (c) variable-speed compressor for VCS.SC.M is $72.54, for VCT.SC.M is $79.27 but for VCT.SC.L is $168.34; and (d) VIG door for VCT.SC.M is $837.38 but for VCT.RC.M is projected at $2,095.84. (NAMA, No. 37 at pp. 10-11) NAMA requested DOE's justification for variations in the cost of the same component and further stated that this rulemaking should be withdrawn and replaced with accurate estimates, particularly for machines under 30 cubic feet in capacity. (
With respect to the comment from NAMA, DOE assigns design specifications and costs for each equipment class based on a representative volume or TDA. Therefore, components may be a different size or capacity than other equipment classes, which likely yields a different cost. DOE expects that the different representative volumes or TDAs account for the differences described by NAMA. For example, the VCT.SC.M primary equipment class analyzed has 2 doors, whereas the VCT.RC.M primary equipment class analyzed has 5 doors. For more information on the design option costs, see chapter 5 of the NOPR TSD.
To account for manufacturers' non-production costs and profit margin, DOE applies a multiplier (the manufacturer markup) to the MPC. The resulting manufacturer selling price (“MSP”) is the price at which the manufacturer distributes a unit into commerce. DOE developed an industry average manufacturer markup by examining the prior CRE rulemaking and annual Securities and Exchange Commission (“SEC”) 10-K reports
DOE seeks comment on the method for estimating manufacturing production costs.
The results of the engineering analysis are reported as cost-efficiency data (or “curves”) in the form of daily energy consumption (in kWh) versus MPC (in dollars). DOE developed curves representing the primary equipment classes. The methodology for developing the curves started with determining the energy consumption for baseline equipment and MPCs for this equipment. Above the baseline, design options were implemented until all available technologies were employed (
In response to the June 2022 Preliminary Analysis, the Joint Commenters recommended that DOE evaluate additional, intermediate-efficiency levels for certain equipment classes that fall between the downstream efficiency levels currently analyzed. (Joint Commenters, No. 39 at p. 4) The Joint Commenters commented that EL 5 for the VCS.SC.M equipment class is cost effective but EL 6 is not; however, an intermediate level between EL 5 and EL 6 (a so-called “EL 5.5”) could be cost effective. (
NAMA stated that DOE had requested comments on the design options for each equipment class, but provided very little information on which commenters can base comments. (NAMA, No. 37 at p. 10) NAMA provided a detailed review of each of the design options considered by DOE in annex A to its comment and commented that DOE estimated that options AD4, 8, 9, 11, 12, and 13 in table 5.8.8 (results for VCT.SC.M) each have energy savings of less than 3 percent. (
In response to the comments from the Joint Commenters and NAMA, DOE updated the EL structure in its NOPR analysis to better reflect the cost-effective design path that manufacturers can take to achieve the ELs. DOE notes that design options are typically ordered by cost effectiveness, which may result in design options with low energy savings and high costs at the end of the design option order. DOE has updated the NOPR analysis based on comments received and manufacturer interview feedback. DOE provides additional details on design options in chapters 3-5 of the NOPR TSD.
The markups analysis develops appropriate markups (
In the June 2022 Preliminary Analysis, DOE considered the following distribution channels:
1a. Contractor channel with replacement (Manufacturer → Wholesaler → Mechanical Contractor → Consumer)
1b. Contractor channel with new construction (Manufacturer → Wholesaler → Mechanical Contractor → General Contractor → Consumer)
2. Wholesale channel (Manufacturer → Wholesaler → Consumer)
3. National account channel (Manufacturer → Consumer).
Following the June 2022 Preliminary Analysis, AHRI suggested that DOE should revise several channels, create a fourth channel for reused or refurbished equipment, and refer to consumers as “end-users” because the term consumer may imply individuals or families. (AHRI, No. 46 at pp. 3-4) AHRI also recommended DOE to include other CRE purchaser categories, such as buyer's clubs, restaurant consortiums, food service consultants, and governmental bids. (
In consideration of the AHRI feedback, DOE included an additional national account channel in which manufacturers sell the equipment to contractors, who in turn sell the equipment to end users. With regard to the suggested addition of distribution channels for reused or refurbished equipment, DOE notes that the markup analysis only pertains to new equipment purchases; therefore, DOE did not consider such distribution channels in the markups analysis. However, refurbishments were considered in the LCC analysis (see section IV.F of this document for details). In the Trade Associations Survey, no market share inputs were provided for the OEM-to-OEM channel. As a result, DOE did not consider this in the final distribution channels. DOE re-estimated the market shares of distribution channels based on manufacturer inputs from the Trade Associations Survey. DOE clarifies that it considers all purchasers of CRE in its analyses and is using the term CRE “purchaser” and “consumer” interchangeably in this document.
The CA IOUs commented that DOE should separate distribution channels by condensing unit configuration. (CA IOUs, No. 43 at p. 6) The CA IOUs stated that there are differences in the sales structure for remote-condensing and self-contained equipment that necessitate a separate pricing analysis. (
DOE acknowledges that equipment with different condensing unit configurations would have different applications and thus different sales structures. In the markups analysis, DOE contends that each equipment type (
DOE developed baseline and incremental markups for each actor in the distribution chain. Baseline markups are applied to the price of equipment with baseline efficiency, while incremental markups are applied to the difference in price between baseline and higher-efficiency models (the incremental cost increase). The incremental markup is typically less than the baseline markup and is designed to maintain similar per-unit
DOE developed baseline and incremental markups for wholesalers and contractors using U.S. Census Bureau data from the 2017 Annual Wholesale Trade Report and the 2017 U.S. Economic Census, respectively.
DOE requests comment on the CRE distribution channels and overall on the markups analysis.
Chapter 6 of the NOPR TSD provides details on DOE's development of the markups analysis for CRE.
The purpose of the energy use analysis is to determine the annual energy consumption of CRE at different efficiencies in representative U.S. commercial buildings, and to assess the energy savings potential of increased CRE efficiency. The energy use analysis estimates the range of energy use of CRE in the field (
For CRE, DOE calculated the energy consumption of the equipment as part of the engineering analysis (see chapter 5 of the NOPR TSD).
DOE requests comment on its approach for the energy use analysis.
Chapter 7 of the NOPR TSD addresses DOE's energy use analysis for CRE.
DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for CRE. The effect of new and amended energy conservation standards on individual purchasers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts:
• The LCC is the total consumer expense of an equipment over the life of that equipment, consisting of total installed cost (manufacturer selling price, distribution chain markups, sales tax, and installation costs) plus operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the equipment.
• The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of more-efficient equipment through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost at higher efficiency levels by the change in annual operating cost for the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC relative to the LCC in the no-new-standards case, which reflects the estimated efficiency distribution of CRE in the absence of new and amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline equipment.
For each considered efficiency level in each equipment class, DOE calculated the LCC and PBP for a nationally representative set of commercial buildings that use CRE. DOE developed commercial buildings samples from the DOE EIA's 2018 Commercial Buildings Energy Consumption Survey (“2018 CBECS”).
Inputs to the calculation of total installed cost include the cost of the equipment—which includes MPCs, manufacturer markups, retailer and distributor markups, and sales taxes—and installation costs. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, equipment lifetimes, and discount rates. DOE created distributions of values for equipment lifetime, discount rates, and sales taxes, with probabilities attached to each value, to account for their uncertainty and variability.
The computer model DOE uses to calculate the LCC relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and CRE user samples. For this rulemaking, DOE conducted probability analyses by randomly sampling from probability distributions using Python. To calculate the LCC and PBP for CRE, DOE performed 10,000 Monte Carlo simulations for each variable. During a single trial, random values are selected from the defined probability distributions for each variable, which enables the estimation of LCC and PBP with uncertainty evaluation. The analytical results include a distribution of 10,000 data points showing the range of LCC savings for a given efficiency level relative to the no-new-standards case efficiency distribution. In performing an iteration of the Monte Carlo simulation for a given purchaser, equipment efficiency is chosen based on its probability. If the chosen equipment efficiency is greater than or equal to the efficiency of the standard level under consideration, the LCC calculation reveals that a consumer is not impacted by the standard level. By accounting for consumers who already purchase more-efficient equipment, DOE avoids overstating the potential benefits from increasing equipment efficiency.
DOE calculated the LCC and PBP for consumers of CRE as if each were to purchase new equipment in the expected year of required compliance with new and amended standards. New and amended standards would apply to CRE manufactured 3 years after the date on which any new and amended standards are published. (42 U.S.C. 6313(c)(6)(C)(i). At this time, DOE estimates publication of a final rule in the second half of 2024. Therefore, for purposes of its analysis, DOE used 2028 as the first full year of compliance with any amended standards for CRE.
Table IV.9 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the Python model,
To calculate consumer equipment costs, DOE multiplied the MPCs developed in the engineering analysis by the markups described previously (along with sales taxes). DOE used different markups for baseline equipment and higher-efficiency equipment because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency equipment.
DOE used a price learning analysis to account for changes in LED lamp prices that are expected to occur between the time for which DOE has data for lamp prices (2022) and the assumed compliance date of the rulemaking (2028). See chapter 8 of the NOPR TSD for more details on how price learning for LED lighting was applied.
In response to the June 2022 Preliminary Analysis, the Joint Commenters noted that while DOE included price trends for lighting design options, other design options, such as variable-speed compressors and high-efficiency fans were not included, and the Joint Commenters encouraged DOE to incorporate price trends for additional CRE design options. (Joint Commenters, No. 39 at p. 5)
As discussed in section IV.C of this document, DOE included variable-speed compressors as a technology option for higher efficiency levels in certain equipment classes. To develop future prices specific for that technology, DOE applied a different price trend to the electronic control board of the variable-speed compressor. DOE estimated that the cost of that control board was 50 percent of the cost of the variable frequency drive (“VFD”) included in the variable speed compressor. DOE used Producer Price Index (“PPI”) data on “semiconductors and related device manufacturing” between 1967 and 2021 to estimate the historic price trend of electronic components in the control.
DOE requests comment on its price learning assumptions and methodology.
Installation cost includes labor, overhead, and any miscellaneous materials and parts needed to install the equipment.
In response to the June 2022 Preliminary Analysis, the CA IOUs commented that DOE overestimated installation costs for self-contained equipment compared to remote condensing equipment. (CA IOUs, No. 43 at p. 7) DOE notes that, in the LCC and PBP, such costs were assumed not to vary by EL within the same equipment class, and, therefore, were not considered in the June 2022 Preliminary Analysis.
AHRI commented that more efficient equipment can be more expensive to install and may require more time to set up due to additional programming, equipment size changes with type of insulation used, and technician training. (AHRI, No. 46 at p. 5) Thus, AHRI concluded that installation cost may change with efficiency level. (
In response to these comments, DOE found no evidence that any of the analyzed design options considered in this NOPR require additional installation time. DOE estimates that installation workers may already have the required skills to install the analyzed design options or would adjust their labor rates equally across all efficiency levels if necessary skills are lacking. Therefore, as in the June 2022 Preliminary Analysis, DOE assumed that installation costs do not vary by efficiency level (within the same equipment class) and did not account for installation costs in the LCC and PBP analyses.
DOE requests comment and data to inform how any of the analyzed design options would require additional installation time, training, or other related skills compared to the baseline equipment.
For each equipment class, DOE determined the annual energy consumption for each sample equipment user of CRE at different efficiency levels using the approach described in section IV.E of this document.
Because marginal electricity price more accurately captures the incremental savings associated with a change in energy use from higher efficiency, it provides a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE applied average electricity prices for the energy use of the equipment purchased in the no-new-standards case, and marginal electricity prices for the incremental change in energy use associated with the other efficiency levels considered.
DOE derived electricity prices in 2022 for each census division using data from Edison Electric Institute (“EEI”) Typical Bills and Average Rates reports. Based upon comprehensive, industry-wide surveys, this semi-annual report presents typical monthly electric bills and average kilowatt-hour costs to the customer as charged by investor-owned utilities. For the commercial sector, DOE calculated electricity prices using the methodology described in Coughlin and Beraki (2019).
DOE's methodology allows electricity prices to vary by sector, region, and season. In the analysis, variability in electricity prices is chosen to be consistent with the way the consumer economic and energy use characteristics are defined in the LCC analysis. For CRE, DOE calculated weighted-average values for average and marginal price for the nine census divisions for the commercial sector for both large-size (greater than 5,000 ft
To estimate energy prices in future years, DOE multiplied the 2022 energy prices by the projection of annual average price changes for each of the nine census divisions from the Reference case in
Repair costs are associated with repairing or replacing equipment components that have failed in an appliance or equipment; maintenance costs are associated with maintaining the operation of the equipment. Typically, small incremental increases in equipment efficiency entail no, or only minor, changes in repair and maintenance costs compared to baseline efficiency equipment. DOE does not account for lost time when CRE fails or breaks, as DOE does not have data indicating how that would affect outcomes considered in the LCC, such as operating cost. In the June 2022 Preliminary Analysis, DOE calculated repair costs by considering the typical failure rate of refrigeration system components (compressor, lighting, and evaporator and condenser fan motors), component MPCs and associated markups, and the labor cost of repairs, which is assumed to be performed by private vendors. As discussed in sections 8.3.3 and 8.3.4 of the June 2022 Preliminary Analysis TSD, DOE considered the following specific CRE components and associated failure probabilities during typical CRE lifetime in its repair cost approach: compressor (25 percent), evaporator fan motor (50 percent), condenser fan motor (25 percent), and LED lighting (100 percent), with the presence of occupancy sensors decreasing LED lighting repair frequency by half.
In response to the June 2022 Preliminary Analysis, Continental commented that microchannel condenser coils require more frequent cleaning due to the accumulation of debris and are more susceptible to corrosion and leaks, which often requires replacement. (Continental No. 38 at p. 2) And AHRI stated that microchannel condenser coils require more frequent cleaning. (AHRI, No. 46 at pp. 5-6)
In response to these comments regarding the impact of microchannel condenser coils on repair and maintenance costs and based on feedback from manufacturer interviews, DOE agrees with commenters that microchannel condenser coils are subject to more accumulation of debris, which may result in extended cleaning time. However, DOE found no evidence that microchannel condenser coils may be more susceptible to corrosion and leaks, or that these problems are not repairable with similar labor and material inputs as baseline units. Accordingly, DOE has updated its maintenance costs of equipment with microchannel condenser coils to account for an additional 10 minutes of annual cleaning.
Continental commented that controls for defrost, lighting, and anti-sweat heaters can be challenging for technicians to diagnose and fix, leading to additional labor time and material replacement costs. (Continental No. 38 at p. 2) AHRI, NAMA, and NAFEM commented that adding higher-efficiency CRE components leads to increased repair and maintenance costs due to the component purchase price and labor time. (Trade Associations Survey, No. 50 at p. 26)
With respect to the comments from Continental and AHRI, NAMA, and NAFEM, DOE clarifies that neither vacuum-insulated panels nor controls for defrost and anti-sweat heaters are considered design options. DOE did not consider preventative maintenance for other design options, such as lighting occupancy sensors and night curtains, because DOE assumed they have similar average lifetimes to the equipment in which they are installed.
AHRI commented that additional labor costs should be considered for flammable refrigerants. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM commented that equipment using alternative refrigerants (R-290) should have higher repair costs because leaks are harder to detect. (Trade Associations Survey, No. 50 at p. 26) DOE reiterates in response that equipment classes are analyzed individually and all analyzed self-contained equipment classes use R-290, so there are no refrigerant changes by efficiency level.
AHRI commented that labor shortages have caused an increase in servicing costs. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM commented that there is a shortage of qualified service technicians for CRE in the United States
DOE requests comment and data on its assumptions and approach regarding consideration of repair and maintenance costs in the LCC and PBP analyses. Specifically, DOE requests data on the expected lifetimes and repair and maintenance frequencies of the considered design options in this NOPR.
DOE used a lifetime distribution to characterize the probability that CRE will be retired from service at a given age. For the June 2022 Preliminary Analysis, consistent with the approach followed in the March 2014 Final Rule, which was based on discussions with industry experts, DOE had assumed that lifetime of CRE is correlated to the frequency of store renovations. DOE had also estimated an average lifetime of 10 years for all large-size and small food-service buildings and 15 years for small food-sales buildings, and other businesses with CRE (per the CBECS sample) correlating such buildings with businesses that may have longer renovation cycles, such as independent grocery stores.
In response to the June 2022 Preliminary Analysis, AHRI commented that smaller businesses use their equipment for 15-25 years due to the cost of upgrading. (AHRI, No. 46 at p. 6) AHRI added that, in some cases, compressor racks may be used for 30-40 years, while display cases are switched out once during this time. (
Based on these comments, DOE has adjusted the mean lifetime distribution assumption for CRE to 10 years for large-size buildings and 20 years for small-size buildings, with a maximum lifetime of 40 years for each. DOE clarifies that it does not analyze the energy use of refurbished CRE because such equipment is not subject to new standards. However, DOE accounted for purchasers who sell their CRE to a refurbisher before the end of the equipment lifetime, by assigning a credit equivalent to the residual value of the used equipment at the selling year. See the following section (IV.F.7) for details on the residual value approach.
DOE requests comment and data regarding the CRE lifetime assumptions and methodology.
See chapter 8 of the NOPR TSD for more information.
To model the phenomenon of CRE sold for refurbishment, DOE utilized a residual value for such equipment in the LCC. The residual value represents the remaining dollar value of surviving CRE at the average age of refurbishment, estimated to be 5 years for small-size food service buildings (
DOE requests comment and data on the assumed business types and the corresponding CRE lifetimes at which refurbishment may occur.
In the calculation of LCC, DOE applies discount rates appropriate to commercial consumers to estimate the present value of future operating cost savings.
For purchasers of CRE in the commercial sector, DOE used the cost of capital to estimate the present value of cash flows to be derived from a typical company project or investment. Most companies use both debt and equity capital to fund investments, so the cost of capital is the weighted-average cost to the firm of equity and debt financing. This corporate finance approach is referred to as the weighted-average cost of capital. DOE used currently available economic data in developing commercial discount rates, with Damodaran Online being the primary data source.
See chapter 8 of the NOPR TSD for further details on the development of discount rates.
To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular efficiency level, DOE's LCC analysis considered the projected distribution (market shares) of equipment efficiencies under the no-new-standards case (
To estimate the energy efficiency distribution of CRE for 2028, DOE used test data, feedback from manufacturer interviews, surveys (
To create a robust sample for the energy efficiency distribution used in the LCC analysis, DOE grouped the 28 CRE equipment classes into 21 separate groups. For the equipment classes that DOE relied on CCMS model count data
In response to the June 2022 Preliminary Analysis, Continental commented that DOE's approach to derive the no-standards-case efficiency distribution by relying on manufacturer model counts in the CCMS database is erroneous. (Continental, No. 38 at p. 2) Continental stated that model counts in DOE's CCMS do not reflect sales or market share, but rather the variety of different models that manufacturers offer. (
For this NOPR, as discussed in previous sections, DOE was able to conduct manufacturer interviews and collect shipments data for several equipment classes. The equipment classes for which data was collected account for 85 percent of total shipments and are marked with an asterisk in table IV.10. For the remainder of the equipment classes for which DOE was not able to collect representative shipments data from manufacturers, DOE utilized the CCMS database to estimate the no-new-standards-case efficiency distribution.
The LCC Monte Carlo simulations draw from the efficiency distributions and randomly assign an efficiency to the CRE purchased by each sample CRE purchaser in the no-new-standards case. The resulting percent shares within the sample match the market shares in the efficiency distributions.
While DOE acknowledges that economic factors may play a role when consumers purchase CRE, assignment of CRE efficiency for a given installation, based solely on economic measures such as life-cycle cost or simple payback period, most likely would not fully and accurately reflect actual real-world installations. There are a number of market failures discussed in the economics literature that illustrate how purchasing decisions in the commercial sector with respect to energy efficiency are unlikely to be perfectly correlated with energy use. One study in particular showed evidence of substantial gains in energy efficiency that could have been achieved without negative repercussions on profitability, but the investments had not been undertaken by firms.
DOE requests comment on its methodology and data to better inform the no-standards-case efficiency distribution for CRE.
The payback period is the amount of time (expressed in years) it takes the consumer to recover the additional installed cost of more efficient equipment, compared to baseline equipment, through energy cost savings. Payback periods that exceed the life of the equipment mean that the increased total installed cost is not recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the change in total installed cost of the equipment and the change in the first-year annual operating expenditures relative to the baseline. DOE refers to this as a “simple PBP” because it does not consider changes over time in operating cost savings. The PBP calculation uses the same inputs as the LCC analysis when deriving first-year operating costs.
As noted previously, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing equipment complying with an energy conservation standard level will be less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)). For each considered efficiency level, DOE determined the value of the first year's energy savings by calculating the energy savings in accordance with the applicable DOE test procedure and multiplying those savings by the average energy price projection for the year in which compliance with the new and amended standards would be required.
DOE uses projections of annual equipment shipments to calculate the national impacts of potential amended or new energy conservation standards on energy use, NPV, and future manufacturer cash flows.
The shipments analysis projects units of open and closed refrigeration cases sold in future years in each of food sales, food service, and all other applications combined. These equipment classifications and applications are defined in EIA's 2018 CBECS. DOE estimates demand for these equipment categories in these applications by calculating demand coming from new construction as well as the replacement of retiring units, for each year.
To calculate new demand for these equipment classes in each application, DOE combined new and existing floorspace projections from
To compute demand for replacements, DOE used the lifetime distributions determined in the LCC analysis, which estimates an average lifetime of 10 years for large grocery/multi-line stores (food-sales buildings) and restaurants (food-service buildings), and an average lifetime of 20 years for small food-sales and food-service buildings, with a maximum lifetime of 40 years for all equipment. In each analysis year of the model, DOE calculated retirements across the distribution to compute all demand arising from the retirements.
In response to the June 2022 Preliminary Analysis, AHRI stated that significantly higher-cost equipment would drive growth of the refurbished equipment market and lead to continued use of older equipment with lower efficiencies and higher GWP refrigerants. (AHRI, No. 46 at p. 15) As discussed in section IV.F.6 of this NOPR, DOE revised its assumptions of lifetime of equipment for small buildings from 15 years at the stage of the preliminary analysis to 20 years in this NOPR. To account for the use of refurbished equipment, DOE assumed an elasticity effect for a fraction of the CRE shipments, which is limited to small-size buildings. DOE applied an elasticity constant of −0.5 to shipments for small-size buildings and scaled this constant down to −0.15 over a period of 20 years (then constant thereafter) from the current year of calculations.
DOE requests comment on the price elasticity assumptions for the CRE shipments analysis as they relate to the overall CRE market and the market for refurbished CRE.
AHRI stated that DOE incorrectly estimated the number of existing units in use, as well as their average lifespan and noted that there are significantly more units in current use than DOE estimated. (
Historically, the annual amount of CRE capacity shipped has been depicted in linear feet, which is also an alternative way to express shipments data. DOE determined the linear feet shipped for any given year by multiplying each unit shipped by its associated average length and then summing all the linear footage values. Chapter 9 of the NOPR TSD presents the representative equipment-class lengths used for the conversion of per-unit shipments to linear footage within each equipment class.
AHRI commented that changes to market shares would result in corresponding changes to shipping methodologies and added that some of the imposed requirements would cause retailers to favor open cases, or to take doors off completely. (AHRI, No. 46 at pp. 7-8) AHRI added that the impact of pending refrigerant regulations is unknown. (
AHRI shared, in response to DOE's inquiring about market trends in the June 2022 Preliminary Analysis, that architecture in facilities is anticipated to change due to the refrigerant transition. (AHRI, No. 46 at p. 7) AHRI added that these changes are due in part to the lack of available refrigerants and the likely consequent growth in market share in self-contained and smaller units. (
Chapter 9 of the NOPR TSD provides additional details regarding the shipments analysis.
The NIA assesses the NES and the NPV from a national perspective of total consumer costs and savings that would be expected to result from new and amended standards at specific efficiency levels.
DOE evaluates the impacts of new and amended standards by comparing a case without such standards with standards-case projections. The no-new-standards case characterizes energy use and consumer costs for each equipment class in the absence of new and amended energy conservation standards. For this projection, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. DOE compares the no-new-standards case with projections characterizing the market for each equipment class if DOE adopted new and amended standards at specific energy efficiency levels (
DOE utilized the Python programming language for its shipments' analysis. The final results of the shipments analysis are available in the NIA spreadsheet developed for this analysis, accessible at
Table IV.11 summarizes the inputs and methods DOE used for the NIA analysis for the NOPR. Discussion of these inputs and methods follows the table. See chapter 10 of the NOPR TSD for further details.
A key component of the NIA is the trend in energy efficiency projected for the no-new-standards case and each of the standards cases. Section IV.F.9 of this document describes how DOE developed an energy efficiency distribution for the no-new-standards case (which yields a shipment-weighted average efficiency) for each of the considered equipment classes for the first full year of anticipated compliance (2028) with an amended or new standard.
For the standards cases, DOE used a “roll-up” scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2028). In this scenario, the market shares of equipment in the no-new-standards case that do not meet the standard under consideration would “roll up” to meet the new standard level, and the market share of equipment above the standard would remain unchanged.
In the absence of data on trends in efficiency, DOE assumed no efficiency trend over the analysis period for both the no-new-standards and standards cases. For a given equipment class, market shares by efficiency level were held fixed to their estimated distribution in 2028.
DOE requests comment on its assumption of no efficiency trend for CRE and seeks historical CRE efficiency data, ideally by equipment class or alternatively by equipment family, or overall for the CRE market as a whole.
The national energy savings analysis involves a comparison of national energy consumption of the considered equipment between each potential standards case and the case with no new and amended energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each equipment (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-new-standards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (
In 2011, in response to the recommendations of a committee on “Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards” appointed by the National Academy of Sciences, DOE announced its intention to use FFC measures of energy use and greenhouse gas and other emissions in the national impact analyses and emissions analyses included in future energy conservation standards rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed in the August 18, 2011 document, DOE published a statement of amended policy in which DOE explained its determination that EIA's National Energy Modeling System (“NEMS”) is the most appropriate tool for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector
The inputs for determining the NPV of the total costs and benefits experienced by consumers are (1) total annual installed cost, (2) total annual operating costs (energy costs and repair and maintenance costs), and (3) a discount factor to calculate the present value of costs and savings. DOE calculates net savings each year as the difference between the no-new-standards case and each standards case in terms of total savings in operating costs versus total increases in installed costs. DOE calculates operating cost savings over the lifetime of each equipment shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed price trends for CRE with variable speed compressors and CRE with LED lighting. DOE applied the same trends to project component prices for each representative unit of each equipment class containing variable speed compressors and/or LED lighting. By 2057, which is the end date of the projection period, the average CRE LED lighting price is expected to drop by approximately 25 percent, while the average price of variable speed compressors is expected to drop by approximately 42 percent, relative to projected 2028 prices. Because these component prices do not typically contribute substantively to the overall price of equipment, overall equipment prices are projected to decrease by at most 7 percent by 2057 relative to 2028. The price of equipment at the current baseline efficiency level is expected to drop by at most 3 percent in the same period. For details on the price learning methodology and assumptions, see chapter 8 of the NOPR TSD.
