Animal and Plant Health Inspection Service
Forest Service
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Army Department
Federal Energy Regulatory Commission
Centers for Medicare & Medicaid Services
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
Fish and Wildlife Service
Land Management Bureau
National Park Service
Wage and Hour Division
Federal Highway Administration
Federal Railroad Administration
Bureau of the Fiscal Service
Fiscal Service
Foreign Assets Control Office
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Office of Government Ethics.
Final rule.
In accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the U.S. Office of Government Ethics is issuing this final rule to make the 2024 annual adjustments to the Ethics in Government Act civil monetary penalties.
This final rule is effective January 15, 2024.
Margaret Dylus-Yukins, Assistant Counsel, General Counsel and Legal Policy Division, Office of Government Ethics, Telephone: 202-482-9300; TTY: 800-877-8339; FAX: 202-482-9237.
In November 2015, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (the 2015 Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410). The 2015 Act required Federal agencies to make annual inflationary adjustments to the civil monetary penalties (CMPs) within their jurisdiction, to be effective no later than January 15 of each year.
The Ethics in Government Act, as amended, Chapter 131, title 5 of the United States Code, provides for five CMPs.
(1) knowing and willful failure to file, report required information on, or falsification of a public financial disclosure report, 5 U.S.C. 13106(a)(1), 5 CFR 2634.701(b);
(2) knowing and willful breach of a qualified trust by trustees and interested parties, 5 U.S.C. 13104(f)(6)(C)(i), 5 CFR 2634.702(a);
(3) negligent breach of a qualified trust by trustees and interested parties, 5 U.S.C. 13104(f)(6)(C)(ii), 5 CFR 2634.702(b);
(4) misuse of a public report, 5 U.S.C. 13107(c)(2), 5 CFR 2634.703; and
(5) violation of outside employment/activities provisions, 5 U.S.C. 13145(a), 5 CFR 2636.104(a).
In compliance with the 2015 Act and guidance issued by the Office of Management and Budget (OMB), the U.S. Office of Government Ethics (OGE) made previous inflationary adjustments to the five Ethics in Government Act CMPs, and is issuing this rulemaking to effectuate the 2024 annual inflationary adjustments to those CMPs. In accordance with the 2015 Act, these adjustments are based on the percent change between the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October preceding the date of the adjustment, and the prior year's October CPI-U. Pursuant to OMB guidance, the cost-of-living adjustment multiplier for 2024, based on the CPI-U for October 2023, not seasonally adjusted, is 1.03241. To calculate the 2024 annual adjustment, agencies must multiply the most recent penalty by the 1.03241 multiplier, and round to the nearest dollar.
Applying the formula established by the 2015 Act and OMB guidance, OGE is amending the Ethics in Government Act CMPs through this rulemaking to:
(1) Increase the three penalties reflected in 5 CFR 2634.702(a), 2634.703, and 2636.104(a)—which were previously adjusted to a maximum of $23,727—to a maximum of $24,496;
(2) Increase the penalty reflected in 5 CFR 2634.702(b)—which was previously adjusted to a maximum of $11,864—to a maximum of $12,249; and
(3) Increase the penalty reflected in 5 CFR 2634.701(b)—which was previously adjusted to a maximum of $71,316—to a maximum of $73,627.
These adjusted penalty amounts will apply to penalties for violations that occurred after November 2, 2015, and that are assessed after January 15, 2024 (the effective date of this final rule). OGE will continue to make future annual inflationary adjustments to the Ethics in Government Act CMPs in accordance with the statutory formula set forth in the 2015 Act and OMB guidance.
Pursuant to 5 U.S.C. 553(b), as Acting Director of the Office of Government Ethics, I find that good cause exists for waiving the general notice of proposed rulemaking and public comment procedures as to these technical amendments. The notice and comment procedures are being waived because these amendments, which concern matters of agency organization, procedure and practice, are being adopted in accordance with statutorily mandated inflation adjustment procedures of the 2015 Act, which specifies that agencies shall adjust civil monetary penalties notwithstanding Section 553 of the Administrative Procedure Act. It is also in the public interest that the adjusted rates for civil monetary penalties under the Ethics in Government Act become effective as soon as possible in order to maintain their deterrent effect.
As the Acting Director of the Office of Government Ethics, I certify under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this final rule would not have a significant economic impact on a substantial number of small entities because it primarily affects current Federal executive branch employees.
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. chapter 25, subchapter II), this rule would not significantly or uniquely affect small governments and will not result in increased expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (as adjusted for inflation) in any one year.
Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select the regulatory approaches that maximize net benefits (including economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget has determined that rulemakings such as this implementing annual inflationary adjustments under the 2015 Act are not significant regulatory actions under Executive Order 12866.
As Acting Director of the Office of Government Ethics, I have reviewed this rule in light of section 3 of Executive Order 12988, Civil Justice Reform, and certify that it meets the applicable standards provided therein.
Certificates of divestiture, Conflict of interests, Financial disclosure, Government employees, Penalties, Privacy, Reporting and recordkeeping requirements, Trusts and trustees.
Conflict of interests, Government employees, Penalties.
For the reasons set forth in the preamble, the U.S. Office of Government Ethics is amending 5 CFR parts 2634 and 2636 as follows:
5 U.S.C. ch. 131; 26 U.S.C. 1043; Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note, as amended by sec. 31001, Pub. L. 104-134, 110 Stat. 1321 and sec. 701, Pub. L. 114-74; Pub. L. 112-105, 126 Stat. 291; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.
(b)
(a) The Attorney General may bring a civil action in any appropriate United States district court against any individual who knowingly and willfully violates the provisions of § 2634.408(d)(1) or (e)(1). The court in which the action is brought may assess against the individual a civil monetary penalty in any amount, not to exceed the amounts set forth in Table 1 to this paragraph (a), as provided by section 5 U.S.C. 13104(f)(6)(C)(i) and as adjusted in accordance with the inflation adjustment procedures prescribed in the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
(b) The Attorney General may bring a civil action in any appropriate United States district court against any individual who negligently violates the provisions of § 2634.408(d)(1) or (e)(1). The court in which the action is brought may assess against the individual a civil monetary penalty in any amount, not to exceed the amounts set forth in Table 2 to this paragraph (b), as provided by 5 U.S.C. 13104(f)(6)(C)(ii) and as adjusted in accordance with the inflation adjustment procedures of the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
(a) The Attorney General may bring a civil action against any person who obtains or uses a report filed under this part for any purpose prohibited by 5 U.S.C. 13107(c)(1), as incorporated in § 2634.603(f). The court in which the action is brought may assess against the person a civil monetary penalty in any amount, not to exceed the amounts set forth in Table 1 to this section, as provided by 5 U.S.C. 13107(c)(2) and as adjusted in accordance with the inflation adjustment procedures prescribed in the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
(b) This remedy shall be in addition to any other remedy available under statutory or common law.
5 U.S.C. ch. 131; Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note, as amended by sec. 31001, Pub. L. 104-134, 110 Stat. 1321 and sec. 701, Pub. L. 114-74; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.
(a)
National Credit Union Administration (NCUA).
Final rule.
The NCUA Board (Board) is amending its regulations to adjust the maximum amount of each civil monetary penalty (CMP) within its jurisdiction to account for inflation. This action, including the amount of the adjustments, is required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
This final rule is effective January 10, 2024.
Gira Bose, Senior Staff Attorney, at 1775 Duke Street, Alexandria, VA 22314, or telephone: (703) 518-6562.
Every Federal agency, including the NCUA, is required by law to adjust its maximum CMP amounts each year to account for inflation. Prior to this being an annual requirement, agencies were required to adjust their CMPs at least once every four years. The previous four-year requirement stemmed from the Debt Collection Improvement Act of 1996,
The current annual requirement stems from the Bipartisan Budget Act of 2015,
The 2015 amendments also specified how agencies must conduct annual inflation adjustments after the 2016 catch-up adjustment. Following the catch-up adjustment, agencies must make the required adjustments and publish them in the
The law provides that the adjustments shall be made notwithstanding the section of the Administrative Procedure Act (APA) that requires prior notice and public comment for agency rulemaking.
An annual adjustment under the 2015 amendments is not required if a CMP has been amended in the preceding 12 months pursuant to other authority. Specifically, the statute provides that an agency is not required to make an annual adjustment to a CMP if in the preceding 12 months it has been increased by an amount greater than the annual adjustment required by the 2015 amendments.
This section applies the statutory requirements and the Office of Management and Budget's (OMB) guidance to the NCUA's CMPs and sets forth the Board's calculation of the 2024 adjustments.
The 2015 amendments directed OMB to issue guidance to agencies on implementing the inflation adjustments.
The following table presents the adjustment calculations. The current maximums are found at 12 CFR 747.1001, as adjusted by the final rule that the Board approved in January 2023. This amount is multiplied by the inflation multiplier to calculate the new maximum in the far-right column. Only these adjusted maximum amounts, and not the calculations, will be codified at 12 CFR 747.1001 under this final rule. The adjusted amounts will be effective upon publication in the
On November 28, 2023, the NCUA announced the reinstatement of the program under which the agency assesses CMPs for credit unions failing to submit NCUA Form 5300 Call Reports.
In the 2015 amendments, Congress provided that agencies shall make the required inflation adjustments in 2017 and subsequent years notwithstanding 5 U.S.C. 553,
The Regulatory Flexibility Act (RFA) generally requires that when an agency issues a proposed rule or a final rule pursuant to the APA
As discussed previously, consistent with the APA, the Board has determined for good cause that general notice and opportunity for public comment is unnecessary, and therefore the Board is not issuing a notice of proposed rulemaking.
Accordingly, the Board has concluded that the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply.
Nevertheless, the Board notes that this final rule will not have a significant economic impact on a substantial number of small credit unions because it affects only the maximum amounts of CMPs that may be assessed in individual cases, which are not numerous and generally do not involve assessments at the maximum level. In addition, several of the CMPs are limited to a percentage of a credit union's assets. Finally, in assessing CMPs, the Board generally must consider a party's financial resources.
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency creates a new paperwork burden on regulated entities or modifies an existing burden.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, the NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the Executive order. This final rule adjusts the maximum amounts of certain CMPs that the Board may assess against individuals, entities, and federally insured credit unions, including state-chartered credit unions. However, the final rule does not create any new authority or alter the underlying statutory authorities that enable the Board to assess CMPs. Accordingly, this final rule will not have a substantial direct effect on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The Board has determined that this final rule does not constitute a policy that has federalism implications for purposes of the Executive order.
The Board has determined that this final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999.
For purposes of the Congressional Review Act,
The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-
For the reasons previously stated, the Board is adopting the final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedures thereon are impracticable, unnecessary, or contrary to the public interest.
Civil monetary penalties, Credit unions.
By the National Credit Union Administration Board
For the reasons stated in the preamble, the Board amends 12 CFR part 747 as follows:
12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 104-134; Pub. L. 109-351; Pub. L. 114-74.
(a) The NCUA is required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note)), to adjust the maximum amount of each civil monetary penalty (CMP) within its jurisdiction by the rate of inflation. The following chart displays those adjusted amounts, as calculated pursuant to the statute:
(b) The adjusted amounts displayed in paragraph (a) of this section apply to civil monetary penalties that are assessed after the date the increase takes effect, including those whose associated violation or violations pre-dated the increase and occurred on or after November 2, 2015.
Farm Credit System Insurance Corporation.
Final rule.
This rule implements inflation adjustments to civil money penalties (CMPs) that the Farm Credit System Insurance Corporation (FCSIC) may impose under the Farm Credit Act of 1971, as amended. These adjustments are required by 2015 amendments to the Federal Civil Penalties Inflation Adjustment Act of 1990.
Lynn M. Powalski, General Counsel, Farm Credit System Insurance Corporation, 1501 Farm Credit Drive, McLean, Virginia 22102, (703) 883-4380, TTY (703) 883-4390.
The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act) amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment Act)
FCSIC must enact regulations that annually adjust its CMPs pursuant to the inflation adjustment formula of the amended Inflation Adjustment Act and rounded using a method prescribed by the Inflation Adjustment Act. The new amounts are applicable to penalties assessed on or after January 15, 2024, for conduct occurring on or after November 2, 2015. Agencies do not have discretion in choosing whether to adjust a CMP, by how much to adjust a CMP, or the methods used to determine the adjustment.
First, section 5.65(c) of the Farm Credit Act, as amended (Act), provides that any insured Farm Credit System bank that willfully fails or refuses to file any certified statement or pay any required premium shall be subject to a penalty of not more than $100 for each day that such violations continue, which penalty FCSIC may recover for its use.
FCSIC's current § 1411.1 provides that FCSIC can impose a maximum penalty of $249 per day for a violation under section 5.65(c) and (d) of the Act.
The 2015 Act requires agencies to make annual adjustments for inflation. Annual inflation adjustments are based on the percent change between the October Consumer Price Index for all Urban Consumers (CPI-U) preceding the date of the adjustment, and the prior year's October CPI-U. Consumer Price Index (CPI-U) for the month of October 2023, not seasonally adjusted, the cost-of-living adjustment multiplier for 2024 is 1.03241.
In accordance with the 2015 Act, Federal agencies shall adjust civil monetary penalties “notwithstanding” section 553 of the Administrative Procedures Act. This means that public procedure generally required for agency rulemaking—notice, an opportunity for comment, and a delay in effective date—is not required for agencies to issue regulations implementing the annual adjustment.
Banks, Banking, Civil money penalties, Penalties.
For the reasons stated in the preamble, part 1411 of chapter XIV, title 12 of the Code of Federal Regulations is amended as follows:
12 U.S.C. 2277a-7(10), 2277a-14© and (d); 28 U.S.C. 2461
In accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, a civil money penalty imposed pursuant to section 5.65(c) or (d) of the Farm Credit Act of 1971, as amended, shall not exceed $257 per day for each day the violation continues.
Federal Trade Commission.
Final rule.
The Federal Trade Commission (“FTC” or “Commission”) is implementing adjustments to the civil penalty amounts within its jurisdiction to account for inflation, as required by law.
Effective January 10, 2024.
Marie Choi, Attorney (202-326-3368), Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
The Federal Civil Penalties Inflation Adjustment Act Improvements Act (“FCPIAA”) of 2015
Commission Rule 1.98 sets forth the applicable civil penalty amounts for violations of certain laws enforced by the Commission.
• Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1) (premerger filing notification violations under the Hart-Scott-Rodino Improvements Act)—Increase from $50,120 to $51,744;
• Section 11(
• Section 5(
• Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A) (unfair or deceptive acts or practices)—Increase from $50,120 to $51,744;
• Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B) (unfair or deceptive acts or practices)—Increase from $50,120 to $51,744;
• Section 10 of the FTC Act, 15 U.S.C. 50 (failure to file required reports)—Increase from $659 to $680;
• Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65 (failure by associations engaged solely in export trade to file required statements)—Increase from $659 to $680;
• Section 6(b) of the Wool Products Labeling Act, 15 U.S.C. 68d(b) (failure by wool manufacturers to maintain required records)—Increase from $659 to $680;
• Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e) (failure to maintain required records regarding fur products)—Increase from $659 to $680;
• Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2) (failure to maintain required records regarding fur products)—Increase from $659 to $680;
• Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a) (knowing violations of EPCA § 332, including labeling violations)—Increase from $542 to $560;
• Section 525(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) (recycled oil labeling violations)—Increase from $26,628 to $27,491;
• Section 525(b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(b) (willful violations of recycled oil labeling requirements)—Increase from $50,120 to $51,744;
• Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2) (knowing violations of the Fair Credit Reporting Act)—Increase from $4,705 to $4,857;
• Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, as amended by Public Law 115-263, 21 U.S.C. 355 note (failure to comply with filing requirements)—Increase from $17,719 to $18,293; and
• Section 814(a) of the Energy Independence and Security Act of 2007, 42 U.S.C. 17304 (violations of prohibitions on market manipulation and provision of false information to federal agencies)—Increase from $1,426,319 to $1,472,546.
The FCPIAA, as amended, directs federal agencies to adjust each civil monetary penalty under their jurisdiction for inflation in January of each year pursuant to a cost-of-living adjustment.
The following chart illustrates the application of these adjustments to the civil monetary penalties under the Commission's jurisdiction.
These new penalty levels apply to civil penalties assessed after the effective date of the applicable adjustment, including civil penalties whose associated violation predated the effective date.
The FCPIAA, as amended, directs agencies to adjust civil monetary penalties through rulemaking and to publish the required inflation adjustments in the
Pursuant to the Congressional Review Act (5 U.S.C. 801
Administrative practice and procedure, Penalties, Trade practices.
For the reasons set forth in the preamble, the Federal Trade Commission amends 16 CFR part 1 as follows:
28 U.S.C. 2461 note.
This section makes inflation adjustments in the dollar amounts of civil monetary penalties provided by law within the Commission's jurisdiction. The following maximum civil penalty amounts apply only to penalties assessed after January 10, 2024, including those penalties whose associated violation predated January 10, 2024.
(a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)—$51,744;
(b) Section 11(
(c) Section 5(
(d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)—$51,744;
(e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)—$51,744;
(f) Section 10 of the FTC Act, 15 U.S.C. 50—$680;
(g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65—$680;
(h) Section 6(b) of the Wool Products Labeling Act, 15 U.SC. 68d(b)—$680;
(i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e)—$680;
(j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2)—$680;
(k) Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a)—$560;
(l) Sections 525(a) and (b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) and (b), respectively—$27,491 and $51,744, respectively;
(m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2)—$4,857;
(n) Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, as amended by Public Law 115-263, 21 U.S.C. 355 note—$18,293;
(o) Section 814(a) of the Energy Independence and Security Act of 2007, 42 U.S.C. 17304—$1,472,546; and
(p) Civil monetary penalties authorized by reference to the Federal Trade Commission Act under any other provision of law within the jurisdiction of the Commission—refer to the amounts set forth in paragraphs (c), (d), (e) and (f) of this section, as applicable.
By direction of the Commission.
United States Department of Justice.
Final rule.
This rule amends the United States Department of Justice (“DOJ” or “Department”) Privacy Act implementation regulations, including its Privacy Act record access and amendment procedures. Additionally, this rule includes procedures regarding processing Privacy Act requests to access or amend covered records, as designated under the Judicial Redress Act of 2015, and expands protections on the Department's maintenance of Social Security account numbers, in accordance with the Social Security Number Fraud Prevention Act of 2017.
This final rule is effective February 9, 2024.
Katherine Harman-Stokes, Acting Director, U.S. Department of Justice, Office of Privacy and Civil Liberties, Two Constitution Square, 145 N Street NE, Suite 8W.300, Washington, DC
The Department received no comments in response to the notice of proposed rulemaking for the revision of the Department of Justice Privacy Act regulations published on January 6, 2023, 88 FR 1012, and now finalizes this rule without changes.
The Privacy Act of 1974, as amended, 5 U.S.C. 552a (“Privacy Act”), establishes certain agency responsibilities and individual rights regarding the collection, use, maintenance, and disclosure of records about individuals. To carry out these rights, the Privacy Act requires agencies to promulgate rules that will: (1) establish procedures whereby an individual can be notified if any system of records named by the individual contains a record pertaining to that individual; (2) define reasonable times, places, and requirements for identifying an individual who requests a record or information pertaining to the individual before the agency shall make the record or information available; (3) establish procedures for the disclosure to an individual upon request of a record or information pertaining to the individual, including special procedures, if deemed necessary, for the disclosure to an individual of medical records pertaining to the individual; (4) establish procedures for reviewing a request from an individual concerning the amendment of any record or information pertaining to the individual, for making a determination on the request, for an appeal within the agency of an initial adverse agency determination, and for whatever additional means may be necessary for each individual to exercise fully the individual's rights under the Privacy Act; and (5) establish fees to be charged, if any, to any individual for making copies of records pertaining to the individual, excluding the cost of any search for and review of the record. 5 U.S.C. 552a(f).
The Department's Privacy Act regulations are promulgated at title 28, part 16, subpart D, Code of Federal Regulations. While existing procedures have largely remained the same, certain amendments are required to ensure the Department's Privacy Act regulations reflect changes in the law, as well as in the Department's practices.
The Department continues to process all Privacy Act requests for access to records under the Freedom of Information Act (“FOIA”), 5 U.S.C. 552, following the rules contained in subpart A of part 16, thus giving requesters the benefit of both statutes. The updates to subpart D, in particular 28 CFR 16.41 through 16.45, better align the FOIA and Privacy Act request-for-access procedures. For example, updates to 28 CFR 16.42 align the consultation, referral, and coordination procedures with the FOIA procedures under 28 CFR 16.4, subject to certain deviations to comply with Privacy Act requirements. Updates to 28 CFR 16.42 through 16.43 align the re-routing of misdirected Privacy Act requests for access procedures, the procedures for determining which component is responsible for responding to a request, and the timing for those responses, with the FOIA procedures contained in 28 CFR part 16, subpart A. Finally, similar to the FOIA procedures, components are encouraged, to the extent practicable, to communicate with requesters having access to the internet using electronic means, such as by email or through a web portal.
The changes set forth in this rule update the Department's Privacy Act request-for-access procedures to more accurately reflect existing practices. First, the rules clarify that the Department has a decentralized system for responding to Privacy Act requests for access, by informing requesters that they may make a Privacy Act request for access by writing directly to the component that maintains the record. 28 CFR 16.41(a)(1). The updates remove the requirement that a requester send or deliver requests to Department field offices, and instead requires requesters to send or deliver requests to the component's office at the address listed in appendix I to 28 CFR part 16, or in accordance with the access procedures outlined in the corresponding System of Records Notice. 28 CFR 16.41(a)(2).
Additionally, the updates remove explicit references to in-person Privacy Act requests for access because such requests have become generally impracticable for members of the public. That said, the new procedures explicitly state that a requester may request a record in a particular form or format, 28 CFR 16.41(b), and components will honor a requester's preference where the record is readily reproducible by the component in the form or format requested, 28 CFR 16.43(a). This would continue to permit a member of the public to request access to the member's records in-person when components can provide a copy of the record for in-person inspection.
The rule updates the Department's procedures for requesting amendment or correction of records under the Privacy Act, in accordance with existing practices. First, the rule would explicitly set out the timing for components to respond to a Privacy Act request for amendment or correction. 28 CFR 16.46(b). In accordance with the Privacy Act, 5 U.S.C. 552a(d)(2), components responsible for responding to a Privacy Act request for amendment or correction must acknowledge, in writing, the receipt of the request no later than ten (10) working days after receipt, and must promptly grant or refuse to grant the request. 28 CFR 16.46(b)(1). The rule authorizes components to designate multiple processing tracks that distinguish between simple and more complex Privacy Act requests for amendment or correction, consistent with the Privacy Act request-for-access procedures. 28 CFR 16.46(b)(3). The rule requires components to provide additional content in the response that components must provide when refusing to grant a Privacy Act request for amendment or correction. 28 CFR 16.46(e). Finally, the rule updates the list of records not subject to amendment or correction. 28 CFR 16.46(i).
The rule updates the Department's Privacy Act administrative appeal procedures to align with existing practices. First, the rules clarify that a refusal to grant a Privacy Act request for access or Privacy Act request for amendment or correction is subject to an administrative appeal, and provides examples of what commonly qualifies as a refusal to grant a Privacy Act request. 28 CFR 16.45 through 16.46. The rule clarifies that the Attorney General has designated the Director of the Office of Information Policy, or the Director's designee, with the responsibility for adjudicating Privacy Act access appeals, 28 CFR 16.45(b)(1), and the DOJ Chief Privacy and Civil Liberties Officer (“CPCLO”), or the CPCLO's designee, with the responsibility for adjudicating
The rule updates the Department's Privacy Act record safeguard requirements and employee conduct requirements to reflect updated standards of practice. First, the updates clarify that the Department's administrative, technical, and physical controls in place for its systems of records are consistent with applicable Department and government-wide laws, regulations, policies, and standards, including but not limited to those required for the security of Department information systems. 28 CFR 16.51. Second, the updates require Department employees to read, acknowledge, and agree to abide by the Department of Justice rules of behavior for accessing, collecting, using, maintaining, and protecting personally identifiable information. 28 CFR 16.54.
The Judicial Redress Act of 2015, Public Law 114-126, 130 Stat. 282 (“Judicial Redress Act”), codified at 5 U.S.C. 552a note, extends certain rights of judicial redress established under the Privacy Act to citizens of foreign countries or regional economic organizations certified as a “covered country.” Specifically, the Judicial Redress Act enables a “covered person” (
The Social Security Number Fraud Prevention Act of 2017, Public Law 115-59, 131 Stat. 1152 (“SSN Fraud Prevention Act”), codified at 42 U.S.C. 405 note, requires the Department to promulgate rules that will: (1) specify the circumstances under which inclusion of a Social Security account number on a document sent by mail is necessary; (2) instruct components on the partial redaction of Social Security account numbers where feasible; and (3) require that Social Security account numbers not be visible on the outside of any package sent by mail. This proposal promulgates the above requirements.
Specifically, the updates define the term “necessary” to include only those circumstances in which a component would be unable to comply, in whole or in part, with a legal, regulatory, or policy requirement if prohibited from mailing the full Social Security account number. 28 CFR 16.53(b). The definition further specifies that including the full Social Security account number on a document sent by mail is not necessary if a legal, regulatory, or policy requirement could be satisfied by either partially redacting the Social Security account number or by removing the Social Security number entirely.
The updates also instruct components, where feasible, to partially redact the Social Security account number on any document sent by mail by including no more than the last four digits of the Social Security account number, while prioritizing technical methods to facilitate such redactions. 28 CFR 16.53(d)(3).
Finally, the rule amends 28 CFR part 16, subpart D, throughout to correct minor administrative edits or to reorganize sentences, sections, or paragraphs for readability.
This rule does not raise novel legal or policy issues, nor does it adversely affect the economy, the budgetary impact of entitlements, grants, user fees, loan programs, or the rights and obligations of recipients thereof in a material way. The Department of Justice has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f), and accordingly this rule has not been reviewed by the Office of Information and Regulatory Affairs within the Office of Management and Budget (“OMB”) pursuant to Executive Order 12866.
This rule relates to individuals rather than small business entities. Pursuant to the requirements of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, therefore, the rule will not have a significant economic impact on a substantial number of small entities.
This rule is not a major rule as defined by the Congressional Review Act, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.
The Paperwork Reduction Act of 1995, 44 U.S.C. 3507(d), requires the Department to consider the impact of paperwork and other information collection burdens imposed on the public. The DOJ Certification of Identity Form, DOJ-361, has been assigned OMB No. 1103-0016.
This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
This rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not
This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.
This rule will have no implications for Indian Tribal governments. More specifically, it does not 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. Therefore, the consultation requirements of Executive Order 13175 do not apply.
Administrative practices and procedures, Courts, Freedom of information, Privacy.
Pursuant to the authority vested in me by 5 U.S.C. 552a and 42 U.S.C. 405 note, the Department of Justice amends 28 CFR part 16 as follows:
5 U.S.C. 301, 552, 552a, 553; 28 U.S.C. 509, 510, 534; 31 U.S.C. 3717; 42 U.S.C. 405.
(a)
(2) This subpart contains the procedures that the Department follows when handling covered records maintained by the Department in a system of records, in accordance with the Judicial Redress Act of 2015, 5 U.S.C. 552a note (“Judicial Redress Act”). This subpart should be read together with the Privacy Act and the Judicial Redress Act, which provide additional information about covered records maintained in agency systems of records, including those of the Department.
(3) This subpart contains the procedures that the Department follows when collecting, using, maintaining, or disclosing Social Security account numbers, in accordance with the Privacy Act and the Social Security Number Fraud Prevention Act of 2017, 42 U.S.C. 405 note (“Social Security Number Fraud Prevention Act”). This subpart should be read together with the Privacy Act and the Social Security Number Fraud Prevention Act, which provide additional information about agencies' maintenance of Social Security account numbers, including that of the Department.
(b)
(c)
(d)
(e)
(2) To the extent consistent with the Judicial Redress Act, when making a request for access, amendment, or correction to a covered record, a covered person must follow the procedures outlined in this subpart for making a Privacy Act request for access to a covered record, or a Privacy Act request for amendment or correction of a covered record. A covered person must exhaust the administrative remedies, as outlined in this subpart, before the covered person may bring a cause of action described in paragraph (e)(1) of this section.
(f)
(a)
(2) If a requester cannot determine where within the Department to send the Privacy Act request for access to records, the requester may send it by mail to the FOIA/PA Mail Referral Unit, Justice Management Division, Department of Justice, 950 Pennsylvania Avenue NW, Washington, DC 20530-0001; by email to
(b)
(c)
(d)
(i) Sign the request, and the signature must either be notarized or submitted by the requester under 28 U.S.C. 1746, a law that permits statements to be made under penalty of perjury as a substitute for notarization; or
(ii) When available, use one of the Department's approved digital services, as indicated on the Department's Privacy Act Request web page, to verify the identity of the requester through identity proofing and authentication processes.
(2) While no specific form is required, the requester may obtain forms for this purpose from the FOIA/PA Mail Referral Unit, Justice Management Division, Department of Justice, 950 Pennsylvania Avenue NW, Washington, DC 20530-0001, or obtain the form at
(3) To help identify and locate requested records, a requester may also include, at the requester's option, any additional identifying information which may be helpful in identifying and locating the requested records. Components shall establish appropriate administrative, technical, and physical safeguards to ensure the security and confidentiality of information provided by the requester, and to protect against any anticipated threats, in accordance with § 16.51.
(e)
(i) The identity of the individual who is the subject of the request, by stating the name, current address, date and place of birth, and, at the parent or legal guardian's option, any additional identifying information that may be helpful in identifying and locating the requested records;
(ii) The parent or legal guardian's own identity, as required in paragraph (d) of this section;
(iii) Proof of parentage or legal guardianship, which may be proven by providing a copy of the individual's birth certificate or by providing a court order establishing legal guardianship; and
(iv) That the parent or legal guardian is acting on behalf of that individual in making the request.
(2) Components shall establish appropriate administrative, technical, and physical safeguards to ensure the security and confidentiality of information provided by the parent or
(a)
(b)
(c)
(d)
(e)
(f)
(2) When a component receives a Privacy Act request for access to a record containing information that has been derivatively classified, the receiving component shall consult with or refer the responsibility for responding to that portion of the request to the component or agency that classified the underlying information.
(a)
(b)
(c)
(2) A component may designate multiple processing tracks that distinguish between simple and more complex Privacy Act requests for access, based on the estimated amount of work or time needed to process the request. Among the factors a component may consider are the number of pages involved in processing the request and the need for consultations or referrals. Components may advise requesters of the track into which their request falls and, when appropriate, may offer requesters an opportunity to narrow their request so that it can be placed in a different processing track.
(d)
(e)
(f)
(1) The name and title or position of the person responsible for the adverse determination to the Privacy Act request for access;
(2) A brief statement of the reason(s) for the adverse determination to the Privacy Act request for access, including any Privacy Act exemption(s) applied by the component;
(3) An estimate of the volume of any records or information withheld, if applicable, such as the number of pages or some other reasonable form of estimation, although such an estimate is not required if the volume is otherwise indicated or if providing an estimate
(4) A statement that the adverse determination to the Privacy Act request for access may be appealed under § 16.45, and a description of the requirements set forth in § 16.45.
In processing a Privacy Act request for access, a Privacy Act request for amendment or correction, or a Privacy Act request for accounting, in which information is classified under any applicable Executive order concerning the classification of records, to the extent the requester lacks the appropriate security clearance and fails otherwise to meet all requirements to access the classified record or information, the originating component shall review the information in the record to determine whether it should remain classified. Information determined to no longer require classification shall be de-classified and the record evaluated for an appropriate release to the requester, subject to any applicable exemptions or exceptions. On receipt of any appeal involving classified information, the official responsible for adjudicating the appeal shall take appropriate action to ensure compliance with part 17 of this title.
(a)
(b)
(2) Should the Attorney General exercise the right to respond to a Privacy Act request for access, the Attorney General's decision shall serve as the final action of the Department and will not be subject to a Privacy Act access appeal.
(3) A Privacy Act access appeal ordinarily will not be adjudicated if the request becomes a matter of litigation.
(c)
(2) A decision that upholds a component's adverse determination to the Privacy Act request for access, in whole or in part, shall include a brief statement of the reason(s) for the affirmance, including any Privacy Act exemption applied, and shall provide the requester with notification of the statutory right to file a lawsuit.
(3) A decision that reverses or modifies, in whole or in part, a component's adverse determination to the Privacy Act request for access shall include notice to the requester of the specific reversal or modification. The component(s) shall thereafter further process the request, in accordance with the appeal decision, and respond directly to the requester, as appropriate.
(d)
(a)
(b)
(2) Components must promptly respond to a Privacy Act request for amendment or correction. Components ordinarily will respond to Privacy Act requests for amendment or correction according to their order of receipt. The response time will commence on the date that the request is received by the proper component's office designated to receive requests, but in any event no later than ten (10) working days after the request is first received by any component's office designated by this subpart to receive requests.
(3) A component may designate multiple processing tracks that distinguish between simple and more complex Privacy Act requests for amendment or correction, based on the estimated amount of work or time needed to process the request. Among the factors a component may consider are the number of pages involved in processing the request and the need for consultations or referrals. Components may advise requesters of the track into which their request falls and, when appropriate, may offer requesters an opportunity to narrow their request so that it can be placed in a different processing track.
(c)
(d)
(e)
(1) The name and title or position of the person responsible for the adverse determination to the Privacy Act request for amendment or correction;
(2) A brief statement of the reason(s) for the adverse determination to the Privacy Act request for amendment or correction, including any Privacy Act exemption(s) applied by the component; and
(3) A statement that the adverse determination to the Privacy Act request for amendment or correction may be appealed under paragraph (f) of this section and a description of the requirements set forth in paragraph (f).
(f)
(2) The Chief Privacy and Civil Liberties Officer (“CPCLO”), or a designee of the CPCLO, will act on behalf of the Attorney General on all Privacy Act amendment appeals under this section, unless otherwise directed by the Attorney General.
(3) A Privacy Act amendment appeal ordinarily will not be adjudicated if the request becomes a matter of litigation.
(4) A decision on a Privacy Act amendment appeal must be made in writing. A decision that upholds a component's adverse determination to a Privacy Act request for amendment or correction, in whole or in part, shall include a brief statement of the reason(s) for the affirmance, including any Privacy Act exemption applied, whether the requester has a right to file a Statement of Disagreement, as described in paragraph (g) of this section, and the requester's statutory right to file a lawsuit. A decision that reverses or modifies a component's adverse determination to a Privacy Act request for amendment or correction, in whole or in part, shall notify the requester of the specific reversal or modification. The component shall thereafter further process the request, in accordance with the appeal decision, and respond directly to the requester, as appropriate.
(g)
(h)
(i)
(1) Copies of court records;
(2) Transcripts of testimony given under oath or written statements made under oath;
(3) Transcripts of grand jury proceedings, judicial proceedings, or quasi-judicial proceedings, which are the official record of those proceedings;
(4) Presentence reports, and other records pertaining directly to such reports originating with the courts;
(5) Records in a system of records that have been exempted from amendment and correction, pursuant to 5 U.S.C. 552a(j) or (k), through the applicable regulations in this subpart; and
(6) Records not maintained in a system of records.
(a)
(b)
(c)
(1) Disclosures of information not subject to the Privacy Act;
(2) Disclosures of records not maintained in a system of records;
(3) Disclosures of records maintained in a system of records for which accountings are not required to be kept, including disclosures to those officers and employees of the Department who have a need for the record in the performance of their duties, 5 U.S.C. 552a(b)(1), or disclosures that are required under the FOIA, 5 U.S.C. 552a(b)(2);
(4) Disclosures made to law enforcement agencies for authorized law enforcement activities in response to written requests from those law enforcement agencies specifying the law enforcement activities for which the disclosures are sought; or
(5) Disclosures made from systems of records that have been exempted from the accounting of record disclosure requirements pursuant to the Privacy Act, 5 U.S.C. 552a(j) or (k), through the applicable regulations in this subpart.
(d)
Each component shall preserve all correspondence pertaining to the requests that it receives under this subpart, as well as copies of all requested records, until disposition or destruction is authorized by title 44 of the United States Code or by the National Archives and Records Administration's General Records Schedule 4.2. Records shall not be disposed of while they are the subject of a pending request, appeal, or lawsuit under the Privacy Act.
Components shall charge fees for duplication of records under the Privacy Act in the same way in which they charge duplication fees for responding to FOIA requests under § 16.10. No search or review fee may be charged for any record unless the record has been exempted from access pursuant to exemptions enumerated in the Privacy Act, 5 U.S.C. 552a(j)(2) or (k)(2).
(a)
(b)
(a) Each component shall establish and maintain administrative, technical, and physical controls consistent with applicable Department and Government-wide laws, regulations, policies, and standards, to ensure the security and confidentiality of records, and to protect against reasonably anticipated threats or hazards to their security or integrity, including against any reasonably anticipated unauthorized access, use, or disclosure, which could result in substantial harm, embarrassment, inconvenience, or unfairness to individuals about whom information is maintained. The stringency of these controls shall correspond to the sensitivity of the records that the controls protect. At a minimum, each component shall maintain administrative, technical, or physical controls to ensure that:
(1) Records are protected from unauthorized access, including unauthorized public access;
(2) The physical area in which records are maintained is supervised or appropriately secured to prevent unauthorized persons from having access to them;
(3) Records are protected from damage, loss, or unauthorized alteration or destruction; and
(4) Records are not disclosed to unauthorized persons or to authorized persons for unauthorized purposes in either oral or written form.
(b) Each component shall establish procedures that restrict access to records to only those individuals within the Department who must have access to those records in order to perform their duties and that prevent inadvertent disclosure of records.
(c) The CPCLO, or a designee of the CPCLO, may impose additional administrative, technical, or physical controls to protect records in consultation with the Chief Information Officer and the Director of the Office of Records Management Policy.
(a) Any approved contract for the operation of a system of records shall contain the standard contract terms and conditions in accordance with the Federal Acquisition Regulations in 48 CFR chapter 28 and may also contain additional privacy-related terms and conditions to ensure compliance with the requirements of the Privacy Act for that system of records. The contracting component will be responsible for ensuring that the contractor complies with these contract requirements.
(b) The CPCLO, a designee of the CPCLO, or contracting components may impose additional contract requirements to further protect records.
(a)
(b)
(c)
(1) Any disclosure that is required by Federal statute; or
(2) The disclosure of a Social Security account number to any Federal, State, or local agency maintaining a system of records in existence and operating before January 1, 1975, if such disclosure was required under statute or regulation adopted prior to such date to verify the identity of an individual.
(d)
(2) If the use of the full Social Security account number on a document sent by mail is necessary, the component sending the document shall implement appropriate administrative, technical, and physical safeguards to ensure a reasonable level of security against unauthorized access to, and use, disclosure, disruption, modification, or destruction of, the documents sent by mail.
(3) Where feasible, components should partially redact the Social Security account number on any document sent by mail by including no more than the last four digits of the Social Security account number. Components should prioritize technical methods to redact Social Security account numbers.
(4) Components are prohibited from placing a Social Security account number, whether full or partially redacted, on the outside of any mail.
(e)
(1) The requirements of paragraphs (c) and (d) of this section;
(2) That individuals requested to provide their Social Security account numbers must be informed of:
(i) Whether providing Social Security account numbers is mandatory or voluntary;
(ii) Any statutory or regulatory authority that authorizes the collection of Social Security account numbers; and
(iii) The uses that will be made of the Social Security account numbers; and
(3) That the Department may have other regulations or polices regulating the use, maintenance, or disclosure of Social Security account numbers by which employees must abide.
Each component shall inform its employees and any contractors involved in developing or maintaining a system of records of the provisions of the Privacy Act, including the Privacy Act's civil liability and criminal penalty provisions. Unless otherwise permitted by law, employees and contractors of the Department shall:
(a) Collect from individuals only the information that is relevant and necessary to discharge the responsibilities of the Department;
(b) Collect information about an individual directly from that individual whenever practicable;
(c) Inform each individual asked to supply information for a record pertaining to that individual of:
(1) The legal authority to collect the information and whether providing it is mandatory or voluntary;
(2) The principal purpose for which the Department intends to use the information;
(3) The routine uses the Department may make of the information; and
(4) The effects on the individual, if any, of not providing the information;
(d) Ensure that the component maintains no system of records without public notice and that it notifies appropriate Department officials of the existence or development of any system of records that is not the subject of a current or planned public notice;
(e) Maintain all records that are used by the Department in making any determination about an individual with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to ensure fairness to the individual in the determination;
(f) Except as to disclosures made to an agency or made under the FOIA, make reasonable efforts, prior to disseminating any record about an individual, to ensure that the record is accurate, relevant, timely, and complete;
(g) Maintain no record describing how an individual exercises the individual's First Amendment rights, unless maintaining the record is expressly authorized by statute or by the individual about whom the record is maintained, or is pertinent to and within the scope of an authorized law enforcement activity;
(h) When required by the Privacy Act, maintain an accounting in the specified form of all disclosures of records by the Department to persons, organizations, or agencies;
(i) Maintain and use records with care to prevent the loss or the unauthorized or inadvertent disclosure of a record to anyone;
(j) Notify the appropriate Department official of any record that contains information that the Privacy Act does not permit the Department to maintain; and
(k) Read, acknowledge, and agree to abide by the Department of Justice rules of behavior for accessing, collecting, using, and maintaining Department information.
Nothing in this subpart shall be construed to entitle any person, as of right, to any service or to the disclosure of any record to which such person is not entitled under the Privacy Act, the Social Security Fraud Reduction Act, or the Judicial Redress Act.
Please consult Attachment B of the Department of Justice FOIA Reference Guide for the contact information and a detailed description of the types of records maintained by each Department component. The FOIA Reference Guide is available at
The Department component offices, and any component-specific requirements, for making a FOIA or Privacy Act request are listed in this appendix. The Certification
of Identity form, available at
Coast Guard, Department of Homeland Security (DHS).
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for navigable waters within a 1 nautical mile radius of the M/V GENIUS STAR XI. The safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by a fire onboard the M/V GENIUS STAR XI. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port, Western Alaska.
This rule is effective without actual notice from January 10, 2024, through March 6, 2024. For the purposes of enforcement, actual notice will be used from January 7, 2024, until January 10, 2024.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rule, call or email LT William Mason, Sector Anchorage, AK Waterways Management Division, U.S. Coast Guard; telephone 907-428-4100, email
The Coast Guard is issuing this temporary rule under authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because publishing an NPRM would be impracticable because of the urgent need to establish a safety zone as soon as possible to enhance public safety given the dangers associated with a vessel recently on fire.
Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port, Western Alaska has determined that potential hazards associated with ongoing response activities for a recent vessel fire and the hazardous materials onboard the vessel will be a safety concern for anyone within a 1 nautical mile radius of the M/V GENIUS STAR XI. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone from the potential hazards created by the vessel fire. The duration of the rule is necessary due to the challenges associated with getting materiel and personnel to the vessel given its remote location.
This rule establishes a safety zone from January 7, 2024, through March 6, 2024. The safety zone will cover all navigable waters within 1 nautical mile of the M/V GENIUS STAR XI within the Captain of the Port Zone Western Alaska in the vicinity of the Port of Dutch Harbor, Alaska. The M/V GENIUS STAR XI, IMO 9622710, is a 410 foot General cargo ship with a white superstructure and a black hull.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the safety of emergency operators in the vicinity of the M/V GENIUS STAR XI. The small size and short duration of this safety zone combined with anticipated limited vessel traffic is expected to minimally restrict vessel movements. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via available local means about the zone, and the rule will allow vessels to seek permission under certain conditions to enter the zone from the COTP or a designated representative.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting only 60 days based on the response operations for the fire onboard the M/V GENIUS STAR XI and will prohibit entry within 1 nautical mile of the vessel. It is categorically excluded from further review under paragraph L60d of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative via Marine VHF channel 16 or by calling the USCG Command Center at 907-428-4100. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Department of Veterans Affairs.
Final rule.
The Department of Veterans Affairs (VA) is amending its regulations to adjust for inflation the amount of civil monetary penalties that are within VA's jurisdiction. These adjustments comply with the requirement in the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, to make annual adjustments to the penalties.
This rule is effective January 10, 2024.
Stephanie Li, Assistant Director, Regulations, Legislation, Engagement, and Training, Loan Guaranty Service (26), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 632-8862. (This is not a toll-free number.)
On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act) (Pub. L. 114-74, sec. 701, 129 Stat. 584, 599-600), which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, sec. 5, 104 Stat. 890, 891-892), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The amended statute, codified in a note following 28 U.S.C. 2461, requires agencies to publish annual adjustments for inflation, based on the percentage change between the Consumer Price Index (defined in the statute as the Consumer Price Index for all-urban consumers (CPI-U) published by the Department of Labor) for the month of October preceding the date of the adjustment and the prior year's October CPI-U. 28 U.S.C. 2461 note, secs. 4(a) and (b) and 5(b)(1). This rule implements the 2024 calendar year inflation adjustment amounts.
Under 38 U.S.C. 3710(g)(4)(B), VA is authorized to levy civil monetary penalties against private lenders that originate VA-guaranteed loans if a lender falsely certifies that they have complied with certain credit information and loan processing standards, as set forth by chapter 37, title 38 U.S.C. and part 36, title 38 CFR. Under section 3710(g)(4)(B), any lender who knowingly and willfully makes such a false certification shall be liable to the United States Government for a civil penalty equal to two times the amount of the Secretary's loss on the loan involved or to another appropriate amount, not to exceed $10,000, whichever is greater. VA implemented the penalty amount in 38 CFR 36.4340(k)(1)(i) and (k)(3). On December 19, 2023, the Office of Management and Budget (OMB) issued Circular M-24-07. This circular reflects that the October 2022 CPI-U was 298.012 and the October 2023 CPI-U was 307.671, resulting in an inflation adjustment multiplier of 1.03241. Accordingly, the calendar year 2024 inflation revision imposes an adjustment from $27,018 to $27,894.
Under 31 U.S.C. 3802, VA can impose monetary penalties against any person who makes, presents, or submits a claim or written statement to VA that the person knows or has reason to know is false, fictitious, or fraudulent, or who engages in other covered conduct. The statute permits, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each claim. 31 U.S.C. 3802(a)(1) and (2). VA implemented the penalty amount in 38 CFR 42.3(a)(1)(iv) and (b)(1)(ii). As previously noted, OMB Circular M-24-07 reflects an inflation adjustment multiplier of 1.03241. Therefore, the calendar year 2024 inflation revision imposes an adjustment from $13,508 to $13,946.
Accordingly, VA is revising 38 CFR 36.4340(k)(1)(i) and (3) and 42.3(a)(1)(iv) and (b)(1)(ii) to reflect the 2024 inflationary adjustments for civil monetary penalties assessed or enforced by VA.
The Secretary of Veterans Affairs finds that there is good cause under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity for prior notice and public comment and to publish this rule with an immediate effective date. The statute requires agencies to make annual adjustments for inflation to the allowed amounts of civil monetary penalties “notwithstanding section 553 of title 5, United States Code.” 28 U.S.C. 2461 note, sec. 4(a) and (b). The penalty adjustments, and the methodology used to determine the adjustments, are set by the terms of the statute. VA has no discretion to make changes in those areas. Therefore, an opportunity for prior notice and public comment and a delayed effective date are unnecessary.
Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 (Executive Order on Modernizing Regulatory Review) supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review established in Executive Order 12866 of September 30, 1993 (Regulatory Planning and Review), and Executive Order 13563 of January 18, 2011 (Improving Regulation and Regulatory Review). The Office of Information and Regulatory Affairs has determined that this rulemaking is not a significant regulatory action under Executive Order 12866, as amended by Executive Order 14094. The Regulatory Impact Analysis associated with this rulemaking can be found as a supporting document at
The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable to this rulemaking because notice of proposed rulemaking is not required. 5 U.S.C. 601(2), 603(a), 604(a).
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.
This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).
Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801
Condominiums, Housing, Individuals with disabilities, Loan programs—housing and community development, Loan programs—veterans, Manufactured homes, Mortgage insurance, Reporting and recordkeeping requirements, Veterans.
Administrative practice and procedure, Claims, Fraud, Penalties.
Denis McDonough, Secretary of Veterans Affairs, approved and signed this document on January 4, 2024, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.
For the reasons stated in the preamble, the Department of Veterans Affairs amends 38 CFR parts 36 and 42 as set forth below:
38 U.S.C. 501 and 3720.
Pub. L. 99-509, secs. 6101-6104, 100 Stat. 1874, codified at 31 U.S.C. 3801-3812.
Postal Service
Interim final rule.
This document updates postal regulations by implementing inflation adjustments to civil monetary penalties that may be imposed under consumer protection and mailability provisions enforced by the Postal Service pursuant to the Deceptive Mail Prevention and Enforcement Act and the Postal Accountability and Enhancement Act, as well as the civil monetary penalty that may be imposed by the Postal Service for false claims and statements under the Program Fraud Civil Remedies Act. These adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This document includes the adjustments for 2024 for the statutory civil monetary penalties subject to the 2015 Act and all necessary updates authorized by the 2015 Act for regulatory civil monetary penalties.
Effective January 10, 2024.
Louis DiRienzo, (202) 268-2705,
The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), Public Law 114-74, 129 Stat. 584, amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (1990 Act), Public Law 101-410, 104 Stat. 890 (28 U.S.C. 2461 note), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. Section 3 of the 1990 Act specifically includes the Postal Service in the definition of “agency” subject to its provisions.
Beginning in 2017, the 2015 Act requires the Postal Service to make an annual adjustment for inflation to civil penalties that meet the definition of “civil monetary penalty” under the 1990 Act. The Postal Service must make the annual adjustment for inflation and publish the adjustment in the
The 2015 Act allows the interim final rule and annual inflation adjustments to be published without prior public notice or opportunity for public comment.
Civil monetary penalties may be assessed for postal offenses under sections 106 and 108 of the Deceptive Mail Prevention and Enforcement Act, Public Law 106-168, 113 Stat. 1811, 1814 (
Under 39 U.S.C. 3005(a)(1)-(3), the Postal Service may issue administrative orders prohibiting persons from using the mail to obtain money through false representations or lotteries. Persons who evade, attempt to evade, or fail to comply with an order to stop such prohibited practices may be liable to the United States for a civil penalty under 39 U.S.C. 3012(a). The regulations implemented pursuant to this section currently impose a $85,637 penalty for each mailing less than 50,000 pieces, $171,269 for each mailing of 50,000 to 100,000 pieces, and $17,128 for each additional 10,000 pieces above 100,000 not to exceed $3,425,405. The new penalties will be as follows: a $88,412 penalty for each mailing less than 50,000 pieces, $176,820 for each mailing of 50,000 to 100,000 pieces, and $17,683 for each additional 10,000 pieces above 100,000 not to exceed $3,536,422.
In lieu of or as part of an order issued under 39 U.S.C. 3005(a)(1)-(3), the Postal Service may assess a civil penalty. Currently, the amount of this penalty, set in the implementing regulations to 39 U.S.C. 3012(c)(1), is $42,818 for each mailing that is less than 50,000 pieces, $85,637 for each mailing of 50,000 to 100,000 pieces, and an additional $8,564 for each additional 10,000 pieces above 100,000 not to exceed $1,712,703. The new penalties will be $44,206 for each mailing that is less than 50,000 pieces, $88,412 for each mailing of 50,000 to 100,000 pieces, and an additional $8,842 for each additional 10,000 pieces above 100,000 not to exceed $1,768,212.
Persons may be liable to the United States for a civil penalty under 39 U.S.C. 3012(d) for sending certain deceptive mail matter described in 39 U.S.C. 3001((h)-(k), including:
• Solicitations making false claims of Federal Government connection or approval;
• Certain solicitations for the purchase of a product or service that may be obtained without cost from the Federal Government;
• Solicitations containing improperly prepared “facsimile checks”; and
• Certain solicitations for “skill contests” and “sweepstakes” sent to individuals who, in accordance with 39 U.S.C. 3017(d), have requested that such materials not be mailed to them.
Currently, under the implementing regulations, this penalty is not to exceed $17,128 for each mailing. The new penalty will be $17,683.
Under 39 U.S.C. 3017(g)(2), the Postal Service may impose a civil penalty against a person who provides information for commercial use about individuals who, in accordance with 39 U.S.C. 3017(d), have elected not to receive certain sweepstakes and contest information. Currently, this civil penalty may not exceed $3,425,405 per violation, pursuant to the implementing regulations. The new penalty may not exceed $3,536,422 per violation.
Currently, under 39 U.S.C. 3017(h)(1)(A) and its implementing regulations, any promoter who recklessly mails nonmailable skill contest or sweepstakes matter may be liable to the United States in the amount of $17,128 per violation for each mailing to an individual. The new penalty is $17,683 per violation.
Under 39 U.S.C. 3018(c)(1)(A), the Postal Service may impose a civil penalty payable into the Treasury of the United States on a person who knowingly mails nonmailable hazardous materials or fails to follow postal laws on mailing hazardous materials. Currently, this civil penalty is at least $371, but not more than $147,675 for each violation, pursuant to the implementing regulations. The new penalty is at least $383, but not more than $152,461 for each violation.
In October 1986, Congress enacted the Program Fraud Civil Remedies Act, 31 U.S.C. 3801-3812. The Program Fraud Civil Remedies Act established an administrative remedy against any person who makes, or causes to be made, a false claim or written statement to certain Federal agencies. The Act requires each covered agency to promulgate rules and regulations necessary to implement its provisions. The Postal Service's implementing regulations are found in part 273 of title 39, Code of Federal Regulations. The current penalty amount is $13,508. The new penalty amount is $13,946.
Administrative practice and procedure, Banks, Banking, Credit, Crime, Infants and children, Law enforcement, Penalties, Privacy, Seizures and forfeitures.
Administrative practice and procedure, Claims, Fraud, Penalties.
For the reasons set out in the preamble, the Postal Service amends 39 CFR parts 233 and 273 as follows:
39 U.S.C. 101, 102, 202, 204, 401, 402, 403, 404, 406, 410, 411, 1003, 3005(e)(1), 3012, 3017, 3018; 12 U.S.C. 3401-3422; 18 U.S.C. 981, 983, 1956, 1957, 2254, 3061; 21 U.S.C. 881; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-208, 110 Stat. 3009; Secs. 106 and 108, Pub. L. 106-168, 113 Stat. 1806 (39 U.S.C. 3012, 3017); Pub. L. 114-74, 129 Stat. 584.
31 U.S.C. Chapter 38; 39 U.S.C. 401.
The addition reads as follows:
(b) * * *
(1) * * *
(ii) * * * As adjusted under Public Law 114-74, the penalty is $13,946 per claim.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving changes to
This rule is effective February 9, 2024.
EPA has established a docket for this action under Docket Identification No. EPA-R04-OAR-2023-0097. All documents in the docket are listed on the
Tiereny Bell, Air Regulatory Management Section, Air Planning and Implementation Branch, Air and Radiation Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960. The telephone number is (404) 562-9088. Ms. Bell can also be reached via electronic mail at
On June 15, 2022,
Through a notice of proposed rulemaking (NPRM) published on November 20, 2023 (88 FR 80680), EPA proposed to approve these changes to Regulation 1.06. Section 6,
EPA received one comment on the November 20, 2023, NPRM. The comment expresses both support for and concern about EPA's proposed action to approve the amendments to Jefferson County's emissions reporting requirements.
Jefferson County is subject to the requirements of CAA section 182(a) because it is part of the Louisville, KY-IN moderate nonattainment area for the 2015 8-Hour Ozone National Ambient Air Quality Standards (NAAQS). Regulation 1.06,
As noted in the NPRM, the changes do not reduce the number of facilities required to submit emissions statements. Changing the basis for the exemption from
In this document, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, and as discussed in Section I of this preamble, EPA is finalizing the incorporation by reference of District Regulation 1.06,
EPA is approving the aforementioned changes to Regulation 1.06,
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations.
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA.
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
The District did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving EJ for people of color, low-income populations, and Indigenous peoples.
This action is subject to the Congressional Review Act, and EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as follows:
42 U.S.C. 7401
(c) * * *
Federal Maritime Commission.
Final rule.
The Federal Maritime Commission (Commission) is publishing this final rule to adjust for inflation the civil monetary penalties assessed or enforced by the Commission, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act). The 2015 Act requires that agencies adjust and publish their new civil penalties by January 15 each year.
This rule is effective January 15, 2024.
David Eng, Secretary; Phone: (202) 523-5725; Email:
This rule adjusts the civil monetary penalties assessable by the Commission in accordance with the 2015 Act, which became effective on November 2, 2015. Public Law 114-74, section 701. The 2015 Act further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C. 2461 note), in order to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.
The 2015 Act requires agencies to adjust civil monetary penalties under their jurisdiction by January 15 each year, based on changes in the consumer price index (CPI-U) for the month of October in the previous calendar year. On December 19, 2023, the Office of Management and Budget published guidance stating that the CPI-U multiplier for October 2023 is 1.03241.
Adjustments under the FCPIAA, as amended by the 2015 Act, are not subject to the procedural rulemaking requirements of the Administrative Procedure Act (APA) (5 U.S.C. 553), including the requirements for prior notice, an opportunity for comment, and a delay between the issuance of a final rule and its effective date.
The rule is not a “major rule” as defined by the Congressional Review Act, codified at 5 U.S.C. 801
The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601-612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the APA (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis describing the impact of the rule on small entities or the head of the agency must certify that the rule will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 604-605. As indicated above, this final rule is not subject to the APA's notice and comment requirements, and the Commission is not required to either conduct a regulatory flexibility analysis or certify that the final rule would not have a significant economic impact on a substantial number of small entities.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collection of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).
The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The public may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at
Administrative practice and procedure, Claims, Penalties.
For the reasons stated in the preamble, 46 CFR part 506 is amended as follows:
28 U.S.C. 2461.
(d)
By the Commission.
Federal Communications Commission.
Final rule; announcement of effective and compliance dates.
In this document, the Commission announces that the Office of Management and Budget (OMB) approved the information collection associated with the Commission's
Scott Cinnamon, Cybersecurity and Communications Reliability Division, Public Safety and Homeland Security Bureau, at (202) 418-2319, or email:
This document announces that, on March 25, 2021, OMB approved, for a period of three years, the information collection requirements relating to mandatory submarine outage reporting rules contained in the Commission's
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received final OMB approval on March 25, 2021, for the information collection requirements contained in the modifications to the Commission's rules in 47 CFR parts 1 and 4. Notice of that approval was published in the
Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.
No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-1283.
The foregoing notification is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.
The total annual reporting burdens and costs for the respondents are as follows:
Federal Communications Commission.
Final rule.
In this document, the Federal Communications Commission (Commission) adopts rules to implement the Low Power Protection Act (LPPA or Act), which was enacted on January 5, 2023. The LPPA provides certain low power television (LPTV) stations with a limited window of opportunity to apply for primary spectrum use status as Class A television stations. With limited exceptions, the rules adopted herein are consistent with the Commission's proposals in the Notice of Proposed Rulemaking (
Effective February 9, 2024; except for 47 CFR 73.6030(c) and 73.6030(d) which are delayed. The Federal Communications Commission will publish a document announcing the effective dates of the delayed amendments in the
Kim Matthews, Media Bureau, Policy Division, 202-418-2154,
This is a summary of the Commission's Report and Order (
This document contains new or modified information collection requirements. The Commission, as part
1. In this
2. The Commission created the LPTV service in 1982 to bring television service, including local service, to viewers “otherwise unserved or underserved” by existing full power service providers. From its creation, the LPTV service has been a secondary service, meaning LPTV stations may not cause interference to, and must accept interference from, full power television stations as well as certain land mobile radio operations and other primary services.
3. Currently, there are 1,889 licensed LPTV stations. These stations operate in all states and territories, and serve both rural and urban audiences. LPTV stations were required to complete a transition from analog to digital operation in 2021, and all such stations must now operate in digital format.
4. In 2000, the Commission established a Class A television service to implement the Community Broadcasters Protection Act of 1999 (CBPA). The CBPA allowed certain qualifying LPTV stations to become Class A stations, which provided those television stations primary status, and thereby a measure of interference protection from full service television stations.
5. Congress sought in the CBPA to provide certain LPTV stations a limited window of opportunity to apply for primary status. Among other matters, the CBPA set out certain certification and application procedures for LPTV licensees seeking Class A designation and prescribed the criteria for eligibility for a Class A license. Specifically, under the CBPA, an LPTV station could qualify for Class A status if, during the 90 days preceding the date of enactment of the statute, the station: (1) broadcast a minimum of 18 hours per day; (2) broadcast an average of at least 3 hours per week of programming produced within the market area served by the station, or the market area served by a group of commonly controlled low-power stations that carry common local programming produced within the market area served by such group; and (3) was in compliance with the Commission's requirements for LPTV stations.
6. In addition to these qualifying requirements, the CBPA gave the Commission discretion to determine that the public interest, convenience, and necessity would be served by treating a station as a qualifying LPTV station under the CBPA, or that a station should be considered to qualify for such status for other reasons determined by the Commission, even if it did not meet the qualifying requirements in the statute discussed above. In implementing the CBPA, the Commission concluded, however, that it would not accept applications under the CBPA from LPTV stations that did not meet the statutory criteria and that did not file a certification of eligibility by the statutory deadline, absent compelling circumstances.
7. Like the CBPA, the LPPA is intended “to provide low power TV stations with a limited window of opportunity” to apply for primary status as a Class A television licensee. The Act gives LPTV stations one year to apply for a Class A license, from the date that the Commission's rules implementing the LPPA become effective.
8. The LPPA sets forth eligibility criteria for stations seeking Class A designation that are similar to the eligibility criteria under the CBPA, as discussed above. Specifically, the LPPA provides that the Commission “may approve” an application submitted by an LPTV station if the station meets the following eligibility criteria:
• during the 90-day period preceding the date of enactment of the LPPA (
• the station satisfies the Class A service requirements in 47 CFR 73.6001(b)-(d) or any successor regulation;
• the station demonstrates that it will not cause any interference as described in the CBPA;
• during that same 90-day period, the station complied with the Commission's requirements for LPTV stations; and
• as of January 5, 2023, the station operated in a Designated Market Area with not more than 95,000 television households.
Finally, the LPPA requires that a station accorded Class A status must (1) be subject to the same license terms and renewal standards as a license for a full power television broadcast station (except as otherwise expressly provided in the LPPA) and (2) remain in compliance with the LPPA's eligibility criteria during the term of the station's license.
9. The rules and policies we adopt herein to implement the LPPA are largely consistent with the Commission's proposals in the
10. For the reasons discussed in the
11. The LPPA provides LPTV stations a period of one year to apply for Class A status. The LPPA also provides that the Commission may approve an application for Class A status if the application satisfies section 336(f)(2) of the Communications Act of 1934, as amended (which codifies the CBPA). This provision sets forth the eligibility criteria for stations qualifying for Class A status, and gives the Commission discretion to determine whether a station that does not satisfy such criteria should otherwise qualify. In the
12. As proposed in the
13. We adopt the tentative conclusion in the
14. KXPI-LD, Pocatello, Idaho, retransmits the signal of full power station KIDK, (Fox), Idaho Falls, Idaho. According to NPG, “KXPI-LD is classified in the Commission's records as a digital TV translator station, but it functions more like an originator of programming than a translator; it is a primary Fox Network affiliate providing local news, weather, and information to the Pocatello community. . . .” NPG argues that KXPI-LD meets all of the LPPA's eligibility requirements, “except its ministerial technical classification as a digital TV translator.” NPG also argues that “the FCC's `low power TV station' definition, Rule 74.701(k), encompasses stations like KXPI-LD that retransmit the signal of a TV broadcast station, and does not require program origination.” NPG urges that the Commission permit stations like KXPI-LD to be eligible for the Class A filing opportunity afforded by the LPPA.
15. We affirm our tentative conclusion that translator stations are unlikely to satisfy the eligibility requirements of the LPPA. NPG's argument that the Commission's definition of a low power TV station encompasses stations like KXPI-LD that retransmit the signal of a TV broadcast station, and does not require program origination, is misplaced. LPAA section 2(c)(2)(B)(i)(I) requires that, during the 90-day eligibility period, an LPTV station must broadcast an average of at least three hours per week of programming produced within the market area served by the station. As a translator station, KXPI-LD retransmits the programming feed it obtains from full-power station KIDK. NPG does not demonstrate that the KIDK programming that KXPI-LD is retransmitting was produced in KXPI-LD's own noise limited contour. Thus, NPG has failed to demonstrate how a translator station like KXPI-LD can satisfy the requirement of LPAA section 2(c)(2)(B)(i)(I) to broadcast an average of at least three hours per week of programming produced within the market area served by the translator station.
16. As noted above, the LPPA sets forth eligibility criteria for stations seeking Class A designation that are similar to the eligibility criteria under the CBPA. Specifically, the LPPA provides that the Commission “may approve” an application submitted by an LPTV station if the station, during the 90-day period preceding the date of enactment of the LPPA, meets the same requirements in section 336(f)(2) of the Communications Act applicable to stations that qualified for Class A status under the CBPA, “including the requirements . . . with respect to locally produced programming.” Thus, to qualify for Class A status, in the 90 days preceding the LPPA's January 5, 2023 effective date (between October 7, 2022 and January 5, 2023) an LPTV station must have met the following requirements: (1) the station must have broadcast a minimum of 18 hours per day; (2) the station must have broadcast an average of at least 3 hours per week of programming that was produced within the market area served by such station, or the market area served by a group of commonly controlled LPTV stations that carry common local programming produced within the market area served by such group; and (3) the station must have been in compliance with the Commission's requirements applicable to LPTV stations. In addition, from and after the date of its application for a Class A license, the station must be in compliance with the Commission's operating rules for full power television stations.
17.
18. We decline at this time to adopt REC's proposal that we clarify the definition of “locally produced programming” for purposes of the LPPA. REC advocates that the Commission (1) clarify that local programming may not be repeated within the same week to satisfy the weekly locally produced programming requirement; (2) require that local programming be aired on the same programming stream and not aggregated among multiple streams to meet the minimum requirement; (3) clarify that the local programming requirement need only be satisfied on one programming stream of simultaneous video and related audio programming; and (4) require that the programming must be simultaneous video and audio programming where the audio portion of the programming directly relates to the video portion of the programming. We note that the concerns underlying REC's proposed clarifications are equally applicable to existing Class A stations under the CBPA. Any change to the definition of “locally produced programming” to address such concerns should be considered with respect to all Class A stations, not just those stations that convert to Class A status pursuant to the LPPA. Because the Commission did not propose to revise the definition of locally produced programming for purposes of Class A stations generally, we find REC's proposals to be outside the scope of this proceeding. Accordingly, we decline to pursue REC's proposals at this time.
19.
20. We also require that all stations that receive a Class A license under the LPPA comply with all Class A regulations, as proposed in the
21. Finally, we conclude that the requirement to comply with the Class A eligibility requirements begins when an LPTV station's Class A application is submitted. The LPPA states that the “Commission may approve an application [for Class A status] if the low power TV station submitting the application—satisfies—paragraphs (b), (c), and (d) of 73.6001,” which contains the requirements that Class A stations broadcast a minimum of 18 hours per day and broadcast an average of at least three hours per week of locally produced programming each quarter. This requirement is distinct from the separate statutory obligation to meet the eligibility requirements during the 90-day eligibility period of October 7, 2022 to January 5, 2023. No commenter addressed this issue. As discussed above, the LPPA requires that applicants continue to broadcast a minimum of 18 hours per day and to broadcast an average of at least three hours per week of locally produced programming each quarter after a Class A license is granted. We conclude that the language quoted above would be rendered superfluous if we did not interpret it to apply these requirements from the time the Class A application is submitted. Thus, the requirement to broadcast a minimum of 18 hours per day and broadcast an average of at least three hours per week of locally produced programming each quarter begins when a station submits an application to convert to Class A status pursuant to the LPPA and continues for the term of the Class A license.
22.
23. Consistent with the tentative conclusion in the
24. Apart from a statement regarding the station's operating schedule and a list of locally produced programming aired during the 90 days preceding January 5, 2023, we decline to mandate the form of the additional documents that applicants submit to support their applications. We recognize that some applicants may not have specific types of documentation, or that a specific document may not be in a form that supports the applicant's certification. In light of that, we permit each applicant to provide with the station's application, documents that it has that best support its certification that it met the operational and programming requirements of the LPPA during the eligibility period. The Commission staff will review the documentation on a case-by-case basis and determine if it will need to request additional documentation before it can make a determination whether to grant a Class A license application.
25.
26. We conclude that, similar to the Commission's approach in implementing the CBPA, we will allow deviation from the strict statutory eligibility criteria in the LPPA only where such deviations are insignificant or where there are compelling circumstances such that equity mandates a deviation. We will consider any such requests on a case-by-case basis. As the Commission tentatively concluded in the
27. We adopt the tentative conclusions in the
28. NPG generally supports that the current interference rule rather than the old analog rule should be applied. However, NPG would have us provide flexibility to permit interference beyond what is permitted in our current rules. NPG states that the Commission should adopt a “flexible approach” granting applications that would violate the rule “if the applicant is able to demonstrate no actual interference, acceptance by the licensee subject to such interference, or other showing that the public interest is served by the applicant obtaining Class A status.” We are not persuaded to grant this request. First, we do not anticipate any scenarios where interference is predicted, but the applicant is able to demonstrate a lack of actual interference. The TVStudy software used to prepare and process applications already considers the elements likely to cause actual interference. Specifically, TVStudy makes full use of terrain shielding and Longley-Rice terrain propagation methods to determine whether a proposed facility is predicted to cause impermissible interference consistent with OET Bulletin No. 69, accounting for unique characteristics such as terrain. For this reason, we do not believe there would be merit in accepting other methods of determining interference. Second, the Commission's rules already allow applicants and licensees to accept interference subject to Commission approval, and the Media Bureau will continue to consider and accept interference agreements in processing Class A license applications filed pursuant to the LPPA without the need to adopt additional flexibility. Finally, we reject NPG's suggestion that waiver of television broadcast interference protection rules should be considered upon undefined public interest arguments. NPG provides no example—and we can imagine none—where we have granted an LPTV station primary status that caused interference to a licensed (or previously proposed) broadcast facility entitled to protection. Congress clearly intended the LPPA to apply to a discrete number of LPTV stations that satisfy specific eligibility requirements and protect existing stations and previously proposed facilities. We decline to adopt an exception that would contravene this careful balance.
29.
30. We decline to adopt as both unnecessary and outside the scope of this proceeding, the County of Los Angeles, California's request that we incorporate by reference comments in a proceeding requested by the Land
31. The LPPA requires that an LPTV station must demonstrate that as of January 5, 2023, the station “operates in a Designated Market Area with not more than 95,000 television households.” The LPPA further states that DMA means “(A) a [DMA] determined by Nielsen Media Research or any successor entity; or (B) a [DMA] under a system of dividing television broadcast station licensees into local markets using a system that the Commission determines is equivalent to the system established by Nielsen Media Research . . .” The Commission sought comment in the
32.
33.
34. While the LPPA defines a DMA as “a [DMA] determined by Nielsen Media Research or any successor entity,” it also provides that a DMA may be “a [DMA] under a system of dividing television broadcast station licensees into local markets using a system that the Commission determines is equivalent to the system established by Nielsen Media Research. . . .” The
35. We decline to use market classifications based on Census data, such as MSAs or RSAs, for purposes of implementing the LPPA. The LPPA specifically directs that the Commission use either Nielsen DMAs or a “system of dividing television broadcast station licensees into local markets” that is “equivalent” to the system established by Nielsen. Census classifications are not a “system of dividing television broadcast station licensees into local markets,” and thus cannot be considered “equivalent” to the system established by Nielsen. Such
36. We also reject RCC's argument that our proposed adoption of an approach that limits eligibility under the LPPA to LPTV stations in DMAs with no more than 95,000 TV households is “nonsensical.” This commenter points out that, under this approach, only thirty-three Nielsen DMAs would qualify under the LPPA (in other words, only 33 out of 210 DMAs), amounting to only 1.6% of TV households. As a result, RCC argues that Congress could not have intended for use of Nielsen DMAs. We disagree. Congress clearly intended that eligibility under the LPPA be limited, as the Act expressly provides that eligibility is limited to DMAs with no more than 95,000 TV households. As NAB notes, elevating LPTV stations from secondary to primary Class A status comes at the cost of “effectively block[ing] coverage and service improvements by full-service stations.” In turn, Congress sought to allow certain LPTV stations in only smaller DMAs (not all small LPTV stations or all LPTV stations in rural areas) to elevate to primary status. We decline to read the LPPA as promoting maximum elevation of LPTV stations to primary status; rather, Congress adopted a much more balanced approach.
37. We also decline to use Comscore data as an alternative to the Nielsen Local TV Report for purposes of the LPPA, as advocated by several commenters. Like Nielsen, Comscore is a media analytics company that produces a list of television market areas and a calculation of the number of television households in each market. Because Comscore, like Nielsen, has a proprietary market system and requires payment for access, LPTVBA opposes adoption of Comscore data as an alternative local market system. REC comments that “the debate and development of any alternate system” to Nielsen “would further delay the process and could defeat the purpose of limiting” Class A conversions to rural areas, but also noted that Comscore markets “could be” comparable to Nielsen DMAs and should be considered. While it is possible that Comscore could qualify as a “system of dividing television broadcast station licensees into local markets” that is “equivalent” to the system established by Nielsen, we find that the record here does not establish any material benefits from use of Comscore either in addition to or in place of Nielsen for purposes of the LPPA, nor that any such benefits would outweigh the uncertainty and delay that use of Comscore would have in issuing Class A licenses. In particular, we are concerned about introducing uncertainty into the application review process, in the instance where Comscore's market classifications may differ from Nielsen. The lack of a compelling reason to select a different classification system instead of Nielsen weighs in favor of our decision to use Nielsen Local TV Report for purposes of implementing the LPPA.
38. Finally, we decline the requests of three other commenters who argue in favor of other alternatives to Nielsen DMAs. One Ministries advocates that the Commission should allow LPTV stations to demonstrate that the geographic area covered by the station is a subset of a larger DMA, such as when the station is in a hyphenated DMA,
39. We will not require LPPA Class A stations to continue to comply with the 95,000 TV household threshold if the population in the station's DMA later exceeds the threshold amount as a result of changes beyond the station's control. In the
40. All of the commenters that addressed this interpretation of the Act oppose requiring LPPA Class A stations to remain in DMAs that meet the threshold population restriction, at least without some exceptions. Commenters argue that if the Commission were to require continued compliance with this restriction, licensees would lack regulatory certainty to pursue Class A status, which would undermine the economic viability of Class A stations, and thus fewer stations would likely apply. Commenters also contend that it would be unfair to mandate that a station lose rights through no fault of its own if the population rose above the 95,000 threshold, that the proposal would limit a licensee's ability to modify its facilities in the future (
41. Commenters also argue that the Commission proposal is not required by the statute. Section 2(c)(2)(B)(iii) of the LPPA states that the Commission may approve conversion to Class A status for a station that “as of the date of enactment of this Act, operates in a Designated Market Area with not more than 95,000 television households.” While section 2(c)(3)(B) directs that a converted station is to remain in compliance with paragraph (2)(B)'s eligibility requirements during the term of the license, commenters argue that this language is properly interpreted to require only that a station be in compliance with the DMA requirement “as of” the date of enactment of the LPPA (January 5, 2023), not that it remain in compliance going forward.
42. We are persuaded by commenters who argue that a station, once it converts to Class A status pursuant to the LPPA, should not later lose eligibility and therefore be required to revert back to an LPTV station with secondary spectrum use status as a result of changes beyond the station's control. We conclude that Congress did not intend for LPPA Class A stations to subsequently lose Class A status through DMA changes that are not under the control of the station because Congress intended that the communities served by these stations should be able to rely on uninterrupted service from the stations. Accordingly, we will not require LPPA Class A stations to continue to comply with the 95,000 TV household threshold if the population in the station's DMA later exceeds the threshold amount as a result of changes beyond the station's control. We find that the reasons that a station may no longer comply with the 95,000 TV household threshold that are beyond the station's control are a change in the market size through (1) population growth, (2) a change in the boundaries of a qualifying DMA such that the population of the DMA exceeds 95,000 television households, or (3) the merger of a qualifying DMA into another DMA such that the combined DMA exceeds the threshold amount.
43. We will not, however, permit an LPPA Class A station to maintain its Class A status if the size of the market it serves increases beyond 95,000 television households due to a change within the control of the station. For instance, we will not permit an LPPA Class A station to initiate a move to a different DMA that does not meet the LPPA population threshold at the time of the move and still retain the station's Class A status. We interpret the LPPA's continuing compliance mandate to preclude changes under the station's control that would result in the station's failure to continue to comply with the Act's eligibility requirements. We disagree with those commenters who argue that the Act requires only that the station be in compliance with the DMA requirement as of January 5, 2023. This reading of section 2(c)(2)(B)(iii) of the Act is contrary to the language of section 2(c)(3)(B), which does not carve out the 95,000 TV household threshold requirement from the continuing compliance mandate. Such an interpretation would also undercut the purpose of the LPPA to strengthen protections for TV stations located in smaller DMAs, as it would allow LPPA Class A stations to move to DMAs with larger populations, depriving smaller DMAs of the service these stations provide. We also disagree with those commenters who argue that stations that convert to Class A status pursuant to the LPPA should be able to initiate later site changes that would move the station to a non-qualifying DMA. The language of the Act requires that LPPA Class A licensees remain in compliance with the LPPA's eligibility requirements for the term of their Class A license, including the requirement that they operate in a DMA with no more than 95,000 TV households. Apart from changes to a DMA that are beyond the station's control, we will require that LPPA Class A licensees remain in compliance with the 95,000 TV household threshold DMA requirement for the term of the Class A license. Stations that choose to pursue a non-compliant modification may do so, but will have to surrender their Class A status.
44. As proposed in the
45. When implementing the CBPA, the Commission required stations applying for Class A status to provide local public notice of applications for Class A status “since the nature of the underlying service is changing from secondary to primary service.” We adopt the tentative conclusion in the
46.
47. We affirm the tentative conclusion in the
48. The Commission sought comment in the
49. We appreciate receiving REC's views and have considered them fully in reaching our conclusions herein regarding implementation of the LPPA. We acknowledge the importance of advancing diversity, equity, inclusion, and accessibility, and we believe that the LPPA itself, and the rules we adopt herein implementing the Act, will advance those aims.
50.
51. Consistent with the Commission's conclusion in the Class A MO&O with respect to LPTV stations that converted to Class A status pursuant to the CBPA, we conclude that LPPA Class A stations have the same limited must carry rights as LPTV stations, and do not have the same must carry rights as full service commercial television stations under § 76.55(c) of our rules. In the Class A MO&O, the Commission noted that both the language of the CBPA and the accompanying legislative history were silent with respect to the issue of must carry rights for Class A stations, and concluded that it is unlikely that Congress intended to grant Class A stations full must carry rights, equivalent to those of full-service stations, without addressing the issue directly. The LPPA is also silent with respect to the issue of must carry rights, and we similarly conclude therefore that Congress did not intend to confer full must carry rights on LPPA Class A stations equivalent to full-service stations, and different from the rights of CBPA Class A stations, without addressing the issue in the statute. Instead, we find that Congress intended LPPA Class A stations to have the same limited must carry rights as LPTV stations and existing Class A stations. We thus decline to revise our rules as RCC and Dockins request.
52.
53. The language of the Act clearly requires that, to be eligible for Class A status, a station must operate in a DMA with no more than 95,000 TV households. The Act also requires that LPPA Class A licensees remain in compliance with the LPPA's eligibility requirements for the term of their Class A license. With respect to the Act's DMA limit, as discussed above we interpret this continuing compliance mandate to preclude changes under the station's control that would result in the station's failure to continue to comply with the 95,000 TV household threshold.
54. As discussed above, while the LPPA provides the Commission with additional discretion in evaluating applicants for Class A status to treat a station as qualifying for Class A status if “the Commission determines that the public interest, convenience, and necessity would be served” or “for other reasons determined by the Commission,” we are not inclined to expand the specific qualifying criteria beyond that identified in the statute. The LPPA provides precise and limited eligibility criteria and, except in very limited circumstances, we are not inclined to expand the specific qualifying criteria beyond that identified in the statute. Accordingly, we decline to adopt a blanket
55. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Act Analysis (IRFA) was incorporated into the
56. The
57. We conclude that the application window will be limited to the one year application window contemplated by the Act, and that an application filed for Class A status must demonstrate that the LPTV station operated in a Designated Market Area (DMA) with not more than 95,000 television households on January 5, 2023. We also conclude that LPTV stations that convert to Class A status under the LPPA must comply with the interference protection standards set forth in section 336(f)(7) of the Communications Act of 1934, with the exception of those provisions that are now obsolete given the transition of all television stations from analog to digital operations. We apply the Commission's recently updated definition of an LPTV station for purposes of determining which stations are eligible for Class A status under the LPPA and codify in our rules the eligibility criteria set forth in the LPPA. We also implement provisions of the LPPA which provide that licenses issued to stations that convert to Class A status are subject to full power television station license terms and renewal standards, with certain exceptions. We conclude that LPPA Class A licensees are required to remain in compliance with the LPPA's eligibility requirements for the term of their Class A license, except for changes to the station's DMA that are beyond the control of the station. We conclude that we will evaluate Class A status to eligible LPTV stations as a modification of the station's existing license, and that nothing in the LPPA, or our rules implementing the Act, affects the Commission's work related to the Broadcast Incentive Auction. We address how our actions implementing the LPPA advance diversity, equity, inclusion, and accessibility and, lastly, decline to amend our rules to afford Class A stations must carry rights equivalent to full service stations and decline to adopt a de minimis exception to the LPPA's DMA eligibility requirement.
58. There were no comments filed that specifically addressed the rules and policies proposed in the IRFA.
59. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.
60. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.
61. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. Below, we provide a description of such small entities, as well as an estimate of the number of such small entities, where feasible.
62.
63. As of September 30, 2023, there were 1,377 licensed commercial television stations. Of this total, 1,258 stations (or 91.4%) had revenues of $41.5 million or less in 2022, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Television Database (BIA) on October 4, 2023, and therefore these licensees qualify as small entities under the SBA definition. In addition, the Commission estimates as of September 30, 2023, there were 383 licensed noncommercial educational (NCE) television stations, 380 Class A TV stations, 1,889 LPTV stations and 3,127 TV translator stations. The Commission, however, does not compile and otherwise does not have access to financial information for these television broadcast stations that would permit it to determine how many of these stations qualify as small entities under the SBA small business size standard. Nevertheless, given the SBA's large annual receipts threshold for this industry and the nature of these television station licensees, we presume that all of these entities qualify as small entities under the above SBA small business size standard.
64. In implementing the LPPA, the
65. Beginning on the date of its application for a Class A license and thereafter, a station “must be in compliance with the Commission's operating rules for full-power stations.” We will apply to small and other applicants for Class A status under the LPPA, and to stations that are awarded Class A licenses under that statute, all Part 73 regulations except for those that cannot apply for technical or other reasons. For example, Class A stations must comply with the requirements for informational and educational children's programming, the political programming and political file rules, and the public inspection file rule.
66. The LPPA requires that a station that converts to Class A status pursuant to the statute continue to meet the eligibility requirements of the LPPA during the term of the station's Class A license. To be eligible under the LPPA, in addition to other eligibility requirements, section 2(c)(2)(B)(iii) of the Act requires an LPTV station must “as of the date of enactment” of the LPPA operate in a DMA with not more than 95,000 television households. Section 2(c)(3)(B) of the Act, however, requires that stations that convert to Class A status under the LPPA “remain in compliance” with paragraph (2)(B) “during the term of the license.” We interpret section 2(c)(3)(B) to require that stations that convert to Class A status, including small entities, remain in DMAs with not more than 95,000 television households in order to maintain their Class A status except for situations in which the population in the station's DMA later exceeds the threshold amount through (1) population growth, (2) a change in the boundaries of a qualifying DMA such that the population of the DMA exceeds 95,000 television households, or (3) the merger of a qualifying DMA into another DMA such that the combined DMA exceeds the threshold amount. LPPA Class A stations will not be permitted to initiate a move to a different DMA with more than 95,000 television households at the time of the move and still retain their Class A status. In addition, licensed Class A stations must also continue to meet the minimum operating requirements for Class A stations. Licensees unable to continue to meet the minimum operating requirements for Class A television stations, or that elect to revert to low power television status, must promptly notify the Commission, in writing, and request a change in status. The
67. The
68. We expect the actions we have taken in the
69. The RFA requires an agency to provide, “a description of the steps the agency has taken to minimize the significant economic impact on small entities . . . including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.”
70. Through comments provided by interested parties during the rulemaking proceeding, the Commission considered various proposals from small and other entities. The adopted rules reflect the Commission's efforts to implement the LPPA by balancing the Commission's proposals in the
71. Additionally, in the
72. The Commission will send a copy of the
73.
74.
75. Accordingly,
76.
77.
78.
79.
80.
Television.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:
47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.
(c)
(7) Applications by LPTV stations to convert to Class A status pursuant to the Low Power Protection Act. The applicant shall both broadcast on-air announcements and give online notice.
(a)
(b)
(1) Have been operating in a DMA with not more than 95,000 television households as of January 5, 2023;
(2) Have been broadcasting a minimum of 18 hours per day between October 7, 2022 and January 5, 2023;
(3) Have been broadcasting a minimum of at least three hours per week of locally produced programming between October 7, 2022 and January 5, 2023;
(4) Have been operating in compliance with the Commission's requirements applicable to low power television stations between October 7, 2022 and January 5, 2023;
(5) Be in compliance with the Commission's operating rules for full-power television stations from and after the date of its application for a Class A license; and
(6) Demonstrate that the Class A station for which the license is sought will not cause any interference described in 47 U.S.C. 336(f)(7).
(c)
(d)
(e)
(f)
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a state implementation plan (SIP) revision submitted by the Department of Energy and Environment (DOEE) of the District of Columbia (the District). This revision removes requirements for gasoline vapor recovery systems (VRS) installed on gasoline dispensers, the purpose of which are to capture emissions from vehicle refueling operations, otherwise known as vacuum-assist Stage II vapor recovery. Specifically, this action would remove from the approved SIP prior-approved Stage II requirements applicable to new and existing gasoline dispensing facilities (GDFs). The District of Columbia SIP revision includes a demonstration that removal of Stage II requirements is consistent with the Clean Air Act (CAA) and meets all relevant EPA guidance.
Written comments must be received on or before February 9, 2024.
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2022-0790 at
Adam Lewis, Planning & Implementation Branch (3AD30), Air & Radiation Division, U.S. Environmental Protection Agency, Region III, 1600 John F. Kennedy Boulevard, Philadelphia, PA 19103. The telephone number is (215) 814-2026. Mr. Adam Lewis can also be reached via electronic mail at
On May 18, 2022, the DOEE submitted a revision to its SIP. That SIP submittal consisted of the District's revised Stage II vapor recovery regulations at Title 20 of the District of Columbia Municipal Regulations (DCMR) Chapter 7 Section 705 Stage II Vapor Recovery. DOEE revised its regulations so new GDFs would no longer be required to install and operate Stage II VRS. Additionally, DOEE's revisions allow existing GDFs to decommission existing vacuum-assist Stage II VRS on or after January 1, 2022. The SIP submittal includes a demonstration that removal of Stage II VRS in the District will not interfere with any requirements concerning attainment or reasonable progress of any national ambient air quality standard (NAAQS), or any other applicable requirement of the CAA.
Stage II vapor recovery is an emission control system that is installed on gasoline dispensing equipment at GDFs for the purpose of capturing fuel vapor that would otherwise be released from vehicle gas tanks into the atmosphere during vehicle refueling. Stage II VRS installed on dispensing equipment capture these refueling emissions at the dispenser and route the refueling vapors back to the GDF's underground storage tank, preventing volatile organic compounds (VOCs) in the vapors from escaping to the atmosphere. Beginning in 1998, newly manufactured gasoline-burning cars and trucks have been equipped with on-board refueling vapor recovery (ORVR) systems that utilize carbon canisters installed directly on the vehicle to capture refueling vapors in the vehicle to be later routed to the vehicle's engine for combustion during engine operation.
The 1990 CAA amendments initially required implementation of both Stage II VRS and ORVR systems. Section 182(b)(3) of the CAA required areas classified as moderate and above ozone nonattainment to implement Stage II vapor recovery programs, while CAA section 184(b)(2) required states in the Northeast Ozone Transport Region (OTR) to implement Stage II vapor recovery or comparable measures. CAA section 202(a)(6) required EPA to promulgate regulations for ORVR for light-duty cars and trucks (passenger vehicles); EPA adopted these requirements in a final action published in the
During the phase-in of ORVR controls, Stage II vapor recovery has provided VOC emission reductions in ozone nonattainment areas and in certain areas of the OTR. Congress recognized that ORVR systems and Stage II VRS would over time become largely redundant technologies acting to capture the same pollutants; Congress therefore provided authority in the 1990 CAA amendments for EPA to allow states to remove Stage II vapor recovery programs from their SIPs upon EPA making a finding that ORVR is in “widespread use.”
The District of Columbia was classified as Serious nonattainment for the 1-hour 1979 ozone NAAQS in the
On May 18, 2022, DOEE submitted a SIP revision to EPA consisting of these state regulatory revisions adopted by DOEE, along with a demonstration of the emission impacts of the changes to Stage II requirements on affected areas in the District. This SIP revision includes DOEE's revised rules that allow new GDFs that commence construction on or after January 1, 2022, to do so without installing and operating a Stage II VRS and allow existing GDFs to commence the decommissioning of vacuum-assist Stage II VRS on or after January 1, 2022. DOEE's revised rules incorporate by reference requirements and procedures for decommissioning Stage II VRS based on Chapter 14 of the Petroleum Equipment Institute's “Recommended Practices for Installation and Testing of Vapor-Recovery Systems at Vehicle-Fueling Sites,” 2009 edition, PEI/RP300-09. The revised rules also incorporate by reference requirements and procedures for the maintenance and periodic testing of Stage II VRS for GDFs that opt to continue operating them.
The October 28, 2021, SIP revision also includes a demonstration supporting the discontinuation of the Stage II vapor recovery program in the District. This demonstration, discussed in greater detail below, shows that by 2019 the overall emissions benefits associated with the Stage II vapor recovery program, operated in conjunction with ORVR, are overwhelmed by an emissions disbenefit caused by ORVR incompatibility with the vacuum-assist type Stage II VRS equipment in use at GDFs. DOEE's analysis followed the EPA's “Guidance on Removing Stage II Gasoline Vapor Control Programs from State Implementation Plan and Assessing Comparable Measures” (EPA-457/B-12-001; August 7, 2012), hereafter referred to as EPA's Stage II Removal Guidance. The DOEE analysis demonstrates that within the District the increasing prevalence of ORVR-equipped vehicles and the continued operation of the Stage II vapor recovery program results in increased VOC emissions due to the incompatibility between the vacuum-assist type Stage II VRS equipment and ORVR. The DOEE further demonstrates that allowing the decommissioning of all Stage II VRS equipment on or after January 1, 2022, will result in additional emissions decreases, especially when combined with the increasing prevalence of ORVR-equipped vehicles.
EPA has reviewed the District's revised 20 DCMR 705, Stage II Vapor Recovery, and accompanying SIP narrative, and has concluded that DOEE's October 28, 2021 SIP revision is consistent with EPA's widespread use rule (77 FR 28772, May 16, 2012) and with EPA's Stage II Removal Guidance.
In reviewing the proposed SIP revision, the EPA must ensure that: (1) in accordance with CAA section 110(l)'s non-interference requirement, DOEE has demonstrated that the proposed action would not interfere with attainment of the National Ambient Air Quality Standards or reasonable further progress towards attainment of any NAAQS; (2) in accordance with CAA section 184(b)(2)'s “comparable measures” requirement, that the proposed action would achieve comparable or greater emission reductions than the gasoline vapor recovery requirements contained in CAA section 182(b)(3); and (3) that the proposed action satisfies the anti-backsliding requirements of CAA section 193. As discussed below, the EPA finds that DOEE has demonstrated widespread use of ORVR systems throughout the motor vehicle fleet and that implementation of the rule in the proposed SIP revision would comply with CAA sections 110(l), 184(b)(2), and 193.
CAA section 110(l) specifies that the EPA cannot approve a SIP revision if it would interfere with attainment of NAAQS or reasonable further progress towards attainment, or any other applicable requirement of the CAA; this is commonly referred to as “anti-backsliding.” DOEE's SIP revision submittal includes a CAA section 110(l) anti-backsliding demonstration (based on equations provided in the EPA's Stage II Removal Guidance)
Because the District is located in the northeast OTR, under CAA section 184(b)(2)'s “comparable measures” requirement, the State must show that its SIP revisions include control measures capable of achieving emission reductions comparable to those achievable through Stage II Systems under CAA section 182(b)(3). As stated in the EPA's Stage II Removal Guidance, “the comparable measures requirement is satisfied if phasing out a Stage II control program in a particular area is estimated to have no, or a de minimis, incremental loss of area-wide emission control.” DOEE conducted a comparable measure analysis in accordance with the EPA's Stage II Removal Guidance that shows that phasing out the Stage II program would result in zero or de minimis incremental loss of area wide emission control satisfying the comparable measures requirement of CAA section 184(b)(2).
DOEE's analysis indicates there would be a negative increment value for the potential loss of emission reductions from removing Stage II vapor recovery systems starting in 2019 at a range of at least −0.0425 and at most −0.0348. The EPA's Stage II Removal Guidance explains that a zero or negative increment value indicates that removing Stage II, “would not increase the refueling emissions inventory because the higher efficiency from ORVR and the incompatibility emissions offset the increment due to non-ORVR vehicles being refueled at Stage II GDFs.”
EPA is proposing to approve the District's October 28, 2021 SIP revision for districtwide removal of Stage II vapor recovery requirements, which removes requirements for gasoline vapor recovery systems installed on gasoline dispensers, the purpose of which are to capture emissions from vehicle refueling operations, otherwise known as vacuum-assist Stage II vapor recovery. Specifically, EPA is proposing to approve Title 20 of the District of Columbia Municipal Regulations (DCMR) Chapter 7 Section 705 Stage II Vapor Recovery, and incorporate it into the District's SIP. EPA is proposing to approve this SIP revision because it meets all applicable requirements of the Clean Air Act and relevant EPA guidance and because approval of this SIP revision will not interfere with attainment or maintenance of the ozone NAAQS. EPA is soliciting public comments on the issues discussed in this action or other relevant matters. These comments will be considered before taking final action.
In this document, EPA proposes to include in a final rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the District of Columbia's revisions to 20 DCMR 705, Removal of Stage II Vapor Recovery from Gasoline Dispensing Facilities in the District; (effective date April 8, 2022), as explained in Section II of this preamble. EPA has made, and will continue to make, these materials generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act;
Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
The DOEE did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this proposed rulemaking. Due to the nature of the proposed action being taken here, this proposed rulemaking is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
In addition, this proposed rulemaking, to remove the District's Stage II vapor recovery requirements from the SIP does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the District, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve the Regional Haze State Implementation Plan (SIP) revision submitted by Massachusetts on July 22, 2021, as satisfying applicable requirements under the Clean Air Act (CAA) and EPA's Regional Haze Rule for the program's second implementation period. Massachusetts' SIP submission addresses the requirement that states must periodically revise their long-term strategies for making reasonable progress towards the national goal of preventing any future, and remedying any existing, anthropogenic impairment of visibility, including regional haze, in mandatory Class I Federal areas. The SIP submission also addresses other applicable requirements for the second implementation period of the regional haze program. The EPA is taking this action pursuant to sections 110 and 169A of the Clean Air Act.
Written comments must be received on or before February 9, 2024.
Submit your comments, identified by Docket ID No. EPA-R01-OAR-2023-0185 at
David Mackintosh, U.S. Environmental Protection Agency, Region 1, Air Quality Branch, 5 Post Office Square—Suite 100, (Mail code 5-MO), Boston, MA 02109-3912, at 617-918-1584, or by email at
On July 22, 2021, supplemented on June 15, 2022, the Massachusetts Department of Environmental Protection (MassDEP) submitted a revision to its SIP to address regional haze for the second implementation period. MassDEP made this SIP submission to satisfy the requirements of the CAA's regional haze program pursuant to CAA sections 169A and 169B and 40 CFR 51.308. The EPA is proposing to find that the Massachusetts regional haze SIP submission for the second implementation period meets the applicable statutory and regulatory requirements and thus proposes to approve Massachusetts' submission into its SIP.
In the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's mandatory Class I Federal areas, which include certain national parks and wilderness areas.
Regional haze is visibility impairment that is produced by a multitude of anthropogenic sources and activities which are located across a broad geographic area and that emit pollutants that impair visibility. Visibility impairing pollutants include fine and coarse particulate matter (PM) (
To address regional haze visibility impairment, the 1999 RHR established an iterative planning process that requires both states in which Class I areas are located and states “the emissions from which may reasonably be anticipated to cause or contribute to any impairment of visibility” in a Class I area to periodically submit SIP revisions to address such impairment. CAA 169A(b)(2);
Much of the focus in the first implementation period of the regional haze program, which ran from 2007 through 2018, was on satisfying states' BART obligations. First implementation period SIPs were additionally required to contain long-term strategies for making reasonable progress toward the national visibility goal, of which BART is one component. The core required elements for the first implementation period SIPs (other than BART) are laid out in 40 CFR 51.308(d). Those provisions required that states containing Class I areas establish reasonable progress goals (RPGs) that are measured in deciviews and reflect the anticipated visibility conditions at
States were also required to calculate baseline (using the five-year period of 2000-2004) and natural visibility conditions (
On January 10, 2017, the EPA promulgated revisions to the RHR, (82 FR 3078, January 10, 2017), that apply for the second and subsequent implementation periods. The 2017 rulemaking made several changes to the requirements for regional haze SIPs to clarify States' obligations and streamline certain regional haze requirements. The revisions to the regional haze program for the second and subsequent implementation periods focused on the requirement that States' SIPs contain long-term strategies for making reasonable progress towards the national visibility goal. The reasonable progress requirements as revised in the 2017 rulemaking (referred to here as the 2017 RHR Revisions) are codified at 40 CFR 51.308(f). Among other changes, the 2017 RHR Revisions adjusted the deadline for States to submit their second implementation period SIPs from July 31, 2018, to July 31, 2021, clarified the order of analysis and the relationship between RPGs and the long-term strategy, and focused on making visibility improvements on the days with the most
The EPA provided guidance to the states for their second implementation period SIP submissions in the preamble to the 2017 RHR Revisions as well as in subsequent, stand-alone guidance documents. In August 2019, the EPA issued “Guidance on Regional Haze State Implementation Plans for the Second Implementation Period” (“2019 Guidance”).
As previously explained in the 2021 Clarifications Memo, EPA intends the second implementation period of the regional haze program to secure meaningful reductions in visibility impairing pollutants that build on the significant progress states have achieved to date. The Agency also recognizes that analyses regarding reasonable progress
Because the air pollutants and pollution affecting visibility in Class I areas can be transported over long distances, successful implementation of the regional haze program requires long-term, regional coordination among multiple jurisdictions and agencies that have responsibility for Class I areas and the emissions that impact visibility in those areas. In order to address regional haze, states need to develop strategies in coordination with one another, considering the effect of emissions from one jurisdiction on the air quality in another. Five regional planning organizations (RPOs),
The Mid-Atlantic/Northeast Visibility Union (MANE-VU), one of the five RPOs described above, is a collaborative effort of state governments, tribal governments, and various Federal agencies established to initiate and coordinate activities associated with the management of regional haze, visibility, and other air quality issues in the Mid-Atlantic and Northeast corridor of the United States. Member states and tribal governments (listed alphabetically) include Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Penobscot Indian Nation, Rhode Island, St. Regis Mohawk Tribe, and Vermont. The Federal partner members of MANE-VU are EPA, U.S. National Parks Service (NPS), U.S. Fish and Wildlife Service (FWS), and U.S. Forest Service (USFS).
Under the CAA and EPA's regulations, all 50 states, the District of Columbia, and the U.S. Virgin Islands are required to submit regional haze SIPs satisfying the applicable requirements for the second implementation period of the regional haze program by July 31, 2021. Each state's SIP must contain a long-term strategy for making reasonable progress toward meeting the national goal of remedying any existing and preventing any future anthropogenic visibility impairment in Class I areas. CAA 169A(b)(2)(B). To this end, § 51.308(f) lays out the process by which states determine what constitutes their long-term strategies, with the order of the requirements in § 51.308(f)(1) through (f)(3) generally mirroring the order of the steps in the reasonable progress analysis
In addition to satisfying the requirements at 40 CFR 51.308(f) related to reasonable progress, the regional haze SIP revisions for the second implementation period must address the requirements in § 51.308(g)(1) through (5) pertaining to periodic reports describing progress towards the RPGs, 40 CFR 51.308(f)(5), as well as requirements for FLM consultation that apply to all visibility protection SIPs and SIP revisions. 40 CFR 51.308(i).
A state must submit its regional haze SIP and subsequent SIP revisions to the EPA according to the requirements applicable to all SIP revisions under the CAA and EPA's regulations. See CAA
The first step in developing a regional haze SIP is for a state to determine which Class I areas, in addition to those within its borders, “may be affected” by emissions from within the state. In the 1999 RHR, the EPA determined that all states contribute to visibility impairment in at least one Class I area, 64 FR at 35720-22, and explained that the statute and regulations lay out an “extremely low triggering threshold” for determining “whether States should be required to engage in air quality planning and analysis as a prerequisite to determining the need for control of emissions from sources within their State.”
A state must determine which Class I areas must be addressed by its SIP by evaluating the total emissions of visibility impairing pollutants from all sources within the state. While the RHR does not require this evaluation to be conducted in any particular manner, EPA's 2019 Guidance provides recommendations for how such an assessment might be accomplished, including by, where appropriate, using the determinations previously made for the first implementation period. 2019 Guidance at 8-9. In addition, the determination of which Class I areas may be affected by a state's emissions is subject to the requirement in 40 CFR 51.308(f)(2)(iii) to “document the technical basis, including modeling, monitoring, cost, engineering, and emissions information, on which the State is relying to determine the emission reduction measures that are necessary to make reasonable progress in each mandatory Class I Federal area it affects.”
As part of assessing whether a SIP submission for the second implementation period is providing for reasonable progress towards the national visibility goal, the RHR contains requirements in § 51.308(f)(1) related to tracking visibility improvement over time. The requirements of this subsection apply only to states having Class I areas within their borders; the required calculations must be made for each such Class I area. EPA's 2018 Visibility Tracking Guidance
The RHR requires tracking of visibility conditions on two sets of days: the clearest and the most impaired days. Visibility conditions for both sets of days are expressed as the average deciview index for the relevant five-year period (the period representing baseline or current visibility conditions). The RHR provides that the relevant sets of days for visibility tracking purposes are the 20% clearest (the 20% of monitored days in a calendar year with the lowest values of the deciview index) and 20% most impaired days (the 20% of monitored days in a calendar year with the highest amounts of anthropogenic visibility impairment).
Using the data for the set of most impaired days only, states must plot a line between visibility conditions in the baseline period and natural visibility conditions for each Class I area to determine the URP—the amount of visibility improvement per year, measured in deciviews, that would need to be achieved during each implementation period in order to achieve natural visibility conditions by the end of 2064. The URP is used in later steps of the reasonable progress analysis for informational purposes and to provide a non-enforceable benchmark against which to assess a Class I area's rate of visibility improvement.
EPA's 2018 Visibility Tracking Guidance can be used to help satisfy the 40 CFR 51.308(f)(1) requirements, including in developing information on baseline, current, and natural visibility conditions, and in making optional adjustments to the URP. In addition, the 2020 Data Completeness Memo provides recommendations on the data completeness language referenced in § 51.308(f)(1)(i) and provides updated natural conditions estimates for each Class I area.
The core component of a regional haze SIP submission is a long-term strategy that addresses regional haze in each Class I area within a state's borders and each Class I area that may be affected by emissions from the state. The long-term strategy “must include the enforceable emissions limitations, compliance schedules, and other
Section 51.308(f)(2)(i) provides the requirements for the four-factor analysis. The first step of this analysis entails selecting the sources to be evaluated for emission reduction measures; to this end, the RHR requires states to consider “major and minor stationary sources or groups of sources, mobile sources, and area sources” of visibility impairing pollutants for potential four-factor control analysis. 40 CFR 51.308(f)(2)(i). A threshold question at this step is which visibility impairing pollutants will be analyzed. As EPA previously explained, consistent with the first implementation period, EPA generally expects that each state will analyze at least SO
While states have the option to analyze
EPA explained in the 2021 Clarifications Memo that each state has an obligation to submit a long-term strategy that addresses the regional haze visibility impairment that results from emissions from within that state. Thus, source selection should focus on the in-state contribution to visibility impairment and be designed to capture a meaningful portion of the state's total contribution to visibility impairment in Class I areas. A state should not decline to select its largest in-state sources on the basis that there are even larger out-of-state contributors. 2021 Clarifications Memo at 4.
Thus, while states have discretion to choose any source selection methodology that is reasonable, whatever choices they make should be reasonably explained. To this end, 40 CFR 51.308(f)(2)(i) requires that a state's SIP submission include “a description of the criteria it used to determine which sources or groups of sources it evaluated.” The technical basis for source selection, which may include methods for quantifying potential visibility impacts such as emissions divided by distance metrics, trajectory analyses, residence time analyses, and/or photochemical modeling, must also be appropriately documented, as required by 40 CFR 51.308(f)(2)(iii).
Once a state has selected the set of sources, the next step is to determine the emissions reduction measures for those sources that are necessary to make reasonable progress for the second implementation period.
EPA's 2021 Clarifications Memo provides further guidance on what constitutes a reasonable set of control options for consideration: “A reasonable four-factor analysis will consider the full range of potentially reasonable options for reducing emissions.” 2021 Clarifications Memo at 7. In addition to add-on controls and other retrofits (
After identifying a reasonable set of potential control options for the sources it has selected, a state then collects information on the four factors with regard to each option identified. The EPA has also explained that, in addition to the four statutory factors, states have flexibility under the CAA and RHR to reasonably consider visibility benefits as an additional factor alongside the four statutory factors.
As explained above, § 51.308(f)(2)(i) requires states to determine the emission reduction measures for sources that are necessary to make reasonable progress by considering the four factors. Pursuant to § 51.308(f)(2), measures that are necessary to make reasonable progress towards the national visibility goal must be included in a state's long-term strategy and in its SIP.
As with source selection, the characterization of information on each of the factors is also subject to the documentation requirement in § 51.308(f)(2)(iii). The reasonable progress analysis, including source selection, information gathering, characterization of the four statutory factors (and potentially visibility), balancing of the four factors, and selection of the emission reduction measures that represent reasonable progress, is a technically complex exercise, but also a flexible one that provides states with bounded discretion to design and implement approaches appropriate to their circumstances. Given this flexibility, § 51.308(f)(2)(iii) plays an important function in requiring a state to document the technical basis for its decision making so that the public and the EPA can comprehend and evaluate the information and analysis the state relied upon to determine what emission reduction measures must be in place to make reasonable progress. The technical documentation must include the modeling, monitoring, cost, engineering, and emissions information on which the state relied to determine the measures necessary to make reasonable progress. This documentation requirement can be met through the provision of and reliance on technical analyses developed through a regional planning process, so long as that process and its output has been approved by all state participants. In addition to the explicit regulatory requirement to document the technical basis of their reasonable progress determinations, states are also subject to the general principle that those determinations must be reasonably moored to the statute.
The four statutory factors (and potentially visibility) are used to determine what emission reduction
Because the air pollution that causes regional haze crosses state boundaries, § 51.308(f)(2)(ii) requires a state to consult with other states that also have emissions that are reasonably anticipated to contribute to visibility impairment in a given Class I area. Consultation allows for each state that impacts visibility in an area to share whatever technical information, analyses, and control determinations may be necessary to develop coordinated emission management strategies. This coordination may be managed through inter- and intra-RPO consultation and the development of regional emissions strategies; additional consultations between states outside of RPO processes may also occur. If a state, pursuant to consultation, agrees that certain measures (
Reasonable progress goals “measure the progress that is projected to be achieved by the control measures states have determined are necessary to make reasonable progress based on a four-factor analysis.” 82 FR at 3091. Their primary purpose is to assist the public and the EPA in assessing the reasonableness of states' long-term strategies for making reasonable progress towards the national visibility goal. See 40 CFR 51.308(f)(3)(iii)-(iv). States in which Class I areas are located must establish two RPGs, both in deciviews—one representing visibility conditions on the clearest days and one representing visibility on the most anthropogenically impaired days—for each area within their borders. 40 CFR 51.308(f)(3)(i). The two RPGs are intended to reflect the projected impacts, on the two sets of days, of the emission reduction measures the state with the Class I area, as well as all other contributing states, have included in their long-term strategies for the second implementation period.
For the second implementation period, the RPGs are set for 2028. Reasonable progress goals are not enforceable targets, 40 CFR 51.308(f)(3)(iii); rather, they “provide a way for the states to check the projected outcome of the [long-term strategy] against the goals for visibility improvement.” 2019 Guidance at 46. While states are not legally obligated to achieve the visibility conditions described in their RPGs, § 51.308(f)(3)(i) requires that “[t]he long-term strategy and the reasonable progress goals must provide for an improvement in visibility for the most impaired days since the baseline period and ensure no degradation in visibility for the clearest days since the baseline period.” Thus, states are required to have emission reduction measures in their long-term strategies that are projected to achieve visibility conditions on the most impaired days that are better than the baseline period and show no degradation on the clearest days compared to the clearest days from the baseline period. The baseline period for the purpose of this comparison is the baseline visibility condition—the annual average visibility condition for the period 2000-2004. See 40 CFR 51.308(f)(1)(i), 82 FR at 3097-98.
So that RPGs may also serve as a metric for assessing the amount of progress a state is making towards the national visibility goal, the RHR requires states with Class I areas to compare the 2028 RPG for the most impaired days to the corresponding point on the URP line (representing visibility conditions in 2028 if visibility
The 2017 RHR, 2019 Guidance, and 2021 Clarifications Memo also explain that projecting an RPG that is on or below the URP based on only on-the-books and/or on-the-way control measures (
Section 51.308(f)(6) requires states to have certain strategies and elements in place for assessing and reporting on visibility. Individual requirements under this subsection apply either to states with Class I areas within their borders, states with no Class I areas but that are reasonably anticipated to cause or contribute to visibility impairment in any Class I area, or both. A state with Class I areas within its borders must submit with its SIP revision a monitoring strategy for measuring, characterizing, and reporting regional haze visibility impairment that is representative of all Class I areas within the state. SIP revisions for such states must also provide for the establishment of any additional monitoring sites or equipment needed to assess visibility conditions in Class I areas, as well as reporting of all visibility monitoring data to the EPA at least annually. Compliance with the monitoring strategy requirement may be met through a state's participation in the Interagency Monitoring of Protected Visual Environments (IMPROVE) monitoring network, which is used to measure visibility impairment caused by air pollution at the 156 Class I areas covered by the visibility program. 40 CFR 51.308(f)(6), (f)(6)(i), (f)(6)(iv). The IMPROVE monitoring data is used to determine the 20% most anthropogenically impaired and 20% clearest sets of days every year at each Class I area and tracks visibility impairment over time.
All states' SIPs must provide for procedures by which monitoring data and other information are used to determine the contribution of emissions from within the state to regional haze visibility impairment in affected Class I areas. 40 CFR 51.308(f)(6)(ii), (iii). Section 51.308(f)(6)(v) further requires that all states' SIPs provide for a statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment in any Class I area; the inventory must include emissions for the most recent year for which data are available and estimates of future projected emissions. States must also include commitments to update their inventories periodically. The inventories themselves do not need to be included as elements in the SIP and are not subject to EPA review as part of the Agency's evaluation of a SIP revision.
Separate from the requirements related to monitoring for regional haze purposes under 40 CFR 51.308(f)(6), the RHR also contains a requirement at § 51.308(f)(4) related to any additional monitoring that may be needed to address visibility impairment in Class I areas from a single source or a small group of sources. This is called “reasonably attributable visibility impairment.”
Section 51.308(f)(5) requires a state's regional haze SIP revision to address the requirements of paragraphs 40 CFR 51.308(g)(1) through (5) so that the plan revision due in 2021 will serve also as a progress report addressing the period since submission of the progress report for the first implementation period. The regional haze progress report requirement is designed to inform the public and the EPA about a state's implementation of its existing long-term strategy and whether such implementation is in fact resulting in the expected visibility improvement. See 81 FR 26942, 26950 (May 4, 2016), (82 FR at 3119, January 10, 2017). To this end, every state's SIP revision for the second implementation period is required to describe the status of implementation of all measures included in the state's long-term strategy, including BART and reasonable progress emission reduction measures from the first implementation period, and the resulting emissions reductions. 40 CFR 51.308(g)(1) and (2).
A core component of the progress report requirements is an assessment of changes in visibility conditions on the clearest and most impaired days. For second implementation period progress reports, § 51.308(g)(3) requires states
Similarly, states must provide analyses tracking the change in emissions of pollutants contributing to visibility impairment from all sources and activities within the state over the period since they submitted their first implementation period progress reports. See 40 CFR 51.308(g)(4), (f)(5). Changes in emissions should be identified by the type of source or activity. Section 51.308(g)(5) also addresses changes in emissions since the period addressed by the previous progress report and requires states' SIP revisions to include an assessment of any significant changes in anthropogenic emissions within or outside the state. This assessment must include an explanation of whether these changes in emissions were anticipated and whether they have limited or impeded progress in reducing emissions and improving visibility relative to what the state projected based on its long-term strategy for the first implementation period.
Clean Air Act section 169A(d) requires that before a state holds a public hearing on a proposed regional haze SIP revision, it must consult with the appropriate FLM or FLMs; pursuant to that consultation, the state must include a summary of the FLMs' conclusions and recommendations in the notice to the public. Consistent with this statutory requirement, the RHR also requires that states “provide the [FLM] with an opportunity for consultation, in person and at a point early enough in the State's policy analyses of its long-term strategy emission reduction obligation so that information and recommendations provided by the [FLM] can meaningfully inform the State's decisions on the long-term strategy.” 40 CFR 51.308(i)(2). Consultation that occurs 120 days prior to any public hearing or public comment opportunity will be deemed “early enough,” but the RHR provides that in any event the opportunity for consultation must be provided at least 60 days before a public hearing or comment opportunity. This consultation must include the opportunity for the FLMs to discuss their assessment of visibility impairment in any Class I area and their recommendations on the development and implementation of strategies to address such impairment. 40 CFR 51.308(i)(2). In order for the EPA to evaluate whether FLM consultation meeting the requirements of the RHR has occurred, the SIP submission should include documentation of the timing and content of such consultation. The SIP revision submitted to the EPA must also describe how the state addressed any comments provided by the FLMs. 40 CFR 51.308(i)(3). Finally, a SIP revision must provide procedures for continuing consultation between the state and FLMs regarding the state's visibility protection program, including development and review of SIP revisions, five-year progress reports, and the implementation of other programs having the potential to contribute to impairment of visibility in Class I areas. 40 CFR 51.308(i)(4).
MassDEP submitted its regional haze SIP for the first implementation period to the EPA on July 28, 2009, and supplemented it on December 9, 2010, March 2, 2011, and December 7, 2011. The EPA approved Massachusetts' first implementation period regional haze SIP submission on September 19, 2013 (78 FR 57487). EPA's approval included, but was not limited to, the portions of the plan that address the reasonable progress requirements, Massachusetts' implementation of Best Available Retrofit Technologies on eligible sources, and Massachusetts' 310 CMR 7.05 “Fuels All Districts;” Sulfur in Fuels rule. The requirements for regional haze SIPs for the first implementation period are contained in 40 CFR 51.308(d) and (e). 40 CFR 51.308(b). Pursuant to 40 CFR 51.308(g), Massachusetts was also responsible for submitting a five-year progress report as a SIP revision for the first implementation period, which it did on February 9, 2018. The EPA approved the progress report into the Massachusetts SIP on March 29, 2019 (84 FR 11885).
In accordance with CAA sections 169A and the RHR at 40 CFR 51.308(f), on July 22, 2021,
The following sections describe Massachusetts' SIP submission, including analyses conducted by MANE-VU and Massachusetts' determinations based on those analyses, Massachusetts' assessment of progress made since the first implementation period in reducing emissions of visibility impairing pollutants, and the visibility improvement progress at nearby Class I areas. This notice also contains EPA's evaluation of Massachusetts' submission against the requirements of the CAA and RHR for the second implementation period of the regional haze program.
Section 169A(b)(2) of the CAA requires each state in which any Class I area is located or “the emissions from which may reasonably be anticipated to cause or contribute to any impairment of visibility” in a Class I area to have a plan for making reasonable progress toward the national visibility goal. The RHR implements this statutory requirement at 40 CFR 51.308(f), which provides that each state's plan “must address regional haze in each mandatory Class I Federal area located within the State and in each mandatory Class I Federal area located outside the State that may be affected by emissions from within the State,” and (f)(2), which requires each state's plan to include a long-term strategy that addresses regional haze in such Class I areas. Massachusetts has no mandatory Class I Federal area within its borders.
For the second implementation period, MANE-VU performed technical analyses
One MANE-VU analysis used for contribution assessment was CALPUFF air dispersion modeling. The CALPUFF model was used to estimate sulfate and nitrate formation and transport in MANE-VU and nearby regions originating from large electric generating unit (EGU) point sources and other large industrial and institutional sources in the eastern and central United States. Information from an initial round of CALPUFF modeling was collated for the 444 EGUs that were determined to warrant further scrutiny based on their emissions of SO
Large Electrical Generating Units and Industrial Sources.” MANE-VU TSC. April 4, 2017.
Of the six sources, four were units at Brayton Point Power Station, a coal-fired EGU facility (ORISPL 01619; MassDEP AQID 1200061). All four units at Brayton Point ceased operation in 2017 and the permits were revoked on December 6, 2017.
Canal Station (ORISPL 1599; MassDEP AQID 1200054) operates the other EGU (Unit 1) identified by the modelling, and its greatest impact was to Acadia. Unit 1 is a Babcock & Wilcox boiler that fires No. 6 fuel oil, with a permitted maximum sulfur content of 0.5 percent by weight (wt%) as the sole operational fuel, with No. 2 fuel oil as a startup/ignition fuel. Unit 1 has an approximate maximum heat input rate of 5,083 million British thermal units per hour (MMBtu/hr) and a generating capacity of approximately 560 (net) megawatts (MW). Unit 1 is equipped with low-NO
The emission controls installed on Unit 1 are necessary to achieve compliance with the applicable emission limits under 310 CMR 7.29 and Air Plan Approvals (
Massachusetts concludes that visibility impairing pollutants from Canal Unit 1 are currently well controlled; however, Canal has committed to purchasing 0.3 wt% No. 6 fuel oil following the depletion of the current fuel inventory. Therefore, Massachusetts asked the owner of Canal Unit 1 to submit an application to modify its plan approval to require use of 0.3% sulfur content oil. Massachusetts approved the plan application May 26, 2022, and submitted the plan approval to EPA for approval into the SIP as a supplement to the Regional Haze SIP Revision for Massachusetts on June 15, 2022. If Canal Unit 1 should operate above 10% capacity factor in the future, existing NO
The only Massachusetts industrial source deemed by MANE-VU to have the potential for significant impact on Class I areas in 2011 was Solutia, Inc., which at the time was a coal- and oil-fired chemical plant. Solutia's greatest impact was to Lye Brook, and it ranked 14th in the list of industrial/institutional sources that had potential impacts on Lye Brook, based primarily on its SO
As explained above, the EPA concluded in the 1999 RHR that “all [s]tates contain sources whose emissions are reasonably anticipated to contribute to regional haze in a Class I area,” 64 FR at 35721, and this determination was not changed in the 2017 RHR. Critically, the statute and regulation both require that the cause-or-contribute assessment consider all emissions of visibility-impairing pollutants from a state, as opposed to emissions of a particular pollutant or emissions from a certain set of sources. Consistent with these requirements, the 2019 Guidance makes it clear that “all types of anthropogenic sources are to be included in the determination” of whether a state's emissions are reasonably anticipated to result in any visibility impairment. 2019 Guidance at 8.
The screening analyses on which MANE-VU relied are useful for certain purposes. MANE-VU used information from its technical analysis to rank the largest contributing states to sulfate and nitrate impairment in the seven MANE-VU Class I areas and three additional, nearby Class I areas.
With regard to the analysis and determinations regarding Massachusetts' contribution to visibility impairment at out-of-state Class I areas, the MANE-VU technical work focuses on the magnitude of visibility impacts from certain Massachusetts emissions on other nearby Class I areas. However, the analyses did not account for all emissions and all components of visibility impairment (
Regardless, Massachusetts did determine that sources and emissions within the state contribute to visibility impairment at Class I areas in Maine and New Brunswick. Furthermore, the state took part in the emission control strategy consultation process as a member of MANE-VU. As part of that process, MANE-VU developed a set of emissions reduction measures identified as being necessary to make reasonable progress in the seven MANE-VU Class I areas. This strategy consists of six Asks for states within MANE-VU and five Asks for states outside the region that were found to impact visibility at Class I areas within MANE-VU.
Section 51.308(f)(1) requires states to determine the following for “each mandatory Class I Federal area located within the State”: baseline visibility conditions for the most impaired and clearest days, natural visibility conditions for the most impaired and clearest days, progress to date for the most impaired and clearest days, the differences between current visibility conditions and natural visibility conditions, and the URP. This section also provides the option for states to propose adjustments to the URP line for a Class I area to account for visibility impacts from anthropogenic sources outside the United States and/or the impacts from wildland prescribed fires that were conducted for certain, specified objectives. 40 CFR 51.308(f)(1)(vi)(B).
Although Massachusetts has no Class I areas, emissions from Massachusetts sources contribute to visibility impairment in MANE-VU Class I areas. MANE-VU Class I areas as well as other nearby Class I areas that MANE-VU examined, are listed below. MANE-VU used certain areas (as noted below) to represent nearby Class I areas where monitors do not exist.
The MANE-VU Class I Areas are Lye Brook Wilderness Area (Vermont), Great Gulf Wilderness Area (New Hampshire) (used to represent Presidential Range—Dry River Wilderness Area), Presidential Range—Dry River Wilderness Area (New Hampshire), Acadia National Park (Maine), Moosehorn Wildlife Refuge (Maine) (used to represent Roosevelt
Each state having a Class I area within its borders or emissions that may affect visibility in a Class I area must develop a long-term strategy for making reasonable progress towards the national visibility goal. CAA § 169A(b)(2)(B). As explained in the Background section of this notice, reasonable progress is achieved when all states contributing to visibility impairment in a Class I area are implementing the measures determined—through application of the four statutory factors to sources of visibility impairing pollutants—to be necessary to make reasonable progress. 40 CFR 51.308(f)(2)(i). Each state's long-term strategy must include the enforceable emission limitations, compliance schedules, and other measures that are necessary to make reasonable progress. 40 CFR 51.308(f)(2). All new (
The following section summarizes how Massachusetts' SIP submission addressed the requirements of § 51.308(f)(2)(i); specifically, it describes MANE-VU's development of the six Asks and how Massachusetts addressed each. Massachusetts considers the six Asks to comprise its long-term strategy for the second planning period to address regional haze visibility impairment for each mandatory Class I Federal area affected by emissions from Massachusetts. When developing the Asks with the other MANE-VU states and applying them to sources in Massachusetts, the Commonwealth considered the four statutory factors and the additional regulatory factors and identified emissions control measures necessary to make reasonable progress towards the goal of preventing of any future, and remedying any existing, anthropogenic visibility impairment in Class I areas affected by emissions from Massachusetts. The EPA's evaluation of Massachusetts' long-term strategy is contained in the following Section IV.E.b. Massachusetts' SIP submission describes how it plans to meet the long-term strategy requirements defined by the state and MANE-VU as the “Asks.”
States may rely on technical information developed by the RPOs of which they are members to select sources for four-factor analysis and to conduct that analysis, as well as to satisfy the documentation requirements under § 51.308(f). Where an RPO has performed source selection and/or four-factor analyses (or considered the five additional factors in § 51.308(f)(2)(iv)) for its member states, those states may rely on the RPO's analyses for the purpose of satisfying the requirements of § 51.308(f)(2)(i) so long as the states have a reasonable basis to do so and all state participants in the RPO process have approved the technical analyses. 40 CFR 51.308(f)(2)(iii). States may also satisfy the requirement of § 51.308(f)(2)(ii) to engage in interstate consultation with other states that have emissions that are reasonably anticipated to contribute to visibility impairment in a given Class I area under the auspices of intra- and inter-RPO engagement.
Massachusetts is a member of the MANE-VU RPO and participated in the RPO's regional approach to developing a strategy for making reasonable progress towards the national visibility goal in the MANE-VU Class I areas. MANE-VU's strategy includes a combination of: (1) Measures for certain source sectors and groups of sectors that the RPO determined were reasonable for states to pursue, and (2) a request for member states to conduct four-factor analyses for individual sources that it identified as contributing to visibility impairment. MANE-VU refers to each of the components of its overall strategy as an Ask of its member states. On August 25, 2017, the Executive Director of MANE-VU, on behalf of the MANE-VU states and tribal nations, signed a statement that identifies six emission reduction measures that comprise the Asks for the second implementation period.
MANE-VU's recommendations as to the appropriate control measures were based on technical analyses documented in the RPO's reports and included as appendices to or referenced in Massachusetts' regional haze SIP submission. One of the initial steps of MANE-VU's technical analysis was to determine which visibility-impairing pollutants should be the focus of its efforts for the second implementation period. In the first implementation period, MANE-VU determined that sulfates were the most significant visibility impairing pollutant at the region's Class I areas. To determine the impact of certain pollutants on visibility at Class I areas for the purpose of second implementation period planning, MANE-VU conducted an analysis comparing the pollutant contribution on the clearest and most impaired days in the baseline period (2000-2004) to the most recent period (2012-2016)
• 2016 Updates to the Assessment of Reasonable Progress for Regional Haze in MANE-VU Class I Areas (MA Appendix 6);
• Impact of Wintertime SCR/SNCR Optimization on Visibility Impairing Nitrate Precursor Emissions. November 2017. (MA Appendix 17);
• High Electric Demand Days and Visibility Impairment in MANE-VU. December 2017. (MA Appendix 18);
• Benefits of Combined Heat and Power Systems for Reducing Pollutant Emissions in MANE-VU States. March 2016. (MA Appendix 7);
• 2016 MANE-VU Source Contribution Modeling Report—CALPUFF Modeling of Large Electrical Generating Units and Industrial Sources April 4, 2017 (MA Appendix 8);
• Contribution Assessment Preliminary Inventory Analysis. October 10, 2016. (MA Appendix 11);
• Four-Factor Data Collection Memo. March 2017. (MA Appendix 14);
• Status of the Top 167 Stacks from the 2008 MANE-VU Ask. July 2016. (MA Appendix 10).
To support development of the Asks, MANE-VU gathered information on each of the four statutory factors for six source sectors it determined, based on an examination of annual emission inventories, “had emissions [of SO
MANE-VU Ask 1 is “Electric Generating Units (EGUs) with a nameplate capacity larger than or equal to 25 MW with already installed NO
Massachusetts identified 53 EGU units that meet the criteria of 25 MW or larger with installed controls.
MANE-VU Ask 2 consists of a request that states “Emission sources modeled by MANE-VU that have the potential for 3.0 Mm-1 or greater visibility impacts at any MANE-VU Class I area, as identified by MANE-VU contribution analyses . . . perform a four-factor analysis for reasonable installation or upgrade to emission controls.”
Massachusetts explained that, after examining the visibility impact modeling results (described in Section 5 of Massachusetts' submittal), MANE-VU concluded that a 3 Mm-1 cutoff captured the group of sources contributing the largest percentage of visibility impairing pollutants to Class I areas and that the determination of reasonability for controls on each unit was left to the individual states to allow for unit-specific consideration of the four factors.
MANE-VU's analysis identified 2 units in Massachusetts with potential impacts of 3.0 Mm-1 or greater based on 2015 emissions: Brayton Point 4 and Canal Station 1. Brayton Point was a coal-fired EGU facility (ORISPL 01619; MassDEP AQID 1200061). Massachusetts notes that all units at Brayton Point ceased operation in 2017 and the permits were revoked on December 6, 2017. Canal Station (ORISPL 1599; MassDEP AQID 1200054) operates two steam electric generating units. Unit 1 is a Babcock & Wilcox boiler that fires No. 6 fuel oil, with a permitted maximum sulfur content of 0.5 percent by weight (wt%) as the sole operational fuel, with No. 2 fuel oil as a startup/ignition fuel. Unit 1 has an approximate maximum heat input rate of 5,083 million British thermal units per hour (MMBtu/hr) and a generating capacity of approximately 560 (net) megawatts (MW). Unit 1 is equipped with low-NO
The emission controls installed on Unit 1 are necessary to achieve compliance with the applicable emission limits under 310 CMR 7.29 and Air Plan Approvals issued pursuant to 310 CMR 7.02. The governing NO
The NO
Table 6-2 in the State's submittal shows Canal Unit 1's actual emissions in 2015 along with much lower emissions MANE-VU projected for 2028 and lower still for 2028 emissions under Ask 2.
Massachusetts requested and received a four-factor analysis from the owner of the facility.
MANE-VU Ask 3 is: “Each MANE-VU State that has not yet fully adopted an ultra-low sulfur fuel oil standard as requested by MANE-VU in 2007—pursue this standard as expeditiously as possible and before 2028, depending on supply availability, where the standards are as follows: a. distillate oil to 0.0015% sulfur by weight (15 ppm); b. #4 residual oil within a range of 0.25 to 0.5% sulfur by weight; and c. #6 residual oil within a range of 0.3 to 0.5% sulfur by weight.” MANE-VU included the low sulfur fuel measure in the 2017 Ask because some states had not implemented it yet and the justifications for it determined in the first implementation period remained valid. As described in Section 3 of the Massachusetts SIP submittal, MassDEP met the requirements of Ask 3 during the first implementation period by generally adopting low-sulfur oil regulations in the first planning period. Massachusetts adopted 310 CMR 7.05, “Fuels All Districts” which was approved by EPA into the Massachusetts SIP on September 19, 2013 (78 FR 57487).
MANE-VU Ask 4 is: “EGUs and other large point emission sources larger than 250 MMBTU per hour heat input that have switched operations to lower emitting fuels—pursue updating permits, enforceable agreements, and/or rules to lock-in lower emission rates for SO
The threshold of 250 MMBTU per hour heat input was based on prior BART analysis. Because there are no longer any large coal burning units in Massachusetts, this Ask pertains only to oil burning units. Massachusetts identified no dual/multi-fuel units larger than 250 MMBTU/hr that had made a physical change to switch to a cleaner fuel. All such dual/multi-fuel units are either continuing to burn a mix of fuels or are choosing to maintain their ability to do so in the future.
MANE-VU Ask 5 is: “Where emission rules have not been adopted, control NO
Massachusetts explains that “High electric demand days are days when higher than usual electrical demands bring additional generation units online, many of which are infrequently operated and may have significantly higher emission rates than the rest of the generation fleet. Peaking combustion turbine is defined for the purposes of this `Ask' as a turbine capable of generating 15 megawatts or more, that commenced operation prior to May 1, 2007, is used to generate electricity all or part of which is delivered to the electric power distribution grid for commercial sale and that operated less than or equal to an average of 1752 hours (or 20%) per year during 2014 to 2016; MANE-VU found a correlation between high electric demand days (HEDDs) and the 20% most impaired days at Class I areas. Because smaller turbines have the ability to respond to peak electrical demand and some of these units are not well controlled by existing rules (
Massachusetts identified 25 turbines rated at 15 MW or higher that were operational prior to 2007 that sold electricity to the grid and that operated less than an average of 1752 hours per year during 2014-2016. These 25 turbines are listed in Table 6-3 along with their current emission limits. On March 9, 2018, MassDEP revised 310 CMR 7.19 Reasonably Available Control Technology (RACT) for Sources of Oxides of Nitrogen (NO
Almost all the turbines subject to Ask 5 fall below the 10% capacity factor because they all run very infrequently. If in the future, they exceed the 10% capacity factor limit then they will be subject to the SIP-approved RACT limits of 310 CMR 7.19 and will therefore meet Ask 5 (except for Woodland 10 and Doreen 10 which are not located at
MANE-VU Ask 6 is: “Each State should consider and report in their SIP measures or programs to: (a) decrease energy demand through the use of energy efficiency, and (b) increase the use within their state of Combined Heat and Power (CHP) and other clean Distributed Generation technologies including fuel cells, wind, and solar.”
Massachusetts has taken numerous actions to decrease energy demand through energy efficiency and has been named the most energy efficient state in the nation by the American Council for an Energy-Efficient Economy (ACEEE) for nine consecutive years. Massachusetts ranks second in electric efficiency program spending per capita (at over four times the national average). Massachusetts energy efficiency efforts will continue through the second regional haze implementation period and will achieve emissions reductions beyond those required in the MANE-VU Statement. Key features of the Massachusetts energy efficiency strategy and efforts to expand non-polluting sources of energy and include energy efficiency, clean energy, solar carve-out, Solar Massachusetts Renewable Target (SMART) Program, Clean Energy Standard (310 CMR 7.75), Regional Greenhouse Gas Initiative (RGGI), combined heat and power (CHP), clean peak energy standard (CPS), offshore wind power, and hydroelectric power. Though not part of the SIP, these programs and initiatives have already achieved substantial emissions reductions and will continue to contribute to visibility improvements in Class I areas through 2028 and beyond.
The EPA is proposing to find that Massachusetts has satisfied the requirements of § 51.308(f)(2)(i) related to evaluating sources and determining the emission reduction measures that are necessary to make reasonable progress by considering the four statutory factors. We are proposing to find that Massachusetts has satisfied the four-factor analysis requirement through its analysis and actions to address MANE-VU Asks 2 and 3. We also propose to find that Massachusetts reasonably concluded that it satisfied all six Asks.
As explained above, Massachusetts relied on MANE-VU's technical analyses and framework (
Section 51.308(f)(2)(i) requires states to evaluate and determine the emission reduction measures that are necessary to make reasonable progress by applying the four statutory factors to sources in a control analysis. As explained previously, the MANE-VU Asks are a mix of measures for sectors and groups of sources identified as reasonable for states to address in their regional haze plans. Several of the Asks include analyses of emissions controls, and Massachusetts identifies numerous existing controls that are in the SIP and are included in the long-term strategy. Additionally, Ask 2 (requesting four-factor analyses be conducted) and Ask 3 (requesting adoption of low-sulfur fuel oil) specifically demonstrate Massachusetts' consideration of the statutory factors and together allow the EPA to determine that Massachusetts' SIP is sufficient to satisfy (f)(2)(i). For example, Massachusetts provided information on the four statutory factors for the identified source that continues to operate—an oil-fired EGU and included new fuel sulfur limits for that source in the SIP. See “Four Factor Analysis Canal Unit 1, Canal Generating Station, Sandwich, MA” in Appendix 31. While MANE-VU formulated the Asks to be “reasonable emission reduction strategies” to control emissions of visibility impairing pollutants,
Massachusetts asserted that it satisfies Ask 1 because its SIP-approved regulations applicable to EGU boilers include year-round emission limits and because it already requires that controls be run whenever technically feasible. Air Plan Approvals that MassDEP has issued for these units set short-term NO
Ask 2 addresses the sources MANE-VU determined have the potential for larger than, or equal to, 3.0 Mm
As an initial matter, EPA does not generally agree that 3.0 Mm
MANE-VU identified two units in Massachusetts with potential impacts of 3.0 Mm-1 or greater based on 2015 emissions: Brayton Point Unit 4 and Canal Station Unit 1. Brayton Point was a coal-fired EGU facility (ORISPL 01619; MassDEP AQID 1200061). All four of the coal-fired units at Brayton Point, including Unit 4, ceased operation in 2017 and the permits were revoked on December 6, 2017.