The energy cost savings are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average commercial energy price changes in the Reference case from
Use of higher-efficiency equipment is occasionally associated with a direct rebound effect, which refers to an increase in utilization of the equipment due to the increase in efficiency. DOE did not find any data on the rebound effect specific to CRE that would indicate that end-users or CRE purchasers would alter the utilization of their equipment as a result of an increase in efficiency. CRE are typically plugged in and operate continuously; therefore, DOE assumed a rebound rate of 0.
In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7-percent real discount rate. DOE uses these discount rates in accordance with guidance provided by the Office of Management and Budget (“OMB”) to Federal agencies on the development of regulatory analysis.
In analyzing the potential impact of new and amended energy conservation standards on consumers, DOE evaluates the impact on identifiable subgroups of consumers that may be disproportionately affected by a new or amended national standard. The purpose of a subgroup analysis is to determine the extent of any such disproportional impacts. DOE evaluates impacts on particular subgroups of consumers by analyzing the LCC impacts and PBP for those particular consumers from alternative standard levels.
In response to the June 2022 Preliminary Analysis, AHRI commented that the cost per energy efficiency improvement will be very high and especially challenging for small business owners, and in particular for restaurants and small retailers located in rural and urban food deserts, in which profit margins are low. (AHRI, No. 46 at p. 8)
For this NOPR, DOE analyzed the impacts of the considered standard levels on small businesses. For this subgroup, DOE applied discount rates specific to small businesses to the same consumer sample that was used in the standard LCC analysis. DOE used the LCC and PBP model to estimate the impacts of the considered efficiency levels on this subgroup. For details on the subgroup analysis, see chapter 11 of the NOPR TSD.
DOE performed an MIA to estimate the financial impacts of new and amended energy conservation standards on manufacturers of CRE and to estimate the potential impacts of such standards on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects and includes analyses of projected industry cash flows, the INPV, investments in research and development (“R&D”) and manufacturing capital, and domestic manufacturing employment. Additionally, the MIA seeks to determine how new and amended energy conservation standards might affect manufacturing employment, capacity, and competition, as well as how standards contribute to overall regulatory burden. Finally, the MIA serves to identify any disproportionate impacts on manufacturer subgroups, including small business manufacturers.
The quantitative part of the MIA primarily relies on the GRIM, an industry cash flow model with inputs specific to this rulemaking. The key GRIM inputs include data on the industry cost structure, unit production costs, equipment shipments, manufacturer markups, and investments in R&D and manufacturing capital required to produce compliant equipment. The key GRIM outputs are the INPV, which is the sum of industry annual cash flows over the analysis period, discounted using the industry-weighted average cost of capital, and the impact to domestic manufacturing employment. The model uses standard accounting principles to estimate the impacts of more stringent energy conservation standards on a given industry by comparing changes in INPV and domestic manufacturing employment between a no-new-standards case and the various standards cases (
The qualitative part of the MIA addresses manufacturer characteristics and market trends. Specifically, the MIA considers such factors as a potential standard's impact on manufacturing capacity, competition within the industry, the cumulative impact of other DOE and non-DOE regulations, and impacts on manufacturer subgroups. The complete MIA is outlined in chapter 12 of the NOPR TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase 1 of the MIA, DOE prepared a profile of the CRE manufacturing industry based on the market and technology assessment and publicly available information. This included a top-down analysis of CRE manufacturers that DOE used to derive preliminary financial inputs for the GRIM (
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow analysis to quantify the potential impacts of new and amended energy conservation standards. The GRIM uses several factors to determine a series of annual cash flows starting with the announcement of the standard and extending over a 30-year period following the compliance date of the standard. These factors include annual expected revenues, costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. In general, energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) creating a need for increased investment, (2) raising production costs per unit, and (3) altering revenue due to higher per-unit prices and changes in sales volumes.
In addition, during Phase 2, DOE developed interview guides to distribute to manufacturers of CRE in order to develop other key GRIM inputs, including equipment and capital conversion costs, and to gather additional information on the anticipated effects of energy conservation standards on revenues, direct employment, capital assets, industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed interviews with representative manufacturers. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics to validate assumptions used in the GRIM and to identify key issues or concerns. See section IV.J.3 of this document for a description of the key issues raised by manufacturers
DOE uses the GRIM to quantify the changes in cash flow due to new or amended standards that result in a higher or lower industry value. The GRIM uses a standard, annual discounted cash-flow analysis that incorporates manufacturer costs, markups, shipments, and industry financial information as inputs. The GRIM models changes in costs, distribution of shipments, investments, and manufacturer margins that could result from an amended energy conservation standard. The GRIM spreadsheet uses the inputs to arrive at a series of annual cash flows, beginning in 2023 (the base year of the analysis) and continuing to 2057. DOE calculated INPVs by summing the stream of annual discounted cash flows during this period. For manufacturers of CRE, DOE used a real discount rate of 10.0 percent, which was derived from industry financials and then modified according to feedback received during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles and compares changes in INPV between the no-new-standards case and each standards case. The difference in INPV between the no-new-standards case and a standards case represents the financial impact of the new or amended energy conservation standard on manufacturers. As discussed previously, DOE developed critical GRIM inputs using a number of sources, including publicly available data, results of the engineering analysis, results of the shipments analysis, and information gathered from industry stakeholders during the course of manufacturer interviews. The GRIM results are presented in section V.B.2 of this document. Additional details about the GRIM, the discount rate, and other financial parameters can be found in chapter 12 of the NOPR TSD.
Manufacturing more efficient equipment is typically more expensive than manufacturing baseline equipment due to the use of more complex components, which are typically more costly than baseline components. The changes in the MPCs of covered equipment can affect the revenues, gross margins, and cash flow of the industry. For this NOPR, DOE relied on a design-option approach, supported with the testing and reverse engineering of directly analyzed CRE. The design options were incrementally added to the baseline configuration and continued through the “max-tech” configuration (
The GRIM estimates manufacturer revenues based on total unit shipment projections and the distribution of those shipments by efficiency level. Changes in sales volumes and efficiency mix over time can significantly affect manufacturer finances. For this analysis, the GRIM uses the NIA's annual shipment projections derived from the shipments analysis from 2023 (the base year) to 2057 (the end year of the analysis period). See section IV.J.2.b of this document and chapter 9 of the NOPR TSD for additional details.
New or amended energy conservation standards could cause manufacturers to incur conversion costs to bring their production facilities and equipment designs into compliance. DOE evaluated the level of conversion-related expenditures that would be needed to comply with each considered efficiency level in each equipment class. For the MIA, DOE classified these conversion costs into two major groups: (1) product conversion costs; and (2) capital conversion costs. Product conversion costs are investments in research, development, testing, marketing, and other non-capitalized costs necessary to make equipment designs comply with new or amended energy conservation standards. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new compliant equipment designs can be fabricated and assembled.
DOE based its estimates of the product conversion costs that would be required to meet each efficiency level on information obtained from manufacturer interviews; the design pathways analyzed in the engineering analysis; the equipment teardown analysis; the shipments analysis; and model count information. DOE estimated product development effort, including engineer, laboratory technician, and marketing resources, associated with design options and scaled the costs based on the number of basic models (or product platforms, depending on the nature of the design option). Product development effort varied by design option. DOE modeled door design changes (
To estimate industry product conversion costs, DOE multiplied the product development cost estimate at each efficiency level for each equipment class by the number of industry basic models or product platforms that would require redesign. DOE used its CCD
In addition to the sources used to derive product conversion costs, DOE relied on additional sources of information such as the Trade
As previously stated, the Trade Associations Survey included information about the anticipated capital investments associated with a range of design options. (
DOE requests detailed comment and information on the capital investments associated with each analyzed design option. In particular, DOE requests detailed comment and feedback on the specific changes in equipment and tooling required to incorporate microchannel heat exchangers, as DOE currently models microchannel heat exchangers as a purchased part that can be substituted for tube and fin heat exchangers with minor production line changes.
In general, DOE assumes all conversion-related investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standard. The conversion cost figures used in the GRIM can be found in section IV.J.2.c of this document. For additional information on the estimated capital and product conversion costs, see chapter 12 of the NOPR TSD.
Regarding the potential investments associated with redesigning CRE to use flammable refrigerants in response to refrigerant regulations such as the December 2022 EPA NOPR, DOE did not consider these investments as conversion costs as they are independent of DOE actions related to any new or amended energy conservation standards. Instead, the refrigerant transition expenses are modeled as an impact to industry cashflow and are incorporated into both the no-new-standards case and standards cases. The refrigerant transition expenses includes redesigning CRE to use flammable refrigerants and retrofitting production facilities to accommodate flammable refrigerants. DOE relied on manufacturer feedback in confidential interviews, a report prepared for EPA,
MSPs include direct manufacturing production costs (
Under the preservation-of-gross-margin-percentage scenario, DOE applied a single uniform “gross-margin-percentage” markup across all efficiency levels, which assumes that manufacturers would be able to maintain the same amount of profit as a percentage of revenues at all efficiency levels within an equipment class. As manufacturer production costs increase with efficiency, this scenario implies that the per-unit dollar profit will increase. DOE assumed a gross-margin percentage of 29 percent for all equipment classes.
In the preservation-of-operating-profit scenario, as the cost of production goes up under a standards case, manufacturers are generally required to reduce their manufacturer markups to a level that maintains no-new-standards-case operating profit. DOE implemented
DOE seeks comment on the use of a 1.40 manufacturer markup for all CRE equipment classes analyzed in this proposed rule. DOE also seeks comment on the estimated manufacturer markups and incremental MSPs that result from the analyzed energy conservation standards.
A comparison of industry financial impacts under the two manufacturer markup scenarios is presented in section V.B.2.a of this document.
DOE interviewed manufacturers representing approximately 60 percent of the domestic CRE shipments. Participants included domestic-based and foreign-based OEMs. Participants included manufacturers with a wide range of market shares and variety of equipment offerings, including four manufacturers who offered equipment under the expanded scope.
In interviews, DOE asked manufacturers to describe their major concerns regarding the potential for more stringent energy conservation standards for CRE. The following section highlights manufacturer concerns that helped inform the projected potential impacts of an amended standard on the industry. Manufacturer interviews are conducted under NDAs, so DOE does not document these discussions in the same way that it does public comments in the comment summaries and DOE's responses throughout the rest of this document.
In interviews, manufacturers expressed numerous concerns about efficiency levels that would necessitate significant changes to the cabinet structure (
Regarding VIPs, manufacturers noted there is very limited industry experience with incorporating VIPs into CRE. Manufacturers emphasized that commercial environments may not be suitable for VIPs as they could be easily punctured, which would erode any efficiency improvements. Manufacturers noted that it would be nearly impossible to do in-field replacements of ineffectual VIPs, meaning that a puncture could require an entirely new CRE unit. Manufacturers also noted that implementing VIPs would require significant investment and redesign to the foaming station, manufacturing facility, and equipment design. Typically, CRE designs require numerous fasteners to secure internal components to the cabinet, which would not be feasible with VIPs. Manufacturers also noted the need to allocate special warehouse space to ensure the VIPs are not jostled or roughly handled in the manufacturing environment.
Multiple manufacturers expressed concerns about the ongoing supply chain constraints related to sourcing a range of components, such as high-efficiency motors, compressors, and control boards and electronics. Manufacturers noted that limited component availability, increases in raw material prices, and escalating shipping and transportation costs all affect manufacturer production costs. In addition to higher production costs, these manufacturers stated that the evolving nature of these component shortages requires dedicating personnel resources to identify and qualify new suppliers, build prototypes, conduct testing, and update equipment literature. Some manufacturers expressed concern about standard levels that would necessitate numerous component changes, as the manufacturers are already experiencing delays sourcing parts for prototypes. If these supply constraints continue through the end of the conversion period, industry could face capacity constraints. DOE discusses potential supply constraints in section V.B.2.c of this document.
In response to the June 2022 Preliminary Analysis, NAMA asserted that the convenience services industry had suffered greatly over the past 3 years due to new DOE energy efficiency regulations, new ENERGY STAR levels, regulations on refrigerants (
Furthermore, NAMA commented that the costs associated with setting up the production of R-290 machines can easily cost between $0.5 million and $1.0 million per production line depending on the scale and stated that the June 2022 Preliminary TSD does not capture these costs. (
AHRI commented similarly on the costs and burdens to transition to alternative refrigerants. (AHRI, No. 46 at pp. 12-13, 17-18) AHRI commented that the AIM Act requires refrigerant manufacturers to phase down the supply of high-GWP HFCs, encouraging CRE manufacturers to switch to low-GWP refrigerants, which often have some degree of flammability. (
Regarding the comments about new DOE energy efficiency regulations, DOE's cumulative regulatory burden analysis is based on rulemakings that go into effect within a 3-year time frame before or after the expected compliance date of amended CRE energy conservation standards (2028). Section V.B.2.e of this document includes a list of DOE energy conservation standards rulemakings that contribute to cumulative regulatory burden within the 3-year period before or after the expected compliance date of new and amended CRE energy conservation standards, should they be finalized.
Regarding the comments about EPA's new ENERGY STAR levels, DOE notes that participating in ENERGY STAR is voluntary and not considered in DOE's analysis of cumulative regulatory burden.
Regarding the comments about the costs associated with redesigning equipment to make use of lower-GWP refrigerants, DOE understands that manufacturers of CRE using high-GWP refrigerants (
NAMA commented that DOE should not discount the time and resources needed to evaluate and respond to simultaneous proposed test procedures and energy conservation standards for multiple equipment over a short period of time. (NAMA, No. 37 at p. 17) NAMA stated that when rulemakings occur simultaneously, the cumulative burden increases dramatically. (
Regarding NAMA's suggestion to account for the financial results of the cumulative regulatory burden analysis into the GRIM, DOE incorporated the estimated refrigerant transition costs that occur in the timeframe of the analysis directly into the GRIM in both the no-new-standards case and the standards-case to reflect the impact of refrigerant regulation on CRE industry cash flow. See section V.B.2.e of this document for additional information.
NAMA requested also that DOE stage its energy efficiency regulations at least 3, and preferably 5, years away from other significant and overlapping governmental regulations. (
Regarding NAMA's suggestion to promulgate energy efficiency regulations at least 3, and preferably 5, years away from other significant and overlapping governmental regulations, DOE has statutory requirements under EPCA on the timing of rulemakings. For CRE, EPCA requires that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE evaluate the energy conservation standards for each type of covered equipment and publish either a notification of determination that the standards do not need to be amended, or a NOPR that includes new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1)); 42 U.S.C. 6295(m)(1)) The current CRE energy conservation standards were implemented by the March 2014 Final Rule. 79 FR 17725. Under EPCA, any potential new and amended standards would go into effect (1) 3 years after the date on which the final amended standard is published or (2) if the Secretary determines, by rule, that 3 years is inadequate, not later than 5 years after the date on which the final rule is published. (42 U.S.C. 6313(c)(6)(C)). For this NOPR, DOE has proposed a 3-year compliance period after the date on which final amended standard is published. DOE welcomes stakeholder feedback on choice of 3
NAMA commented that large inaccuracies exist in the tables of design options in the June 2022 TSD and that the June 2022 Preliminary TSD failed to take into account the substantial capital costs caused by these design options, not including recent cost increases due to inflation. (NAMA, No. 37 at pp. 9-10) NAMA stated that it sees no sign DOE has factored into its estimates the cost of capital-intensive design options, such as increased insulation, vacuum panels, heavier doors, and microchannel coils, and that these costs, which would be accrued on top of the millions of dollars being invested to move from high-GWP refrigerants to low-GWP refrigerants, comprise an issue of cumulative burden. (
With respect to NAMA's comment on design options and capital costs, DOE did not estimate capital conversion costs for the June 2022 Preliminary Analysis as DOE does not conduct a full MIA for rulemaking stages prior to the NOPR analysis stage. For this NOPR, DOE accounts for the capital investments required to implement the considered design options in the MIA. See section IV.J.2.c of this document for additional details on conversion costs.
AHRI commented that its members face significant regulatory burdens requiring redesign, retooling, testing, and listing of equipment; new regulations related to the inclusion of special/definite-purpose motors as regulated; state-mandated refrigerant emissions limits, which coincide with a change in the safety standard for CRE; and new regulations requiring elimination of the use of phenyl isopropylated phosphate (PIP 3:1) in components. (AHRI, No. 46 at p. 16) AHRI commented that recent changes to the scope of test procedures for electric motors will increase the burden on manufacturers significantly if all equipment using special and definite-purpose motors were suddenly forced to certify compliance with standards for component parts, including the testing, paperwork, and recordkeeping requirements that accompany certification. (
DOE analyzes cumulative regulatory burden pursuant to section 13(g) of the Process Rule. Regarding comments related to the electric motors test procedure final rule published on October 19, 2022 (“October 2022 Final Rule”), DOE tentatively expects that the motors used in the CRE covered by this rulemaking would not be directly impacted by the electric motors rulemaking because the motors used in CRE are typically below 0.25 horsepower, and, thus, are outside the scope of the October 2022 Final Rule.
Regarding comments related to regulations requiring elimination of the use of PIP 3:1 in components, DOE did not consider chemical regulations in its NOPR cumulative regulatory burden analysis as EPA's final rule is not a CRE-specific Federal regulatory action and the required compliance date does not occur within the specified 3-year cumulative regulatory burden timeframe analyzed in this NOPR.
AHRI commented that manufacturers of chef bases, griddle stands, and other equipment for which there is no test procedure would have to spend additional time and funds to determine test efficacy and whether it is possible to meet DOE-designated energy conservation standards. (AHRI, No. 46 at p. 8)
DOE is proposing new and amended conservation standards for chef bases and high-temperature units (
NAMA commented that the CRE industry has suffered shortages in the supply chain of critical parts during recent years. (NAMA, No. 37 at p. 14) Specifically, NAMA commented regarding difficulties in acquiring fabricated computer chips and other components in the electronics, displays, and electrical area. (
As detailed in section IV.J.3 of this document, DOE received similar comments about the challenges sourcing certain CRE components in recent years during confidential manufacturer interviews. DOE notes that increased costs associated with recent supply
DOE requests comment on the availability of computer chips and other electronic components used in CREs in the timeframe of 2028, and specifically how availability would affect industry's ability to achieve higher efficiency levels.
NAFEM commented that DOE was evasive in DOE's response to comments regarding negative impacts on a substantial number of small businesses in the July 2021 RFI. (NAFEM, No. 40 at p. 4) NAFEM commented that it continues to work with the Small Business Administration (“SBA”) Office of Advocacy to ensure that small businesses have a direct avenue for input and that DOE properly assesses cumulative regulatory burden and conducts a fair regulatory flexibility analysis. (
DOE notes that there is no regulatory flexibility analysis or manufacturer impact analysis in the preliminary analysis stage of rulemakings. At this NOPR stage, DOE identified 25 small domestic OEMs selling covered CRE in the United States. In support of this NOPR analysis, DOE contractors conducted confidential manufacturer interviews, which included discussions with small, domestic OEMs. DOE incorporated their feedback into the MIA. Additionally, DOE analyzed the impact of the proposed amended standards on small business manufacturers in section VI.B of this document and in chapter 12 of the NOPR TSD.
NAMA commented that no contact between DOE consultants and its manufacturing members was apparent and stated its belief that the information in the June 2022 Preliminary TSD would have been more accurate and reflective of today's market if NAMA's members had been interviewed. (NAMA, No. 37 at p. 6)
DOE did not conduct preliminary manufacturer interviews in support of the June 2022 Preliminary Analysis. However, DOE conducted interviews with a range of manufacturers in support of this NOPR analysis. DOE conducted manufacturer interviews with eight CRE OEMs, representing approximately 60 percent of domestic industry shipments. For additional information on manufacturer interviews, see section IV.J.3 of this document and chapter 12 of the NOPR TSD.
The emissions analysis consists of two components. The first component estimates the effect of potential energy conservation standards on power sector and site (where applicable) combustion emissions of CO
The analysis of electric power sector emissions of CO
FFC upstream emissions, which include emissions from fuel combustion during extraction, processing, and transportation of fuels, and “fugitive” emissions (direct leakage to the atmosphere) of CH
The emissions intensity factors are expressed in terms of physical units per MWh or MMBtu of site energy savings. For power sector emissions, specific emissions intensity factors are calculated by sector and end use. Total emissions reductions are estimated using the energy savings calculated in the national impact analysis.
DOE's no-new-standards case for the electric power sector reflects the
SO
However, beginning in 2016, SO
CSAPR also established limits on NO
The MATS limit mercury emissions from power plants, but they do not include emissions caps and, as such, DOE's energy conservation standards would be expected to slightly reduce Hg emissions. DOE estimated mercury emissions reduction using emissions factors based on
As part of the development of this proposed rule, for the purpose of complying with the requirements of Executive Order 12866, DOE considered the estimated monetary benefits from the reduced emissions of CO
To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates presented in the
In response to the June 2022 Preliminary Analysis, AHRI expressed concern that DOE's social cost of carbon (“SCC”) analysis used to generate the original 2007 and updated 2020 new interim value for the social cost of carbon dioxide extends beyond the statutory authority and the scope contemplated by Congress. (AHRI, No. 46 at p. 9) AHRI stated its belief that DOE should withdraw the SCC values and refrain from using the SCC in any other rulemaking or policymaking until the SCC undergoes a more rigorous notice, review and comment process. (
As stated in section III.F.1.f of this document, DOE accounts for the environmental and public health benefits associated with the more efficient use of energy, including those connected to global climate change, and considers them important to take into account when considering the need for national energy conservation. (See 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) In addition, Executive Order 13563 states that each agency must, among other things: “select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity).” 76 FR 3821 (Jan. 21, 2011) For these reasons, DOE includes monetized emissions reductions in its evaluation of potential standard levels and reporting of net benefits. As previously stated, however, DOE would reach the same conclusion presented in this proposed rulemaking in the absence of the social cost of greenhouse gases.
AHRI stated that the SCC's time-period for analysis renders its applicability suspect. (AHRI, No. 46 at p. 9) AHRI noted that, in contrast to the timeframe considered for carbon emissions, DOE calculates the present value of the costs to consumers and manufacturers over a 30-year period. (
In response, DOE notes that its analysis considers the costs and benefits associated with 30 years of shipments of a covered product. Because such products continue to operate beyond 30 years, DOE accounts for energy cost savings and reductions in emissions until all products shipped within the 30-year period are retired. In the case of CO
AHRI stated that EPCA's focus is exclusively on benefits accruing within this nation, and thus SCC figures reported by DOE at the global level are beyond the scope and authority of DOE. (
AHRI stated that DOE wrongly assumes that SCC values will increase over time. (
AHRI commented that if DOE still chooses to include the SCC, DOE should consider the benefits of foam blowing and the refrigerant transition in its analysis. (
DOE estimates the monetized benefits of the reductions in emissions of CO
DOE exercises its own judgment in presenting monetized climate benefits as recommended by applicable Executive orders, and DOE would reach the same conclusion presented in this proposed rulemaking in the absence of the social cost of greenhouse gases. That is, the social costs of greenhouse gases, whether measured using the February 2021 interim estimates presented by the IWG or by another means, did not affect the rule ultimately proposed by DOE.
DOE estimated the global social benefits of CO
The SC-GHG estimates presented here were developed over many years, using a transparent process, peer-reviewed methodologies, the best science available at the time of that process, and with input from the public. Specifically, in 2009, the IWG, which included DOE and other executive branch agencies and offices, was established to ensure that agencies were using the best available science and to promote consistency in the SC-CO
On January 20, 2021, President Biden issued Executive Order 13990, which re-established the IWG and directed it to ensure that the U.S. Government's estimates of the social cost of carbon and other greenhouse gases reflect the best available science and the recommendations in the National Academies 2017 report. The IWG was tasked with first reviewing the SC-GHG estimates currently used in Federal analyses and publishing interim estimates within 30 days of the E.O. that reflect the full impact of GHG emissions, including by taking global damages into account. The interim SC-GHG estimates published in February 2021 are used here to estimate the climate benefits for this proposed rulemaking. The E.O. instructs the IWG to undertake a fuller update of the SC-GHG estimates that takes into consideration the advice in the National Academies 2017 report and other recent scientific literature. The February 2021 SC-GHG TSD provides a complete discussion of the IWG's initial review conducted under E.O. 13990. In particular, the IWG found that the SC-GHG estimates used under E.O. 13783 fail to reflect the full impact of GHG emissions in multiple ways.
First, the IWG found that the SC-GHG estimates used under E.O. 13783 fail to fully capture many climate impacts that affect the welfare of U.S. citizens and residents, and those impacts are better reflected by global measures of the SC-GHG. Examples of omitted effects from the E.O. 13783 estimates include direct effects on U.S. citizens, assets, and investments located abroad, supply chains, U.S. military assets and interests abroad, tourism, and spillover pathways, such as economic and political destabilization and global migration that can lead to adverse impacts on U.S. national security, public health, and humanitarian concerns. In addition, assessing the benefits of U.S. GHG mitigation activities requires consideration of how those actions may affect mitigation activities by other countries, as those international mitigation actions will provide a benefit to U.S. citizens and residents by mitigating climate impacts that affect U.S. citizens and residents. A wide range of scientific and economic experts have emphasized the issue of reciprocity as support for considering global damages of GHG emissions. If the United States does not consider impacts on other countries, it is difficult to convince other countries to consider the impacts of their emissions on the United States. The only way to achieve an efficient allocation of resources for emissions reduction on a global basis—and so benefit the United States and its citizens—is for all countries to base their policies on global estimates of damages. As a member of the IWG involved in the development of the February 2021 SC-GHG TSD, DOE agrees with this assessment and, therefore, in this proposed rule, DOE centers attention on a global measure of SC-GHG. This approach is the same as that taken in DOE regulatory analyses from 2012 through 2016. A robust estimate of climate damages that accrue only to U.S. citizens and residents does not currently exist in the literature. As explained in the February 2021 SC-GHG TSD, existing estimates are both incomplete and an underestimate of total damages that accrue to the citizens and residents of the United States because they do not fully capture the regional interactions and spillovers discussed above; nor do they include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature. As noted in the February 2021 SC-GHG TSD, the IWG will continue to review developments in the literature, including more robust methodologies for estimating a U.S.-specific SC-GHG value, and explore ways to better inform the public of the full range of carbon impacts. As a member of the IWG, DOE will continue to follow developments in the literature pertaining to this issue.
Second, the IWG found that the use of the social rate of return on capital (7 percent under current OMB Circular A-4 guidance) to discount the future benefits of reducing GHG emissions inappropriately underestimates the impacts of climate change for the purposes of estimating the SC-GHG. Consistent with the findings of the National Academies and the economic literature, the IWG continued to conclude that the consumption rate of interest is the theoretically appropriate discount rate in an intergenerational context,
Furthermore, the damage estimates developed for use in the SC-GHG are estimated in consumption-equivalent terms, and so an application of OMB Circular A-4's guidance for regulatory analysis would then use the consumption discount rate to calculate the SC-GHG. DOE agrees with this assessment and will continue to follow developments in the literature pertaining to this issue. DOE also notes that while OMB Circular A-4, as published in 2003, recommends using 3-percent and 7-percent discount rates as “default” values, Circular A-4 also reminds agencies that “different regulations may call for different emphases in the analysis, depending on the nature and complexity of the regulatory issues and the sensitivity of the benefit and cost estimates to the key assumptions.” On discounting, Circular A-4 recognizes that “special ethical considerations arise when comparing benefits and costs across generations,” and Circular A-4 acknowledges that analyses may appropriately “discount future costs and consumption benefits . . . at a lower rate than for intragenerational analysis.” In the 2015 Response to Comments on the Social Cost of Carbon for Regulatory Impact Analysis, OMB, DOE, and the other IWG members recognized that “Circular A-4 is a living document” and “the use of 7 percent is not considered appropriate for intergenerational discounting. There is wide support for this view in the academic literature, and it is recognized in Circular A-4 itself.” Thus, DOE concludes that a 7-percent discount rate is not appropriate to apply to value the social cost of greenhouse gases in the analysis presented in this NOPR.
To calculate the present and annualized values of climate benefits, DOE uses the same discount rate as the
As a member of the IWG involved in the development of the February 2021 SC-GHG TSD, DOE agrees with the above assessment and will continue to follow developments in the literature pertaining to this issue. While the IWG works to assess how best to incorporate the latest peer-reviewed science to develop an updated set of SC-GHG estimates, it set the interim estimates to be the most recent estimates developed by the IWG prior to the group being disbanded in 2017. The estimates rely on the same models and harmonized inputs and are calculated using a range of discount rates. As explained in the February 2021 SC-GHG TSD, the IWG has recommended that agencies revert to the same set of four values drawn from the SC-GHG distributions based on three discount rates as were used in regulatory analyses between 2010 and 2016 and were subject to public comment. For each discount rate, the IWG combined the distributions across models and socioeconomic emissions scenarios (applying equal weight to each) and then selected a set of four values recommended for use in benefit-cost analyses: an average value resulting from the model runs for each of three discount rates (2.5 percent, 3 percent, and 5 percent), plus a fourth value, selected as the 95th percentile of estimates based on a 3-percent discount rate. The fourth value was included to provide information on potentially higher-than-expected economic impacts from climate change. As explained in the February 2021 SC-GHG TSD, this update reflects the immediate need to have an operational SC-GHG for use in regulatory benefit-cost analyses and other applications that was developed using a transparent process, peer-reviewed methodologies, and the science available at the time of that process, and DOE agrees with this determination. Those estimates were subject to public comment in the context of dozens of proposed rulemakings as well as in a dedicated public comment period in 2013.
There are a number of limitations and uncertainties associated with the SC-GHG estimates. First, the current scientific and economic understanding of discounting approaches suggests discount rates appropriate for intergenerational analysis in the context of climate change are likely to be less than 3 percent, near 2 percent or lower.
DOE's derivations of the SC-CO
The SC-CO
For 2051 to 2070, DOE used SC-CO
DOE multiplied the CO
The SC-CH
DOE multiplied the CH
For the NOPR, DOE estimated the monetized value of NO
DOE also estimated the monetized value of NO
DOE multiplied the site emissions reduction (in tons) in each year by the associated $/ton values, and then discounted each series using discount rates of 3 percent and 7 percent as appropriate.
The utility impact analysis estimates the changes in installed electrical capacity and generation projected to result for each considered TSL. The analysis is based on published output from the NEMS associated with
The output of this analysis is a set of time-dependent coefficients that capture the change in electricity generation, primary fuel consumption, installed capacity, and power sector emissions due to a unit reduction in demand for a given end use. These coefficients are multiplied by the stream of electricity savings calculated in the NIA to provide estimates of selected utility impacts of potential new and amended energy conservation standards.
DOE considers employment impacts in the domestic economy as one factor in selecting a proposed standard. Employment impacts from new and amended energy conservation standards include both direct and indirect impacts. Direct employment impacts are any changes in the number of employees of manufacturers of the equipment subject to standards, their suppliers, and related service firms. The MIA addresses those impacts. Indirect employment impacts are changes in national employment that occur due to the shift in expenditures and capital investment caused by the purchase and operation of more-efficient appliances. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, caused by (1) reduced spending by consumers on energy, (2) reduced spending on new energy supply by the utility industry, (3) increased consumer spending on the equipment to which the new standards apply and other goods and services, and (4) the effects of those three factors throughout the economy.
One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sector employment statistics developed by the Labor Department's Bureau of Labor Statistics (“BLS”). BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy.
DOE estimated indirect national employment impacts for the standard levels considered in this NOPR using an input/output model of the U.S. economy called Impact of Sector Energy Technologies version 4 (“ImSET”).
DOE notes that ImSET is not a general equilibrium forecasting model, and that there are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Because ImSET does not incorporate price changes, the employment effects predicted by ImSET may over-estimate actual job impacts over the long run for this rulemaking. Therefore, DOE used ImSET only to generate results for near-term timeframes (2028-2032), where these uncertainties are reduced. For more details on the employment impact analysis, see chapter 16 of the NOPR TSD.
The following section addresses the results from DOE's analyses with respect to the considered energy conservation standards for CRE. It addresses the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy conservation standards for CRE, and the standards levels that DOE is proposing to adopt in this NOPR. Additional details regarding DOE's analyses are contained in the NOPR TSD supporting this document.
In general, DOE typically evaluates potential new or amended standards for equipment by grouping individual efficiency levels for each class into TSLs. Use of TSLs allows DOE to identify and consider manufacturer cost interactions between the equipment classes, to the extent that there are such
In the analysis conducted for this NOPR, DOE analyzed the benefits and burdens of six TSLs for CRE. DOE developed TSLs that combine efficiency levels for each analyzed equipment class. DOE presents the results for the TSLs in this document, while the results for all efficiency levels that DOE analyzed are in the NOPR TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels that DOE has identified for potential new and amended energy conservation standards for CRE. TSL 6 represents the maximum technologically feasible (“max-tech”) energy efficiency for all equipment classes. TSL 5 represents the highest efficiency level with positive LCC savings, including subgroups, for all equipment classes. TSL 4 represents the highest efficiency level with maximum LCC savings for all equipment classes. TSL 3 represents the highest efficiency level with positive LCC savings and single speed compressor for equipment classes in which this design option was considered. TSL 2 represents the highest efficiency level with maximum LCC savings and single speed compressor for equipment classes with compressors, which also corresponds to the minimum efficiency level between TSL 4 and TSL 3. TSL 1 represents the minimum efficiency level with positive LCC savings.
Table V.2 presents the TSLs and the corresponding percent reduction in energy use below baseline by equipment class. The baseline values for the self-contained equipment classes are presented in table IV.6 in section IV.C.1.a of this document.
DOE analyzed the economic impacts on CRE consumers by looking at the effects that potential new and amended standards at each TSL would have on the LCC and PBP. DOE also examined the impacts of potential standards on selected consumer subgroups. These analyses are discussed in the following sections.
In general, higher-efficiency equipment affect consumers in two ways: (1) purchase price increases and (2) annual operating costs decrease. Inputs used for calculating the LCC and PBP include total installed costs (
Table V.3 through table V.58 show the LCC and PBP results for the TSLs considered for each equipment class. In the first of each pair of tables, the simple payback is measured relative to the baseline equipment. In the second table, impacts are measured relative to the efficiency distribution in the no-new-standards case in the compliance year (see section IV.F.9 of this document). Because some consumers purchase equipment with higher efficiency in the no-new-standards case, the average savings are less than the difference between the average LCC of the baseline equipment and the average LCC at each TSL. The savings refer only to consumers who are affected by a standard at a given TSL. Those who already purchase an equipment with efficiency at or above a given TSL are not affected. Consumers for whom the LCC increases at a given TSL experience a net cost.
In the consumer subgroup analysis, DOE estimated the impact of the considered TSLs on small businesses. Table V.59 compares the average LCC savings and PBP at each efficiency level for small businesses with the entire consumer sample for CRE. In most cases, the average LCC savings and PBP for small businesses at the considered efficiency levels are not substantially different from the average for all businesses. Chapter 11 of the NOPR TSD presents the complete LCC and PBP results for the subgroup.
As discussed in section IV.F.10 of this document, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for an equipment that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback period for each of the considered TSLs, DOE used discrete values, and, as required by EPCA, based the energy use calculation on the DOE test procedure for CRE. In contrast, the PBPs presented in section V.B.1.a of this document were calculated using distributions that reflect the range of energy use in the field.
Table V.60 presents the rebuttable-presumption payback periods for the considered TSLs for CRE. While DOE examined the rebuttable-presumption criterion, it considered whether the standard levels considered for the NOPR are economically justified through a more detailed analysis of the economic impacts of those levels, pursuant to 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to the consumer, manufacturer, Nation, and environment. The results of that analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level, thereby supporting or rebutting the results of any preliminary determination of economic justification.
DOE performed an MIA to estimate the impact of new and amended energy conservation standards on manufacturers of CRE. The following section describes the expected impacts on manufacturers at each considered TSL. Chapter 12 of the NOPR TSD explains the analysis in further detail.
In this section, DOE provides GRIM results from the analysis, which examines changes in the industry that would result from new and amended standards. Table V.61 summarizes the estimated financial impacts (represented by changes in INPV) of potential new and amended energy conservation standards on manufacturers of CRE, as well as the conversion costs that DOE estimates manufacturers of CRE would incur at each TSL.
The impact of potential new and amended energy conservation standards was analyzed under two scenarios: (1) the preservation of gross margin percentage; and (2) the preservation of operating profit, as discussed in section IV.J.2.d of this document. The preservation of gross margin percentages applies a “gross margin percentage” of 29 percent for all equipment classes across all efficiency levels.
The preservation-of-operating-profit scenario reflects manufacturers' concerns about their inability to maintain margins as MPCs increase to reach more stringent efficiency levels. In this scenario, while manufacturers make the necessary investments required to convert their facilities to produce compliant equipment, operating profit does not change in absolute dollars and decreases as a percentage of revenue. The preservation-of-operating-profit scenario represents the lower (or more severe) bound to industry profitability under potential new and amended energy conservation standards.
Each of the modeled scenarios resulted in a unique set of cash flows and corresponding INPV for each TSL. INPV is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023-2057). The “change in INPV” results refer to the difference in industry value between the no-new-standards case and standards case at each TSL. To provide perspective on the short-run cash flow impact, DOE includes a comparison of free cash flow between the no-new-standards case and the standards case at each TSL in the year before new and amended standards would take effect. This figure provides an understanding of the magnitude of the required conversion costs relative to the cash flow generated by the industry in the no-new-standards case.
Conversion costs are one-time investments for manufacturers to bring their manufacturing facilities and equipment designs into compliance with potential new and amended standards. As described in section IV.J.2.c of this document, conversion cost investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standards. The conversion costs can have a significant impact on the short-term cash flow on the industry and generally result in lower free cash flow in the period between the publication of the final rule and the compliance date of potential new and amended standards. Conversion costs are independent of the manufacturer markup scenarios and are not presented as a range in this analysis.
The following cash flow discussion refers to the equipment classes as detailed in table IV.1 in section IV.A of this document and the TSLs as detailed in section V.A of this document. Table V.62 through table V.66 show the design options analyzed in the engineering analysis for each directly analyzed equipment class by TSL. See section IV.C of this document and chapter 5 of the NOPR TSD for additional information on the engineering analysis.
At TSL 6, the standard represents the max-tech efficiencies for all equipment classes. The change in INPV is expected to range from −$300.4 million to $243.6 million, which represents a change in INPV of -9.1 percent to 7.4 percent, respectively. At this level, free cash flow is estimated to decrease by 41.3 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance would be required. In 2027, approximately 2.2 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 6. See table V.67 for the percent of equipment class shipments that would meet or exceed the efficiencies required at each TSL in 2027.
The design options DOE analyzed at TSL 6 included the max-tech technologies for all equipment classes. For all open (
At max-tech, DOE expects that nearly all manufacturers would need to dedicate notable engineering resources to update equipment designs and source, qualify, and test high-efficiency components across their CRE portfolio. However, most design options analyzed involve more efficient components (
CRE equipment classes with transparent doors (
At TSL 6, the shipment-weighted average MPC for all CRE is expected to increase by 25.0 percent relative to the no-new-standards case shipment-weighted average MPC for all CRE in 2028. Given the projected increase in production costs, DOE expects an estimated 2.9 percent drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation of gross margin percentage scenario, the large increase in cashflow from the higher MSP outweighs the $343.8 million in conversion costs, causing an increase in INPV at TSL 6 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $343.8 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 6 under the preservation of operating profit scenario. See section IV.J.2.d of this document for further details on the manufacturer markup scenarios.
At TSL 5, the standard represents the highest efficiency level with positive LCC savings for all equipment classes. The change in INPV is expected to range from −$159.3 million to −$30.9 million, which represents a change in INPV of −4.8 percent to −0.9 percent, respectively. At this level, free cash flow is estimated to decrease by 27.6 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 10.8 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 5.
The design options DOE analyzed at TSL 5 are similar to the design options analyzed at TSL 6 except most equipment classes with transparent doors would not need to incorporate vacuum-insulated glass doors. All VCT equipment classes would likely need to incorporate triple pane glass with krypton fill except for VCT.SC.H and VCT.SC.M (together accounting for 26.4 percent of industry shipments), which would likely not require improved door designs. DOE expects that HCT equipment classes would not need to incorporate additional panes of glass to meet TSL 5 levels. At this level, DOE also expects that fewer self-contained equipment classes would need to incorporate microchannel condensers. Additionally, manufacturers of HCS equipment classes may not need to incorporate variable-speed compressors to meet the efficiencies required. For the five highest-volume equipment classes, TSL 5 corresponds to lower efficiency levels for four equipment classes: VCT.RC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.M. For VCT.RC.M and VCT.SC.M, TSL 5 corresponds to EL 3. For VCT.SC.M, TSL 5 corresponds to EL 5. For VCT.SC.L, TSL 5 corresponds to EL 6. For VCS.SC.M, TSL 5 corresponds to EL 4. For VCS.SC.M and VCS.SC.L, the efficiencies required at TSL 5 are the same as TSL 6. At this level, the VCT.RC.M and VCT.SC.L equipment classes would both need to incorporate triple pane glass with krypton fill. Out of the four highest volume self-contained classes, only VCT.SC.L and VCS.SC.L would require the use of microchannel condensers.
Similar to TSL 6, DOE expects manufacturers would spend development time updating equipment designs to incorporate high-efficiency components. However, at this level, DOE expects that most manufacturers of CRE with transparent doors could meet the TSL 5 efficiencies without implementing vacuum-insulated glass doors. Of the 11 directly analyzed transparent door equipment classes, only SOC.SC.M would likely require the use of vacuum-insulated glass doors to meet the efficiencies required. SOC.SC.M accounts for approximately 0.4 percent of analyzed industry shipments in 2027. DOE estimates capital conversion costs of $38.9 million and product conversion costs of $187.5 million. Conversion costs total $226.4 million.
At TSL 5, the shipment-weighted average MPC for all CRE is expected to increase by 6.0 percent relative to the no-new-standards case shipment-weighted average MPC for all CRE in 2028. Given the projected increase in
At TSL 4, the standard represents the highest efficiency level with maximum LCC savings for all equipment classes. The change in INPV is expected to range from -$103.8 million to −$16.7 million, which represents a change in INPV of −3.2 percent to −0.5 percent, respectively. At this level, free cash flow is estimated to decrease by 18.0 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 15.7 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 4.
At TSL 4, the efficiency levels required for most equipment classes are lower than the efficiency levels required at TSL 5, including for the five highest-volume equipment classes. At this level, no self-contained equipment classes are expected to require the use of microchannel condensers. At TSL 4, none of the highest-volume self-contained equipment classes (VCT.SC.M, VCT.SC.L, VCS.SC.M, VCS.SC.L) would need to incorporate microchannel condensers. Additionally, DOE does not expect VCS.SC.M would require the use of variable-speed compressors to meet TSL 5 efficiencies. For VCT.RC.M and VCT.SC.M, DOE expects manufacturers would not need to implement additional panes of glass to meet the efficiencies required. For VCT.RC.M, TSL 4 corresponds to EL 1. For VCT.SC.M, TSL 4 corresponds to EL 3. For VCT.SC.L, TSL 4 corresponds to EL 5. For VCS.SC.M, TSL 4 corresponds to EL 3. For VCS.SC.L, TSL 4 corresponds to EL 5. At this level, product conversion costs may be necessary to source, qualify, and test high-efficiency components but to a lesser extent than higher TSLs. Some manufacturers of self-contained equipment classes may need to invest in new tooling if incorporating variable-speed compressors require additional modifications to CRE designs. Some manufacturers of transparent door equipment classes may need to invest in new fixtures to accommodate additional panes of glass into CRE designs. DOE estimates capital conversion costs of $26.0 million and product conversion costs of $121.5 million. Conversion costs total $147.5 million.
At TSL 4, the shipment-weighted average MPC for all CRE is expected to increase by 4.1 percent relative to the no-new-standards case shipment-weighted average MPC for all CRE in 2028. Given the projected increase in production costs, DOE expects an estimated 0.4 percent drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation-of-gross-margin-percentage scenario, the increase in cashflow from the higher MSP is slightly outweighed by the $147.5 million in conversion costs, causing a small decrease in INPV at TSL 4 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $147.5 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 4 under the preservation of operating profit scenario.
At TSL 3, the standard represents the highest efficiency level with positive LCC savings and the incorporation of single speed compressors for all equipment classes in which this design option was considered. The change in INPV is expected to range from −$ 61.9 million to −$15.0 million, which represents a change in INPV of −1.9 percent to −0.5 percent, respectively. At this level, free cash flow is estimated to decrease by 11.3 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 28.8 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 3.
At TSL 3, the efficiency levels required for many equipment classes are lower than the efficiency levels required at TSL 4. However, the efficiency levels required for some equipment classes are the same or are higher (
At TSL 3, the shipment-weighted average MPC for all CRE is expected to increase by 2.2 percent relative to the no-new-standards case shipment-weighted average MPC for all CRE in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation-of-gross-margin-percentage scenario, the minor increase in cashflow from the higher MSP is slightly outweighed by the $97.1 million in conversion costs, causing a small decrease in INPV at TSL 3 under this scenario. Under the preservation-of-operating-profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $97.1 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 3 under the preservation-of-operating-profit scenario.
At TSL 2, the standard represents the highest efficiency level with maximum LCC savings and the incorporation of single speed compressors for all equipment classes in which this design option was considered. The change in INPV is expected to range from −$44.4 million to −$6.7 million, which represents a change in INPV of −1.4 percent to −0.2 percent, respectively.
At this level, the efficiency levels required for most equipment classes are the same as TSL 3. For the five highest-volume equipment classes, TSL 2 corresponds to lower efficiency levels for one equipment class: VCT.RC.M. DOE expects manufacturers would likely need to implement occupancy sensors into VCT.RC.M designs. For VCT.SC.M, VCT.SC.L, VCS.SC.M, and VCS.SC.L, the efficiencies at TSL 2 are the same as TSL 3. At this level, DOE expects industry would incur minimal capital conversion costs. The lower efficiency levels required for two equipment classes—VCT.RC.M and SOC.RC.M—drive the drop in product conversion costs at this level. For VCT.RC.M and SOC.RC.M, DOE expects manufacturers could meet TSL 2 efficiencies by incorporating occupancy sensors, which requires minimal development effort. DOE estimates capital conversion costs of $2.2 million and product conversion costs of $66.1 million. Conversion costs total $68.3 million.
At TSL 2, the shipment-weighted average MPC for all CRE is expected to increase by 1.7 percent relative to the no-new-standards case shipment-weighted average MPC for all CRE in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation of gross margin percentage scenario, the minor increase in cashflow from the higher MSP is slightly outweighed by the $68.3 million in conversion costs, causing a minor decrease in INPV at TSL 2 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $68.3 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 2 under the preservation of operating profit scenario.
At TSL 1, the standard represents the minimum efficiency level with positive LCC savings. The change in INPV is expected to range from −$12.2 million to $4.5 million, which represents a change in INPV of -0.4 percent to 0.1 percent, respectively. At this level, free cash flow is estimated to decrease by 1.9 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 35.6 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 1.
At this level, the efficiency levels correspond to EL 1 for nearly all equipment classes (except for VCT.SC.H, HCT.SC.M, and HCT.SC.L, which are set to baseline or EL 0). DOE expects most self-contained equipment classes would need to incorporate higher-efficiency fan motors (
At TSL 1, the shipment-weighted average MPC for all CRE is expected to increase by 0.8 percent relative to the no-new-standards case shipment-weighted average MPC for all CRE in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation of gross margin percentage scenario, the minor increase in cashflow from the higher MSP slightly outweighs the $15.3 million in conversion costs, causing a minor increase in INPV at TSL 1 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $15.3 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 1 under the preservation of operating profit scenario.
DOE seeks comments, information, and data on the capital conversion costs and product conversion costs estimated for each TSL.
To quantitatively assess the potential impacts of new and amended energy conservation standards on direct employment in the CRE industry, DOE used the GRIM to estimate the domestic labor expenditures and number of direct employees in the no-new-standards case and in each of the standards cases during the analysis period. DOE calculated these values using statistical data from the 2021
Labor expenditures related to equipment manufacturing depend on the labor intensity of the equipment, the sales volume, and an assumption that wages remain fixed in real terms over time. The total labor expenditures in each year are calculated by multiplying the total MPCs by the labor percentage of MPCs. The total labor expenditures in the GRIM were then converted to total production employment levels by dividing production labor expenditures by the average fully burdened wage multiplied by the average number of hours worked per year per production worker. To do this, DOE relied on the
Total production employees was then multiplied by the U.S. labor percentage to convert total production employment to total domestic production employment. The U.S. labor percentage represents the industry fraction of domestic manufacturing production capacity for the covered equipment. This value is derived from manufacturer interviews, equipment database analysis, DOE's shipments analysis, and publicly available information. DOE estimates that approximately 77 percent of currently covered CRE are produced domestically.
The domestic production employees estimate covers production line workers, including line supervisors, who are directly involved in fabricating and assembling equipment within the OEM facility. Workers performing services that are closely associated with production operations, such as materials handling tasks using forklifts, are also included as production labor.
Non-production workers account for the remainder of the direct employment figure. The non-production employees category covers domestic workers who are not directly involved in the production process, such as sales, engineering, human resources, management,
Using the GRIM, DOE estimates in the absence of new energy conservation standards there would be 7,472 domestic workers for CRE in 2028. Table V.68 shows the range of the impacts of energy conservation standards on U.S. manufacturing employment in the CRE industry. The discussion below provides a qualitative evaluation of the range of potential impacts presented in the table.
The direct employment impacts in table V.68 represent the potential domestic employment changes that could result following the compliance date for CRE in this proposal. The upper bound estimate corresponds to a potential change in the number of domestic workers that would result from new and amended energy conservation standards if manufacturers continue to produce the same scope of covered equipment within the United States after compliance takes effect.
To establish a conservative lower bound, DOE assumes all manufacturers would shift production to foreign countries with lower labor costs. Most of the design options analyzed in the engineering analysis require manufacturers to purchase more-efficient components from suppliers. These components do not require significant additional labor to assemble or significant production line updates. Incorporating vacuum-insulated panels could lead to greater labor requirements, however, as discussed in section IV.B.1 of this document, DOE did not consider vacuum-insulated panels as a design option in its engineering analysis. As a result, DOE believes the likelihood of changes in production location due to new and amended standards are relatively low.
Additional detail on the analysis of direct employment can be found in chapter 12 of the NOPR TSD. Additionally, the employment impacts discussed in this section are independent of the employment impacts from the broader U.S. economy, which are documented in chapter 16 of the NOPR TSD.
In interviews, most manufacturers noted potential manufacturing capacity concerns relating to widespread adoption of increased insulation thickness or VIPs. As discussed in section IV.B.1 of this document, DOE excluded these technologies from further consideration in the engineering analysis and, thus, DOE does not expect manufacturers would need to increase insulation thickness or incorporate VIPs to meet any of the efficiency levels analyzed in this NOPR. Therefore, when considering potential new and amended energy conservation standards in isolation, DOE believes manufacturers would be able to maintain manufacturing capacity levels and continue to meet market demand under the proposed new and amended energy conservation standards. However, multiple manufacturers raised concerns about technical and laboratory resource constraints due to overlapping regulations over a short time period. Specifically, these manufacturers mentioned the testing and redesign required for new safety standards and the various regulations necessitating the transition to low-GWP refrigerants. Some manufacturers stated that there are already experiencing testing laboratory shortages, which would further be exacerbated should EPA finalize its proposals in the December 2022 EPA NOPR and DOE set more stringent standards that necessitate the redesign of the majority of basic models. Manufacturers noted that the ongoing supply chain constraints further strain technical and laboratory resources as manufacturers are forced to identify and qualify new component suppliers due to shortages and long lead times.