Canal Station (ORISPL 1599; MassDEP AQID 1200054) operates two steam electric generating units. Unit 1 is a Babcock & Wilcox boiler that fires No. 6 fuel oil, with a permitted maximum sulfur content of 0.5 percent by weight (wt%) as the sole operational fuel, with No. 2 fuel oil as a startup/ignition fuel. Unit 1 has an approximate maximum heat input rate of 5,083 million British thermal units per hour (MMBtu/hr) and a generating capacity of approximately 560 (net) megawatts (MW). Unit 1 is equipped with low-NO
Pursuant to Ask 2, MassDEP requested a four-factor analysis from the owner of Canal Unit 1, which the owner submitted on September 19, 2020.
With respect to SO
The four-factor analysis also evaluates the use of ultra-low sulfur diesel (ULSD) and retrofitting with a spray dry absorber for SO
Based on Canal's commitment to use 0.3% sulfur content fuel oil, MassDEP requested that the Permittee submit a permit application to require its use. Subsequently, MassDEP modified Canal's Plan Approval to provide that the sulfur content of No. 6 fuel oil purchased for Unit 1 shall not exceed 0.3% by weight. MassDEP has requested that EPA approve it into the SIP, which EPA proposes to do in today's action.
The EPA proposes to find that Massachusetts reasonably determined it has satisfied Ask 2. As explained above, we do not generally agree that a 3.0 Mm
Ask 3, which addresses the sulfur content of heating oil used in MANE-VU states, is based on a four-factor analysis for the heating oil sulfur reduction regulations contained in that Ask; specifically, for the control strategy of reducing the sulfur content of distillate oil to 15 ppm. As described in Section 3 of the Massachusetts SIP submittal, MassDEP met the requirements of Ask 3 during the first implementation period by generally adopting low-sulfur oil regulations in the first planning period. Massachusetts adopted 310 CMR 7.05, “Fuels All Districts.” The regulation limited the Statewide sulfur content of distillate oil to 500 parts per million (ppm) from July 1, 2014, through June 30, 2018, and then to 15 ppm starting July 1, 2018. The regulation also sets the sulfur in fuel limit for No. 6 residual oil, starting July 1, 2018, at 0.5% by weight Statewide, except for the Berkshire Air Pollution Control District (APCD), which encompasses the Towns and Cities in Berkshire County, the westernmost county in the Commonwealth. The Berkshire APCD has a 1974 legislative exemption allowing sources in this district to burn up to 2.2% sulfur residual oil.
The EPA proposes to find that Massachusetts reasonably relied on MANE-VU's four-factor analysis for a low-sulfur fuel oil regulation, which engaged with each of the statutory factors and explained how the information supported a conclusion that a 15 ppm-sulfur fuel oil standard for fuel oils is reasonable. Massachusetts' SIP-approved ultra-low sulfur fuel oil rule is consistent with Ask 3's sulfur content standards for the three types of fuel oils (distillate oil, #4 residual oil, #6 residual oil). EPA therefore proposes to find that Massachusetts reasonably determined that it has satisfied Ask 3.
Massachusetts concluded that no additional updates were needed to meet Ask 4, which requests that MANE-VU states pursue updating permits, enforceable agreements, and/or rules to lock-in lower emission rates for sources larger than 250 MMBtu per hour that have switched to lower emitting fuels. As explained above, Massachusetts has asserted that there are no longer any large coal burning units in Massachusetts, meaning that this Ask pertains only to oil burning units. MA identified no dual/multi-fuel units larger than 250 MMBTU/hr that had made a physical change to switch to a cleaner fuel. All such dual/multi-fuel units are either continuing to burn a mix of fuels or are choosing to maintain their ability to do so in the future. In addition, modified units in Massachusetts are required to amend their permits through the New Source Review (NSR) process if they plan to switch back to coal or a fuel that will increase emissions. A change in fuel, unless already allowed in the permit, would be a modification.
Thus, given the permitting and regulatory requirements outlined above, including the fact that sources that have switched fuel are required to revise their permits to reflect the change, that state rules make any proposed reversion difficult by requiring permitting and other control analyses, including NSR, the EPA proposes to find that Massachusetts reasonably determined it has satisfied Ask 4.
Ask 5 addresses NO
Ask 5 included an option to achieve equivalent alternative emission reductions for those combustion turbines whose limits do not match the “minimum” limits in the Ask. The retirement of Brayton Point 1-2-3 and repowering of Solutia Boiler 11 each provide alternative SO
Therefore, the permanent retirement of Brayton 1-2-3 and repowering of Solutia Boiler 11 each satisfies the Ask for the remaining 11 turbines not covered by the most recent MassDEP RACT rule. Because the Solutia Boiler 11 repowering and Brayton 1-2-3 retirements offset over 100% of the emissions from the 11 turbines on HEDDs, they exceed the visibility improvement requirements of Ask 5. In
For the majority of combustion turbines identified in the Ask, the RACT levels adopted by Massachusetts comply with the minimum requested by this Ask. For those turbines that do not meet the minimum limits, MassDEP has identified alternative emission reductions obtained through the retirement of Brayton 1-2-3 and the repowering of Solution Boiler 11 that more than make up the difference. Therefore, EPA proposes to find that Massachusetts reasonably concluded that its existing regulations comply with Ask 5.
Finally, with regard to Ask 6, Massachusetts has taken numerous actions to decrease energy demand through energy efficiency and has been named the most energy efficient state in the nation by the American Council for an Energy-Efficient Economy (ACEEE) for nine consecutive years. The EPA is proposing to find that Massachusetts has satisfied Ask 6's request to consider and report in its SIP measures or programs related to energy efficiency, cogeneration, and other clean distributed generation technologies.
In sum, the EPA is proposing to find—based on Massachusetts' participation in the MANE-VU planning process, how it has addressed the Asks, and the EPA's assessment of Massachusetts' emissions and point sources—that Massachusetts has complied with the requirements of § 51.308(f)(2)(i). Specifically, Massachusetts's application of MANE-VU Asks 1 2, and 3 engages with the requirement that states evaluate and determine the emission reduction measures necessary to make reasonable progress by considering the four statutory factors.
EPA is proposing to find the state's approach meets the regulatory requirements for several reasons. Massachusetts reasonably evaluated and explained its decision to focus on SO
EPA proposes to find that Massachusetts's SIP submittal satisfies the requirements that states determine the emission reduction measures that are necessary to make reasonable progress by considering the four factors, and that their long-term strategies include the enforceable emission limitations, compliance schedules, and other measures necessary to make reasonable progress.
The consultation requirements of § 51.308(f)(2)(ii) provide that states must consult with other states that are reasonably anticipated to contribute to visibility impairment in a Class I area to develop coordinated emission management strategies containing the emission reductions measures that are necessary to make reasonable progress. Section 51.308(f)(2)(ii)(A) and (B) require states to consider the emission reduction measures identified by other states as necessary for reasonable progress and to include agreed upon measures in their SIPs, respectively. Section 51.308(f)(2)(ii)(C) speaks to what happens if states cannot agree on what measures are necessary to make reasonable progress.
Massachusetts participated in and provided documentation of the MANE-VU intra- and inter-RPO consultation processes, which included consulting with both MANE-VU and non-MANE-VU states about emissions from Massachusetts reasonably anticipated to contribute to visibility impairment in Class I areas within the MANE-VU area and in adjacent areas. The consultations addressed developing coordinated emission management strategies containing the emission reductions necessary to make reasonable progress at the Class I areas. Massachusetts addressed the MANE-VU Asks by providing information on the measures it has in place that satisfy each Ask.
In sum, Massachusetts participated in the MANE-VU intra- and inter-RPO consultation and included in its SIP submittal the measures identified and agreed to during those consultations, thereby satisfying § 51.308(f)(2)(ii)(A) and (B). Massachusetts satisfied § 51.308(f)(2)(ii)(C) by participating in MANE-VU's consultation process, which documented the disagreements between the upwind states and MANE-VU and explained MANE-VU's reasoning on each of the disputed issues. Based on the entirety of MANE-VU's intra- and inter-RPO consultation and MANE-VU's and Massachusetts' responses to comments on the SIP submission and various technical analyses therein, we propose to determine that Massachusetts has satisfied the consultation requirements of § 51.308(f)(2)(ii).
The documentation requirement of § 51.308(f)(2)(iii) provides that states
Section 51.308(f)(2)(iii) also requires that the emissions information considered to determine the measures that are necessary to make reasonable progress include information on emissions for the most recent year for which the state has submitted triennial emissions data to the EPA (or a more recent year), with a 12-month exemption period for newly submitted data. Massachusetts' SIP submission included 2017 National Emissions Inventory (NEI) data for NO
We also propose to find that Massachusetts reasonably considered the five additional factors in § 51.308(f)(2)(iv) in developing its long-term strategy. Pursuant to § 51.308(f)(2)(iv)(A), Massachusetts noted that existing and ongoing state and federal emission control programs that contribute to emission reductions through 2028 would impact emissions of visibility impairing pollutants from point and nonpoint sources in the second implementation period. Massachusetts included in its SIP a comprehensive lists of control measures identifying the source category and corresponding Code of Massachusetts Regulations provisions.
Massachusetts' consideration of measures to mitigate the impacts of construction activities as required by § 51.308(f)(2)(iv)(B) includes, in section 6.6 of its SIP submission, measures that Massachusetts has implemented to mitigate the impacts from such activities. Massachusetts has implemented standards that reduce fugitive dust emissions from construction, rules to address exhaust emissions including rules to limit the idling of vehicles and equipment, rules to reduce allowable smoke from on-road diesel engines, and general conformity rules.
Pursuant to § 51.308(f)(2)(iv)(C), source retirements and replacement schedules are addressed in section 6.7 of Massachusetts' submission. Source retirements and replacements were considered in developing the 2028 emission projections, with on the books/on the way retirements and replacements included in the 2028 projections. The EGU point sources included in the inventories used in the MANE-VU contribution assessment and that were subsequently retired are described in Section 4 of the Massachusetts' submission.
In considering smoke management as required in 40 CFR 51.308(f)(2)(iv)(D), Massachusetts explained, in section 6.8 of its submission, that it addresses smoke management through its air regulation at 310 CMR 7.07, which bans open burning in 22 urban municipalities and prohibits the use of open burning to clear commercial or institutional land for non-agricultural purposes. Prescribed burning is allowed upon specific permission from MassDEP. Massachusetts considers these efforts to be sufficient to protect visibility in the Class I areas affected by emission from Massachusetts source, including agricultural and forestry smoke.
Massachusetts considered the anticipated net effect of projected changes in emissions as required by 51.308(f)(2)(iv)(E) by discussing, in Section 6.9 of its submission, the photochemical modeling for the 2018-2028 period it conducted in collaboration with MANE-VU. The two modeling cases run were a 2028 base case, which considered only on-the-books controls, and a 2028 control case that considered implementation of the MANE-VU Ask. The results of that modeling are shown as RPGs on the graphs in Section 2 and detailed in the presentation of RPGs in the MANE-VU visibility report. The 2028 inventory projections demonstrate a substantial reduction in emissions. The modeling shows that projected visibility at all potentially impacted Class I areas will remain well below the URP line in 2028 for the most impaired days and that there will be no degradation in visibility for the least impaired days.
Because Massachusetts has reasonably considered each of the five additional factors, the EPA proposes to find that Massachusetts has satisfied the requirements of 40 CFR 51.308(f)(2)(iv).
Section 51.308(f)(3) contains the requirements pertaining to RPGs for each Class I area. Because Massachusetts does not host a Class I area, it is not subject to either § 51.308(f)(3)(i) or 51.308(f)(3)(ii)(A). Section 51.308(f)(3)(ii)(B) requires that, if a state contains sources that are reasonably anticipated to contribute to visibility impairment in a Class I area in
Table 2-1 of Massachusetts' SIP submittal summarizes baseline visibility conditions (
Section 51.308(f)(6) specifies that each comprehensive revision of a state's regional haze SIP must contain or provide for certain elements, including monitoring strategies, emissions inventories, and any reporting, recordkeeping and other measures needed to assess and report on visibility. Since Massachusetts does not contain any Class I areas, it is not required to submit the monitoring strategy referenced in 51.308(f)(6), nor
40 CFR 51.308(f)(6)(iii), however, applies to states with no Class I areas (such as Massachusetts) and requires them to include in their Regional Haze SIPs procedures by which monitoring data and other information are used in determining the contribution of emissions from within the state to visibility impairment at Class I areas in other states. Monitoring in Massachusetts that contributes data for assessing visibility is described in section 2.1 of the Massachusetts SIP submission. Visibility data analysis procedures are described in the MANE-VU visibility data report.
Section 51.308(f)(6)(v) requires SIPs to provide for a statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment, including emissions for the most recent year for which data are available and estimates of future projected emissions. It also requires a commitment to update the inventory periodically. Massachusetts provides for emissions inventories and estimates for future projected emissions by participating in the MANE-VU RPO and complying with EPA's Air Emissions Reporting Rule (AERR). In 40 CFR part 51, subpart A, the AERR requires states to submit updated emissions inventories for criteria pollutants to EPA's Emissions Inventory System (EIS) every three years. The emission inventory data is used to develop the NEI, which provides for, among other things, a triennial state-wide inventory of pollutants that are reasonably anticipated to cause or contribute to visibility impairment.
Section 4 of Massachusetts' submission includes tables of NEI data. The source categories of the emissions inventories included are: (1) Point sources, (2) nonpoint sources, (3) non-road mobile sources, and (4) on-road mobile sources. The point source category is further divided into AMPD point sources and non-AMPD point sources. Massachusetts included NEI emissions inventories for the following years: 2002 (one of the regional haze program baseline years), 2008, 2011, 2014, and 2017; and for the following pollutants: SO
Section 51.308(f)(6)(v) also requires states to include estimates of future projected emissions and include a commitment to update the inventory periodically. Massachusetts relied on the MANE-VU 2028 emissions projections for MANE-VU states. MANE-VU completed two 2028 projected emissions modeling cases—a 2028 base case that considers only on-the-books controls and a 2028 control case that considers implementation of the MANE-VU Asks.
The EPA proposes to find that Massachusetts has met the requirements of 40 CFR 51.308(f)(6) as described above, including through its continued participation in the MANE-VU RPO and its on-going compliance with the AERR, and that no further elements are necessary at this time for Massachusetts to assess and report on visibility pursuant to 40 CFR 51.308(f)(6)(vi). Massachusetts' SIP submittal also includes a commitment to update the statewide emissions inventory periodically.
Section 51.308(f)(5) requires that periodic comprehensive revisions of states' Regional Haze plans also address the progress report requirements of 40 CFR 51.308(g)(1) through (5). The purpose of these requirements is to evaluate progress towards the applicable RPGs for any Class I area within the state and each Class I area outside the state that may be affected by emissions from within that state. Sections 51.308(g)(1) and (2) apply to all states and require a description of the status of implementation of all measures included in a state's first implementation period regional haze plan and a summary of the emission reductions achieved through implementation of those measures. Section 51.308(g)(3) applies only to states with Class I areas within their borders and requires such states to assess current visibility conditions, changes in visibility relative to baseline (2000-2004) visibility conditions, and changes in visibility conditions relative to the period addressed in the first implementation period progress report. Section 51.308(g)(4) applies to all states and requires an analysis tracking changes in emissions of pollutants contributing to visibility impairment from all sources and sectors since the period addressed by the first implementation period progress report. This provision further specifies the year or years through which the analysis must extend depending on the type of source and the platform through which its emission information is reported. Finally, § 51.308(g)(5), which also applies to all states, requires an assessment of any significant changes in anthropogenic emissions within or outside the state that have occurred since the period addressed by the first implementation period progress report, including whether such changes were anticipated and whether they have limited or impeded expected progress towards reducing emissions and improving visibility.
Massachusetts' submission describes the status of measures of the long-term strategy from the first implementation period. As a member of MANE-VU, Massachusetts considered the MANE-VU Asks and adopted corresponding measures into its long-term strategy for the first implementation period. The MANE-VU Asks were: (1) Timely implementation of Best Available Retrofit Technology (BART) requirements; (2) EGU controls including Controls at 167 Key Sources that most affect MANE-VU Class I areas; (3) Low sulfur fuel oil strategy; and (4) Continued evaluation of other control measures. Massachusetts met all the identified reasonable measures requested during the first implementation period. During the first planning period for regional haze, programs that were put in place focused on reducing SO
The EPA proposes to find that Massachusetts has met the requirements of 40 CFR 51.308(g)(1) and (2) because its SIP submission describes the measures included in the long-term
Pursuant to § 51.308(g)(4), in Section 4 of its submittal, Massachusetts provided a summary of emissions of NO
The reductions achieved by Massachusetts emission control measures are seen in the emissions inventory. Based on Massachusetts' SIP submission, NO
In Massachusetts' submission, table 4-3 shows a summary of PM
Table 4-4 of Massachusetts' submission shows a summary of PM
Table 4-7 of Massachusetts' submission shows VOC emissions from all NEI data categories for the period 2002 to 2017 in Massachusetts. VOC emissions have shown a steady decline in Massachusetts over this period. VOC decreases were achieved in all sectors due to Federal new engine standards for onroad and nonroad vehicles and equipment, the National and State low emission vehicle programs, SIP-approved area source rules such as consumer products, portable fuel containers, paints, autobody refinishing, asphalt paving applications, and solvent cleaning operations, and point source controls.
Table 4-8 of Massachusetts' submission shows ammonia (NH
The EPA is proposing to find that Massachusetts has satisfied the requirements of § 51.308(g)(4) by providing emissions information for NO
Massachusetts uses the emissions trend data in the SIP submission to support the assessment that anthropogenic haze-causing pollutant emissions in Massachusetts have decreased during the reporting period and that changes in emissions have not limited or impeded progress in reducing pollutant emissions and improving visibility. The data Massachusetts presents for NO
Section 169A(d) of the Clean Air Act requires states to consult with FLMs before holding the public hearing on a proposed regional haze SIP, and to include a summary of the FLMs' conclusions and recommendations in the notice to the public. In addition, section 51.308(i)(2)'s FLM consultation provision requires a state to provide FLMs with an opportunity for consultation that is early enough in the state's policy analyses of its emission reduction obligation so that information and recommendations provided by the FLMs can meaningfully inform the state's decisions on its long-term strategy. If the consultation has taken place at least 120 days before a public hearing or public comment period, the opportunity for consultation will be deemed early enough, but the opportunity for consultation must be provided at least sixty days before a public hearing or public comment period at the state level. Section 51.308(i)(2) also requires that the consultation include the opportunity for the FLMs to discuss their assessment of visibility impairment in any Class I area and their recommendations on the development and implementation of strategies to address visibility impairment. Section 51.308(i)(3) requires states, in developing their implementation plans, to include a description of how they addressed FLMs' comments.
The states in the MANE-VU RPO conducted FLM consultation early in the planning process concurrent with the state-to-state consultation that formed the basis of the RPO's decision making process. As part of the consultation, the FLMs were given the opportunity to review and comment on the technical documents developed by MANE-VU. The FLMs were invited to attend the intra- and inter-RPO consultations calls among states and at least one FLM representative was documented to have attended seven intra-RPO meetings and all inter-RPO
As part of this early engagement with the FLMs, on April 12, 2018, the NPS sent letters to the MANE-VU states requesting that they consider specific individual sources in their long-term strategies.
On November 13, 2020, Massachusetts submitted a draft Regional Haze SIP to the U.S. Forest Service, the U.S. Fish and Wildlife Service, and the National Park Service for a 60-day review and comment period pursuant to 40 CFR 51.308(i)(2). Massachusetts received comments from the Forest Service and from the National Park Service by January 15, 2021. Massachusetts responded to the FLM comments and included a summary of the responses in Section 7.3 of its submission to EPA, in accordance with § 51.308(i)(3). In satisfaction of § 51.308(i)(4), Massachusetts explains that it will continue to consult with the FLMs through MANE-VU's planning process (including participation in regular Technical Support Committee meetings that include FLM participation in the development of progress reports and the regional strategy for future RH SIP revisions), MassDEP regulatory and permit notification emails (which provide notification of air quality regulation amendments, SIP revisions, major new source review permits, ambient air monitoring plans), and MassDEP air quality advisory committee meetings.
On April 7, 2021, MassDEP issued a notice of public hearing and comments and the availability of the draft Regional Haze SIP revision for 2018-2028 on MassDEP's Public Notices and Hearings web page and on its SIP web page and emailed the notice to parties that have registered for the MassDEP public notice email list. The notice announced two video conference call public hearings on May 11, 2021 and the opportunity to submit written comments until May 14, 2021. Appendix 43 of the Massachusetts SIP submittal contains a summary of public comments received and MassDEP's responses.
For the reasons stated above, the EPA proposes to find that Massachusetts has satisfied the requirements under 40 CFR 51.308(i) to consult with the FLMs on its regional haze SIP for the second implementation period.
Massachusetts' July 22, 2021, SIP submission includes a commitment to revise and submit a regional haze SIP in 2028, and every ten years thereafter. The state's commitment includes submitting periodic progress reports in accordance with § 51.308(f) and a commitment to evaluate progress towards the reasonable progress goal for each mandatory Class I Federal area located within the state and in each mandatory Class I Federal area located outside the state that may be affected by emissions from within the state in accordance with § 51.308(g).
The EPA is proposing to approve the “Massachusetts Regional Haze State Implementation Plan Revision for the Second Planning Period (2018-2028)”, submitted July 22, 2021 and “Regional Haze SIP Revision for Massachusetts—Supplement” source specific requirements for Canal Generating Station, submitted May 26, 2022 as collectively satisfying the regional haze requirements for the second implementation period contained in 40 CFR 51.308(f), (g), and (i).
In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference “Regional Haze SIP Revision for Massachusetts—Supplement” source specific requirements for Canal Generating Station (Permit number 21-AQ02F-011-APP), submitted May 26, 2022. The EPA has made, and will continue to make, these documents generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA.
In addition, this proposed rulemaking action, pertaining to Massachusetts regional haze SIP submission for the second planning period, is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.” The air agency did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides.
Office of the Secretary, Interior.
Notice of proposed rulemaking.
The Department of the Interior (DOI, Department) is proposing to amend its regulations to exempt certain records in the INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS), system of records from one or more provisions of the Privacy Act of 1974 because of criminal, civil, and administrative law enforcement requirements.
Submit comments on or before March 11, 2024.
You may submit comments, identified by docket number [DOI-2023-0027] or Regulatory Information Number (RIN) Number 1090-AB28, by any of the following methods:
•
•
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Teri Barnett, Departmental Privacy Officer, U.S. Department of the Interior, 1849 C Street NW, Room 7112, Washington, DC 20240,
The Privacy Act of 1974, as amended, 5 U.S.C. 552a, governs the means by which the U.S. Government collects, maintains, uses, and disseminates personally identifiable information. The Privacy Act applies to information about individuals that is maintained in a “system of records.” A system of records is a group of any records under the control of an agency from which information about an individual is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. See 5 U.S.C. 552a(a)(4) and (5).
Individuals may request access to records containing information about themselves under the Privacy Act of 1974, 5 U.S.C. 552a(b), (c) and (d). However, the Privacy Act authorizes Federal agencies to exempt systems of records from access by individuals under certain circumstances, such as where the access or disclosure of such information would impede national security or law enforcement efforts. Exemptions from Privacy Act provisions must be established by regulation pursuant to 5 U.S.C. 552a(j) and (k).
The DOI Office of Law Enforcement and Security (OLES) maintains the INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS), system of records to help DOI and its law enforcement bureaus and offices carry out responsibilities to prevent, detect, and investigate known and suspected criminal activity; detain and apprehend those committing crimes on DOI properties or Tribal reservations; manage investigations and law enforcement activities including use of force, critical incidents, property damage claims, traffic accidents, and domestic issues; and prevent visitor accidents or injuries on DOI properties or Tribal reservations. The system also contains statements and records of complaints, reports, correspondence from or about complainants, subjects, and victims of law enforcement investigations. Accordingly, records in the system are used during investigations and law enforcement activities and related criminal
A system of records notice for INTERIOR/DOI-10, Incident Management, Analysis and Reporting System, was previously published in the
Under 5 U.S.C. 552a(j) and (k), the head of a Federal agency may promulgate rules to exempt a system of records from certain provisions of the Privacy Act of 1974. The INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS), system of records contains law enforcement records and investigatory material that are exempt from provisions of the Privacy Act of 1974 under 5 U.S.C. 552a(j) and (k). The DOI previously promulgated regulations at 43 CFR 2.254 to exempt records in this system from all provisions of the Privacy Act except subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i) pursuant to 5 U.S.C. 552a(j)(2); and to exempt records from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2).
In this NPRM, DOI is proposing to amend its existing exemptions under 43 CFR 2.254 subsections (a) and (c) to reflect the new title of the system, INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS), and to claim additional exemptions from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) of the Privacy Act pursuant to 5 U.S.C. 552a(k)(1), (k)(3), (k)(5), and (k)(6) because this system of records contains material that support law enforcement activities and investigations. DOI may waive exemptions on a case-by-case basis where a release would not interfere with or reveal investigatory material compiled for law enforcement purposes, or reveal records on suitability, eligibility, or qualifications for Federal employment, military service, Federal contracts, or access to classified information, or compromise confidential sources. Exemptions from these subsections are justified for the following reasons:
1. 5 U.S.C. 552a(c)(3). This section requires an agency to make the accounting of each disclosure of records available to the individual named in the record upon request. Records in this system may contain investigatory records and material compiled for law enforcement purposes other than material within the scope of 5 U.S.C. 552a(j)(2). Release of accounting of disclosures would alert the subjects of an investigation to the existence of the investigation, law enforcement activity or investigation, and the fact that they are subjects of the investigation or could disclose confidential information that could be detrimental to national security. The release of such information to the subjects of an investigation would provide them with significant information concerning the nature and scope of an investigation, and could seriously impede or compromise the investigation, endanger the physical safety of confidential sources, witnesses and their families, and lead to the improper influencing of witnesses, the destruction of evidence, or the fabrication of testimony.
2. 5 U.S.C. 552a(d); (e)(4)(G) and (e)(4)(H); and (f). These sections require an agency to provide notice and disclosure to individuals that a system contains records pertaining to the individual, as well as providing rights of access and amendment. Records in this system may contain investigatory material compiled for law enforcement purposes other than material within the scope of 5 U.S.C. 552a(j)(2). Granting access to these records in the system could inform the subject of an investigation of an actual or potential criminal violation of the existence of that investigation, the nature and scope of the information and evidence obtained, of the identity of confidential sources, witnesses, and law enforcement personnel, and could provide information to enable the subject to avoid detection or apprehension. Granting access to such information could seriously impede or compromise an investigation; endanger the physical safety of confidential sources, witnesses, and law enforcement personnel, as well as their families; lead to the improper influencing of witnesses, the destruction of evidence, or the fabrication of testimony; and disclose investigative techniques and procedures. In addition, granting access to such information could disclose confidential information that could impact national security or could constitute an unwarranted invasion of the personal privacy of others.
3. 5 U.S.C. 552a(e)(1). This section requires the agency to maintain information about an individual only to the extent that such information is relevant or necessary. The application of this provision could impair investigations because it is not always possible to determine the relevance or necessity of specific information in the early stages of an investigation. Relevance and necessity are often questions of judgment and timing, and it is only after information is evaluated that the relevance and necessity of such information can be established for an investigation. In addition, during the course of an investigation, the investigator may obtain information which is incidental to the main purpose of the investigation, but which may relate to matters under the investigative jurisdiction of another agency. Such information cannot readily be segregated.
4. 5 U.S.C. 552a(e)(4)(I). This section requires an agency to provide public notice of the categories of sources of records in the system. The application of this provision could provide the subject of an investigation with substantial information about the nature and scope of that investigation, could provide information to enable the subject to avoid detection or apprehension, seriously impede or compromise an investigation, or the fabrication of testimony, and disclose investigative techniques and procedures. Additionally, the application of this section could cause sources to refrain from giving such information because of fear of reprisal, or fear of breach of promise(s) of anonymity and confidentiality. This could compromise DOI's ability to conduct investigations and to identify, detect and apprehend violators.
Executive Order (E.O.) 14094 reaffirms the principles of E.O. 12866 and E.O. 13563 and states that regulatory analysis should facilitate agency efforts to develop regulations that serve the public interest, advance statutory objectives, and are consistent with E.O. 12866, E.O. 13563, and the Presidential Memorandum of January 20, 2021 (Modernizing Regulatory Review). Regulatory analysis, as practicable and appropriate, shall recognize distributive impacts and equity, to the extent permitted by law. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed
E.O. 12866, as reaffirmed by E.O. 13563 and E.O. 14094, provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that this rule is not significant.
The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601,
(a) Does not have an annual effect on the economy of $100 million or more.
(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.
(c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises.
This proposed rule does not impose an unfunded mandate on State, local, or Tribal governments in the aggregate, or on the private sector, of more than $100 million per year. The proposed rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. This proposed rule makes only minor changes to 43 CFR part 2. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1501
In accordance with Executive Order 12630, the proposed rule does not have significant takings implications. This proposed rule makes only minor changes to 43 CFR part 2. A takings implication assessment is not required.
In accordance with Executive Order 13132, this proposed rule does not have any federalism implications to warrant the preparation of a Federalism Assessment. The proposed rule is not associated with, nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. A Federalism Assessment is not required.
This proposed rule complies with the requirements of Executive Order 12988. Specifically, this rule:
(a) Does not unduly burden the Federal judicial system.
(b) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and
(c) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.
In accordance with Executive Order 13175, the Department of the Interior has evaluated this proposed rule and determined that it would have no substantial effects on Federally Recognized Indian Tribes.
This proposed rule does not require an information collection from 10 or more parties and a submission under the Paperwork Reduction Act (44 U.S.C. 3501,
This proposed rule does not constitute a major Federal Action significantly affecting the quality for the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321,
This proposed rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.
We are required by Executive Order 12866 and 12988, the Plain Writing Act of 2010 (Pub. L. 111-274), and the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means each proposed rule we publish must:
Administrative practice and procedure, Confidential information, Courts, Freedom of Information Act, Privacy Act.
For the reasons stated in the preamble, the Department of the Interior proposes to amend 43 CFR part 2 as follows:
5 U.S.C. 301, 552, 552a, 553; 31 U.S.C. 3717; 43 U.S.C. 1460, 1461, the Social Security Number Fraud Prevention Act of 2017, Pub. L. 115-59, September 15, 2017.
The additions and revisions read as follows:
(a) * * *
(5) INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
(b) * * *
(4) INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
(c) * * *
(15) INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
(d) * * *
(4) INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
(e) * * *
(9) INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
(f) * * *
(2) INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
Administrative Conference of the United States.
Notice.
The Assembly of the Administrative Conference of the United States adopted four recommendations at its hybrid (virtual and in-person) Eightieth Plenary Session: Best Practices for Adjudication Not Involving an Evidentiary Hearing, Identifying and Reducing Burdens on the Public in Administrative Processes, Improving Timeliness in Agency Adjudication, and User Fees.
For Recommendations 2023-5 and 2023-6, Matthew Gluth; Recommendation 2023-7, Lea Robbins; and Recommendation 2023-8, Kazia Nowacki. For each of these recommendations the address and telephone number are: Administrative Conference of the United States, Suite 706 South, 1120 20th Street NW, Washington, DC 20036; Telephone 202-480-2080.
The Administrative Conference Act, 5 U.S.C. 591-596, established the Administrative Conference of the United States. The Conference studies the efficiency, adequacy, and fairness of the administrative procedures used by Federal agencies and makes recommendations to agencies, the President, Congress, and the Judicial Conference of the United States for procedural improvements (5 U.S.C. 594(1)). For further information about the Conference and its activities, see
The Assembly of the Conference met during its Eightieth Plenary Session on December 14, 2023, to consider four proposed recommendations and conduct other business. All four recommendations were adopted.
Recommendation 2023-5,
Recommendation 2023-6,
Recommendation 2023-7,
Recommendation 2023-8,
The Conference based its recommendations on research reports and prior history that are posted at:
Federal administrative adjudication takes many forms.
In many federal administrative adjudications, however, no constitutional provision, statute, regulation, or executive order grants parties the right to an evidentiary hearing.
There are many policy reasons why adjudications might be conducted without a legally required opportunity for an evidentiary hearing, though such reasons are beyond the scope of this Recommendation. The stakes in disputes resolved through such adjudications vary widely, but whether the stakes are low or high, each decision matters to the parties. For those involved in or familiar with these adjudications, the most important factor in their view of government may be the way these decisions are made. Accordingly, decision making in such adjudications should be accurate, efficient, and both fair and perceived to be fair, regardless of the stakes involved.
Adjudications without an evidentiary hearing differ in fundamental ways from those that include a legally required opportunity for an evidentiary hearing. In adjudications of all types, a decision maker conducts an investigation and issues an initial, preliminary, or proposed decision. In adjudications that include an evidentiary hearing, if the private party does not acquiesce in that decision, the party is entitled to an evidentiary hearing before a neutral decision maker who, after considering the evidence and arguments, issues a decision. Typically, the private party also can seek review of that decision within the agency, often by the agency head or officials exercising authority delegated by the agency head. By contrast, in adjudications without an evidentiary hearing, often the same decision maker who issued the initial, proposed, or preliminary decision issues the decision, normally after considering input from the affected party. Typically, that party is entitled to seek review of that decision by a different decision maker within the agency. These fundamental differences are reflected in this Recommendation.
No uniform set of procedures applies to all adjudications without evidentiary hearings, nor could one be devised. Some characteristics are common, however. Such adjudications often allow for document exchanges and submission of research studies, oral arguments, public hearings, conferences with staff, interviews, negotiations, examinations, and inspections. Agencies that engage in such adjudications typically employ dispute resolution methodologies without the procedures typical of evidentiary hearings, such as the opportunity to cross examine witnesses, the prohibition of ex parte communications, the separation of adjudicative functions from investigative and prosecutorial functions, and the exclusive record principle.
While not subject to the requirement that a decision be preceded by an evidentiary hearing, adjudications without evidentiary hearings may be subject to other legal requirements. The Due Process Clause of the Constitution's Fifth Amendment may require certain minimum procedures for such adjudications that involve constitutionally protected interests in life, liberty, or property.
Statutorily required procedures and judicial review, however, may be insufficient to ensure fairness, accuracy, and efficiency in adjudications without an evidentiary hearing. Due process, the APA, and other sources of law external to the agency often do not specifically prescribe the details of agency procedures, and judicial review may be unrealistic because the costs of such review exceed the value of the interests at stake.
This Recommendation identifies a set of best practices for adjudications without an evidentiary hearing and encourages agencies to implement them through their regulations and guidance documents. Many agencies conducting such adjudications already follow these best practices. This Recommendation recognizes that agencies adjudicate a wide range of matters, have different adjudicatory needs and available resources, and are subject to different legal requirements. What works best for one agency may not work for another. Agencies must take into account their own unique circumstances when implementing the best practices that follow. Accordingly, agencies adopting or modifying procedures for adjudication without an evidentiary hearing should tailor these best practices to their individual systems.
1. Agencies conducting adjudications without evidentiary hearings should notify parties of the initial, proposed, or preliminary decision, including the reasons for that decision.
2. Such notice should provide sufficient detail and be given in sufficient time to allow parties to contest the initial, proposed, or preliminary decision and submit evidence to support their position. This notice should provide parties with the following information, when applicable:
a. Whether the agency provides a second chance to achieve compliance;
b. The manner by which the party can submit additional evidence and argument to influence the agency's initial, proposed, or preliminary decision;
c. The amount of time before further agency action will be taken; and
d. Whether and, if so, how parties may access materials in the agency's case file.
3. Agencies should allow parties in adjudications without evidentiary hearings to furnish decision makers with evidence and arguments. Depending on the stakes involved, the types of issues involved, and the agency's caseload and adjudicatory resources, the process for furnishing evidence and argument may include written submissions or oral presentations and the opportunity to rebut adverse information. Agencies should make such opportunities available in a manner that permits people with disabilities and people with limited English proficiency to take advantage of them.
4. If credibility issues are presented, the party should be permitted an opportunity to rebut adverse information.
5. When feasible, agencies should allow participants in their adjudications without evidentiary hearings to be represented by a lawyer or a lay person with relevant expertise.
6. Particularly for self-represented parties, agencies should not prevent participants in their adjudications without evidentiary hearings from obtaining assistance or support from friends, family members, or other individuals in presenting their case.
7. Agencies should make their proceedings as accessible as possible to self-represented parties by providing plain-language resources, such as frequently asked questions (FAQs), and other appropriate assistance, such as offices dedicated to helping the public navigate agency programs.
8. Agencies should tailor neutrality standards appropriately to adjudications without evidentiary hearings, which may be conducted by decision makers who engage in their own investigations or participate in investigative teams and may have prior involvement in the matter.
9. Consistent with government ethics requirements, agencies should require the recusal of employees engaged in adjudications without evidentiary hearings who have financial or other conflicts of interest in matters they are investigating or deciding.
10. Agencies should require recusal of employees who reasonably may be viewed as not impartial.
11. When adjudications without evidentiary hearings involve serious sanctions, agencies should consider adopting internal separation of investigative or prosecutorial functions and adjudicatory functions.
12. Agencies conducting adjudications without evidentiary hearings should provide oral or written statements of reasons that follow federal plain-language guidelines setting forth the rationale for the decision, including the factual and other bases for it. The level of detail in the statement should be consistent with the stakes involved in the adjudication.
13. Agencies should provide for administrative review of their decisions by higher-level decision makers or other reviewers unless it is impracticable because of high caseload, lack of available staff, or time constraints, or because of low stakes.
14. Agency regulations should specify the procedures for each adjudication without an evidentiary hearing the agency conducts. Consistent with Recommendation 92-1,
15. Agencies should ensure their regulations, guidance documents, staff manuals, procedural instructions, and FAQs addressing their adjudications without evidentiary hearings follow federal plain-language guidelines and are easily accessible on the agency's website.
16. Agencies should ensure that their notices, statements, procedural instructions, FAQs, and other documents that contain important information about their adjudications without evidentiary hearings are made available in languages understood by people who frequently appear before the agency.
17. Agencies with an ombuds program should ensure that their ombuds are empowered to handle complaints about adjudications without evidentiary hearings.
18. Agencies without an ombuds program should consider establishing one, particularly if their adjudications without evidentiary hearings have sufficient caseloads, significant stakes, or significant numbers of unrepresented parties. The establishment and standards of such programs should follow the best practices identified in Recommendation 2016-5,
19. Agencies with smaller caseloads, lower stakes, or lack of available staff should consider sharing an ombuds program with other similarly situated agencies to address any resource constraints.
20. Agencies that choose not to establish or share an ombuds program should provide alternative procedures for allowing parties to submit feedback or complaints, such as through an agency portal or dedicated email address.
21. Agencies conducting adjudications without evidentiary hearings should establish methods for assessing and improving the quality of their decisions to promote accuracy, efficiency, fairness, the perception of fairness, and other goals relevant to those adjudications in accordance with Recommendation 2021-10,
Each year, millions of people navigate administrative processes to access benefits and services and otherwise engage with government programs to help themselves and their families. These processes can be extraordinarily complex. Additionally, processes can vary significantly across and within government agencies. These variations can make it especially hard when members of the public need to access multiple programs at the same time, for example during key life events such as retirement, birth of a child, or unexpected disaster.
Navigating these processes requires time and effort to learn both about programs and how to access them. Complying with these processes also requires significant work, such as completing forms, obtaining and submitting information, and possibly traveling to in-person interviews or hearings. Efforts to comply can result in stress, stigma, frustration, fear, or other psychological harms. These costs—which may be described as learning, compliance, and psychological costs, respectively—can be collectively understood as administrative burden.
Administrative burdens significantly affect whether and how the public accesses a wide range of government programs, including those related to veterans benefits and services, student financial aid, Social Security benefits, health care, disaster assistance, tax credits, nutrition assistance, housing assistance, and unemployment insurance. These burdens can be exacerbated when programs are not wholly administered by the federal government but in partnership with state, local, or tribal governments. Although some level of administrative burden may be necessary—to establish eligibility for programs with sufficient accuracy or to prevent fraud—research shows the cumulative effect of this burden hinders the ability of agencies to achieve their missions. Billions of dollars in government benefits go unclaimed every year,
Various authorities govern how federal agencies identify and reduce administrative burdens. The Paperwork Reduction Act (PRA) has long required agencies to identify burdens associated with information they collect from the public and explain why those burdens are necessary to administer their programs.
While some administrative burdens are imposed by Congress or by state law, federal agencies have an important role to play in reducing the burdens they impose when administering their programs. Agencies employ numerous strategies to reduce those burdens, including simplifying processes, improving access for persons with limited English proficiency and persons with disabilities, expanding the availability of online (instead of solely in-person) processes, and establishing ombuds offices to assist those experiencing burdens.
Collaboration within and between federal agencies, and between federal agencies and state, local, and tribal governments, is also essential for burden reduction. Interagency data sharing that is consistent with the Fair Information Practice Principles
This Recommendation provides best practices for agencies to use in identifying and reducing unnecessary administrative burdens. Building on previous recommendations of the Conference,
This Recommendation also includes a recommendation directed to OMB that builds on OMB's prior actions directed at reducing burdens. It recommends that OMB provide agencies with additional guidance for measurement and consideration of administrative burden and forgone benefits and services, as well as provide additional guidance on agencies' consideration of the potential advantages and disadvantages of administrative data sharing. This guidance could take many forms, including written guidance or agency-specific or government-wide training. In addition, again building on past recommendations of the Conference and related implementation efforts,
1. Federal agencies should seek to identify and reduce administrative burdens that the public faces when interacting with government programs.
2. Agencies' efforts to identify and reduce burdens should take into account the experiences and perspectives of members of the public who interact with government programs.
3. Because members of the public often interact with multiple government agencies and programs during key life experiences, such as retirement, birth of a child, or unexpected disaster, agency and program officials should collaborate to identify and reduce burdens that would predictably arise during those experiences.
4. When undertaking efforts to identify and reduce burdens, agencies should consider the effects on other important public values, including program integrity.
5. Agencies should adopt procedures for consulting with members of the public who interact with government programs to better inform agency officials about the nature of the burdens their processes impose. In seeking to do so, agencies should try to identify and consult with those who may face disproportionate burdens in accessing agency programs. Agencies should employ multiple consultative techniques, including:
a. Client outreach, such as surveys and focus groups;
b. Requests for public comment;
c. Complaint portals available on agency websites;
d. Consultation with agency staff who work with the public, including agency ombuds or public advocate staff; and
e. Consultation with nongovernmental organizations, advocacy groups, and other members of the private sector (such as representatives, program navigators who help members of the public engage with governmental processes, and social workers) who assist members of the public.
6. To help identify burdens, agencies should use the information obtained through such consultation to identify the procedures members of the public face, and resulting burdens, at each step in the process.
7. To determine agencies' authority to reduce burdens, agencies should trace the legal or operational source of identified burdens to determine whether they are imposed by statute or by regulation, guidance, or agency practice, at the federal or state level.
8. Agencies should, to the extent feasible, estimate and quantify any learning, compliance, or psychological costs of interacting with their programs. These costs
9. Agencies should periodically review their administrative processes to identify opportunities to simplify them by, as appropriate:
a. Limiting the number of steps in processes;
b. Reducing the length of required forms;
c. Limiting documentation requirements, where possible;
d. Eliminating notary requirements and substituting unsworn statements under penalty of perjury; and
e. Expanding access to persons with limited English proficiency and persons with disabilities.
10. Agencies should allow the public to interact with government programs using online processes while still retaining in-person processes when necessary to ensure access to benefits and services. In particular, agencies should, when possible:
a. Create alternatives (such as digital or telephonic signatures) for requirements for “wet” signatures;
b. Allow members of the public to use universal logins used by government agencies;
c. Allow members of the public to interact with agencies by telephone or video conference rather than requiring in-person appointments; and
d. Make agency websites and processes accessible on mobile devices.
11. When permitted by law, agencies should reduce steps members of the public must take to receive benefits or services by using information in the government's possession to determine program eligibility, prepopulate enrollment forms, or automatically select the most beneficial program options for members of the public unless they decide to opt out.
12. Agencies should make information about their programs as easy as possible to find and understand, proactively provide information to members of the public about their eligibility for benefits and services, and allow members of the public to expeditiously access records pertaining to themselves when required for obtaining benefits and services.
13. Agencies should timely provide information in plain language and, when appropriate and feasible, in multiple languages to ensure members of the public can understand and use the information.
14. Agencies should increase the availability of assistance for members of the public interacting with their programs, beyond continuing to enable members of the public to rely on assistance from other persons such as family or friends, by:
a. Working with legal aid organizations and others who provide pro bono or “low” bono (below market rate but not free) services to increase availability of representation;
b. Establishing rules authorizing accredited or qualified nonlawyer representatives to practice before the agency; and
c. Expanding the use of agency staff, including front-line staff, ombuds, and public advocates, as well as government-sponsored and -supported entities designed to help members of the public navigate government processes.
15. Agencies should identify unnecessary administrative burdens that are required by statutes in their Supporting Statements under the Paperwork Reduction Act (PRA) and in their annual proposed legislative program submissions to the Office of Management and Budget (OMB) under OMB Circular A-19.
16. Political appointees, senior executives, and other agency leaders should prioritize burden identification strategies and reduction efforts, using their leadership positions to articulate burden reduction goals for agency staff and outline commitments for achieving them, particularly when such commitments require collaboration between agency units. Agencies should connect their burden reduction goals to their strategic planning and reporting goals under the Government Performance and Results Act.
17. Agencies should identify whether they have particular programs or functions that involve interaction with the public. Agencies with such programs should assemble a team devoted to improving the experiences that these members of the public have when interacting with the agency, often referred to as customer experience (CX) teams. CX teams should have thorough knowledge of relevant agency programs. Senior career staff should partner with one or more political appointees to provide CX teams with sufficient authority within the agency to accomplish their goals.
18. Agencies should include their general counsels and other relevant staff with statutory responsibilities related to burden reduction (for example, privacy officers and PRA officers) in such reduction efforts as early as possible in order to facilitate agency efforts to maximize burden reduction.
19. Federal agencies should expand efforts to collaborate with other entities to maximize burden reduction. In particular, program and legal staff should collaborate with their chief data officer and other relevant officials on ways to share data across federal agencies and between federal and state agencies, consistent with the Fair Information Practice Principles and all relevant law and policy, in order to:
a. Increase outreach to members of the public who may be eligible for administrative programs;
b. Reduce requirements for forms and documentation; and
c. Under certain conditions, provide for automatic enrollment and renewal.
20. Agencies should work with their chief data officers and other relevant officials in cross-agency working groups to share information about best practices for reducing burden and using data-sharing agreements.
21. OMB should provide agencies with additional guidance, potentially including models and training, to inform agency:
a. Measurement and consideration of administrative burden and forgone benefits and services, such as in regulatory impact analyses;
b. Examination of the potential legal or policy advantages and disadvantages of administrative data sharing, in particular providing additional positive examples of data sharing; and
c. Use of flexibilities under the PRA to make it easier for agencies to conduct CX research and to improve agency service delivery.
22. When developing legislation that establishes or affects administrative programs, Congress should provide express statutory authority for agencies to share data where doing so would further the goals of the legislation and not cause undue harm to other legislative purposes or critical privacy interests.
It is often said that justice delayed is justice denied. Indeed, one rationale underlying the adjudication of many types of cases by executive branch agencies is that they often can decide them more quickly through administrative methods than the courts can through judicial methods.
Federal agencies adjudicate millions of cases each year, including applications for benefits and services, applications for licenses and permits, and enforcement actions against persons suspected of violating the law. Members of the public depend on the timely adjudication of their cases. Delayed adjudication, especially given the possible added time of judicial review, can have significant consequences, particularly for members of historically underserved communities.
The time it takes an agency to decide a case depends on, among other variables, the evidentiary and procedural demands of the case, the volume of cases pending before the agency, and the resources available to the agency to adjudicate cases. Many factors can affect these variables, such as the funds appropriated by Congress, which directly impact the resources that agencies can allocate to adjudication. Other factors include the establishment and expansion of programs by Congress, economic and demographic changes, trends in federal employment affecting agencies' ability to recruit and retain personnel involved in adjudication, disruptions to agency operations, such as the COVID-19 pandemic, and agency organizational structures and procedures.
Agencies rely on a wide range of procedural, organizational, personnel,
• Delegation of final decisional authority subject to discretionary review by the agency head;
• Use of precedential decision making by appellate decision makers;
• Adoption of procedures for summary judgment
• Use of a broad suite of active case management techniques;
• Implementation of electronic case management and publicly accessible online processes;
• Establishment of quality assurance systems;
• Development of reasonable time limits or step-by-step time goals for agency action;
• Use of alternative dispute resolution (ADR) techniques;
• Use of simplified or expedited procedures in appropriate cases;
• Use of remote hearings;
• Aggregation of similar claims;
• Use of personnel management strategies.
These recommendations remain valuable resources for policymakers charged with promoting and improving timeliness in agency adjudication. As technologies develop, policymakers also are increasingly looking to artificial intelligence and other advanced algorithmic tools to streamline or automate time-consuming, error-prone, or resource-intensive processes.
At the same time, no single method will promote timeliness at all agencies in all circumstances. Each agency has its own mission, serves different communities, adjudicates according to a distinct set of legal requirements, has different resources available to it, and faces different operational realities. Moreover, in promoting timely adjudication, agencies must remain sensitive to other values of administrative adjudication such as decisional quality, procedural fairness, consistency, transparency, customer service, and equitable treatment. Building on earlier recommendations, this Recommendation provides a general framework that agencies and Congress can use to both foster an organizational culture of timeliness in agency adjudication in accord with principles of fairness, accuracy, and efficiency and devise plans to address increased caseloads, delays, backlogs, and other timeliness concerns when they arise.
1. Agencies should ensure their electronic or other case management systems are collecting data necessary for accuracy in monitoring and detecting changes in case processing times at all levels of their adjudication systems (
a. The number of proceedings of each type pending, commenced, and concluded during a standard reporting period (
b. The current status of each case pending at every level of their adjudication systems; and
c. For each case, the number of days required to meet critical case processing milestones within and across different levels of their adjudication systems.
2. To meet organizational goals and obtain information about expectations for adjudication timelines, agencies should communicate regularly with interested persons within and outside the agency. In addition to formal engagements, agencies should provide ongoing opportunities for interested persons within and outside the agency to provide feedback and suggestions. Methods for obtaining such information include:
a. Surveys of interested persons within and outside the agency;
b. Listening sessions and other meetings;
c. Requests for information published in the
d. Online feedback forms; and
e. Use of ombuds.
3. Agencies should adopt organizational performance goals that encourage and provide clear expectations for timeliness. Performance goals may take several forms, including goals contained in agency strategic plans, guidelines establishing time limits for concluding cases, and policies instituting step-by-step time goals. In developing organizational performance goals for timeliness, agencies should:
a. Use the information described in Paragraphs 1 and 2 to develop goals that are reasonable and objective;
b. Encourage interested persons within and outside the agency to participate in the development of such goals; and
c. Periodically reevaluate such goals to ensure they (i) continue to be reasonable; (ii) encourage and provide clear expectations for timeliness; and (iii) do not adversely affect decisional quality or the fairness or integrity of proceedings.
4. When agencies use timeliness or productivity measures in appraising the performance of employees, as defined in 5 U.S.C. 4301, and members of the Senior Executive Service, or in setting timeliness or productivity expectations for administrative law judges, who are not subject to performance appraisals, agencies should:
a. Use the information described in Paragraphs 1 and 2 to develop measures or expectations that are reasonable and objective and provide clear expectations for timeliness;
b. Encourage interested persons within and outside the agency, including employees to whom the measures or expectations apply, to participate in the development of such measures or expectations;
c. Ensure measures or expectations reflect tasks within the control of individual employees;
d. Ensure measures or expectations take into account the range of case types and tasks performed by individual employees as well as resources (
e. For employees who decide cases, ensure measures or expectations do not lead them to decide cases in a particular way;
f. For all employees, ensure measures or expectations do not lead them to take actions that would adversely affect decisional quality or the fairness or integrity of proceedings; and
g. Periodically reevaluate such measures or expectations.
The Administrative Conference has adopted many recommendations, listed in the Preamble, that identify organizational, procedural, technological, and case management techniques that agencies should use, in appropriate circumstances, to promote timeliness in adjudication or respond to increased caseloads, delays, backlogs, and other timeliness concerns. Agencies should also implement the following best practices, as appropriate:
5. Agencies should narrow disputes and resolve cases at the lowest possible level of their adjudication systems and, at each level, use the least time- and resource-intensive processes available and appropriate to the circumstances, such as informal prehearing procedures, alternative dispute resolution, streamlined procedures, or decision making on the written record.
6. As appropriate, agencies should adopt procedures for (i) resolving multiple cases in a single proceeding, such as the aggregation of similar claims; and (ii) resolving recurring legal or factual issues, such as precedential decision making or substantive rulemaking.
7. Agencies should adopt processes for screening cases at intake to (i) resolve procedural issues as early as possible; (ii) identify cases that may be appropriate for less time- and resource-intensive processes, such as those described in Paragraphs 5 and 6; (iii) identify cases that can be resolved quickly because they are legally and factually straightforward; and (iv) identify cases that should be prioritized or expedited.
8. Agencies should adopt procedures that standardize the allocation of tasks among adjudicators, managers, staff attorneys, and paralegal support staff.
9. Agencies should review and update as necessary their Human Capital Operating Plans (5 CFR pt. 250) to ensure their hiring and position management needs are aligned properly with their operational goals for adjudication.
10. Agencies should automate routine tasks that do not require a significant exercise of discretion when automation will not adversely affect quality or program integrity. Such tasks may include receiving filings and evidence, establishing new case files, associating records with case files, de-duplicating records, assigning cases to agency personnel for action, screening cases as described in Paragraph 7, and generating and releasing standardized correspondence.
11. Agencies should outsource routine tasks that do not require a significant exercise of discretion—such as transcribing, scanning records, or mailing correspondence—when it would be more efficient and cost-effective for a contractor to perform them and there are no legal or policy reasons to assign the tasks to agency personnel (
12. Agencies should adopt rules and policies that reflect best practices for case management, including evidentiary development, motions practice, intervention, extensions of time, decision writing, and methods for encouraging prompt action and discouraging undue delay by parties. At the same time, agencies should ensure that adjudicators, managers, and support staff have sufficient flexibility to manage individual cases fairly, accurately, and efficiently, and test alternative case management techniques that may reveal new best practices. Agencies should periodically reevaluate such rules and policies, using the information described in Paragraphs 1 and 2, to ensure they continue to reflect best practices for case management and provide relevant personnel with sufficient flexibility to manage individual cases and test alternative case management techniques.
13. Agencies should establish organizational units, supervisory structures, and central and field operations that reinforce timeliness and facilitate appropriate communication among agency personnel involved in adjudication at all levels of an adjudication system.
14. Agencies should update public websites and electronic case management systems so that they are able to handle the volume of current and future cases efficiently and effectively.
15. Agencies should engage in evidence-based and transparent strategic planning to anticipate and address concerns about timeliness, including increased caseloads, delays, and backlogs. In undertaking such strategic planning, agencies should:
a. Use the information described in Paragraphs 1 and 2 to identify case processing trends such as geographical or temporal variations in case intake or case processing times, assess the causes of timeliness concerns, and identify points at all levels of their adjudication systems that are causing delays;
b. Review previous efforts to address timeliness concerns to understand what initiatives have been attempted and which have been effective;
c. Consider a wide range of options for improving timeliness in the adjudication process without adversely affecting decisional quality, procedural fairness, program integrity, or other objectives. Options may include organizational, procedural, technological, case management, and other techniques, including those identified in previous Conference recommendations and Paragraphs 5-14;
d. Engage in candid discussions with adjudicators, managers, and support staff at all levels of their adjudication systems, as well as interested persons outside the agency, regarding the benefits, costs, and risks associated with different options for improving timeliness;
e. Develop proposed plans for addressing timeliness concerns, and solicit feedback on the plans from interested persons within and outside of the agency;
f. Consider pilot studies and demonstration projects before implementing interventions broadly to test the effectiveness of different interventions and identify unintended consequences; and
g. Designate a senior official responsible for coordinating the activities described in this Paragraph.
16. Agencies should facilitate communication between components involved in their adjudication systems and other components that carry out functions necessary for timely adjudication, such as those that oversee information technology, human resources, budget planning, office space, and procurement.
17. Agencies should coordinate, as appropriate, with the President and Congress by providing information on recommended legislative changes and appropriations that would promote timeliness generally or address ongoing timeliness concerns.
18. Agencies should partner with federal entities such as the Chief Information Officers Council, the U.S. Digital Service, the General Services Administration, and the Office of Personnel Management to develop and implement best practices for leveraging information technology, human capital, and other resources to promote or improve timeliness.
19. Unless precluded by law or otherwise inappropriate, agencies should share information with each other about their experiences with and practices for promoting timeliness generally and addressing ongoing timeliness concerns. The Office of the Chair of the Administrative Conference should provide for the interchange of such information, as authorized by 5 U.S.C. 594(2).
20. Agencies should develop partnerships with relevant legal service providers, other nongovernmental organizations, and state and local government agencies that advocate for or provide assistance to individuals who participate as parties in agency adjudications.
21. Agencies should make informational materials available to adjudicators, managers, staff attorneys, and paralegal support staff. Agencies should conduct regular training sessions for such personnel on best practices for fair, accurate, and efficient case management.
22. Agencies should provide parties and representatives with resources to help them navigate their adjudication systems, understand procedural alternatives that may expedite decision making in appropriate cases, and learn about best practices for efficient and effective advocacy before the agency. Such resources may include informational materials (
23. As early as possible and at key points throughout the adjudication process, agencies should provide self-represented parties with plain-language materials informing them of (i) their right to be represented by an attorney or qualified nonlawyer legal service provider; (ii) potential benefits of representation; and (iii) options for obtaining representation.
24. Agencies should publicly identify case management priorities and procedures that have been adopted to improve timeliness and may result in parties' cases being identified for aggregation, expedition, or similar alternative techniques.
25. Agencies should publicly disclose (i) average processing times and aggregate processing data for claims pending, commenced, and concluded during a standard reporting period; (ii) any deadlines or processing goals for adjudicating cases; and (iii) information about the agency's plans for and progress in addressing timeliness concerns. Agencies should consider whether and to what extent they should disclose such information pertaining to agency subcomponents.
26. When agencies use timeliness or productivity measures in appraising the performance of employees, as defined in 5 U.S.C. 4301, and members of the Senior Executive Service, or in setting timeliness or productivity expectations for administrative law judges, who are not subject to performance appraisals, they should disclose such measures or expectations publicly and explain how they were developed. For employees who are subject to performance appraisal, agencies should disclose publicly (i) how they use such measures to appraise employees, and (ii) whether employees are eligible for incentive awards based on timeliness or productivity.
27. As set forth in Recommendation 78-3,
a. Recognize that preexisting statutory or regulatory frameworks or special circumstances (
b. State expressly what should occur if the agency does not meet its statutory deadline;
c. State expressly whether affected persons may or may not enforce the time limit through judicial action and, if so, the nature of the relief available for this purpose; and
d. Consider the need to increase agency resources to enable the agency to meet its statutory deadline.
Federal agencies charge user fees as part of many programs. For purposes of this Recommendation, a federal agency “user fee” is (1) any fee assessed by an agency for a good or service that the agency provides to the party paying the fee, as well as (2) any fee collected by an agency from an entity engaged in, or seeking to engage in, activity regulated by the agency, either to support a specific regulatory service provided to that entity or to support a regulatory program that at least in part benefits the entity.
Agencies have assessed user fees since this country was founded. In 1952, Congress enacted the Independent Offices Appropriations Act (IOAA), giving agencies broad authority to charge user fees in connection with specific goods or services that benefit identifiable persons or entities.
In 1987, the Administrative Conference adopted Recommendation 87-4,
There have been significant developments since ACUS last addressed this topic in 1987. Congress and agencies have continued to expand the collection of and reliance on user fees,
Today, user fee programs serve many purposes and vary significantly in their design. Some are established by a specific statute. Such statutes may specify the fee amount, provide a formula for calculating fees, or prescribe a standard for the agency to use in establishing reasonable fees (
When designing user fee programs, Congress and agencies must also consider possible negative consequences such as the potential for fees to adversely affect the quality of agency decision making or its appearance of impartiality; their potential to affect the behavior of private persons and entities in unintended ways; the impact of the fees on low-income people, members of historically underserved communities, and small businesses and other small entities; the agency's revenue stability; and congressional oversight. The Conference consistently has emphasized the potential for public engagement to help policymakers obtain more comprehensive information, enhance the legitimacy of their decisions, and increase public support for their decisions.
Given expanded reliance on user fees, the development of new models for user fee programs, and updated guidance on user fees from OMB, the Conference decided to revisit the subject. This Recommendation represents the Conference's current views on the objectives, design, and implementation of user fee programs by Congress and agencies, and supplements and updates Recommendation 87-4.
1. In creating or modifying user fees, Congress or agencies, as appropriate, should identify the purpose(s) of an agency's user fee program, such as shifting the costs of a program from taxpayers to those persons or entities whom the program benefits, supplementing general revenue, or incentivizing or discouraging certain behavior. Congress or agencies also should consider whether or not there are reasons for waivers, exemptions, or reduced rates.
2. When establishing a user fee-funded program, especially one with a novel fee structure and one that collects fees from regulated entities, Congress or agencies, as appropriate, should consider whether any feature of the program might inappropriately affect or be perceived as inappropriately affecting agency decision making and whether any steps should be taken to mitigate those effects.
3. Congress or agencies, as appropriate, should consider whether a user fee may have a negative or beneficial effect on the behavior of individuals and entities subject to that fee. Congress or agencies also should consider whether the user fee might have other public benefits, such as promoting equity, reducing barriers to market entry, incentivizing desirable behavior, or producing some other socially beneficial outcome, or might have other public costs. Congress or agencies, as appropriate, should set forth procedures for waiving or reducing user fees that would cause undue hardship for low-income individuals, members of historically underserved communities, small businesses, and other small entities.
4. Congress or agencies, as appropriate, should ensure user fees are not disproportionate in relation to government costs or to the benefits that users receive.
5. When Congress enacts a specific statute, separate from the Independent Offices Appropriations Act, authorizing an agency to collect user fees, it should specify, as applicable:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
6. Whenever Congress decides to create a new statutory user fee program, it should reach out to relevant agencies for technical assistance early in the legislative drafting process and it should consider input from interested persons.
7. Congress should maintain oversight of agencies that operate user fee programs, such as through the appropriations process or authorizing legislation that specifies the purpose, time, and availability for money collected through user fee programs.
8. When an agency establishes a new user fee program or sets fees under an existing program, it should follow the rulemaking requirements of 5 U.S.C. 553 unless Congress has specified otherwise. In engaging with interested members of the public, agencies should follow the best practices suggested in Recommendations 2018-7,
9. Agencies should communicate clearly to the public the purpose(s) of their user fee programs, the nature of the fee setting process, and the uses for which the agency expends collected fees. Agencies also should be transparent with and engage the public when conducting activities that may affect the design of their user fee programs or the level of their fees, for instance by inviting public participation at early stages such as during cost and demand forecasting and budget formulation.
10. Agencies should maintain an easy-to-find page on their websites describing their user fee-funded programs, identifying and explaining the fees, describing any waivers or exemptions available, identifying the uses for which the agency expends collected fees, and providing links to supporting resources, such as the governing sections of the
11. Agencies should conduct regular reviews, consistent with Recommendation 2021-2,
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are advising the public that we have prepared a pest risk analysis that evaluates the risks associated with importation of fresh rhizomes of turmeric (
We will consider all comments that we receive on or before March 11, 2024.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
Mr. Marc Phillips, Senior Regulatory Policy Specialist, Regulatory Coordination and Compliance, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1231; phone: (301) 851-2114; email:
Under the regulations in “Subpart L—Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-12, referred to below as the regulations), the Animal and Plant Health Inspection Service (APHIS) prohibits or restricts the importation of fruits and vegetables into the United States from certain parts of the world to prevent plant pests from being introduced into or disseminated within the United States.
Section 319.56-4 contains a performance-based process for approving the importation of fruits and vegetables that, based on the findings of a pest risk analysis, can be safely imported subject to one or more of the five designated phytosanitary measures listed in paragraph (b) of that section.
APHIS received a request from the national plant protection organization (NPPO) of Mexico to allow the importation of fresh rhizomes of turmeric (
Therefore, in accordance with § 319.56-4(c), we are announcing the availability of our pest risk assessment and RMD for public review and comment. Those documents, as well as a description of the economic considerations associated with the importation of fresh rhizomes of turmeric from Mexico, may be viewed on the
After reviewing any comments that we receive, we will announce our decision regarding the import status of fresh rhizomes of turmeric from Mexico in a subsequent notice. If the overall conclusions of our analysis and the Administrator's determination of risk remain unchanged following our consideration of the comments, then we will authorize the importation of fresh rhizomes of turmeric from Mexico into the United States subject to the requirements specified in the RMD.
Forest Service, Agriculture (USDA).
Notice; correction.
The Office of the Federal Register published a correction in the
In the
Comments concerning the scope of the analysis are most valuable to the Forest Service if received by February 2, 2024.
Forest Service, Agriculture (USDA).
Notice of availability for public comment; extension of comment period.
The Forest Service (Forest Service or Agency) published a notice in the
The comment period for the notice published November 17, 2023, at 88 FR 80269, is extended. Comments must be received in writing by January 30, 2024.
Comments may be submitted electronically to
Peter Mali, National Wilderness Program Manager,
Climbing is a growing sport in the United States. According to the Outdoor Industry Association's 2022 Report on Outdoor Participation Trends, there were nearly 10.3 million climbers in the United States in 2021. Approximately 30 percent of outdoor climbing in the United States occurs on NFS lands. In recent years, line officers have expressed concerns about climbing-related impacts on resources and conflicts among uses. Current Forest Service directives do not provide guidance for climbing opportunities on NFS lands. The Joint Explanatory Statement accompanying the 2021 Consolidated Appropriations Act directs the Forest Service to issue general guidance on climbing opportunities on NFS lands, including the application of the Wilderness Act (16 U.S.C. 1131-1136) to climbing opportunities and appropriate use of fixed anchors and fixed equipment in wilderness. To address impacts associated with increased climbing on NFS lands and consistent with the Joint Explanatory Statement, the Forest Service is proposing revisions to its directives to provide guidance on climbing opportunities on NFS lands.
The proposed directive would provide guidance on climbing opportunities inside and outside wilderness on NFS lands and would provide for climbing opportunities that serve visitor needs; meet land management and recreation policy objectives; emphasize the natural setting of NFS lands; align with natural and cultural resource protection and the Agency's responsibility to Indian Tribes; and are consistent with applicable law, directives, and the applicable land management plan.