DOE seeks comment on whether manufacturers expect that manufacturing capacity constraints, engineering resource constraints, or laboratory constraints would limit equipment availability to consumers in the timeframe of the new and amended standards compliance date (2028).
Small business, low volume, and niche equipment manufacturers, and manufacturers exhibiting a cost structure substantially different from the industry average could be affected disproportionately. As discussed in section IV.J of this document, using average cost assumptions to develop an industry cash flow estimate is inadequate to assess differential impacts among manufacturer subgroups.
For CRE, DOE identified and evaluated the impact of new and amended conservation standards on one subgroup: small manufacturers. The SBA defines a “small business” as having 1,250 employees or less for NAICS 333415, “Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing,” which includes CRE manufacturing. Based on this definition, DOE identified 25 domestic OEM in the CRE industry that qualify as a “small business.”
For a discussion of the impacts on the small manufacturer subgroup, see the regulatory flexibility analysis in section VI.B of this document or chapter 12 of the NOPR TSD.
One aspect of assessing manufacturer burden involves looking at the cumulative impact of multiple DOE standards and the equipment/product-specific regulatory actions of other Federal agencies that affect the manufacturers of a covered product or equipment. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. In addition to energy conservation standards, other regulations can significantly affect manufacturers' financial operations. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing equipment. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency. DOE evaluates equipment/product-specific regulations that will take effect approximately three years before or after the estimated 2028 compliance date of any new and amended energy conservation standards for CRE. This information is presented in table V.69.
DOE requests information regarding the impact of cumulative regulatory burden on manufacturers of CRE associated with multiple DOE standards or equipment/product-specific regulatory actions of other Federal agencies.
The December 2022 EPA NOPR
DOE accounted for the costs associated with redesigning CRE to make use of flammable refrigerants and retrofitting production facilities to accommodate flammable refrigerants in the GRIM. DOE considers the expenses associated with the refrigerant transition as independent of DOE actions related to any new and amended energy conservation standards. Therefore, DOE incorporated the refrigerant transition expenses into both the no-new-standards case and standards cases. DOE relied on manufacturer feedback in confidential interviews, a report prepared for EPA,
DOE requests comments on the magnitude of costs associated with transitioning CRE designs and production facilities to accommodate low-GWP refrigerants that would be incurred between the publication of this NOPR and the proposed compliance date of new and amended standards. Quantification and categorization of
This section presents DOE's estimates of the national energy savings and the NPV of consumer benefits that would result from each of the TSLs considered as potential new and amended standards.
To estimate the energy savings attributable to potential new and amended standards for CRE, DOE compared their energy consumption under the no-new-standards case to their anticipated energy consumption under each TSL. The savings are measured over the entire lifetime of equipment purchased in the 30-year period that begins in the year of anticipated compliance with new and amended standards (2028-2057). Table V.70 presents DOE's projections of the national energy savings for each TSL considered for CRE. The savings were calculated using the approach described in section IV.E of this document.
OMB Circular A-4
DOE estimated the cumulative NPV of the total costs and savings for consumers that would result from the TSLs considered for CRE. In accordance with OMB's guidelines on regulatory analysis,
The NPV results based on the aforementioned 9-year analytical period are presented in
The previous results reflect the use of a default trend to estimate the change in price for CRE over the analysis period (
DOE estimates that that new and amended energy conservation standards for CRE would reduce energy expenditures for consumers of those equipment, with the resulting net savings being redirected to other forms of economic activity. These expected shifts in spending and economic activity could affect the demand for labor. As described in section IV.N of this document, DOE used an input/output model of the U.S. economy to estimate indirect employment impacts of the TSLs that DOE considered. There are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes (2028-2032), where these uncertainties are reduced.
The results suggest that the proposed standards would be likely to have a negligible impact on the net demand for labor in the economy. The net change in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Chapter 16 of the NOPR TSD presents detailed results regarding anticipated indirect employment impacts.
As discussed in section IV.C.1.b of this document, DOE has tentatively concluded that the standards proposed in this NOPR would not lessen the utility or performance of the CRE under consideration in this rulemaking. Manufacturers of these equipment currently offer units that meet or exceed the proposed standards.
DOE considered any lessening of competition that would be likely to result from new and amended standards. As discussed in section III.F.1 of this document, the Attorney General determines the impact, if any, of any lessening of competition likely to result from a proposed standard, and transmits such determination in writing to the Secretary, together with an analysis of the nature and extent of such impact. To assist the Attorney General in making this determination, DOE has provided DOJ with copies of this NOPR and the accompanying TSD for review. DOE will consider DOJ's comments on the proposed rule in determining whether to proceed to a final rule. DOE will publish and respond to DOJ's comments in that document. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the
Enhanced energy efficiency, where economically justified, improves the Nation's energy security, strengthens the economy, and reduces the environmental impacts (costs) of energy production. Reduced electricity demand due to energy conservation standards is also likely to reduce the cost of maintaining the reliability of the electricity system, particularly during peak-load periods. Chapter 15 in the NOPR TSD presents the estimated impacts on electricity generating capacity, relative to the no-new-standards case, for the TSLs that DOE considered in this proposed rulemaking.
Energy conservation resulting from potential energy conservation standards for CRE is expected to yield
As part of the analysis for this rulemaking, DOE estimated monetary benefits likely to result from the reduced emissions of CO
As discussed in section IV.L.2 of this document, DOE estimated the climate benefits likely to result from the reduced emissions of methane and N
The time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD.
DOE is well aware that scientific and economic knowledge about the contribution of CO
DOE also estimated the monetary value of the health benefits associated with NO
Not all the public health and environmental benefits from the reduction of greenhouse gases, NO
The Secretary of Energy, in determining whether a standard is economically justified, may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) No other factors were considered in this analysis.
Table V.80 presents the NPV values that result from adding the estimates of the potential economic benefits resulting from reduced GHG and NO
When considering new or amended energy conservation standards, the standards that DOE adopts for any type (or class) of covered equipment must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) In determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standard exceed its burdens by, to the greatest extent practicable, considering the seven statutory factors discussed previously. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also result in significant conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of new and amended standards for CRE at each TSL, beginning with the maximum technologically feasible level, to determine whether that level was economically justified. Where the max-tech level was not justified, DOE then considered the next most efficient level and undertook the same evaluation until it reached the highest efficiency level that is both technologically feasible and economically justified and saves a significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of each TSL, tables in this section present a summary of the results of DOE's quantitative analysis for each TSL. In addition to the quantitative results presented in the tables, DOE also considers other burdens and benefits that affect economic justification. These include the impacts on identifiable subgroups of consumers who may be disproportionately affected by a national standard and impacts on employment.
DOE also notes that the economics literature provides a wide-ranging discussion of how consumers trade off upfront costs and energy savings in the absence of government intervention. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements. There is evidence that consumers undervalue future energy savings as a result of (1) a lack of information; (2) a lack of sufficient salience of the long-term or aggregate benefits; (3) a lack of sufficient savings to warrant delaying or altering purchases; (4) excessive focus on the short term, in the form of inconsistent weighting of future energy cost savings relative to available returns on other investments; (5) computational or other difficulties associated with the evaluation of relevant tradeoffs; and (6) a divergence in incentives (for example, between renters and owners, or builders and purchasers). Having less than perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher-than-expected rate between
Table V.81 and table V.82 summarize the quantitative impacts estimated for each TSL for CRE. The national impacts are measured over the lifetime of CRE purchased in the 30-year period that begins in the anticipated year of compliance with new and amended standards (2028-2057). The energy savings, emissions reductions, and value of emissions reductions refer to full-fuel-cycle results. The efficiency levels contained in each TSL are described in section V.A of this document.
DOE first considered TSL 6, which represents the max-tech efficiency levels for all equipment classes. The design options DOE analyzed at this level included the max-tech technologies for all equipment classes. For all open (
TSL 6 would save an estimated 3.38 quads of FFC energy over 30 years of shipments (2028-2057), an amount DOE considers significant. Under TSL 6, the NPV of consumer benefits would be −$10.1 billion using a discount rate of 7 percent, and −$16.5 billion using a discount rate of 3 percent for the same 30-year period.
The cumulative emissions reductions at TSL 6 are 60.7 Mt of CO
Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO
At TSL 6, affected purchasers of CRE experience an average LCC savings ranging from −$3,397.0. to $1,524.5 with a payback period ranging from 94 years to 2.1 years. For example, for equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and VCT.RC.M, which account for 82% of annual CRE shipments, there is a net LCC savings of $0.171, −$1,417.24, $260.731, −$1,093.53, and −$3,397.0 and a PBP of 5.04, 4539, 3.2, 18.5, and 94 years, respectively. Overall, a majority of CRE purchasers (69.0 percent) would experience a net cost and the LCC savings would be negative for 13 of 28 analyzed equipment classes, representing 48% of annual shipments. Furthermore, the shipment-weighted-average PBP is estimated at 23 years, which is generally higher than the average CRE lifetime.
At TSL 6, the projected change in INPV ranges from a decrease of $300.4 million to an increase of $243.6 million, which corresponds to a decrease of 9.1 percent and an increase of 7.4 percent, respectively. DOE estimates that industry must invest $343.8 million to update equipment designs and source, qualify, and test high-efficiency components across their entire CRE portfolio. In 2027, a year before compliance is required, DOE estimates that approximately 2.2 percent of CRE shipments would meet the efficiency levels analyzed at TSL 6.
At this level, nearly all manufacturers would need to spend notable development time incorporating the analyzed max-tech design options across their entire CRE portfolio. However, most design options analyzed involve more efficient components (
Based on this analysis, the Secretary tentatively concludes that at TSL 6 for CRE, the benefits of energy savings,
DOE then considered TSL 5, which represents the highest efficiency level with positive LCC savings for each equipment class. For approximately half of the classes, this TSL represents efficiency levels less than max-tech. For most open (
TSL 5 would save an estimated 3.11 quads of full fuel cycle energy over 30 years of shipments (2028 to 2057), an amount DOE considers significant. Under TSL 5, the NPV of consumer benefit would be $2.38 billion using a discount rate of 7 percent, and $7.10 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 5 are 55.8 Mt of CO
Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO
At TSL 5, affected purchasers for each CRE equipment class experience an average LCC savings ranging from $7.77 to $1,524.52 with a payback period ranging from 1.765 years to 13.8 years. For example, for equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and VCT.RC.M, which account for 82% of annual CRE shipments, there is a net LCC savings of $128.91, $82.53, $260.73, $120.34,1 and $133.625 and a PBP of 4.1, 7.6, 3.2, 5.8, and 10.9 years, respectively. Overall, approximately 78 percent of affected CRE purchasers would experience a net benefit or not be affected at TSL 5. Furthermore, the estimated shipment-weighted-average LCC savings is $165.52 and PBP is 5.5 years, which is lower than the average CRE lifetime.
At TSL 5, the projected change in INPV ranges from a decrease of $159.3 million to a decrease of $30.9 million, which correspond to decreases of 4.8 percent and 0.9 percent, respectively. DOE estimates that industry must invest $226.4 million to comply with standards set at TSL 5. In 2027, the year before compliance is required, DOE estimates that approximately 10.8 percent of CRE shipments would meet the efficiency levels analyzed at TSL 5. Similar to TSL 6, DOE expects manufacturers would spend development time updating equipment designs to incorporate high-efficiency components. However, at this level, DOE expects that most manufacturers of CRE with transparent doors could meet the TSL 5 efficiencies without implementing vacuum-insulated glass doors. Of the 11 directly analyzed transparent door equipment classes, only the SOC.SC.M equipment class would likely require vacuum-insulated glass doors to meet the TSL 5 efficiency levels. SOC.SC.M accounts for approximately 0.4 percent of analyzed industry shipments in 2027.
After considering the analysis and weighing the benefits and burdens, the Secretary has tentatively concluded that at a standard set at TSL 5 for CRE would be economically justified. At this TSL, the average LCC savings for all affected purchasers is positive. An estimated 67.1 percent of purchasers experience a net benefit, while 21.9 percent of purchasers experience a net LCC cost. The FFC national energy savings are significant and the NPV of consumer benefits is positive using both a 3-percent and 7-percent discount rate. Notably, the benefits to consumers vastly outweigh the cost to manufacturers. At TSL 5, the NPV of consumer benefits, even measured at the more conservative discount rate of 7 percent is over 14 times higher than the maximum estimated manufacturers' loss in INPV. The standard levels at TSL 5 are economically justified even without weighing the estimated monetary value of emissions reductions. When those emissions reductions are included—representing $3.04 billion in climate benefits (associated with the average SC-GHG at a 3-percent discount rate), and $5.94 billion (using a 3-percent discount rate) or $2.32 billion (using a 7-percent discount rate) in health benefits—the rationale becomes stronger still.
As stated, DOE conducts the walk-down analysis to determine the TSL that represents the maximum improvement in energy efficiency that is technologically feasible and economically justified as required under EPCA. The walk-down is not a comparative analysis, as a comparative analysis would result in the maximization of net benefits instead of energy savings that are technologically feasible and economically justified, which would be contrary to the statute. 86 FR 70892, 70908. Although DOE has not conducted a comparative analysis to select the proposed energy conservation standards, DOE notes that TSL 5 represents the highest efficiency level for each equipment class with positive LCC savings for each equipment class, and a considerably lower reduction in INPV, and positive consumer NPV compared to TSL 6.
Although DOE considered proposed new and amended standard levels for CRE by grouping the efficiency levels for each equipment class into TSLs, DOE evaluates all analyzed efficiency levels in its analysis. For all equipment classes, the proposed standard level
Therefore, based on the previous considerations, DOE proposes to adopt the energy conservation standards for CRE at TSL 5. The proposed new and amended energy conservation standards for CRE, which are expressed as kWh/day, are shown in table V.83.
The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The annualized net benefit is (1) the annualized national economic value (expressed in 2022$) of the benefits from operating equipment that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase costs), and (2) the annualized monetary value of the climate and health benefits from emission reductions.
Table V.84 shows the annualized values for CRE under TSL 5, expressed in 2022$. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and NO
Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards for CRE is $330 million per year in increased equipment costs, while the estimated annual benefits are $738 million in reduced operating costs, $174 million from climate benefits, and $341 million from health benefits. In this case, the net benefit amounts to $923 million per year.
Manufacturers, including importers, must use equipment-specific certification templates to certify compliance to DOE. For CRE, the certification template reflects the general certification requirements specified at 10 CFR 429.12 and the equipment-specific requirements specified at 10 CFR 429.42 DOE is not proposing to amend the equipment-specific certification requirements for this equipment.
Executive Order (“E.O.”) 12866, “Regulatory Planning and Review,” as supplemented and reaffirmed by E.O. 13563, “Improving Regulation and Regulatory Review,” 76 FR 3821 (Jan.
Section 6(a) of E.O. 12866 also requires agencies to submit “significant regulatory actions” to OIRA for review. OIRA has determined that this proposed regulatory action constitutes a “significant regulatory action” within the scope of section 3(f)(1) of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an assessment, including the underlying analysis, of benefits and costs anticipated from the proposed regulatory action, together with, to the extent feasible, a quantification of those costs; and an assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, and an explanation as to why the planned regulatory action is preferable to the identified potential alternatives. These assessments are summarized in this preamble and further detail can be found in the technical support document for this rulemaking.
The Regulatory Flexibility Act (5 U.S.C. 601
For manufacturers of CRE, the SBA has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the statute. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of the rule. (
DOE is proposing new and amended energy conservation standards for CRE. EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, part C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42 U.S.C. 6311-6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This equipment includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E)) EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)) On March 28, 2014, DOE published a final rule that prescribed the current energy conservation standards for CRE manufactured on and after March 27, 2017. 79 FR 17725. EPCA provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) This proposed rulemaking is in accordance with DOE's obligations under EPCA.
EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, part C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42 U.S.C. 6311-6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B))
EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C.
DOE reviewed this proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. 68 FR 7990. DOE conducted a market assessment to identify potential small manufacturers of CRE. DOE began its assessment by compiling an equipment database of CRE models available in the United States. To develop a comprehensive equipment database of CRE basic models, DOE reviewed its Compliance Certification Database (“CCD”)
DOE initially identified 83 OEMs that sell CRE in the United States. Of the 83 OEMs identified, DOE tentatively determined that 25 companies qualify as small businesses and are not foreign-owned and operated.
Of the 25 small, domestic CRE OEMs, 24 OEMs manufacture vertical equipment classes (
For the purposes of this IRFA, DOE assumed that the industry capital conversion costs would be evenly distributed across the OEMs that manufacture each equipment class to avoid underestimating the potential capital investments small manufacturers may incur as a result of the proposed standard. As discussed in section IV.J.2.c of this document, DOE scaled the industry capital conversion costs by the number of OEMs offering models of the respective equipment class. For product conversion costs, DOE assumed all small businesses would choose to redesign or replace models that do not meet the proposed TSL 5 efficiency levels. DOE used basic model counts to scale the industry product conversion costs, as discussed in section IV.J.2.c of this document. DOE expects manufacturers would have to incorporate various high-efficiency components to meet the TSL 5 efficiencies across their CRE offerings. For certain transparent door equipment classes, capital conversion costs may be necessary to incorporate improved door designs. For self-contained equipment classes, many manufacturers would likely have to incorporate VSCs into CRE designs. To incorporate VSCs, which could be larger than existing single-speed compressors, manufacturers may need new tools for the baseplate. Product conversion costs may be necessary to qualify, source, and test new high-efficiency components (
Out of the 24 small OEMs of vertical equipment classes, DOE expects 23 OEMs would incur some conversion costs to redesign models that do not currently the proposed efficiency levels. The remaining small OEM would likely not incur conversion costs as a direct result of the proposed standard as all of their vertical CRE models currently meet or exceed the proposed levels. Vertical equipment classes account for approximately 90.1 percent of industry shipments in 2027. All the VOP and VCT equipment classes would likely require manufacturers to incorporate occupancy sensors to meet TSL 5. DOE further expects VOP equipment classes would also need to incorporate night curtains. DOE expects manufacturers of VOP.SC.M would likely also need to incorporate EC condenser fan motors, VSCs, and microchannel condensers. Some VCT equipment classes would likely need to incorporate triple pane glass with krypton fill. VCT.SC.M, and VCT.SC.L likely would further need to incorporate EC condenser fan motors and VSCs. For most VCS equipment classes, manufacturers would likely need to incorporate evaporator fan controls, EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers.
DOE expects all 8 small OEMs of semi-vertical equipment classes would incur some conversion costs to redesign models that do not currently meet the proposed efficiency levels. Semi-vertical equipment classes account for approximately 2.1 percent of industry shipments in 2027. All semi-vertical equipment classes would likely need to incorporate occupancy sensors and night curtains. SVO.SC.M would also likely require EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers.
Out of the 7 small OEMs of service-over-counter equipment classes, DOE expects 6 OEMs would incur some conversion costs to redesign models that do not currently the proposed efficiency levels. The remaining small OEM would likely not incur conversion costs as a direct result of the proposed standard as all of their service-over-counter CRE models currently meet or exceed the proposed levels. Service-over-counter equipment classes account for approximately 0.5 percent of industry shipments in 2027. SOC.RC.M and SOC.SC.M would likely incorporate occupancy sensors. SOC.RC.M would also likely require triple pane glass doors with krypton fill. SOC.SC.M would also likely require VIG doors,
Out of the 10 small OEMs of horizontal equipment classes, DOE expects 9 OEMs would incur some conversion costs to redesign models that do not currently the proposed efficiency levels. The remaining small OEM would likely not incur conversion costs as a direct result of the proposed standard as all of their horizontal CRE models currently meet or exceed the proposed levels. Horizontal equipment classes account for approximately 5.9 percent of industry shipments in 2027. For HZO equipment classes, manufacturers would likely incorporate occupancy sensors. For HZO.SC.M and HZO.SC.L equipment classes, manufacturers would likely incorporate EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers. DOE expects that HCT.SC.I would likely need to incorporate VSCs and occupancy sensors to meet TSL 5 levels. For HCS equipment classes, manufacturers would likely incorporate EC condenser fan motors. HCS.SC.M would also likely require evaporator fan controls and EC condenser fan motors.
DOE expects all 3 small OEMs offering chef base equipment classes to incur some conversion costs to redesign models that do not meet efficiency levels at TSL 5. Chef base equipment classes account for approximately 1.4 percent of industry shipments in 2027. Manufacturers would likely incorporate EC evaporator fan motors, EC condenser fan motors, and VSCs for CB.SC.M. None of the small businesses offer CB.SC.L.
Based on annual revenue estimates from market research tools (
DOE seeks comments, information, and data on the number of small businesses in the industry, the names of those small businesses, and their market shares by equipment class. DOE also requests comment on the potential impacts of the proposed standards on small manufacturers.
DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the proposed rule.
The discussion in the previous section analyzes impacts on small businesses that would result from DOE's proposed rule, represented by TSL 5. In reviewing alternatives to the proposed rule, DOE examined energy conservation standards set at lower efficiency levels. While TSL 1, TSL 2, TSL 3, and TSL 4 would reduce the impacts on small business manufacturers, it would come at the expense of a reduction in energy savings. TSL 1 achieves 67.0 percent lower energy savings compared to the energy savings at TSL 5. TSL 2 achieves 43.7 percent lower energy savings compared to the energy savings at TSL 5. TSL 3 achieves 41.0 percent lower energy savings compared to the energy savings at TSL 5. TSL 4 achieves 10.6 percent lower energy savings as compared to the energy savings at TSL 5.
Based on the presented discussion, establishing standards at TSL 5 balances the benefits of the energy savings at TSL 5 with the potential burdens placed on
Additional compliance flexibilities may be available through other means. Manufacturers subject to DOE's energy efficiency standards may apply to DOE's Office of Hearings and Appeals for exception relief under certain circumstances. Manufacturers should refer to 10 CFR part 430, subpart E, and 10 CFR part 1003 for additional details.
Manufacturers of CRE must certify to DOE that their equipment comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their equipment according to the DOE test procedures for CRE, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer equipment and commercial equipment, including CRE. (
Notwithstanding any other provision of the 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 PRA, unless that collection of information displays a currently valid OMB Control Number.
DOE is analyzing this proposed regulation in accordance with the National Environmental Policy Act of 1969 (“NEPA”) and DOE's NEPA implementing regulations (10 CFR part 1021). DOE's regulations include a categorical exclusion for rulemakings that establish energy conservation standards for consumer products or industrial equipment. 10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this proposed rulemaking qualifies for categorical exclusion B5.1 because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, none of the exceptions identified in categorical exclusion B5.1(b) apply, no extraordinary circumstances exist that require further environmental analysis, and it otherwise meets the requirements for application of a categorical exclusion.
E.O. 13132, “Federalism,” 64 FR 43255 (Aug. 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has tentatively determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the equipment that are the subject of this proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (
With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of E.O. 12988, “Civil Justice Reform,” imposes on Federal agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any, (2) clearly specifies any effect on existing Federal law or regulation, (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction, (4) specifies the retroactive effect, if any, (5) adequately defines key terms, and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of E.O. 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, section 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR
Although this proposed rule does not contain a Federal intergovernmental mandate, it may require expenditures of $100 million or more in any one year by the private sector. Such expenditures may include: (1) investment in research and development and in capital expenditures by CRE manufacturers in the years between the final rule and the compliance date for the new standards and (2) incremental additional expenditures by consumers to purchase higher-efficiency CRE, starting at the compliance date for the applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the proposed rule. (2 U.S.C. 1532(c)) The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The
Under section 205 of UMRA, DOE is obligated to identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. (2 U.S.C. 1535(a)) DOE is required to select from those alternatives the most cost effective and least burdensome alternative that achieves the objectives of the proposed rule unless DOE publishes an explanation for doing otherwise, or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(m), this proposed rule would establish new and amended energy conservation standards for CRE that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified, as required by 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the alternatives considered by DOE is presented in chapter 17 of the TSD for this proposed rule.
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This proposed rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
Pursuant to E.O. 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (Mar. 15, 1988), DOE has determined that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at
E.O. 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which proposes new and amended energy conservation standards for CRE, is not a significant energy action because the proposed standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on this proposed rule.
On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (“OSTP”), issued its Final Information Quality Bulletin for Peer Review (“the Bulletin”). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government's scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are “influential scientific information,” which the Bulletin defines as “scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.” 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of the energy conservation standards development process and the analyses that are typically used and has prepared a report describing that peer review.
In response to the June 2022 Preliminary Analysis, DOE received a comment from NAMA requesting the Department to conduct an in person public meeting. NAMA commented that it is requesting an in person public meeting due to the webinar held on August 8, 2022, feeling rushed and to allow time for full dialogue on these important subjects. (NAMA, No. 37, p. 4)
After carefully considering NAMA's request, the Department has decided to grant the request for an in-person public meeting. Consequently, DOE will be hosting an in-person public meeting in addition to the webinar. Please note that attendance will be limited for the in-person public meeting due to room size capacity limits.
The time, date, and location of the public meeting are listed in the
Please note that foreign nationals participating in the public meeting are subject to advance security screening procedures which require advance notice prior to attendance at the public meeting. If a foreign national wishes to participate in the public meeting, please inform DOE as soon as possible by contacting Ms. Regina Washington at (202) 586-1214 or by email:
DOE requires visitors to have laptops and other devices, such as tablets, checked upon entry into the building. Any person wishing to bring these devices into the building will be required to obtain a property pass. Visitors should avoid bringing these 5 devices, or allow an extra 45 minutes to check in. Please report to the visitor's desk to have devices checked before proceeding through security.
Due to the REAL ID Act implemented by the Department of Homeland Security (“DHS”), there have been recent changes regarding ID requirements for individuals wishing to enter Federal buildings from specific States and U.S. territories. DHS maintains an updated website identifying the State and territory driver's licenses that currently are acceptable for entry into DOE facilities at
In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE's website at
Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the
DOE will designate a DOE official to preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. After the public meeting and until the end of the comment period, interested parties may submit further comments on the proceedings and any aspect of the rulemaking.
The public meeting will be conducted in an informal, conference style. DOE will a general overview of the topics addressed in this proposed rulemaking, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this proposed rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit, as time permits, other participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket, which can be viewed as described in the
DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the
However, your contact information will be publicly viewable if you include it in the comment itself or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Otherwise, persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.
Do not submit to
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Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via postal mail or hand delivery/courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No telefacsimiles (“faxes”) will be accepted.
Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, that are written in English, and that are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.
It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).
Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:
(1) DOE requests comments on its proposal to require that the proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is 3 years after the date on which the final new and amended standards are published. More generally, DOE requests comment on whether it would be beneficial to CRE manufacturers to align the compliance date of any DOE amended or established standards as closely as possible with the refrigerant prohibition dates proposed by the December 2022 EPA NOPR.
(2) DOE requests comment on the impacts to CRE manufacturers and consumers from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA).
(3) DOE requests comment on the proposed definitions for “cold-wall evaporator,” “forced-air evaporator,” “pass-through doors,” “roll-in door,” “roll-through doors,” “sliding door,” and “rating temperature.”
(4) DOE requests comment on blast chiller or freezer design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix D of 10 CFR 431.64.
(5) DOE requests comment on refrigerated buffet/preparation table design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix C of 10 CFR 431.64.
(6) DOE requests comment on publicly available market data on CRE manufacturers or identification of any CRE manufacturers with large market shares not identified in Chapter 3 of the TSD NOPR.
(7) DOE requests comment on the decision to screen out increased insulation thickness, vacuum-insulated panels, linear compressors, and air curtain design as design options for improving the energy efficiency of CRE.
(8) DOE requests comment on its proposal to use baseline levels for CRE equipment based upon the anticipated design changes that will be made by manufacturers in response to the December 2022 EPA NOPR.
(9) DOE further requests comment on its estimates of energy-use reduction associated with the design changes made by manufacturers in response to the December 2022 EPA NOPR.
(10) DOE requests comment on its proposal to apply an energy use multiplier to certain equipment classes that contain CRE with unique utility and energy use characteristics. DOE additionally requests comment on the proposed multiplier values and equipment classes for which these multipliers would be applied.
(11) DOE seeks comment on the method for estimating manufacturing production costs.
(12) DOE requests comment on the CRE distribution channels and overall on the markups analysis.
(13) DOE requests comment on its approach for the energy use analysis.
(14) DOE requests comment on its price learning assumptions and methodology.
(15) DOE requests comment and data to inform how any of the analyzed design options would require additional installation time, training, or other related skills compared to the baseline equipment.
(16) DOE requests comment and data on its assumptions and approach regarding consideration of repair and maintenance costs in the LCC and PBP analyses. Specifically, DOE requests data on the expected lifetimes and repair and maintenance frequencies of the considered design options in this NOPR.
(17) DOE requests comment and data regarding the CRE lifetime assumptions and methodology.
(18) DOE requests comment and data on the assumed business types and the corresponding CRE lifetimes at which refurbishment may occur.
(19) DOE requests comment on its methodology and data to better inform the no-standards-case efficiency distribution for CRE.
(20) DOE requests comment on the price elasticity assumptions for the CRE shipments analysis as they relates to the overall CRE market and the market for refurbished CRE.
(21) DOE requests comment on its assumption of no efficiency trend for CRE and seeks historical CRE efficiency data, ideally by equipment class or alternatively by equipment family, or overall for the CRE market as a whole.
(22) DOE seeks comment on the use of a 1.40 manufacturer markup for all CRE equipment classes analyzed in this proposed rule. DOE also seeks comment on the estimated manufacturer markups and incremental MSPs that result from the analyzed energy conservation standards.
(23) DOE requests detailed comment and information on the capital investments associated with each analyzed design option. In particular, DOE requests detailed comment and feedback on the specific changes in equipment and tooling required to incorporate microchannel heat exchangers, as DOE currently models microchannel heat exchangers as a purchased part that can be substituted for tube and fin heat exchangers with minor production line changes.
(24) DOE requests comment on the availability of computer chips and other electrical components used in CREs and specifically if these components are used to achieve higher efficiency levels.
(25) DOE seeks comments, information, and data on the capital conversion costs and product conversion costs estimated for each TSL.
(26) DOE seeks comment on whether manufacturers expect that manufacturing capacity constraints, engineering resource constraints, or laboratory constraints would limit equipment availability to consumers in the timeframe of the new and amended standards compliance date (2028).
(27) DOE requests information regarding the impact of cumulative regulatory burden on manufacturers of CRE associated with multiple DOE standards or equipment/product-specific regulatory actions of other Federal agencies.
(28) DOE requests comments on the magnitude of costs associated with transitioning CRE designs and production facilities to accommodate low-GWP refrigerants that would be incurred between the publication of this NOPR and the proposed compliance date of new and amended standards. Quantification and categorization of these costs, such as engineering efforts, testing lab time, certification costs, and capital investments (
(29) DOE seeks comments, information, and data on the number of small businesses in the industry, the names of those small businesses, and their market shares by equipment class. DOE also requests comment on the potential impacts of the proposed standards on small manufacturers.
(30) Additionally, DOE welcomes comments on other issues relevant to the conduct of this rulemaking that may not specifically be identified in this document.
The Secretary of Energy has approved publication of this notice of proposed rulemaking and announcement of public meeting.
Administrative practice and procedure, Confidential business information, Energy conservation test procedures, and Reporting and recordkeeping requirements.
This document of the Department of Energy was signed on September 28, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
For the reasons set forth in the preamble, DOE proposes to amend part 431 of chapter II of title 10 of the Code of Federal Regulations, as set forth below:
42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
The additions and revision read as follows:
(a) In this section—
(1) The term “V” means the volume of a commercial refrigerator, freezer, and refrigerator-freezer, as determined in accordance with section 3.1. of appendix B to subpart C of this part.
(2) The term “TDA” means the total display area of a commercial refrigerator, freezer, and refrigerator-freezer, as determined in accordance with section 3.2. of appendix B to subpart C of this part.
(b) Each commercial refrigerator, freezer, and refrigerator-freezer, except as specified in paragraph (d) of this section, manufactured on or after March 27, 2017 and before [
(1) For commercial refrigerators, freezers, and refrigerator-freezers other than commercial hybrids, commercial refrigerator-freezers, or wedge cases:
(2) For commercial hybrids and commercial refrigerator-freezers, the maximum daily energy consumption (MDEC) for each model shall be the sum of the MDEC values for all of its compartments. For each compartment, measure the TDA or volume of that compartment, and determine the appropriate equipment class based on that compartment's equipment family, condensing unit configuration, and designed operating temperature. The MDEC limit for each compartment shall be the calculated value obtained by entering that compartment's TDA or volume into the standard equation in paragraph (b)(1) of this section for that compartment's equipment class. Measure the calculated daily energy consumption (CDEC) or total daily energy consumption (TDEC) for the model:
(i) For commercial hybrids and commercial refrigerator-freezers where two or more independent remote condensing units are each connected to separate, individual compartments, measure the total refrigeration load of each compartment separately according to appendix B to subpart C of this part. The CDEC for the model shall be the sum of the compressor energy consumption (CEC) for each compartment, fan energy consumption (FEC), lighting energy consumption (LEC), anti-condensate energy consumption (AEC), defrost energy consumption (DEC), condensate evaporator pan energy consumption (PEC), and other applicable energy consumption (OEC).
(ii) For commercial hybrids and commercial refrigerator-freezers where two or more compartments are connected to one remote condensing unit, measure the total refrigeration load of the model according to appendix B to subpart C of this part.
(A) Calculate a weighted adjusted dew point temperature for the model by:
(B) Calculate the CEC for the model using the total refrigeration load and the weighted average adjusted dew point temperature. The CDEC for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and OEC.
(iii) For commercial hybrids and commercial refrigerator-freezers connected to a self-contained condensing unit, measure the TDEC for the model according to appendix B to subpart C of this part.
(3) For wedge cases, measure the CDEC or TDEC according to appendix B to subpart C of this part. For wedge cases in equipment classes for which a volume metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (b)(1) of this section. For wedge cases of equipment classes for which a TDA metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (b)(1) of this section incorporating a value for the TDA that is the product of:
(i) The vertical height of the air-curtain (or glass in a transparent door) and
(ii) The largest overall width of the case, when viewed from the front.
(c) Each commercial refrigerator, freezer, and refrigerator-freezer, except as specified in paragraph (d) of this section, manufactured on or after [
(1) For commercial refrigerators, freezers, and refrigerator-freezers other than commercial hybrids, commercial refrigerator-freezers, or wedge cases:
(2) For commercial hybrids and commercial refrigerator-freezers, the MDEC for each model shall be the sum of the MDEC values for all of its compartments. For each compartment, measure the TDA or volume of that compartment, and determine the appropriate equipment class based on that compartment's equipment family, condensing unit configuration, and designed operating temperature. The MDEC limit for each compartment shall be the calculated value obtained by entering that compartment's TDA or volume into the standard equation in paragraph (c)(1) of this section for that compartment's equipment class. Measure the CDEC or TDEC for the model:
(i) For commercial hybrids and commercial refrigerator-freezers where two or more independent remote
(ii) For commercial hybrids and commercial refrigerator-freezers where two or more compartments are connected to one remote condensing unit, measure the total refrigeration load of the model according to appendix B to subpart C of this part.
(A) Calculate a weighted adjusted dew point temperature for the model by:
(B) Calculate the CEC for the model using the total refrigeration load and the weighted average adjusted dew point temperature. The CDEC for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and OEC.
(iii) For commercial hybrids and commercial refrigerator-freezers connected to a self-contained condensing unit, measure the TDEC for the model according to appendix B to subpart C of this part.
(3) For wedge cases, measure the CDEC or TDEC according to appendix B to subpart C of this part. For wedge cases in equipment classes for which a volume metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (c)(1) of this section. For wedge cases of equipment classes for which a TDA metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (c)(1) of this section incorporating a value for the TDA that is the product of:
(i) The vertical height of the air-curtain (or glass in a transparent door) and
(ii) The largest overall width of the case, when viewed from the front.
(d) The energy conservation standards in paragraph (b) of this section do not apply to chef bases or griddle stands. The energy conservation standards in paragraphs (b) through (c) of this section do not apply to buffet tables or preparation tables, blast chillers, blast freezers, or mobile refrigerated cabinets.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking.
This document contains proposed regulations that would provide guidance regarding certain clean vehicle credits as established by the Inflation Reduction Act of 2022. The proposed regulations would provide guidance for taxpayers who purchase qualifying previously-owned clean vehicles or purchase qualifying new clean vehicles and intend to transfer the amount of any previously-owned clean vehicle credit or new clean vehicle credit to dealers who are entities eligible to receive advance payments of either credit. The proposed regulations also would provide guidance for dealers to become eligible entities to receive advance payments of previously-owned clean vehicle credits or new clean vehicle credits, and rules regarding recapture of the credits. The proposed regulations would affect taxpayers intending to transfer previously-owned clean vehicle or new clean vehicle credits and eligible entities to whom the credits are transferred, as well as taxpayers who purchased previously-owned clean vehicles or new clean vehicles in the event the vehicles cease being eligible for the credits. The proposed regulations also provide guidance on the meaning of three new definitions added to the exclusive list of “mathematical or clerical errors” relating to certain assessments of tax without a notice of deficiency.
Written or electronic comments and requests for a public hearing must be received by December 11, 2023. Requests for a public hearing must be submitted as prescribed in the “Comments and Requests for a Public Hearing” section.
Commenters are strongly encouraged to submit public comments electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations, the Office of Associate Chief Counsel (Passthroughs & Special Industries) at (202) 317-6853 (not a toll-free number); concerning submissions of comments and requests for a public hearing, call Vivian Hayes (202) 317-6901 (not a toll-free number) or send an email to
Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as the Inflation Reduction Act of 2022 (IRA), added section 25E to the Internal Revenue Code (Code) and amended section 30D of the Code. Section 25E provides a credit (section 25E credit) against the tax imposed by chapter 1 of the Code (chapter 1) with respect to a previously-owned clean vehicle that a taxpayer purchases and places in service. Section 30D provides a credit (section 30D credit) against the tax imposed by chapter 1 with respect to each new clean vehicle that a taxpayer purchases and places in service. Both the section 25E credit and section 30D credit are determined and allowable with respect to the taxable year in which the taxpayer places the previously-owned clean vehicle or new clean vehicle, as applicable, in service. In addition, several of the provisions of section 25E incorporate by cross-reference some of the definitions and rules of section 30D. The IRA also amended section 6213 of the Code by adding three new definitions to the exclusive list of “mathematical or clerical errors” in section 6213(g)(2). These new definitions are set out in sections 6213(g)(2)(T), (U), and (V).
This document contains proposed amendments to the Income Tax Regulations (26 CFR part 1) under sections 25E and 30D and to the Procedure and Administration Regulations (26 CFR part 301) under section 6213 (proposed regulations). The proposed regulations under section 30D supplement a notice of proposed rulemaking (REG-120080-22) published in the
Section 30D was enacted by section 205(a) of the Energy Improvement and Extension Act of 2008, Division B of Public Law 110-343, 122 Stat. 3765, 3835 (October 3, 2008), to provide a credit for purchasing and placing in service new qualified plug-in electric drive motor vehicles. Section 30D has been amended several times since its enactment, most recently by section 13401 of the IRA. In general, the amendments made by section 13401 of the IRA to section 30D apply to vehicles placed in service after December 31, 2022, except as provided in section 13401(k)(2) through (5) of the IRA.
Effective beginning on April 18, 2023, section 30D(b) provides a maximum credit of $7,500 per new clean vehicle, consisting of $3,750 if certain critical minerals requirements are met and $3,750 if certain battery components requirements are met. These requirements are described in section 30D(e)(1) and (2), respectively, and the April 2023 proposed regulations.
The amount of the section 30D credit is treated as a personal credit or a general business credit depending on the character of the vehicle. In general, the section 30D credit is treated as a personal credit allowable under subpart A of part IV of subchapter A of chapter 1. Section 30D(c)(2). However, the amount of the section 30D credit that is attributable to property that is of a character subject to an allowance for depreciation is treated as a current year business credit under section 38(b) instead of being allowed under section 30D. Section 30D(c)(1). Section 38(b)(30) lists as a current year business credit the portion of the section 30D credit to which section 30D(c)(1) applies. The IRA did not amend section 30D(c)(1) or (2).
The April 2023 proposed regulations addressed the case of mixed-use vehicles. Section 30D(c)(1) requires that so much of the section 30D credit that would be allowed under section 30D(a) for any taxable year (determined without regard to section 30D(c)) that is attributable to a depreciable vehicle must be treated as a general business credit under section 38 that is listed in section 38(b)(30) for such taxable year (and not allowed under section 30D(a)). In the case of a depreciable vehicle the use of which is 50 percent or more business use in the taxable year such
The IRA added several special rules under section 30D(f) applicable to vehicles placed in service after December 31, 2022. These special rules include the rule in section 30D(f)(9) that requires a taxpayer to include on the taxpayer's return for the taxable year the vehicle identification number (VIN) of the vehicle for which the section 30D credit is claimed. In addition, section 30D(f)(10) denies the section 30D credit to certain high-income taxpayers. More specifically, section 30D(f)(10)(A) provides that no credit is allowed for any taxable year if (i) the lesser of (I) the modified adjusted gross income of the taxpayer for such taxable year, or (II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds (ii) the threshold amount (modified adjusted gross income (AGI) Limitation). New section 30D(f)(10)(B) provides that the threshold amount is (i) in the case of a joint return or a surviving spouse (as defined in section 2(a) of the Code), $300,000, (ii) in the case of a head of household (as defined in section 2(b) of the Code), $225,000, and (iii) in the case of any other taxpayer, $150,000. New section 30D(f)(10)(C) defines “modified adjusted gross income” as adjusted gross income (AGI) increased by any amount excluded from gross income under sections 911, 931, or 933.
The IRA added new section 30D(g) to the Code, which allows the taxpayer to elect to transfer the section 30D credit in certain situations for vehicles placed in service after December 31, 2023. Section 30D(g)(1) provides that subject to such regulations or other guidance as the Secretary of the Treasury or her delegate (Secretary) determines necessary, a taxpayer may elect to transfer a section 30D credit with respect to a new clean vehicle to an eligible entity (vehicle transfer election). If the taxpayer who acquires a new clean vehicle makes a vehicle transfer election under section 30D(g) with respect to such vehicle, the section 30D credit that would otherwise be allowed to such taxpayer with respect to such vehicle is allowed to the eligible entity specified in such election (and not the taxpayer). Section 30D(g)(2) defines an “eligible entity” with respect to the vehicle for which the section 30D credit is allowed as the dealer that sold such vehicle to the taxpayer and that satisfies the following four requirements set forth in section 30D(g)(2)(A) through (D): (i) the dealer, subject to section 30D(g)(4), must be registered with the Secretary for purposes of section 30D(g)(2), at such time, and in such form and manner, as the Secretary prescribes; (ii) the dealer, prior to the vehicle transfer election and not later than at the time of sale, must have disclosed to the taxpayer purchasing such vehicle the manufacturer's suggested retail price, the value of the section 30D credit allowed and any other incentive available for the purchase of such vehicle, and the amount provided by the dealer to such taxpayer as a condition of the vehicle transfer election; (iii) the dealer, not later than at the time of sale, must have paid the taxpayer (whether in cash or in the form of a partial payment or down payment for the purchase of such vehicle) an amount equal to the credit otherwise allowable to such taxpayer; and (iv) the dealer with respect to any incentive otherwise available for the purchase of a vehicle for which a section 30D credit is allowed, including any incentive in the form of a rebate or discount provided by the dealer or manufacturer, must have ensured that the availability or use of such incentive does not limit the ability of a taxpayer to make a vehicle transfer election, and such election does not limit the value or use of such incentive.
Section 30D(g)(3) addresses the timing of the transfer and provides that any vehicle transfer election cannot be made by the taxpayer any later than the date on which the vehicle for which the section 30D credit is allowed is purchased.
Section 30D(g)(4) provides that upon determination by the Secretary that a dealer has failed to comply with the requirements described in section 30D(g)(2), the Secretary may revoke the dealer's registration.
Section 30D(g)(5) provides that with respect to any payment described in section 30D(g)(2)(C), such payment is not includible in the gross income of the taxpayer and is not deductible with respect to the dealer.
Section 30D(g)(6) addresses the application of certain other requirements to the transfer of credit and provides that in the case of any vehicle transfer election with respect to any vehicle: (i) the basis reduction and no double benefit requirements of section 30D(f)(1) and (2) apply to the taxpayer who acquired the vehicle in the same manner as if the section 30D credit determined with respect to such vehicle were allowed to such taxpayer; (ii) the election in section 30D(f)(6) to not take the section 30D credit does not apply; and (iii) the VIN requirement of section 30D(f)(9) is treated as satisfied if the eligible entity provides the VIN of such vehicle to the Secretary in such manner as the Secretary may provide.
Section 30D(g)(7)(A) provides for the establishment of a program to make advance payments to eligible entities in an amount equal to the cumulative amount of the credits allowed with respect to any vehicles sold by such entity for which a vehicle transfer election described in section 30D(g)(1) has been made. Section 30D(g)(7)(B) provides that rules similar to the rules of section 6417(d)(6) of the Code apply for purposes of the advance payment rules, and section 30D(g)(7)(C) provides that for purposes of 31 U.S.C. 1324, the payments under section 30D(g)(7)(A) are treated in the same manner as a refund due from a credit provision referred to in 31 U.S.C. 1324(b)(2).
Section 30D(g)(8) defines the term “dealer” as a person licensed by a State, the District of Columbia, the Commonwealth of Puerto Rico, any other territory or possession of the United States, an Indian tribal government, or any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m)) to engage in the sale of vehicles. Section 30D(g)(9) defines an “Indian tribal government” as the recognized governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, community, component band, or component reservation, individually identified (including parenthetically) in the list published most recently as of the date of enactment of section 30D(g) (that is, August 16, 2022) pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5131).
Section 30D(g)(10) provides that in the case of any taxpayer who has made a vehicle transfer election with respect to a new clean vehicle and received a payment from an eligible entity, if the section 30D credit would otherwise (but for section 30D(g)) not be allowable to such taxpayer pursuant to the application of the modified AGI limitations in section 30D(f)(10), the income tax imposed on such taxpayer under chapter 1 for the taxable year in which such vehicle was placed in service must be increased by the amount of the payment received by such taxpayer.
No section 30D credit is allowed with respect to a vehicle placed in service after December 31, 2032. Section 13401(k)(4) of the IRA provides that the ability for a taxpayer to elect to transfer a section 30D credit under section 30D(g) applies to vehicles placed in service after December 31, 2023.
Section 13402 of the IRA added section 25E to the Code. Section 25E provides that, in the case of a qualified buyer who during a taxable year places in service a previously-owned clean vehicle, an income tax credit (that is, the section 25E credit) is allowed for the taxable year in an amount equal to the lesser of: (1) $4,000, or (2) the amount equal to 30 percent of the sale price with respect to such vehicle.
Section 25E(b)(1) sets a limitation based on modified adjusted gross income and provides that no section 25E credit is allowed for any taxable year if (A) the lesser of (i) the modified adjusted gross income of the taxpayer for such taxable year, or (ii) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds (B) the threshold amount. The threshold amount is set forth in section 25E(b)(2) and varies based on a taxpayer's filing status. In the case of a taxpayer filing a joint return or who is a surviving spouse (as defined in section 2(a)), the threshold amount is $150,000. In the case of a taxpayer who is a head of household (as defined in section 2(b)), the threshold amount is $112,500. In the case of any other taxpayer, the threshold amount is $75,000. Section 25E(b)(3) defines modified adjusted gross income as adjusted gross income increased by any amount excluded from gross income under sections 911, 931, or 933.
Section 25E(c) defines certain terms for purposes of the section 25E credit. Section 25E(c)(1) defines a “previously-owned clean vehicle” as, with respect to a taxpayer, a motor vehicle that satisfies the following four requirements set forth in section 25E(c)(1)(A) through (D): (i) the model year of the motor vehicle is at least 2 years earlier than the calendar year in which the taxpayer acquires such vehicle; (ii) the original use of the motor vehicle commences with a person other than the taxpayer; (iii) the motor vehicle is acquired by the taxpayer in a qualified sale, and (iv) the motor vehicle meets the requirements of section 30D(d)(1)(C), (D), (E), (F), and (H) (except for the original use requirement of section 30D(d)(1)(H)(iv)), or is a motor vehicle that satisfies the requirements under section 30B(b)(3)(A) and (B), and has a gross vehicle weight rating of less than 14,000 pounds.
Section 25E(c)(2) defines a “qualified sale” as a sale of a motor vehicle (i) by a dealer (as defined in section 30D(g)(8)), (ii) for a sale price which does not exceed $25,000, and (iii) that is the first transfer since the date of enactment of the IRA (that is, August 16, 2022) to a qualified buyer other than the person with whom the original use of such vehicle commenced.
Section 25E(c)(3) defines a “qualified buyer” as, with respect to a sale of a motor vehicle, a taxpayer who is an individual with respect to whom no deduction is allowable with respect to another taxpayer under section 151, who purchases such vehicle for use and not for resale, and who has not been allowed a section 25E credit for any sale during the 3-year period ending on the date of the sale of such vehicle.
Section 25E(c)(4) defines a “motor vehicle” and “capacity” to have the meaning given to such terms in section 30D(d)(2) and (4), respectively.
Section 25E(d) provides that no section 25E credit is allowed with respect to any vehicle unless the taxpayer includes the VIN of such vehicle on the taxpayer's tax return for the taxable year. Section 25E(e) provides that rules similar to the rules of section 30D(f) (without regard to paragraph (10) or (11) thereof) apply for purposes of section 25E. Section 25E(f) provides that rules similar to section 30D(g) apply to the transfer of a section 25E credit for previously-owned vehicles (thus, a taxpayer also may elect to transfer a section 25E credit).
Section 25E applies to vehicles acquired after December 31, 2022. No section 25E credit is allowed with respect to a vehicle acquired after December 31, 2032. Section 13402(e)(2) of the IRA provides that the ability of a taxpayer to elect to transfer a section 25E credit under section 25E(f) applies to vehicles placed in service by the taxpayer after December 31, 2023.
Section 13403(a) of the IRA added section 45W to the Code, which is effective for vehicles acquired after December 31, 2022, and before January 1, 2033. A taxpayer can claim a section 45W credit for purchasing and placing in service a qualified commercial clean vehicle, as defined in section 45W(c), during the taxable year. Section 45W(b)(1) provides that the amount of the section 45W credit is the lesser of: 15 percent of the taxpayer's basis in the vehicle (30 percent in the case of a vehicle not powered by a gasoline or diesel internal combustion engine), or the incremental cost of the vehicle. Section 45W(b)(2) provides that the incremental cost of any qualified commercial clean vehicle is an amount equal to the excess of the purchase price for such vehicle over the purchase price of a comparable vehicle. Section 45W(b)(3) defines “comparable vehicle” to mean any vehicle that is powered solely by a gasoline or diesel internal combustion engine and is comparable in size and use to such vehicle. Section 45W(b)(4) provides that the 45W credit is limited to $7,500 in the case of a vehicle that has a gross vehicle weight rating of less than 14,000 pounds, and $40,000 for all other vehicles.
Section 45W(c) defines “qualified commercial clean vehicle” for purposes of the section 45W credit. Section 45W(d) establishes special rules for purposes of the section 45W credit, including the application of basis reduction, domestic usage, and recapture rules similar to those under section 30D(f) of the Code and a rule disallowing a double benefit under section 45W for a taxpayer claiming a new clean vehicle credit under section 30D. Section 45W(e) provides that no section 45W credit is allowed with respect to any vehicle unless the taxpayer includes the VIN of such vehicle on the tax return for the taxable year. Section 45W(f) grants the Secretary authority to issue regulations or other guidance to carry out the purposes of section 45W, including regulations or other guidance relating to determination of the incremental cost of any qualified commercial clean vehicle.
Section 6213(b)(1) authorizes the IRS to make certain assessments of mathematical or clerical errors without first issuing a notice of deficiency under section 6213(a). In lieu of a notice of deficiency giving the taxpayer 90 days
Math error assessments were first authorized by section 274(f) of the Revenue Bill of 1926. The legislative history provided that “in the case of a mere mathematical error appearing upon the face of the return, assessment of a tax due to such mathematical error may be made at any time, and that such assessment shall not be regarded as a deficiency notification.” H.R. Rep. No. 69-1, at 11 (1926). The Tax Reform Act of 1976 added section 6213(f)(2) (current section (g)(2)) to the Code, which defined “mathematical or clerical error” as: (A) an error in addition, subtraction, multiplication, or division shown on the return; (B) an incorrect use of an IRS table if the error is apparent from the existence of other information on the return; (C) inconsistent entries on the return; (D) an omission of information required to be supplied on the return in order to substantiate an item on that return; and (E) an entry of a deduction or credit item in an amount which exceeds a statutory limit which is either (a) a specified monetary amount or (b) a percentage, ratio, or fraction—if the items entering into the application of that limit appear on that return.
The definition of mathematical or clerical error as set out in 1976 contained only these five specific items, all of which could be ascertained directly from the face of a return. These items remain in current section 6213(g)(2)(A)-(E). Since that time, Congress has expanded the definition of “mathematical or clerical error” in section 6213(g)(2) several times, and in 1998, added flush language to section 6213(g)(2) that applies to all section 6213(g)(2) subparagraphs: “A taxpayer shall be treated as having omitted a correct TIN [taxpayer identification number] for purposes of the preceding sentence if information provided by the taxpayer on the return with respect to the individual whose TIN was provided differs from the information the Secretary obtains from the person issuing the TIN.” The legislative history indicates that Congress added this language to clarify that a correct TIN is one that was assigned by the Social Security Administration (SSA) or the IRS to the individual identified on the return, and that there should be no inconsistencies between the data that is reported on the return and the data from the agency issuing the TIN. H.R. Conf. Rep. No. 825, 105th Cong. 2d Sess. 1588 (1998).
On October 5, 2022, the Treasury Department and the IRS published Notice 2022-46, 2022-43 I.R.B. 302. The notice requested general comments on issues arising under sections 25E and 30D, as well as specific comments concerning: (1) definitions; (2) critical minerals and battery components; (3) foreign entities of concern; (4) recordkeeping and reporting; (5) eligible entities; (6) elections to transfer and advance payments; and (7) recapture. The Treasury Department and the IRS received 884 comments from industry participants, environmental groups, individual consumers, and other stakeholders. The Treasury Department and the IRS appreciate the commenters' interest and engagement on these issues. These comments have been carefully considered in the preparation of the proposed regulations.
On December 12, 2022, the Treasury Department and the IRS published Revenue Procedure 2022-42, 2022-52 I.R.B. 565, providing guidance for qualified manufacturers to enter into written agreements with the IRS, as required in sections 30D, 25E, and 45W, and to report certain information regarding vehicles produced by such manufacturers that may be eligible credits under these sections. In addition, Revenue Procedure 2022-42 provides the procedures for sellers of new clean vehicles or previously-owned clean vehicles to report certain information to the IRS and the purchasers of such clean vehicles.
On April 17, 2023, the Treasury Department and the IRS published the April 2023 proposed regulations in the
On October 6, 2023, in addition to filing this notice of proposed rulemaking for public inspection, the Treasury Department and the IRS released Revenue Procedure 2023-33, which will be published on October 23, 2023, in Internal Revenue Bulletin 2023-43, to provide guidance for taxpayers electing to transfer credits under section 25E or 30D and for eligible entities receiving advance payments of credits under sections 30D and 25E. This revenue procedure sets forth the procedures under sections 30D(g) and 25E(f) for the transfer of the previously-owned clean vehicle credit and the new clean vehicle credit from the taxpayer to an eligible entity, including the procedures for dealer registration with the IRS, the procedures for the revocation and suspension of that registration, and the establishment of an advance payment program to eligible entities. In addition, this revenue procedure supersedes sections 5.01 and 6.03 of Revenue Procedure 2022-42, providing new information for the timing and manner of submission of seller reports, respectively. This revenue procedure also supersedes sections 6.01 and 6.02 of Revenue Procedure 2022-42, providing updated information on submission of written agreements by manufacturers to the IRS to be considered qualified manufacturers, as well as the method of submission of monthly reports by qualified manufacturers.
Section 25E(a) provides that, in the case of a qualified buyer who during a taxable year places in service a previously-owned clean vehicle, an income tax credit is allowed for the taxable year equal to the lesser of: (1) $4,000, or (2) the amount equal to 30 percent of the sale price with respect to such vehicle. Proposed § 1.25E-1(a) would state the general rule that an income tax credit is available under section 25E for a qualified buyer of a previously-owned clean vehicle placed in service during the taxable year in an amount equal to the lesser of: (1) $4,000, or (2) the amount equal to 30 percent of the sale price with respect to such vehicle. Proposed § 1.25E-1(b) would provide definitions that apply for purposes of section 25E and the proposed section 25E regulations (that is, proposed §§ 1.25E-1 through 1.25E-3). Proposed § 1.25E-1(c) would provide rules regarding the modified adjusted
As discussed later in this Explanation of Provisions section, the proposed rules under section 25E also include severability clauses and generally are proposed to apply to taxable years beginning after the date these regulations are published in the
Proposed § 1.25E-1(c)(1) would provide, consistent with section 25E(b), limitations based on the amount of a taxpayer's modified adjusted gross income, proposing that no credit is allowed under section 25E for any taxable year if the lesser of the modified adjusted gross income of the taxpayer for such taxable year, or, the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds the threshold amount. Proposed § 1.25E-1(c)(2), consistent with section 25E(b)(2), would define the “threshold amount” as, in the case of a joint return or a surviving spouse (as defined in section 2(a)), $150,000; in the case of a head of household (as defined in section 2(b)), $112,500; and in any other case, $75,000. Proposed § 1.25E-1(b)(3) would define “modified adjusted gross income” as adjusted gross income increased by any amount excluded from gross income under sections 911, 931, or 933 of the Code. Proposed § 1.25E-1(c)(3) would provide that if the taxpayer's filing status for the taxable year differs from the taxpayer's filing status in the preceding taxable year, the taxpayer satisfies the limitation if the taxpayer's modified AGI does not exceed the threshold amount in either year based on the applicable filing status for that taxable year. This proposed rule is consistent with proposed § 1.30D-4(b)(4) in the April 2023 proposed regulations.
Proposed § 1.25E-1(d)(1) would provide that the amount of the section 25E credit attributable to a previously-owned clean vehicle may be claimed on only one tax return. In the event a previously-owned clean vehicle is placed in service by multiple owners, no allocation or proration of the section 25E credit is available. This proposed rule is necessary because the structure of section 25E provides for one taxpayer to claim the section 25E credit per vehicle placed in service. See generally section 25E(a), (c)(3), (e) (providing for rules similar to section 30D(f)(8) and (9)) and section 6213(g)(2)(U) of the Code. Section 25E does not contain rules for allocation or proration of the section 25E credit with respect to a single vehicle to multiple taxpayers placing that vehicle in service, and such an allocation or proration would present administrative challenges. Proposed § 1.25E-1(d)(2) would provide that for seller reporting, the name and taxpayer identification number of the vehicle owner claiming the section 25E credit must be listed on the seller report pursuant to sections 25E(c)(1)(D)(i) and 30D(d)(1)(H). The credit will be allowed only on the tax return of the owner listed in the seller report. This proposed rule is consistent with proposed § 1.30D-4(c) in the April 2023 proposed regulations.
Proposed § 1.25E-1(b)(1) would define “dealer” by reference to the statutory definition provided in section 25E(c)(2)(A) and section 30D(g) except that the term does not include persons licensed solely by a territory of the United States, and does include a dealer licensed in any jurisdiction described in section 30D(g) (other than one exclusively licensed in a territory) that makes sales at sites outside of the jurisdiction in which its licensed. The dealer does not include persons licensed solely by a territory because clean vehicle credits generally are not allowed for vehicles used predominantly outside of the 50 States and the District of Columbia. See sections 30D(f)(4), 25E(e), 50(b)(1), and 7701(a)(9) of the Code. In addition, United States citizens who are bona fide residents of U.S. territories are generally ineligible for Federal tax credits. See sections 931, 932, 933, and former section 935 of the Code. To allow for flexibility, especially in the case of direct-to-consumer sales, the proposed definition of dealer includes a dealer licensed in any jurisdiction described in section 30D(g) (other than one exclusively licensed in a U.S. territory) that makes sales in jurisdictions in which it may not be licensed.
Proposed § 1.25E-1(b)(2) would define “incentive,” for purposes of the sale price definition in proposed § 1.25E-1(b)(9), as any reduction in total sale price offered to and accepted by a taxpayer from the dealer or manufacturer, other than a reduction in the form of a partial payment or down payment for the purchase of a previously-owned clean vehicle pursuant to section 25E(f) and proposed § 1.25E-3.
Proposed § 1.25E-1(b)(3) would define “modified adjusted gross income” by reference to the statutory definition provided in section 25E(b)(3).
Proposed § 1.25E-1(b)(4) would provide that a previously-owned clean vehicle is considered to be placed in service on the date the taxpayer takes possession of the vehicle. This proposed definition is consistent with the meaning of “placed in service” for purposes of other provisions of the Code under which property is considered to be “placed in service” when the property is “placed in a condition or state of readiness and availability for a specifically assigned function” and as “the date on which the owner of the vehicle took actual possession of the vehicle.”
Proposed § 1.25E-1(b)(5) would define “previously-owned clean vehicle” by reference to the statutory definition provided in section 25E(c)(1).
Proposed § 1.25E-1(b)(6), consistent with section 25E(c)(3), would define “qualified buyer” as, with respect to a sale of a motor vehicle, a taxpayer who is an individual, who purchases such vehicle for use and not for resale, with respect to whom no deduction is allowable to another taxpayer under section 151, and who has not been allowed a section 25E credit for any sale during the 3-year period ending on the date of the sale of such vehicle.
Proposed § 1.25E-1(b)(7) would define “qualified manufacturer” by reference to section 30D(d)(3).
Section 25E(c)(2) defines “qualified sale” as a sale of a motor vehicle by a
Proposed § 1.25E-1(b)(8)(ii) would provide the first transfer rule, which proposes that to be a qualified sale, a transfer must be the first transfer of the previously-owned clean vehicle since August 16, 2022, as shown by the vehicle history of such vehicle, after the sale to the original owner. The proposed first transfer rule would provide certainty that the previously-owned clean vehicle is eligible for the section 25E credit, since the dealer and taxpayer may not otherwise know if the transfer was a qualified sale due to the difficulties in determining whether previous transfers were to qualified buyers. For example, dealers and taxpayers would not be able to determine whether a previous transfer of the vehicle as a used vehicle was to an individual or to a taxpayer who is not a dependent. The taxpayer would be able to rely on the dealer's representation of the vehicle history in determining whether the first transfer rule is satisfied, provided the seller report is accepted by the IRS. However, taxpayers would also be encouraged to independently examine the vehicle history to confirm whether the first transfer rule is satisfied, using publicly available tools.
For purposes of the proposed first transfer rule, the proposed regulations would ignore a transfer to or between dealers. The definition of qualified sale in section 25E(c)(2) requires that a sale must be by a dealer to an individual for the buyer to be able to claim the section 25E credit. If a transfer to a dealer were taken into account as a transfer, the vast majority of eligible vehicles would never qualify for the section 25E credit because a dealer (itself ineligible for the credit) selling a used vehicle will have acquired the vehicle from the prior owner (for example, as a trade-in) before selling the vehicle as a used vehicle. Treating transfers to dealers as a transfer would thus frustrate Congress's purpose in enacting section 25E. In addition, the Treasury Department and the IRS understand that transfers between dealers generally do not result in a change of title that would appear on a vehicle history. Accordingly, selling or trading in a vehicle to a dealer for resale should not disqualify the vehicle for purposes of the first transfer rule.
Examples illustrating the first transfer rule are provided in proposed § 1.25E-1(e).
Proposed § 1.25E-1(b)(9) would define the “sale price” of a previously-owned clean vehicle as the total sale price agreed upon by the buyer and dealer in a written contract at the time of sale, including any delivery charges and after the application of any incentives, but excluding separately-stated taxes and fees required by law. The sale price of a previously-owned clean vehicle is determined before the application of any trade-in value. This proposed definition of sale price would include fees and charges imposed by the dealer to prevent dealers from allocating a portion of the price of the previously-owned clean vehicle to separately stated fees (other than those required by law) and charges to avoid the $25,000 sales price cap in section 25E(c)(2)(B). This proposed definition does not include separate financing, extended warranties, insurance, or maintenance service charges.
Proposed § 1.25E-1(b)(10) would define “section 25E regulations” to mean proposed §§ 1.25E-1, 1.25E-2, and 1.25E-3.
Proposed § 1.25E-1(b)(11) would define “seller report” as the report described in section 25E(c)(1)(D)(i) by reference to section 30D(d)(1)(H) and provided by the dealer of a vehicle to the taxpayer and the IRS in the manner provided in, and containing the information described in Revenue Procedure 2023-33. Seller reports must be provided to the IRS electronically. See section II of this Explanation of Provisions for a more detailed discussion of this definition.
As noted in part II.C of the Background section, the April 2023 proposed regulations provided, in relevant part, definitions that apply for purposes of section 30D and the section 30D regulations. These proposed regulations would modify proposed § 1.30D-2 by adding paragraph (j), which proposes a definition for seller report. Sections 5 and 6 of Revenue Procedure 2022-42 provided initial procedures for sellers of vehicles to provide seller reports to the IRS.
Proposed § 1.30D-2(j) would define a “seller report” as the report described in section 30D(d)(1)(H) (which section 25E(c)(1)(D)(i) cross references as part of the definition of a previously-owned clean vehicle) that is provided by the seller of a vehicle to the taxpayer and the IRS. The seller report must be provided to the IRS electronically, and the additional time and manner procedures for providing the seller report, as well as the information that must be included in the seller report, is contained in Revenue Procedure 2023-33, which will supersede relevant portions of Revenue Procedure 2022-42.
As noted in section II.C of the Background section of this preamble, the April 2023 proposed regulations provided guidance regarding the special rules under section 30D(f). See proposed § 1.30D-4 of the April 2023 proposed regulations. These proposed regulations add provisions to those special rules that are relevant to recapture of the section 25E credit and the section 30D credit. These proposed regulations also add special rules relevant to section 25E. These proposed regulations are accompanied by Revenue Procedure 2023-33.
Proposed § 1.25E-2(b)(1) would provide that for purposes of sections 25E(e) and 30D(f)(2), the amount of any deduction or other credit allowable under chapter 1 of the Code for a vehicle for which a section 25E credit is allowable must be reduced by the amount of the section 25E credit allowed for such vehicle. Proposed § 1.25E-2(b)(2) would provide rules for the interaction of sections 30D and section 25E and provide that a section 30D credit that has been allowed with respect to a vehicle in a taxable year before the year in which a section 25E credit is allowable for that vehicle does not reduce the amount allowable under section 25E. Accordingly, a taxpayer who otherwise satisfies the requirements of section 25E would be
Section 25E(e) provides that, for purposes of section 25E, rules similar to the rules of section 30D(f) apply. Section 30D(f)(5) instructs the Secretary to provide regulations for recapturing the benefit of any section 30D credit with respect to any property that ceases to be eligible for the section 30D credit. Thus, proposed §§ 1.25E-2(c) and 1.30D-4(d) would provide corresponding rules under section 30D(f)(5) for cancelled sales, returns, and resales of the vehicle. Because the rules proposed under each section generally are the same, with the exception of references to the clean vehicle credit applicable to the section (that is, the section 25E credit under proposed § 1.25E-2(c) and the section 30D credit under proposed § 1.30D-4(d)), the discussion in section III.D.1 through III.D.3 of this Explanation of Provisions, unless otherwise noted, refers to a “clean vehicle credit” to denote the credit under section 25E and section 30D.
Proposed §§ 1.25E-2(c)(1)(i) and 1.30D-4(d)(1)(i) would provide the Federal income tax consequences that apply if the sale of a vehicle between the taxpayer and seller is cancelled before the taxpayer places the vehicle in service (that is, before the taxpayer takes possession of the vehicle). Specifically, in the case of a cancelled sale, the taxpayer may not claim a clean vehicle credit with respect to the vehicle. The vehicle will still be eligible for a clean vehicle credit upon a subsequent qualifying sale to another taxpayer because the vehicle was not placed in service as part of the prior cancelled sale. Additionally, the seller report (as defined in proposed §§ 1.25E-1(b)(11) and 1.30D-2(j) and described in part II of this Explanation of Provisions), if already submitted, must be rescinded by the seller pursuant to the procedures in the procedural guidance published in Revenue Procedure 2023-33. Finally, because the taxpayer is not eligible for the credit, no vehicle transfer election is available under the clean vehicle credit transfer rules described in section IV of this Explanation of Provisions.
Proposed §§ 1.25E-2(c)(1)(ii) and 1.30D-4(d)(1)(ii) would provide the Federal income tax consequences that apply if the taxpayer returns the vehicle to the seller within 30 days of placing the vehicle in service. Specifically, in the case of such return, the taxpayer cannot claim a clean vehicle credit with respect to the vehicle. The Treasury Department and the IRS understand that vehicle retailers may have return policies that range from several days up to 30 days, so the proposed rules regarding returns within 30 days reflect industry practice.
In the case of a return within 30 days of what was a new clean vehicle, the vehicle, once returned, already was placed in service by the taxpayer and therefore is not available for original use by another taxpayer. Because section 30D(d)(1)(A) requires that original use of a new clean vehicle commence with the taxpayer, for purposes of section 30D, the returned vehicle is not eligible for the section 30D credit upon a subsequent sale. In the case of a return of a previously-owned clean vehicle, the vehicle, once returned, is not eligible for the section 25E credit upon a subsequent sale if the vehicle history reflects that the prior sale and return was a qualified sale per section 25E(c)(2)(C). However, if the vehicle history does not reflect the prior sale and return, the vehicle remains eligible for the section 25E credit under the first transfer rule described in proposed § 1.25E-1(b)(8)(ii). The seller report, in the case of a return, must be updated by the seller to reflect the return pursuant to the procedures published in Revenue Procedure 2023-33. Finally, if the taxpayer made an election to transfer the clean vehicle credit, that vehicle transfer election is nullified, and any advance payment made pursuant to the clean vehicle transfer rules will be recaptured from the eligible entity as an excessive payment.
See section IV.E.1 of this Explanation of Provisions for a discussion of the excessive payment rules described in the preceding paragraph.
Proposed §§ 1.25E-2(c)(1)(iii) and 1.30D-4(d)(1)(iii) would treat the taxpayer as having purchased the vehicle with an intent to resell such vehicle if the resale occurs within 30 days of the taxpayer placing the vehicle in service. Section 30D(d)(1)(B) provides that a new clean vehicle must be acquired for use or lease by the taxpayer and not for resale, and section 25E(c)(3)(B) defines a qualified buyer as purchasing the vehicle for use and not for resale. The Treasury Department and the IRS propose that a resale within 30 days is a sufficiently short period of time to presume that the purchase was done with the intent to resell. As a result, in such a case the taxpayer who purchased the new clean vehicle and resold it within 30 days may not claim a clean vehicle credit with respect to the vehicle.
In the case of a resale by the taxpayer within 30 days of what was a new clean vehicle, the vehicle, once placed in service for use by the taxpayer, is not considered available for original use by another taxpayer for purposes of section 30D, so the vehicle is not eligible for the section 30D credit upon a subsequent sale. In the case of a resale by the taxpayer within 30 days of what was a previously-owned clean vehicle, the vehicle, once placed in service for use by the taxpayer, is not eligible for the section 25E credit upon a subsequent sale. In the case of a resale of such vehicle, however, the seller report is not required to be updated because the seller may not have knowledge of the subsequent resale. Finally, if the taxpayer made an election to transfer the clean vehicle credit, that vehicle transfer election remains in effect and the value of any transferred credit pursuant to the clean vehicle transfer rules will be recaptured from the taxpayer (as opposed to the advance payment being collected from the eligible entity as an excessive payment, since the eligible entity is not a party to the subsequent resale).
See section IV.E.2 of this Explanation of Provisions for a discussion of the excessive payment rules of proposed §§ 1.25E-3(g)(2) and 1.30D-5(f)(2) described in the preceding paragraph.
Proposed §§ 1.25E-2(c)(1)(iv) and 1.30D-4(d)(iv) would provide a rule for returns or resales not described in section III.D.2 and 3 of this Explanation of Provisions (that is, returns or resales occurring more than 30 days after the date on which the taxpayer places the vehicle in service). Generally, taxpayers returning or reselling a clean vehicle more than 30 days after the date the taxpayer places in service will remain eligible for the section 30D or section 25E credit for the purchase of such vehicle. The proposed regulations would provide that, in the case of what was a new clean vehicle before the return or resale, the vehicle, once returned or resold, is not available for original use by another taxpayer and, therefore, is not eligible for a section 30D credit. Similarly, in the case of what was a previously-owned clean vehicle before the return or resale, the vehicle, once returned or resold, generally is not eligible for the section 25E credit upon a subsequent sale
Although the proposed regulations would not provide an automatic clean vehicle credit recapture rule for returns or resales more than 30 days after a return or resale, the IRS may determine upon facts and circumstances that a clean vehicle was purchased with the intent to return or resell and may disallow the clean vehicle credit in such cases.
The Treasury Department and the IRS request comments as to whether 30 days is the appropriate length of time for the return rule in proposed §§ 1.25E-2(c)(1)(ii) and 1.30D-4(d)(1)(ii) and the resale rule in proposed §§ 1.25E-2(c)(1)(iii) and 1.30D-4(d)(1)(iii).
Proposed § 1.25E-2(d) would provide that a title to a previously-owned clean vehicle indicating that such vehicle has been damaged or is otherwise a branded title does not impact the vehicle's eligibility for a section 25E credit.
In general, to be eligible for the section 25E credit and the section 30D credit, a clean vehicle must be accompanied by a seller report. See sections 30D(d)(1)(H) and 25E(c)(1)(D)(i). Proposed §§ 1.25E-2(e) and 1.30D-4(g) would provide that the seller must register with the IRS in the manner set forth in Revenue Procedure 2023-33 for purposes of filing seller reports.
As discussed in the April 2023 proposed regulations and in these regulations, a taxpayer will continue to use Form 8936, now titled
Section 30D(g), as noted in more detail in section I.A of the Background section of this preamble, generally establishes a set of rules under which a taxpayer may transfer a section 30D credit to certain dealers, referred to as eligible entities, in which case the eligible entity (and not the taxpayer) is allowed the section 30D credit and in exchange the eligible entity must pay the taxpayer an amount equal to the transferred section 30D credit (with such payment being made either in cash or in the form of a partial payment or down payment for the purchase of the vehicle). Section 25E(f) provides that, for purposes of section 25E, rules similar to the rules of section 30D(g) apply.
The proposed regulations described in this section IV of the Explanation of Provisions are designed in part to ensure program integrity. Advance payment of the section 30D and section 25E credits poses unique compliance challenges, since such advance payments are not subject to the same tax administration procedures that apply to claiming a credit via return filing. Furthermore, participation in the credit transfer and advance payment program is optional. The transfer of the section 30D and 25E credits is elective on the part of the taxpayer, and the eligible entity can decide whether to offer to the taxpayer the ability to transfer such credits (thereby participating in the advance payment program). Taxpayers instead may choose to wait and claim a section 30D or section 25E credit on the taxpayer's return. Section 30D(g)(1) provides that a taxpayer election to transfer the 30D credit is subject to the regulations or other guidance that the Secretary determines necessary. Section 30D(g)(7) instructs the Secretary to establish a program for making advance payments to eligible entities—that is, payments made by the IRS to the eligible entity before the eligible entity files its Federal income tax return for the relevant taxable year. Taken together, these provisions provide authority for the Secretary to establish the parameters and conditions of the transfer election and the accompanying advance payment program for those taxpayers and eligible entities that choose to participate, in furtherance of sound tax administration.
Proposed §§ 1.25E-3 and 1.30D-5 would provide transfer rules under these provisions (section 30D(g) and section 25E(f) by cross reference to section 30D(g)), including by establishing an advance payment program for such transfers. Because the rules proposed under each section are the same, with the exception of references to the clean vehicle credit applicable to the section (that is, the section 25E credit under proposed § 1.25E-3 and the section 30D credit under proposed § 1.30D-5), the discussion in section IV of this Explanation of Provisions, unless otherwise noted, refers to a “clean vehicle credit” to denote the credit under section 25E and section 30D.
The rules below do not specifically address the requirements, under section 30D(g)(2)(B)(ii) and (D), relating to the disclosure by the dealer of other incentives and the requirement that the dealer ensures that the availability or use of such other incentives do not limit the ability of a taxpayer to make a vehicle transfer election, and such election does not limit the value or use of such incentives. The Treasury Department and the IRS request comments as what guidance, if any, should be given here.
Proposed §§ 1.25E-3(b) and 1.30D-5(a) would provide definitions that apply for purposes of the transfers of a clean vehicle credit. The definitions described in this section IV.A of the Explanation of Provisions apply to both proposed § 1.25E-3(b) and proposed § 1.30D-5(a).
Proposed regulations 1.25E-3(b)(1) and 1.30D-5(a)(1) would define “advance payment program” as the program described in section 30D(g)(7) (and section 25E(f) by cross reference to section 30D(g)) and these proposed regulations under which an eligible entity may receive an advance payment from the Treasury Department in the case of a vehicle transfer election made by an electing taxpayer. The advance payment program represents the exclusive means by which an eligible entity may receive a transferred clean vehicle credit.
Dealer for purposes of the transfer rules in proposed §§ 1.25E-3(b)(2) and 1.30D-(a)(2) has the same meaning as that in proposed § 1.25E-1(b)(1) and described in section I.C.1 of this Explanation of Provisions.
Dealer tax compliance means that all required Federal information and tax returns of the dealer have been filed, including for Federal income and employment tax, and the dealer has paid all Federal tax, penalties, and interest due of the dealer at the time of sale. In the case of an installment agreement, the proposed regulations clarify that a dealer is in dealer tax compliance if the dealer is current on its obligations under that installment agreement. See proposed §§ 1.25E-3(b)(2) and 1.30D-5(a)(3).