The proposed directive would add a new section, 2355, to Forest Service Manual (FSM) 2300—Recreation, Wilderness, and Related Resource Management, chapter 2350—Trail, River, and Similar Recreation Opportunities, which would provide that climbing is an appropriate use of NFS lands (proposed FSM 2355.03, para. 1)—including in wilderness—when conducted in accordance with applicable law and Forest Service directives and consistent with the applicable land management plan (proposed FSM 2355.03, para. 4); that a climbing management plan be developed, as funding and resources allow, for climbing opportunities in wilderness, and for climbing opportunities outside wilderness where the District Ranger determines that climbing is causing adverse resource impacts or use conflicts (proposed FSM 2355.21); that fixed anchors and fixed equipment are installations for purposes of section 4(c) of the Wilderness Act (16 U.S.C. 1133(c)) (proposed FSM 2355.32, para. 1); that a Forest Supervisor may authorize the placement or replacement of fixed anchors and fixed equipment in wilderness based on a case-specific determination that they are the minimum necessary for administration of the area for Wilderness Act purposes, including primitive or unconfined recreation and preservation of wilderness character (proposed FSM 2355.32, para. 1); that existing fixed anchors and fixed equipment in wilderness may be retained pending completion of a Minimum Requirements Analysis, as funding and resources allow, that determines they are the minimum necessary to facilitate primitive or unconfined recreation or otherwise preserve wilderness character (FSM 2355.32, para. 5);); and that the issuance and administration of special use permits are encouraged to enhance visitor access to climbing opportunities and visitor education concerning low impact climbing practices (proposed FSM 2355.03, para. 9).
To allow for enforcement of restrictions and prohibitions in climbing management plans as needed, the Forest Service will be proposing revisions via a separate
The minimum 120-day Tribal consultation for the proposed directive was initiated November 8, 2021, and will conclude at the end of the comment period for the proposed directive.
To ensure that all members of the public who have an interest in NFS climbing opportunities have the opportunity to provide comment, we are extending the comment period on the proposed directive to January 30, 2024.
After the public comment period closes, the Forest Service will consider timely comments that are within the scope of the proposed directive in the development of the final directive. A notice of the final directive, including a response to timely comments, will be posted on the Forest Service's web page at
Lithion Battery, Inc. submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Henderson, Nevada within FTZ 89. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on December 27, 2023.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished products include: battery packs also known as (aka) modules; controllers for battery management systems; housing units for controllers and battery cells aka compacts; and, metal cabinets for storing battery modules (duty rate ranges from duty-free to 3.4%).
The proposed foreign-status materials and components include: battery modules and controllers; cylindrical cells; steel cabinets; shipping containers for storing battery modules; cables of copper wiring and plastic rubber connectors and insulators; plastic frames and cases; metal fasteners; screws; rubber insulation; glues and adhesives; and, wire harnesses (duty rate ranges from duty-free to 3.4%). The request indicates that the materials/components are subject to duties under section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 301 decisions require subject merchandise
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Juanita Chen at
Volkswagen Group of America, Inc., submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Chattanooga, Tennessee within FTZ 134. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on January 4, 2024.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed foreign-status components include: high voltage heating positive coefficient modules; stainless steel exhaust systems with catalyst; spindle drives; light on detection sensors; and, rain sensors (duty rate ranges from duty-free to 4.2%). The request indicates that certain materials/components are subject to duties under section 232 of the Trade Expansion Act of 1962 (section 232) and section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 232 and section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Christopher Wedderburn at
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that
Applicable January 10, 2024.
Rebecca Janz, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2972.
On August 22, 2023, Commerce published in the
The products covered by this investigation are tin mill products from Turkey. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), in September and October 2023, we conducted verifications of the sales and cost information submitted by Toscelik Profil ve Sac Endustrisi A.S. and Tosyali Toyo Celik A.S., collectively, Tosyali Toyo/Toscelik Profil,
We are incorporating Tosyali Toyo/Toscelik Profil's revised databases, submitted at Commerce's request, into this final determination, which reflect changes based on minor corrections Tosyali Toyo/Toscelik Profil submitted at verification, as well as minor discrepancies found by Commerce.
The final estimated weighted-average dumping margin is as follows:
Consistent with section 735(a)(4) of the Act, Commerce disregards
Furthermore, Commerce has not calculated an estimated weighted-average dumping margin for all other producers and exporters pursuant to sections 735(c)(1)(B) and (c)(5) of the Act because it has not made an affirmative determination of sales at LTFV.
Commerce intends to disclose its calculations performed in this final determination within five days of its public announcement or, if there is no public announcement, within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).
In the
In accordance with section 735(d) of the Act, we will notify the U.S. International Trade Commission of this final negative determination of sales at LTFV. As our final determination is negative, this proceeding is terminated in accordance with section 735(c)(2) of the Act.
This notice will serve as the final reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of 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 violation which is subject to sanction.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (± 10%) or 0.255 mm (± 10%) with 770 mm (minimum width) (± 1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (± 1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70- 130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch (3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8 temper, 1.00/0.25 pound/base box coating, 60 pound/base box (0.0066 inch) thickness, and 35.9375 inch ordered width; or (6) CADR8 temper, 1.00/0.25 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 32.9375 inch, 33.125 inch, or 35.1875 inch ordered width.
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that certain cold-drawn mechanical tubing of carbon and alloy steel (cold-drawn mechanical tubing) from Italy was sold in the United States at less than normal value during the period of review (POR), June 1, 2021, through May 31, 2022.
Applicable January 10, 2024.
Colin Thrasher, 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) 482-3004.
On July 7, 2023, Commerce published the
Commerce conducted this administrative review in accordance with section 751 of the Tariff Act of 1930, as amended (the Act).
The products covered by this
All issues raised by interested parties in their case and rebuttal briefs are addressed in the Issues and Decision Memorandum. A list of the issues that parties raised, and to which we responded in the Issues and Decision Memorandum, is attached to this notice as an appendix. 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 a review of the record and comments received from interested parties, we have revised a revenue-related offset associated with U.S. movement charges. For a more detailed discussion of this change,
Commerce determines that the following weighted-average dumping margin exists for the POR June 1, 2021, through May 31, 2022:
Commerce intends to disclose to interested parties the calculations performed in connection with these final results within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of the notice of final results in the
Pursuant to section 751(a)(2)(A) of the Act, and 19 CFR 351.212(b)(1), Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by this review.
Because Dalmine'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 Dalmine for which it 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 established in the original less-than-fair value (LTFV) investigation (
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 Dalmine will be equal to the weighted-average dumping margin established in the final results of this administrative review; (2) for merchandise exported by a company not covered in this review but covered in a prior segment of the proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recently-completed segment in which it was reviewed; (3) if the exporter is not a firm covered in this review or the original LTFV investigation, but the producer is, then the cash deposit rate will be the rate established for the most recently-completed segment of this proceeding for the producer of the merchandise; and (4) the cash deposit rate for all other producers or exporters will continue to be 47.87 percent,
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 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 has occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a final reminder to parties subject to 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/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.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5) and 19 CFR 351.213(h)(2).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that tin mill products from the Netherlands are not being, or are not likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation January 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
Brittany Bauer, 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) 482-3860.
On August 22, 2023, Commerce published in the
For a complete description of the events that followed the
The products covered by this investigation are tin mill products from the Netherlands. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), in September and October 2023, we conducted verifications of the sales and cost information submitted by TSIJ for use in our final determination. We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by TSIJ.
All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached as Appendix II to this notice.
We have made certain changes to the margin calculations for TSIJ since the
The final estimated weighted-average dumping margin is as follows:
Commerce determines that TSIJ, the only individually-examined respondent, has not made sales of subject merchandise at LTFV. Accordingly, Commerce has not calculated an estimated weighted-average dumping margin for all other producers and exporters pursuant to sections 735(c)(1)(B) and (c)(5) of the Act, because it has not made an affirmative determination of sales at LTFV.
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In the
In accordance with section 735(d) of the Act, we will notify the International Trade Commission of this final negative determination of sales at LTFV. As our final determination is negative, this proceeding is terminated in accordance with section 735(c)(2) of the Act.
This notice will serve as the final reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). 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 violation which is subject to sanction.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (±10%) or 0.251 mm (90 pound base box) (±10%) or 0.255 mm (±10%) with 770 mm (minimum width) (±1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (±1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70- 130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch (3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8 temper, 1.00/0.25 pound/base box coating, 60 pound/base box (0.0066 inch) thickness, and 35.9375 inch ordered width; or (6) CADR8 temper, 1.00/0.25 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 32.9375 inch, 33.125 inch, or 35.1875 inch ordered width.
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that tin mill products from Taiwan are not being, or are not likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation
Applicable January 10, 2024.
Jacob Saude, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0981.
On August 22, 2023, Commerce published in the
A summary of the events that occurred since Commerce published the
The products covered by this investigation are tin mill products from Taiwan. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope specific case and rebuttal briefs.
All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
Commerce conducted verification of the information relied upon in making its final determination in this investigation, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act). Specifically, Commerce conducted on-site verifications of the home market sales, U.S. sales, and cost of production responses submitted by Ton Yi Industrial Corporation (Ton Yi).
During the on-site verification, Ton Yi presented minor corrections to its U.S. sales database.
In accordance with section 735(a)(3) of the Act and 19 CFR 351.206, Commerce continues to find that critical circumstances do not exist for Ton Yi. For a full description of the methodology and results of Commerce's critical circumstances analysis,
Commerce determines that the final estimated weighted-average dumping margin exists:
Consistent with sections 735(c)(1)(B) and (c)(5) of the Act, Commerce has not calculated an estimated weighted-average dumping margin for all other producers and exporters because it has not made an affirmative final determination of sales at LTFV.
Commerce intends to disclose the calculations performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
In the
In accordance with section 735(d) of the Act, Commerce will notify the U.S. International Trade Commission of its final negative determination of sales at
This notice will serve as a reminder to the parties subject to an 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). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (± 10%) or 0.255 mm (± 10%) with 770 mm (minimum width) (± 1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (± 1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70-130 mg/m2, with a chromium oxide layer of 5-30 mg/m2, with a tensile strength of 260-440 N/mm2, with an elongation of 28-48%, with a hardness (HR-30T) of 40-58, with a surface roughness of 0.5-1.5 microns Ra, with magnetic properties of Bm (kg) 10.0 minimum, Br (kg) 8.0 minimum, Hc (Oe) 2.5-3.8, and MU 1400 minimum, as measured with a Riken Denshi DC magnetic characteristic measuring machine, Model BHU-60.
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch (3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8 temper, 1.00/0.25 pound/base box coating, 60 pound/base box (0.0066 inch) thickness, and 35.9375 inch ordered width; or (6) CADR8 temper, 1.00/0.25 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 32.9375 inch, 33.125 inch, or 35.1875 inch ordered width.
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m2 and a chromium oxide layer between 5-30 mg/m2; chemical composition of 0.05% maximum carbon, 0.03% maximum silicon, 0.60% maximum manganese, 0.02% maximum phosphorous, and 0.02% maximum sulfur; magnetic flux density (Br) of 10 kg minimum and a coercive force (Hc) of 3.8 Oe minimum.
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that imports of tin mill products from Germany are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is January 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
George McMahon or Carolyn Adie, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1167 and (202) 482-6250, respectively.
On August 22, 2023, Commerce published in the
A summary of the events that occurred since Commerce published the
The products covered by this investigation are tin mill products from Germany. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
Commerce verified the information relied upon in making its final determination in this investigation, consistent with section 782(i) of the Tariff Act of 1930, as amended (the Act). Specifically, Commerce conducted on-site verifications of the information and data on home market sales, U.S. sales, and cost of production submitted by thyssenkrupp Rasselstein GmbH (TKR).
All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
We made certain changes to the margin calculation for TKR since the
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for individually investigated exporters and producers, excluding rates that are zero,
In this investigation, Commerce calculated an individual estimated weighted-average dumping margin for the sole mandatory respondent, TKR, that is not zero,
In accordance with section 735(a)(3) of the Act and 19 CFR 351.206, Commerce continues to find that critical circumstances do not exist for all companies in Germany. For a full description of the methodology and results of Commerce's critical circumstances analysis,
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce intends to disclose the calculations performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of subject merchandise, as described in Appendix I of this notice, which were entered, or withdrawn from warehouse, for consumption on or after August 22, 2023, the date of publication of the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), upon the publication of this notice, we will instruct CBP to require a cash deposit for estimated antidumping duties for such entries as follows: (1) the cash deposit rate for the respondent listed in the table above is the company-specific estimated weighted-average dumping margin listed for the respondent in the table; (2) if the exporter is not the respondent listed in the table above, but the producer is, then the cash deposit rate is the company-specific estimated weighted-average dumping margin listed for the producer of the subject merchandise in the table above; and (3) the cash deposit rate for all other producers and exporters is the all-others estimated weighted-average dumping margin listed in the table above.
In accordance with section 735(d) of the Act, Commerce will notify the U.S. International Trade Commission (ITC) of its final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of tin mill products no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated, all cash deposits posted will be refunded, and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed in the “Continuation of Suspension of Liquidation” section above.
This notice serves as the only reminder to parties subject to an 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). 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 terms of an APO is a sanctionable violation.
This final determination is issued and published in accordance with sections 735(d) and 777(i) of the Act and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (± 10%) or 0.255 mm (± 10%) with 770 mm (minimum width) (± 1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (± 1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70-130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch (3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8 temper, 1.00/0.25 pound/base box coating, 60 pound/base box (0.0066 inch) thickness, and 35.9375 inch ordered width; or (6) CADR8 temper, 1.00/0.25 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 32.9375 inch, 33.125 inch, or 35.1875 inch ordered width.
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of tin mill products from the People's Republic of China (China). The period of investigation is January 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
Genevieve Coen or Melissa Porpotage, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3251 or (202) 482-1413, respectively.
On June 26, 2023, Commerce published its
For a complete description of the events that followed the
The products covered by this investigation are tin mill products from China. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
The subsidy programs under investigation, and the issues raised in the case and rebuttal briefs that were submitted by parties in this investigation, are discussed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
Commerce conducted this investigation in accordance with section 701 of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found to be countervailable, Commerce determines that there is a subsidy,
In making this final determination, Commerce relied, in part, on facts otherwise available, pursuant to sections 776(a) and (b) of the Act. For a full discussion of our application of adverse facts available (AFA),
Commerce was unable to conduct on-site verification of the information relied on in making its final determination in this investigation. However, in August 2023, we took additional steps in lieu of on-site verifications to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Act, by conducting virtual verification of one of the mandatory respondents, Shougang Jingtang United Iron & Steel Co., Ltd. (Jingtang Iron).
In accordance with sections 703(e)(1), and 776(a) and (b) of the Act, and 19 CFR 351.206, as well as our analysis of comments received regarding our affirmative preliminary determination of critical circumstances,
Based on our review and analysis of the information at verification and comments received from interested parties, we made changes to the subsidy rate calculations for Jingtang Iron. For a discussion of the comments received,
Pursuant to section 705(c)(5)(A)(i) of the Act, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and
Commerce determines that the following estimated countervailable subsidy rates exist:
Commerce intends to disclose to interested parties the calculations performed in this final determination within five days of any public announcement or, if there is no public announcement, within five days of the date of the publication of this notice in the
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a countervailing duty (CVD) order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated CVDs for entries of subject merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
In accordance with section 705(d) of the Act, we will notify the ITC of our final affirmative determination that countervailable subsidies are being provided to producers and exporters of pressure washers from China. Because the final determination in this proceeding is affirmative, in accordance with section 705(b) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of pressure washers from China no later than 45 days after our final determination. In addition, we are making available to the ITC all non-privileged and nonproprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, CVDs on all imports of the subject merchandise that are 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.
In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (± 10%) or 0.255 mm (±10%) with 770 mm (minimum width)
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70-130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch(3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8 temper, 1.00/0.25 pound/base box coating, 60 pound/base box (0.0066 inch) thickness, and 35.9375 inch ordered width; or (6) CADR8 temper, 1.00/0.25 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 32.9375 inch, 33.125 inch, or 35.1875 inch ordered width.
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. in., with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that tin mill products from the United Kingdom (UK) are not being, or are not likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation (POI) January 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
Charles DeFilippo, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3797.
On August 22, 2023, Commerce published in the
The products covered by this investigation are tin mill products from the UK. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope specific case and rebuttal briefs.
Commerce conducted verification of the information relied upon in making its final determination in this investigation, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act). Specifically, Commerce conducted on-site verifications of the home market sales, U.S. sales, and cost of production responses submitted by Tata Steel UK Ltd. (TSUK).
During the on-site verification, TSUK presented minor corrections to its home market and U.S. sales databases.
Commerce determines that the final estimated weighted-average dumping margin exists:
Consistent with sections 735(c)(1)(B) and (c)(5) of the Act, Commerce has not calculated an estimated weighted-average dumping margin for all other producers and exporters because it has not made an affirmative final determination of sales at LTFV.
Commerce intends to disclose its calculations and analysis performed to interested parties in this final determination within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
In the
In accordance with section 735(d) of the Act, Commerce will notify the U.S. International Trade Commission of its final negative determination of sales at LTFV. As our final determination is negative, this proceeding is terminated in accordance with section 735(c)(2) of the Act.
This notice will serve as a reminder to the parties subject to an 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). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (± 10%) or 0.255 mm (± 10%) with 770 mm (minimum width) (± 1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (± 1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70- 130 mg/m2, with a chromium oxide layer of 5-30 mg/m2, with a tensile strength of 260-440 N/mm2, with an elongation of 28-48%, with a hardness (HR-30T) of 40-58, with a surface roughness of 0.5-1.5 microns Ra, with magnetic properties of Bm (kg) 10.0 minimum, Br (kg) 8.0 minimum, Hc (Oe) 2.5-3.8, and MU 1400 minimum, as measured with a Riken Denshi DC magnetic characteristic measuring machine, Model BHU-60.
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch(3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m2 and a chromium oxide layer between 5-30 mg/m2; chemical composition of 0.05% maximum carbon, 0.03% maximum silicon, 0.60% maximum manganese, 0.02% maximum phosphorous, and 0.02% maximum sulfur; magnetic flux density (Br) of 10 kg minimum and a coercive force (Hc) of 3.8 Oe minimum.
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC) that revocation of the antidumping duty (AD) and countervailing duty (CVD) orders on certain softwood lumber products (softwood lumber) from Canada would likely lead to the continuation or recurrence of dumping and countervailable subsidies, and material injury to an industry in the United States, Commerce is publishing a notice of continuation of these AD and CVD orders.
Applicable December 28, 2023.
Zachary Shaykin, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2638.
On January 3, 2018, Commerce published in the
On December 28, 2023, the ITC published its determination, pursuant to sections 751(c) and 752(a) of the Act, that revocation of the
The merchandise covered by the
• Coniferous wood, sawn, or chipped lengthwise, sliced or peeled, whether or not planed, whether or not sanded, or whether or not finger-jointed, of an actual thickness exceeding six millimeters.
• Coniferous wood siding, flooring, and other coniferous wood (other than moldings and dowel rods), including strips and friezes for parquet flooring, that is continuously shaped (including, but not limited to, tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded) along any of its edges, ends, or faces, whether or not planed, whether or not sanded, or whether or not end-jointed.
• Coniferous drilled and notched lumber and angle cut lumber.
• Coniferous lumber stacked on edge and fastened together with nails, whether or not with plywood sheathing.
• Components or parts of semi-finished or unassembled finished products made from subject merchandise that would otherwise meet the definition of the scope above.
Finished products are not covered by the scope of these
The following items are excluded from the scope of these
• Softwood lumber products certified by the Atlantic Lumber Board as being first produced in the Provinces of Newfoundland and Labrador, Nova Scotia, or Prince Edward Island from logs harvested in Newfoundland and Labrador, Nova Scotia, or Prince Edward Island.
• U.S.-origin lumber shipped to Canada for processing and imported into the United States if the processing occurring in Canada is limited to one or more of the following: (1) kiln drying; (2) planing to create smooth-to-size board; or (3) sanding.
• Box-spring frame kits if they contain the following wooden pieces—two side rails, two end (or top) rails and varying numbers of slats. The side rails and the end rails must be radius-cut at both ends. The kits must be individually packaged and must contain the exact number of wooden components needed to make a particular box-spring frame, with no further processing required. None of the components exceeds 1″ in actual thickness or 83″ in length.
• Radius-cut box-spring-frame components, not exceeding 1″ in actual thickness or 83″ in length, ready for assembly without further processing. The radius cuts must be present on both ends of the boards and must be substantially cut so as to completely round one corner.
Softwood lumber product imports are generally entered under Chapter 44 of the Harmonized Tariff Schedule of the United States (HTSUS). This chapter of the HTSUS covers “Wood and articles of wood.” Softwood lumber products that are subject to these
Subject merchandise as described above might be identified on entry documentation as stringers, square cut box-spring-frame components, fence pickets, truss components, pallet components, flooring, and door and window frame parts. Items so identified might be entered under the following ten-digit HTSUS subheadings in Chapter 44: 4415.20.40.00; 4415.20.80.00; 4418.99.9105; 4418.99.9120; 4418.99.9140; 4418.99.9195; 4421.99.70.40; and 4421.99.9880.
Although these HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of these
As a result of the determinations by Commerce and the ITC that revocation of the
The effective date of the continuation of the
This notice also serves as a final reminder to parties subject to an 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 terms of an APO is a violation which is subject to sanction.
These five-year (sunset) reviews and this notice are in accordance with sections 751(c) and 751(d)(2) of the Act and published in accordance with section 777(i) of the Act and 19 CFR 351.218(f)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that imports of tin mill products from the People's Republic of China (China) are being, or are likely to be, sold in the United States at less-than-fair value (LTFV). The period of investigation is July 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
Rachel Jennings, AD/CVD Operations, Office V, Enforcement and Compliance,
On August 22, 2023, Commerce published in the
A summary of the events that occurred since Commerce published the
The products covered by this investigation are tin mill products from China. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
All issues raised in the case and rebuttal briefs by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues raised is attached to this notice as Appendix II.
We continue find that critical circumstances exist for imports of tin mill products from China for the China-wide entity pursuant to sections 735(a)(3)(A) and (B) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.206.
For the purposes of this final determination, consistent with the
In the
The final estimated weighted-average dumping margin is as follows:
Normally, Commerce will disclose to the parties in a proceeding the calculations performed in connection with a final determination within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of the notice of final determination in the
In accordance with sections 735(c)(1)(B) and 735(c)(4)(A) of the Act, for the China-wide entity, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of subject merchandise as described in Appendix I of this notice, which were entered, or withdrawn from warehouse, for consumption, on or after May 24, 2023, which is 90 days prior to the date of publication of the
To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of domestic subsidy pass-through and export subsidies determined in a companion countervailing duty (CVD) proceeding when CVD provisional measures are in effect. Accordingly, where Commerce makes an affirmative determination for domestic subsidy pass-through or export subsidies, Commerce offsets the calculated estimated weighted-average dumping margin by the appropriate rates. Commerce has continued to adjust the cash deposit rate for the China-wide entity for export subsidies in the companion CVD investigation by the appropriate export subsidy rate as indicated in the above chart.
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the amount by which the normal value exceeds the U.S. price as follows: (1) for all Chinese exporters of subject merchandise, the cash deposit rate will be equal to the estimated dumping margin established for the China-wide entity; and (2) for all third country exporters of subject merchandise, the cash deposit rate is also the cash deposit rate applicable to the China-wide entity. These suspension of liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, we will notify the U.S. International Trade Commission (ITC) of our final affirmative determination of sales at LTFV. Because the final determination in this proceeding is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of tin mill products from China no later than 45 days after this final determination. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all cash deposits will be refunded or canceled, and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise that are 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 an 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). 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 terms of an APO is a sanctionable violation.
This final determination and notice are issued and published in accordance with sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The products within the scope of the investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double- reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of the investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of the investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (± 10%) or 0.255 mm (± 10%) with 770 mm (minimum width) (± 1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (±
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70-130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8 temper, 1.00/0.25 pound/base box coating, 60 pound/base box (0.0066 inch) thickness, and 35.9375 inch ordered width; or (6) CADR8 temper, 1.00/0.25 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 32.9375 inch, 33.125 inch, or 35.1875 inch ordered width.
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to the investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC) that revocation of the antidumping duty (AD) order and countervailing duty (CVD) order on cast iron soil pipe fittings (soil pipe fittings) from the People's Republic of China (China) would likely lead to a continuation or recurrence of dumping, countervailable subsidies, and material injury to an industry in the United States, Commerce is publishing a notice of continuation of the AD and CVD orders.
Applicable December 28, 2023.
Katherine Johnson or Henry Wolfe, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4929 or (202) 482-0574, respectively.
On August 31, 2018, Commerce published in the
On December 28, 2023, the ITC published its determination, pursuant to sections 751(c) and 752(a) of the Act, that revocation of the
The merchandise covered by these
Cast iron soil pipe fittings are classified into two major types—hubless and hub and spigot. Hubless cast iron soil pipe fittings are manufactured without a hub, generally in compliance with Cast Iron Soil Pipe Institute (CISPI) specification 301 and/or American Society for Testing and Materials (ASTM) specification A888. Hub and spigot pipe fittings have hubs into which the spigot (plain end) of the pipe or fitting is inserted. Cast iron soil pipe fittings are generally distinguished from other types of nonmalleable cast iron fittings by the manner in which they are connected to cast iron soil pipe and other fittings.
Excluded from the scope are all drain bodies. Drain bodies are normally classified in subheading 7326.90.86.88 of the Harmonized Tariff Schedule of the United States (HTSUS).
The subject imports are normally classified in subheading 7307.11.0045 of the HTSUS: Cast fittings of nonmalleable cast iron for cast iron soil pipe. They may also be entered under HTSUS 7324.29.0000 and 7307.92.3010. The HTSUS subheadings and specifications are provided for convenience and customs purposes only; the written description of the scope of these
As a result of the determinations by Commerce and the ITC that revocation of the
The effective date of the continuation of the
This notice also serves as a final reminder to parties subject to an 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 terms of an APO is a violation which is subject to sanction.
These five-year (sunset) reviews and this notice are in accordance with sections 751(c) and 751(d)(2) of the Act and published in accordance with 777(i) the Act, and 19 CFR 351.218(f)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that imports of tin mill products from Canada are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation January 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
Yang Jin Chun, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-5760.
On August 22, 2023, Commerce published in the
A summary of the events that occurred since Commerce published the
The products covered by this investigation are tin mill products from Canada. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
Commerce verified the information relied upon in making its final determination in this investigation, consistent with section 782(i) of the Tariff Act of 1930, as amended (the Act). Specifically, Commerce conducted on-site verifications of the information and data on home market sales, U.S. sales, and cost of production submitted by ArcelorMittal Dofasco G.P. (Dofasco).
All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
We made certain changes to the margin calculation for Dofasco since the
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for individually investigated exporters and producers, excluding rates that are zero,
In this investigation, Commerce calculated an individual estimated weighted-average dumping margin for the sole mandatory respondent, Dofasco, that is not zero,
In accordance with section 735(a)(3) of the Act and 19 CFR 351.206, Commerce continues to find that critical circumstances do not exist for all companies in Canada. For a full description of the methodology and results of Commerce's critical circumstances analysis,
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce intends to disclose the calculations performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of subject merchandise, as described in Appendix I of this notice, which were entered, or withdrawn from warehouse, for consumption on or after August 22, 2023, the date of publication of the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), upon the publication of this notice, we will instruct CBP to require a cash deposit for estimated antidumping duties for such entries as follows: (1) the cash deposit rate for the respondent listed in the table above is the company-specific estimated weighted-average dumping margin listed for the respondent in the table; (2) if the exporter is not the respondent listed in the table above, but the producer is, then the cash deposit rate is the company-specific estimated weighted-average dumping margin listed for the producer of the subject merchandise in the table above; and (3) the cash deposit rate for all other producers and exporters is the all-others estimated weighted-average dumping margin listed in the table above.
In accordance with section 735(d) of the Act, Commerce will notify the U.S. International Trade Commission (ITC) of
This notice serves as the only reminder to parties subject to an 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). 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 terms of an APO is a sanctionable violation.
This final determination and notice are issued and published in accordance with sections 735(d) and 777(i) of the Act and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (± 10%) or 0.251 mm (90 pound base box) (±10%) or 0.255 mm (±10%) with 770 mm (minimum width) (±1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (±1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70- 130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that tin mill products from the Republic of Korea (Korea) are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation (POI) January 1, 2022, through December 31, 2022.
Applicable January 10, 2024.
Fred Baker or Preston Cox, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2924 or (202) 482-5041, respectively.
On August 22, 2023, Commerce published in the
The products covered by this investigation are tin mill products from Korea. For a complete description of the scope of this investigation,
During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs.
Commerce verified the sales and cost information submitted by KG Dongbu Steel Co., Ltd. (KG Dongbu) and TCC Steel Corp. (TCC) for use in our final determination, consistent with section 782(i) of the Tariff Act of 1930, as amended (the Act). We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by KG Dongbu and TCC.
We made certain changes to the preliminary weighted-average margin
We revised the sales data reported by TCC to incorporate the corrections provided by the company at verification.
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for individually investigated exporters and producers, excluding rates that are zero,
In this investigation, Commerce calculated an individual estimated weighted-average dumping margin for TCC that is not zero,
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce intends to disclose the calculations performed in connection with this final determination within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
In accordance with section 733(d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of tin mill products from Korea as described in the appendix, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the
Because the estimated weighted-average dumping margin for KG Dongbu as the producer and exporter is zero, entries of shipments of subject merchandise that are produced and exported by KG Dongbu will not be subject to suspension of liquidation or cash deposit requirements. Accordingly, Commerce will direct CBP not to suspend liquidation of entries of subject merchandise produced and exported by KG Dongbu. In accordance with section 735(a)(4) of the Act and 19 CFR 351.204(e)(1), should the investigation result in an antidumping duty order pursuant to section 736 of the Act, entries of shipments of subject merchandise from this producer/exporter combination will be excluded from the order. However, entries of shipments of subject merchandise from this company in any other producer/exporter combination, or by third parties that sourced subject merchandise from the excluded producer/exporter combination, will be subject to suspension of liquidation at the all-others rate.
Further, pursuant to section 733(d)(1)(B) of the Act and 19 CFR 351.205(d), Commerce will instruct CBP to require a cash deposit equal to the estimated weighted-average dumping margin or the estimated all-others rate, as follows: (1) the cash deposit rate for the respondents listed in the table above is the company-specific cash deposit rate listed for the respondent in the table; (2) if the exporter is not a respondent identified in the table above, but the producer is, then the cash deposit rate will be equal to the company-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin.
In accordance with section 735(d) of the Act, we will notify the U.S. International Trade Commission (ITC) of this final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of tin mill products no later than 45 days after this final determination. If the ITC determines
This notice serves as the only reminder to parties subject to an 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). Timely written notification of 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 and this notice are issued and published pursuant to sections 735(d) and 777(i) of the Act and 19 CFR 351.210(c).
The products within the scope of this investigation are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.
All products that meet the written physical description are within the scope of this investigation unless specifically excluded. The following products are outside and/or specifically excluded from the scope of this investigation:
• Single reduced electrolytically chromium coated steel with a thickness 0.238 mm (85 pound base box) (±10%) or 0.251 mm (90 pound base box) (±10%) or 0.255 mm (±10%) with 770 mm (minimum width) (±1.588 mm) by 900 mm (maximum length if sheared) sheet size or 30.6875 inches (minimum width) (±1/16 inch) and 35.4 inches (maximum length if sheared) sheet size; with type MR or higher (per ASTM) A623 steel chemistry; batch annealed at T2
• Single reduced electrolytically chromium- or tin-coated steel in the gauges of 0.0040 inch nominal, 0.0045 inch nominal, 0.0050 inch nominal, 0.0061 inch nominal (55 pound base box weight), 0.0066 inch nominal (60 pound base box weight), and 0.0072 inch nominal (65 pound base box weight), regardless of width, temper, finish, coating or other properties.
• Single reduced electrolytically chromium coated steel in the gauge of 0.024 inch, with widths of 27.0 inches or 31.5 inches, and with T-1 temper properties.
• Single reduced electrolytically chromium coated steel, with a chemical composition of 0.005% max carbon, 0.030% max silicon, 0.25% max manganese, 0.025% max phosphorous, 0.025% max sulfur 0.070% max aluminum, and the balance iron, with a metallic chromium layer of 70-130 mg/m
• Bright finish tin-coated sheet with a thickness equal to or exceeding 0.0299 inch, coated to thickness of
• Electrolytically chromium coated steel having ultra flat shape defined as oil can maximum depth of 5/64 inch (2.0 mm) and edge wave maximum of 5/64 inch (2.0 mm) and no wave to penetrate more than 2.0 inches (51.0 mm) from the strip edge and coilset or curling requirements of average maximum of 5/64 inch (2.0 mm) (based on six readings, three across each cut edge of a 24 inches (61 cm) long sample with no single reading exceeding 4/32 inch (3.2 mm) and no more than two readings at 4/32 inch (3.2 mm)) and (for 85 pound base box item only: crossbuckle maximums of 0.001 inch (0.0025 mm) average having no reading above 0.005 inch (0.127 mm)), with a camber maximum of
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents in the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.7 mg/square foot of chromium applied as a cathodic dichromate treatment, with coil form having restricted oil film weights of 0.3-0.4 grams/base box of type DOS-A oil, coil inside diameter ranging from 15.5 to 17 inches, coil outside diameter of a maximum 64 inches, with a maximum coil weight of 25,000 pounds, and with temper/coating/dimension combinations of: (1) CAT4 temper, 1.00/.050 pound/base box coating, 70 pound/base box (0.0077 inch) thickness, and 33.1875 inch ordered width; or (2) CAT5 temper, 1.00/0.50 pound/base box coating, 75 pound/base box (0.0082 inch) thickness, and 34.9375 inch or 34.1875 inch ordered width; or (3) CAT5 temper, 1.00/0.50 pound/base box coating, 107 pound/base box (0.0118 inch) thickness, and 30.5625 inch or 35.5625 inch ordered width; or (4) CADR8 temper, 1.00/0.50 pound/base box coating, 85 pound/base box (0.0093 inch) thickness, and 35.5625 inch ordered width; or (5) CADR8
• Electrolytically tin coated steel having differential coating with 1.00 pound/base box equivalent on the heavy side, with varied coating equivalents on the lighter side (detailed below), with a continuous cast steel chemistry of type MR, with a surface finish of type 7B or 7C, with a surface passivation of 0.5 mg/square foot of chromium applied as a cathodic dichromate treatment, with ultra flat scroll cut sheet form, with CAT5 temper with 1.00/0.10 pound/base box coating, with a lithograph logo printed in a uniform pattern on the 0.10 pound coating side with a clear protective coat, with both sides waxed to a level of 15-20 mg/216 sq. inch, with ordered dimension combinations of (1) 75 pound/base box (0.0082 inch) thickness and 34.9375 inch x 31.748 inch scroll cut dimensions; or (2) 75 pound/base box (0.0082 inch) thickness and 34.1875 inch x 29.076 inch scroll cut dimensions; or (3) 107 pound/base box (0.0118 inch) thickness and 30.5625 inch x 34.125 inch scroll cut dimension.
• Tin-free steel coated with a metallic chromium layer between 100-200 mg/m
• Tin-free steel laminated on one or both sides of the surface with a polyester film, consisting of two layers (an amorphous layer and an outer crystal layer), that contains no more than the indicated amounts of the following environmental hormones: 1 mg/kg BADGE (BisPhenol—A Di-glycidyl Ether), 1 mg/kg BFDGE (BisPhenol—F Di-glycidyl Ether), and 3 mg/kg BPA (BisPhenol—A).
The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS), under HTSUS subheadings 7210.11.0000, 7210.12.0000, 7210.50.0020, 7210.50.0090, 7212.10.0000, and 7212.50.0000 if of non-alloy steel and under HTSUS subheadings 7225.99.0090, and 7226.99.0180 if of alloy steel. Although the subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that Shanghai Tainai Bearing Co., Ltd. (Tainai) sold tapered roller bearings and parts thereof, finished and unfinished, (TRBs) from the People's Republic of China (China) at less than normal value (NV) during the period of review (POR), June 1, 2021, through May 31, 2022.
Applicable January 10, 2024.
Jerry Xiao, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2273.
On July 7, 2023, Commerce published in the
The merchandise covered by the
All issues raised in case and rebuttal briefs filed 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 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 our review of the record and comments received from interested parties regarding our
In the
The statute and our regulations do not address the establishment of a rate to be
For the companies subject to this review that established their eligibility for a separate rate, Commerce determines that the following estimated weighted-average dumping margins exist for the period June 1, 2021, through May 31, 2022:
Commerce intends to disclose the calculations performed in connection with these final results of review to interested parties within five days after public announcement of the final results or, if there is no public announcement, within five days of the date of publication of the notice of final results in the
In the
Under Commerce's current policy regarding the conditional review of the China-wide entity, the China-wide entity will not be under review unless a party specifically requests, or Commerce self-initiates, a review of the entity.
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.
For Tainai, Commerce will calculate importer-specific assessment rates for antidumping duties, in accordance with 19 CFR 351.212(b)(1). Where the respondent reported reliable entered values, Commerce intends to calculate importer-specific
For Jingli, the non-selected separate rate respondent, we will direct CBP to assess antidumping duties at a rate equal to the weighted-average dumping margin determined for Tainai in these final results.
Commerce determined that C&U Group, C&U Automotive, C&U Metallurgy, Huangshi C&U, and Sichuan C&U did not qualify for a separate rate. Therefore, we will instruct CBP to assess antidumping duties on entries of subject merchandise from these entities at 92.84 percent, the established weighted-average dumping margin for the China-wide entity.
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for shipments of the subject merchandise from China 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 the final results of this review; (2) for previously investigated or reviewed Chinese and non-Chinese exporters not listed above that currently have a separate rate, the cash deposit rate will continue to be the exporter-specific rate published for the most recently completed segment of this proceeding where the exporter received that separate rate; (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 the rate for the China-wide entity, 92.84 percent;
These deposit requirements, when imposed, shall remain in effect until further notice.
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 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 has occurred and the subsequent assessment of double antidumping 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 terms of an APO is a violation subject to sanction.
We are issuing and publishing these final results of administrative review in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(5) and 19 CFR 351.213(h)(2).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of letter of authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA Regulations for Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico (GOM), notification is hereby given that a Letter of Authorization (LOA) has been issued to Anadarko Petroleum Corporation (Anadarko) for the take of marine mammals incidental to geophysical survey activity in the GOM.
The LOA is effective from January 15, 2024, through May 15, 2024.
The LOA, LOA request, and supporting documentation are available online at:
Rachel Wachtendonk, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which: (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 19, 2021, we issued a final rule with regulations to govern the unintentional taking of marine mammals incidental to geophysical survey activities conducted by oil and gas industry operators, and those persons authorized to conduct activities on their behalf (collectively “industry operators”), in U.S. waters of the GOM over the course of 5 years (86 FR 5322, January 19, 2021). The rule was based on our findings that the total taking from the specified activities over the 5-year period will have a negligible impact on the affected species or stock(s) of marine mammals and will not have an unmitigable adverse impact on the availability of those species or stocks for subsistence uses. The rule became effective on April 19, 2021.
Our regulations at 50 CFR 217.180
Anadarko plans to conduct a one-dimensional vertical seismic profile (VSP) within Mississippi Canyon Block MC-40. The survey area has water depths of approximately 1,070 meters (m). Anadarko plans to use either a 12-element, 2,400 cubic inch (in
Consistent with the preamble to the final rule, the survey effort proposed by Anadarko in its LOA request was used to develop LOA-specific take estimates based on the acoustic exposure modeling results described in the preamble (86 FR 5322, January 19, 2021). In order to generate the appropriate take number for authorization, the following information was considered: (1) survey type; (2) location (by modeling zone);
No VSP surveys were included in the modeled survey types, and use of existing proxies (
For the planned survey, the seismic source array will be deployed from a drilling rig at or near the borehole, with the seismic receivers (
In addition, all available acoustic exposure modeling results assume use of a 72-element, 8,000 in
The survey is planned to occur in zone 5. The survey could take place in any season. Therefore, the take estimates for each species are based on the season that has the greater value for the species (
Additionally, for some species, take estimates based solely on the modeling yielded results that are not realistically likely to occur when considered in light of other relevant information available during the rulemaking process regarding marine mammal occurrence in the GOM. The approach used in the acoustic exposure modeling, in which seven modeling zones were defined over the U.S. GOM, necessarily averages fine-scale information about marine mammal distribution over the large area of each modeling zone. This can result in unrealistic projections regarding the likelihood of encountering particularly rare species and/or species not expected to occur outside particular habitats. Thus, although the modeling conducted for the rule is a natural starting point for estimating take, our rule acknowledged that other information could be considered (see,
NMFS' final rule described a “core habitat area” for Rice's whales (formerly known as GOM Bryde's whales)
Although Rice's whales may occur outside of the core habitat area, we expect that any such occurrence would be limited to the narrow band of suitable habitat described above (
Killer whales are the most rarely encountered species in the GOM, typically in deep waters of the central GOM (Roberts
NOAA surveys in the GOM from 1992 to 2009 reported only 16 sightings of killer whales, with an additional 3 encounters during more recent survey effort from 2017 to 2018 (Waring
The rarity of encounter during seismic surveys is not likely to be the product of high bias on the probability of detection. Unlike certain cryptic species with high detection bias, such as
In summary, killer whales are the most rarely encountered species in the GOM and typically occur only in particularly deep water. This survey would take place in deep waters that would overlap with depths in which killer whales typically occur. While this information is reflected through the density model informing the acoustic exposure modeling results, there is relatively high uncertainty associated with the model for this species, and the acoustic exposure modeling applies mean distribution data over areas where the species is in fact less likely to occur. In addition, as noted above in relation to the general take estimation methodology, the assumed proxy source (72-element, 8,000-in
In addition, in this case, use of the exposure modeling produces results that are smaller than average GOM group sizes for one species (Maze-Foley and Mullin, 2006). NMFS' typical practice in such a situation is to increase exposure estimates to the assumed average group size for a species in order to ensure that, if the species is encountered, exposures will not exceed the authorized take number. However, other relevant considerations here lead to a determination that increasing the estimated exposures to the average group size would likely lead to an overestimate of actual potential take. In this circumstance, the very short survey duration (maximum of 8 days) and relatively small Level B harassment isopleths produced through use of the (at most) 12-element, 2,400-in
Based on the results of our analysis, NMFS has determined that the level of taking expected for this survey and authorized through the LOA is consistent with the findings made for the total taking allowable under the regulations for the affected species or stocks of marine mammals. See table 1 in this notice and table 9 of the rule (86 FR 5322, January 19, 2021).
Under the GOM rule, NMFS may not authorize incidental take of marine mammals in an LOA if it will exceed “small numbers.” In short, when an acceptable estimate of the individual marine mammals taken is available, if the estimated number of individual animals taken is up to, but not greater than, one-third of the best available abundance estimate, NMFS will determine that the numbers of marine mammals taken of a species or stock are small. For more information please see NMFS' discussion of the MMPA's small numbers requirement provided in the final rule (86 FR 5322, January 19, 2021; 86 FR 5438, January 19, 2021).
The take numbers for authorization, which are determined as described above, are used by NMFS in making the necessary small numbers determinations through comparison with the best available abundance estimates (see discussion at 86 FR 5322, January 19, 2021 and 86 FR 5391, January 19, 2021). For this comparison, NMFS' approach is to use the maximum theoretical population, determined through review of current stock assessment reports (SAR;
Based on the analysis contained herein of Anadarko's proposed survey activity described in its LOA application and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the affected species or stock sizes (
NMFS has determined that the level of taking for this LOA request is consistent with the findings made for the total taking allowable under the incidental take regulations and that the amount of take authorized under the LOA is of no more than small numbers. Accordingly, we have issued an LOA to Anadarko authorizing the take of marine mammals incidental to its geophysical survey activity, as described above.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a meeting of the South Atlantic Fishery Management Council's Law Enforcement Advisory Panel.
The South Atlantic Fishery Management Council's (Council) will hold a meeting of the Law Enforcement Advisory Panel (AP) January 29-30, 2024, in Charleston, SC.
The Law Enforcement AP will meet from 1 p.m. until 5 p.m. on January 29, and from 9 a.m. until 5 p.m. on January 30, 2024.
Kim Iverson, Public Information Officer, SAFMC; phone: (843) 571-4366 or toll free: (866) SAFMC-10; fax: (843) 769-4520; email:
Meeting information, including the agenda, overview, briefing book materials, and an online public comment form will be posted on the Council's website at:
The agenda for the Law Enforcement AP meeting includes: an update on developing amendments; discussion of enforcement components of amendments for wreckfish management (Snapper Grouper Amendment 48), recreational permitting for the Snapper Grouper Fishery (Snapper Grouper Amendment 46), and on-demand gear for black sea bass pots (Snapper Grouper Regulatory Amendment 36). The AP will also receive an overview and discuss tournament sales of king mackerel; updates on compliance with for-hire reporting, descending devices, and protected areas; and general updates from Federal and state enforcement representatives. The AP will provide input and recommendations on agenda items for the Council's consideration and address other items as needed.
The meeting is physically accessible to people with disabilities. Requests for auxiliary aids should be directed to the Council office (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Pacific Fishery Management Council (Pacific Council) will convene a meeting of the Scientific and Statistical Committee's (SSC) Groundfish Subcommittee (GFSC) to review public comments associated with the 2021 stock assessment and 2023 rebuilding analyses of quillback rockfish off California. The SSC GFSC meeting is open to the public and will be conducted in person with a web broadcast that provides the opportunity for remote public comment.
The SSC GFSC meeting will be held Friday, January 26, 2024 from 8:30 a.m. until 3:30 p.m. (Pacific standard time) or when business for the day has been completed.
The SSC GFSC meeting will be held in the Wallingford/Fremont Rooms of the Watertown Hotel/Inn, 4242 Roosevelt Way NE, Seattle, WA 98105; telephone 206-826-4242.
This meeting is being conducted in person with a web broadcast that provides the opportunity for remote public comment. Specific meeting information, materials, and instructions for how to connect to the meeting remotely will be provided in the meeting announcement on the Pacific Council's website (see
Marlene A. Bellman, Staff Officer, Pacific Council; telephone: (503) 820-2414, email:
The purpose of the SSC GFSC meeting is to review public comments associated with the 2021 stock assessment and 2023 rebuilding analyses of quillback rockfish off California, as provided during the November 2023 Pacific Council meeting. The review meeting will follow Terms of Reference designed for this specific review as requested by the Pacific Council, as well as SSC operational guidelines.
No management actions will be decided by the SSC GFSC. The meeting participants' role will be the development of recommendations and reports for consideration by the full SSC and Pacific Council at the March 2024 meeting in Fresno, California.
Although non-emergency issues not contained in the meeting agendas may be discussed, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt (
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that Sean Todd, Ph.D., College of the Atlantic, 105 Eden Street, Bar Harbor, ME 04609, has applied in due form for a permit for scientific research on marine mammal parts.
Written comments must be received on or before February 9, 2024.
The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species (APPS) home page,
Written comments on this application should be submitted via email to
Those individuals requesting a public hearing should submit a written request via email to
Erin Markin, Ph.D., or Shasta McClenahan, Ph.D., (301) 427-8401.
The subject permit is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
The applicant proposes to receive, import, and export parts for research from up to 150 individual cetaceans and 500 individual pinnipeds of any species, annually. Sources of parts may include animals in foreign countries stranded alive or dead or that died
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of hybrid meeting open to the public offering both in-person and virtual options for participation.
The Gulf of Mexico Fishery Management Council (Council) will hold a 4-day hybrid meeting to consider actions affecting the Gulf of Mexico fisheries in the exclusive economic zone (EEZ).
The meeting will convene Monday, January 29 through Thursday, February 1, 2024, 8:30 a.m.—5 p.m., CST daily.
Dr. Carrie Simmons, Executive Director, Gulf of Mexico Fishery Management Council; telephone: (813) 348-1630.
The meeting will begin with the Administrative/Budget Committee reviewing and discussing the Proposed Standing and Special Scientific and Statistical Committee (SSC) Reorganization for June 2024 Appointments, Ad Hoc and Standing Advisory Panels, Proposed 2024 Activities and Budget, and the 2020-2023 Administrative Award Anticipated Funding and Proposed Carryover Projects. The committee will review and approve Proposal Activities for Phase II Inflation Reduction Act Funding for the Regional Management Councils and finalize the Steering Committee makeup for the Recreational Initiative.
The Law Enforcement Committee will review summaries from the Law Enforcement Technical Committee discussion on Red Snapper Individual Fishing Quota (IFQ) Advanced Landings Notifications and additional topics.
The Data Collection Committee will receive a summary report from the Ad Hoc Charter For-hire Data Collection Advisory Panel meeting including recommendations and next steps for For-hire Electronic Reporting. Hold a discussion on Marine Recreational Information Program-Fishing Effort Survey (MRIP-FES) Inventory and Action Plan for the Gulf of Mexico and receive an update on the Status of the Timeline on the Implementation of the Commercial Logbooks.
The Shrimp Committee will receive an update on Early Adopter Program for Shrimp Cellular Vessel Monitoring Systems (cVMS) and discuss Shrimp Future Project: Workshops to Address Current Challenges and Future Scenario Planning.
The Reef Fish Committee will review and discuss draft options for Modification of Mid-Water Snapper Complex Composition and Catch Limits, Gag Grouper Management Measures and Final Action: Draft Abbreviated Framework Action: Modifications to Catch Limits for Gulf of Mexico Lane Snapper. The committee will also review Permit Requirements for Participation in Individual Fishing Quota (IFQ) Programs and review the 2023 Gulf Red Grouper Recreational Landings and Quota Closure.
The Sustainable Fisheries Committee will discuss Allocations and Allocation Review Policy and Summary of SSC Discussion on Incorporation Social Science Theory and methods in Ecosystem Assessments.
Immediately following the Sustainable Fisheries Committee, National Marine Fisheries Service (NMFS) will Host a General Question and Answer Session.
The Outreach and Education Committee will review the 2023 Communications Improvement Plan Progress and 2023 Analytics, 2023 In-Person Event Outreach Progress and 2024 Plan, and Communications Guidelines Book Review. The committee will discuss Fishery Ecosystem Plan Outreach, Coastal Migratory Pelagics Stakeholder Engagement and Management Timeline Tool. The committee will receive an update on Return `Em Right Best Practices Manual and review other items from the O&E Technical Committee Summary.
At approximately 10:45 a.m., CST, the Council will reconvene with a Call to Order, Announcements and Introductions, Adoption of Agenda and Approval of Minutes. The Council will receive updates on NMFS National Seafood Strategy Regional Implementation Plan, update from Bureau of Ocean Energy Management (BOEM) on Wind Energy Development in the Gulf of Mexico and Opportunities to Advance Equity and Environmental Justice (EEJ) in Gulf of Mexico Fisheries through the Southeast EEJ Implementation Plan; and, discuss Exempted Fishing Permit Application.
Following lunch, the Council will hold public comment testimony from 1:30 p.m. to 5 p.m., CST for Final Action Item: Draft Abbreviated Framework Action: Modifications to Catch Limits for Gulf of Mexico Lane Snapper, receive comments on the Southeast EEJ Implementation Plan and Exempted Fishing Permit Application; including, open testimony on other fishery issues or concerns. Public comment may begin earlier than 1:30 p.m. CST but will not conclude before that time. Persons wishing to give public testimony in-person must register at the registration kiosk in the meeting room. Persons wishing to give public testimony virtually must sign up via the link on the Council website. Registration for virtual testimony is open at the start of the meeting, Monday, January 29, at 8:30 a.m., CST and closes 1 hour before public
The Council will receive Committee reports from Administrative/Budget, Law Enforcement, Data Collection, Shrimp, Reef Fish, Sustainable Fisheries, Education and Outreach, and recommendations on Exempted Fishing Permit Application. The Council will receive updates from the following supporting agencies: Louisiana Law Enforcement Efforts; South Atlantic Fishery Management Council; NOAA Office of Law Enforcement (OLE); Gulf States Marine Fisheries Commission; U.S. Coast Guard; U.S. Fish and Wildlife Service; and Department of State.
The Council will discuss Council Planning and Primary Activities and Other Business items, Litigation Update.
The meeting will be a hybrid meeting; both in-person and virtual participation available. You may register for the webinar to listen-in only by visiting
The timing and order in which agenda items are addressed may change as required to effectively address the issue, and the latest version along with other meeting materials will be posted on the website as they become available.
Although other non-emergency issues not contained in this agenda may come before this group for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), those issues may not be the subject of formal action during these meeting. Actions will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Act, provided that the public has been notified of the Council's intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid or accommodations should be directed to Kathy Pereira, (813) 348-1630, at least 15 days prior to the meeting date.
United States Patent and Trademark Office, U.S. Department of Commerce.
Notice of meetings.
The United States Patent and Trademark Office (USPTO) is announcing the Public Engagement Partnership meeting series to facilitate increased engagement with the public about the patent system. The USPTO will host the first meeting of the Public Engagement Partnership series virtually and in person at the USPTO headquarters on March 1, 2024. The purpose of this meeting is to provide education about the patent system and to share ideas, experiences, and insights related to the administration of the system.
The first public meeting will take place on March 1, 2024, from 1-5 p.m. ET. Persons seeking to attend, either virtually or in person, must register by February 29, 2024, at the web page in the
Register at
Linda Horner, Acting Senior Lead Administrative Patent Judge, at 571-272-4596 or
The USPTO's mission is to drive U.S. innovation, inclusive capitalism, and global competitiveness with the ultimate goal of increasing innovation, entrepreneurship, and creativity for the benefit of all Americans and people around the world. In fulfilling this mission, the USPTO appreciates that its work impacts our country's economic prosperity and, in turn, the public. In January of 2023, the USPTO engaged with the public at a listening session regarding USPTO collaboration with other government agencies to ensure that the patent system is not being used to unjustifiably delay competition beyond that reasonably contemplated by applicable law. At this listening session, members of the public expressed a desire to increase engagement with the USPTO about the patent system.
To expand outreach efforts, the USPTO seeks to form a partnership with members of the public, including, for example, advocacy groups, public interest-focused nonprofits, academics, and civil society. The Public Engagement Partnership will provide an opportunity to bring the public and the USPTO together through a series of engagements to offer education about the patent system and to share ideas, experiences, and insights related to the administration of the system.
The USPTO will hold the inaugural meeting of the Public Engagement Partnership meeting series virtually and in person at the USPTO headquarters in Alexandria, Virginia, on March 1, 2024. Presentations at this first meeting will provide foundational education about the patent system and the USPTO's practices and policies. The meeting will also include a panel discussion with representatives of the public interest community and advocacy groups on areas of particular interest. Subsequent meetings in the series will build on this foundational information. For example, future meetings will include presentations on tools for understanding a patent and existing mechanisms for participation in the patent procurement process, such as third-party submissions. Meetings will also cover participation in the enforcement of patents before the USPTO via ex parte reexamination requests, and petitions for inter partes review and post-grant review before the Patent Trial and Appeal Board. These mechanisms are available to the public at large.
The public meeting will take place virtually and in person at the USPTO headquarters, Clara Barton Auditorium, 600 Dulany St., Alexandria, VA 22314, on March 1, 2024, from 1-5 p.m. ET. The agenda is available on the USPTO
United States Patent and Trademark Office, Department of Commerce.
Notice of information collection; request for comment.
The United States Patent and Trademark Office (USPTO), as required by the Paperwork Reduction Act of 1995, invites comments on the extension and revision of an existing information collection: 0651-0032 Initial Patent Applications. The purpose of this notice is to allow 60 days for public comment preceding submission of the information collection to OMB.
To ensure consideration, comments regarding this information collection must be received on or before March 11, 2024.
Interested persons are invited to submit written comments by any of the following methods. Do not submit Confidential Business Information or otherwise sensitive or protected information.
•
•
•
Requests for additional information should be directed to Raul Tamayo, Senior Legal Advisor, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450; by telephone at 571-272-7728; or by email at
The United States Patent and Trademark Office (USPTO) is required by title 35 of the United States Code, including 35 U.S.C. 131, to examine applications for patents. The USPTO administers the patent statutes relating to examination through various rules in chapter 37 of the Code of Federal Regulations (CFR), such as, for example, 37 CFR 1.16 through 1.84. Each patent applicant must provide sufficient information to allow the USPTO to properly examine the application to determine whether it meets the criteria set forth in the patent statutes and regulations for issuance as a patent. The patent statutes and regulations require that an application for patent include the following information:
(1) A specification containing a description of the invention and at least one claim defining the property right sought by the applicant;
(2) A drawing(s) or photograph(s), where necessary for an understanding of the invention;
(3) An oath or declaration signed by the applicant (under 35 U.S.C. 115(f), the time for filing the oath or declaration is no later than the date on which the issue fee for the patent is paid); and
(4) A filing fee.
Various types of patent applications are covered under this information collection:
• Noncontinuing, nonprovisional utility, plant and design applications,
• Provisional applications,
• Continuation/divisional applications of international applications,
• Continued prosecution applications (design), and
• Continuation/divisional and continuation-in-part applications of utility, plant, and design applications.
In addition, this information collection covers certain other papers filed by applicants, such as, for example, petitions to accept an unintentionally delayed priority or benefit claim, petitions to accept a filing by other than all of the inventors or a person not the inventor, and petitions requesting that applications filed under 37 CFR 1.495(b) be accorded a receipt date.
Furthermore, this information collection incorporates the lone item in 0651-0073 (Patent Law Treaty): petitions to restore the right of priority to a foreign application under 37 CFR 1.55(c) or the benefit of a prior-filed provisional application under 37 CFR 1.78(b). The petitions are used to extend the 12-month periods set forth in 35 U.S.C. 119(a) and (e) by an additional 2 months where there is an unintentional delay in filing an application claiming priority to a foreign application or the benefit of a provisional application. Once this information collection is renewed, and the petitions are added, 0651-0073 will be discontinued.
The items in this information collection can be submitted through the USPTO patent electronic filing system (Patent Center), the USPTO's online filing and viewing system for patent applications and related documents. The USPTO also will accept submissions by mail, hand delivery, and facsimile, except that facsimile submission of the information in this collection is limited to certain items in accordance with 37 CFR 1.6(d).
There are no capital start-up, maintenance, or recordkeeping costs associated with this information collection. However, there is non-hour cost burden in the way of filing fees, drawing costs, and postage costs.
The total annual (non-hour) respondent cost burden for this collection is estimated to be $1,156,494,847, which includes $672,189,140 in filing fees, $484,123,750 in drawing costs, and $181,957 in postage.
The filing fees associated with this information collection are listed in the table below.
Patent applicants can submit drawings with their utility, design, plant, and provisional applications. Applicants can prepare these drawings on their own or they can hire patent illustration services firms to create them. As a basis for estimating the drawing costs, the USPTO expects that all applicants will have their drawings prepared by a patent illustration firm.
Estimates for the patent drawing can vary greatly, depending on the number of figures to be produced, the total number of pages for the drawings, and the complexity of the drawings. Because there are many variables involved, the USPTO is using the average of the estimated cost ranges for the application drawings to derive the estimated cost per sheet that is then used to calculate the total drawing costs seen the table below.
The utility, plant, and design continuation and divisional applications use the same drawings as the initial filings, so they are not included in these totals. New drawings may be submitted in the continuation-in-part applications, so those numbers are included in these estimates. The drawings for the continued prosecution applications also are included in the drawing cost totals for designs. There are no continuation, divisional, or continuation-in-part provisional applications.
• Utility Application Drawings—The USPTO estimates that the costs to produce these drawings can range from $50 to $200 per sheet. Taking the average of this range, the USPTO estimates that it can cost $125 per sheet to produce the drawings and that, on average, 10 sheets of drawings are submitted for an average cost of $1,250 to produce the utility drawings. Out of 339,000 utility applications submitted, the USPTO estimates that 68% (or 230,520) applications will be submitted with drawings.
• Plant Application Drawings—In general, photographs are submitted for the plant applications, although drawings can also be submitted. The USPTO estimates that the cost to produce the photographs or drawings for the plant applications can range from $50 to $100. Taking the average of this range, the USPTO estimates that it can cost $75 per sheet to produce the photographs or drawings for the plant applications. On average, 10 sheets of drawings are submitted for an average cost of $750 to produce the photographs/drawings for the plant applications. Out of 1,005 plant applications submitted per year, the USPTO estimates that all of them will be submitted with drawings.
• Design Application Drawings—The USPTO estimates that the costs to produce design drawings can range from $50 to $350 per sheet. Taking the average of this range, the USPTO estimates that it can cost $200 per sheet to produce design drawings. On average, 10 sheets of drawings are submitted for an average cost of $2,000 to produce the design drawings. Out of 48,850 design applicants submitted per year, the USPTO estimates that all of them will be submitted with drawings.
• Provisional Application Drawings—The USPTO estimates that the cost to produce the provisional drawings can range from $30 to $200 per sheet. Taking the average of this range, the USPTO estimates that it can cost $115 per sheet to produce the provisional drawings. On average, 10 sheets of drawings are submitted for an average cost of $1,150 to produce the provisional drawings. Out of 160,000 provisional applications submitted per year, the USPTO estimates that 53% (or 84,800) applications will be submitted with drawings.
Although the USPTO prefers that the items in this information collection be submitted electronically, the items may be submitted by mail through the United States Postal Service (USPS). The USPTO estimates the following:
• If an applicant decides to file a patent application covered under this information collection by mail, the USPTO recommends that the patent application be filed by Priority Mail Express® in accordance with 37 CFR 1.10 to establish the date of deposit with the USPS as the filing date (otherwise the filing date of the application will be the date that it is received at the USPTO). The USPTO estimates that about 1.5% of patent applicants (lines 1-10) will be filed by mail resulting in 6,245 mailed applications. Using the Priority Mail Express® flat rate cost for mailing envelopes, the USPTO estimates that the average cost for sending a patent application by Priority Mail Express® will be $28.95; resulting in a cost of $180,793.
• If an applicant decides to file a petition or a paper filed under 37 CFR 1.41(c), 1.41(a)(2) (pre-AIA), 1.48(d), 1.53(c)(2), 1.53(c)(2) (pre-PLT (AIA)), 1.55(c), or 1.78(b) by mail, the USPTO estimates that the petition or paper will be sent by Priority Mail. The USPTO estimates that about 1.5% of these petitions (lines 14 and 15) will be filed by mail resulting in 117 mailed items. Using the Priority Mail USPTO further estimates that the average cost for a Priority Mail legal flat rate envelope shipped via USPS is $9.95; resulting in an cost of $1,164.
Therefore, the total estimated postage cost for this collection is $181,957.
The USPTO is soliciting public comments to:
(a) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(b) Evaluate the accuracy of the Agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(c) Enhance the quality, utility, and clarity of the information to be collected; and
(d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
All comments submitted in response to this notice are a matter of public record. USPTO will include or summarize each comment in the request to OMB to approve this information collection. Before including an address, phone number, email address, or other personally identifiable information (PII) in a comment, be aware that the entire comment—including PII—may be made publicly available at any time. While you may ask in your comment to withhold PII from public view, USPTO cannot guarantee that it will be able to do so.
United States Patent and Trademark Office, Department of Commerce.
Notice.
The United States Patent and Trademark Office (USPTO) is publishing guidelines for USPTO employees to use, regardless of the technology, for ascertaining compliance with the enablement requirement of the patent laws during the examination of utility patent applications and the review of utility patents in light of the recent U.S. Supreme Court decision in
These guidelines are effective January 10, 2024.
Mary C. Till, Senior Legal Advisor, Office of Patent Legal Administration, at
These guidelines are intended to inform USPTO personnel and the public on the USPTO's implementation of the Supreme Court decision in
These guidelines do not constitute substantive rulemaking and therefore do not have the force and effect of law. They have been developed as a matter of internal USPTO management and are not intended to create any right or benefit, substantive or procedural, enforceable by any party against the USPTO. Rejections will continue to be based on the substantive law, and it is the rejections that are appealable. Consequently, any failure by USPTO personnel to follow the guidelines, by itself, does not create a new ground to appeal or petition.
These guidelines are not intended to announce any major changes to USPTO practice or procedure, and are incorporating guidance from the
The enablement requirement refers to the requirement of 35 U.S.C. 112(a) that the specification must describe the invention in such terms that one skilled in the art can make and use the claimed invention. As discussed in section 2164.01 of the MPEP, any analysis of whether a particular claim is supported by the disclosure in an application requires a determination of whether that disclosure, when filed, contained sufficient information regarding the subject matter of the claim so as to enable one skilled in the pertinent art to make and use the claimed invention. In
In
In
The Federal Circuit, citing
Turning to the claims at issue in
Thus, the Federal Circuit decision in
The Supreme Court clarified that the specification does not always need to “describe with particularity how to make and use every single embodiment within a claimed class.”
The Supreme Court's conclusion rested on the examination of the particular claims in light of the Court's precedent, including
In reviewing the Federal Circuit's enablement determination, the Supreme Court stated that the specification is not necessarily inadequate just because it leaves the skilled artisan to perform some measure of adaptation or testing. The Supreme Court, citing
To assess the amount of experimentation required by the specification so as to determine compliance with the enablement prong of 35 U.S.C. 112(a), the Federal Circuit developed a framework of factors in
For more recent guidance on how to determine whether experimentation is reasonable, it is instructive to look at the
In
In
Finally, in
Therefore, consistent with
Department of the Army, DoD.
Notice of open committee meeting.
The Department of the Army is publishing this notice to announce the following Federal advisory committee meeting of the Army Education Advisory Committee (AEAC). This meeting is open to the public.
The Army Education Advisory Committee will meet from 8 a.m. to 5 p.m. on both January 24-25, 2024.
Army Education Advisory Committee, 950 Jefferson Avenue, Building 950, U.S. Training and Doctrine Command (TRADOC) Headquarters, Conference Room 2047, Ft. Eustis, VA 23604.
Dr. Justin M. Green, the Designated Federal Officer for the committee, in writing at ATTN: ATTG-TRI-G, TRADOC, 950 Jefferson Ave, Fort Eustis, VA 23604, by email at
Due to circumstances beyond the control of the Designated Federal Officer, the Army Education Advisory Committee was unable to provide public notification required by 41 CFR 102-3.150(a) concerning its January 24-25, 2024 meeting. Accordingly, the Advisory Committee Management Officer for the Department of Defense, pursuant to 41
The committee meeting is being held under the provisions of the Federal Advisory Committee Act (FACA; 5 U.S.C. 10), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.150.
Because the meeting of the committee will be held in a Federal Government facility on a military base, security screening is required. A photo ID is required to enter base. Please note that security and gate guards have the right to inspect vehicles and persons seeking to enter and exit the installation. TRADOC Headquarters is fully handicap accessible. Wheelchair access is available in front at the main entrance of the building. For additional information about public access procedures, contact Dr. Green, the committee's Designated Federal Officer, at the email address or telephone number listed in the
Pursuant to 41 CFR 102-3.140d, the Committee is not obligated to allow a member of the public to speak or otherwise address the Committee during the meeting. Members of the public will be permitted to make verbal comments during the Committee meeting only at the time and in the manner described below. If a member of the public is interested in making a verbal comment at the open meeting, that individual must submit a request, with a brief statement of the subject matter to be addressed by the comment, at least seven business days in advance to the committee's Designated Federal Official, via electronic mail, the preferred mode of submission, at the address listed in the
The license for the Meyers Falls Hydroelectric Project No. 2544 was issued for a period ending December 31, 2023.
Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1), requires the Commission, at the expiration of a license term, to issue from year-to-year an annual license to the then licensee(s) under the terms and conditions of the prior license until a new license is issued, or the project is otherwise disposed of as provided in section 15 or any other applicable section of the FPA. If the project's prior license waived the applicability of section 15 of the FPA, then, based on section 9(b) of the Administrative Procedure Act, 5 U.S.C. 558(c), and as set forth at 18 CFR 16.21(a), if the licensee of such project has filed an application for a subsequent license, the licensee may continue to operate the project in accordance with the terms and conditions of the license after the minor or minor part license expires, until the Commission acts on its application. If the licensee of such a project has not filed an application for a subsequent license, then it may be required, pursuant to 18 CFR 16.21(b), to continue project operations until the Commission issues someone else a license for the project or otherwise orders disposition of the project.
If the project is subject to section 15 of the FPA, notice is hereby given that an annual license for Project No. 2544 is issued to Hydro Technology Systems for a period effective January 1, 2024, through December 31, 2024, or until the issuance of a new license for the project or other disposition under the FPA, whichever comes first. If issuance of a new license (or other disposition) does not take place on or before December 31, 2024, notice is hereby given that, pursuant to 18 CFR 16.18(c), an annual license under section 15(a)(1) of the FPA is renewed automatically without further order or notice by the
If the project is not subject to section 15 of the FPA, notice is hereby given that Hydro Technology Systems is authorized to continue operation of the Meyers Falls Hydroelectric Project under the terms and conditions of the prior license until the issuance of a subsequent license for the project or other disposition under the FPA, whichever comes first.
This is a supplemental notice in the above-referenced proceeding of Escalante 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, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
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 January 24, 2024.
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
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file associated with, but not a part of, the decisional record of the proceeding. Unless the Commission determines that the prohibited communication and any responses thereto should become a part of the decisional record, the prohibited off-the-record communication will not be considered by the Commission in reaching its decision. Parties to a proceeding may seek the opportunity to respond to any facts or contentions made in a prohibited off-the-record communication and may request that the Commission place the prohibited communication and responses thereto in the decisional record. The Commission will grant such a request only when it determines that fairness so requires. Any person identified below as having made a prohibited off-the-record communication shall serve the document on all parties listed on the official service list for the applicable proceeding in accordance with Rule 2010, 18 CFR 385.2010.
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e)(1)(v).
The following is a list of off-the-record communications recently received by the Secretary of the Commission. This filing may be viewed on the Commission's website at
On October 27, 2023, Kram Hydro 3, LLC, filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of hydropower project to be located at the U.S. Army Corps of Engineers' (Corps) Emmett Sanders Lock and Dam near the City of Pine Bluff, Jefferson County, Arkansas. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Emmett Sanders Lock and Dam Hydroelectric Project would consist of the following: (1) a 90-foot-wide, 200-350-foot-long armored intake channel, upstream of the powerhouse; (2) a 100-foot-long, 180-foot-wide concrete powerhouse located downstream of the existing Corps dam on the northeast bank, housing two identical Kaplan turbine-generator units with a combined generating capacity of 20.0 megawatts; (3) a 200-foot-long, 100-foot wide unlined tailrace; (4) a 300-foot-long concrete retaining wall to be constructed downstream of the powerhouse; and (5) a 7-mile-long, 115 kilovolt transmission line. The proposed project would have an estimated annual generation of 90,300 megawatt-hours.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system 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
More information about this project, including a copy of the application, can be viewed, or printed on the “eLibrary” link of the Commission's website at
Take notice that during the month of December 2023, the status of the above-captioned entities as Exempt Wholesale Generators or Foreign Utility Companies became effective by operation of the Commission's regulations. 18 CFR 366.7(a) (2022).
Take notice that on December 19, 2023, East Tennessee Natural Gas, LLC (East Tennessee), 915 North Eldridge Parkway, Suite 1100, Houston, Texas 77079, filed an amendment to its application in Docket No. CP23-516-000, pursuant to sections 7(c) of the Natural Gas Act (NGA) and part 157 of the Commission's regulations requesting authorization to amend its proposed Ridgeline Expansion Project (Project) that was filed on July 18, 2023. Specifically, East Tennessee is amending the application to change the proposed 8-mile-long, 24-inch-diameter pipeline lateral to an approximately 8-mile-long, 30-inch-diameter pipeline segment on East Tennessee's mainline in Morgan and Roane Counties, Tennessee. The amendment will not materially change the Project capacity or cost, all as more fully set forth in the amendment which is 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 project should be directed to Amish George, Manger, Rates and Certificates at East Tennessee Natural Gas LLC, P.O. Box 1642, Houston, Texas 77251-1642 by phone at (713) 627-5120, 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 p.m. eastern time on January 25, 2024. 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 January 25, 2024.
There are three methods you can use to submit your comments or protests to the Commission. In all instances, please reference the Project docket number CP23-516-001 in your submission.
(1) You may file your comments electronically by using the eComment feature, which is located on the
(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 number (CP23-516-001).
The Commission encourages electronic filing of comments (options 1 and 2 above) and has eFiling staff available to assist you at (202) 502-8258 or
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 number CP23-516-001 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 number CP23-516-001.
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: Amish George, Manger, Rates and Certificates at East Tennessee Natural Gas LLC, P.O. Box 1642, Houston, Texas 77251-1642, or at
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
Federal Communications Commission.
Notice of a modified system of records.
The Federal Communications Commission (FCC, Commission, or Agency) proposes to modify an existing system of records, FCC/OMD-23, Cadapult Space Management Center (CSMS), subject to the Privacy Act of 1974, as amended. This action is necessary to meet the requirements of the Privacy Act to publish in the
This modified system of records will become effective on January 10, 2024. Written comments on the routine uses are due by February 9, 2024. The routine uses in this action will become effective on February 9, 2024 unless comments are received that require a contrary determination.
Send comments to Brendan McTaggart, Federal Communications Commission (FCC), 45 L Street NE, Washington, DC 20554, or to
Brendan McTaggart, (202) 418-1738, or
This notice serves to update and modify FCC/OMD-23, as a result of various necessary changes and updates. The substantive changes and modifications to the previously published version of the FCC/OMD-23 system of records include:
1. Updating the language in the Security Classification to follow OMB guidance.
2. Updating the language in the Purposes section to be consistent with the language and phrasing currently used generally in the FCC's SORNs.
3. Modifying the language in the Categories of Individuals and Categories of Records to be consistent with the language and phrasing currently used in the FCC's SORNs.
4. Updating and/or revising language in the following routine uses (listed by current routine use number): (8) Congressional Inquiries; (9) Government-wide Program Management and Oversight; and (10) Breach Notification, the revision of which is required by OMB Memorandum No. M-17-12.
5. Adding the following new routine uses (listed by current routine use number): (4) Labor Relations; (5) Litigation; (6) Adjudication; (7) Law Enforcement and Investigation; (11) Assistance to Federal Agencies and Entities Related to Breaches, the addition of which is required by OMB Memorandum No. M-17-12; and (12) Non-Federal Personnel to allow contractors, vendors, grantees, or volunteers performing or working on a contract, grant, or cooperative agreement for the Federal Government to have access to needed information.
6. Updating the SORN to include the relevant National Archives and Records Administration (NARA) records schedules.
The system of records is also updated to reflect various administrative changes related to the system managers and system addresses; policy and practices for storage and retrieval of the information; administrative, technical, and physical safeguards; and updated notification, records access, and contesting records procedures.
FCC/OMD-23, Cadapult Space Management System (CSMS).
No information in the system is classified.
Office of Managing Director (OMD), Federal Communications Commission (FCC), 45 L Street NE, Washington, DC 20554.
Office of Managing Director (OMD), Federal Communications Commission (FCC), 45 L Street NE, Washington, DC 20554.
5 U.S.C. 301, 40 U.S.C. 468, 44 U.S.C. 3101, Executive Order 12411, Government Work Space Management Reforms, and the NTEU/FCC Basic Negotiated Agreement, Article 9, Employee Space and Facilities.
The FCC uses the information in this information system for purposes that include, but are not limited to, the allocation of the offices, workstations, facility workspaces, and hoteling workspaces for FCC employees and contractors following the FCC/NTEU space assignment policy, as well as tracking workstation occupancy, vacancy, and utilization rates; evaluating bureau and office housing and realignments based on utilization and reorganizations; and calculating and documenting FCC bureau and office rent reporting. Additionally, in the event of an emergency, OMD staff uses information from this system to devise a “Reconstitution Plan” to create the space requirements for alternative work location(s) in other buildings to be used to relocate FCC employees and/or contractors.
The categories of individuals whose records are maintained in this system include, but are not limited to, FCC employees and contractors.
The records in this system include, but are not limited to, the name, organization (bureau/office/division), pay type, grade, supervisory status, bargaining unit status, workspace requirements, workspace location (office or workstation), and work telephone number for each employee or contractor.
Sources of records in this system include FCC employees and contractor; FCC information systems and applications used in the onboarding, offboarding, and reassignment processes; and diagrams and drawings.
In addition to those disclosures 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 the FCC as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
1. Emergency Response—A record on an individual in this system of records may be disclosed to emergency medical
2. First Responders—A record from this system of records may be disclosed to law enforcement officials, Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA), Department of Defense (DOD), National Telecommunications and Information Administration (NTIA), White House Communications Agency (WHCA), other federal agencies, and state and local emergency response officials,
3. Reconstitution Plan—A record from this system of records may be disclosed to the General Services Administration (GSA), the National Telecommunications and Information Administration (NTIA), the Department of Homeland Security (DHS), and Federal Emergency Management Agency (FEMA); District of Columbia, Virginia, and Maryland state government agencies; and any other Federal, state, and local agencies involved in Federal agency evacuation, emergency facilities, space management, and/or relocation policies and plans, or related issues.
4. Labor Relations—A record from this system may be disclosed to officials of labor organizations recognized under 5 U.S.C. chapter 71 upon receipt of a formal request and in accord with the conditions of 5 U.S.C. 7114 when relevant and necessary to their duties of exclusive representation concerning personnel policies, practices, and matters affecting working conditions.
5. Litigation—To disclose records to the Department of Justice (DOJ) when: (a) the FCC or any component thereof; (b) any employee of the FCC in his or her official capacity; (c) any employee of the FCC in his or her individual capacity where the DOJ or the FCC has agreed to represent the employee; or (d) the United States Government is a party to litigation or has an interest in such litigation, and by careful review, the FCC determines that the records are both relevant and necessary to the litigation, and the use of such records by the Department of Justice is for a purpose that is compatible with the purpose for which the FCC collected the records.
6. Adjudication—To disclose records in a proceeding before a court or adjudicative body, when: (a) the FCC or any component thereof; or (b) any employee of the FCC in his or her official capacity; or (c) any employee of the FCC in his or her individual capacity; or (d) the United States Government, is a party to litigation or has an interest in such litigation, and by careful review, the FCC determines that the records are both relevant and necessary to the litigation, and that the use of such records is for a purpose that is compatible with the purpose for which the agency collected the records.
7. Law Enforcement and Investigation—When the FCC investigates any violation or potential violation of a civil or criminal law, regulation, policy, executed consent decree, order, or any other type of compulsory obligation, to disclose pertinent information as it deems necessary to the target of an investigation, as well as with the appropriate Federal, State, local, Tribal, international, or multinational agencies, or a component of such an agency, responsible for investigating, prosecuting, enforcing, or implementing a statute, rule, regulation, order, or other requirement.
8. Congressional Inquiries—To provide information to a Congressional office from the record of an individual in response to an inquiry from that Congressional office made at the written request of that individual.
9. Government-wide Program Management and Oversight—To DOJ to obtain that Department's advice regarding disclosure obligations under the Freedom of Information Act (FOIA); or to OMB to obtain that office's advice regarding obligations under the Privacy Act.
10. Breach Notification—To appropriate agencies, entities, and persons when: (a) the Commission suspects or has confirmed that there has been a breach of the system of records; (b) the Commission has determined that as a result of the suspected or confirmed compromise there is a risk of harm to individuals, the Commission (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 Commission's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
11. Assistance to Federal Agencies and Entities Related to Breaches—To another Federal agency or Federal entity, when the Commission determines that information from this system 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, program, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
12. Non-Federal Personnel—To disclose information to non-Federal personnel, including contractors, other vendors (
This an electronic system of records that resides on the FCC's or a vendor's network.
Information in the electronic database can be retrieved by searching electronically for the FCC employee or contractor's name, workspace location, and organizational unit,
The information in this electronic system is maintained and disposed of in accordance with the relevant NARA records schedules, including General Records Schedule (GRS) 5.1: Common Office Records, DAA-GRS-2016-0016; and GRS 5.3: Continuity and Emergency Planning Records, DAA-GRS-2016-0004.
The electronic records, files, and data are stored within FCC or a vendor's accreditation boundaries and maintained in a database housed in the FCC's or vendor's computer network databases. Access to the electronic and paper files is restricted to authorized employees and contractors; and in the case of electronic files to IT staff, contractors, and vendors who maintain the IT networks and services. Other employees and contractors may be granted access on a need-to-know basis. The electronic files and records are protected by the FCC and third-party privacy safeguards, a comprehensive
Individuals wishing to request access to and/or amendment of records about themselves should follow the Notification Procedures below.
Individuals wishing to request access to and/or amendment of records about themselves should follow the Notification Procedures below.
Individuals wishing to determine whether this system of records contains information about themselves may do so by writing to
None.
(75 FR 56533) (September 16, 2010).
Federal Communications Commission.
Notice of public meeting.
In accordance with the Federal Advisory Committee Act, this notice advises interested persons that the Federal Communications Commission's (FCC or Commission) Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States (Task Force) will hold its next meeting live and via live internet link.
January 31, 2024. The meeting will come to order at 10 a.m. EST.
The meeting will be open to the public and held in the Commission Meeting Room at FCC Headquarters, located at 45 L Street NE, Washington, DC 20554, and will also be available via live feed from the FCC's web page at
Christi Shewman, Designated Federal Officer, at (202) 418-0646, or
The meeting will be held on January 31, 2024 at 10 a.m. EST in the Commission Meeting Room at FCC Headquarters, 45 L Street NE, Washington, DC, and will be open to the public, with admittance limited to seating availability. Any questions that arise during the meeting should be sent to
Open captioning will be provided for this event. Other reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via email to
Notice is given that a complaint has been filed with the Federal Maritime Commission (the “Commission”) by Visual Comfort & Co. (the “Complainant”) against COSCO Shipping Lines (North America) Inc. (the “Respondent”). Complainant states that the Commission has jurisdiction over the complaint pursuant to 46 U.S.C. 41301 through 41309 and personal jurisdiction over Respondent as an ocean common carrier as defined in 46 CFR 520.2.
Complainant is a corporation organized under the laws of Texas with its principal place of business located in Houston, Texas, and is a shipper as defined in 46 U.S.C. 40102(23).
Complainant identifies Respondent as a Chinese global ocean carrier with an office in the United States located in Secaucus, New Jersey, and as a vessel-operating ocean common carrier as defined in 46 U.S.C. 40102(18).
Complainant alleges that Respondent violated 46 U.S.C. 41102(c) and 41104(a)(10) and 46 CFR 545.5 regarding a failure to establish, observe, and enforce just and reasonable practices relating to receiving, handling, storing, and delivering property; and an unreasonable refusal to deal or negotiate. Complainant alleges these violations arose from assessment of demurrage, detention, per diem, and yard storage charges during periods of time in which the charges were not just or reasonable because of circumstances outside the control of the Complainant and its agents and service providers, and because of acts or omissions of the Respondent.
An answer to the complaint must be filed with the Commission within 25 days after the date of service.
The full text of the complaint can be found in the Commission's electronic Reading Room at
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than January 25, 2024.
A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414. Comments can also be sent electronically to
1.
A. Federal Reserve Bank of Kansas City (Jeffrey Imgarten, Assistant Vice President) One Memorial Drive, Kansas City, Missouri, 64198-0001. Comments can also be sent electronically to
1.
2.
Board of Governors of the Federal Reserve System.
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), Federal agencies are required to publish notice in the
Comments must be received by March 11, 2024.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William N. Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires Federal agencies to publish a 60-day notice in the
The MCBS is a continuous, multipurpose survey of a nationally representative sample of aged, disabled, and institutionalized Medicare beneficiaries. The MCBS, which is sponsored by the Centers for Medicare & Medicaid Services (CMS), is the only comprehensive source of information on the health status, health care use and expenditures, health insurance coverage, and socioeconomic and demographic characteristics of the entire spectrum of Medicare beneficiaries. The core of the MCBS is a series of interviews with a stratified random sample of the Medicare population, including aged and disabled enrollees, residing in the community or in institutions. Questions are asked about enrollees' patterns of health care use, charges, insurance coverage, and payments over time. Respondents are asked about their sources of health care coverage and payment, their demographic characteristics, their health and work history, and their family living circumstances. In addition to collecting information through the core questionnaire, the MCBS collects information on special topics.
Notice of meetings.
This notice announces the 2024 meetings of the Physician-Focused Payment Model Technical Advisory Committee (PTAC). These meetings include deliberation and voting on proposals for physician-focused payment models (PFPMs) submitted by individuals and stakeholder entities and may include discussions on topics related to current or previously submitted PFPMs. All meetings are open to the public.
The 2024 PTAC meetings will occur on the following dates:
Monday-Tuesday, March 25-26, 2024, from 9 a.m. to 5 p.m. ET.
Monday-Tuesday, June 10-11, 2024, from 9 a.m. to 5 p.m. ET.
Monday-Tuesday, September 16-17, 2024, from 9 a.m. to 5 p.m. ET.
Monday-Tuesday, December 2-3, 2024, from 9 a.m. to 5 p.m. ET.
Please note that times are subject to change. If the times change, the ASPE PTAC website will be updated (
All PTAC meetings will be held virtually or in the Great Hall of the Hubert H. Humphrey Building, 200 Independence Avenue SW, Washington, DC 20201.
Lisa Shats, Designated Federal Officer at
PTAC is governed by provisions of the Federal Advisory Committee Act, as amended (5 U.S.C. app.), which sets forth standards for the formation and use of federal advisory committees.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings 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.
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.
Notice is hereby given of a change in the meeting of the Interagency Autism Coordinating Committee, January 24, 2024, 9:00 a.m. to January 24, 2024, 5:00 p.m., National Institutes of Health, Neuroscience Center, 6001 Executive Boulevard, Rockville, MD 20852 which was published in the
This Notice is being amended to change the meeting start time from 9:00 a.m. to 10:00 a.m. The location remains the same. This hybrid meeting will also be accessible remotely at
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Advisory Environmental Health Sciences Council.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The meeting can be accessed from the NIEHS Videocast at the following link:
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.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has procedures at
Information is also available on the Institute's/Center's home page:
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.
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.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings 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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings 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.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings 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.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings 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.
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
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, contact the SAMHSA Reports Clearance Officer at
Comments are invited on: (a) whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The Substance Abuse and Mental Health Services Administration (SAMHSA) Center for Mental Health Services (CMHS) is requesting clearance for data collection associated with a national cross-site evaluation of process, outcomes, and impact for the Advancing Wellness and Resilience in Education (hereinafter referred to as Project AWARE) and Trauma-Informed Services in Schools (TISS) programs.
The purpose of the Project AWARE-TISS Cross-Site Evaluation is to better understand how each program is implemented, the extent to which they facilitate collaboration between education agencies and mental health systems, and how each program contributes to access and referral to mental health services and improved outcomes for youth.
The AWARE-TISS Cross-Site Evaluation incorporates four evaluation components to provide a robust understanding of the implementation (process), outcomes, and associated impacts of the AWARE and TISS Programs and includes program-specific components to ensure programmatic differences and commonalities are understood. With this integrated evaluation design, SAMHSA maintains the ability to evaluate and report on each program separately, while additionally benefiting from the ability to understand the overarching impact of both programs collectively.
Approval is being requested for data collection associated with a Process Evaluation and an Outcome Evaluation. Several program specific sub-studies and cross-program impact analyses will also be conducted to assess implementation and outcomes overall as well as those outcomes specific to high-need subpopulations and under-resourced communities. A behavioral health equity and cultural equity lens will be applied to each area of evaluation to ensure a culturally specific understanding of intervention implementation, outcomes, and impacts.
The Process Evaluation will contain two studies (Implementation and Sustainability Study and Systems Change Study) that examine strategies common to both programs related to program implementation facilitators and barriers, workforce development, and grantees' plans to sustain critical program components beyond their grant period. This assessment of common elements will provide a means to compare the implementation strategies that are successful across both AWARE and TISS grantees and identify successes and challenges in changing systems, policies, service provision, and school climate; increasing behavioral health equity in access and service delivery; and increasing social and emotional development and well-being in school-aged children and youth. The Process Evaluation will also address implementation of program-specific components.
For AWARE, the evaluation will document how the grantees implement the three-tiered public health model in schools and the referral pathways to increase access to mental health promotion, prevention, and intervention. The evaluation will assess the grantee collaborative efforts and grantee activities intended to increase workforce capacity to identify the signs and symptoms of mental illness and ability to refer to appropriate services promptly.
For TISS, the Process Evaluation will focus on examining what innovative strategies the grantees use to increase access to trauma informed services for school-aged youth and how the collaborative efforts of grantees and their partners develop/improve a school-based system for identification, referral, early intervention, treatment, and supportive services. Additionally, the Process Evaluation will assess the implementation of training to improve school capacity to address trauma support needs and engagement of families and communities to increase awareness of the effects of trauma on children and youth.
The Outcome Evaluation will include two studies that examine important facets of the AWARE and TISS programs: (1) identification and referral infrastructure (Identification and Referral Study); and (2) youth resiliency and outcomes (Youth Resiliency and Outcomes Study). Both studies will provide critical information about the effectiveness of the AWARE and TISS programs in establishing and enhancing school-based mental health supports for students.
Program specific sub-studies, inclusive of two TISS case studies and an AWARE Suicide Awareness and Prevention Sub-Study, will be conducted to provide more extensive contextual and implementation information related to the AWARE and TISS programs.
Finally, in addition to assessing the process and outcomes of each of the AWARE and TISS programs, we will
The proposed multimethod approach considers allowable and required activities, variation in the partnerships and provider networks/infrastructure, program settings, populations being served, the range of program implementation plans and goals, existing data systems, and grant infrastructures that support implementation and evaluation participation. In addition, the design considers the stage of implementation of currently funded grantees to seamlessly integrate cohorts appropriately into the evaluation studies.
Fourteen primary data collection activities compose the AWARE-TISS Cross-Site Evaluation.
The estimated response burden to collect this information associated with the AWARE-TISS Cross-Site Evaluation is as follows annualized over the requested 3-year clearance period is presented below. Annual Burden (hours) and Total Cost ($) are rounded to the nearest whole number.
Send comments to Carlos Graham, SAMHSA Reports Clearance Officer at
Office of the Assistant Secretary for Policy Development and Research, HUD.
Notice.
The United States Housing Act of 1937 provides for assisted housing for “low-income families” and “very low-income families.” These designations are defined as percentages of area median family income and are known as income limits. Since FY 2010, HUD has limited the increase from year to year in its income limits as the higher of five percent or twice the percentage change in national median family income. This notice adds an express stipulation that the annual income limit increase may never exceed ten percent. HUD further clarifies the definition of national median family income for purposes of setting income limits.
Comment Due Date: February 8, 2024.
HUD invites interested persons to submit comments on this notice. Communications must refer to the above docket number and title.
There are two methods for submitting public comments.
1.
2.
Questions on this notice may be addressed to Adam Bibler, Director, Program Parameters and Research Division, Office of Economic Affairs, Office of Policy Development and Research, HUD Headquarters, 451 7th Street SW, Room 8208, Washington, DC 20410, telephone number (202) 402-6057; or via email at
This
The United States Housing Act of 1937 (the 1937 Act) provides for assisted housing for “low-income families” and “very low-income families.” Section 3(b)(2) of the 1937 Act defines “low-income families” and “very low-income families” as families whose incomes are below 80 percent and 50 percent, respectively, of the area median family income, with adjustments for family size. These income limits are referred to as “Section 8 income limits” because of the historical and statutory links with that program, although the same income limits are also used as eligibility criteria for several other federal programs. The 1937 Act specifies conditions under which Section 8 income limits are to be adjusted either on a designated area basis or because of family incomes or housing-cost-to-income relationships that are unusually high or low.
HUD issues updated area median family income estimates and Section 8 income limits annually. Since Fiscal Year (FY) 2010, HUD has limited the amount that the income limit for an area could increase or decrease.
There are several reasons for these limits on increases and decreases. First, HUD's calculation of area median family income estimates is based on survey data from the Census Bureau's American Community Survey (ACS). Survey estimates of income are subject to measurement error and may fluctuate from year to year even when the true median income for a given area is unchanged. The limits on increases and decreases ensure that outlier estimates of area median family income changes do not cause undue administrative burden or negatively impact program participants through wildly fluctuating income limit levels.
Second, several programs, most notably the Low-Income Housing Tax Credit (LIHTC), use Section 8 income limits to determine eligibility and rent levels for low-income households. By limiting decreases in income limits to no more than 5 percent, HUD helps ensure the financial viability of affordable housing properties.
This notice announces a change to the FY 2010 criteria for determining the maximum possible increase in income limits. For FY 2024 income limits and thereafter, HUD intends to set the maximum possible increase in income limits at the higher of five percent or
Additionally, HUD is formally establishing the definition of “national median family income” used in the calculation of the cap in income limit increases. From FY 2010 to FY 2014 HUD used an estimate of national median family income based on the ACS estimate of national family income adjusted in part with an inflation adjustment and in part on historical trends in national median family income. From FY 2015 to FY 2021 HUD used estimates of ACS national median income adjusted with actual and forecast inflation alone. For FY 2022 and FY 2023, HUD used unadjusted estimates of national median family income from the ACS.
For FY 2024 and thereafter, HUD intends to continue calculating the cap on income limit increases using the most recent unadjusted estimates of median family income provided by the Census Bureau via the ACS. Therefore, for FY 2024 income limits, the cap would be based on the change in national median family income from ACS 2021 to ACS 2022 (see the discussion below regarding HUD's income limit release schedule). By continuing to remove inflation adjustments from its cap calculation, HUD is keeping the calculation in line with its purpose of capturing trends in median family income data addressing survey volatility rather than volatility introduced by accelerating or decelerating inflation.
HUD released FY 2023 income limits on May 15, 2023. HUD would ordinarily have based the 2023 income limits on ACS 2020 data. However, the Census Bureau did not release normal ACS 2020 one-year data as a result of difficulties with the ACS data collection during the COVID-19 pandemic. Therefore, HUD elected to “skip” 2020 and instead base the FY 2023 income limits on ACS 2021 data. HUD intends to preserve this two-year gap between the vintage of the ACS data and the fiscal year for which the income limits are published. FY 2024 income limits will therefore be based on ACS 2022 data. An exception to this practice may occur in years in which the ACS implements new metropolitan statistical area definitions that HUD has not yet captured in its Fair Market Rent calculations. HUD believes it can implement this two-year gap and still release income limits on or around April 1 of each year.
While HUD invites comments on any aspect of this notice, HUD is particularly interested in receiving comments in response to the following specific questions:
○ If yes, why have you done so, and have the increases been adequate to operate and maintain your property?
○ In the years where you raised rents to the maximum allowable amount, did you see any changes in the turnover of your units as compared with turnover in years when you did not raise rents to the maximum allowable amount?
○ If no, what factors do you use in determining how much you raise your rents? In what years have HUD income limit changes been adequate for a LIHTC property to keep up with operating and maintenance costs, and in what years has it not been adequate?
Office of Public Indian Housing, HUD.
Notice of a rescindment of a system of records.
Pursuant to the provisions of the Privacy Act of 1974, as amended, the Department of the Housing and Urban Development (HUD), the Office of Public Indian Housing, is issuing a public notice of its intent to rescind the Grants Interface Management System (GIMS) because the system was decommissioned by the Office of Chief Information Officer in 2022.
Comments will be accepted on or before February 9, 2024. This proposed action will be effective immediately upon publication.
You may submit comments, identified by one of the following methods:
LaDonne White, Chief Privacy Officer, 451 Seventh Street SW, Room 10139; Washington, DC 20410; telephone number (202) 708-3054 (this is not a toll-free number). 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
The Grants Interface Management System (GIMS) was created to receive grant applications from the
Grants Interface Management System (GIMS), P017.
The previously published notice in the
Office of Public and Indian Housing, HUD.
Notice of a rescindment of a system of records.
Pursuant to the provisions of the Privacy Act of 1974, as amended, the Department of the Housing and Urban Development (HUD), the Office of Public and Indian Housing, Office of Public Housing and Voucher Programs, is issuing a public notice of its intent to rescind the Disaster Information System (DIS) because the requirement for the Disaster Housing Assistance Program (DHAP) which ended in 2011.
Comments will be accepted on or before February 9, 2024. This proposed action will be effective immediately upon publication.
You may submit comments, identified by one of the following methods:
LaDonne White, Chief Privacy Officer, 451 Seventh Street SW, Room 10139, Washington, DC 20410; telephone number (202) 708-3054 (this is not a toll-free number). 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
The Disaster Information System (DIS) was used for program implementation activities related to the Disaster Housing Assistance Program (DHAP) case management services. DHAP is a Federal Emergency Management Agency (FEMA) pilot grant program to provide temporary rental subsidies and case management for non-HUD assisted individuals and families displaced by Hurricanes Katrina or Rita. HUD was the servicing agency that administers the DHAP program for FEMA. The program ended in 2011 and none of the records are active because the information would not be eligible for existing HUD or FEMA programs and as such would no longer be needed. Records are no longer maintained by HUD and have run the record retention period. The records were wiped from the system. The electronic records were destroyed in accordance with schedule 20 of the National Archives and Records Administration General Records Schedule. System no longer exists in IAS or CSAM.
Disaster Information System (DIS).
The previously published notice in the
Office of the Chief Financial Officer, HUD.
Notice of a new system of records.
Pursuant to the provisions of the Privacy Act of 1974, as amended, the Department of the Housing and Urban Development (HUD), Office of the Chief Financial Officer (OCFO) Accounting Operations Center, is issuing a public notice of its intent to create a new system of records titled, “HUD Remittance and Debt Collection.” The purpose of the HUD Remittance and Debt Collection (HRDC) is to provide OCFO with the ability to track debts and remittances.
Comments will be accepted on or before February 8, 2024. This proposed action will be effective on the date following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number or by one of the following methods:
LaDonne White; 451 Seventh Street SW, Room 10139; Washington, DC 20410-0001; telephone number (202) 708-3054 (this is not a toll-free number). 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
HUD, Office of the Chief Financial Officer (OCFO) maintains the “HUD Remittance and Debt Collection (HRDC)” system of records. HRDC allows data from multiple sources to be integrated into a single store. It tracks remittances and debts along with debtor information to facilitate debt servicing and posting transactions in the general ledger. Information is collected from multiple sources. OCFO Accounting Operations Center collects via encrypted email, paper/mail, official form (sent via mail/encrypted email), and/or federal (public) information system. The gathered researched data is then entered into the Remittance Management and Debt Tracking database.
The Debt Tracking sources are Program Office Action Officials (Repayment Agreements), Office of the Inspector General, District Courts (Judgment in a Criminal Case), and the Public Access to Court Electronic Records (PACER) System.
The Remittance Management sources are Treasury's Collection Information Repository (CIR) which includes Fedwire—Federal Reserve Bank of New York, Electronic Check Processing (ECP)—Lockboxes, and
HUD Remittance and Debt Collection (HRDC), HUD/CFO-05.
Unclassified.
Records are maintained at the HUD OCFO, Accounting Operations Center, 307 W 7th St., Suite 1000, Fort Worth, TX 76102-5100.
Mary L. Dominguez, Director, Office of the Chief Financial Officer, Accounting Operations Center, 307 W 7th St., Suite 1000, Fort Worth, TX 76102-5100; Phone (817) 978-5669.
The Debt Collection Act of 1982, Public Law 97-365, 96 Stat. 1749 (1982), as amended by the Debt Collection Improvement Act of 1996, 31 U.S.C. 3701-3720E (original version at Pub. L. 104-134, 110 Stat. 132 (1996)), the Federal Debt Collection Procedures Act of 1990, 28 U.S.C. 3001-3308 (original version at Pub. L. 101-647, 104 Stat. 4789 (1990)) and chapter 31 of title 44, United States Code, and HUD Debt Collection Handbook, 1900.25 Rev-5.
The HRDC database allows HUD OCFO to track remittances and debts. OCFO Accounting Operations Centers collects and maintains debtors' information to locate and correspond with them to collect/resolve their debts. The information is used to perform legal, financial, and administrative services associated with the collection of debts due to the United States, ultimately posting to debtor accounts (general ledger) and for financial reporting.
Individuals or grantees that have been adjudicated to owe a debt or criminal restitution to the United States.
Debtor's full name, social security number (SSN), Home address and telephone number.
The Debt Tracking sources are Program Office Action Officials (Repayment Agreements), Office of the Inspector General (Form 15-G), District Courts (Judgment in a Criminal Case), and the Public Access to Court Electronic Records (PACER) System.
The Remittance Management sources are Treasury's Collection Information Repository (CIR) which includes Fedwire—Federal Reserve Bank of New York, Electronic Check Processing (ECP)—Lockboxes, and
(1) To the Department of Treasury, Bureau of Fiscal Service, who provides debt and cash collection services for HUD as follows:
(a)
(b)
(2) To the Department of Treasury, Internal Revenue Services (IRS) for the purposes of reporting canceled debt on form IRS 1099-C.
(3) To appropriate agencies, entities, and persons when (1) HUD suspects or has confirmed that there has been a breach of the system of records, (2) HUD has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, HUD's (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with HUD's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
(4) To another Federal agency or Federal entity, when HUD determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) 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.
(5) To appropriate Federal, State, local, tribal, or other governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, or license, where HUD determines that the information would assist in the enforce civil or criminal laws, when such records, either alone or in conjunction with other information, indicate a violation or potential violation of law.
(6) To a court, magistrate, administrative tribunal, or arbitrator in the course of presenting evidence, including disclosures to opposing counsel or witnesses in the course of civil discovery, litigation, mediation, or settlement negotiations; or in connection with criminal law proceedings; when HUD determines that use of such records is relevant and necessary to the litigation and when any of the following is a party to the litigation or have an interest in such litigation: (1) HUD, or any component thereof; or (2) any HUD employee in his or her official capacity; or (3) any HUD employee in his or her individual capacity where HUD has agreed to represent the employee; or (4) the United States, or any agency thereof, where HUD determines that litigation is likely to affect HUD or any of its components.
(7) To any component of the Department of Justice or other Federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, when HUD determines that the use of such records is relevant and necessary to the litigation and when any of the following is a party to the litigation or have an interest in such litigation: (1) HUD, or any component thereof; or (2) any HUD employee in his or her official capacity; or (3) any HUD employee in his or her individual capacity where the Department of Justice or agency conducting the litigation has agreed to represent the employee; or (4) the United States, or any agency thereof, where HUD determines that litigation is likely to affect HUD or any of its components.
(8) To contractors, grantees, experts, consultants and their agents, or others performing or working under a contract, service, grant, cooperative agreement, or other agreement with HUD, when necessary to accomplish an agency function related to a system of records. Disclosure requirements are limited to only those data elements considered relevant to accomplishing an agency function.
(9) To a congressional office from the record of an individual, in response to an inquiry from the congressional office made at the request of that individual.
Pursuant to 31 U.S.C. 3711(e) that information contained in this system of records may also be disclosed to a consumer reporting agency when trying to collect a claim owed on behalf of the government.
Paper and Electronic.
Debtor's Full Name, SSN, Home Address, Telephone number, and Assigned Account Number.
Record retention is in conformance with National Archives and Records Administration (NARA) General Records Schedule (GRS) 1.1: Financial Management and Reporting Records; DAA-GRS-2013-0003. Financial transaction records related to procuring goods and services, paying bills, collecting debts and accounting records. Destroy 6 years after final payment or cancellation, but longer if required for business use.
Only authorized users in the OCFO, Accounting Operations Center will have access to system data. Entities outside of the Accounting Operations Center do not have direct access to the database. All OCFO employees are required to complete information systems security training annually and are reminded periodically about policies and procedures in this area.
Other safeguards are implemented. Paper records are stored in locked file cabinets.
Individuals requesting records of themselves should address written inquiries to the Department of Housing Urban and Development, 451 7th Street SW, Washington, DC 20410-0001. For verification, individuals should provide their full name, current address, and telephone number. In addition, the requester must provide either a notarized statement or an unsworn declaration made under 24 CFR 16.4.
The HUD rule for contesting the content of any record pertaining to the individual by the individual concerned is published in 24 CFR 16.8 or may be obtained from the system manager.
Individuals requesting notification of records of themselves should address written inquiries to the Department of Housing Urban Development, 451 7th Street SW, Washington, DC 20410-0001. For verification purposes, individuals should provide their full name, office or organization where assigned, if applicable, and current address and telephone number. In addition, the requester must provide either a notarized statement or an unsworn declaration made under 24 CFR 16.4.
N/A.
N/A.
Fish and Wildlife Service, Interior.
Notice of intent to conduct restoration planning.
Notice is hereby given of the trustees' (Department of the Interior, and Washington Department of Fish and Wildlife) intent to proceed with restoration planning actions to address injuries to natural resources resulting from the discharge of oil associated with a 1999 mystery spill along the northern Oregon and southern Washington coastline. The purpose of this restoration planning effort is to assess injuries to natural resources resulting from the spill and develop and implement a plan for the restoration of these injured resources.
For further information, contact the following trustee representatives: Mike Szumski (U.S. Fish and Wildlife Service), via email at
On March 4, 1999, Federal and State natural resource agencies received reports of tarballs and oiled birds coming ashore on beaches in northern Oregon and southern Washington. The event lasted several days, during which response crews collected the carcasses of 272 seabirds, primarily rhinoceros auklets (
Under the Oil Pollution Act of 1990 (OPA; 33 U.S.C. 2701
The purpose of the OPA is to make the environment and public whole for injuries to natural resources and services resulting from an incident involving a discharge of oil. Pursuant to section 1006(b) of OPA (33 U.S.C. 2706(b)), the Department of the Interior (U.S. Fish and Wildlife Service) and the State of Washington (Washington Department of Fish and Wildlife) are joint trustees (trustees) for natural resources injured by the incident. Per section 1006 of OPA (33 U.S.C. 2706), the trustees are authorized to assess the type and extent of injury to natural resources from an oil spill and then develop a plan that will restore injured resources back to baseline, a process known as restoration planning. With this
The NRDA process will identify and quantify the nature and extent (both temporal and spatial) of injuries to natural resources and resource services arising out of the incident, and enable the trustees to develop plans for the restoration, replacement, or rehabilitation of those injured resources, or for the acquisition of equivalent resources or resource services. The assessment will be conducted pursuant to the regulations for NRDA at 15 CFR part 990. The NRDA will address natural resources and resource services, primarily bird injury, along the northern Oregon and southern Washington coastline for which injuries attributable to the incident have been, or can be, determined.
Section 1006 of the OPA, 33 U.S.C. 2706, authorizes the trustees to seek damages from the responsible party to pay for the implementation of the restoration plan. In the event that a viable responsible party cannot be identified, the trustees are authorized (33 U.S.C. 1321) to seek funding for natural resource damage claims for damage costs from the Oil Spill Liability Trust Fund (OSLTF), which is administered by the U.S. Coast Guard National Pollution Funds Center (Center). The trustees are proceeding in accordance with the regulations for NRDA at 15 CFR part 990, and plan to seek funding from the Center for costs associated with the Oregon-Washington Coast Mystery Spill NRDA and restoration.
The trustees have made the following determinations pursuant to 15 CFR 990.41 and 990.42:
1. A spill of undetermined volume began on or about March 4, 1999, into the waters of the Pacific Ocean, off the coasts of northern Oregon and southern Washington. This occurrence constituted an “incident” within the meaning of 15 CFR 990.30.
2. The incident was not permitted under a permit issued under Federal, State, or local law; was not from a public vessel; and was not from an onshore facility subject to the Trans-Alaska Pipeline Authority Act (43 U.S.C. 1651
3. Oil discharged during the incident adversely affected marine and shoreline habitats, and wildlife. Consequently, natural resources under the trusteeship of the trustees have been injured as a result of the incident.
4. As a result of the foregoing determinations, the trustees have jurisdiction to pursue restoration under the OPA.
The trustees have determined, pursuant to 15 CFR 990.42(a), that:
1. Pre-assessment data collected and analyzed pursuant to 15 CFR 990.43 demonstrate that injuries to a wide variety and number of seabirds have resulted from the incident, including marbled murrelets (
2. Response actions during cleanup have not adequately addressed the injuries and lost services resulting from the incident. Response efforts consisted of cleaning up oil stranded along affected beaches and the collection of injured birds. These efforts reduced the magnitude and duration of impacts to shoreline habitats and wildlife but did not eliminate all injuries or make restoration unnecessary. Data from numerous oil spills demonstrate that the bird carcasses collected during an oil spill represent only a portion of the birds killed by the oil, suggesting that additional birds likely died as a result of the incident.
3. Assessment procedures are available to estimate total injury, identify appropriate restoration projects, and scale those projects to compensate for the injury. Procedures consist of, but are not limited to, the following.
a. Analysis of mortality data collected during the incident;
b. Analysis of reproductive and demographic parameters of key species;
c. Modeling environmental parameters such as historical winds and currents;
d. Analysis of historic seabird population data; and
e. Analysis of habitat information to scale restoration.
4. Feasible restoration alternatives exist to address injuries from the incident. Restoration activities are expected to focus on seabirds. Restoration could include enhancement or protection of seabird nesting habitat through acquisition, predator management, invasive species removal, habitat creation, habitat enhancement, education, or other means. During restoration planning, the trustees evaluate potential projects, determine the scale of restoration actions needed to make the environment and the public whole, and release a draft damage assessment and restoration plan for public review and comment.
Based upon the foregoing determinations, the trustees intend to proceed with restoration planning for this incident.
The trustees have opened an administrative record (“record”) in compliance with 15 CFR 990.45. The record will include documents relied upon by the trustees during the assessment of natural resource damages being performed in connection with the incident. The public may view the record online at
Pursuant to 15 CFR 990.14(d), the trustees intend to seek public comment on the draft damage assessment and restoration plan once it is completed. A separate
Fish and Wildlife Service, Interior.
Notice of issuance of permits.
We, the U.S. Fish and Wildlife Service (Service), have issued the following permits to conduct certain activities with endangered species. We issue these permits under the Endangered Species Act (ESA).
Information about the applications for the permits listed in this notice is available online at
Brenda Tapia, by phone at 703-358-2185 or via email at
We, the U.S. Fish and Wildlife Service (Service), have issued permits to conduct certain activities with endangered and threatened species in response to permit applications that we received under the authority of section 10(a)(1)(A) of the Endangered Species Act of 1973 (16 U.S.C. 1531
After considering the information submitted with each permit application and the public comments received, we issued the requested permits subject to certain conditions set forth in each permit. For each application for an endangered species, we found that (1) the application was filed in good faith, (2) the granted permit would not operate to the disadvantage of the endangered species, and (3) the granted permit would be consistent with the purposes and policy set forth in section 2 of the ESA.
The permittees' original permit application materials, along with public comments we received during public comment periods for the applications, are available for review. To locate the application materials and received
We issue this notice under the authority of the Endangered Species Act, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comments.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications for a permit to conduct activities intended to recover and enhance endangered species survival. With some exceptions, the Endangered Species Act (ESA) prohibits certain activities that may impact endangered species, unless a Federal permit allows such activity. The ESA also requires that we invite public comment before issuing these permits.
To ensure consideration, please submit your written comments by February 9, 2024.
Marty Tuegel, Supervisor, Environmental Review Division, by phone at 505-248-6651, or via email at
With some exceptions, the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
The ESA and our implementing regulations in the Code of Federal Regulations (CFR) at title 50, part 17, provide for issuing such permits and require that we invite public comment before issuing permits for activities involving listed species.
A recovery permit we issue under the ESA, section 10(a)(1)(A), authorizes the permittee to conduct activities with endangered or threatened species for scientific purposes that promote recovery or enhance the species' propagation or survival. These activities often include such prohibited actions as capture and collection. Our regulations implementing section 10(a)(1)(A) for these permits are found at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
Documents and other information submitted with these applications are available for review by any party who submits a request as specified in
Proposed activities in the following permit requests are for the recovery and enhancement of propagation or survival of the species in the wild. We invite local, State, Tribal, and Federal agencies and the public to submit written data, views, or arguments with respect to these applications. The comments and recommendations that will be most useful and likely to influence agency decisions are those supported by quantitative information or studies. Please refer to the permit record number when submitting comments.
All comments we receive become part of the public record associated with this action. Requests for copies of comments will be handled in accordance with the Freedom of Information Act, National Environmental Policy Act, and Service and Department of the Interior policies and procedures. 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 to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.
We provide this notice under section 10 of the Endangered Species Act (16 U.S.C. 1531
Office of the Secretary, Interior.
Notice of a modified system of records.
Pursuant to the provisions of the Privacy Act of 1974, as amended, the Department of the Interior (DOI, Department) is issuing a public notice of its intent to modify the Privacy Act system of records, INTERIOR/DOI-10, Incident Management, Analysis and Reporting System. DOI is revising this notice to change the title of the system, propose new and modified routine uses, and update all sections of the system notice to accurately reflect the scope of the system. This modified system will be included in DOI's inventory of systems of records.
This modified system will be effective upon publication. New and modified routine uses will be effective February 9, 2024. Submit comments on or before February 9, 2024.
You may send comments identified by docket number [DOI-2023-0023] by any of the following methods:
•
•
•
Teri Barnett, Departmental Privacy Officer, U.S. Department of the Interior, 1849 C Street NW, Room 7112, Washington, DC 20240,
The DOI Office of Law Enforcement and Security (OLES) maintains the INTERIOR/DOI-10, Incident Management, Analysis and Reporting System, as a unified Department-wide law enforcement records management system. This system of records helps DOI protect life and resources, manage law enforcement incidents and investigations, measure performance, meet reporting requirements, and foster public trust through transparent and accountable law enforcement programs. The system also provides the capability to prevent, detect, and investigate known and suspected criminal activity and violations of fish and wildlife laws; transmit information to Federal law enforcement databases and repositories; analyze and prioritize protection efforts; provide information to justify law enforcement funding requests and expenditures; assist in managing visitor use and protection programs; investigate, detain and apprehend those committing crimes on DOI properties, including National Wildlife Refuges, National Parks, and Tribal reservations (for the purpose of this system of
DOI is proposing to change the title of the system of records to INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS) to reflect the modified scope of the system; update the system manager and system location sections; expand on categories of individuals covered by the system, the categories of records and records source categories sections; update authorities for maintenance of the system; update the storage, safeguards, and records retention schedule; update the notification, records access and contesting procedures; and provide general updates in accordance with the Privacy Act of 1974 and Office of Management and Budget (OMB) Circular A-108,
DOI is also changing the routine uses from a numeric to alphabetic list and is proposing to modify existing routine uses to provide clarity and transparency and reflect updates consistent with standard DOI routine uses. The notice of disclosure to consumer reporting agencies in former routine use 13 was moved to the end of this section. Routine use A has been modified to further clarify disclosures to the Department of Justice or other Federal agencies when necessary in relation to litigation or judicial proceedings. Routine use B has been modified to clarify disclosures to a congressional office to respond to or resolve an individual's request made to that office. Routine use H has been modified to expand the sharing of information with territorial organizations in response to court orders or for discovery purposes related to litigation. Routine use I has been modified to include the sharing of information with grantees and shared service providers that perform services requiring access to these records on DOI's behalf to carry out the purposes of the system. Routine use J was slightly modified to allow DOI to share information with appropriate Federal agencies or entities when reasonably necessary to prevent, minimize, or remedy the risk of harm to individuals or the Federal Government resulting from a breach in accordance with OMB Memorandum M-17-12,
Proposed routine use O allows DOI to share information with the news media and the public where there exists a legitimate public interest in the disclosure of information and it is necessary to preserve the confidence in the integrity of the DOI, demonstrate DOI's commitment to serving the public and the accountability of its officers and employees. Proposed routine use T allows DOI to share information with adjudicative or regulatory agencies when necessary and appropriate to adjudicate decisions affecting individuals who are subjects of investigations or covered by this system notice. Proposed routine use U allows DOI to share information with complainants, victims, family members, and representatives to the extent necessary to provide information on results of investigations or cases or matters they may be involved in. Proposed routine use V allows DOI to share information with an official or employee regarding a matter within that individual's area of responsibility or when relevant and necessary to respond to official inquiries by the Department or other authority. Proposed routine use W allows DOI to share information with Tribal organizations when necessary and relevant under the Indian Self-Determination and Education Assistance Act.
Pursuant to the Privacy Act, 5 U.S.C. 552a(b)(12), DOI may disclose information from this system to consumer reporting agencies as defined in the Fair Credit Reporting Act (15 U.S.C. 1681a(f)) or the Federal Claims Collection Act of 1966 (31 U.S.C. 3701(a)(3)) to aid in the collection of outstanding debts owed to the Federal Government.
In a Notice of Proposed Rulemaking published separately in the
The Privacy Act of 1974, as amended, embodies fair information practice principles in a statutory framework governing the means by which Federal agencies collect, maintain, use, and disseminate individuals' records. The Privacy Act applies to records about individuals that are maintained in a “system of records.” A “system of records” is a group of any records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to the individual. The Privacy Act defines an individual as a United States citizen or lawful permanent resident. Individuals may request access to their own records that are maintained in a system of records in the possession or under the control of DOI by complying with DOI Privacy Act regulations at 43 CFR part 2, subpart K, and following the procedures outlined in the Records Access, Contesting Record, and Notification Procedures sections of this notice.
The Privacy Act requires each agency to publish in the
You should be aware your entire comment including your personally identifiable information, such as your address, phone number, email address, or any other personal information in your comment, may be made publicly available at any time. While you may request to withhold your personally identifiable information from public review, we cannot guarantee we will be able to do so.
INTERIOR/DOI-10, DOI Law Enforcement Records Management System (LE RMS).
Classified and Unclassified.
Office of Law Enforcement and Security, U.S. Department of the Interior, 1849 C Street NW, Washington, DC 20240; Albuquerque Data Center, 1011 Indian School Road, Northwest, Albuquerque, NM 87104; DOI facilities and data centers; DOI-approved cloud service providers; and DOI bureaus and offices that manage law enforcement programs as identified in the System Manager section below.
(1) Director, Office of Law Enforcement and Security, U.S. Department of the Interior, 1849 C Street NW, Mail Stop Room 3411, Washington, DC 20240.
(2) Bureau of Indian Affairs, Office of Justice Services, 1849 C Street NW, Mail Stop MS-3662-MIB, Washington, DC 20240.
(3) Director, Office of Law Enforcement and Security, Bureau of Land Management, 1849 C Street NW, Mail Stop: Fifth Floor, Room #5618, Washington, DC 20240.
(4) Bureau of Reclamation, Policy and Programs Directorate, Denver Security Division, Supervisory Security Specialist, P.O. Box 25007, Denver, CO 80225.
(5) Director, Office of Law Enforcement, U.S. Fish and Wildlife Service, MS: OLE, 5275 Leesburg Pike, Falls Church, Virginia 22041.
(6) National Park Service, Program Manager, National Park Service Law Enforcement, Security, and Emergency Services, U.S. Department of the Interior, 1849 C Street NW, Mailstop 2560, Washington, DC 20240.
Uniform Federal Crime Reporting Act, 28 U.S.C. 534; Intelligence Reform and Terrorism Prevention Act of 2004 (Pub. L. 108-458); Homeland Security Act of 2002 (Pub. L. 107-296); USA PATRIOT ACT of 2001 (Pub. L. 107-56); USA PATRIOT Improvement Act of 2005 (Pub. L. 109-177); Tribal Law and Order Act of 2010 (Pub. L. 111-211); Fish and Wildlife Act of 1956, 16 U.S.C. 742a-742j-l; Refuge Recreation Act, 16 U.S.C. 460k-460k-4; Endangered Species Act of 1973, 16 U.S.C. 1531-1544; Lacey Act, 18 U.S.C. 42; Executive Order 14074: Advancing Effective, Accountable Policing and Criminal Justice Practices to Enhance Public Trust and Public Safety, May 25, 2022; Homeland Security Presidential Directive 7—Critical Infrastructure Identification, Prioritization, and Protection; Homeland Security Presidential Directive 12—Policy for a Common Identification Standard for Federal Employees and Contractors; Criminal Intelligence Systems Operating Policies, 28 CFR part 23; Law and Order, 25 CFR part 10, Indian Country Detention Facilities and Programs; Courts of Indian Offenses and Law and Order Code, 25 CFR part 11; and Indian Country Law Enforcement, 25 CFR part 12.
The LE RMS system of records is an incident management and reporting system used to prevent, detect, and investigate known and suspected criminal activity; protect natural and cultural resources; capture, integrate and share law enforcement and related information and observations from other sources; measure performance of law enforcement programs and management of emergency incidents; meet reporting requirements; foster public trust through transparent and accountable law enforcement programs; transmit information to Federal law enforcement databases and repositories; analyze and prioritize protection efforts; assist in managing visitor use and protection programs; enable the ability to investigate, detain and apprehend those committing crimes on DOI properties or Tribal reservations; and to investigate and prevent visitor accident incidents and injuries on DOI properties or Tribal reservations.
The categories of individuals covered in the system include current and former Federal employees, consultants, contractors, subcontractors, and grantees; Federal, Tribal, State, local and foreign law enforcement officers and officials; witnesses, complainants, informants, and parties who have been identified as potential subjects or parties to an investigation; and individuals or entities who are or have been the subject of investigations and other individuals associated with alleged violation(s) of Federal law, regulations, or rules of conduct.
Additionally, this system contains information regarding members of the general public, including individuals and/or groups of individuals involved with law enforcement incidents involving Federal assets or occurring on public lands and Tribal reservations, such as witnesses, individuals making complaints, individuals involved in reports of traffic accidents on DOI managed properties and Tribal reservations, and individuals being investigated or arrested for criminal or traffic offenses or involved in certain types of non-criminal incidents.
The system includes law enforcement incident reports, law enforcement personnel records, and law enforcement training records, which contain the following information: names, home addresses, work addresses, telephone numbers, email addresses and other contact information, emergency contact information; dates of birth, place of birth; gender, ethnicity and race; biometric information such as physical or distinguishing attributes of an individual; Social Security numbers, driver's license numbers, passport numbers, identification numbers for non-citizens, Federal Bureau of Investigation (FBI) Universal Control Numbers, State identification numbers; Tribal identification numbers or other Tribal enrollment data; vehicle identification numbers, license plate numbers, boat registration or hull number; work history, educational history, affiliations, and other related data; criminal history, arrest and incarceration records, prior contacts with law enforcement, and records related to the transport of individuals.
Incident and investigation records related to or documenting criminal and administrative investigations and other law enforcement activities, use of force, critical incidents, traffic safety, property damage claims, motor vehicle crashes, domestic violence incidents, information sharing and analysis, and other law enforcement activities may include, but are not limited to: incident reports, case files and notes; attachments such as photos or digital images, video recordings from body worn cameras, vehicle mounted
Records in this system also include information concerning Federal civilian employees and contractors, Federal, Tribal, State, and local law enforcement officers and may contain information regarding an officer's name, contact information, station and career history, firearms qualifications, medical history, background investigation and status, date of birth, and Social Security number. Information regarding officers' equipment, such as firearms, electronic control devices, body armor, vehicles, computers and special equipment related skills is also included in this system.
Sources of information in the system include current and former DOI officials and employees; officials of Federal, State, Tribal, local, and foreign law enforcement and non-law enforcement agencies and organizations including the FBI and Department of Justice; subjects of investigations, complainants, informants, suspects, victims, witnesses, private citizens, and visitors to Federal properties; photos and recordings captured from law enforcement body worn cameras, vehicle mounted cameras, hand-held cameras or other devices, closed circuit television, or other surveillance methods; and public source materials. Records may also be obtained from other internal and external sources such as personnel, training or other systems of records, DOI personnel, contractors, and other parties for matters related to the maintenance of this system, and information sharing partners.
In addition to those disclosures 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 outside DOI as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To the Department of Justice (DOJ), including Offices of the U.S. Attorneys, or other Federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, when it is relevant or necessary to the litigation and one of the following is a party to the litigation or has an interest in such litigation:
(1) DOI or any component of DOI;
(2) Any other Federal agency appearing before the Office of Hearings and Appeals;
(3) Any DOI employee or former employee acting in their official capacity;
(4) Any DOI employee or former employee acting in their individual capacity when DOI or DOJ has agreed to represent that employee or pay for private representation of the employee; or
(5) The United States Government or any agency thereof, when DOJ determines that DOI is likely to be affected by the proceeding.
B. To a congressional office when requesting information on behalf of, and at the request of, the individual who is the subject of the record, to the extent the records have not been exempted from disclosure pursuant to 5 U.S.C. 552a(j) and (k).
C. To the Executive 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, or for a purpose compatible with the reason for which the records are collected or maintained, to the extent the records have not been exempted from disclosure pursuant to 5 U.S.C. 552a(j) and (k).
D. To any criminal, civil, or regulatory law enforcement authority (whether Federal, State, territorial, local, Tribal or foreign) when a record, either alone or in conjunction with other information, indicates a violation or potential violation of law—criminal, civil, or regulatory in nature, and the disclosure is compatible with the purpose for which the records were compiled.
E. To an official of another Federal agency to provide information needed in the performance of official duties related to reconciling or reconstructing data files or to enable that agency to respond to an inquiry by the individual to whom the record pertains.
F. To Federal, State, territorial, local, Tribal, or foreign agencies that have requested information relevant or necessary to the hiring, firing or retention of an employee or contractor, or the issuance of a security clearance, license, contract, grant or other benefit, when the disclosure is compatible with the purpose for which the records were compiled.
G. To representatives of the National Archives and Records Administration (NARA) to conduct records management inspections under the authority of 44 U.S.C. 2904 and 2906.
H. To State, territorial and local governments and Tribal organizations to provide information needed in response to court order and/or discovery purposes related to litigation, when the disclosure is compatible with the purpose for which the records were compiled.
I. To an expert, consultant, grantee, shared service provider, or contractor (including employees of the contractor) of DOI that performs services requiring access to these records on DOI's behalf to carry out the purposes of the system.
J. To appropriate agencies, entities, and persons when:
(1) DOI suspects or has confirmed that there has been a breach of the system of records;
(2) DOI has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, DOI (including its information systems, programs, and operations), the Federal Government, or national security; and
(3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with DOI's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
K. To another Federal agency or Federal entity, when DOI determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in:
(1) responding to a suspected or confirmed breach; or
(2) 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.
L. To the Office of Management and Budget (OMB) during the coordination and clearance process in connection with legislative affairs as mandated by OMB Circular A-19.
M. To the Department of the Treasury to recover debts owed to the United States.
N. To the news media and the public in support of the law enforcement activities, including obtaining public
O. To the news media and the public (including select members of the public, such as victims' family members) when:
(1) Release of the specific information would not constitute an unwarranted invasion of personal privacy, and
(2) There exists a legitimate public interest in the disclosure of the information and its release would:
(a) Preserve public confidence and trust in the integrity of DOI;
(b) Demonstrate DOI's commitment to serving the public and achieving its mission; or
(c) Reveal the accountability of DOI's officers, employees, or individuals covered by the system.
P. To the Department of Justice, the Department of Homeland Security, or other Federal, State, Tribal, and local law enforcement agencies for the purpose of information exchange on law enforcement activity or as required by Federal law, statute, regulation, executive order, and DOI policy.
Q. To agency contractors, grantees, shared service providers, or volunteers for DOI or other Federal Departments who have been engaged to assist the Government in the performance of a contract, grant, cooperative agreement, or other activity related to this system of records and who need to have access to the records in order to perform the activity.
R. To any of the following entities or individuals, for the purpose of providing information on traffic accidents, personal injuries, or the loss or damage of property:
(1) Individuals involved in such incidents;
(2) Persons injured in such incidents;
(3) Owners of property damaged, lost or stolen in such incidents; and/or
(4) These individuals' duly verified insurance companies, personal representatives, administrators of estates, and/or attorneys.
The release of information under these circumstances should only occur when it will not interfere with ongoing law enforcement proceedings; risk the health or safety of an individual; reveal the identity of an information or witness that has received an explicit assurance of confidentiality; or reveal protected or confidential law enforcement techniques and practices. Social Security numbers and Tribal identification numbers should not be released under these circumstances unless the Social Security number or Tribal identification number belongs to the individual requester.
S. To any criminal, civil, or regulatory authority (whether Federal, State, territorial, local, Tribal or foreign) for the purpose of providing background search information on individuals for legally authorized purposes, including but not limited to background checks on individuals residing in a home with a minor or individuals seeking employment opportunities requiring background checks.
T. To an administrative forum, including ad hoc forums, which may include an Administrative Law Judge, public hearings/proceedings, or other established adjudicatory or regulatory agencies (
U. To complainants, victims, decedent's estate representative, or family members of victims, and their attorney or legal representative, to the extent necessary to provide such persons with information concerning the results of an investigation or case arising from the matters of which they complained and/or of which they were the subject of law enforcement activity.
V. To a former official or employee of the Department when relevant and necessary to respond to an official inquiry by a Federal, State, or local government entity or professional licensing authority, in accordance with applicable Department regulations; or to facilitate communications with a former official or employee that may be necessary for personnel-related or other official purposes where the Department requires information and/or consultation assistance regarding a matter within that person's former area of responsibility.
W. To Tribal organizations when necessary and relevant to the assumption of a program under Public Law 93-638, the Indian Self-Determination and Education Assistance Act, 25 U.S.C. 450
Electronic records are maintained in information systems or stored on magnetic disc, tape or digital media. Paper records are maintained in file cabinets in secure facilities.
Records may be retrieved by multiple identifiers including Social Security number, first or last name, badge number, address, phone number, vehicle information and physical attributes.
Records in this system are retained and disposed of in accordance with Office of the Secretary Records Schedule 8151, Incident, Management, Analysis and Reporting System, which was approved by the National Archives and Records Administration (NARA) (N1-048-09-5), and other NARA approved bureau or office records schedules. The specific record schedule for each type of record or form is dependent on the subject matter and records series. After the retention period has passed, temporary records are disposed of in accordance with the applicable records schedule and DOI policy. Disposition methods include burning, pulping, shredding, erasing, and degaussing in accordance with Departmental records policy. Permanent records that are no longer active or needed for agency use are transferred to the National Archives for permanent retention in accordance with NARA guidelines.
The records contained in this system are safeguarded in accordance with 43 CFR 2.226 and other applicable security and privacy rules and policies. During normal hours of operation, paper records are maintained in locked file cabinets under the control of authorized personnel. Computer servers on which electronic records are stored are located in secured DOI controlled facilities with physical, technical and administrative levels of security to prevent unauthorized access to the DOI network and information assets. Access granted to authorized personnel is password-protected, and each person granted access to the system must be individually authorized to use the system. A Privacy Act Warning Notice appears on computer monitor screens when records containing information on individuals are first displayed. Data exchanged between the servers and the system is encrypted. Backup tapes are encrypted and stored in a locked and controlled room in a secure, off-site location.
Computerized records systems follow the National Institute of Standards and Technology privacy and security standards as developed to comply with the Privacy Act of 1974, as amended, 5 U.S.C. 552a; Paperwork Reduction Act of 1995, 44 U.S.C. 3501
Access to records in the system is limited to authorized personnel who have a need to access the records in the performance of their official duties, and each user's access is restricted to only the functions and data necessary to perform that person's job responsibilities. System administrators and authorized users are trained and required to follow established internal security protocols and must complete all security, privacy, and records management training and sign the DOI Rules of Behavior. A Privacy Impact Assessment was conducted to ensure that Privacy Act requirements are met and appropriate privacy controls were implemented to safeguard the personally identifiable information contained in the system.
DOI has exempted portions of this system from the access provisions of the Privacy Act of 1974 pursuant to 5 U.S.C. 552a(j) and (k). DOI will make access determinations on a case-by-case basis.
To the extent that portions of this system are not exempt, an individual requesting access to their records should send a written inquiry to the applicable System Manager identified above. DOI forms and instructions for submitting a Privacy Act request may be obtained from the DOI Privacy Act Requests website at
DOI has exempted portions of this system from the amendment provisions of the Privacy Act of 1974 pursuant to 5 U.S.C. 552a(j) and (k). DOI will make amendment determinations on a case-by-case basis.
To the extent that portions of this system are not exempt, an individual requesting amendment of their records should send a written request to the applicable System Manager as identified above. DOI instructions for submitting a request for amendment of records are available on the DOI Privacy Act Requests website at
DOI has exempted portions of this system from the notification procedures of the Privacy Act of 1974 pursuant to 5 U.S.C. 552a(j) and(k). DOI will make notification determinations on a case-by-case basis.
To the extent that portions of this system are not exempt, an individual requesting notification of the existence of records about them should send a written inquiry to the applicable System Manager as identified above. DOI instructions for submitting a request for notification are available on the DOI Privacy Act Requests website at
This system contains law enforcement and investigatory records that are exempt from certain provisions of the Privacy Act of 1974, 5 U.S.C. 552a(j) and (k). In accordance with 5 U.S.C. 553(b), (c) and (e), DOI has promulgated rules separately in the
Pursuant to 5 U.S.C. 552a(j)(2), DOI has exempted this system from the provisions of the Privacy Act except subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i). DOI has also exempted portions of this system from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) of the Privacy Act pursuant to 5 U.S.C. 552a (k)(1), (k)(2), (k)(3), (k)(5), and (k)(6). Additionally, when this system receives a record from another system that is exempted in that source system under 5 U.S.C. 552a(j) or (k), DOI claims the same exemptions for those records that are claimed in the primary systems of records from which they originated and any additional exemptions set forth here.
79 FR 31974 (June 3, 2014); modification published at 86 FR 50156 (September 7, 2021).
Bureau of Land Management, Interior.
Notice of new recreation fees.
Pursuant to applicable provisions of the Federal Lands Recreation Enhancement Act (FLREA), the Bureau of Land Management (BLM), Central Yukon Field Office, intends to
All new fees will take effect on July 8, 2024.
The business plan and information concerning the proposed fees may be reviewed at the Fairbanks District Office Public Room, 222 University Avenue, Fairbanks, AK 99709; or online at
William Hedman, Acting Field Manager, Central Yukon Field Office, telephone: (907) 474-2375, email:
Individuals in the United States who are deaf, blind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services for contacting Mr. La Marr. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
The FLREA directs the Secretary of the Interior to publish a six-month advance notice in the
The BLM intends to establish recreation fees for expanded amenities at the Coldfoot Cabin at milepost (MP) 175 along the Dalton Highway. The Central Yukon Field Office administers the BLM utility corridor and adjacent lands along the Dalton Highway from MP 56 to just south of MP 300 for recreation under the Dalton Highway Special Recreation Management Area. The Coldfoot Cabin is currently used administratively during the summer months and will be made available for rent as a public use cabin during the winter months.
The Coldfoot Cabin qualifies as a site where visitors can be charged an “Expanded Amenity Recreation Fee” under FLREA (16 U.S.C. 6802(g)). The cabin provides toilet facilities, refuse containers, picnic tables, access roads and parking, visitor protection, and fee collection by management personnel.
Effective July 8, 2024, the Central Yukon Field Office will initiate new fee collection at the facility unless the BLM publishes a
In accordance with BLM recreation fee program policy, the Central Yukon Field Office has developed a recreational fee business plan that is available as listed in the
The BLM notified and involved the public at each stage of the planning process for the new fees. The BLM posted written notices of the proposed fees at the fee site on April 20, 2023. It announced a 30-day public comment period on the draft business plan on April 20, 2023, through a BLM news release, BLM social media, and the BLM website. The draft business plan was publicly available for review and comment at the BLM Fairbanks District Office and on the BLM Alaska business plan website from April 20, 2023, to May 20, 2023.
National Park Service, Interior.