Electing taxpayer means the individual that purchases and places in service a clean vehicle and that elects to transfer a clean vehicle credit associated with that vehicle that would otherwise be allowable to that individual. To be an electing taxpayer, the individual must make certain attestations regarding anticipated eligibility for the credit to a registered dealer as provided in Revenue Procedure 2023-33. See proposed §§ 1.25E-3(b)(3) and 1.30D-5(a)(4). For example, the electing taxpayer must make an attestation regarding satisfaction of the modified adjusted gross income limitations for the clean vehicle credit. In addition, for purposes of section 30D, the electing taxpayer must attest to the registered dealer that it plans to use the vehicle predominantly for personal use. Id. Because the election to transfer a credit under section 30D(g) is limited to the credit allowable under subsection 30D, a taxpayer may not elect to transfer a general business credit for a new clean vehicle allowable under section 38 instead of section 30D, pursuant to section 30D(c)(1). As described in proposed § 1.30D-1(b)(1) of the April 2023 proposed regulations, a depreciable vehicle the use of which is 50 percent or more business use in the taxable year the vehicle is placed in service is not apportioned between section 38 and section 30D, but instead is creditable entirely under section 38 as a general business credit. Thus, the use of a new clean vehicle must be predominantly personal for a taxpayer to be able to make the election to transfer the credit under section 30D(g). These attestations will help prevent a transfer of the credit for which the taxpayer is ineligible, and therefore will reduce instances of recapture.
Eligible entity means a registered dealer that meets certain requirements and, by reason of meeting those requirements, is eligible to receive advance payments from the IRS under the advance payment program. See proposed §§ 1.25E-3(b)(4) and 1.30D-5(a)(5). The requirements the eligible entity must meet are described in section IV.D of this Explanation of Provisions.
Registered dealer refers to a dealer that has completed the registration described in proposed §§ 1.25E-3(c) and 1.30D-5(b) and section IV.B of this Explanation of Provisions. See proposed §§ 1.25E-3(b)(5) and 1.30D-5(a)(6).
Time of sale means the date the clean vehicle is placed in service. The date the clean vehicle is placed in service is the date the taxpayer takes possession of the vehicle. See proposed §§ 1.25E-3(b)(6) and 1.30D-5(a)(7); see also proposed § 1.30D-2(e) of the April 2023 proposed regulations for the definition of placed in service.
Proposed §§ 1.25E-3(c)(1) and 1.30D-5(b)(1) would provide that, before being eligible to participate in the advance payment program and receive transfers of clean vehicle credits from an electing taxpayer, a dealer must register (thereby becoming a registered dealer). The dealer will register in the manner set forth in Revenue Procedure 2023-33.
Proposed §§ 1.25E-3(c)(2) and 1.30D-5(b)(2) would provide rules regarding dealer tax compliance. Specifically, if the dealer is not in dealer tax compliance for any of the taxable periods during the most recent five taxable years, the dealer may register to become a registered dealer, but the dealer cannot receive advance payments under the advance payment program until the dealer tax compliance issue is resolved. In such case, the dealer, while registered, is not an eligible entity until it comes into dealer tax compliance. Relevant procedural guidance regarding dealer tax compliance will be published in the Internal Revenue Bulletin.
Pursuant to section 30D(g)(1) and (g)(7), participation in the advance payment program is elective and is subject to the requirements and conditions that the Secretary determines necessary. Requiring registration of a dealer before it may participate in the advance payment program ensures that only entities that are valid, licensed vehicle dealers are eligible to receive advance payments of the transferred credits. In addition, requiring dealer tax compliance ensures that entities receiving advance payments are current on their Federal tax obligations. Taken together, these requirements help ensure that only compliant, registered dealers receive the benefit of the elective advance payment program by preventing fraud and ensuring sound tax administration.
For clean vehicles placed in service after December 31, 2023, the proposed regulations would provide that an electing taxpayer may make an election to transfer a clean vehicle credit otherwise allowable to the electing taxpayer to an eligible entity pursuant to a vehicle transfer election. See proposed §§ 1.25E-3(d) and 1.30D-5(c). The vehicle transfer election is made by the electing taxpayer no later than at the time of sale pursuant to Revenue Procedure 2023-33, and, once made, the vehicle transfer election is irrevocable. To make a valid vehicle transfer election, the electing taxpayer must transfer the entire amount of the clean vehicle credit otherwise allowable to it and, in exchange for the transferred clean vehicle credit, the eligible entity must pay the electing taxpayer an amount equal to the clean vehicle credit included in the vehicle transfer election or treat the credit amount as a down payment or partial payment.
Proposed §§ 1.25E-3(e)(1) and 1.30D-5(d)(1) would provide the Federal income tax treatment of a vehicle transfer election as to an electing
Proposed §§ 1.25E-3(e)(2) and 1.30D-5(d)(2) would provide the Federal income tax treatment of a vehicle transfer election as to an eligible entity. Specifically, the eligible entity may receive as an advance payment from the Treasury Department the amount of the clean vehicle credit transferred to the eligible entity as part of a vehicle transfer election, which is not includible in the eligible entity's gross income for the taxable year in which such payment is received or accrued, as appropriate, and such payment may exceed the eligible entity's regular tax liability (as defined in section 26(b)(1)) for such taxable year and generally is not subject to recapture unless the excessive payment rules apply. The eligible entity may not deduct the payment made to the electing taxpayer, and, consistent with the treatment as to the electing taxpayer described in section IV.C.1 of this Explanation of Provisions, the electing taxpayer is treated as paying the eligible entity the amount of the transferred clean vehicle credit as part of the purchase price of the clean vehicle. The amount of this payment by the electing taxpayer is treated as part of the amount realized by the eligible entity under section 1001 from the sale of the clean vehicle.
The proposed regulations would provide special rules in the case of an eligible entity that is a partnership or an S corporation. See proposed §§ 1.25E-3(e)(2)(vi) and 1.30D-5(d)(2)(vi). Because the electing taxpayer is treated as paying the eligible entity the amount of the transferred clean vehicle credit as part of the purchase price of the clean vehicle and the amount of this payment is treated as part of the amount realized by the eligible entity under section 1001 from the sale of the clean vehicle, the advance payment is not treated as tax exempt income to the partnership or S corporation for purposes of the Code. These rules would ensure proper basis and capital accounting reporting for advance payments received by partnerships and S corporations and parity in Federal tax treatment regardless of the form through which the eligible entity conducts its business.
Proposed §§ 1.25E-3(e)(3) and 1.30D-5(d)(3) would provide that the Federal income tax treatment of the payments associated with a vehicle transfer election are the same regardless of whether the payment is made in cash or in the form of a partial payment or down payment for the purchase of the clean vehicle. Additionally, proposed §§ 1.25E-3(e)(4) and 1.30D-5(d)(4) would describe the additional rules that apply by reason of a vehicle transfer election (that is, section 30D(f)(1) and (f)(2), section 30D(f)(6), and section 30D(f)(9), including with respect to the section 25E proposed regulations by reason of the cross reference to section 30D(g) in section 25E(f)).
Proposed § 1.30D-5(d)(5) would provide examples demonstrating the Federal income tax treatment of a vehicle transfer election.
As noted earlier in this section, the advance payment program allows an eligible entity to receive payments from the IRS corresponding to the amount of the clean vehicle credit for which a vehicle transfer election was made before the eligible entity files its Federal income tax return for the taxable year with respect to which the vehicle transfer election relates. See proposed §§ 1.25E-3(f) and 1.30D-5(e). To qualify for the advance payment program, a registered dealer (that is, a dealer that meets the registration requirements described in section IV.B of this Explanation of Provisions), must meet additional requirements to be an eligible entity. Those requirements are that the registered dealer must submit additional registration information and be in dealer tax compliance, the registered dealer must retain information related to the vehicle transfer election for the period specified in the proposed regulations, and the registered dealer must meet any other requirements provided in procedural guidance published in the Internal Revenue Bulletin.
The proposed regulations would also refer to suspension and revocation procedures identified in Revenue Procedure 2023-33. See proposed §§ 1.25E-3(f)(3) and (4) and 1.30D-5(e)(3) and (4). Section 7803(e)(3) provides it is the function of the IRS Independent Office of Appeals (Appeals) to resolve Federal tax controversies without litigation. Decisions made by the IRS relating to the suspension or revocation of a dealer's registration are not Federal tax controversies within the meaning of the section 7803(e)(3) because registration is too attenuated and separate from any tax liability of the registering dealer. These registration-related decisions would have no direct effect on the amount of a dealer's tax liability and likely would only affect the source of the dealer's income. For example, a dealer's ability to benefit from sections 30D(g) or 25E(f) is predicated on registration, a buyer purchasing the eligible clean vehicle, and a buyer making an election to transfer the credit under sections 30D(g) or 25E(f). Only upon those three events would the registration affect the dealer's tax liability. Accordingly, proposed §§ 1.25E-3(f)(3) and (4) and 1.30D-5(e)(3) and (4) would provide that a dealer could not administratively appeal the IRS's decisions relating to the suspension or revocation of a dealer's registration unless the IRS and the IRS Independent Office of Appeals agree that such review is available and the IRS provides the time and manner for such review.
As noted in section I of the Background section of this preamble, section 30D(g)(10) provides that, in the case of any taxpayer who has made an election described in section 30D(g)(1) with respect to a new clean vehicle and received a payment described in section 30D(g)(2)(C) from an eligible entity, if the credit under section 30D would otherwise (but for section 30D(g)) not be allowable to such taxpayer pursuant to the application of section 30D(f)(10) (relating to the modified adjusted gross income limitation), the tax imposed on such taxpayer under chapter 1 for the taxable year in which such vehicle was placed in service will be increased by the amount of the payment received by such taxpayer. Because of the section 25E(f) cross reference to section 30D(g), similar rules will apply for previously-owned clean vehicles.
Proposed §§ 1.25E-3(g)(1) and 1.30D-5(f)(1) would provide that, in the case of a clean vehicle credit that would otherwise not be allowable to a taxpayer that made a vehicle transfer election because the taxpayer exceeds the limitation based on modified adjusted gross income, the income tax imposed on the taxpayer under chapter 1 for the taxable year in which the vehicle was placed in service is increased by the amount of the payment received by the taxpayer pursuant to the vehicle transfer election. The taxpayer in such a case must reconcile the amounts on its tax return for the taxable year.
As noted in section I of the Background section of this preamble, section 30D(g)(7)(B) (and section 25E(f) by cross reference to section 30D(g)) provides that rules similar to the rules of section 6417(d)(6) apply for purposes of the advance payment program. Proposed §§ 1.25E-3(g)(2) and 1.30D-5(f)(2) would provide that, in the case of any advance payment that the IRS determines constitutes an excessive payment, the tax imposed on the eligible entity by chapter 1, regardless of whether such entity would otherwise be subject to chapter 1 tax, for the taxable year in which such determination is made will be increased by the sum of the amount of the excessive payment, plus an amount equal to 20 percent of such excessive payment. The latter amount, however, will not apply if the eligible entity demonstrates to the IRS that the excessive payment was due to reasonable cause, which is presumed to be the case for a clean vehicle returned within 30 days of placing such vehicle in service. See proposed §§ 1.25E-3(g)(2)(ii) and 1.30D-5(f)(2)(ii).
The proposed regulations would provide that an excessive payment means, with respect to an advance payment to an eligible entity pursuant to a vehicle transfer election made by an electing taxpayer, an advance payment made to a registered dealer that fails to meet the requirements to be an eligible entity, or to an eligible entity with respect to a clean vehicle to the extent the payment exceeds the amount of the clean vehicle credit that would be otherwise allowable to the electing taxpayer with respect to the vehicle. See proposed §§ 1.25E-3(g)(2)(iii) and 1.30D-5(f)(2)(iii). However, any excess attributable to a taxpayer exceeding the limitation based on modified adjusted gross income is not treated as an excessive payment to an eligible entity.
Proposed §§ 1.25E-3(h) and 1.30D-5(g) would provide that an electing taxpayer must file an income tax return for the taxable year in which the vehicle transfer election is made that reports such election. Specifically, the electing taxpayer must file a Form 1040,
Proposed §§ 1.25E-3(i) and 1.30D-5(h) would provide that a taxpayer may make no more than two transfer elections per taxable year, consisting of elections either for two section 30D credits or for one section 30D credit and one section 25E credit. In the case of a joint return, each spouse may make two transfer elections per taxable year, for a maximum of four vehicle transfer elections in a taxable year. This proposed rule is intended to ensure program integrity by limiting transfer elections to vehicle sales that appear to be for legitimate personal or individual use. The section 30D credit may only be transferred for clean vehicles that are for predominantly personal use, and a taxpayer transferring the section 25E credit must be an individual. Moreover, a qualified buyer of a previously-owned clean vehicle for the section 25E credit must not have been allowed a prior section 25E credit for a sale in the prior three years. The Treasury Department and the IRS believe that it is unlikely that an individual who meets the modified adjusted gross income limitations would purchase more than two clean vehicles in a taxable year for legitimate personal or individual use. Accordingly, in light of the unique compliance challenges posed by advance payments of the section 30D and section 25E credits and pursuant to the broad authority conferred by section 30D(g)(1) and section 25E(f), the proposed regulations would limit taxpayers to two vehicle transfer elections in a taxable year.
The IRA added three new definitions to the exclusive list of “mathematical or clerical errors” in section 6213(g)(2). These new definitions are set out in sections 6213(g)(2)(T), (U), and (V). Section 6213(g)(2)(T) provides that the term “mathematical or clerical error” means an omission of a correct VIN required under section 30D(f)(9) (relating to credit for new clean vehicles) to be included on a return; section 6213(g)(2)(U) provides that the term “mathematical or clerical error” means an omission of a correct VIN required under section 25E(d) (relating to credit for previously-owned clean vehicles) to be included on a return; and section 6213(g)(2)(V) provides that the term “mathematical or clerical error” means an omission of a correct VIN required under section 45W(e) (relating to commercial clean vehicle credit) to be included on a return.
The flush language added by Congress in 1998 to clarify the meaning of a correct TIN does not provide the clarification that is necessary to determine the meaning of “an omission of a correct vehicle identification number” under sections 6213(g)(2)(T) through (V). Accordingly, proposed § 301.6213-2 would provide rules for determining when the IRS is authorized to use math error authority to make a summary assessment when there has been an “omission of a correct vehicle identification number” on a taxpayer's return when claiming or electing to transfer the credits under sections 30D, 25E and 45W.
Proposed § 301.6213-2 would describe when taxpayers will be treated as having omitted a correct VIN required to be included on a taxpayer's return under section 30D, section 25E, and section 45W. Under proposed § 301.6213-2(b), a taxpayer would be treated as having omitted a correct VIN (1) when the VIN required to be reported under section 30D(f)(9), 25E(d), or 45W(e) is not included on the tax return; (2) when the VIN required to be reported under section 30D(f)(9), 25E(d), or 45W(e) is included on the tax return but is not a VIN for an eligible vehicle under section 30D(d)(1), 25E(c)(1), or 45W(c); (3) when the VIN required to be reported under section 30D(f)(9), 25E(d), or 45W(e) is included on the tax return but the taxpayer claims the credit for a year in which the vehicle is not eligible for the credit; (4) when the VIN required to be reported under section 30D(f)(9) is included on the tax return but differs
A taxpayer claiming a credit with respect to a new clean vehicle under section 30D, a previously-owned clean vehicle under section 25E(a), or a commercial clean vehicle under section 45W(a), is required under sections 30D(f)(9), 25E(d), or 45W(e), whichever is applicable, to report the VIN of such vehicle on the taxpayer's return. Under proposed § 301.6213-2, a taxpayer would be treated as having omitted a correct VIN required under sections 30D(f)(9), 25E(d), and 45W(e), if the VIN is missing from the taxpayer's return or the number reported on the return is an invalid VIN. A VIN is a unique identifying code for a specific automobile. Modern VINs comprise 17 characters (digits and capital letters) that act as a unique identifier for the vehicle and displays the car's unique features, specifications, and manufacturer. An invalid VIN is a number that does not match any existing VIN reported by a qualified manufacturer. Under the proposed regulation, if the IRS determines that a taxpayer has failed to include the VIN with the tax return for the taxable year because the VIN is missing or invalid, the IRS is authorized to make an assessment of the tax based on an omission of a correct VIN under either section 6213(g)(2)(T), (U), or (V), whichever is applicable.
The credit under sections 30D, 25E, or 45W is available for vehicles that qualify as a new clean vehicle under section 30D(d)(1), a previously-owned clean vehicle under section 25E(c)(1), or a qualified commercial clean vehicle under section 45W(c). Under proposed § 301.6213-2, a taxpayer would be treated as having omitted a correct VIN required under sections 30D(f)(9), 25E(d), or 45W(e), if the VIN included on the taxpayer's return is not that of a new clean vehicle under section 30D(d)(1), a previously-owned clean vehicle under section 25E(c)(1), or a qualified commercial clean vehicle under section 45W(c). Under the proposed regulation, if the IRS determines that a taxpayer reported a VIN but the VIN is not for a vehicle described in sections 30D(d)(1), 25E(c)(1), or 45W(c), the IRS is authorized to make an assessment of the tax based on an omission of a correct VIN under section 6213(g)(2)(T), (U), or (V), whichever is applicable.
The credit under section 30D is available for each new clean vehicle placed in service by the taxpayer during the taxable year if the new clean vehicle meets the critical mineral and battery component requirements applicable for that year, as defined in sections 30D(e)(1) and (2). Beginning in 2023, the percentage of the value of the applicable critical minerals contained in the vehicle's battery, as well as the percentage of the value of the components contained in the vehicle's battery that were manufactured or assembled in North America, must equal or exceed the applicable percentages identified in sections 30D(e)(1) or (2) for the relevant year. If the vehicle does not meet at least one of the applicable percentage requirements for critical minerals and battery components for the specified year in which it is placed in service, the vehicle is ineligible for the section 30D credit for the claimed year. Therefore, a VIN reported on a taxpayer's return that does not meet the section 30D(e)(1) or (2) requirements for the applicable year cannot be a correct VIN under section 30D.
The credits under sections 30D, 25E, and 45W are available for vehicles that qualify as a new clean vehicle under section 30D(d)(1), a previously-owned clean vehicle under section 25E(c)(1), or a qualified commercial clean vehicle under section 45W(c) for the taxable year the vehicle is placed in service. If a taxpayer claims the credit under sections 30D, 25E, or 45W, whichever is applicable, for a year other than the year that the vehicle was placed in service, the vehicle is ineligible for the credit for the claimed year. Therefore, a VIN reported on a taxpayer's return for a vehicle that was not placed in service for the year the taxpayer claims the credit cannot be a correct VIN under sections 30D, 25E or 45W. Under proposed § 301.6213-2(b)(3), a taxpayer would be treated as having omitted a correct VIN required under section 30D(f)(9) if the VIN included on the tax return is for a vehicle that is not eligible for such credit under section 30D(e)(1) or (2) in the taxable year that the taxpayer claims the credit, if the taxpayer claims the credit under section 30D, 25E, or 45W for a year other than the year that the vehicle was placed in service, or if the taxpayer claims a credit under section 25E for a previously-owned clean vehicle with a model year that is not at least two model years earlier than the calendar year in which such vehicle is acquired. Under the proposed regulation, if the IRS determines the taxpayer omitted a correct VIN required under section 30D(f)(9) because the VIN included on the tax return is for a vehicle that is not eligible for such credit under section 30D(e)(1) or (2) in the taxable year that the taxpayer claims the credit, or if the taxpayer claims the credit under section 30D, 25E, or 45W for a year other than the year that the vehicle was placed in service, the IRS is authorized to make an assessment of the tax based on an omission of a correct VIN under section 6213(g)(2)(T), (U), or (V), whichever is applicable.
Section 30D(d)(1)(H) requires the person who sells a new clean vehicle to the taxpayer to furnish a report to the taxpayer and to the Secretary that contains (i) the name and TIN of the taxpayer, (ii) the VIN of the vehicle, unless, in accordance with any applicable rules promulgated by the Secretary of Transportation, the vehicle is not assigned such a number, (iii) the battery capacity of the vehicle, (iv) verification that original use of the vehicle commences with the taxpayer, (v) the maximum credit under section 30D allowable to the taxpayer with respect to the vehicle, and (vi) in the case of a taxpayer who makes a vehicle transfer election, any amount described in section 30D(g)(2)(C) that was paid to such taxpayer. These requirements for the seller report reflect that it is a fundamental reporting requirement that the VIN for each vehicle eligible for the credit be linked to a particular taxpayer's TIN. A VIN reported on a taxpayer's return by anyone other than the reported taxpayer's TIN cannot, therefore, be a correct VIN for the taxpayer claiming the section 30D credit.
To reflect this TIN/VIN linkage and ensure that only the taxpayer who purchased the vehicle is able to claim the VIN for the vehicle eligible for the section 30D credit, proposed
Section 25E(c)(1)(D)(i) requires the person who sells a previously-owned clean vehicle to the taxpayer to furnish a report to the taxpayer and to the Secretary that meets the requirements of section 30D(d)(1)(H) (except for clause (iv) thereof). Just like the requirements for the seller report for a new clean vehicle, the requirements for the seller's previously-owned clean vehicle report reflect a fundamental linkage between the VIN for each vehicle eligible for the credit and a particular taxpayer's TIN. For the same reasons listed in section V.E of this Explanation of Provisions, a VIN reported on a taxpayer's return by anyone other than the reported taxpayer's TIN cannot, therefore, be a correct VIN for the taxpayer claiming the section 25E credit.
To reflect this TIN/VIN linkage and ensure that only the taxpayer who purchased the vehicle is able to claim the VIN for the vehicle eligible for the section 25E credit, proposed § 301.6213-2(b)(5) would provide that a taxpayer is treated as having omitted a correct VIN on a tax return as required under section 25E(d) if the VIN on the tax return does not match the VIN included in the seller report under section 25E(c)(1)(D)(i) for a taxpayer claiming the credit. Under the proposed regulation, if the IRS determines that a taxpayer included a VIN on a tax return but the VIN claimed on the taxpayer's return is not for a vehicle that was reported to the IRS and the taxpayer under sections 25E(c)(1)(D)(i) for that taxpayer, the IRS would be authorized to make an assessment of the tax based on an omission of a correct VIN under section 6213(g)(2)(U).
If any provision in this proposed rulemaking is held to be invalid or unenforceable facially, or as applied to any person or circumstance, it shall be severable from the remainder of this rulemaking, and shall not affect the remainder thereof, or the application of the provision to other persons not similarly situated or to other dissimilar circumstances.
Except as described in the following paragraph, these regulations are generally proposed to apply to new clean vehicles and previously-owned clean vehicles placed in service in taxable years beginning after October 10, 2023.
Proposed §§ 1.25E-3, 1.30D-5, and 301.6213-2 are proposed to apply to taxable years beginning after December 31, 2023. The applicability date of proposed §§ 1.25E-3 and 1.30D-5 would align with the applicability date of the transfer provisions of the section 25E or section 30D credit, which apply to vehicles acquired or placed in service, respectively, after December 31, 2023. Proposed § 301.6213-2 describes the exercise of math error authority with respect to omission of a correct VIN, which relates in part to seller reporting. Application of this proposed rule to taxable years beginning after December 31, 2023, would align with the commencement of the electronic submission of seller reporting to improve administration of the section 25E and section 30D credits.
This notice of proposed rulemaking modifies proposed §§ 1.30D-2 and 1.30D-4 of the April 2023 proposed regulations.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) generally requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit.
For purposes of the PRA, the reporting burden associated with the collection of information in proposed §§ 1.25E-3 and 1.30D-5 regarding vehicle transfer elections will be reflected in the PRA Submissions associated with Revenue Procedure 2023-33. The IRS is seeking OMB approval and requesting a new OMB control number for Revenue Procedure 2023-33. These proposed regulations do not alter previously accounted for information collection requirements and do not create new collection requirements. OMB Control Number 1545-2137 covers Form 8936 and Form 8936-A regarding electric vehicle credits, including the new requirement in section 30D(f)(9) to include on the taxpayer's return for the taxable year the VIN of the vehicle for which the section 30D credit is claimed. Revenue Procedure 2022-42 describes the procedural requirements for qualified manufacturers to make periodic written reports to the Secretary to provide information related to each vehicle manufactured by such manufacturer that is eligible for the section 30D credit as required in section 30D(d)(3), including the critical mineral and battery component certification requirements in section 30D(e)(1)(A) and (2)(A). In addition, Revenue Procedure 2022-42 also provides the procedures for sellers of new clean vehicles to report information required by section 30D(d)(1)(H) for vehicles to be eligible for the section 30D credit. The collections of information contained in Revenue Procedure 2022-42 are described in that document and were submitted to the Office of Management and Budget in accordance with the PRA under control number 1545-2137.
The Regulatory Flexibility Act (5 U.S.C. 601
The proposed regulations would provide the eligibility rules and key definitions regarding the section 25E credit to allow taxpayers to know whether their purchase of a used vehicle is eligible for the section 25E credit. In addition, the proposed regulations would provide rules regarding the recapture authority under sections 30D(f)(5) and 25E(e), so that taxpayers and the IRS have clear rules regarding when a clean vehicle may cease being eligible property for purposes of the section 25E and section 30D credits. Further, the proposed regulations would provide rules regarding the meaning of the omission of a correct VIN for purposes of math error authority as described in section 6213(g)(2). Clear rules regarding the exercise of math error authority will provide for efficient and fair tax administration.
The proposed regulations would provide guidance for purposes of taxpayers electing to transfer vehicle credits under sections 25E(f) and 30D(g) to eligible entities and for eligible entities participating in the advance payment program with respect to those transferred credits. The proposed rules would provide rules regarding the process for taxpayers to elect to transfer the credit and for eligible entities to register and receive advance payments from the IRS and rules regarding the Federal income tax treatment of the vehicle transfer election, including recapture and excessive payments. The proposed rules regarding the vehicle transfer election ensure certainty regarding the consequences of the transfer election, decrease the risk of fraud, and expedite the process by which an eligible entity may receive an advance payment under section 25E(f) or 30D(g).
The proposed rules are expected to encourage taxpayers to increase the placing in service of new and previously-owned clean vehicles. Thus, the Treasury Department and the IRS intend and expect that the proposed rules will deliver benefits across the economy and environment that will beneficially impact various industries, including clean vehicle manufacturers and dealers.
The Small Business Administration estimates in its 2023 Small Business Profile that 99.9 percent of United States businesses meet its definition of a small business. The applicability of these proposed regulations does not depend on the size of the business, as defined by the Small Business Administration. As described more fully in the preamble to this proposed regulation and in this IRFA, these rules may affect a variety of different businesses across several different industries, but will primarily affect dealers of new and previously-owned clean vehicles who would like to be eligible entities to receive a transferred credit from the buyers of a clean vehicle. The Treasury Department and the IRS currently estimate the number of dealers of new clean vehicles to be approximately 16,000, and the number of dealers of previously-owned clean vehicles to be approximately 36,000.