Notice of availability; extension of public comment period.
The National Park Service extends the public comment period for a draft Wilderness Stewardship Reference Manual 41 guidance governing the management of climbing activities in wilderness areas in the National Park System. Extending the comment period will allow more time for the public to review the proposal and submit comments.
The public comment period for the draft Wilderness Stewardship Reference Manual 41 guidance that published on November 17, 2023 (88 FR 80333), is extended. We will accept comments received or postmarked on or before 11:59 p.m. MT on January 30, 2024.
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Roger Semler, Wilderness Stewardship Division Manager, National Park Service, (202-430-7615),
On November 17, 2023, the National Park Service (NPS) published in the
United States International Trade Commission.
January 18, 2024 at 11:00 a.m.
Room 101, 500 E Street SW, Washington, DC 20436, Telephone: (202) 205-2000.
Open to the public.
1. Agendas for future meetings: none.
2. Minutes.
3. Ratification List.
4. Commission vote on Inv. Nos. 701-TA-589 and 731-TA-1394-1396 (Review)(Forged Steel Fittings (FSF) from China, Italy, and Taiwan). The Commission currently is scheduled to complete and file its determinations and views of the Commission on January 26, 2024.
5. Outstanding action jackets: none.
Sharon Bellamy, Supervisory Hearing and Information Officer, 202-205-2000.
The Commission is holding the meeting under the Government in the Sunshine Act, 5 U.S.C. 552(b). In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
By order of the Commission.
Notice.
In accordance with the Paperwork Reduction Act (PRA), the Wage and Hour Division (WHD) is providing notice to the public that the WHD sponsored information collection request (ICR) titled “Nondisplacement of Qualified Workers Under Service Contracts” has been approved by the Office of Management and Budget (OMB). WHD is notifying the public that the information collection has been approved and is effective immediately through January 31, 2027.
The OMB approval of the new collection of information is effective immediately with an expiration date of January 31, 2027.
Robert Waterman, Division of Regulations, Legislation, and Interpretation, Wage and Hour, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number) or by sending an email to
The Department of Labor submitted a proposed new information collection titled Nondisplacement of Qualified Workers Under Service Contracts (OMB Control Number 1235-0NEW) in conjunction with a proposed rule published in the
Section (k) of 5 CFR 1320.11, “Clearance of Collections of Information in Proposed Rules,” states: “After receipt of notification of OMB's approval, instruction to make a substantive or material change to, disapproval of a collection of information, or failure to act, the agency shall publish a notice in the
In accordance with the purposes of Sections 29 and 182b of the Atomic Energy Act (42 U.S.C. 2039, 2232(b)), the Advisory Committee on Reactor Safeguards (ACRS) will hold meetings on February 7-9, 2024. The Committee will be conducting meetings that will include some Members being physically present at the NRC while other Members participate remotely. Interested members of the public are encouraged to participate remotely in any open sessions via MS Teams or via phone at 301-576-2978, passcode 619018704#. A more detailed agenda including the MSTeams link may be found at the ACRS public website at
[NOTE: Pursuant to 5 U.S.C. 552b(c)(4), a portion of this session may be closed in order to discuss and protect information designated as proprietary.]
[NOTE: Pursuant to 5 U.S.C. 552b(c)(4), a portion of this session may be closed in order to discuss and protect information designated as proprietary.]
[NOTE: Pursuant to 5 U.S.C. 552b(c)(4), a portion of this session may be closed in order to discuss and protect information designated as proprietary.]
Procedures for the conduct of and participation in ACRS meetings were published in the
An electronic copy of each presentation should be emailed to the cognizant ACRS staff at least one day before the meeting.
In accordance with subsection 10(d) of Public Law 92-463 and 5 U.S.C. 552b(c), certain portions of this meeting may be closed, as specifically noted above. Use of still, motion picture, and television cameras during the meeting may be limited to selected portions of the meeting as determined by the Chairman. Electronic recordings will be permitted only during the open portions of the meeting.
ACRS meeting agendas, meeting transcripts, and letter reports are available through the NRC Public Document Room (PDR) at
Nuclear Regulatory Commission.
Notification to applicants and licensees of a criminal history program fee decrease.
The U. S. Nuclear Regulatory Commission (NRC) will decrease the current fee of $35 assessed to applicants and licensees for criminal history records checks to $32. This fee is necessary to recover the full cost for the administration of the Criminal History Program (CHP). Information regarding this change can be found on the NRC's CHP public website at
The fee decrease will begin on February 1, 2024.
Please refer to Docket ID NRC-2023-0214 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
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Doreen Turner, Office of Nuclear Security and Incident Response, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone: 301-415-7553; email:
Pursuant to requirements in the Chief Financial Officers Act of 1990 (31 U.S.C. 902(a)(8)), the NRC conducts biennial reviews of the fees assessed to applicants and licensees for criminal history records checks. Specifically, the purpose of these reviews is to determine the suitability of fees to cover the costs charged by the Federal Bureau of Investigation (FBI) and the costs of NRC to administer the program. The latest biennial review was completed on September 14, 2023. As a result of this review, the Chief Financial Officer approved a decrease in fees to be implemented in fiscal year 2024.
During this biennial review cycle, the NRC was able to identify contract cost savings and obtain more accurate cost information for supporting CHP services (
As a reminder, payment is due upon fingerprint card submission, and the NRC's preferred method of payment is through
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the Market Dominant or the Competitive product list, or the modification of an existing product currently appearing on the Market Dominant or the Competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern Market Dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern Competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II.
1.
2.
This Notice will be published in the
Office of Science and Technology Policy (OSTP).
Notice of public meetings.
The National Nanotechnology Coordination Office (NNCO), on behalf of the Nanoscale Science, Engineering, and Technology (NSET) Subcommittee of the Committee on Technology, National Science and Technology Council (NSTC), will facilitate stakeholder discussions of targeted nanotechnology topics through workshops and webinars, as well as community of research and network meetings, between the publication date of this Notice and December 31, 2024.
The NNCO will hold workshops and webinars, as well as meetings from communities of research and networks, between the publication date of this Notice and December 31, 2024.
Information about upcoming workshops, webinars, and other events, will be posted on
Patrice Pages at
These public meetings address the charge in the 21st Century Nanotechnology Research and Development Act for NNCO to provide “for public input and outreach . . . by the convening of regular and ongoing public discussions.” Workshop and webinar topics may include technical subjects; environmental, health, and safety issues related to nanomaterials (nanoEHS); business case studies; or other areas of potential interest to the nanotechnology community. Areas of focus for the communities of research may include research on nanoEHS; nanotechnology education; nanomedicine; nanomanufacturing; climate change; nanometrology; or other areas of potential interest to the nanotechnology community. The communities of research are not intended to provide any government agency with advice or recommendations; such action is outside of their purview.
Pursuant to Section 19(b)(1)
Pursuant to the provisions of Section 19(b)(1) under the Act,
The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the Exchange 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 these 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 aspects of such statements.
The Exchange makes this filing to correct six typographical citation and cross-reference errors in the IEX Rule Book. Specifically, the Exchange proposes to update external citations to subsections of Rule 600(b) of Regulation NMS under the Act in IEX Rules 10.160(f), 11.210(a)(2), 11.230(b), 11.610(y), and 11.610(qq) (“Regulation NMS citations”); the Exchange also proposes to update an internal cross-reference error attributable to a recent rule change.
With respect to the Regulation NMS citations, IEX notes that in 2021, the Commission amended Regulation NMS in connection with the adoption of the Market Data Infrastructure Rules.
• The citation to the Regulation NMS definition of Intermarket Sweep Order in IEX Rule 10.160(f) would be changed from Rule 600(b)(30) to Rule 600(b)(38);
• The citation to the Regulation NMS definition of NMS Stock in IEX Rule 11.210(a)(2) would be changed from Rule 600(b)(46)
• The citation to the Regulation NMS definition of Protected Quotation in IEX Rule 11.230(b) would be changed from Rule 600(b)(58) to Rule 600(b)(71);
• The citation to the Regulation NMS definition of Listed Option in IEX Rule 11.610(y) would be changed from Rule 600(b)(35) to Rule 600(b)(43);
• The citation to the Regulation NMS definition of NMS Stock in IEX Rule 11.610(y) would be changed from Rule 600(b)(47) to Rule 600(b)(55);
With respect to the internal cross-reference, IEX Rule 11.190(b)(2)(G) cross-references IEX Rule 11.190(b)(7)(E)(v), when it should cross-reference IEX Rule 11.190(b)(7)(F)(v). This cross-reference error stems from a recent rule filing that renumbered IEX Rule 11.190(b)(7) without updating the cross-reference contained in IEX Rule 11.190(b)(2)(G).
IEX notes that both the proposed changes to the Regulation NMS citations and the internal cross-reference do not substantively modify system functionality or processes on the Exchange, but solely correct outdated cross-references.
IEX believes that the proposed rule change is consistent with the provisions of Section 6(b)
The Exchange believes that the proposed changes to the Regulation NMS citations would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed changes are designed to update external and internal rule references. The Exchange believes that Members would benefit from the increased clarity, thereby reducing potential confusion and ensuring that persons subject to the Exchange's jurisdiction, regulators, and the investing public can more easily navigate and understand the Exchange's rules.
The Exchange also believes that the proposed rule change is consistent with the public interest and the protection of investors because it will provide increased clarity in the Exchange's rules, thereby reducing potential confusion, as described above.
IEX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. As described in the Purpose and Statutory Basis sections, this rule filing merely proposes to correct five external citations and one internal cross-reference. The proposed rule change is not intended to address competitive issues but rather would modify Exchange rules to update citations to Regulation NMS and an internal cross-reference. Since the proposal does not substantively modify system functionality or processes on the Exchange, the proposed changes will not impose any burden on competition.
Written comments were neither solicited nor received.
The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A)
The Exchange believes that the proposed rule change meets the criteria of subparagraph (f)(6) of Rule 19b-4
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the 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.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing a proposal to amend the Fee Schedule to: (i) apply the Exchange's current Connectivity and Application Session fees to MEMX Options Users, (ii) implement a waiver of Connectivity and Application Session fees solely related to participation on MEMX Options until February 1, 2024, and (iii) make an organizational change to its existing fee schedule for the Exchange's pre-existing equities market (“MEMX Equities”), in order to create a separate fee schedule for Connectivity Fees (for both MEMX Equities and MEMX Options). The Exchange proposes to implement the changes to the Fee Schedule pursuant to this proposal immediately. The text of the proposed rule change is provided in Exhibit 5.
In its filing with the Commission, the Exchange 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 these 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 aspects of such statements.
The Exchange is filing a proposal to amend the Fee Schedule to: (i) apply the Exchange's current Connectivity and Application Session fees to MEMX Options Users, (ii) implement a waiver of Connectivity and Application Session fees solely related to participation on MEMX Options until February 1, 2024, and (iii) make an organizational change to its existing fee schedule for the Exchange's pre-existing equities market (“MEMX Equities”), in order to create a separate fee schedule for Connectivity Fees (for both MEMX Equities and MEMX Options). The Exchange believes that these changes will provide greater transparency to Members about how the Exchange assesses fees, as well as allowing Members to more easily validate their bills on a monthly basis. The Exchange notes that none of these changes amend any existing fee applicable to MEMX Equities. The Exchange is proposing to implement the proposal immediately. The Exchange previously filed the proposal on October 24, 2023 (SR-MEMX-2023-29) (the “Initial Proposal”). The Exchange has withdrawn the Initial Proposal and replaced the proposal with the current filing (SR-MEMX-2023-39).
As set forth below, the Exchange believes that its proposal provides a great deal of transparency regarding the cost of providing connectivity services and anticipated revenue and that the proposal is consistent with the Act and associated guidance. The Exchange is re-filing this proposal promptly following the withdrawal of the Initial Proposal in order to provide additional details not contained in the Initial Proposal and modify the original proposed Options Connectivity and Application Session fee waiver end date from January 1, 2024, to February 1, 2024.
As noted above, the Exchange is proposing to apply the current fees it charges to Members and non-Members
In general, the Exchange believes that exchanges, in setting fees of all types, should meet very high standards of transparency to demonstrate why each new fee or fee increase meets the Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among members and markets. In particular, the Exchange believes that each exchange should take extra care to be able to demonstrate that these fees are based on its costs and reasonable business needs.
In proposing to charge fees for connectivity services to MEMX Options, the Exchange has sought to be especially diligent in assessing those fees in a transparent way against its own aggregate costs of providing the related services, and also carefully and transparently assessing the impact on Members—both generally and in relation to other Members,
As detailed below, MEMX calculated its aggregate annual costs for providing physical connectivity to both MEMX Equities and MEMX Options in 2024 at $11,448,322 and its aggregate annual costs for providing application sessions at $5,918,788. In order to cover the aggregate costs of providing connectivity to its Options and Equities Users (both Members and non-Members) going forward and to make a modest profit, as described below, the Exchange is proposing to modify its Fee Schedule, pursuant to MEMX Rules 15.1(a) and (c), to charge a fee to Options Users, as it currently does to Equities Users, of $6,000 per month for each physical connection in the Primary Data Center and of $3,000 per month for each physical connection in the Secondary Data Center. The Exchange also proposes to modify its Fee Schedule, pursuant to MEMX Rules 15.1(a) and (c), to charge a fee to Options Users, as it currently does to Equities Users, of $450 per month for each Order Entry Port and Drop Copy Port in the Exchange's Primary Data Center, as further described below.
In September 2023, MEMX completed a study of its aggregate projected costs to produce market data and connectivity across both its Equities and Options platforms in 2024 (the “Cost Analysis”). The Cost Analysis required a detailed analysis of MEMX's aggregate baseline costs, including a determination and allocation of costs for core services provided by the Exchange—transaction execution, market data, membership services and trading permits, regulatory services, physical connectivity, and application sessions (which provide order entry, cancellation and modification functionality, risk functionality, ability to receive drop copies, and other functionality). MEMX separately divided its costs between those costs necessary to deliver each of these core services, including infrastructure, software, human resources (
By allocating segmented costs to each core service, MEMX was able to estimate by core service the potential margin it might earn based on different fee models. The Exchange notes that as a non-listing venue it has four primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity services, membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these four primary sources of revenue. The Exchange also notes that as a general matter each of these sources of revenue is based on services that are interdependent. For instance, the Exchange's system for executing transactions is dependent on physical hardware and connectivity; only Members and parties that they sponsor to participate directly on the Exchange may submit orders to the Exchange; many Members (but not all) consume
Through the Exchange's extensive Cost Analysis, the Exchange analyzed every expense item in the Exchange's general expense ledger to determine whether each such expense relates to the provision of connectivity services, and, if such expense did so relate, what portion (or percentage) of such expense actually supports the provision of connectivity services, and thus bears a relationship that is, “in nature and closeness,” directly related to network connectivity services. In turn, the Exchange allocated certain costs more to physical connectivity and others to application sessions, while certain costs were only allocated to such services at a very low percentage or not at all, using consistent allocation methodologies as described above. Based on this analysis, MEMX estimates that the cost drivers to provide connectivity services in 2024, including both physical connections and application sessions, will result in an aggregate annual cost of $17,367,110, as further detailed below. The Exchange notes that it utilized the same principles to generate the 2021 Cost Analysis, applicable to Equities only, and at that time, the estimated annual aggregate cost to provide connectivity services was $13,724,580. The differences between such estimated costs and the overall analysis are primarily based on: (1) the addition of MEMX Options, (ii) increased, and in some cases decreased, costs projected by the Exchange, (iii) and changes made to reallocate certain costs into categories that more closely align the Exchange's audited financial statements, as further described below.
The following chart details the individual line-item costs considered by MEMX to be related to offering physical connectivity as well as the percentage of the Exchange's overall costs such costs represent for such area (
Below are additional details regarding each of the line-item costs considered by MEMX to be related to offering physical connectivity, as well as any relevant discussion of how the costs projected for 2024 differ, if any, from the Exchange's previous Cost Analysis conducted in 2021 in adopting Connectivity Fees for its Equities platform, which are the same fees the Exchange is proposing to apply for its Options platform in this filing.
In allocating personnel (Human Resources) costs, in order to not double count any allocations, the Exchange first excluded any employee time allocated towards options regulation in order to recoup costs via the Options Regulatory Fee (“ORF”).
In 2021, 13.8% of the Exchange's Human Resources costs were allocated towards the provision of physical connectivity, which is slightly lower than the 17% allocation in the current Cost Analysis. The Exchanges notes that this increase is due to additional hiring necessary to support network infrastructure, and that in advance of the launch of MEMX Options, this hiring started at the beginning of 2023.
The Connectivity cost includes external fees paid to connect to other exchanges and third parties. The Exchange notes that its connectivity to external markets is required in order to receive market data to run the Exchange's matching engine and basic operations compliant with existing regulations, primarily Regulation NMS. Approximately 75% of the Exchange's connectivity costs are allocated towards the provision of physical connectivity, which is the same percentage identified in the 2021 Cost Analysis. Of note, the 2021 Cost Analysis allocated approximately $162,000 per month of connectivity costs towards physical connectivity, which is notably higher than the $34,420
Data Center costs include an allocation of the costs the Exchange incurs to provide physical connectivity in the third-party data centers where it maintains its equipment (such as dedicated space, security services, cooling and power). The Exchange notes that it does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties. The Exchange has allocated a high percentage of the Data Center cost (70%) to physical connectivity because the third-party data centers and the Exchange's physical equipment contained therein is the most direct cost in providing physical access to the Exchange. In other words, for the Exchange to operate in a dedicated space with connectivity of participants to a physical trading platform, the data centers are a very tangible cost, and in turn, if the Exchange did not maintain such a presence then physical connectivity would be of no value to market participants. This slight decrease over the allocation of Data Center costs to physical connectivity from 2021 (75%) is due to the fact that at the time of the 2021 Cost Analysis there were certain one-time costs in establishing the Exchange's data center presence that it will not have in 2024, as well as the fact that in the 2021 Cost Analysis, additional costs were included in the Data Center category that are not included in the current Analysis.
The Technology category includes the Exchange's network infrastructure, other hardware, software, and software licenses used to operate and monitor physical assets necessary to offer physical connectivity to the Exchange. Of note, certain of these costs were included in the Connectivity and a separate Hardware and Software Licenses category in the 2021 Cost Analysis; however, in order to align more closely with the Exchange's audited financial statements these costs were combined into the broader Technology category. The Exchange allocated approximately 21% of its Technology costs to physical connectivity in 2024.
All physical assets and software, which also includes assets used for testing and monitoring of Exchange infrastructure, were valued at cost, depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which are owned by the Exchange and some of which are leased by the Exchange in order to allow efficient periodic technology refreshes. As noted above, the Exchange allocated 33% of all depreciation costs to providing physical connectivity. This is a higher percentage than was allocated to providing physical connectivity in 2021 (18.5%), and this increase is due to a high amount of capital expenditures required to build the Exchange's options platform, none of which began to depreciate until the launch of options in September 2023. The Exchange notes, however, that it did not allocate depreciation costs for any internally developed software to build the Exchange's trading platforms to physical connectivity, as such software does not impact the provision of physical connectivity.
External Market Data includes fees paid to third parties, including other exchanges, to receive and consume market data from other markets. The Exchange notes that it did not allocate any External Market Data fees to the provision of physical connectivity as market data is not related to such services.
Finally, a limited portion of general shared expenses was allocated to physical connectivity as without these general shared costs the Exchange would not be able to operate in the manner that it does and provide physical connectivity. The costs included in general shared expenses include general expenses of the Exchange, including office space and office expenses (
As a final part of the Exchange's analysis related to physical connectivity, the Exchange determined the total
The following chart details the individual line-item costs considered by MEMX to be related to offering application sessions as well as the percentage of the Exchange's overall costs such costs represent for such area (
With respect to application sessions, MEMX calculated Human Resources cost by taking an allocation of employee time for employees whose functions include providing application sessions and maintaining performance thereof (including a broader range of employees such as technical operations personnel, market operations personnel, and software engineering personnel) as well as a limited subset of personnel with ancillary functions related to maintaining such connectivity (such as sales, membership, and finance personnel). The estimates of Human Resources cost were again determined by consulting with department leaders, determining which employees are involved in tasks related to providing application sessions and maintaining performance thereof, and confirming that the proposed allocations were reasonable based on an understanding of the percentage of their time such employees devote to tasks related to providing application sessions and maintaining performance thereof. The Exchange notes that senior level executives were only allocated Human Resources costs to the extent the Exchange believed they are involved in overseeing tasks related to providing application sessions and maintaining performance thereof. The Human Resources cost was again calculated using a blended rate of compensation reflecting salary, equity and bonus compensation, benefits, payroll taxes, and 401(k) matching contributions. As shown in the table above, for 2024, the Exchange allocated approximately 12% of its Human Resources costs to providing application sessions, which is higher than the 7.7% it allocated in 2021. This increase is again due to additional hiring needed to support the addition of MEMX Options.
The Connectivity cost includes external fees paid to connect to other exchanges, as described above. The Exchange did not allocate any Connectivity costs to application sessions in the current Cost Analysis, which differs from the 2.6% allocated towards application sessions in the 2021 Cost Analysis. This difference is due to the fact that certain formerly categorized Connectivity costs are now categorized under Technology in the current 2024 Cost Analysis.
Data Center costs include an allocation of the costs the Exchange incurs to provide physical connectivity in the third-party data centers where it maintains its equipment as well as related costs (the Exchange does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties). As shown in the table, the Exchange allocated 2% of its Data Center costs to application sessions in the current Cost Analysis, which is in line with the 2.6% it allocated in the 2021 Cost Analysis.
The Technology category includes the Exchange's network infrastructure, other hardware, software, and software licenses used to monitor the health of the order entry services provided by the Exchange. The Exchange allocated 11% of its Technology costs to the provision of application sessions, which is in line with the 10.1% it allocated in the 2021 Cost Analysis.
External Market Data includes fees paid to third parties, including other exchanges, to receive and consume market data from other markets. The Exchange allocated 18% of External Market Data fees to the provision of application sessions as such market data is necessary to offer certain services related to such sessions, such as validating orders on entry against the National Best Bid and National Best
All physical assets and software, which also includes assets used for testing and monitoring of order entry infrastructure, were valued at cost, depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which is owned by the Exchange and some of which is leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange allocated 9% of all depreciation costs to providing application sessions. In contrast to physical connectivity, described above, the Exchange did allocate depreciation costs for depreciated internally developed software to build the Exchange's platforms to application sessions because such software is related to the provision of such connectivity.
Finally, a limited portion of general shared expenses was allocated to overall application session costs as without these general shared costs the Exchange would not be able to operate in the manner that it does and provide application sessions. The costs included in general shared expenses include general expenses of the Exchange, including office space and office expenses (
Lastly, the Exchange determined the total
In conducting its Cost Analysis, the Exchange did not allocate any of its expenses in full to any core services (including physical connectivity or application sessions) and did not double-count any expenses. Instead, as described above, the Exchange allocated applicable cost drivers across its core services and used the same Cost Analysis to form the basis of this proposal and the filing it recently submitted proposing the establishment of an ORF.
In total, the Exchange allocated 17% of its Human Resources costs to providing physical connections and 12% of its Human Resources costs to providing application sessions, for a total allocation of 29% of its Human Resources expense to provide connectivity services. In turn, the Exchange allocated the remaining 71% of its Human Resources expense to Regulatory Services (21%), membership (2%) and transactions and market data
As another example, the Exchange allocated depreciation expense to all core services, including physical connections and application sessions, but in different amounts. The Exchange believes it is reasonable to allocate the identified portion of such expense because such expense includes the actual cost of the computer equipment, such as dedicated servers, computers, laptops, monitors, information security appliances and storage, and network switching infrastructure equipment, including switches and taps that were purchased to operate and support the network. Without this equipment, the Exchange would not be able to operate the network and provide connectivity services to its Members and non-Members and their customers. However, the Exchange did not allocate all of the depreciation and amortization expense toward the cost of providing connectivity services, but instead allocated approximately 42% of the Exchange's overall depreciation and amortization expense to connectivity services (33% attributed to physical connections and 9% to application sessions). The Exchange allocated the remaining depreciation and amortization expense (approximately 58%) toward regulatory services (approximately 8%), and to providing transaction services and market data (approximately 50%).
Looking at the Exchange's operations holistically, the estimated total monthly costs to the Exchange for offering core services in 2024 is $4,604,583, compared to the $3,954,537 noted in the 2021 Cost Analysis. Based on its projections, the Exchange expects to collect approximately $1,768,800 on a monthly basis for connectivity services. Incorporating this amount into the Exchange's overall projected revenue, including projections related to the ORF, the Exchange anticipates monthly revenue of approximately $5,988,620 from all sources (
The Exchange notes that its revenue estimates are based on projections across all potential revenue streams and will only be realized to the extent such revenue streams actually produce the revenue estimated. As a new entrant to the hyper-competitive exchange environment, and an exchange focused on driving competition, the Exchange does not yet know whether such expectations will be realized. For instance, in order to generate the revenue expected from connectivity, the Exchange will have to be successful in retaining existing options clients that wish to maintain physical connectivity and/or application sessions or in obtaining new clients that will purchase such services. Similarly, the Exchange will have to be successful in retaining a positive net capture on transaction fees in order to realize the anticipated revenue from transaction pricing.
The Exchange notes that the Cost Analysis was based on the Exchange's operations in 2023 (which is currently underway) and projections for the next year. As such, the Exchange believes that its costs will remain relatively similar in future years (as demonstrated by the comparison of the 2021 Cost Analysis to the 2024 Cost Analysis). It is possible however that such costs will either decrease or increase. To the extent the Exchange sees growth in use of connectivity services it will receive additional revenue to offset future cost increases. However, if use of connectivity services is static or decreases, the Exchange might not realize the revenue that it anticipates or needs in order to cover applicable costs. Accordingly, the Exchange is committing to conduct a one-year review after implementation of these fees. The Exchange expects that it may propose to adjust fees at that time, to increase fees in the event that revenues fail to cover costs and a reasonable mark-up of such costs. Similarly, the Exchange would propose to decrease fees in the event that revenue materially exceeds our current projections. In addition, the Exchange will periodically conduct a review to inform its decision making on whether a fee change is appropriate (
MEMX offers its Members the ability to connect to the Exchange in order to transmit orders to and receive information from the Exchange. Members can also choose to connect to MEMX indirectly through physical connectivity maintained by a third-party extranet. Extranet physical connections may provide access to one or multiple Members on a single connection. Users of MEMX physical connectivity services (both Members and non-Members
As described above, the Exchange has previously justified its pricing with respect to MEMX Equities and believes the most fair approach, absent a significant differentiation between application costs to Equities and Options, is to apply the same pricing to all participants of either platform. As such, in order to cover the aggregate costs of providing physical connectivity to Options and Equities Users and make a modest profit, as described below, the Exchange is proposing to charge a fee of $6,000 per month for each physical connection in the Primary Data Center and a fee of $3,000 per month for each physical connection in the Secondary Data Center for connections to its Options platform, as it currently charges for connections to its Equities platform. There is no requirement that any Member maintain a specific number of physical connections and a Member may choose to maintain as many or as few of such connections as each Member deems appropriate. Further, as noted above, existing Equities Members may choose to use their existing physical connection(s) to access the Exchange's Options platform.
The Exchange notes, however, that pursuant to Rule 2.4 (Mandatory Participation in Testing of Backup Systems), the Exchange does require a small number of Members to connect and participate in functional and performance testing as announced by the Exchange, which occurs at least once every 12 months. Specifically, Members that have been determined by the Exchange to contribute a meaningful percentage of the Exchange's overall volume must participate in mandatory testing of the Exchange's backup systems (
The proposed fee will not apply differently based upon the size or type of the market participant, but rather based upon the number of physical connections a User requests, based upon factors deemed relevant by each User (either a Member, service bureau or extranet). The Exchange believes these factors include the costs to maintain connectivity, business model and choices Members make in how to participate on the Exchange, as further described below.
The proposed fee of $6,000 per month for physical connections at the Primary Data Center is designed to permit the Exchange to cover the costs allocated to providing connectivity services with a modest profit margin (approximately 20%), which would also help fund future expenditures (increased costs, improvements, etc.). The Exchange believes it is appropriate to charge fees that represent a reasonable markup over cost given the other factors discussed above and the need for the Exchange to maintain a highly performant and stable platform to allow Members to transact with determinism.
As noted above, the Exchange proposes a discounted rate of $3,000 per month for physical connections at its Secondary Data Center. The Exchange has proposed this discounted rate for Secondary Data Center connectivity in order to encourage Members to establish and maintain such connections. Also, as noted above, a small number of Members are required pursuant to Rule 2.4 to connect and participate in testing of the Exchange's backup systems, and the Exchange believes it is appropriate to provide a discounted rate for physical connections at the Secondary Data Center given this requirement. The Exchange notes that this rate is well below the cost of providing such services and the Exchange will operate its network and systems at the Secondary Data Center without recouping the full amount of such cost through connectivity services.
The proposed fee for physical connections is effective on filing and will become operative immediately, subject to the proposed waiver described below.
Similar to other exchanges, MEMX offers its Members application sessions, also known as logical ports, for order entry and receipt of trade execution reports and order messages. Members can also choose to connect to MEMX indirectly through a session maintained by a third-party service bureau. Service bureau sessions may provide access to one or multiple Members on a single session. Users of MEMX connectivity services (both Members and non-Members
As described above, in order to cover the aggregate costs of providing application sessions to Options Users and to make a modest profit, as described below, the Exchange is proposing to charge a fee of $450 per month for each Order Entry Port and Drop Copy Port in the Primary Data Center for Options application sessions, which is the same fee it currently charges for Equities application sessions. The Exchange notes that it does not propose to charge for: (1) Order Entry Ports or Drop Copy Ports in the Secondary Data Center, or (2) any Test Facility Ports or MEMOIR Gap Fill Ports, again, which it does not charge for Equities Users. The Exchange has proposed to continue to provide Order Entry Ports and Drop Copy Ports in the Secondary Data Center for Options free of charge in order to encourage Members to connect to the Exchange's backup trading systems. Similarly, because the Exchange wishes to encourage Members to conduct appropriate testing of their use of the Exchange, the Exchange has not proposed to charge for Test Facility Ports. With respect to MEMOIR Gap Fill ports, such ports are exclusively used in order to receive information when a market data recipient has temporarily lost its view of MEMX market data. The Exchange has not proposed charging for such ports because the costs of providing and maintaining such ports is more directly related to producing market data.
The proposed fee of $450 per month for each Order Entry Port and Drop Copy Port in the Primary Data Center is designed to permit the Exchange to cover the costs allocated to providing application sessions with a modest profit margin (approximately 6%), which would also help fund future expenditures (increased costs, improvements, etc.).
The proposed fee is also designed to encourage Users to be efficient with their application session usage, thereby resulting in a corresponding increase in the efficiency that the Exchange would be able to realize in managing its aggregate costs for providing connectivity services. There is no requirement that any Member maintain a specific number of application sessions and a Member may choose to maintain as many or as few of such ports as each Member deems appropriate. The Exchange has designed its platform such that Order Entry Ports can handle a significant amount of message traffic (
The proposed fee will not apply differently based upon the size or type of the market participant, but rather based upon the number of application sessions a User requests, based upon factors deemed relevant by each User (either a Member or service bureau on behalf of a Member). The Exchange believes these factors include the costs to maintain connectivity and choices Members make in how to segment or allocate their order flow.
The proposed fee for application sessions is effective on filing and will become operative immediately, subject to the proposed waiver described below.
As discussed above, the proposed fees for connectivity services do not by design apply differently to different types or sizes of Members. As discussed in more detail in the Statutory Basis section, the Exchange believes that the likelihood of higher fees for certain Members subscribing to connectivity services usage than others is not unfairly discriminatory because it is based on objective differences in usage of connectivity services among different Members. The Exchange's incremental aggregate costs for all connectivity services are disproportionately related to Members with higher message traffic and/or Members with more complicated connections established with the Exchange, as such Members: (1) consume the most bandwidth and resources of the network; (2) transact the vast majority of the volume on the Exchange; and (3) require the high-touch network support services provided by the Exchange and its staff, including network monitoring, reporting and support services, resulting in a much higher cost to the Exchange to provide such connectivity services. For these reasons, MEMX believes it is not unfairly discriminatory for the Members with higher message traffic and/or Members with more complicated connections to pay a higher share of the total connectivity services fees. While Members with a business model that results in higher relative inbound message activity or more complicated connections are projected to pay higher fees, the level of such fees is based solely on the number of physical connections and/or application sessions deemed necessary by the Member and not on the Member's business model or type of Member. The Exchange notes that the correlation between message traffic and usage of connectivity services is not completely aligned because Members individually determine how many physical connections and application sessions to request, and Members may make different decisions on the appropriate ways based on facts unique to their individual businesses. Based on the Exchange's architecture, as described above, the Exchange believes that a Member even with high message traffic would be able to conduct business on the Exchange with a relatively small connectivity services footprint.
Finally, the fees for connectivity services will help to encourage connectivity services usage in a way that aligns with the Exchange's regulatory obligations. As a national securities exchange, the Exchange is subject to Regulation Systems Compliance and Integrity (“Reg SCI”).
To encourage new participants to join the Exchange as Members in order to participate in MEMX Options, the Exchange is proposing to waive all Connectivity Fees used solely for MEMX Options until February 1, 2024. As noted above, physical connections may be used to access both Equities and Options, and as such, the Exchange will internally verify whether new connections are being used solely for Options connections in order to determine whether such connection qualifies for this waiver. Separately, Members specify the Exchange to which their requested application sessions should connect, and as such, any new application sessions for MEMX Options will qualify for this waiver.
The Exchange is proposing to more clearly separate Connectivity Fees from the Exchange's current fee schedule. Currently, the Exchange has separate transaction fee schedules for Equities and Options, and the current Connectivity Fees appear solely on the Equities fee schedule. The Exchange proposes to remove the Connectivity Fees section from the Equities fee schedule, and add hyperlinks at the bottom of the Equities and Options fee schedules that direct the User to a single Connectivity fee schedule. The Exchange believes this format is appropriate given that the same Connectivity Fees apply to both Equities and Options Users, and separating out the fee schedule for Connectivity Fees will reduce potential confusion (
The Exchange also proposes to add three additional bullet points to the new Connectivity Fee Schedule related to MEMX Options. The first will notify Members that a physical connection can be used to access MEMX Equities and/or MEMX Options. The second will clarify that an application session can only be used to access one MEMX platform,
The Exchange believes that the proposed fees for connectivity services to MEMX Options are reasonable, equitable and not unfairly discriminatory because, as described above, the proposed pricing for connectivity services is directly related to the relative costs to the Exchange to provide those respective services and does not impose a barrier to entry to smaller participants.
The Exchange recognizes that there are various business models and varying sizes of market participants conducting business on the Exchange. The Exchange's incremental aggregate costs for all connectivity services are disproportionately related to Members with higher message traffic and/or Members with more complicated connections established with the Exchange, as such Members: (1) consume the most bandwidth and resources of the network; (2) transact the vast majority of the volume on the Exchange; and (3) require the high-touch network support services provided by the Exchange and its staff, including network monitoring, reporting and support services, resulting in a much higher cost to the Exchange to provide such connectivity services. Accordingly, the Exchange believes the allocation of the proposed fees that increase based on the number of physical connections or application sessions is reasonable based on the resources consumed by the respective type of market participant (
With regard to reasonableness, the Exchange understands that when appropriate given the context of a proposal the Commission has taken a market-based approach to examine whether the SRO making the proposal was subject to significant competitive forces in setting the terms of the proposal. In looking at this question, the Commission considers whether the SRO has demonstrated in its filing that: (i) there are reasonable substitutes for the product or service; (ii) “platform” competition constrains the ability to set the fee; and/or (iii) revenue and cost analysis shows the fee would not result in the SRO taking supra-competitive profits. If the SRO demonstrates that the fee is subject to significant competitive forces, the Commission will next consider whether there is any substantial countervailing basis to suggest the fee's terms fail to meet one or more standards under the Exchange Act. If the filing fails to demonstrate that the fee is constrained by competitive forces, the SRO must provide a substantial basis, other than competition, to show that it is consistent with the Exchange Act, which may include production of relevant revenue and cost data pertaining to the product or service.
MEMX believes the proposed fees for connectivity services are fair and reasonable as a form of cost recovery for the Exchange's aggregate costs of offering connectivity services to Members and non-Members. The proposed fees are expected to generate monthly revenue of $1,768,800 providing cost recovery to the Exchange for the aggregate costs of offering connectivity services, based on a methodology that narrowly limits the cost drivers that are allocated cost to those closely and directly related to the particular service. In addition, this revenue will allow the Exchange to continue to offer, to enhance, and to continually refresh its infrastructure as necessary to offer a state-of-the-art trading platform. The Exchange believes
The Exchange further believes that the proposed fees, as they pertain to purchasers of each type of connectivity alternative, constitute an equitable allocation of reasonable fees charged to the Exchange's Members and non-Members and are allocated fairly amongst the types of market participants using the facilities of the Exchange.
As described above, the Exchange believes the proposed fees are equitably allocated because the Exchange's incremental aggregate costs for all connectivity services are disproportionately related to Members with higher message traffic and/or Members with more complicated connections established with the Exchange, as such Members: (1) consume the most bandwidth and resources of the network; (2) transact the vast majority of the volume on the Exchange; and (3) require the high-touch network support services provided by the Exchange and its staff, including network monitoring, reporting and support services, resulting in a much higher cost to the Exchange to provide such connectivity services.
Commission staff previously noted that the generation of supra-competitive profits is one of several potential factors in considering whether an exchange's proposed fees are consistent with the Act.
The proposed fees for Options connectivity services will allow the Exchange to cover certain costs incurred by the Exchange associated with providing and maintaining necessary hardware and other network infrastructure as well as network monitoring and support services; without such hardware, infrastructure, monitoring and support the Exchange would be unable to provide the connectivity services. The Exchange routinely works to improve the performance of the network's hardware and software. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those costs by adopting fees for connectivity services. As detailed above, the Exchange has four primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity services, membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these four primary sources of revenue. The Exchange's Cost Analysis estimates the costs to provide connectivity services at $1,447,000. Based on current connectivity services usage, the Exchange would generate monthly revenues of approximately $1,768,800. This represents a modest profit when compared to the cost of providing connectivity services and that profit represents a modest increase over the profit estimated in the 2021 Cost Analysis (a reasonable goal for a newly formed business,
As noted above, when incorporating the projected revenue from connectivity services into the Exchange's overall projected revenue, including projections related to recently adopted market data fees, the Exchange anticipates monthly revenue of $5,988,620 from all sources. As such, applying the Exchange's holistic Cost Analysis to a holistic view of anticipated revenues, the Exchange would earn approximately 23% margin on its operations as a whole. The Exchange believes that this amount is reasonable and is again evidence that the Exchange will not earn a supra-competitive profit.
The Exchange notes that other exchanges offer similar connectivity options to market participants and that the Exchange's fees are a discount as compared to the majority of such fees.
In conclusion, the Exchange submits that its proposed fee structure satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act
The Exchange believes that the waiver of Connectivity Fees for physical connections and application sessions used solely for Options until February 1, 2024 is reasonable, equitable, and not unfairly discriminatory in that it will apply uniformly to all Options Users. The Exchange is proposing the waiver to provide an incentive for options trading firms to apply for membership to MEMX Options, which has recently launched. The options markets are quote-driven markets and are dependent on liquidity providers for liquidity and price discovery. The proposal will be of particular importance in encouraging liquidity providers to become members of the Exchange, which may result in more trading opportunities, enhanced competition, and improved overall market quality on the Exchange. The Exchange notes that it previously proposed waiving Connectivity Fees for physical connections and application sessions used solely for Options until January 1, 2024, but has determined to extend the time for such waiver to February 1, 2024, due to the fact the Exchange has been rolling out the number of options classes traded on MEMX Options gradually since its initial launch and will not complete such rollout until January of 2024. The Exchange believes it is reasonable to postpone the time at which it will commence charging Connectivity Fees for physical connections and application sessions until after such rollout is complete.
The Exchange believes that the proposed reorganization of its fee schedule to establish a separate fee schedule for Connectivity Fees is reasonable and equitable because it is a non-substantive change and does not involve changing any existing fees or rebates that apply to trading activity on MEMX Equities. Further, the changes are designed to make the fee schedule easier to read and for Members to validate the bills they receive from the Exchange. The Exchange also believes this reorganization is non-discriminatory because it applies uniformly to all Members. The Exchange believes the proposed fee schedule will be clearer and less confusing for Members of the Exchange and will eliminate potential Member confusion, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market, and in general, protecting investors and the public interest.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that the proposed rule change to apply the same Connectivity Fees to Options Users as it does to Equities Users would place certain market participants at the Exchange at a relative disadvantage compared to other market participants because the proposed connectivity pricing is associated with relative usage of the Exchange by each market participant and does not impose a barrier to entry to smaller participants. As noted above, the Exchange has previously justified its pricing with respect to MEMX Equities and believes the most fair approach, absent a significant differentiation between application costs to Equities and Options, is to apply the same pricing to all participants of either platform. The Exchange believes its proposed pricing is reasonable and lower than what other options exchanges charge and, when coupled with the availability of third-party providers that also offer connectivity solutions, that participation on the Exchange is affordable for all market participants, including smaller trading firms. Therefore, the fees may stimulate intramarket competition by attracting additional firms to become Members of MEMX Options. As described above, the connectivity services purchased by market participants typically increase based on their additional message traffic and/or the complexity of their operations. The market participants that utilize more connectivity services typically utilize the most bandwidth, and those are the participants that consume the most resources from the network. Accordingly, the proposed fees for connectivity services do not favor certain categories of market participants in a manner that would impose a burden on competition; rather, the allocation of the proposed Connectivity Fees reflects the network resources consumed by the various size of market participants and the costs to the Exchange of providing such connectivity services.
As it relates to the reorganization of the fee schedule and the Options Connectivity Fee Waiver, as discussed above, the Exchange does not believe that the proposed changes would impose any burden on intramarket competition because such changes would encourage new participants to participate on the Exchange, thereby enhancing liquidity and market quality on the Exchange, as well as enhancing the attractiveness of the Exchange as a trading venue. The Exchange believes this would encourage market participants to direct order flow to the Exchange.
The Exchange does not believe that the proposed changes would impose any burden on intramarket competition because such changes will incentivize new participants to join MEMX Options and the majority of the Exchange's current Equities members joined at a time when MEMX Equities did not charge connectivity fees (also to incentivize such participants to join), and thus have already received this benefit. The options markets are quote-driven markets and are dependent on liquidity providers for liquidity and price discovery. The proposal will be of particular importance in encouraging liquidity providers to become members of the Exchange, which may result in more trading opportunities, enhanced competition, and improved overall market quality on the Exchange. For the foregoing reasons, the Exchange believes the proposed changes would not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe the proposed fees for Options Connectivity place an undue burden on competition on other SROs that is not necessary or appropriate. Additionally, other exchanges have similar connectivity alternatives for their participants, but with higher rates to connect.
Additionally, as described above, the proposed reorganization of the fee schedule and Connectivity Fee Waiver will incentive market participants to join the Exchange during the Fee Waiver period. Accordingly, the Exchange believes the proposal would not burden, but rather promote, intermarket competition by enabling it to better compete with other options exchanges.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of the 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 to determine whether the proposed rule change should be approved or disapproved.
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.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe EDGX Exchange, Inc. (the “Exchange” or “EDGX”) proposes to amend Rule 21.17. The text of the proposed rule change is provided below.
The System's acceptance and execution of orders, quotes, and bulk messages, as applicable, are subject to the price protection mechanisms and risk controls in Rule 21.16, this Rule 21.17, and as otherwise set forth in the Rules. Unless otherwise specified the price protections set forth in this Rule, including the numeric values established by the Exchange, may not be disabled or adjusted. The Exchange may share any of a User's risk settings with the Clearing Member that clears transactions on behalf of the User.
(a)
(1)-(3) No change.
(4)
(A)-(B) No change.
(C) The System enters a market order with a Time-in Force of Day or limit order with a Time-in-Force of Day, GTC, or GTD (or unexecuted portion) not executed pursuant to subparagraph (A) in the EDGX Options Book with a displayed price equal to the Drill-Through Price, unless the terms of the order instruct otherwise.
(i)-(vii) No change.
([viii]
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange 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 these 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 aspects of such statements.
The Exchange proposes to amend Rule 21.17. Specifically, the Exchange proposes to exclude Intermarket Sweep Orders (“ISOs”) from its drill-through protection. Pursuant to Rule 21.17(a)(4)(A), if a buy (sell) order enters the book at the conclusion of the opening auction process or would execute or post to the book when it enters the book, the Exchange's system executes the order up to an Exchange-determined buffer amount (determined on a class and premium basis) above (below) the offer (bid) limit of the Opening Collar
Currently, the drill-through protection applies to ISOs. An ISO is a limit order for an options series that meets the following requirements: (1) when routed to an Eligible Exchange,
The Exchange proposes to exclude ISOs from the drill-through protection.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes the proposed rule change will promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a national market system, and protect investors and the public interest, because it will increase instances in which ISOs receive executions up to their limit prices, including outside of the market prices when the ISOs were submitted to the Exchange, which the Exchange believes is consistent with the expectations of users that submit those orders. As noted above, the primary purpose of ISOs is to permit orders to trade at prices outside of the market. The primary purpose of the drill-through price protection is to prevent orders from executing at prices “too far away” from the market when they enter the book for potential execution. The Exchange believes excluding ISOs from the drill-through is consistent with the purpose of each type of functionality. Therefore, the Exchange believes the proposed rule change will enhance the Exchange system by aligning its drill-through protection with the intended purpose of ISOs.
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. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, because it will apply in the same manner to ISOs of all Members. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, because it relates solely to the application of one of the Exchange's price protection mechanisms to ISOs. The Exchange notes at least one other options exchange excludes ISOs from certain of its price protection measures.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of the 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 to determine whether the proposed rule change should be approved or disapproved.
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.
Notice of report.
This document provides an update to the Department of State's report to Congress on July 19, 2023, regarding foreign persons who are determined to have knowingly engaged in actions that undermine democratic processes or institutions, significant corruption, or obstruction of investigation into such acts of corruption in El Salvador, Guatemala, and Honduras pursuant to the United States—Northern Triangle Enhanced Engagement Act, as amended.
Consistent with section 353(b) of the United States—Northern Triangle Enhanced Engagement Act (Div. FF, Pub. L. 116-260) (the Act), as amended, this report is being submitted to the House Foreign Affairs Committee, Senate Foreign Relations Committee, House Committee on the Judiciary, and the Senate Committee on the Judiciary.
This document provides an update to the Department of State's report to Congress on July 19, 2023. Section 353(b) requires the submission of a report that identifies the following persons in El Salvador, Guatemala, Honduras, and Nicaragua: foreign persons who the President has determined have knowingly engaged (1) in actions that undermine democratic processes or institutions; (2) in significant corruption; and (3) in obstruction of investigations into such acts of corruption, including the following: corruption related to government contracts; bribery and extortion; the facilitation or transfer of the proceeds of corruption, including through money laundering; and acts of violence, harassment, or intimidation directed at governmental and nongovernmental corruption investigators. On November 10, 2021, the President signed the Reinforcing Nicaragua's Adherence to Conditions for Electoral Reform (RENACER) Act, adding Nicaragua to the countries within the scope of Section 353. On June 21, 2021, the President delegated his authority under section 353 to the Secretary of State.
Under section 353, foreign persons identified in the report submitted to Congress are generally ineligible for visas and admission to the United States and any current visa shall be revoked and any other valid visa or entry documentation cancelled. Consistent with section 353(g), this report will be published in the
This report includes individuals who the Secretary has determined have engaged in the relevant activity based upon credible information. The Department will continue to review the individuals listed in the report and consider all available tools to deter and disrupt corrupt and undemocratic activity in El Salvador, Guatemala, Honduras, and Nicaragua. The Department also continues to actively
Ricardo Gomez, President Commissioner of the Institute for Access to Public Information, undermined democratic processes or institutions by purposefully and wrongfully blocking access to public information through his position as President Commissioner at the Institute for Access to Public Information.
Gerardo Guerrero, commissioner of the Institute for Access to Public Information, undermined democratic processes or institutions by purposefully and wrongfully blocking access to public information through his position as a Commissioner at the Institute for Access to Public Information.
Andrés Grégori Rodríguez, commissioner of the Institute for Access to Public Information, undermined democratic processes or institutions by purposefully and wrongfully blocking access to public information through his position as a Commissioner at the Institute for Access to Public Information.
Ricardo Arturo Salgado Bonilla, Current Minister of Strategic Planning, undermined democratic processes or institutions by directing the LIBRE party's coordinated efforts through party loyalist groups (“colectivos”) to suppress dissent by violently intimidating opposition legislators calling for a legislative session on October 31, 2023.
Mohammad Yusuf Amdani Bai, a private businessman, engaged in significant corruption by bribing Honduran Supreme Court officials to rule in favor of his business in a private lawsuit.
Cristian Adolfo Sánchez, engaged in significant corruption by participating in a scheme that defrauded the Honduran government of more than $300,000, and colluded with Ministry of Health officials to improperly award government contracts.
Leonor Eugenia Morales Lazo, current prosecutor, undermined democratic processes or institutions by leading a politically-motivated investigation to cast doubt on certified election results to disrupt the presidential transition.
Noe Nehemías Rivera Vasquez, current prosecutor, undermined democratic processes or institutions by bringing politically motivated charges against justice actors fighting corruption and impunity.
Pedro Otto Hernandez Gonzalez, current prosecutor, undermined democratic processes or institutions by participating in a politically-motivated investigation to cast doubt on certified election results to disrupt the presidential transition.
Silvia Patricia Valdes Quezada, a former Supreme Court of Justice magistrate, undermined democratic processes or institutions by participating in the “Parallel Commissions” scheme to stack the Supreme Court and Appellate Courts with corrupt judges.
Gloria Maria Saavedra Corrales, Judge in the Tenth Criminal District Court of Hearings of Managua, undermined democratic processes or institutions by using her position and authority within the Nicaraguan judicial system to knowingly facilitate a coordinated campaign to suppress dissent by confiscating property from the Jesuit Central American University without a legal basis, in order to install a regime-friendly administration.
Maribel del Socorro Duriez González, President of Nicaragua's National Council for Evaluation and Accreditation (CNEA), undermined democratic processes or institutions by taking part in a coordinated campaign to suppress dissent by confiscating property from the government's political opponents, including the Central American University (UCA) and at least 25 other private Nicaraguan universities, without a legal basis, in order to install a regime-friendly administrations.
Ramona Rodriguez Perez, President of Nicaragua's National Council of Universities (CNU), undermined democratic processes or institutions by taking part in a coordinated campaign to suppress dissent by confiscating property from the government's political opponents, including Central American University (UCA) and at least 25 other private Nicaraguan universities, without a legal basis, in order to install a regime-friendly administrations.
Alejandro Enrique Genet Cruz, Rector of Casimiro Sotelo University (formerly Central American University), undermined democratic processes or institutions by taking part in a coordinated campaign to retaliate against critics of the Ortega-Murillo regime and to suppress dissent by using his position to create policies that punish Casimiro Sotelo University faculty and students who do not take part in political activities for Ortega's Sandinista National Liberation Front (FSLN) political party.
Metro-North Commuter Railroad Company (MNR) has filed a verified notice of exemption under 49 CFR part 1152 subpart F—
MNR has certified that: (1) no local freight or overhead traffic has moved over the Line during the past two years; (2) no formal complaint filed by a user of rail service on the Line (or by a state or local government on behalf of such user) regarding cessation of service over the Line is pending with either the Surface Transportation Board (Board) or any U.S. District Court or has been decided in favor of a complainant within the two-year period; and (3) the requirements at 49 CFR 1152.50(d)(1) (notice to government agencies) have been met.
As a condition to this exemption, any employee adversely affected by the
Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received,
All pleadings, referring to Docket No. AB 1311 (Sub-No. 1X), must be filed with the Surface Transportation Board either via e-filing on the Board's website or in writing addressed to 395 E Street, SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on MNR's representative, Charles A. Spitulnik, Kaplan, Kirsch & Rockwell, LLP, 1634 I (Eye) Street NW, Suite 300, Washington, DC 20006.
If the verified notice contains false or misleading information, the exemption is void ab initio.
Public use or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), MNR shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the Line. If consummation has not been effected by MNR's filing of a notice of consummation by January 10, 2025, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire.
Board decisions and notices are available at
By the Board, Mai T. Dinh, Director, Office of Proceedings.
Susquehanna River Basin Commission.
Notice.
This notice lists Approvals by Rule for projects by the Susquehanna River Basin Commission during the period set forth in
December 1-31, 2023.
Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, PA 17110-1788.
Jason E. Oyler, General Counsel and Secretary to the Commission, telephone: (717) 238-0423, ext. 1312; fax: (717) 238-2436; email:
This notice lists the projects, described below, receiving approval for the consumptive use of water pursuant to the Commission's approval by rule process set forth in 18 CFR 806.22 (e) and (f) for the time period specified above.
1. Plainville Brands, LLC—Plainville Farms, ABR-202312005; New Oxford Borough, Adams County, Pa.; Consumptive Use of Up to 0.380 mgd; Approval Date: December 6, 2023.
2. Penn State Health Hampden Medical Center—Hampden Medical Center; ABR-202312006; Hampden Township, Cumberland County, Pa.; Consumptive Use of Up to 0.1620 mgd; Approval Date: December 7, 2023.
1. Coterra Energy Inc.; Pad ID: DobrosielskiJ P1; ABR-202312003; Auburn & Dimock Townships, Susquehanna County, Pa.; Consumptive Use of Up to 5.0000 mgd; Approval Date: December 7, 2023.
2. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: Amcor; ABR-201211018.R2; Meshoppen Township, Wyoming County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 8, 2023.
3. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: Joeguswa; ABR-201211019.R2; Cherry Township, Sullivan County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 8, 2023.
4. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: Lucarino Drilling Pad #1; ABR-201112010.R2; Wilmot Township, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 8, 2023.
5. RENEWAL—Range Resources—Appalachia, LLC; Pad ID: State Game Lands 075A—East Pad; ABR-201311005.R2; Pine Township, Lycoming County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 8, 2023.
6. RENEWAL—Seneca Resources Company, LLC; Pad ID: Sherman 492W; ABR-201310001.R2; Sullivan Township, Tioga County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 8, 2023.
7. RENEWAL—SWN Production Company, LLC; Pad ID: TNT 1 LIMITED PARTNERSHIP; ABR-201112006.R2; New Milford Township, Susquehanna County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: December 8, 2023.
8. Coterra Energy Inc.; Pad ID: ConboyT P1; ABR-202312002; Middletown Township, Susquehanna County, Pa.; Consumptive Use of Up to 5.0000 mgd; Approval Date: December 10, 2023.
9. Greylock Production, LLC; Pad ID: Ron Well Pad; ABR-202312001; Hector Township, Potter County, Pa.; Consumptive Use of Up to 6.0000 mgd; Approval Date: December 10, 2023.
10. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: Edger; ABR-201112020.R2; Smithfield Township, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 18, 2023.
11. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: RGB; ABR-201112021.R2; Smithfield Township, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 18, 2023.
12. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: Wildonger; ABR-201112026.R2; Wyalusing Township, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 18, 2023.
13. RENEWAL—Chesapeake Appalachia, L.L.C.; Pad ID: Yost; ABR-201112022.R2; Franklin Township, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: December 18, 2023.
14. RENEWAL—Coterra Energy Inc.; Pad ID: CareyR P1; ABR-201112023.R2; Harford Township, Susquehanna County, Pa.; Consumptive Use of Up to 5.0000 mgd; Approval Date: December 18, 2023.
15. RENEWAL—Seneca Resources Company, LLC; Pad ID: DCNR 007 Pad K; ABR-201112018.R2; Delmar Township, Tioga County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 18, 2023.
16. RENEWAL—SWN Production Company, LLC; Pad ID: NR-11-DAYTON-PAD; ABR-201312002.R2; Great Bend Township, Susquehanna County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: December 18, 2023.
17. RENEWAL—SWN Production Company, LLC; Pad ID: NR-14-BRANT-PAD; ABR-201312001.R2; Great Bend Township, Susquehanna County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: December 18, 2023.
18. RENEWAL—SWN Production Company, LLC; Pad ID: RU-40-BREESE-PAD; ABR-201312003.R2; New Milford Township, Susquehanna County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: December 18, 2023.
19. RENEWAL—Seneca Resources Company, LLC; Pad ID: Cotton Hanlon 595; ABR-201612001.R1; Sullivan Township, Tioga County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 20, 2023.
20. RENEWAL—EQT ARO LLC; Pad ID: Kurt Haufler Pad A; ABR-201312005.R2; Cogan House Township, Lycoming County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 26, 2023.
21. RENEWAL—Repsol Oil & Gas USA, LLC; Pad ID: STICKNEY (07 087) A; ABR-201312004.R2; Choconut Township, Susquehanna County, Pa.; Consumptive Use of Up to 6.0000 mgd; Approval Date: December 26, 2023.
22. RENEWAL—Seneca Resources Company, LLC; Pad ID: Scheible 898; ABR-201112039.R2; Deerfield Township, Tioga County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 26, 2023.
23. RENEWAL—SWN Production Company, LLC; Pad ID: LOCH; ABR-201112031.R2; Cogan House Township, Lycoming County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: December 26, 2023.
24. Inflection Energy (PA) LLC; Pad ID: Easton Well Site; ABR-202312004; Upper Fairfield Township, Lycoming County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: December 29, 2023.
25. RENEWAL—Coterra Energy Inc.; Pad ID: Jeffers Farms P1; ABR-201112003.R2; Harford Township, Susquehanna County, Pa.; Consumptive Use of Up to 5.0000 mgd; Approval Date: December 29, 2023.
Susquehanna River Basin Commission.
Notice.
The Susquehanna River Basin Commission will hold a public hearing on February 1, 2024. The Commission will hold this hearing in person and telephonically. At this public hearing, the Commission will hear testimony on the projects listed in the Supplementary Information section of this notice and testimony on the General Permit GP-3, Cooperative Fish Nursery. Such projects and actions are intended to be scheduled for Commission action at its next business meeting, tentatively scheduled for March 14, 2024, which will be noticed separately. The public should note that this public hearing will be the only opportunity to offer oral comments to the Commission for the listed projects and actions. The deadline for the submission of written comments is February 12, 2024.
The public hearing will convene on February 1, 2024, at 6:30 p.m. The public hearing will end at 9 p.m. or at the conclusion of public testimony, whichever is earlier. The deadline for submitting written comments is Monday, February 12, 2024.
This public hearing will be conducted in person and virtually. You may attend in person at Susquehanna River Basin Commission, 4423 N. Front St., Harrisburg, Pennsylvania, or join by telephone at Toll-Free Number 1-877-304-9269 and then enter the guest passcode 2619070 followed by #.
Jason Oyler, General Counsel and Secretary to the Commission, telephone: (717) 238-0423 or
The draft General Permit GP-3, Cooperative Fish Nursery, and related Fact Sheet may be viewed on the Commissions website at
Information concerning the project applications is available at the Commission's Water Application and Approval Viewer at
In addition to hearing testimony on General Permit GP-3, the public hearing will cover the following projects:
1. Project Sponsor and Facility: ADLIB Resources, Inc. (Meshoppen Creek), Springville Township, Susquehanna County, Pa. Application for renewal of surface water withdrawal of up to 0.499 mgd (peak day) (Docket No. 20190301).
2. Project Sponsor and Facility: Beech Resources, LLC (Lycoming Creek), Lycoming Township, Lycoming County, Pa. Application for surface water withdrawal of up to 1.500 mgd (peak day).
3. Project Sponsor and Facility: Cherokee Pharmaceuticals, LLC (Susquehanna River), Riverside Borough, Northumberland County, Pa. Modification to extend the approval terms of the consumptive use and surface water withdrawal approvals (Docket Nos. 20090310 and 20090311) while the facility begins to decommission operations through 2028, and a phased reduction in the surface water withdrawal from 34.392 mgd to 5.100 mgd (peak day) and consumptive use from 0.999 mgd to 0.200 mgd (peak day).
4. Project Sponsor and Facility: Chesapeake Appalachia, L.L.C. (Susquehanna River), Braintrim Township, Wyoming County, Pa. Application for renewal of surface water withdrawal of up to 3.000 mgd (peak day) (Docket No. 20190303).
5. Project Sponsor and Facility: Chesapeake Appalachia, L.L.C.
6. Project Sponsor and Facility: Conestoga Country Club, Manor Township, Lancaster County, Pa. Application for renewal of groundwater withdrawal of up to 0.281 mgd (30-day average) from Well 1 (Docket No. 20080617).
7. Project Sponsor: Dauphin County General Authority. Project Facility: Highlands Golf Course, Swatara Township, Dauphin County, Pa. Application for renewal of consumptive use of up to 0.249 mgd (30-day average) (Docket No. 19940104).
8. Project Sponsor and Facility: East Cocalico Township Authority, East Cocalico Township, Lancaster County, Pa. Application for renewal of groundwater withdrawal of up to 0.115 mgd (30-day average) from Well 2A (Docket No. 19990901).
9. Project Sponsor: East Hempfield Township. Project Facility: Four Seasons Golf Club, East Hempfield Township, Lancaster County, Pa. Applications for renewal of groundwater withdrawal of up to 0.199 mgd (30-day average) from Well C and consumptive use of up to 0.304 mgd (peak day) (Docket No. 19970504).
10. Project Sponsor: Golf Enterprises, Inc. Project Facility: Valley Green Golf Course, Newberry Township, York County, Pa. Application for renewal of consumptive use of up to 0.099 mgd (30-day average) (Docket No. 20021019).
11. Project Sponsor: Greater Hazleton Community-Area New Development Organization, Inc. Project Facility: CAN DO, Inc.—Corporate Center, Butler Township, Luzerne County, Pa. Application for groundwater withdrawal of up to 0.288 mgd (30-day average) from Well 2.
12. Project Sponsor and Facility: Greylock Production, LLC (Genesee Forks), Hector Township, Potter County, Pa. Application for surface water withdrawal of up to 1.440 mgd (peak day).
13. Project Sponsor and Facility: Greylock Production, LLC (Pine Creek), Ulysses Township, Potter County, Pa. Application for surface water withdrawal of up to 2.592 mgd (peak day).
14. Project Sponsor and Facility: Hegins-Hubley Authority, Hegins Township, Schuylkill County, Pa. Application for renewal of groundwater withdrawal of up to 0.110 mgd (30-day average) from Well 5 (Docket No. 19981204).
15. Project Sponsor and Facility: Keystone Potato Products, LLC, Frailey Township, Schuylkill County, Pa. Applications for groundwater withdrawal of up to 0.140 mgd (30-day average) from Well 2 and consumptive use of up to 0.140 mgd (30-day average).
16. Project Sponsor: New Enterprise Stone & Lime Co., Inc. Project Facility: Laflin Quarry, Plains Township, Luzerne County, Pa. Modification to increase consumptive use by an additional 0.240 mgd (30-day average), for a total consumptive use of up to 0.280 mgd (30-day average) (Docket No. 20230613).
17. Project Sponsor and Facility: New Holland Borough Authority, Earl Township, Lancaster County, Pa. Application for groundwater withdrawal of up to 0.391 mgd (30-day average) from Well 1.
18. Project Sponsor and Facility: Newport Borough Water Authority, Oliver Township, Perry County, Pa. Application for early renewal of groundwater withdrawal at an increased rate of up to 0.096 mgd (30-day average) from Well 1 (Docket No. 20140908).
19. Project Sponsor: Post Consumer Brands, LLC. Project Facility: Bloomsburg Plant, South Centre Township, Columbia County, Pa. Applications for renewal of groundwater withdrawal of up to 0.530 mgd (30-day average) from Well 6 and consumptive use of up to 0.800 mgd (peak day) (Docket No. 19910709).
20. Project Sponsor and Facility: PPG Operations LLC (West Branch Susquehanna River), Goshen Township, Clearfield County, Pa. Modification to review withdrawal and approval for use of AMD-impacted water under Commission Policy No. 2021-04 (Docket No. 20210605).
21. Project Sponsor: Rich Valley Golf, Inc. Project Facility: Rich Valley Golf Course (Conodoguinet Creek), Silver Spring Township, Cumberland County, Pa. Applications for renewal of surface water withdrawal of up to 0.325 mgd (peak day) and consumptive use of up to 0.325 mgd (30-day average) (Docket No. 19990306).
22. Project Sponsor and Facility: Seneca Resources Company, LLC (Cowanesque River), Westfield Township, Tioga County, Pa. Application for renewal of surface water withdrawal of up to 0.375 mgd (peak day) (Docket No. 20190311).
23. Project Sponsor: Shadow Ranch Resort, Inc. Project Facility: Shadowbrook Resort (Tunkhannock Creek), Tunkhannock Township, Wyoming County, Pa. Application for renewal of surface water withdrawal of up to 0.999 mgd (peak day) (Docket No. 20190307).
24. Project Sponsor and Facility: Sugar Hollow Water Services LLC (Martins Creek), Hop Bottom Borough, Susquehanna County, Pa. Application for renewal of surface water withdrawal of up to 0.360 mgd (peak day) (Docket No. 20190310).
25. Project Sponsor and Facility: SWN Production Company, LLC (Martins Creek), Brooklyn Township, Susquehanna County, Pa. Application for renewal of surface water withdrawal of up to 0.997 mgd (peak day) (Docket No. 20190312).
Interested parties may call into the hearing to offer comments to the Commission on any business listed above required to be the subject of a public hearing. Given the nature of the meeting, the Commission strongly encourages those members of the public wishing to provide oral comments to pre-register with the Commission by emailing Jason Oyler at
Susquehanna River Basin Commission.
Notice.
This notice lists the minor modifications approved for a previously approved project by the Susquehanna River Basin Commission during the period set forth in
December 1-31, 2023.
Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, PA 17110-1788.
Jason E. Oyler, General Counsel and Secretary to the Commission, telephone: (717) 238-0423, ext. 1312; fax (717) 238-2436; email:
This notice lists previously approved projects receiving approval of minor modifications, described below, pursuant to 18 CFR 806.18 or Commission Resolution Nos. 2013-11 and 2015-06 for the time period specified above.
1. Global Tungsten & Powders LLC (consumptive use), Docket No. 20231221, North Towanda Township and Towanda Borough, Bradford County, Pa.; modification approval to adjust the term of approval and align term with the term of another Commission docket approval; Approval Date: December 15, 2023.
Federal Highway Administration (FHWA), DOT.
Notice of request for reinstatement of a previously approved information collection.
The FHWA has forwarded the information collection request described in this notice to the Office of Management and Budget (OMB) for approval of a new (periodic) information collection. We published a
Please submit comments by February 9, 2024.
You may submit comments identified by DOT Docket ID Number 0002 by any of the following methods:
Jason Broehm, Office of Safety, 202-366-2201, Federal Highway Administration, Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, between 7:30 a.m. to 4:30 p.m., Monday through Friday, except Federal holidays.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of information collection; request for comment.
Under the Paperwork Reduction Act of 1995 (PRA) and its
Interested persons are invited to submit comments on or before February 9, 2024.
Written comments and recommendations for the proposed ICR should be sent within 30 days of publication of this notice to
Ms. Arlette Mussington, Information Collection Clearance Officer, at email:
The PRA, 44 U.S.C. 3501-3520, and its implementing regulations, 5 CFR part 1320, require Federal agencies to issue two notices seeking public comment on information collection activities before OMB may approve paperwork packages.