Of the estimated 16,000 dealers of new clean vehicles, we estimate that 10,000 will have receipts in excess of $25 million; 3,000 will have receipts between $10-$25 million; 1,000 will have receipts between $5-10 million, and 2,000 will have receipts under $5 million. Of the estimated 36,000 dealers of previously-owned clean vehicles, we estimate that 500 will have receipts in excess of $25 million; 1,500 will have receipts between $10-$25 million; 2,000 will have receipts between $5-10 million, and 32,000 will have receipts under $5 million.
The Treasury Department and the IRS expect to receive more information on the impact on small businesses through comments on this proposed rule and again when participation in the election to transfer credits under sections 25E(f) and 30D(g) commences.
The recordkeeping and reporting requirements would increase for taxpayers who elect to transfer the section 25E or 30D credit to an eligible entity. In addition, the recordkeeping and reporting requirements would increase for dealers who seek to qualify as eligible entities and participate in the advance payment program. Although the Treasury Department and the IRS do not have sufficient data to determine precisely the likely extent of the increased costs of compliance, the estimated burden of complying with the recordkeeping and reporting requirements are described in the PRA section of the preamble. The Treasury Department and IRS estimate that, based on the total of 52,000 dealers of new (16,000) and previously-owned (36,000) clean vehicles, it will take approximately one hour to register as entities eligible to receive advance payments of credits under sections 25E and 30D, for a total of 52,000 hours total. The Treasury Department and IRS further estimate that there are approximately 950,000 taxpayers who will purchase new clean vehicles and 28,750 taxpayers who will purchase previously-owned clean vehicles who will elect to transfer their respective credits to the eligible entity, for a total of 978,750 elections annually. The Treasury Department and IRS estimate each election will take approximately 15 minutes to complete, for a total burden of approximately 244,688 hours per year.
The Treasury Department and the IRS considered various alternatives in promulgating these proposed regulations. Significant alternatives considered include: (1) the sale price definition in proposed § 1.25E-1(b)(9); (2) the first transfer rule described in proposed § 1.25E-1(b)(8); (3) the recapture rules provided in proposed §§ 1.25E-2(c) and 1.30D-4(f), and (4) the dealer registration requirements provided in proposed §§ 1.25E-3(b) and 1.30D-5(b).
Regarding the sale price definition in proposed § 1.25E-1(b)(9), the Treasury Department and the IRS considered the appropriate scope of the definition and how the definition of sale price should be consistent with or diverge from the definition of manufacturer's suggested retail price for purposes of section 30D(f)(11). The definition of manufacturer's suggested retail price in proposed § 1.30D-2(c) of the April 2023 proposed regulations refers to a statutory definition in 15 U.S.C. 1232 that is used for purposes of vehicle labeling on the vehicle window sticker. That proposed definition includes optional accessories or items included by the manufacturer at the time of delivery to the dealer but excludes delivery charges to the dealer. For used vehicles, however, there are not similar vehicle labeling standards that provide a standard for defining sales price. In addition, in a used vehicle sale the dealer and buyer may negotiate to characterize a portion of the sale price as a separately stated fee or charge (other than those required by law) to avoid the section 25E sales price cap of $25,000. To prevent this type of recharacterization, proposed § 1.25E-1(b)(9) defines sale price to mean the total sale price agreed upon by the buyer and the dealer, including any delivery charges. This definition specifically excludes separately-stated taxes and fees required by State or local law, since such taxes and fees are not subject to negotiation or recharacterization by the dealer and buyer.
The Treasury Department and the IRS considered various alternatives to the
The Treasury Department and the IRS considered alternatives to the recapture rules provided in proposed §§ 1.25E-2(c) and 1.30D-4(f). Given the increased availability and benefits of the section 30D credit and the new section 25E credit when the credit can be transferred to an eligible entity and is not limited by the taxpayer's tax liability, the Treasury Department and the IRS determined it was necessary to provide rules regarding when the value of the clean vehicle credits can be recaptured. The Treasury Department and the IRS also considered the appropriate length of time within which a return or resale of a vehicle would make the taxpayer ineligible for the credit. Longer and shorter periods of time were considered. Based on industry standard return policies, including money back guarantees, the Treasury Department and the IRS determined that it was appropriate to deny the benefit of the credit if the credit was returned within 30 days. In addition, the Treasury Department and the IRS determined it was reasonable to assume an intent to resell the vehicle, making the purchase of the vehicle ineligible, if the vehicle was resold within 30 days.
Finally, with respect to the dealer registration requirements provided in proposed §§ 1.25E-3(b) and 1.30D-5(b), the Treasury Department and the IRS considered various processes by which a seller could become an eligible entity and participate in the advance payment program. The Treasury Department and the IRS considered a process that did not require submission of a significant amount of information prior to the dealer becoming an eligible entity, but such an approach could require more back-end compliance. To ensure efficient tax administration and reduce fraud, the Treasury Department and the IRS determined that an up-front, electronic registration process was necessary for the IRS to effectively review and validate eligible entity status. To ensure efficient tax administration and reduce fraud, the Treasury Department and the IRS determined that an up-front, electronic registration process was necessary for the IRS to effectively review and validate eligible entity status. In addition, the Treasury Department and the IRS determined that dealers must submit identity information and attestations regarding their participation in the advance payment program to ensure program integrity. Finally, the Treasury Department and the IRS determined that dealer tax compliance was necessary to ensure that advance payments are being paid only to compliant dealers.
The proposed rule would not duplicate, overlap, or conflict with any relevant Federal rules. As discussed in the Explanation of Provisions, the proposed rules would merely provide requirements, procedures, and definitions related to the clean vehicle transfer election programs for sections 25E and 30D. The Treasury Department and the IRS invite input from interested members of the public about identifying and avoiding overlapping, duplicative, or conflicting requirements.
Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). This proposed rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.
Pursuant to the Memorandum of Agreement, Review of Treasury Regulations under Executive Order 12866 (June 9, 2023), tax regulatory actions issued by the IRS are not subject to the requirements of section 6 of Executive Order 12866, as amended. Therefore, a regulatory impact assessment is not required.
Before these proposed amendments to the regulations are adopted as final regulations, consideration will be given to comments that are submitted timely to the IRS as prescribed in this preamble under the
A public hearing will be scheduled if requested in writing by any person who timely submits electronic or written comments. Requests for a public hearing are also encouraged to be made electronically. If a public hearing is scheduled, notice of the date and time for the public hearing will be published in the
Announcement 2023-16, 2023-20 I.R.B. 854 (May 15, 2023), provides that public hearings will be conducted in person, although the IRS will continue to provide a telephonic option for individuals who wish to attend or testify at a hearing by telephone. Any telephonic hearing will be made accessible to people with disabilities.
Guidance cited in this preamble is published in the Internal Revenue Bulletin and is available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at
The principal author of these proposed regulations is the Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, the Treasury Department and the IRS propose to amend 26 CFR parts 1 and 301 as follows:
26 U.S.C. 7805 * * *
Sections 1.25E-1 through 1.25E-3 also issued under 26 U.S.C. 25E.
Section 1.30D-5 also issued under 26 U.S.C. 30D.
This section lists the captions contained in §§ 1.25E-1 through 1.25E-3.
(a) In general.
(b) Definitions.
(1) Dealer.
(2) Incentive.
(3) Modified adjusted gross income.
(4) Placed in service.
(5) Previously-owned clean vehicle.
(6) Qualified buyer.
(7) Qualified manufacturer.
(8) Qualified sale.
(i) In general.
(ii) First transfer rule.
(9) Sale price.
(10) Section 25E regulations.
(11) Seller report.
(c) Limitation based on modified adjusted gross income.
(1) In general.
(2) Threshold amount.
(3) Special rule for change in filing status.
(d) Limitation on multiple owners.
(1) In general.
(2) Seller reporting.
(e) Examples.
(1) Example 1.
(2) Example 2.
(3) Example 3.
(4) Example 4.
(5) Example 5.
(6) Example 6.
(f) Severability.
(g) Applicability date.
(a) In general.
(b) No double benefit.
(1) In general.
(2) Interaction of section 30D and section 25E no double benefit rules.
(c) Recapture.
(1) In general.
(i) Cancelled sale.
(ii) Vehicle return.
(iii) Resale.
(iv) Other returns and resales.
(2) Recapture rules in the case of a vehicle transfer election.
(3) Example.
(d) Branded title.
(e) Seller registration.
(f) Requirement to file a complete income tax return.
(g) Severability.
(h) Applicability date.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Dealer.
(3) Dealer tax non-compliance.
(4) Electing taxpayer.
(5) Eligible entity.
(6) Registered dealer.
(7) Time of sale.
(8) Vehicle transfer election.
(c) Dealer registration.
(1) In general.
(2) Effect of dealer tax non-compliance.
(d) Vehicle transfer election by electing taxpayer to transfer credit.
(e) Federal income tax consequences of the vehicle transfer election.
(1) Treatment of electing taxpayer.
(2) Treatment of eligible entity.
(3) Form of payment from eligible entity to electing taxpayer.
(4) Application of certain other requirements.
(5) Examples.
(f) Advance payments received by eligible entities.
(1) In general.
(2) Requirements for a registered dealer to become an eligible entity.
(3) Suspension of registered dealer eligibility.
(4) Revocation of registered dealer eligibility.
(g) Increase in tax.
(1) Recapture where taxpayer exceeds modified adjusted gross income limitation.
(2) Excessive payments.
(i) In general.
(ii) Reasonable cause.
(iii) Excessive payment defined.
(iv) Special rule for cases in which the purchaser's modified adjusted gross income exceeds the limitation.
(3) Example.
(h) Requirement of return.
(1) In general.
(2) Income tax return.
(i) Two vehicle transfer elections per year.
(j) Severability.
(k) Applicability date.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(i) Who is an individual;
(ii) Who purchases such vehicle for use and not for resale;
(iii) With respect to whom no deduction is allowable to another taxpayer under section 151 of the Code; and
(iv) Who has not been allowed a credit under section 25E and this section for any sale occurring during the period beginning three calendar years before the date of the sale of the vehicle and ending on the date of the sale.
(7)
(8)
(A) By a dealer (as defined in paragraph (b)(1) of this section);
(B) For a sale price that does not exceed $25,000; and
(C) That is the first transfer of the motor vehicle after August 16, 2022 (the date of enactment of section 25E), to a qualified buyer other than the person with whom the original use of such vehicle commenced.
(ii)
(9)
(10)
(11)
(c)
(i) The lesser of—
(A) The modified adjusted gross income of the taxpayer for such taxable year; or
(B) The modified adjusted gross income of the taxpayer for the preceding taxable year; exceeds
(ii) The threshold amount.
(2)
(i) In the case of a joint return or a surviving spouse (as defined in section 2(a) of the Code), the threshold amount is $150,000.
(ii) In the case of a head of household (as defined in section 2(b) of the Code), the threshold amount is $112,500.
(iii) In the case of a taxpayer not described in paragraph (c)(2)(i) or (ii) of this section, the threshold amount is $75,000.
(3)
(d)
(2)
(e)
(1)
(2)
(3)
(4)
(5)
(f)
(g)
(a)
(b)
(2)
(c)
(i)
(A) The taxpayer may not claim the section 25E credit with respect to the vehicle;
(B) The sale will be treated as not having occurred (and no transfer is considered to have occurred by reason of the cancelled sale), and the vehicle will, therefore, still qualify for the section 25E credit upon a subsequent sale meeting the requirements of section 25E and the section 25E regulations;
(C) The seller report (as defined in § 1.25E-1(b)(11)) must be rescinded by the seller in the manner set forth in guidance published in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)(a) of this chapter); and
(D) The taxpayer cannot make an election to transfer the credit under section 25E(f) and § 1.25E-3.
(ii)
(A) The taxpayer cannot claim the section 25E credit with respect to the vehicle;
(B) The sale will be treated as having occurred (and a transfer is therefore considered as having occurred by reason of the sale), and the vehicle will not qualify for the section 25E credit upon a subsequent sale, unless the vehicle history does not reflect the prior sale and return; if the vehicle history does not reflect the prior sale and return, the vehicle remains eligible for the section 25E credit under the first transfer rule described in § 1.25E-1(b)(8)(ii);
(C) The seller report (as defined in § 1.25E-1(b)(11)) must be updated by the seller; and
(D) Any vehicle transfer election made pursuant to section 25E(f) and § 1.25E-3, if applicable, will be treated as nullified and any advance payment made pursuant to section 25E(f) and § 1.25E-3, if applicable, will be collected from the eligible entity as an excessive payment pursuant to § 1.25E-3.
(iii)
(A) The taxpayer may not claim the section 25E credit with respect to the vehicle;
(B) The sale to the taxpayer will be treated as occurring (and a transfer is therefore considered as occurring by reason of the sale), and the vehicle will not qualify for the section 25E credit upon a subsequent sale;
(C) The seller report (as defined in § 1.25E-1(b)(11)) will not be updated; and
(D) Any vehicle transfer election made pursuant to section 25E(f) and § 1.25E-3, if applicable, will remain in effect and any advance payment made pursuant to section 25E(f) and § 1.25E-3 will not be collected from the eligible entity; and
(E) The value of the transferred credit will be collected from the taxpayer.
(iv)
(2)
(3)
(d)
(e)
(f)
(g)
(h)
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(c)
(2)
(d)
(e)
(i) The amount of the section 25E credit that the electing taxpayer elects to transfer to the eligible entity under section 30D(g) (by reason of section 25E(f)) and paragraph (d) of this section may exceed the electing taxpayer's regular tax liability (as defined in section 26(b)(1) of the Code) for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture;
(ii) The payment made by an eligible entity to an electing taxpayer under section 30D(g)(2)(C) (by reason of 25E(f)) and paragraph (d) of this section to an electing taxpayer pursuant to a vehicle transfer election is not includible in the gross income of the electing taxpayer; and
(iii) The payment made by an eligible entity under section 30D(g)(2)(C) (by reason of section 25E(f)) and paragraph (d) of this section is treated as repaid by the electing taxpayer to the eligible entity as part of the purchase price of the previously-owned clean vehicle. Thus, the repayment by the electing taxpayer is part of the electing taxpayer's basis in the previously-owned clean vehicle prior to the application of the basis reduction rule of section 30D(f)(1) that applies by reason of section 25E(e) and § 1.25E-2(a).
(2)
(i) The eligible entity is allowed the section 25E credit with respect to the previously-owned clean vehicle and
(ii) Advance payments received by the eligible entity are not treated as a tax credit in the hands of the eligible entity and may exceed the eligible entity's regular tax liability (as defined in section 26(b)(1)) for the taxable year in which the sale occurs;
(iii) An advance payment received by the eligible entity is not included in the gross income of the eligible entity;
(iv) The payment made by an eligible entity under section 30D(g)(2)(C) (by reason of section 25(f)) and paragraph (d) of this section to an electing taxpayer is not deductible by the eligible entity; and
(v) The payment made by an eligible entity to the electing taxpayer under section 30D(g)(2)(C) (by reason of section 25(f)) and paragraph (d) of this section is treated as paid by the electing taxpayer to the eligible entity as part of the purchase price of the previously-owned clean vehicle. Thus, the repayment by the electing taxpayer is treated as an amount realized of the eligible entity under section 1001 of the Code and the regulations in this part under section 1001.
(vi) If the eligible entity is a partnership or an S corporation, then—
(A) The IRS will make the advance payment to such partnership or S corporation equal to the amount of the section 25E credit allowed that is transferred to the eligible entity;
(B) Such section 25E credit is reduced to zero and is, for any other purpose of the Code, deemed to have been allowed solely to such entity (and not allocated or otherwise allowed to its partners or shareholders) for such taxable year; and
(C) The amount of the advance payment is not treated as tax exempt income to the partnership or S corporation for purposes of the Code.
(3)
(4)
(i) The requirements of section 30D(f)(1) (regarding basis reduction) and 30D(f)(2) (regarding no double benefit), by reason of section 25E(e), apply to the electing taxpayer as if the vehicle transfer election were not made (so, for example, the electing taxpayer must reduce the taxpayer's basis in the vehicle by the amount of the section 25E credit, regardless of the vehicle transfer election).
(ii) Section 30D(f)(6) (regarding the election not to take the credit), by reason of section 25E(e), will not apply (in other words, by electing to transfer the credit, the electing taxpayer is electing to take the credit).
(iii) Section 30D(f)(9) (regarding the vehicle identification number (VIN) requirement), by reason of section 25E(e), and section 25E(d) (regarding the VIN requirement) will be treated as satisfied if the eligible entity provides the VIN of such vehicle to the IRS in the form and manner set forth in guidance published in the Internal Revenue Bulletin.
(5)
(i)
(B)
(ii)
(B)
(iii)
(B)
(f)
(2)
(i) The registered dealer submits all required registration information and is in dealer tax compliance.
(ii) The registered dealer retains information regarding the vehicle transfer election for three calendar years beginning with the year immediately after the year in which the vehicle is placed in service, as described in guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter).
(iii) The eligible entity meets any other requirements of section 25E(f) by reference to section 30D(g) and this section included in guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter) or in forms and instructions.
(3)
(4)
(g)
(2)
(A) The amount of the excessive payment; plus
(B) An amount equal to 20 percent of such excessive payment.
(ii)
(iii)
(A) To a registered dealer that fails to meet the requirements to be an eligible entity provided in paragraph (f)(2) of this section; or
(B) Except as provided in paragraph (g)(2)(iv) of this section, to an eligible entity with respect to a vehicle to the extent the payment exceeds the amount of the credit that, without application of section 25E(f) and this section, would be otherwise allowable to the electing taxpayer with respect to the vehicle for such tax year.
(iv)
(3)
(i)
(ii)
(h)
(2)
(i)
(j)
(k)
The revisions and additions read as follows:
(j) Seller report.
(f) Recapture rules.
(1) In general.
(i) Cancelled sale.
(ii) Vehicle return.
(iii) Resale.
(iv) Other vehicle returns and resales.
(2) Recapture rules in the case of a vehicle transfer election.
(g) Seller registration.
(h) Requirement to file a complete income tax return.
(a) Definitions.
(1) Advance payment program.
(2) Dealer.
(3) Dealer tax compliance.
(4) Electing taxpayer.
(5) Eligible entity.
(6) Registered dealer.
(7) Time of sale.
(8) Vehicle registration election.
(b) Dealer registration.
(1) In general.
(2) Effect of dealer tax non-compliance.
(c) Election by electing taxpayer to transfer credit.
(d) Federal income tax consequences of the vehicle transfer election.
(1) Treatment of electing taxpayer.
(2) Treatment of eligible entity.
(3) Form of payment from eligible entity to electing taxpayer.
(4) Application of certain other requirements.
(5) Examples.
(e) Advance payments received by eligible entities.
(1) In general.
(2) Requirements for a registered dealer to become an eligible entity.
(3) Suspension of registered dealer eligibility.
(4) Revocation of registered dealer eligibility.
(f) Increase in tax.
(1) Recapture where taxpayer exceeds modified adjusted gross income limitation.
(2) Excessive payments.
(i) In general.
(ii) Reasonable cause.
(iii) Excessive payment defined.
(iv) Special rule for cases in which the purchaser's modified adjusted gross income exceeds the limitation.
(3) Example.
(g) Requirement of return.
(1) In general.
(2) Income tax return.
(h) Two vehicle transfer elections per year.
(i) Severability.
(j) Applicability date.
(j)
(f)
(i)
(A) The taxpayer may not claim the section 30D credit with respect to the vehicle;
(B) The sale will be treated as not having occurred and the vehicle will be considered available for original use by another taxpayer (regardless of the cancelled sale), and the vehicle will, therefore, still be eligible for the section 30D credit;
(C) The seller report must be rescinded by the seller in the manner set forth in guidance published in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)(a) of this chapter); and
(D) The taxpayer cannot make a vehicle transfer election under section 30D(g) and § 1.30D-5(c) with respect to the cancelled sale.
(ii)
(A) The taxpayer cannot claim the section 30D credit with respect to the vehicle;
(B) The vehicle will no longer be considered available for original use by another taxpayer, and, therefore, the vehicle will no longer be eligible for the section 30D credit;
(C) The seller report must be updated by the seller; and
(D) A vehicle transfer election under 30D(g) and § 1.30D-5(c), if applicable, will be treated as nullified and any advance payment made pursuant to section 30D(g) and § 1.30D-5(e) will be collected from the eligible entity as an excessive payment pursuant to § 1.30D-5(f).
(iii)
(A) The taxpayer cannot claim the section 30D credit with respect to the vehicle;
(B) The vehicle will no longer be considered available for original use by another taxpayer, and, therefore, the vehicle will no longer be eligible for the section 30D credit;
(C) The seller report will not be updated;
(D) A vehicle transfer election under 30D(g) and § 1.30D-5(c), if applicable, will remain in effect and any advance payment made pursuant to section 30D(g) and § 1.30D-5(e) will not be collected from the eligible entity; and
(E) The value of any transferred credit will be collected from the taxpayer.
(iv)
(2)
(g)
(h)
(a)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(b)
(2)
(c)
(d)
(i) The credit amount under section 30D that the electing taxpayer elects to transfer to the eligible entity under section 30D(g) and paragraph (c) of this section may exceed the electing taxpayer's regular tax liability (as defined in section 26(b)(1) of the Code) for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture.
(ii) The payment made by an eligible entity to an electing taxpayer under section 30D(g)(2)(C) and paragraph (c) of this section to an electing taxpayer
(iii) The payment made by an eligible entity to an electing taxpayer under section 30D(g)(2)(C) and paragraph (c) of this section is treated as repaid by the electing taxpayer to the eligible entity as part of the purchase price of the new clean vehicle. Thus, the repayment by the electing taxpayer is included in the electing taxpayer's basis in the new clean vehicle prior to the application of the basis reduction rule in section 30D(f)(1).
(2)
(i) The eligible entity is allowed the credit under section 30D with respect to the new clean vehicle and may receive an advance payment pursuant to section 30D(g)(7) and paragraph (e) of this section;
(ii) Advance payments received by the eligible entity are not treated as a tax credit in the hands of the eligible entity and may exceed the eligible entity's regular tax liability (as defined in section 26(b)(1)) for the taxable year in which the sale occurs;
(iii) An advance payment received by the eligible entity is not included in the gross income of the eligible entity;
(iv) The payment made by an eligible entity under section 30D(g)(2)(C) and paragraph (c) of this section to an electing taxpayer is not deductible by the eligible entity;
(v) The payment made by an eligible entity to an electing taxpayer under section 30D(g)(2)(C) and paragraph (c) of this section is treated as repaid by the electing taxpayer to the eligible entity as part of the purchase price of the new clean vehicle. Thus, the repayment by the electing taxpayer is treated as an amount realized of the eligible entity under section 1001 of the Code and the regulations in this part under section 1001; and
(vi) If the eligible entity is a partnership or an S corporation, then—
(A) The IRS will make the advance payment to such partnership or S corporation equal to the amount of the section 30D credit allowed that is transferred to the eligible entity;
(B) Such section 30D credit is reduced to zero and is, for any other purpose of the Code, deemed to have been allowed solely to such entity (and not allocated or otherwise allowed to its partners or shareholders) for such taxable year; and
(C) The amount of the advance payment is not treated as tax exempt income to the partnership or S corporation for purposes of the Code.
(3)
(4)
(i) The requirements of section 30D(f)(1) (regarding basis reduction) and 30D(f)(2) (regarding no double benefit) apply to the electing taxpayer as if the vehicle transfer election were not made (so, for example, the electing taxpayer must reduce its basis in the vehicle by the amount of the section 30D credit, regardless of the vehicle transfer election);
(ii) Section 30D(f)(6) (regarding the election not to take the credit) will not apply (in other words, by electing to transfer the credit, the electing taxpayer is electing to take the credit); and
(iii) Section 30D(f)(9) (regarding the VIN requirement) will be treated as satisfied if the eligible entity provides the vehicle identification number of such vehicle to the IRS in the form and manner set forth in guidance published in the Internal Revenue Bulletin.
(5)
(i)
(B)
(ii)
(B)
(iii)
(B)
(e)
(2)
(i) The registered dealer submits required registration information and is in dealer tax compliance;
(ii) The registered dealer retains information regarding the vehicle transfer election for three calendar years beginning with the year immediately after the year in which the vehicle is placed in service, as described in guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter); and
(iii) The registered dealer meets any other requirements of section 30D(g) and this section included in guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter).
(3)
(4)
(f)
(2)
(A) The amount of the excessive payment; plus
(B) An amount equal to 20 percent of such excessive payment.
(ii)
(iii)
(A) To a registered dealer that fails to meet the requirements to be an eligible entity provided in section 30D(g)(2) and paragraph (e)(2) of this section; or
(B) Except as provided in paragraph (f)(2)(iv) of this section, to an eligible entity with respect to a vehicle to the extent the payment exceeds the amount of the credit that, without application of section 30D(g) and this section, would be otherwise allowable to the electing taxpayer with respect to the vehicle for such tax year.
(iv)
(3)
(i)
(ii)
(g)
(2)
(h)
(i)
(j)
26 U.S.C. 7805.
Section 301.6213-2 also issued under 26 U.S.C. 6213.
(a)
(1) Under section 6213(g)(2)(T), an omission of a correct vehicle identification number required under section 30D(f)(9) of the Code (relating to credit for new clean vehicles) to be included on a return;
(2) Under section 6213(g)(2)(U), an omission of a correct vehicle identification number required under section 25E(d) of the Code (relating to credit for previously-owned clean vehicles) to be included on a return; and
(3) Under section 6213(g)(2)(V), an omission of a correct vehicle identification number required under section 45W(e) of the Code (relating to commercial clean vehicle credit) to be included on a return.
(b)
(1) The vehicle identification number required to be reported under section 30D(f)(9), 25E(d), or 45W(e) is not included on the return of tax;
(2) The vehicle identification number included on the return of tax is not that of a vehicle eligible for a credit under section 30D, 25E, or 45W;
(3) The vehicle identification number included on the return of tax is not that of a vehicle eligible for a credit under section 30D, 25E, or 45W for the year in which it is claimed;
(4) The vehicle identification number included on the return of tax differs from the vehicle identification number reported to the IRS and the taxpayer under section 30D(d)(1)(H) for each new clean vehicle placed in service during the taxable year by the taxpayer who was issued the report; or
(5) The vehicle identification number included on the return of tax differs from the vehicle identification number reported to the IRS and the taxpayer under section 25E(c)(1)(D)(i) for each previously-owned clean vehicle placed in service during the taxable year by the taxpayer who was issued the report.
(c)