Before OMB decides whether to approve this proposed collection of information, it must provide 30 days' notice for public comment. Federal law requires OMB to approve or disapprove paperwork packages between 30 and 60 days after the 30-day notice is published. 44 U.S.C. 3507(b)-(c); 5 CFR 1320.12(d);
Comments are invited on the following ICR regarding: (1) whether the information collection activities are necessary for FRA to properly execute its functions, including whether the information will have practical utility; (2) the accuracy of FRA's estimates of the burden of the information collection activities, including the validity of the methodology and assumptions used to determine the estimates; (3) ways for FRA to enhance the quality, utility, and clarity of the information being collected; and (4) ways to minimize the burden of information collection activities on the public, including the use of automated collection techniques or other forms of information technology.
The summary below describes the ICR that FRA will submit for OMB clearance as the PRA requires:
FRA informs all interested parties that it may not conduct or sponsor, and a respondent is not required to respond to, a collection of information that does not display a currently valid OMB control number.
Bureau of the Fiscal Service, Fiscal Service, Treasury.
Notice of rate to be used for Federal debt collection, and discount and rebate evaluation.
The Secretary of the Treasury is responsible for computing and publishing the percentage rate that is used in assessing interest charges for outstanding debts owed to the Government (The Debt Collection Act of 1982, as amended). This rate is also used by agencies as a comparison point in evaluating the cost-effectiveness of a cash discount. In addition, this rate is used in determining when agencies should pay purchase card invoices when the card issuer offers a rebate. Notice is hereby given that the applicable rate for calendar year 2024 is 4.00 percent.
January 1, 2024, through December 31, 2024.
Department of the Treasury, Bureau of the Fiscal Service, Payment Management, E-Commerce Division (LC-RM 349B), 3201 Pennsy Drive, Building E, Landover, MD 20785 (Telephone: 202-874-9428).
The rate reflects the current value of funds to the Treasury for use in connection with Federal Cash Management systems, and is based on investment rates set for purposes of Public Law 95-147, 91 Stat. 1227 (October 28, 1977), as calculated by the Department of the Treasury's Office of Debt Management. The annual Interest Rate Factors used in determining the Current Value of Funds Rate are based on weekly average Fed funds less 25 basis points for the 12-month period ending every September 30, rounded to the nearest whole percentage, for applicability effective each January 1. Quarterly revisions are made if the annual average, on a moving basis, changes by 2 percentage points. The rate for calendar year 2024 reflects
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 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 Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On December 28, 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.
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 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 Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On November 29, 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.
United States Institute of Peace (USIP) and Endowment of the United States Institute of Peace.
Announcement of meeting.
USIP announces the next meeting of the Board of Directors.
Friday, January 19, 2024 (9 a.m.-12:30 p.m.).
The next meeting of the Board of Directors will be held April 19, 2024.
2301 Constitution Avenue NW, Washington, DC 20037.
Corinne Graff, 202-429-7895,
Open Session—Portions may be closed pursuant to subsection (c) of section 552b of title 5, United States Code, as provided in subsection 1706(h)(3) of the United States Institute of Peace Act, Public Law 98-525.
Wage and Hour Division, Department of Labor.
Final rule.
The U.S. Department of Labor (the Department) is modifying Wage and Hour Division regulations to replace its analysis for determining employee or independent contractor classification under the Fair Labor Standards Act (FLSA or Act) with an analysis that is more consistent with judicial precedent and the Act's text and purpose.
This final rule is effective on March 11, 2024.
Amy DeBisschop, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division (WHD), U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Alternative formats are available upon request by calling 1-866-487-9243. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Questions of interpretation and/or enforcement of the agency's regulations may be directed to the nearest WHD district office. Locate the nearest office by calling WHD's toll-free help line at (866) 4US-WAGE ((866) 487-9243) between 8 a.m. and 5 p.m. in your local time zone, or logging onto WHD's website for a nationwide listing of WHD district and area offices at
This final rule addresses how to determine whether a worker is properly classified as an employee or independent contractor under the Fair Labor Standards Act (FLSA or Act). Congress enacted the FLSA in 1938 to eliminate “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.”
As used in this rule, the term “independent contractor” refers to workers who, as a matter of economic reality, are not economically dependent on an employer for work and are in business for themselves. Such workers play an important role in the economy and are commonly referred to by different names, including independent contractor, self-employed, and freelancer. This rule is not intended to disrupt the businesses of independent contractors who are, as a matter of economic reality, in business for themselves.
Determining whether an employment relationship exists under the FLSA begins with the Act's definitions. Although the FLSA does not define the term “independent contractor,” it contains expansive definitions of “employer,” “employee,” and “employ.” “Employer” is defined to “include[ ] any person acting directly or indirectly in the interest of an employer in relation to an employee,” “employee” is defined as “any individual employed by an employer,” and “employ” is defined to “include[ ] to suffer or permit to work.”
Since the 1940s, the Department and courts have applied an economic reality test to determine whether a worker is an employee or an independent contractor under the FLSA, grounded in the Act's broad understanding of employment. The ultimate inquiry is whether, as a matter of economic reality, the worker is economically dependent on the employer for work (and is thus an employee) or is in business for themself (and is thus an independent contractor). In assessing economic dependence, courts and the Department have historically conducted a totality-of-the-circumstances analysis, considering multiple factors to determine whether a worker is an employee or an independent contractor, with no factor or factors having predetermined weight. There is significant and widespread uniformity among federal courts of appeals in the adoption and application of the economic reality test, although there is slight variation as to the number of factors considered or how the factors are framed. These factors generally include the opportunity for profit or loss, investment, permanency, control, whether the work is an integral part of the employer's business, and skill and initiative.
In January 2021, the Department published a rule titled “Independent Contractor Status Under the Fair Labor Standards Act” (2021 IC Rule), providing guidance on the classification of independent contractors under the FLSA applicable to workers and businesses in any industry.
The effective date of the 2021 IC Rule was March 8, 2021. On March 4, 2021, the Department published a rule delaying the effective date of the 2021 IC Rule (Delay Rule) and on May 6, 2021, it published a rule withdrawing the 2021 IC Rule (Withdrawal Rule). On March 14, 2022, in a lawsuit challenging the Department's delay and withdrawal of the 2021 IC Rule, a Federal district court in the Eastern District of Texas issued a decision vacating the Delay and Withdrawal Rules.
On October 13, 2022, the Department published a Notice of Proposed Rulemaking (NPRM) regarding employee or independent contractor classification under the FLSA, proposing to rescind and replace the 2021 IC Rule.
After careful consideration, the Department decided it was appropriate to move forward with a proposed rescission of the 2021 IC Rule and a replacement regulation. As explained in the NPRM, the Department believed that retaining the 2021 IC Rule would have a confusing and disruptive effect on workers and businesses alike due to its departure from case law describing and applying the multifactor economic reality test as a totality-of-the-circumstances test. Further, because the 2021 IC Rule departed from legal precedent, it was not clear whether courts would adopt its analysis—a question that could take years of appellate litigation in different federal courts of appeals to sort out, resulting in more uncertainty as to the applicable test. The Department also explained in the NPRM that it believed the 2021 IC Rule's departure from the longstanding test applied by the courts could result in greater confusion among employers in applying the new analysis, which could place workers at greater risk of misclassification as independent contractors due to the new analysis being applied improperly, and thus could negatively affect both the workers and competing businesses that correctly classify their employees.
The initial deadline for interested parties to submit comments on the NPRM was November 28, 2022. In response to requests for an extension of the time period for filing written comments, the Department lengthened the comment period an additional 15 days to December 13, 2022, resulting in a total comment period of 61 days.
As described below, after considering the views expressed by commenters, the Department is finalizing its proposal with some modifications. For the reasons explained in the NPRM and detailed in section III, the Department concludes that it is appropriate to rescind the 2021 IC Rule and set forth an analysis for determining employee or independent contractor status under the Act that is more consistent with existing judicial precedent and the Department's longstanding guidance prior to the 2021 IC Rule.
In addition to rescinding the 2021 IC Rule, the Department is adding part 795. Specifically, this final rule modifies the regulatory text published on January 7, 2021, at 86 FR 1246 through 1248, addressing whether workers are employees or independent contractors under the FLSA. Instead of using the “core factors” set forth in the 2021 IC Rule, this final rule returns to a totality-of-the-circumstances analysis of the economic reality test in which the factors do not have a predetermined weight and are considered in view of the economic reality of the whole activity. In addition to this critical reversion to the longstanding analysis that preceded the 2021 IC Rule, this final rule returns to the longstanding framing of investment as its own separate factor, and the integral factor as one that looks to whether the work performed is an integral part of a potential employer's business rather than part of an integrated unit of production. The final rule also provides broader discussion of how scheduling, remote supervision, price setting, and the ability to work for others should be considered under the control factor, and it allows for consideration of reserved rights while removing the provision in the 2021 IC Rule that minimized the relevance of retained rights. Further, the final rule discusses exclusivity in the context of the permanency factor, and initiative in the context of the skill factor.
While the above modifications from the 2021 IC Rule were all proposed in the NPRM, the Department also made several adjustments to the proposed regulations after consideration of the comments received. Notably, as discussed further below, the portion of the Department's proposal for the control factor stating that control implemented for purposes of complying with legal obligations may be indicative of control generated many comments. The Department is modifying the proposed language to address confusion and concern regarding potential unintended consequences.
Additionally, the Department received many comments regarding the investment factor. In response to a number of comments concerning the Department's proposal to consider the relative investments of the worker and the potential employer, the Department is clarifying in the final rule that consideration of the relative investments of the worker and the potential employer should be compared not only in terms of dollar value or size of the investments, but should focus on whether the worker is making similar types of investments as the employer (albeit on a smaller scale) that would suggest that the worker is operating independently. Further, in response to
Further clarifications and adjustments to the regulatory text that reflect a range of comments made by employers; workers; those who view themselves as independent contractors, self-employed, or freelancers; labor unions; legal services providers; policy and research organizations; and counsel for both businesses and employees have been made as well and are discussed under the section-by-section analysis that follows.
The final rule reiterates that part 795 contains the Department's general interpretations for determining whether workers are employees or independent contractors under the FLSA. Further, it reiterates that economic dependence is the ultimate inquiry, meaning that a worker is an independent contractor as opposed to an employee under the Act if the worker is, as a matter of economic reality, in business for themself. The final rule explains that the economic reality test is comprised of multiple factors that are tools or guides to conduct the totality-of-the-circumstances analysis to determine economic dependence. The six factors described in the regulatory text should guide an assessment of the economic realities of the working relationship, but no one factor or subset of factors is necessarily dispositive. The final rule provides guidance on how six economic reality factors should be considered—opportunity for profit or loss depending on managerial skill, investments by the worker and the potential employer, the degree of permanence of the work relationship, the nature and degree of control, the extent to which the work performed is an integral part of the potential employer's business, and skill and initiative. Just as under the 2021 IC Rule, and in accordance with longstanding precedent and guidance, additional factors may also be considered if they are relevant to the overall question of economic dependence.
The Department recognizes that this return to a totality-of-the-circumstances analysis in which the economic reality factors are not assigned a predetermined weight and each factor is given full consideration represents a change from the 2021 IC Rule. However, the Department believes that this approach is the most beneficial because it is aligned with the Department's decades-long approach (prior to the 2021 IC Rule) as well as with federal appellate case law, and is more consistent with the Act's text and purpose as interpreted by the courts. The Department believes that this final rule will provide more consistent guidance to employers as they determine whether workers are economically dependent on the employer for work or are in business for themselves, as well as useful guidance to workers on whether they are correctly classified as employees or independent contractors. Accordingly, the Department believes that the guidance provided in this final rule will help protect employees from misclassification. Moreover, this final rule recognizes that independent contractors serve an important role in our economy and provides a consistent approach for those businesses that engage (or wish to engage) independent contractors as well as for those who wish to work as independent contractors.
Enacted in 1938, the FLSA generally requires that covered employers pay nonexempt employees at least the Federal minimum wage (presently $7.25 per hour) for every hour worked, and at least one and one-half times the employee's regular rate of pay for all hours worked beyond 40 in a workweek.
The FLSA's wage-and-hour protections apply to employees. In relevant part, section 3(e) of the Act defines the term “employee” as “any individual employed by an employer.”
Interpreting these provisions, the U.S. Supreme Court has stated that “[a] broader or more comprehensive coverage of employees within the stated categories would be difficult to frame,” and that “the term `employee' under the FLSA had been given `the broadest definition that has ever been included in any one act.' ”
At the same time, the Supreme Court has recognized that the Act was “not intended to stamp all persons as employees.”
The FLSA does not define the term “independent contractor.” While it is clear that section 3(g)'s “suffer or permit” language contemplates a broader coverage of workers compared to what exists under the common law, “there is in the [FLSA] no definition that solves problems as to the limits of the employer-employee relationship under the Act.”
In a series of cases from 1944 to 1947, the U.S. Supreme Court considered employee or independent contractor status under three different Federal statutes that were enacted during the 1930s New Deal Era—the FLSA, the National Labor Relations Act (NLRA), and the Social Security Act (SSA)—and applied an economic reality test under all three laws.
In the first of these cases,
On June 16, 1947, the Supreme Court decided
The same day that the Supreme Court issued its decision in
On June 23, 1947, one week after the
Following these Supreme Court decisions, Congress responded with separate legislation to amend the NLRA and SSA's employment definitions. First, in 1947, Congress amended the NLRA's definition of “employee” to clarify that the term “shall not include any individual having the status of an independent contractor.”
Despite its amendments to the NLRA and SSA in response to
Subsequently, in
Since
When determining whether a worker is an employee under the FLSA or an independent contractor, federal courts of appeals apply an economic reality test using the factors identified in
Some courts of appeals have applied the factors with some variations. For example, the Fifth Circuit typically does not list the “integral part” factor as one of the considerations that guides its analysis.
In sum, since the 1940s, federal courts have analyzed the question of employee or independent contractor status under the FLSA using a multifactor, totality-of-the-circumstances economic reality test, with no factor or factors being dispositive. The courts have examined the economic realities of the employment relationship to determine whether the worker is economically dependent on the employer for work or is in business for themself, even if they have varied slightly in their articulations of the factors. Despite such variation, all courts have looked to the factors first articulated in
The Department has applied a multifactor economic reality test since the Supreme Court's opinions in
Subsequent WHD opinion letters addressing employee or independent contractor status under the FLSA have provided similar recitations of the
In 1962, the Department revised the regulations in 29 CFR part 788, which generally provides interpretive guidance on the FLSA's exemption for employees in small forestry or lumbering operations, and added a provision addressing the distinction between employees and independent contractors.
In 1972, the Department added similar guidance on independent contractor status at 29 CFR 780.330(b), in a provision addressing the employment status of sharecroppers and tenant farmers.
In 1997, the Department promulgated a regulation applying a multifactor economic reality analysis for distinguishing between employees and independent contractors under the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), which notably incorporates the FLSA's “suffer or permit” definition of employment by reference.
Also in 1997, WHD issued Fact Sheet #13, “Employment Relationship Under the Fair Labor Standards Act (FLSA).”
On July 15, 2015, WHD issued additional subregulatory guidance, Administrator's Interpretation No. 2015-1, “The Application of the Fair Labor Standards Act's `Suffer or Permit' Standard in the Identification of Employees Who Are Misclassified as Independent Contractors” (AI 2015-1).
In 2019, WHD issued an opinion letter, FLSA2019-6, regarding whether workers who worked for companies operating self-described “virtual marketplaces” were employees covered under the FLSA or independent contractors.
On January 7, 2021, the Department published the 2021 IC Rule, with an effective date of March 8, 2021.
The Department explained that the purpose of the 2021 IC Rule was to establish a “streamlined” economic reality test that improved on prior articulations described as “unclear and unwieldy.”
The 2021 IC Rule explained that independent contractors are not employees under the FLSA and are therefore not subject to the Act's minimum wage, overtime pay, or recordkeeping requirements. It adopted an economic reality test under which a worker is an employee of an employer if that worker is economically dependent on the employer for work and is an independent contractor if the worker is in business for themself.
The 2021 IC Rule identified five economic realities factors to guide the inquiry into a worker's status as an employee or independent contractor, while acknowledging that the factors were not exhaustive, no one factor was dispositive, and additional factors could be considered if they “in some way indicate whether the [worker] is in business for him- or herself, as opposed to being economically dependent on the potential employer for work.”
The 2021 IC Rule's first core factor was the nature and degree of control over the work, which indicated independent contractor status to the extent that the worker exercised substantial control over key aspects of the performance of the work, such as by setting their own schedule, by selecting their projects, and/or through the ability to work for others, which might include the potential employer's competitors.
The 2021 IC Rule's second core factor was the worker's opportunity for profit or loss.
The 2021 IC Rule also identified three other non-core factors: the amount of skill required for the work, the degree of permanence of the working relationship between the worker and the employer, and whether the work is part of an integrated unit of production (which it cautioned is “different from the concept of the importance or centrality of the individual's work to the potential employer's business”).
The 2021 IC Rule also stated that the actual practice of the parties involved is more relevant than what may be contractually or theoretically possible, and provided five “illustrative examples” demonstrating how the analysis would apply in particular factual circumstances.
On January 19, 2021, WHD issued Opinion Letters FLSA2021-8 and FLSA2021-9 applying the Rule's analysis to specific factual scenarios. WHD subsequently withdrew those opinion letters on January 26, 2021, explaining that the letters were issued prematurely because they were based on a rule that had yet to take effect.
On February 5, 2021, the Department published a proposal to delay the 2021 IC Rule's effective date until May 7, 2021—60 days after the Rule's original March 8, 2001, effective date.
On March 12, 2021, the Department published a NPRM proposing to withdraw the 2021 IC Rule.
On March 14, 2022, in a lawsuit challenging the Department's Delay and Withdrawal Rules under the Administrative Procedure Act (APA), a district court in the Eastern District of Texas issued a decision vacating the Department's Delay and Withdrawal Rules.
The Department filed a notice of appeal of the district court's decision.
Following a series of stakeholder forums on the classification of workers as employees or independent contractors under the FLSA, the Department published an NPRM on October 13, 2022 proposing to rescind the 2021 IC Rule and replace it with new part 795 regulations.
The initial deadline for interested parties to submit comments on the NPRM was November 28, 2022. In response to requests for an extension of the time period for filing written comments, the Department lengthened the comment period an additional 15
The Department received approximately 55,400 comments on the NPRM. Comments were submitted by a diverse array of stakeholders, including employees, self-identified independent contractors, businesses, trade associations, labor unions, advocacy groups, law firms, members of Congress, state and local government officials, and other interested members of the public. This section provides a high-level summary of commenter views. Significant issues raised in the comments received are discussed in subsequent sections of this preamble, along with the Department's response to those comments and a discussion of resulting changes that have been made in the final rule's regulatory text. All comments received may be viewed on the
Many of the comments the Department received can be characterized in the following ways: (1) very general statements of support or opposition; (2) personal anecdotes that did not address a specific aspect of the proposal; or (3) identical or nearly identical “campaign” comments sent in response to comment initiatives sponsored by various groups.
As a general matter, most employees, labor unions, worker advocacy groups, and other affiliated stakeholders generally expressed support for the NPRM, asserting that its proposed guidance was more consistent with judicial precedent and would better protect employees from misclassification than the 2021 IC Rule. By contrast, most commenters who identified as independent contractors, business entities, and commenters affiliated with those constituencies generally expressed opposition to the NPRM, criticizing the Department's proposed economic reality test as ambiguous and biased against independent contracting.
The Department received several comments addressing topics that are beyond the scope of this rulemaking. For example, numerous individuals submitted comments expressing support or opposition to the “Protecting the Right to Organize Act”, H.R. 842, 117th Cong. (2021), proposed legislation that would amend the NLRA. Other commenters expressed views on possible legislative reforms to extend wage-and-hour protections and other employment benefits to workers classified as independent contractors.
Some commenters addressed the rulemaking's potential effect on workers other than those classified as independent contractors. For example, the Labor Relations and Employment Law Society at St. John's University School of Law requested the Department to apply the NPRM's proposed economic reality test to evaluate the employment status of unpaid student interns. Similarly, Boulette Golden & Marin L.L.P. asserted that the NPRM's proposed guidance creates a “false dichotomy” where “every worker in the United States is either an employee or an `independent business.' ” To clarify, this rulemaking specifically addresses the legal distinction between FLSA-covered employees and independent contractors; it does not replace or supplant the analyses that courts and the Department apply when evaluating FLSA coverage of other kinds of workers, such as unpaid interns, students, trainees, or volunteers.
Finally, some commenters opined on potential compliance or enforcement measures. For example, the Sheet Metal and Air Conditioning Contractors' National Association (“SMACNA”) requested that the Department introduce a mandatory “Notice of Independent Contractor Status” form for businesses and independent contractors in the construction industry, to notify “true independent contractors” of their tax obligations and help enforcement against misclassification. This suggestion, however, is outside the scope of this rulemaking, which has not proposed any mandatory notice and focuses specifically on the legal distinction between FLSA-covered employees and independent contractors. Further, some commenters raised compliance with employment verification requirements under the Immigration Reform and Control Act (IRCA), both to note that some employers are incentivized to misclassify immigrant workers as independent contractors in part because they do not have to verify the work authorization of independent contractors,
The Department recognizes that independent contractors and small businesses play an important role in our economy. It is also fundamental to the Department's obligation to administer and enforce the FLSA that workers who should be covered under the Act are able to receive its protections. In the FLSA context, employees misclassified as independent contractors are denied
As explained in the NPRM, the Department believes that the 2021 IC Rule did not fully comport with the FLSA's text and purpose as interpreted by the courts. The Department further believes that leaving the 2021 IC Rule in place would have a confusing and disruptive effect on workers and businesses alike due to its departure from decades of case law describing and applying the multifactor economic reality test as a totality-of-the-circumstances test. While the Department agrees that the 2021 IC Rule identified a need to further develop and center the concept of economic dependence, the 2021 IC Rule included provisions that are in tension with longstanding case law, such as designating two “core factors” as most probative and predetermining that they carry greater weight in the analysis; considering investment and initiative only as part of the opportunity for profit or loss factor; and excluding consideration of whether the work performed is central or important to the potential employer's business. These and other provisions in the 2021 IC Rule narrowed the economic reality test by limiting the facts that may be considered as part of the test—facts which the Department believes are relevant in determining whether a worker is economically dependent on the employer for work or is in business for themself. As the NPRM explained, this novel narrowing of the test under which certain factors are always elevated and other facts are essentially precluded from consideration may result in misapplication of the economic reality test and an increased risk of FLSA-covered employees being misclassified as independent contractors. Moreover, the 2021 IC Rule did not address the potential risks to workers of such misclassification.
The Department previously explained these concerns about the 2021 IC Rule at length in the Withdrawal Rule,
In the NPRM, the Department acknowledged that its proposal departed from the approach taken in the 2021 IC Rule, and further discussed the rationale used in the 2021 IC Rule and why the Department had carefully reconsidered that reasoning and determined that modifications were necessary.
Thousands of commenters opined on this rulemaking. Most commenters that expressed support for the NPRM—including labor unions, worker advocacy organizations, and workers—were highly critical of the 2021 IC Rule, often referencing or attaching earlier comments filed in opposition to that rule when it was proposed.
A number of commenters supportive of the NPRM also stated that the economic reality test applied by courts is not only compatible with the modern
Other commenters, including most business-affiliated stakeholders and many self-identified independent contractors, disagreed with the Department's proposal to rescind and replace the 2021 IC Rule. Many of these commenters argued that the 2021 IC Rule was based on judicial precedent.
Commenters opposed to this rulemaking agreed with the 2021 IC Rule's assessment that the economic reality test traditionally applied by courts is incompatible with the modern economy.
Several commenters stated that the Department's proposal would deter businesses from engaging with independent contractors, which in turn would have disruptive economic consequences. In a joint comment, 33 business advocacy organizations and over 100 local Chambers of Commerce (“Coalition of Business Stakeholders”) asserted that, under the NPRM, “the only scenario in which a hiring entity can be sure it is safe from an enforcement action by the DOL is when it classifies, or misclassifies, its workers as employees” and concluded that the NPRM would “upend millions of legitimate, productive independent contractor relationships.”
Upon consideration of the comments and as described throughout this preamble, the Department continues to believe that this final rule's approach offers a better framework for understanding and applying the concept of economic dependence by explaining how the touchstone of whether an individual is in business for themself is analyzed within each of the six economic reality factors. This rule's discussion of how courts and the Department's previous guidance apply the factors brings the multifactor test into focus, reduces confusion as to the overlapping factors, and provides a more consistent basis for understanding how the test has the flexibility to be applied to changes in the modern economy. Accordingly, the Department no longer views the concerns articulated in the 2021 IC Rule as impediments to using the economic reality test formulated by the courts and the Department's longstanding guidance.
The Department is, however, retaining its longstanding interpretation, as it did in the 2021 IC Rule, that economic dependence is the ultimate inquiry, and that an employee is someone who, as a matter of economic reality, is economically dependent on an employer for work—not for income.
Regarding commenters that stated that the 2021 IC Rule provided more clarity in distinguishing between factors, the Department believes, upon further consideration, that any purported confusion and inefficiency due to overlapping factors was overstated in the 2021 IC Rule. Moreover, when each factor is viewed under the framework of whether the worker is economically dependent or in business for themself, the rationale for considering facts under more than one factor is clearer. The Department explains in more detail in section V why considering certain facts under more than one factor is consistent with the totality-of-the-circumstances approach of the economic realities analysis used by courts. And the Department provides guidance regarding how to consider certain facts, such as the ability to work for others and whether the working relationship is exclusive, under more than one factor. The Department believes that this flexible approach is supported by the case law and preferable to rigidly and artificially limiting facts to only one factor, as the 2021 IC Rule did.
Concerning comments that the 2021 IC Rule was better suited to the modern economy, the Department believes that this final rule is well-equipped to address a wide array of traditional and emerging work relationships, as discussed throughout section V of this preamble. In the 2021 IC Rule, the Department stated that “technological and social changes have made shortcomings of the economic realities test more apparent in the modern economy,” thus justifying the 2021 IC Rule's characterization of the integral, investment, and permanence factors as less important in determining a worker's classification.
The Department's response to commenter feedback on the potential economic consequences of this rulemaking is discussed in the regulatory impact analysis provided in section VII. However, the Department continues to believe that proper application of the FLSA in the modern economy requires the flexibility of an economic reality test that does not predetermine the probative value of particular factors and which is adaptable to different industries and workers. As further explained in sections III.C and VII, commenter assertions of economic disruption related to this rulemaking are belied by the fact that this rulemaking merely aligns the Department's interpretive guidance with the same legal standard courts have been applying for decades—and are continuing to apply today.
The discussion that follows sets forth the Department's explanation of the need for this rulemaking and responds to relevant commenter feedback.
In the NPRM, the Department explained that it was proposing to rescind and replace the 2021 IC Rule in part because that rule was not fully aligned with the FLSA's text as interpreted by the courts or the Department's longstanding analysis, as well as decades of case law describing and applying the multifactor economic reality test. In relevant part, the NPRM explained that the Department had three primary and overlapping legal concerns with the 2021 IC Rule: (1) its creation of two “core factors” as the “most probative” in the economic reality analysis; (2) the oversized role of the control factor in its analysis; and (3) its altering of several economic reality factors to minimize or exclude key facts commonly analyzed by courts.
After considering the comments, the Department continues to believe that the 2021 IC Rule marked a departure from the way in which courts and the Department adopted and applied the multifactor, totality-of-the-circumstances economic reality test in which the factors do not have a predetermined weight and are considered in view of the economic reality of the whole activity. The Department also continues to believe that the 2021 IC Rule's departure from longstanding precedent unduly narrowed the economic reality test by limiting facts that may be considered as part of the test that are relevant in determining whether a worker is economically dependent on the employer for work or is in business for themself. By doing so, the 2021 IC Rule artificially restricted the Act's expansive definitions of “employer,” “employee,” and “employ,” undermining the Act's text and purposes, as interpreted by courts and the Department's longstanding interpretation of the economic reality test.
As the NPRM explained, the 2021 IC Rule set forth a new articulation of the economic reality test, elevating two factors (control and opportunity for profit or loss) as “core” factors above other factors, asserting that the two core factors have “greater probative value” in determining a worker's economic dependence.
Many commenters expressed concerns about the 2021 IC Rule's elevation of two “core factors” and supported the Department's proposal to restore a totality-of-the-circumstances analysis where no factor (or set of factors) is given a predetermined weight. Several commenters asserted that the use of core factors was contrary to Supreme Court precedent.
Other commenters supported the 2021 IC Rule's use of core factors and did not agree with the Department's proposal to change the 2021 IC Rule's analysis. Pointing to the Department's review of appellate case law described in the 2021 IC Rule preamble,
Having considered the comments, the Department continues to believe that the 2021 IC Rule was in tension with the Act, judicial precedent, and congressional intent. As the Department explained in the NPRM, there is no statutory basis for such a predetermined weighting of the factors and the Department is concerned that prioritizing two core factors over other factors may not fully account for the Act's broad definition of “employ,” as interpreted by the courts. The Department agrees with those commenters that noted that the elevation of two core factors improperly narrowed the analysis of the relevant facts, thereby reducing the scope of the FLSA's protections. For example, if facts relevant to the control and opportunity for profit or loss factors both point to independent contractor status for a particular worker but weakly so, those factors should not be presumed to carry more weight than stronger factual findings under other factors (
Moreover, the Department is not aware of any court that has, as a general rule, elevated any one economic reality factor or subset of factors above others, despite receiving several comments suggesting that there was such case law. The 2021 IC Rule did not cite or rely on any particular decision where a court announced such a general rule predetermining the weight of some of the economic reality factors. Further, the Department has examined cases raised by commenters in support of the core factor analysis and none stand for the proposition that a predetermined elevation of any factor or set of factors is appropriate under the economic reality analysis for worker classification under the FLSA. Rather, the cases cited by commenters are either relevant to a different statute such as the Americans with Disabilities Act (“ADA”) or Title VII, reference a joint employment analysis rather than an employee classification analysis, or have had excerpts taken out of context.
The Supreme Court has emphasized that employment status under the economic reality test turns upon “the circumstances of the whole activity,” rather than “isolated factors.”
Regarding comments relying on the 2021 IC Rule's reference to an appellate case law analysis to support the elevation of core factors, the Department has carefully reconsidered the cases cited in the 2020 NPRM and 2021 IC Rule in support.
Additionally, while there are certainly many cases in which the classification decision made by the court aligns with the classification indicated by the control and opportunity for profit or loss factors, the 2021 IC Rule did not identify any cases stating that those two factors are “more probative” of a worker's classification than other factors. Rather, the 2021 IC Rule acknowledged that there are cases in which the classification suggested by the control factor did not align with the worker's classification as determined by the courts.
Moreover, it is necessarily the case when applying a multifactor balancing test that when any two factors of that test both point toward the same outcome, the probability of that indicated outcome aligning with the ultimate outcome increases. The 2021 IC Rule did not address whether a different combination of two factors would yield similar results. Yet, an in-depth review of the case law indicates that it would yield similar results, as most of the cases cited in the 2020 NPRM and 2021 IC Rule in support of its core factor analysis had multiple factors pointing in the same direction.
In any event, the 2021 IC Rule significantly altered the “control” and “opportunity for profit or loss” factors, changing what facts may be considered for each, as discussed more fully in section V. For example, contrary to the approach taken by most courts, the 2021 IC Rule placed a significant focus on the worker's control rather than the potential employer's control and recast the opportunity for profit or loss factor as indicating independent contractor status based on the worker's initiative or investment. Thus, irrespective of whether control and opportunity for profit or loss were more frequently aligned with the ultimate result in prior appellate cases, the new framing of these factors, as redefined in the 2021 IC Rule, set forth a new standard for analysis that is unsupported by precedent.
The 2021 IC Rule identified “the nature and degree of control over the work” as one of two core factors given “greater weight” in the independent contractor analysis.
Commenter views on the 2021 IC Rule's emphasis on control overlapped with those responding to its creation of “core factors.” For example, several commenters in support of the NPRM asserted that elevating the role of control makes the 2021 IC Rule's analysis too similar to a common law control test.
As discussed earlier, commenters opposed to the NPRM stated that the control factor should be given added weight in the economic reality test (along with the opportunity for profit or loss factor), due to its purported strong correlation with the ultimate outcomes of prior FLSA court decisions.
As noted in the NPRM, although the 2021 IC Rule's analysis regarding who is an employee and who is an independent contractor was not the same as the common law control analysis, elevating the importance of control in every FLSA employee or independent contractor analysis brought the 2021 Rule closer to
The NPRM stated that the Department remained concerned that the 2021 IC Rule's preclusion of certain facts from being considered under the factors improperly narrowed the economic reality test and did not allow for a full consideration of all facts which might be relevant to determining whether a worker is economically dependent upon an employer for work or in business for themself. Examples of such narrowing from the 2021 IC Rule include: (1) stating that “control” indicative of an employment relationship must involve an employer's “substantial control over key aspects of the performance of the work,” excluding requirements “to comply with specific legal obligations, satisfy health and safety standards, carry insurance, meet contractually agreed-upon deadlines or quality control standards, or satisfy other similar terms;”
Numerous commenters opined on the 2021 IC Rule's general narrowing of the economic reality test and the extent to which it justifies this rulemaking. For example, IBT stated that “[t]he current rule conflicts with the intended broad definition and coverage of the [FLSA] and adopts an impermissibly narrow test for determining employee status.”
Other commenters defended the merit of the 2021 IC Rule's five economic reality factors, as discussed in greater detail in section V. As a general matter, these commenters praised the 2021 IC Rule's description of the economic reality factors for reducing overlap and redundancy compared to the approach taken by courts, stating that such changes brought greater clarity to the regulated community.
Having considered the comments on this issue, the Department believes that the 2021 IC Rule altered various economic reality factors in ways that improperly narrowed the economic reality test, because such alterations minimized or excluded facts which in many cases are relevant for determining whether a worker is economically dependent upon an employer for work or in business for themself. The Department remains of the view that the 2021 IC Rule's alteration of several economic reality factors provides another important justification for this rulemaking. Commenter feedback on the proper articulation of each factor in the economic reality test is described in greater detail in section V.
The 2021 IC Rule stated that it sought to “significantly clarify to stakeholders how to distinguish between employees and independent contractors under the Act.”
First, as the Department explained in the NPRM, because the 2021 IC Rule departed from courts' longstanding precedent, it is not clear whether courts would have at some point adopted the Rule's analysis were it not being rescinded as part of this rulemaking. The Department further explained that this question could have taken years of appellate litigation in different federal courts of appeals to sort out, resulting in more uncertainty as to the applicable economic reality test. Businesses operating nationwide would have had to familiarize themselves with multiple standards for determining who is an employee under the FLSA. This litigation and these multiple standards would have likely caused confusion and uncertainty.
Second, as the Department noted in the NPRM, the 2021 IC Rule would have introduced several ambiguous terms and concepts into the analysis for determining whether a worker is an employee under the FLSA or an independent contractor. For example, those following the guidance provided in the 2021 IC Rule had to grapple with what it means in practice for two factors to be “core” factors and entitled to greater weight. In addition, they had to determine, in cases where the two core factors point to the same classification, how “substantial” the likelihood is that they point toward the correct classification if the additional factors point toward the other classification. Additionally, as explained in the NPRM, the 2021 IC Rule did not specify whether the “additional factors” that could be considered under that rule had less probative value (or weight) than the three non-“core” factors. Assuming that they did, the 2021 IC Rule would have essentially resulted in a three-tiered multifactor balancing test, with the “core” factors given more weight than enumerated non-“core” factors, and the enumerated non-“core” factors given more weight than the “additional” factors. The 2021 IC Rule would have also improperly collapsed some factors into each other, so that, for example, investment and initiative would have been considered only as a part of the opportunity for profit or loss factor, requiring courts and the regulated community to reconsider how they have long applied those factors. These new concepts, this new weighing of the factors, and this new treatment of the factors would have likely caused confusion and uncertainty.
In sum, the NPRM explained that the 2021 IC Rule would have complicated rather than simplified the analysis for determining whether a worker is an employee or independent contractor under the FLSA, which is further justification for this final rule to rescind and replace the 2021 IC Rule.
As a threshold matter, commenters disagreed over whether courts would adopt and apply the 2021 IC Rule's analysis if it were left in place. Multiple commenters agreed with the Department's concern, as described in the NPRM, that courts might not adopt or apply the 2021 IC Rule, which they criticized as an unlawfully narrow interpretation of the FLSA.
Commenters opposed to the NPRM, however, expressed confidence that, if left in place, the 2021 IC Rule would be adopted by courts over time and promote greater uniformity in the law.
Having considered the comments, the Department continues to have serious concerns about the extent to which federal courts would have adopted the 2021 IC Rule, were it not being rescinded by this rulemaking. The Department is unaware of a single federal court that has applied the 2021 IC Rule's analysis. To the contrary, to the Department's knowledge, only a few court decisions have even considered the 2021 IC Rule and all expressly
The Department disagrees with commenter assertions that the 2021 IC Rule's analysis was more likely to be adopted by courts than the analysis proposed in the NPRM. The Department's analysis in this rulemaking is grounded in longstanding case law, while the new standard and new concepts introduced by the 2021 IC Rule were a very significant departure from that longstanding case law. For example, as previously discussed, the 2021 IC Rule created “core” factors that were automatically given greater weight in the analysis, contrary to how every appellate court has described the economic reality test.
Some commenters alleged that certain aspects of the NPRM's proposed guidance were departures from judicial precedent, such as its proposal that “control implemented by the employer for purposes of complying with legal obligations, safety standards, or contractual or customer service standards may be indicative of control,”
Apart from the 2021 IC Rule's reception by courts, commenters also disagreed over whether the 2021 IC Rule's guidance brought clarity or confusion as a standalone matter. Some commenters asserted that the novelty of the 2021 IC Rule's analysis, for example, would have created confusion as compared to the longstanding analysis applied by courts.
In contrast, other commenters asserted that rescission and replacement of the 2021 IC Rule would reduce certainty and clarity.
Having reviewed the comments, the Department continues to believe that the 2021 IC Rule introduced uncertainty regarding the applicable legal standard for determining whether a worker is an employee or an independent contractor under the FLSA, contrary to its stated intent. Prior to the 2021 IC Rule, there was certainty as to the applicable legal standard for determining whether a worker was an employee or independent contractor under the FLSA because federal courts of appeals applied a totality-of-the-circumstances, economic reality test that did not elevate any factors above the others. Despite slight variation in the exact number and phrasing of specific economic reality factors, courts and the Department generally examined the same economic reality factors. The 2021 IC Rule, however, injected uncertainty into this area of the law by putting forth new guidance that was at odds (for all of the reasons discussed herein) with
Additionally, the Department continues to believe that the aspects of the 2021 IC Rule's analysis introduced confusion, making that rule's guidance vulnerable to misapplication. Confusion about how to apply the 2021 IC Rule was evident in many of the comments submitted in opposition to the Department's proposal to rescind and replace that rule. For example, several commenters inaccurately described the 2021 IC Rule as establishing a “two-factor test,”
Commenter confusion about the 2021 IC Rule is unsurprising because that rule set forth a novel analysis which has not been applied by any court. The confusion evident in the comments received reinforces the Department's assessment, as explained in the NPRM, that the 2021 IC Rule could have resulted in misapplication of the economic reality test and may have conveyed to employers that more workers could be classified as independent contractors than prior to the 2021 IC Rule.
In the NPRM, the Department explained that to the extent the 2021 IC Rule's guidance resulted in the misclassification of employees as independent contractors, the resulting denial of FLSA protections could harm the affected workers. These protections include being paid at least the federal minimum wage for all hours worked, overtime compensation for hours worked over 40 in a workweek, and protection against retaliation for complaining about, for example, a violation of the FLSA. The Department further explained in the NPRM that the 2021 IC Rule did not fully consider these potential consequences for workers. The NPRM noted that this result could have a disproportionate impact on women and people of color, to the extent such workers are overrepresented in low-wage positions where misclassification is more likely.
Many commenters, including worker advocacy groups, labor unions, and other stakeholders, shared views about the 2021 IC Rule's effect on employees vulnerable to misclassification. The Department also received significant feedback regarding the potential effects of this rulemaking on independent contractors, as well as from commenters who did not agree that the 2021 IC Rule would or could increase the prevalence of misclassification.
Many commenters agreed with the Department's assessment that the misclassification of employees as independent contractors remains a serious problem for workers, businesses, and the broader economy. Several commenters referenced studies or data estimating a high prevalence of misclassification in the economy, in addition to those mentioned in the NPRM's regulatory impact analysis.
Many commenters discussed how the misclassification of employees as independent contractors deprives workers of wages. SWACCA, for example, commented that “the estimated 20 percent of construction workers who should be treated as employees (but are not) lose close to $1 billion in wages annually.” Commenters pointed out that misclassification undercuts employers that comply with the law and causes a “race to the bottom” in labor standards.
Beyond wage effects, commenters identified and discussed many other consequences of worker misclassification. For example, the NWLC asserted “by strengthening the employment test to reduce misclassification, the Department can ensure that more nursing mothers will be able to hold their employers accountable for providing appropriate facilities and adequate break time.”
Several commenters emphasized the uniquely harmful risks and consequences of misclassification for workers in certain demographic groups.
Many commenters agreed with the Department's assessment that the 2021 IC Rule has increased the risk of misclassification. For example, SWACCA asserted that challenges in enforcing misclassification in the construction industry “would be compounded if enforcement officials had to pursue bad actors under the January 2021 Rule's novel interpretation of the law that could require protracted litigation to clarify and would permit more contractors to argue that their classification of workers as independent contractors is permissible, or at least defensible, under the FLSA.” The International Association of Machinists and Aerospace Workers asserted that the 2021 IC Rule “creates perverse incentives for companies to misclassify workers,” because “[t]he more easily a company can misclassify its workforce, the more incentive for other companies to do the same, creating a `race to the bottom' in employment practices and social standards to the detriment of workers.” CLASP & GFI and Farmworker Justice both commented that the 2021 IC Rule's elevation of the “control” and “opportunity for profit or loss” factors might exacerbate misclassification among farmworkers, whose employment status is particularly dependent on the consideration of factors other than the 2021 IC Rule's “core” factors.
Commenters opposed to this rulemaking generally did not dispute the occurrence or importance of employee misclassification, at least in certain industries. For example, a lawyer representing employers acknowledged that “independent contractor status can be abused.”
Having considered the comments, the Department remains of the view that the misclassification of employees as independent contractors is a serious problem affecting workers who do not receive proper wages and businesses that have to compete in the economy against businesses that unlawfully misclassify their workers. As explained more fully in section III.B., the 2021 IC
The Department's 2022 press releases addressing misclassification enforcement referenced by some commenters primarily involved investigations by the Department that were initiated before the 2021 IC Rule was published and/or covered a period of investigation prior to March 8, 2021. In any event, the Department's ability to pursue some enforcement actions involving misclassification while applying the 2021 IC Rule's guidance is not a persuasive reason to retain the 2021 IC Rule. The Department is not promulgating this rule because the 2021 IC Rule renders the Department powerless to enforce misclassification. Rather, the 2021 IC Rule's guidance injected a new framework for analyzing whether workers are employees or independent contractors under the FLSA that is inconsistent with decades of case law interpreting the Act. As explained earlier, the Department is further concerned that widespread stakeholder confusion over the 2021 IC Rule and its guidance regarding how its factors should be applied (as discussed in section II.B.) may be causing some misclassification that would not occur in the absence of the rule. For these reasons, the Department believes that rescinding the 2021 IC Rule will likely both reduce misclassification and restore the Department's ability to consider all relevant facts under a totality-of-the-circumstances economic reality test that does not predetermine the weight of certain factors, consistent with the text of the FLSA and decades of judicial precedent.
Other commenters expressed concern that rescinding the 2021 IC Rule will result in the widespread reclassification of workers who should be considered independent contractors.
Some commenters contended that the NPRM's guidance was inappropriately broad and would encompass as employees individuals who they assert are appropriately classified as independent contractors.
Other commenters disagreed that the Department's proposal would result in the reclassification of appropriately classified independent contractors. For example, an individual commenter wrote that “[i]mproving classification rules and returning to a back-to-basics approach used for over fifty years does not mean independent contractors will automatically be classified as employees.” Noting that “[t]he Proposed Rule is a restatement of decades of court precedents and WHD guidance,” UBC remarked that “[a]ny employer who has been correctly classifying its independent contractors has no worry that the Proposed Rule will result in liability under the FLSA.” Multiple business stakeholders and self-identified independent contractors commented that they did not expect such reclassification for workers in their industry. For example, LPL Financial stated that it believes that the Department's proposal “will not result in the reclassification of independent financial professionals as employees” and it “commend[ed] the DOL for undertaking the rulemaking process and proposing a rule that recognizes that entrepreneurs who establish and build small businesses utilizing their managerial skills and professional expertise can operate in an independent contractor model to create multigenerational financial advising practices.” Over 1,000 financial advisors affiliated with Ameriprise and LPL Financial submitted separate campaign comments in support of the NPRM, asserting that “[the] proposal will allow me to continue to choose to be an independent contractor.”
Having considered the comments, the Department continues to believe that this rulemaking will not jeopardize legitimate independent contracting arrangements. Fears to the contrary are not realistic given that the Department is adopting guidance derived from the same analysis that courts have applied for decades and have been continuing to apply since the 2021 IC Rule took effect. There is no evidence that the status quo prior to the 2021 IC Rule was hindering the use of independent contractors.
Because the FLSA's economic reality test is broad and fact-specific, the Department cannot categorically declare that individual workers in particular occupations or industries will always qualify as independent contractors applying the guidance provided in this rule. However, keeping in mind that the Department is adopting guidance in this
In sum, the Department's rulemaking to rescind and replace the 2021 IC Rule is motivated, in part, by an assessment that the guidance provided here will likely benefit workers as a whole, including those workers at risk of being misclassified as independent contractors as well as those who are appropriately classified as independent contractors.
Until the 2021 IC Rule, the Department had not previously promulgated generally applicable regulations on independent contractor classification in the FLSA's 83 years of existence. In light of the consistency of the economic reality test as adopted by the circuits, the Department had instead relied on subregulatory documents to provide generally applicable guidance for the Department and the regulated community on determining employee or independent contractor status under the FLSA. In the NPRM, the Department explained that, although it believes that its earlier subregulatory guidance provided appropriate guidance to the regulated community, the Department upon further consideration recognized that publishing regulatory guidance would be beneficial for stakeholders, particularly because the Department had published a regulation in 2021. The NPRM elaborated that detailed federal regulations would be easier to locate and read for interested stakeholders than applicable circuit case law, potentially helping workers and businesses better understand the Department's interpretation of their rights and responsibilities under the law. Additionally, the NPRM explained that adopting detailed regulations that are aligned with existing precedent could better protect workers, who were placed at a greater risk of misclassification as a consequence of the 2021 IC Rule.
Several commenters agreed with the Department's reasons for replacing the 2021 IC Rule with alternative regulatory guidance. These commenters generally asserted that detailed regulatory guidance brings added clarity to interested parties.
Other commenters commended the accessibility of generally applicable regulatory guidance.
Some labor unions and worker advocacy organizations opined that the Department needs to promulgate regulatory guidance to counteract confusion introduced by the 2021 IC Rule.
Several commenters, however, disagreed that the Department should issue regulations addressing independent contractor status under the FLSA. Some of these commenters asserted that the Department has no legal authority or expertise to do so.
Having considered the comments, the Department continues to believe not only in the benefits of adopting alternative guidance on the distinction between FLSA-covered employees and independent contractors, but also in the value of providing such guidance in easily-accessible regulatory text. Although the Department previously issued regulatory guidance on this issue specific to the sharecropping and lumber industries in parts 780 and 788,
Further, as noted in the 2021 IC Rule, the Department “without question has relevant expertise in the area of what
The Department acknowledges that some commenters would prefer Congress to address this issue through legislation and to adopt one uniform standard that would apply across federal laws.
Many of the commenters opposed to this rulemaking asserted that the Department's rulemaking to rescind and replace the 2021 IC Rule is premature or otherwise ill-timed.
Some commenters noted the added costs and uncertainty attributable to the Department promulgating the 2021 IC Rule and subsequently proposing to rescind and replace it.
Other commenters cited to various economic conditions that caution (in their view) against any rulemaking that would deter independent contracting.
The Department disagrees with the various timing arguments advanced by commenters urging the Department to delay or withdraw this rulemaking, though it is mindful of the impact that changes in the Department's guidance may end up having on the regulated community. As the Department has explained, there are compelling reasons to rescind and replace the 2021 IC Rule, including its significant departure from judicial precedent, the confusion it has introduced for affected stakeholders, and the consequences for workers and competing businesses attributable to an increased risk of misclassification. Allowing the 2021 IC Rule to stay in effect for a longer period would not ameliorate any of those concerns. To the contrary, as NELP pointed out, “over time . . . negative consequences . . . will be exacerbated.” The fact that no court has applied the 2021 IC Rule in the year since the district court's decision in
The Department further finds arguments about stakeholder reliance on the 2021 IC Rule to be unpersuasive. Before the 2021 IC Rule's effective date, the Department issued rules intending to delay the effective date of and then withdraw the 2021 IC Rule, while also identifying concerns with the 2021 IC Rule. The Department then announced on June 3, 2022 that it was initiating a new rulemaking on employee and independent contractor classification under the FLSA.
Finally, the Department disagrees with commenters that it is obligated to wait for more time to gather data before rescinding the 2021 IC Rule and promulgating a new rule.
In the NPRM, the Department noted that it had considered four alternatives to what it proposed.
Regarding adoption of the common law test, as the Department explained in the NPRM, that test is contrary to the “suffer or permit” language in section 3(g) of the FLSA, which the Supreme Court has interpreted as requiring a broader definition of employment than under the common law. Accordingly, the Department stated that the common law test is inconsistent with the FLSA because that test “is not sufficiently protective in assessing worker classification under the FLSA.” Regarding adoption of an ABC test, as the Department explained, the Supreme Court has held that the economic reality test is the applicable standard for determining workers' classification
As a third alternative, the Department considered proposing to only partially rescind the 2021 IC Rule and instead retain some aspects of it. In discussing this alternative, the Department listed numerous instances in which its NPRM was consistent or in agreement with the 2021 IC Rule. The Department explained that it considered “simply removing the problematic `core factors' analysis from the 2021 IC Rule and retaining the five factors as described in th[at] rule.” However, the Department rejected this approach because numerous ways in which that rule described the factors were in tension with judicial precedent and longstanding Department guidance and “narrow[ed] the economic reality test by limiting the facts that may be considered as part of the test, facts which the Department believes are relevant in determining whether a worker is economically dependent on the employer for work or in business for themself.” For those reasons, the Department “concluded that in order to provide clear, affirmative regulatory guidance that aligns with case law and is consistent with the text and purpose of the Act as interpreted by courts, a complete rescission and replacement of the 2021 IC Rule is needed” as opposed to a partial rescission.
As a fourth alternative, the Department considered rescinding the 2021 IC Rule and, instead of promulgating new regulations, providing guidance on employee or independent contractor classification through subregulatory guidance. In discussing this alternative, the Department reiterated the reasons why it believed that rescission of the 2021 IC Rule was necessary. The Department acknowledged that prior to the 2021 IC Rule, it did not have general guidance published in the Code of Federal Regulations on the classification of workers as employees or independent contractors. The Department explained that issuing a new rule rather than subregulatory guidance would allow the Department to provide in-depth guidance that is more closely aligned with circuit case law, allows the Department to formally collect and consider a wide range of views by using the notice-and-comment process, and may further improve consistency among courts regarding the classification of workers because courts are accustomed to considering relevant agency regulations. For these reasons, the Department decided not to propose rescinding the 2021 IC Rule and providing only subregulatory guidance, and to instead propose the regulations set forth in the NPRM.
A few commenters expressly addressed the first alternative—adopting a common law control test.
Having considered the comments, the Department reaffirms its position that the FLSA's definitions, as interpreted by courts, reflect Congress' rejection of the common law test as determining employee status under the Act. The Department continues to believe that adopting the common law test would be contrary to FLSA section 3(g)'s “suffer or permit” language, which under Supreme Court and federal appellate precedent requires a broader definition of employment than the common law test.
A number of commenters addressed the second alternative—adopting an ABC test. Most commenters agreed with the Department's proposed rejection of an ABC test as inconsistent with current precedent and/or expressed opposition to an ABC test. For example, CCI stated that, “[w]hile the ABC test may be appropriate in some circumstances (for example collective bargaining rights), we believe the Department is correct to return to a broader `totality-of-the-circumstances' analysis for wage and overtime protections under the Fair Labor Standards Act.” UBC described the rejection of an ABC test as an “adherence to precedent.” State AGs stated that, although “the ABC test arguably protects against employee misclassification better than other tests in use” and “several of the undersigned State AGs apply the ABC test,” they “understand the Department believes it is constrained under current law from implementing the ABC test under the FLSA[.]”
SBLC “applaud[ed] the DOL for declining calls to adopt an ABC test, like what is currently used in California, or a similar test that would apply a stringent requisite factor test rather than a balancing test.” The International Franchise Association (“IFA”) “support[ed] the DOL's explicit statement in its 2022 NPRM that the ABC test, which is used in states like California and Massachusetts, is `inconsistent' with controlling Supreme Court authority under the FLSA.” The App Association expressed concerns with the ABC test and “discourage[d] alignment in federal regulation with California's approach.” The Coalition of Trucking Stakeholders stated that the Department “properly acknowledge[d] that the adoption of any ABC-like test, which is not based upon an economic-realities assessment, would be contrary to precedent” (citation omitted). And noting that the ABC test “assumes all workers are employees unless they can demonstrate that they meet specific criteria,” The Owner-Operator Independent Drivers Association (“OOIDA”) stated that “the Department is correct in its assessment that the ABC
Some commenters advocated for adoption of an ABC test. For example, the Los Angeles County Federation of Labor, AFL-CIO & Locals 396 and 848 of the International Brotherhood of Teamsters (“LA Fed & Teamsters Locals”) acknowledged that “the Department is correct in its conclusion that the lower federal courts have developed a fairly consistent version of what is referred to as the economic realities test by identifying a list of six non-exclusive factors to frame their analysis,” but asserted that “there is nothing in the FLSA's legislative history nor in the Supreme Court's precedent that compels this exact six-factor framing.” Discussing
Having considered the comments, the Department is not adopting an ABC test. The Department continues to believe that an ABC test would be inconsistent with Supreme Court and federal appellate precedent interpreting and applying the FLSA, and therefore, this final rule declines to adopt an ABC test. The Supreme Court has repeatedly explained that “economic reality” is the applicable standard for determining whether a worker is an employee or not under the FLSA.
NABTU stated that, although it “believes that the `ABC test' is the better test for determining worker classification, NABTU understands that absent congressional action, DOL must operate within the parameters of the statute as defined by controlling Supreme Court precedent” (footnote omitted). NABTU nonetheless recommended that, “for purposes of applying the economic reality test to the construction industry, DOL adopt a rebuttable presumption that all construction workers are employees.”
A number of commenters objected that the Department's proposed test (in particular the integral factor) might have the same effect—either unintendedly or not—as an ABC test.
A few commenters addressed generally the NPRM's discussion of the alternatives considered by the Department. State AGs, in addition to commenting on the first and second alternatives, commented that “retaining portions of the 2021 Rule that are consistent with the Proposed Rule would not provide needed clarity because the governing principle of the 2021 Rule was a marked departure from
WPI commented that it “is well settled that agencies are required to consider alternatives within the ambit of the regulation being considered,” including “less restrictive rules than those proposed” (citations omitted). WPI further commented that the district court in
As an initial matter, although the Department believes that the common law control test and an ABC test are not feasible options in this rulemaking, as discussed above, several commenters advocated for the adoption of one or the other of those tests.
Finally, WPI claimed that the NPRM did not consider “simply reverting to interpretive guidance already in place prior to the 2021 IC Rule” and “ignore[d] this option in a purported quest for clarity.” In the commenter's view, there is already clarity in the economic reality test because of the case law explaining and interpreting it, and the commenter added that the NPRM went “beyond any position the Department has taken historically” and was not “faithful to settled caselaw and analysis by courts upon which it claims to base its proposed rule.” As an initial matter, the Department considered (as the fourth alternative) “rescinding the 2021 IC Rule and providing guidance on employee or independent contractor classification through subregulatory guidance instead of through new regulations.”
As explained in section III, the Department believes that replacing the 2021 IC Rule with regulations addressing the multifactor economic reality test that more fully reflect the case law and continue to be relevant to the modern economy is helpful for workers and employers in understanding how to apply the law in this area. These regulations and the explanatory preamble provide in-depth guidance, and because courts are accustomed to considering relevant agency regulations, issuing these regulations may further improve consistency among courts regarding this issue. The Department is therefore rescinding the 2021 IC Rule and issuing this final rule to replace part 795; the provisions of the regulation are discussed below.
Having reviewed commenter feedback submitted in response to the proposed rule, the Department is finalizing the following regulations to provide guidance regarding whether workers are employees or independent contractors under the FLSA. The regulations include a new part 795 and cross- references in 29 CFR 780.330(b) and 788.16(a) to part 795. Of particular note, the regulations set forth in this final rule do not use “core factors” and instead return to a totality-of-the-circumstances analysis of the economic reality test in which the factors do not have a predetermined weight and are considered in view of the economic reality of the whole activity. Regarding the economic reality factors, this final rule returns to the longstanding framing of investment as a separate factor, and integral as an integral part of the potential employer's business rather than an integrated unit of production. The final rule also provides broader discussion of how scheduling, remote supervision, price setting, and the ability to work for others should be considered under the control factor, and it allows for consideration of reserved rights while removing the provision in the 2021 IC Rule that minimized the relevance of retained rights. Further, the final rule discusses exclusivity in the context of the permanency factor, and initiative in the context of the skill factor. The Department also made several adjustments to the proposed regulations after consideration of the comments received, including revisions to the regulations regarding the investment factor and the control factor (specifically addressing compliance with legal obligations).
Additionally, in the 2021 IC Rule, the Department proposed not to revise its regulation addressing employee or independent contractor status under MSPA in 29 CFR 500.20(h)(4), stating, in part, that the MSPA regulation and the 2021 IC Rule both applied an economic reality test in which the ultimate inquiry was economic dependence. In the NPRM, the Department similarly did not propose to make any revisions to the MSPA regulation, which adopts by reference the FLSA's definition of “employ,” and considers “whether or not an independent contractor or employment relationship exists under the Fair Labor Standards Act” to interpret employee or independent contractor status under MSPA.
Finally, the Department also proposed to formally rescind the 2021 IC Rule.
The Department responds to commenters' feedback on the proposed rule below.
Proposed § 795.100 explained that the interpretations in part 795 will guide WHD's enforcement of the FLSA and are intended to be used by employers, employees, workers, and courts to assess employment status under the Act.
In the NPRM, the Department proposed to simplify § 795.105(a) of the 2021 IC Rule and make additional clarifying edits to § 795.105(b).
The Department proposed that paragraph § 795.105(b) would affirm that economic dependence is the ultimate inquiry for determining whether a worker is an independent contractor or an employee; this paragraph also makes clear that the plain language of the statute is relevant to the analysis.
As a preliminary matter, Cetera Financial Group urged the Department to “recognize that economic dependence often does not exist and certainly should not be presumed” and that it “should be the subject of a threshold inquiry prior to applying the other factors in the economic realities test, or, at a minimum, added as an additional factor.” As the Department explained in the NPRM, the question of economic dependence is the ultimate inquiry, and the factors are tools or guideposts for answering that inquiry, so it would not be appropriate to make “economic dependence” an additional factor or a threshold inquiry. The Department agrees, however, that economic dependence should never be presumed and that when it does not exist, that worker is not an employee.
Commenters generally agreed that economic dependence was the right lens for evaluating whether an employment relationship exists under the FLSA.
Some commenters stated that the Department's proposed language broadened the definition of “economic dependence” and objected to this perceived broadening.
The Department notes that this concept of economic dependence—one which does not focus on the amount of income earned or whether the worker has other income streams—has been the Department's consistent position. Although some commenters believed the Department was proposing a different approach, the concept of economic dependence in the NPRM and this final rule is identical to the 2021 IC Rule, which stated that, “other forms of dependence, such as dependence on income or subsistence, do not count” and that “dependence of income or subsistence, is not a relevant consideration in the economic reality test.”
Lastly, as a global matter, some commenters objected to the Department's use of the word “employer” throughout the proposed regulatory provisions and recommended that the Department use an alternate term such as “potential employer” instead because it made it seem as if the result of the analysis was predetermined in favor of employee status.
Having considered the comments, the Department is adopting § 795.105(a) and (b) largely as proposed, explaining that economic dependence is the ultimate inquiry, and that an employee is someone who, as a matter of economic reality, is economically dependent on an employer for work—not for income. The Department is also making three clarifying edits. First, in response to comments, the Department uses the phrase “worker's potential employer” or “potential employer” instead of the word “employer” in § 795.105(a). The Department did not intend for its use of the word “employer” to predetermine any result and makes the change throughout the regulatory text. The Department is using the terms
The Department also proposed to delete § 795.105(c) and (d) of the 2021 IC Rule because it believed that the factors of the economic reality test should not be given a predetermined weight and designated as “core” or “additional guideposts.” As discussed in section III (Need for Rulemaking) as well as in section V.C., the Department is proceeding with the removal of these paragraphs, and discussion of the economic reality test and the individual factors is being moved to § 795.110. The comments regarding the discontinuation of “core factors” and the Department's return to the economic reality test's longstanding totality-of-the-circumstances analysis are discussed in section V.C.
In the NPRM, the Department proposed to replace § 795.110 (Primacy of actual practice) from the 2021 IC Rule with a provision discussing the economic reality test and the economic reality factors. Proposed § 795.110(a) introduced the economic reality test, emphasizing that the economic reality factors are guides to be used to conduct a totality-of-the-circumstances analysis. It also explained that the factors are not exhaustive, and no single factor is dispositive.
Many commenters supported the Department's return to the longstanding totality-of-the-circumstances economic reality analysis, stating that it would provide clarity and align with the statutory text and relevant case law.
Several commenters emphasized that the Act's definitions should guide the analysis. The LA Fed & Teamsters Locals, for example, observed that “[c]ourts have interpreted the FLSA's broad suffer or permit to work language as seeking to answer one foundational question regarding the relationship between a worker and the entity to whom that worker provides their labor.” They added that the 2021 IC Rule “improperly elevates certain factors and prevents consideration of certain facts, would invite employers to find ways to cloak a worker's dependence in a veneer of independence and would fail to account for changes in working structures that come with societal progress.”
In contrast, other commenters stated that the Department's proposal to replace the “core factor” analysis and return to the totality-of-the-circumstances analysis undermined the clarity of the 2021 IC Rule, creating more uncertainty and confusion.
Other commenters stated that the 2021 IC Rule's core factor analysis was better suited to the issues of the current economy than the Department's proposal. For instance, the Job Creators Network Foundation commented that the Department's proposal “conflicts with the way America's economy works today” and that the new economy would be “significantly diminished” if the proposal were to move forward. In contrast, other commenters stated that the NPRM “accurately analyzes modern workplace trends and provides detailed guidance on how these changes to the nature of work itself must be integrated and considered within those six identified factors (and within the additional factors that may arise in particular factual scenarios).” LA Fed & Teamsters Locals;
Some commenters stated that the Department's proposed factors were too broad and not tethered to economic dependence. IBA and CPIE, for example, commented that the proposed regulations “are not faithful to answering the question of economic dependence” and instead “consistently resolve alternative interpretations of a specific factor in the direction of broadening the scope of the factor.” Similarly, some commenters stated that the Department's proposal expanded the range of relevant factors and “hold[s] a thumb on the analytical scale towards employment.”
Several commenters requested that the Department provide additional guidance regarding how to weigh the factors in various scenarios.
Various commenters requested that the Department state that workers in their particular industry or occupation were bona fide independent contractors.
After considering all comments and as discussed in detail below, the Department is adopting § 795.110(a) as proposed.
Regarding comments that the Department's proposal is generally biased in favor of employee status, or that its analysis of each factor places a “thumb on the scale” toward employment, the Department reiterates that its proposal is consistent with longstanding judicial precedent and, critically, the plain language of the Act. The Department agrees with those commenters who emphasized the Act's relevant statutory definitions. As it has stated previously, the Department believes that determining whether an employment relationship exists under the FLSA begins with the Act's definitions.
In its 1947 brief before the Supreme Court in
Thus, the Department's analysis does not place a “thumb on the scale” for employment. Rather, it was Congress's clear intent in fashioning the Act (which has been repeated by courts for decades) that the statutory language sweep broader than the common law and encompass all workers who are “suffered or permitted” to work, and the test for employment must reflect that plain language and clear intent. The Department emphasizes again, however, that there is a wide assortment of bona fide independent contractors across industries and occupations, and it believes that the regulations as finalized in this rule allow for this range of work relationships—from employees to independent contractors—to be appropriately classified.
The Department has also considered the comments opining that the Department's totality-of-the-circumstances economic reality test will cause confusion or uncertainty and that the 2021 IC Rule's core factors analysis was clearer. The Department believes, however, that an analysis that has been applied for decades and is aligned with the breadth of the relevant statutory definitions and binding judicial precedent is not only more faithful to the Act but also more familiar to the regulated community, workers, and those enforcing the Act.
The economic reality test was developed by the Supreme Court in interpreting and applying the social legislation of the 1930s, including the FLSA.
To aid in answering this ultimate inquiry of economic dependence, several factors have been considered by courts and the Department as particularly probative when conducting a totality-of-the-circumstances analysis of whether a worker is an employee or an independent contractor under the FLSA.
These considerations identified by the Supreme Court are the same factors that the Department set forth in its NPRM. Courts, employers, workers, and enforcement personnel have been considering these factors for over 75 years. As such, the Department does not see a credible basis for comments that predict sharply increased litigation, dramatic curtailment of opportunities, or massive reclassification of workers. This is the analysis that the Department (except for the 2021 IC Rule) and courts have applied for more than 7 decades to classify workers under the Act, and the predictions raised in the comments as concerns have not been evident. Moreover, this final rule represents the Department's most comprehensive guidance regarding the economic reality test used by courts to determine employee or independent contractor status. As such, to the extent there was litigation around this issue due to a lack of clarity, that should be further alleviated by this rulemaking. As explained further in the economic analysis in section VII, because of this alignment with a longstanding analysis, the Department does not expect widespread reclassification as a result of this rule.
Rather, the economic reality test, the case law, and the Department's position have remained remarkably consistent since the 1940s, and throughout this time the test has demonstrated its ability to address evolving workplace trends. The test's focus has remained on whether the worker is in business for themself, with the inquiry directed toward the question of economic dependence. This consistency is, at least in part, due to the fact that the analysis works for a broad swath of work arrangements, both longstanding and emerging, and its overarching rationale based on economic dependence makes common sense. It is not surprising that some courts and the Department may have used somewhat different iterations of the factors over the last several decades, as the factors “are aids—tools to be used to gauge the degree of dependence of alleged employees on the business with which they are connected.”
While the Department appreciates, as some commenters noted, that two factors (like any test with fewer factors) are simpler in some ways than six factors, the Department believes that it would be a disservice to stakeholders to present an analysis that is contrary to how courts view the totality-of-the-circumstances analysis. Courts have repeatedly admonished against a mechanical application of the factors and have required a full analysis of all relevant factors, which is why the Department believes that any clarity created by shrinking the test to two core factors and artificially weighting them is illusory. As addressed in the NPRM, since
Regarding comments that the Department should provide additional guidance regarding how to weigh the
Regarding comments that certain relevant facts may overlap among the factors, as explained in the NPRM, the Department believes that emphasizing the discrete nature of each particular factor and evaluating each factor in a vacuum fails to analyze the entire range of potential employment relationships in the manner demanded by the Act's text and accompanying case law. Additionally, the test must be able to identify the vast variety of legitimate independent contractor relationships.
As to those comments stating that the proposed rule was not well-suited to the modern economy, the Department disagrees. The Department notes that the cases addressing employee vs. independent contractor status discussed in this rule and using the economic reality test apply to a wide range of today's workers, from cable installers to exotic dancers to health care workers, and the Department's enforcement experience applying the economic reality test is similarly varied. With this rulemaking, the Department describes the economic reality factors that reflect the totality-of-the-circumstances approach that courts have taken for decades and are still applying to today's workplaces, and provides an analysis as to how the Department considers each factor in today's workplaces, based on case law and the Department's enforcement expertise in this area. For example, the investment factor is returned to being a separate factor, considers facts such as whether the investment is capital or entrepreneurial in nature, and considers the worker's investments relative to the employer's investments. Significant additional guidance is provided for the control factor, including detailed discussions of how scheduling, supervision, price-setting, and the ability to work for others should be considered when analyzing the degree of control exerted over a worker. And the integral factor is returned to its longstanding Departmental and judicial interpretation, rather than the “integrated unit of production” approach that was included in the 2021 IC Rule.
The Department declines commenter requests to provide any industry-specific or occupation-wide exemptions or carve-outs to this rule. As explained elsewhere, the Department intends these regulations to apply to a broad range of work relationships and will continue to assess the need for more specific subregulatory guidance.
Finally, multiple commenters seemed to refer to worker classification as a preference or suggested that the Department's proposal would infringe upon workers' or businesses' choices.
The Supreme Court's “decisions interpreting the FLSA have frequently emphasized the nonwaivable nature of an individual employee's right[s] . . . under the Act” and “have held that FLSA rights cannot be abridged by contract or otherwise waived.”
The Department is finalizing § 795.110(a) as proposed. In the sections that follow, the Department is providing a detailed analysis about the application of each factor based on case law and the Department's enforcement experience as a guide for employers and workers in determining whether a worker is an employee or an independent contractor, with each factor discussed through the lens of economic dependence.
Regarding the opportunity for profit or loss depending on managerial skill factor, the Department proposed that this factor consider “whether the worker exercises managerial skill that affects the worker's economic success or failure in performing the work.” The Department identified a nonexclusive list of facts that may be relevant when considering this factor: whether the worker determines or can meaningfully negotiate the charge or pay for the work provided; whether the worker accepts or declines jobs or chooses the order and/or time in which the jobs are performed; whether the worker engages in marketing, advertising, or other efforts to expand their business or secure more work; and whether the worker makes decisions to hire others, purchase materials and equipment, and/or rent space. The Department added that, if a worker has no opportunity for a profit or loss, then this factor suggests that the worker is an employee. The Department said further that some decisions by a worker that can affect the amount of pay that a worker receives, such as the decision to work more hours or take more jobs, generally do not reflect the exercise of managerial skill indicating independent contractor status under this factor.
The Department explained that the proposed regulatory text for this factor focused the opportunity for profit or loss factor on whether the worker exercises managerial skill that affects the worker's economic success or failure in performing the work. The Department noted that the 2021 IC Rule similarly considered managerial skill, but explained that the proposed regulatory text more accurately reflects the consideration of the profit or loss factor in the case law and reflects the ultimate inquiry into the worker's economic dependence or independence. The Department further explained that many federal courts of appeals “apply this factor with an eye to whether the worker is using managerial skill to affect the worker's opportunity for profit or loss” and discussed that case law. The Department also noted that its proposal would consider investment as a separate factor, unlike the 2021 IC Rule's consideration of investment within its opportunity for profit or loss factor. Additionally, the Department explained that the proposed regulatory text stating that the fact that a worker has no opportunity for a loss indicates employee status is consistent with the overall inquiry into economic dependence and is supported by the case law. Finally, the Department discussed the case law and its prior guidance supporting its view that a worker's decision to work more hours (when paid hourly) or work more jobs (when paid a flat fee per job) where the employer controls assignment of hours or jobs is similar to decisions that employees routinely make and does not reflect managerial skill.
In addition to the numerous comments generally supporting the Department's six-factor analysis, a number of commenters expressed support for the NPRM's discussion of the opportunity for profit or loss depending on managerial skill factor. For example, Smith Summerset & Associates LLC “highly applaud[ed] inclusion of `managerial skill' in the title line and in the first sentence of the proposed” regulatory text and stated that “the exercise of managerial skill is a sine qua non of independent contractor status.” LA Fed & Teamsters Locals agreed “that it is managerial skill that matters when analyzing whether a worker's earning ability is relevant to the employee status analysis” (emphasis omitted). Several commenters (including Farmworker Justice, NWLC, and the Shriver Center) stated that “a worker who has the power to make key business decisions that affect their opportunity for profit or loss is more likely to be an independent contractor than a worker who does not have power over these decisions.” Similarly, NELP expressed agreement with the proposal “to explicitly tie the opportunity for profit or loss to a worker's managerial skill, not their ability to work longer” (emphasis omitted).
Regarding the Department's proposal that decisions to work more hours or take more jobs “generally do not reflect the exercise of managerial skill indicating independent contractor status under this factor,”
Several commenters found the NPRM's listing of potentially relevant facts when applying this factor to be helpful. Real Women in Trucking noted that this factor can appropriately indicate employee or independent contractor status for truck drivers and that the NPRM's “addition of relevant facts to consider under this factor . . . provides helpful context to differentiate between these scenarios.” Smith Summerset & Associates LLC “applaud[ed] the specific examples of managerial skill listed in the [proposal].” And UFCW stated that, “[c]orrectly, the proposed rule highlights whether the worker can meaningfully negotiate, accept or decline jobs, and engage in efforts to expand their independent business.”
Some other commenters that generally supported the Department's six-factor analysis requested changes to or clarifications of the opportunity for profit or loss depending on managerial skill factor. For example, UFCW cited agreements that it says are imposed by companies like Instacart, Uber, and Lyft that prohibit workers from connecting with or soliciting their customers and stated that “actively prohibit[ing] workers from developing an independent business is evidence of a lack of opportunity to profit or loss based managerial skill.” UFCW also stated that, “when black-box algorithms solely dictate their available work, pay, and other economic conditions,” “[w]orkers are powerless to negotiate or make any managerial decisions.” The Department agrees that such facts would be probative of whether a worker has an opportunity for profit or loss depending on managerial skill but also reiterates that no one fact is dispositive under this factor.
Real Women in Trucking requested that the Department address “free market” load boards (load boards are matching systems where shippers post freights that they need carried and carriers post their availability), which, in the commenter's view, “offer an opportunity to control profit or loss (unlike internal load boards).” Similarly, OOIDA explained its view that “the mere fact that an individual purchases equipment or services from a business they work with
Smith & Summerset recommended adding “depending on managerial skill” to the third sentence of the regulatory text so that it reads: “If a worker has no opportunity for profit or loss depending on managerial skill, then this factor suggests that the worker is an employee.” The commenter stated that, “[w]ithout the managerial skill qualifier, the reader is invited to quickly think of working more or fewer hours as an opportunity for profit or loss.” However, the subsequent sentence in the regulatory text addresses working more hours. Moreover, the intent of the third sentence is to explain that, where a worker who has no opportunity for profit or loss, this factor indicates employee status. Qualifying that explanation with a reference to managerial skill is unnecessary, because regardless of managerial skill, the worker's lack of an opportunity for profit or loss points this factor toward employee status.
NELA recommended a number of changes to this factor. It stated that a “worker who can experience `profit' with no attached risk of business loss is not truly in business for themselves,” and suggested that the following language from the NPRM preamble be added to the regulatory text: “The fact that a worker has no opportunity for a loss indicates employee status. Workers who incur little or no costs or expenses, simply provide their labor, and/or are paid hourly, piece rate, or flat rate are unlikely to experience a loss. This factor suggests employee status in those circumstances.” However, the third sentence of the regulatory text already explains that this factor indicates employee status where a worker has no opportunity for a loss. NELA further suggested that the Department should “incorporate the flip side” of its above suggestion and state that “the chance for a `loss' with no corresponding opportunity for profit is a sign of dependence on the employer, which points toward employee status.” Again, the third sentence of the regulatory text already covers circumstances where the worker has “no opportunity for a profit or loss.” NELA also suggested that the following language be added to the regulatory text: “The fact that an employer may impose fines, penalties, or chargebacks on a worker for faulty performance does not mean that the worker may experience a loss. These kinds of costs are likely to make workers more dependent on their employers, and therefore more like employees.” (The first sentence is from the NPRM preamble, and the second sentence is new language suggested by NELA.) The Department declines to add this language to the regulatory text. The Department notes that although fines, penalties, and chargebacks can indicate a worker's economic dependence on the employer, whether they indicate dependence may depend on the circumstances.
NELA additionally suggested changing the regulatory text identifying accepting or declining jobs as a relevant factor so that it would read: “whether the worker exercises managerial skill in accepting or declining jobs without employer input or chooses the order and/or time in which the jobs are performed independent from employer control.” In the Department's view, however, adding a reference to “managerial skill” is unhelpful because accepting or declining jobs is an underlying fact that is relevant to determining whether the worker exercises managerial skill. And adding references to “employer input” and “employer control” are unnecessary because the focus of this factor is whether the worker has an opportunity
Numerous commenters opposed, disagreed with, and/or requested changes to or clarifications of the proposed opportunity for profit or loss depending on managerial skill factor. For example, several commenters raised concerns that certain of the facts in the nonexclusive list of facts identified by the Department as relevant to this factor cannot be satisfied in their particular industries. Texas Association for Home Care & Hospice stated that, “[i]n home care, independent contractor clinicians cannot hire other workers for the purposes of completing the contracted jobs (
Having considered these comments, the Department adopts its proposed list of facts that may be relevant when applying this factor. The list is plainly nonexclusive, and neither any fact listed nor this factor will be dispositive of a worker's status. As the regulatory text provides, “no one factor or subset of factors is necessarily dispositive,” and the “outcome of the analysis does not depend on isolated factors but rather upon the circumstances of the whole activity.”
Although the U.S. Chamber agreed that the facts listed in the regulatory text are “relevant to whether workers are independent contractors or employees,” it stated that the NPRM was “wrong to require a worker to `exercise' these decisions to exemplify independent contractor status.” Analogizing to the NPRM's discussion of how reserved rights can be relevant in addition to actual practice, the U.S. Chamber asserted that “the more important question is whether the worker has the
Having considered the comments on this point, the Department is revising the final regulatory text to emphasize the worker's “opportunities” for profit or loss based on managerial skill and to delete the reference to whether the worker “exercises” managerial skill. The Department concurs that the term “opportunities,” which encompasses opportunity more broadly than “whether the worker exercises managerial skill,” is more consistent conceptually with the case law analyzing this factor and with the remainder of the regulatory text. Although the Department did not intend for the “exercises managerial skill” language to be limiting, focusing on “opportunities” should capture the facts relevant to a worker's profit or loss and managerial skill, as explained further in the discussion of comments in the following paragraph.
The Coalition of Business Stakeholders stated that “[m]any independent contractors offer their services to select employers for the express purpose of avoiding negotiating costs for services, advertising, and hiring support staff,” and that the NPRM “utterly fails to account for workers' preference for having an independent contractor relationship that avoids these costs.” The commenter asserted that this “framework would virtually always weigh in favor of employment status.” NRF & NCCR stated that “the fact that someone might not engage in certain practices or take on certain risks that would further impact the level of profit or loss should not result in a finding that the individual is not an independent contractor, unless that person is prevented from doing so by the entity with whom the individual contracts.” According to the commenter, for example, “[a] carpenter or plumber who chooses to market through word of mouth and to complete one job at a time, and not hire helpers and make the investments necessary to work on multiple job[s] simultaneously, is no less an independent contractor than a carpenter or plumber who has made different choices about how to operate his or her business.” The Department believes that the opportunity, for example, to hire others or purchase materials and equipment, and a decision to not take such action based on a consideration of possible costs and rewards, can indicate managerial skill. For this to be the case, the worker must have a real opportunity to take the action and make an independent business decision indicating managerial skill to not take the action. In other circumstances, not taking an action may not indicate managerial skill. For example, if the action requires approval from the employer (for example, the employer must approve any person hired by the worker as a helper) or the action is not feasible financially (for example, the worker is lower-paid and cannot hire others or make purchases), then there is likely no opportunity for the worker to make an independent business decision indicating managerial skill. Regardless, no one action or lack of action should determine whether this factor indicates employee or independent contractor status; the Department identifies in the regulatory text a number of possibly relevant facts, and other relevant facts may be considered too.
Several commenters expressed concern that the mention of “managerial skill” in the proposed regulatory text did not include references to “initiative,” “business acumen,” and “judgment.” For example, CWI stated that the proposed regulatory text “narrows the inquiry” as compared to the 2021 IC Rule, which referenced “business acumen or judgment” in its discussion of this factor. CWI further stated that the NPRM's preamble “acknowledge[d] that `initiative,' `business acumen,' and `judgment' are informative of the opportunity-for-profit-or-loss factor” (citing 87 FR 62238). CWI requested that the Department “retain the 2021 IC Rule's formulation of the standard.”
CPIE commented that, although earlier court decisions “properly considered an individual's opportunity for loss in evaluating the individual's economic dependence,” the U.S. economy has changed, and “[t]here are countless numbers of individuals today who operate thriving businesses with their laptop computers and incur no risk of loss whatsoever.” The commenter asserted that “[t]he fact that these individuals operate a type of business that does not require a substantial financial investment should not deny them their right to offer their services as
A number of commenters expressed concerns with and/or sought changes to the last sentence of the regulatory text: “Some decisions by a worker that can affect the amount of pay that a worker receives, such as the decision to work more hours or take more jobs, generally do not reflect the exercise of managerial skill indicating independent contractor status under this factor.” For example, NHDA stated that each decision by a “driver to accept or reject an opportunity (in this case, a load) is a business decision that affects his/her economic success” and “involves the weighing of an opportunity cost” (
Having considered these comments, the Department believes that the last sentence of the proposed regulatory text for this factor can be more precise. In the NPRM, the Department explained this concept as follows: “a worker's decision to work more hours (when paid hourly) or work more jobs (when paid a flat fee per job) where the employer controls assignment of hours or jobs is similar to decisions that employees routinely make and does not reflect managerial skill.”
Fight for Freelancers asserted that there was a conflict between this provision regarding working more hours or jobs and the provision stating that accepting or declining jobs can be a relevant fact when applying this factor. The Coalition of Business Stakeholders commented that the NPRM is “unclear on whether, when assessing the opportunity for profit or loss factor, a worker's ability to accept or decline work weighs in favor of independent contractor status.” The Department believes these comments overlook the totality-of-the-circumstances nature of the analysis; there is no particular factor to satisfy. In addition, the text addresses two concepts that are not in conflict. The last sentence of the regulatory text (as revised) addresses a worker who can earn more by working more hours or taking more jobs. That worker is working more to earn more but not exercising managerial skill (at least in that regard). On the other hand, a worker may be able to accept and
MEP commented that “managerial skill should be broadly defined” and that “managerial skill should include an individual's ability to complete the work more efficiently or effectively.” World Floor Covering Association (“WFCA”) commented that, although it “recognizes that merely working longer hours or more efficiently does not distinguish an independent contractor from an employee,” “[a]n individual who uses initiation or judgment to perform a job more efficiently can generate greater profits, even if compensated by the hour or by piecework rates.” WFCA suggested that “depending on managerial skill” be stricken from the title of this factor and that the first sentence of the regulatory text be revised to state: “This factor considers whether the worker exercises managerial skills, implements innovations, or uses other entrepreneurial concepts that affects the worker's economic success or failure in performing the work.” For the reasons explained in the NPRM and in this section, managerial skill is properly the focus of the opportunity for profit or loss factor because it helps to distinguish between decisions that affect a worker's earnings and the use of initiative, judgment, or business acumen that may create opportunities for profit or loss. As further explained in the NPRM, whether the worker's opportunity for profit or loss depends on managerial skill (or initiative or judgment as discussed above) is ingrained in the case law.
In addition, WFCA provided examples of workers who can “install complex wood or tile patterns” and requested that implementing “new techniques or innovations” and developing “specialized or unique skills” be added to the nonexclusive list of facts that may be relevant when applying this factor. However, as discussed in this section, implementing techniques or innovations is not necessarily indicative of managerial skill and may instead relate more to how the worker performs the work. The same may be said about developing skills; especially considering the examples provided by WFCA, these skills seem more about performing particular work. As discussed above in response to NELA's comment that technical proficiency in completing each job is not managerial skill indicative of independent contractor status, the focus of this factor is the worker's managerial skill and not the worker's performance of particular jobs. Accordingly, the Department declines to make the changes requested by WFCA.
The Department is finalizing the opportunity for profit or loss depending on managerial skill factor (§ 795.110(b)(1)) with the modifications discussed herein.
A worker for a landscaping company performs assignments only as determined by the company for its corporate clients. The worker does not independently choose assignments, solicit additional work from other clients, advertise the landscaping services, or endeavor to reduce costs. The worker regularly agrees to work additional hours in order to earn more. In this scenario, the worker does not exercise managerial skill that affects their profit or loss. Rather, their earnings may fluctuate based on the work available and their willingness to work more. Because of this lack of managerial skill affecting opportunity for profit or loss, these facts indicate employee status under the opportunity for profit or loss factor.
In contrast, a worker provides landscaping services directly to corporate clients. The worker produces their own advertising, negotiates contracts, decides which jobs to perform and when to perform them, and decides when and whether to hire helpers to assist with the work. This worker exercises managerial skill that affects their opportunity for profit or loss. Thus, these facts indicate independent contractor status under the opportunity for profit or loss factor.
Regarding the investments factor, the Department proposed that this factor consider “whether any investments by a worker are capital or entrepreneurial in nature.” The provision stated that “[c]osts borne by a worker to perform their job,” such as “tools and equipment to perform specific jobs and the worker's labor,” “are not evidence of capital or entrepreneurial investment and indicate employee status.” The provision further stated that investments that are capital or entrepreneurial in nature and thus indicative of independent contractor status are those that “generally support an independent business and serve a business-like function, such as increasing the worker's ability to do different types of or more work, reducing costs, or extending market reach.” The Department also proposed that “the worker's investments should be considered on a relative basis with the employer's investments in its overall business.” The provision further said that “[t]he worker's investments need not be equal to the employer's investments, but the worker's investments should support an independent business or serve a business-like function for this factor to indicate independent contractor status.”
The Department explained that its proposal to treat investments as its own separate factor in the economic reality analysis is consistent with its approach prior to the 2021 IC Rule and with the approach of most courts. The Department further explained that considering investments as part of the opportunity for profit or loss factor, as the 2021 IC Rule did, is flawed because, among other reasons, it “may incorrectly tilt the analysis in favor of independent contractor outcomes” and “have the effect in some cases of
Finally, the Department explained that its proposal to evaluate the worker's investment in relation to the employer's investment in its business “is not only consistent with the totality-of-the-circumstances analysis that is at the heart of the economic reality test, but it would also provide factfinders with an additional tool to differentiate between a worker's economic dependence and independence based on the particular facts of the case.” The Department discussed the federal appellate case law supporting its proposal and addressed any contrary federal appellate case law.
In addition to the numerous comments generally supporting the Department's six-factor analysis, a number of commenters expressed support for the NPRM's treatment of investments as a separate factor in the economic realities analysis. NWLC explained that, “[c]onsistent with the Department's guidance from its earliest applications of the economic reality test until the 2021 Rule, the proposed rule considers investments by the worker and the employer as a factor distinct from opportunity for profit or loss.” LA Fed & Teamsters Locals stated that the 2021 IC Rule had “improperly combine[d]” the investments factor with the opportunity for profit or loss factor and that the NPRM's treatment of the investments factor as a separate factor “more faithfully adheres to the long history of jurisprudence defining how to determine the economic reality.” The State AGs agreed that treating investments as a separate factor is “consistent with the case law.” Gale Healthcare Solutions expressed “support [for] the proposal to treat worker investment as a standalone factor in the economic reality analysis rather than as part of [the] opportunity for profit or loss analysis.” Others, including NELP, Real Women in Trucking, IBT, and AFL-CIO, expressed similar support.
A number of commenters also supported the substance of the NPRM's discussion of the investments factor. For example, Leadership Conference appreciated the clarification that the NPRM's investments factor would provide, stating that “[a] true independent contractor should make significant capital or entrepreneurial investments in their business, especially relative to the entity that hired them.” The Shriver Center agreed that the investments of “a true independent contractor . . . must be capital or entrepreneurial, as opposed to tools that a worker is required by a business to have in order to perform a job.” Others, including Farmworker Justice, Real Women in Trucking, and LIUNA, commented similarly.
ROC United described as crucial the NPRM's clarification “that `the use of a personal vehicle that the worker already owns to perform work—or that the worker leases as required by the employer to perform work—is generally not an investment that is capital or entrepreneurial in nature.' ” AFL-CIO “strongly encourage[d] [the Department] to include in the Final Rule its observation” regarding a worker's use of a personal vehicle. LA Fed & Teamsters Locals agreed that the NPRM's approach to a worker's use of a personal vehicle was right and added that evaluating the worker's investment relative to the employer's “is critical because even when employers push the cost of tools and supplies onto the workers doing the work at the core of the employer's business, the employers often have even larger investments.”
Some commenters that generally supported the Department's six-factor analysis requested changes to or clarifications of the investments factor. In particular, a number of commenters addressed costs and expenses that employers require workers to bear or that they otherwise impose on workers and argued that such costs and expenses are not of a capital or entrepreneurial nature indicating independent contractor status. For example, Intelycare asserted that when a nursing agency shifts fees for malpractice insurance onto workers, those fees are not an investment by the workers. Intelycare added: “We urge the Department to close such loopholes and instruct that companies cannot shift or attempt to disguise their own investments in an effort to avoid employee classification.” Gale Healthcare Solutions likewise requested that the Department “clarify that when a company shifts its `investment' cost or a typical cost of doing business to workers (
Having considered these comments, the Department agrees that costs unilaterally imposed by an employer on a worker are not capital or entrepreneurial in nature. Where the worker has no meaningful say either in the fact that the cost will be imposed or the amount, the cost cannot be an investment indicating that the worker is in business for themself. Using malpractice insurance for nurses as an example, if such insurance is required by law or regulation and a nursing staffing agency purchases and maintains the insurance for the nurses and passes that cost on to, or imposes a charge for insurance on, the nurses, that cost does not indicate independent contractor status. But, if insurance is required by law or regulation, and the nurse can choose among policies based on their prices and coverages and does independently procure a policy, then the cost of the insurance could be capital or entrepreneurial in nature and indicative of independent contractor status. For these reasons, the Department is modifying the relevant sentence from the regulatory text regarding the investments factor to add the following text: “and costs that the
Relatedly, Real Women in Trucking stated that truck drivers who wholly own or independently finance a truck are true owner-operators because “[t]his type of investment gives [them] the ability to keep their truck if they decide to stop working for any particular company, and accordingly some measure of economic independence.” The commenter further stated that, in contrast, “employer-sponsored leases for work equipment, including for trucks, are not investments of the kind that weigh in favor of independent contractor classification.” The Department generally agrees with this distinction, although it is hesitant to state that the existence of an employer-sponsored lease can never indicate independent contractor status. Consistent with the discussion of malpractice insurance in the previous paragraph, if a driver is not required to lease a truck from the employer, is able to consider independent financing options, is able to meaningfully negotiate the terms of the lease with the employer, is not required by the employer to work for it for a minimum period of time nor prohibited by it from using the leased truck to work for others, and then decides to lease from the employer, the cost of the truck leased from the employer could be capital or entrepreneurial in nature, especially if the lease could ultimately result in the driver's wholly owning the truck.
Regarding the proposed regulatory text's statement that the costs to workers of tools to perform specific jobs are not capital or entrepreneurial investments, LIUNA suggested the following addition: “The mere utility of a worker's tools to perform similar work for other employers does not render the worker's purchase of those tools an entrepreneurial investment, especially where the pertinent employer invests far more in facilitating or purchasing the employees' work.” In support, LIUNA stated that “[t]he weight of authority . . . overwhelmingly suggests that the potential utility of a workers' tools for other projects does not render those workers[] independent contractors.” This statement, however, overlooks that the economic realities analysis considers the totality of the circumstances. A worker's use of tools alone does not determine whether the worker is an employee or independent contractor. Moreover, the Department believes that a worker's purchase of tools and equipment for use performing multiple jobs for multiple employers can be a capital or entrepreneurial investment. The regulatory text already explains that the nature of such purchases of tools and equipment needs to be determined and that such costs to a worker and the worker's other investments should be considered on a relative basis with the employer's investments in its overall business. Accordingly, the Department declines LIUNA's suggestion.
NELA stated that the NPRM “correctly focuses on whether investments are capital or entrepreneurial in nature” but expressed concerns that the “Department's decision to separate the `investment' prong from the `opportunities for profit and loss' prong . . . goes too far, and detracts from . . . needed clarity.” According to NELA, “[a]n expenditure is only an `investment' when it may impact profit and loss,” and “[i]f an employee has spent money for work but has no opportunity for profit and loss as a result, then the conclusion should be that they are not `investing' in anything.” NELA requested that the NPRM “be edited to clarify that `investment' inherently implies the possibility of profit and is only `capital or entrepreneurial in nature' . . . when it has a nexus with profit and loss.” The Department agrees that whether the worker's expenditures may result in profits or losses to the worker is highly relevant to whether those expenditures are capital or entrepreneurial in nature. However, because, as explained further below, the investment factor is not synonymous with the opportunity for profit or loss factor and because adding a “nexus with profit or loss” requirement is not supported by the weight of the case law that has historically viewed the two factors as analytically distinct under the economic reality test, the Department declines to promulgate an absolute requirement that expenditures have “a nexus with profit and loss” to be capital or entrepreneurial in nature. Moreover, such a requirement could be viewed as similar to the 2021 IC Rule's approach of combining the consideration of investments with opportunity for profit or loss—an approach that the Department is rejecting as discussed below. For all the reasons stated herein, the Department is restoring investments as its own separate factor. Although some overlaps between factors are understandable, tying investments to profits and losses in the absolute manner suggested by NELA would be contrary to the Department's goal of rectifying the 2021 IC Rule's treatment of investments as part of the opportunity for profit or loss factor.
NELA further stated that the NPRM was “correct to incorporate a relative-investment analysis” in this factor, but that “the Department should explain that the relative-investment analysis is qualitative, not quantitative, to better align this prong with the overarching dependence/independence inquiry.” According to NELA, “[a] qualitative review of relative investments helps determine whether the investment is entrepreneurial in nature,” but “[a]n analysis that instead focuses on a quantitative comparison of investments is rarely conclusive, because not all industries are equally capital-intensive.” NELA added that “the threshold question of which expenditures are entrepreneurial `investments' versus `tools' makes quantitative comparison confusing and inconclusive.”
Having considered these comments, the Department agrees that focusing the comparison of the worker's and the employer's investments on their qualitative natures is helpful. As NELA points out, different industries may be more or less “capital-intensive.” Thus, focusing only on the quantitative measures (
Numerous commenters opposed, disagreed with, and/or requested changes to or clarifications of the proposed investments factor. For example, several commenters opposed the NPRM's proposed treatment of investments as its own separate factor. NRF & NCCR stated that “investments are so interrelated with profits and losses that analyzing them separately is duplicative and unnecessary,” and that the 2021 IC Rule, “following Second Circuit precedent,” “brings clarity and helps reduce overlap to this analysis.” N/MA stated that “[i]nvestment by a worker in their own business creates an expense, which by definition creates an equation whether the worker may experience loss or profit depending on the worker's net profits.” CWI stated that, “because the investment factor is already sufficiently addressed in the opportunity-for-profit-or-loss factor, there is no need for it to be addressed again as a standalone factor.” CWI disagreed with the Department's characterization of the 2021 IC Rule on this point, stating that the 2021 IC Rule “provides that both initiative and investment must be considered, though both are not required” and thus “provides that the satisfaction of either is a
Having considered the comments, the Department agrees with the comments discussed above from commenters including AFL-CIO, IBT, LA Fed & Teamsters Locals, NELP, and NWLC, and is retaining investments as a separate factor in the economic realities analysis. The Department's approach is consistent with the overwhelming majority of federal appellate case law and the Department's practice prior to the 2021 IC Rule. Almost all of the federal courts of appeals consider investments as a separate factor.
The Department recognizes that the consideration of investments may be related to the consideration of the opportunity for profit or loss. As explained above in response to a comment from NELA, whether the worker's expenditures may result in profits or losses to the worker is highly relevant to whether those expenditures are capital or entrepreneurial in nature. The U.S. Chamber, for example, cited the Fourth Circuit's decision in
Moreover, as decisions from the Fifth Circuit and other Circuits demonstrate, investments may be relevant to whether the worker is economically dependent on the employer separate and apart from the worker's opportunity for profit or loss. For example, the Fifth Circuit found in
The 2021 IC Rule's treatment of investments as part of its opportunity for profit or loss factor further reinforces the Department's decision to treat investments as a separate factor. The 2021 IC Rule stated that its opportunity for profit or loss factor indicates independent contractor status if the worker exercises initiative or if the worker manages their investment in the business.
In sum, nothing in this final rule forecloses consideration, in an appropriate case, of investments as they relate to the worker's opportunity for profit or loss. However, for all of the reasons set forth above and consistent with this final rule's totality-of-the-circumstances approach, treating investments as a separate factor in the analysis ensures that investments are accorded, at least at the outset of the analysis, the same considerations as the other factors and that the probative value of the investments toward the worker's dependence or independence will affect the ultimate outcome of the analysis.
A few commenters objected to the proposed regulatory text's statement that the investments factor “considers whether any investments by a worker are capital or entrepreneurial in nature.”
Having considered these comments, the Department adopts the proposal that whether the worker's investments are capital or entrepreneurial in nature is probative of whether they indicate employee or independent contractor status. Considering the worker's investment in this manner is consistent with the overall inquiry of determining whether the worker is economically dependent on the employer for work or is in business for themself because a capital or entrepreneurial investment indicates that the worker is operating as an independent business. More specifically, capital or entrepreneurial investments tend to help a worker work for multiple companies—a characteristic of an independent business. Accordingly, the examples in the regulatory text (“increasing the worker's ability to do different types of or more work, reducing costs, or extending market reach”) generally involve efforts to work independently for multiple companies. Focusing on whether the worker's investments are capital or entrepreneurial in nature does not construe the factor “narrowly,” as CWI asserted. As explained below in response to specific comments asserting that this factor is limiting, there are no minimum-dollar thresholds or other requirements for investments to be capital or entrepreneurial and thus indicate independent contractor status. Instead, focusing on the nature of the worker's investments ties this factor to the worker's economic dependence or independence.
Many federal appellate court decisions have emphasized how the worker's investment must be capital in nature for it to indicate independent contractor status. For example, the Seventh Circuit determined in
Moreover, CWI's efforts to use
Appraisal Institute and Real Estate Evaluation Advocacy Association asked whether “an appraiser seeking out specialized education, training, and certification” is making a capital or entrepreneurial investment “even when those trainings or certifications are industry requirements for certain categories of work.” As a general matter and as opposed to costs that a potential employer unilaterally imposes on a worker, a worker's efforts to obtain specialized education, training, and certification that are required by an industry can be capital or entrepreneurial in nature if (for example and as explained in the regulatory text) they increase the worker's ability to do different types of or more work or extend market reach.
CLDA asserted that the “rule commentary also states the investment must be large, must be a capital expenditure, and must be entrepreneurial in nature.” It added: “This ignores the practical realities of starting a business. Few entrepreneurs can start a business with multi-million-dollar investments in equipment, technology, and real estate.” Direct Selling Association (“DSA”) similarly commented that focusing on whether the investment is capital or entrepreneurial in nature “would disproportionately impact underserved communities that direct selling serves such as Hispanics.” Stating that “practically any individual can start [a direct selling business] for an average of $82.50,” it added that the Department proposed “a rule that would penalize this low-cost business by requiring a large investment to point towards being an independent contractor.” TheDream.US commented that “Dreamers certainly have skills and initiative, but not the resources to make the level of capital investment that the DOL seems to be proposing.” Although the NPRM cited cases discussing “large” expenditures,
MEP stated that the examples of capital or entrepreneurial investments in the proposed regulatory text “unnecessarily limit the personal investments that should be considered in the analysis and seem to suggest that independent contractors can only be those individuals who want to expand their business, increase their workload, or extend the business' market reach.” These examples, however, are preceded in the regulatory text by the words “such as” and are plainly a nonexhaustive set of examples—none of which have to be satisfied.
Numerous commenters raised concerns with the statement in the proposed regulatory text that: “Costs borne by a worker to perform their job (
Having considered these comments, the Department continues to believe that it is helpful to provide guidance regarding workers who provide tools and equipment to perform a specific job, but acknowledges that the “to perform their job” language in the proposed regulatory text can be made more precise. Applying the general principle from the regulatory text that the focus should be on whether the investment is capital or entrepreneurial in nature and that capital or entrepreneurial investments tend to increase the worker's ability to do different types of or more work, reduce costs, or extend market reach, investment in tools or equipment to perform a specific job would not qualify as capital or entrepreneurial. As the Department explained in the NPRM, “an investment that is expedient to perform a particular job (such as tools or equipment purchased to perform the job and that have no broader use for the worker) does not indicate independence.”
A number of commenters expressed concerns with the statement in the NPRM's preamble that “the use of a personal vehicle that the worker already owns to perform work—or that the worker leases as required by the employer to perform work—is generally not an investment that is capital or entrepreneurial in nature.”
CLDA commented that “most entrepreneurs start their businesses with what they already have,” stating that “[t]hey start with using . . . their car as their delivery vehicle.” CLDA added that “[t]hose items may have started as personal items, but they become critical business tools and critical business investments when the entrepreneur starts using them to build a business.” The U.S. Chamber commented that the NPRM's “absolutist statement ignores the fact that contractors may utilize their personal vehicles in a way that shows entrepreneurial activity. For example, if workers forgo selling their personal vehicle and, instead, choose to use their vehicle to drive for a ridesharing platform, that is quintessentially entrepreneurial activity. The fact that they had already owned their vehicle is immaterial.” Uber commented that “[w]hile it is true that drivers on platforms like Uber's
Having considered the comments, the Department agrees with the comments discussed above from commenters that supported the NPRM's statement regarding personal vehicles, including AFL-CIO, LA Fed & Teamsters Locals, and ROC United, and reaffirms this statement. Whether a vehicle owned or leased by a worker and used to perform work is a capital or entrepreneurial investment does depend on the totality of the circumstances. In the scenario where a worker already owns a vehicle and happens to then use it to perform work, the acquisition of that vehicle was not for a business purpose and generally cannot be a capital or entrepreneurial investment. As the Eleventh Circuit explained in
Finally, numerous commenters opposed the NPRM's proposal to consider the worker's investments “on a relative basis with the employer's investments in its overall business.”
For example, CWI expressed “grave concerns” with comparing investments, stating that this approach “is inconsistent with law, uninformative to the economic realities test, and ultimately injects nothing but further uncertainty into the analysis.” CWI added that the Supreme Court in
Club for Growth Foundation commented that the 2021 IC Rule was correct to reject a relative investments analysis. It added: “The size of the hiring business has no relevance to whether the worker is a contractor or an employee. Consider a talented translator who translates a book, on the same terms and for the same fee, into French for a local college press and into Spanish for a major commercial publishing house. Why should she be considered more likely to be an employee when doing the Spanish work?” OOIDA similarly commented that “it doesn't make sense that an owner-operator would be an independent contractor if they are working with a three-truck carrier but then be judged differently if they go to work for a carrier with hundreds or thousands of trucks.” The CA Chamber, CLDA, Flex, NACS, NHDA, and Scopelitis, made similar points.
Having considered these comments, the Department continues to believe that comparing the worker's investments to the employer's investment is well-grounded in the case law and the Department's prior guidance. The Department further believes that comparing types of investments is indicative of whether a worker is economically dependent on the employer for work or is in business for themself.
Although the Supreme Court in
That said, the Department understands the concerns raised by many commenters with merely comparing the size of and dollar expenditures by the worker to those of the employer, especially for workers who are sole proprietors. Accordingly, as explained above in response to comments from NELA and others that suggested that the comparison of the worker's and the employer's investments should focus on the “qualitative” nature of their respective investments, the Department is modifying the last sentence of the proposed regulatory text for the investments factor to be two sentences and to read: “The worker's investments need not be equal to the potential employer's investments and should not be compared only in terms of the dollar values of investments or the sizes of the worker and the potential employer. Instead, the focus should be on comparing the investments to determine whether the worker is making similar types of investments as the potential employer (even if on a smaller scale) to suggest that the worker is operating independently, which would indicate independent contractor status.” This modification should address commenters' concerns that the size of and/or dollar investments of the employer will determine the outcome when comparing the investments. As explained above, comparing the qualitative (rather than primarily the quantitative) value of the investments is a better indicator of whether the worker is economically dependent on the employer for work or is in business for themself. That is because, regardless of the amount or size of their investments, if the worker is making similar types of investments as the employer or investments of the type that allow the worker to operate independently in the worker's industry or field, then that fact suggests that the worker is in business for themself.
Applying this qualitative approach to, for example, the hypothetical truck driver described by OOIDA is instructive. The hypothetical suggests that a driver “would be an independent contractor if [the driver is] working with a three-truck carrier,” but the same driver would be an employee if the driver goes “to work for a carrier with hundreds or thousands of trucks.”
ACLI commented that the proposed “Relative Investment factor conflicts with . . . the Ability to Profit or Loss Based On Managerial Skill factor” because the Department is “saying that a worker's effectiveness in managing their overhead and expenses to maximize profit suggests independent contractor status, but that a worker's failure to invest sizeable sums to offset the company's investment suggests employment status.” It added that the opportunity for profit or loss factor “should be given greater weight than the relative investment factor so that workers who are skilled in managing their own overhead expenses are not penalized and deemed employees simply because they are better businesspeople and need to invest less and less over time as their businesses mature.” American Securities Association made a similar point. As an initial matter, the Department is not giving any factor any greater predetermined weight than any of the other factors for all of the reasons explained in this final rule. And as reiterated in this final rule, workers will not be “deemed employees” when applying the economic realities analysis based on one fact or factor because the analysis considers the totality of the circumstances. The Department's modifications to the investments factor, and particularly the emphasis on comparing the worker's investments and the employer's investments qualitatively more than quantitatively, should address any concern that “a worker's failure to invest sizeable sums to offset the company's investment suggests employment status.”
The Department is finalizing the investments factor (§ 795.110(b)(2)) with the revisions discussed herein.
A graphic designer provides design services for a commercial design firm. The firm provides software, a computer, office space, and all the equipment and supplies for the worker. The company invests in marketing and finding clients and maintains a central office from which to manage services. The worker occasionally uses their own preferred drafting tools for certain jobs. In this scenario, the worker's relatively minor investment in supplies is not capital in nature and does little to further a business beyond completing specific jobs. Thus, these facts indicate employee status under the investment factor.
A graphic designer occasionally completes specialty design projects for the same commercial design firm. The graphic designer purchases their own design software, computer, drafting tools, and rents an office in a shared workspace. The graphic designer also spends money to market their services. These types of investments support an independent business and are capital in nature (
For this factor, the Department proposed that the degree of permanence of the work relationship would “weigh[ ] in favor of the worker being an employee when the work relationship is indefinite in duration or continuous, which is often the case in exclusive working relationships,” and that this factor would “weigh[ ] in favor of the worker being an independent contractor when the work relationship is definite in duration, non-exclusive, project-based, or sporadic based on the worker being in business for themself and marketing their services or labor to multiple entities.” The Department noted that independent contractors may have “regularly occurring fixed periods of work,” but that “the seasonal or temporary nature of work by itself would not necessarily indicate independent contractor classification.” To further clarify, the Department proposed that “[w]here a lack of permanence is due to operational characteristics that are unique or intrinsic to particular businesses or industries and the workers they employ, rather than the workers' own independent business initiative,” this would not indicate that the workers are independent contractors.
As the Department noted in the NPRM and in the 2021 IC Rule, courts and the Department routinely consider the permanence of the work relationship as part of the economic reality analysis under the FLSA to determine employee
Consistent with case law analyzing this factor, the Department proposed to provide further specificity by noting that an indefinite or continuous relationship is often consistent with an employment relationship, but that a worker's lack of a permanent or indefinite relationship with an employer is not necessarily indicative of independent contractor status if it does not result from the worker's own independent business initiative.
Many commenters agreed with the Department's overall proposal for this factor.
Many commenters also agreed with the portion of the Department's proposal that addressed situations in which a lack of permanency is inherent in the work, such as temporary or seasonal positions, which the Department had proposed as not necessarily indicating independent contractor status if it is not the result of the worker's own business initiative.
The primary concern commenters raised about the Department's proposal to consider the degree of permanence of the work relationship as an indicator of employee or independent contractor status is that a long-term pattern of interaction is valued in business relationships, and that it can indicate the vitality and stability of a business where, for example, satisfied long-term clients or customers continue to use their services or contract for particular work.
The Department agrees that the permanence factor, like other factors in the economic reality test, is best understood in the overall context of the relationship between the parties where all relevant aspects are considered. The Department also clearly recognizes and appreciates that people who are in business for themselves often rely on repeat business and long-term clients or customers in order for their business to remain economically viable or successful. Thus, the Department notes that the proposed regulatory text does not reduce the permanence analysis to a simple long-term/short-term question. Instead, it looks to the general characteristics historically identified by courts and the Department regarding the permanency factor, which indicate employee status where there is a longer-term, continuous, or indefinite work relationship, and independent contractor status where the work is definite in duration, nonexclusive, project-based, or sporadic due to the worker being in business for themself. It explicitly recognizes that an independent contractor may have “regularly-occurring fixed periods of work.” As shown in the example, a 3-year relationship between a cook who provides specialty meals and an entertainment venue does not automatically result in the cook being an employee of the venue, particularly where the cook acts as a “freelancer” by providing meals intermittently to the venue while marketing their meal preparation services to multiple customers and the cook can determine whether to provide meals for specific events at the venue based on any reason, including because the cook is too busy with other work.
Several commenters expressed a mistaken belief that having a degree of permanence in a work relationship would automatically make workers employees, s
Some commenters suggested clarifications to better capture the permanency factor, in their view. For example, IBT and NELP suggested that the Department focus on whether the worker's role or position in a business is long-term, regular, or indefinite, rather than focusing on the individual's tenure, because high turnover of individuals in a particular position does not mean that the position or role within a business is not long-term, but that the job may be economically unsustainable or too dangerous for the worker. The Department agrees that a short-term duration of work may not be indicative of independent contractor status for these and other reasons. However, the Department notes that while this factor is known as the “permanency” factor, which could be observed literally by the length of an individual worker's tenure, the regulatory text also provides guidance regarding whether the work was on an indefinite or continuous basis. The Department believes that this captures situations where a position began as an indefinite or continuous one but was cut short—without the need to focus on the nature of the position or role within a business. Further, the commenters' suggestion is not, to the Department's knowledge, an analysis that has been adopted for this factor by the courts.
NELP also suggested that the Department note that an employer may manipulate the permanence of a work relationship by firing or terminating a worker, and that if a worker lacks the power to influence their own permanence, this should weigh in favor of employee status. The Department notes that consideration of whether this type of manipulation to evade the obligations of the FLSA has occurred would seem to be more appropriate in an enforcement situation than in the regulatory text.
One commenter, CWI, objected to the Department's inclusion of “[w]here a lack of permanence is due to operational characteristics that are unique or intrinsic to particular businesses or industries and the workers they employ, rather than the workers' own business initiative, this factor is not indicative of independent contractor status” because it felt this language fails to account for the fact that “many types of independent contractor work are often limited or sporadic in duration precisely because such work is only needed for a discrete period of time” and that “the critical question is whether the worker acted like a business.” The U.S. Chamber also contended that it “makes no difference whether . . . project-to-project work occurs as a result of `operational characteristics,' ” urging the Department to more clearly identify that whether a worker is acting independently is better viewed through the lens of whether the worker chooses “how, when, and the volume of services to provide.” The Department agrees with these commenters that the critical question is whether the worker is in business for themself, which is why the proposed regulatory language would require consideration of whether a lack of permanence is due to the workers' own business initiative. Commenters such as NABTU and the NDWA supported the Department's proposal in this respect, noting that in industries like construction and home care, employment can be temporary and sporadic, and that consideration of whether the worker exercised independent business initiative was important.
The Department continues to believe that it is consistent with the case law and relevant to the overall question of economic reality to consider whether short periods of work are due to workers acting independently to obtain business opportunities or to the operational characteristics of particular industries
Many commenters suggested industry-specific analyses for the permanence factor.
A smaller number of commenters addressed the Department's proposal to recognize that the exclusivity of a work relationship is appropriately considered under the permanency factor and to reject the 2021 IC Rule's approach of considering exclusivity just under the control factor based on whether the worker has the ability to work for others.
The Coalition of Business Stakeholders, NHDA, and NRF & NCCR commented that they preferred to have exclusivity considered only under the control factor, as in the 2021 IC Rule. Similarly, the American Trucking Association contended that the permanence factor was redundant with the control factor because the only relevant aspect of the tenure of the parties' relationship is whether the entity contracting with the worker exercised coercion to prevent them from pursuing other business. Another commenter, FSI, objected that the Department had proposed to include exclusivity under the permanence factor based in part on the weight of the federal appellate case law rather than applying its own independent reasoning.
The Department continues to believe, as discussed in the NPRM, that when analyzing worker classification under the FLSA, all facts that may be relevant to a particular factor should be considered, consistent with the totality-of-the-circumstances approach taken by courts.
LIUNA suggested certain edits to the proposed regulatory text to better capture, in its view, the case law discussed in the NPRM where courts found that working exclusively for a particular employer for the duration of a seasonal or temporary job was indicative of employee status. LIUNA commented that the first sentence of the proposed regulatory text did not properly reflect this case law because it could be read solely as a characterization of work relationships that are indefinite or continuous: “This factor weighs in favor of the worker being an employee when the work relationship is indefinite in duration or continuous, which is often the case in exclusive working relationships.” It suggested that the Department better align the regulatory text with the case law by substituting the language regarding exclusivity in that sentence with the phrase “or exclusive of work for other employers.” The Department agrees that the concept of exclusivity should not be limited to work relationships that are indefinite or continuous, and that it is more precise and aligned with the case law to substitute the language suggested, which the Department is adopting in this final rule. The Department wishes to emphasize, however, that the disjunctive word “or” is used in the regulatory text, and that it is intended to mean that exclusivity is not required in order for this factor to weigh in favor of employee status.
LIUNA requested further clarifying edits that would remove “project-based” from the general description of work relationships that weigh in favor of independent contractor status in order to add a more specific sentence stating that exclusivity in definite-term, project-based working relationships in industries that require project-based work “such as certain segments of the agricultural or construction industries” is probative of employee status. Similarly, Outten & Golden noted that project-based work can be indicative of employment when it is “regular, repeated, or when it is project-based, but still long-term” and it recommended including in the regulatory text the examples of seasonal or temporary work that were discussed in the NPRM as being consistent with an employment relationship, such as seasonal construction, agriculture, and retail work and temporary staffing agencies.
NHDA posited that whether a work relationship is exclusive is less illustrative of whether a worker is in business for themself than the reason for the exclusivity, and that where a worker freely chooses to have an exclusive relationship with one transportation provider because of a “satisfying selection of routes or loads that permits the worker to attain financial goals,” that worker should “not be judged as less in business for themselves than a worker who contracts with multiple transportation providers.” The Department agrees that an exclusive relationship alone would not be determinative of the economic reality of the working relationship, and that it is important to look at all relevant factors, including factors referenced by the comment such as the worker's opportunity for profit or loss, to aid in the analysis. The Department notes that by recognizing that exclusivity weighs in favor of the worker being an employee, the Department is not stating either that independent contractors can never have exclusive relationships with other businesses or that employees who have nonexclusive relationships with employers because they work multiple jobs become independent contractors.
To the contrary, as discussed in the NPRM, although an exclusive relationship is often associated with an employment relationship and a sporadic or project-based, nonexclusive relationship is more frequently associated with independent contractor classification, courts have explained that simply having more than one job or working irregularly for a particular employer does not remove a worker from employee status and the protections of the FLSA. For example, in
Courts have also determined that the fact that a worker does not rely on the employer as their exclusive or primary source of income is not indicative of whether an employment relationship exists.
Finally, the Department noted in the NPRM that where workers provide services under a contract that is routinely or automatically renewed, courts have determined that this indicates permanence and an indefinite working arrangement associated with employment.
The Department is finalizing the permanence factor (§ 795.105(b)(3)) with the modifications discussed herein.
A cook has prepared meals for an entertainment venue continuously for several years. The cook prepares meals as directed by the venue, depending on the size and specifics of the event. The cook only prepares food for the entertainment venue, which has regularly scheduled events each week. The relationship between the cook and the venue is characterized by a high degree of permanence and exclusivity. These facts indicate employee status under the permanence factor.
A cook has prepared specialty meals intermittently for an entertainment venue over the past 3 years for certain events. The cook markets their meal preparation services to multiple venues and private individuals and turns down work for any reason, including because the cook is too busy with other meal preparation jobs. The cook has a sporadic or project-based nonexclusive relationship with the entertainment venue. These facts indicate independent contractor status under the permanence factor.
In the NPRM, the Department proposed to modify § 795.105(d)(1)(i), which considered control as a “core” factor in the economic reality test. The 2021 IC Rule assessed the employer's and the worker's “substantial control over key aspects of the performance of the work,” which included setting schedules, selecting projects, controlling workloads, and affecting the worker's ability to work for others.
In its proposal and consistent with the 2021 IC Rule, the Department explained that it continues to believe that issues related to scheduling, supervision over the performance of the work (including the ability to assign work), and the worker's ability to work for others are relevant considerations in evaluating the nature and degree of control. The Department's proposal also considered additional aspects of control in the workplace that have been identified in the case law or through the Department's enforcement experience—such as control mediated by technology or control over the economic aspects of the work relationship. However, as noted above, the Department's proposal did not elevate control as a “core” factor in the analysis.
In addition, and contrary to the 2021 IC Rule, the Department's proposed regulation included a sentence stating that an employer's compliance with
Commenters from across the spectrum agreed that control was a highly relevant factor to the economic reality analysis.
Regarding the proposed scope of the factor, one commenter criticized the Department's proposal for eliminating the 2021 IC Rule's “express requirement of `substantial' control.”
A very large proportion of the comments received regarding the control factor addressed the proposal that an employer's compliance with legal obligations, safety or health standards, or requirements to meet contractual or quality control obligations may indicate control, suggesting that the worker is economically dependent on the employer. Many commenters objected to this proposal. For example, Flex commented: “Legally required control is generally disregarded since that is control imposed by the government, not by the client or hiring party. The client or hiring party is not choosing to exercise legally required control; it is required to do so.”
Other commenters stated that the Department's proposal would disincentivize employers to prioritize safety and other beneficial policies, because employers would not want to risk workers being classified as employees.
Some heavily regulated industries in particular expressed concern about this proposed provision, including the trucking, financial services, insurance, and real estate industries. Scopelitis stated that “the proposal to consider compliance with legal, safety, or quality control obligations as employer-like control indicative of an employee relationship is untenable in the highly regulated trucking and logistics industries and any rollback of
Other commenters supported this proposed provision. The AFL-CIO commented that the very fact that a government entity or court “imposes an obligation on an entity to ensure a workplace or a set of workers complies with law strongly suggests that responsible government officials believe that the entity stands in a relationship with the workers such that it is appropriate for it to do so.”
Upon consideration, the Department is adopting proposed § 795.110(b)(4) with several revisions in response to comments received. For decades, courts and the Department have taken the view that the control factor represents one facet of the economic reality test.
Regarding comments critiquing the Department's proposed regulatory text shifting the focus of this factor back to the nature and degree of control exerted by the potential employer rather than by the worker, the Department declines to make any alterations to this proposed text. The control factor has its roots in the common law, where the inquiry was whether the “employer” had the “right to control the manner and means by which [work] is accomplished.”
Moreover, as explained in the NPRM and consistent with the economic reality analysis, this factor should necessarily focus on whether the employer controls meaningful economic aspects of the work relationship because that focus is probative of whether the worker stands apart as their own business. Simply assessing whether the employer lacks control over discrete working conditions (
Regarding the comments received addressing the scope of the control factor such as whether reserved control should be included or whether the regulation should require “substantial” control, the Department declines to make the changes requested. First, the Department believes that the reference to reserved control should remain in the regulation as proposed. Control can certainly be exerted directly in the workplace by an employer, such as when it sets a worker's schedule, compels attendance, or directs or supervises the work.
Finally, current § 795.105(d)(1)(i) states that an employer requiring a worker to “comply with specific legal obligations, satisfy health and safety standards, carry insurance, meet contractually agreed-upon deadlines or quality control standards, or satisfy other similar terms . . . does not constitute control that makes the [worker] more or less likely to be an employee.”
The Department took a more nuanced approach in the preamble discussion than some commenters recognized in their comments, and it continues to find cases such as
In the NPRM, the Department was cognizant of the challenge of setting forth a regulation that would capture all of the facts relevant to the nature and degree of a potential employer's control while balancing the practical considerations of the way businesses, particularly in some industries, must simultaneously comply with a host of legal, regulatory, and business-related demands. While the Department sought to strike the suitable balance between these two concerns in the NPRM, the comments have persuaded the Department that the provision as proposed may lead to unintended consequences due to stakeholder confusion and uncertainty. The Department does not agree, however, with commenters who stated that the Department's proposed regulatory text would make compliance with the law a “negative factor.” As noted by commenters, businesses already must comply with various legal and regulatory requirements—for example, from the IRS, state licensing boards, and city ordinances. Additionally, the Department never had a blanket prohibition prior to the 2021 IC Rule on the consideration of compliance with legal obligations, and none of the mass uncertainty or noncompliance with legal norms suggested by commenters were apparent.
The Department is further revising the regulation to state that “actions taken by the potential employer that go beyond compliance with a specific, applicable Federal, State, Tribal, or local law or regulation and instead serve the potential employer's own compliance methods, safety, quality control, or contractual or customer service standards may be indicative of control.” This part of the regulatory text means that a potential employer's control over compliance methods, safety, quality control, or contractual or customer service standards that goes beyond what is required by specific, applicable Federal, State, Tribal, or local law or regulation may in some—but not all—cases be relevant to the analysis of a potential employer's control if it is probative of a worker's economic dependence. For example, in contrast to the background check example in the prior paragraph, a home care agency's extensive provider qualifications, such as fulfilling comprehensive training requirements (beyond training required for relevant licenses), may be probative of control. The Department continues to believe that control exerted by the employer to achieve these ends may be relevant to the underlying analysis of whether the worker is economically dependent on the employer, particularly where the employer dictates and enforces the manner and circumstances of compliance.
These instances of potential control, however, are relevant only if probative of the worker's economic dependence, as with any other consideration under the economic reality factors. For example, when an employer, rather than a worker, imposes safety or customer service obligations beyond what is required by specific, applicable Federal, State, Tribal, or local law or regulations, it may be evidence that the worker is not in fact in business for themself. In those instances, they are not doing the entrepreneurial tasks that suggest that they are responsible for understanding and adhering to requirements that apply to the work or services they are performing such that they are assuming the risk of noncompliance—a typical and expected risk that workers in business for themselves regularly assume. Moreover, the Department understands that parties representing a wide array of business relationships enter into contracts, and this regulation should not inhibit those practices. For example, if a potential employer requires all workers to sign a contract acknowledging that the business's general policy is that invoices for work projects must be submitted within a particular timeframe, this is not indicative of control because such a generally applicable contractual term does not itself suggest that a worker is economically dependent on the employer for work. In contrast, if a potential employer requires all workers to sign a contract outlining specifically how, when, and where the work must be performed, that specific direction would be indicative of control because it suggests that the workers are not operating independently. The Department believes that this revised text will be able to encompass control that is relevant to the overall analysis of economic dependence while providing businesses with a clear rule regarding compliance with specific legal obligations.
As the Department emphasized in the NPRM and again emphasizes here, the facts and circumstances of each case must be assessed, and the manner in which the employer chooses to implement such obligations will be highly relevant to the analysis. For example, under this final regulatory text, it is not indicative of control if a potential employer requires everyone who enters a construction site to wear a hard hat as required by city ordinance.
The Department reminds stakeholders that this is merely one aspect of one factor of a multifactor test. Even if compliance with specific safety, contractual, customer service, or quality control requirements is indicative of control in a specific case, this does not compel a particular conclusion that the control factor favors employee status or that the overall analysis requires a particular result.
With these general principles in mind, the next sections address the Department's proposals regarding several aspects of control to be considered in determining whether the nature and degree of control indicates that the worker is an employee or an independent contractor. This discussion is intended to be an aid in assessing common aspects of control—including scheduling, supervision, price setting, and ability to work for others—but should not be considered an exhaustive list, given the various ways in which an employer may control a worker or the economic aspects of the work relationship. Additional changes to the final regulatory text in response to comments are also discussed throughout these sections.
As a consideration under the control factor, the Department proposed that“[f]acts relevant to the employer's control over the worker include whether the employer sets the worker's schedule[.]”
The Department recognizes that many independent contractor relationships include the worker's ability to start and end work as they see fit.
As the Department noted, courts have often found that a worker's ability to set their own schedule, by itself, provides only minimal evidence that a worker is an independent contractor, particularly when the hiring entity exerts other types of control; therefore, the freedom to set one's schedule should be evaluated against other forms of control implemented by an employer.
As the discussion in the NPRM concluded, control over a worker's schedule exhibits just that: one form of control.
Several commenters expressed general support for the NPRM's discussion of scheduling flexibility. For example, the AFL-CIO noted that “[t]he NPRM . . . correctly makes clear that . . . `scheduling flexibility is not necessarily indicative of independent contractor status where other aspects of control are present[.]' ” In their comments, ACRE et al. and the Washington Center for Equitable Growth agreed that flexible work schedules can be common to employees and independent contractors alike and ACRE et al. noted that “flexible schedules alone do not determine a worker's employment status.”
Some commenters addressed industry specific practices. For example, ROC United noted that their members, who are restaurant workers, “frequently decide when and how long to work,” yet, “once working, they have very little control over how they actually do the work,” suggesting their economic dependence. UFCW similarly commented that, in their experience working with drivers, app-based companies “threaten to expel workers from the platform or reduce the availability of work shifts, unless the worker continuously accepts jobs;” a situation that limits the benefit of flexibility.
The law firm Nichols Kaster noted that, in their experience, “employers who misclassify their workers as independent contractors rely on the workers' ability to decline work as evidence of lack of control. But there is oftentimes no meaningful choice because declining work can result in discipline or other consequences.” It suggested including language from the preamble in the final rule to emphasize this point. NELA agreed with the Department's discussion of scheduling flexibility and similarly suggested that the Department include more information about scheduling flexibility in the final rule. Moreover, Gale Healthcare Solutions noted that the term “scheduling flexibility” needs further refinement, since workers in the healthcare industry may have the flexibility to select their preferred shift from a job board but do not have the flexibility to decide when the shift starts and ends, and this “inherently less `flexibility' ” would indicate employee status. The Department declines commenters' suggestions to include additional content in the final regulatory text for this factor. The current proposal was intended to provide succinct statements regarding each factor of the economic reality test with the understanding that the preamble will be accessible for additional information regarding the rule, as will future subregulatory guidance.
Several commenters also expressed concern with the Department's approach, asserting that scheduling flexibility is a strong indicator of independent contractor status. For instance, Uber stated that “a worker's ability to autonomously determine their own work schedule (days, hours, time of day, and more) is a strong predictor of independent status—on Uber, drivers and couriers can start and stop work whenever and wherever they choose, accepting only those offers they want to take[.]” DoorDash asserted that “[n]ot only is scheduling flexibility a significant distinction between employment and independent work: it gets to the very heart of the economic
SHRM suggested that the Department's treatment of scheduling flexibility is misguided because, for example, “contract work may provide [low-wage earners] with control over their schedules, providing the ability to maximize their earnings and better attend to their personal obligations.” Multiple individuals, like one “independent healthcare professional,” stressed that many people like them want “the freedom to engage in flexible work arrangements that best meet our needs.”
The Department recognizes that many workers need and desire flexibility in their work schedules and seek out job opportunities that provide that flexibility. And, in some cases, control over one's schedule can be probative of an employer's lack of control over a worker, indicating that they may be an independent contractor.
Some commenters asserted that consideration of scheduling flexibility should take into account specific industry and/or contractual arrangements that limit its availability. For example, NRF & NCCR commented that the Department's proposed approach “ignores key realities of business relationships common to retailers and restaurants.” Examples include individuals who rent retail space but are constrained by limited operating hours of the building in which they rent, food delivery workers who may only be able to deliver food when a restaurant is open, or cleaning crews who can only do their work at night. They asserted that these types of limitations do not necessarily indicate that the worker lacks control over their schedule. The CA Chamber echoed this sentiment, noting that “[a] business engaging a contractor to perform services is likely to have certain dates or times that they would prefer or possibly need that work to be performed,” suggesting the Department did not take this reality into account.
Dart contended that if the Department's perspective is that limited scheduling control by the worker indicates employee status, then many drivers who independently “elect to transport similar loads along the same routes over a period of time, risk losing their status and independence under this factor.” They asserted that drivers who wish to remain independent would thus have to “arbitrarily switch routes and carriers, and . . . bear whatever costs or inefficiencies such switches may give rise to, simply to preserve their independent status under this factor” and requested that the Department adopt “language which specifically incorporates consideration of the reality of the industry in question.”
In addition, DoorDash suggested that the type of flexibility its workers possess is fundamentally different from the flexibility an employee may obtain from an employer. For instance, “[h]aving some room to voice a preference about shifts or work remotely isn't true scheduling flexibility, because the ultimate control still belongs to their employers, who dictate things like deadlines and meeting schedules that can't be shirked.” In contrast, DoorDash noted that its platform allows workers to work on their own time and walk away, potentially for weeks or months at a time.
The Department disagrees that its formulation of the control factor must explicitly consider unique contractual or industry-specific scenarios that might affect scheduling flexibility. The language of the proposed rule noted that “[f]acts relevant to the employer's control over the worker include whether the employer sets the worker's schedule,” or where the employer “places demands on workers” that do not allow them to work . . . when they choose.”
Finally, some commenters asserted that the Department's shift in focus to the employer's control was misguided. CWI suggested that “where a result or service is perishable or deadline driven, based on the consumer's desire or the nature of the product or service, it is inappropriate to describe the final deadline as evidence of the business setting the worker's schedule.” In this way, CWI argued, a focus on scheduling flexibility solely from the perspective of the employer, “prevents a counterbalancing of those separate actions by the employee that, separate and apart from its direct interactions with the putative employer, establish he is in business for himself.” Similarly, N/MA noted that a shift in focus “from the worker's right to control the manner and means by which the work is performed to the purported employer's control . . . [is] misdirected,” and does not consider “the totality of the worker's business . . . including . . . whether the worker . . . determines to prioritize, stagger, or overlap projects from multiple entities” as they see fit.
The Department's decision to present the control factor from the perspective of the employer's control over the economic aspects of the working relationship conforms to relevant case law describing the factor and also represents a common-sense understanding that an employer's ability to control a worker's time may be probative of the worker's status.
The Department is finalizing the scheduling portion of the control factor at § 795.105(b)(4) as proposed.
With respect to the consideration of supervision within the control factor, the Department proposed that “[f]acts relevant to the employer's control over the worker include whether the employer . . . supervises the performance of the work” including “whether the employer uses technological means of supervision (such as by means of a device or electronically)” or “reserves the right to supervise or discipline workers.”
A lack of supervision is not alone indicative of independent contractor status,
In the NPRM, the Department also explained that employers may rely on training and hiring systems that make direct supervision unnecessary. As the Department noted, in
Finally, the Department noted that supervision can come in many different forms beyond physical “over the shoulder” supervision, which may not be immediately apparent.
Several commenters supported the Department's discussion of supervision generally. For instance, LCCRUL & WLC noted that case law confirms the fact that, “direct, on-site supervision” is not a prerequisite to find that a worker is an employee. As LCCRUL & WLC noted, the Department's approach toward supervision allows a “more accurate and comprehensive determination of the economic reality of the parties' relationship.” ACRE et al., PowerSwitch Action and other commenters noted that the Department's description of supervision is helpful, since it highlights the many ways in which a worker might be controlled at work through direct management or technological surveillance.
Commenters such as NELP and ROC United commended the Department's decision to address technologically-mediated supervision, since, as NELP noted, “[m]any businesses today manage their workforces with monitoring systems that track productivity, location, and attendance.” Providing this focus, NELP explained, “will ensure that supervision is analyzed regardless of the medium used to accomplish it.” As CLASP & GFI commented, “new technologies make[ ] it easier for employers to keep close tabs on workers and simultaneously disengage from modes of management that, in a pre-digital world, would likely have been indicators of an employment relationship.” The use of such technology, they noted, may particularly effect low-wage workers whose jobs can be easier to measure, such as warehouse workers whose efficiency in moving material can be readily quantified, or delivery drivers, whose speed, routes, and drop-off points can be managed digitally. As they describe, in some industries, digital “surveillance has completely supplanted in-person supervision in cases where the nature of the work would otherwise require an onsite supervisor.”
While some comments supported the overall approach to supervision in the NPRM, others suggested that the Department go further, either by adding additional context to the regulatory text or discussing additional facets of supervision. For instance, Nichols Kaster commented that the Department's approach is helpful since “supervision can take multiple forms” and employers have often argued that their workers are independent contractors by citing to the fact that they don't engage in in-person supervision of their work. However, it, along with NELA, called on the Department to include more information from the preamble discussion in the final regulatory text, specifically language addressing supervision via automated systems and that the lack of apparent supervision would not necessarily be indicative of a worker's independent contractor status.
Similarly, NELP requested that the Department include language in the final regulatory text specifically clarifying “that a lack of direct supervision may still support a finding of an employer's right to control if an employer can simply exert control when it deems it in the employer's interest to do so.” Outten & Golden noted that the text of the final rule should also encompass the concept of “monitoring,” since “many workers who work remotely . . . are primarily `supervised' through digital monitoring.” In addition, Gale Healthcare Solutions and IntelyCare suggested that the Department include supervision provided by onsite or related entities such as scenarios where healthcare staff sent by an employer to a worksite receive “supervisory-like feedback” on their performance that can be communicated back to their employer. Moreover, Gale Healthcare was concerned that if the Department indicated in the final rule that initial training—which some employers have deployed in lieu of direct supervision—is indicative of control, and thus employee status, that employers who wish to continue engaging independent contractors may forego such training, which could harm individuals in the healthcare industry.
The Department declines to adopt the additional regulatory language suggested by commenters, as it believes additional discussion is more appropriate for future subregulatory guidance. In response to NELP, the Department understands its suggestion as requesting additional detail regarding reserved control, which is discussed elsewhere in this final rule. The Department also declines to add the phrase “monitoring” to the final regulatory text as requested by Outten & Golden. As described below, the Department agrees that supervision of a worker includes all forms of supervision which go to the worker's performance of the work. Thus, while the act of collecting data through monitoring systems could be used to supervise the performance of work, it might instead serve other operational needs of the employer not related to control. Therefore, adding “monitoring” to the regulatory text would not be helpful at highlighting this distinction. Moreover, to the extent Outten & Golden's comments were intended to include monitoring to capture situations where the employer would monitor a worker and then exert supervisory control when needed or desired, the Department is confident that this scenario is very similar to its discussion of reserved control where an employer possesses supervisory control but elects to exert it when it chooses.
The Department also recognizes the situation that Gale Healthcare Solutions and IntelyCare raise regarding supervision that may be performed by other entities where the work is performed and relayed back to a potential employer. However, the Department declines to add specific language addressing this scenario, since this scenario would require a fact-specific inquiry. For example, if a potential employer is exercising control, but delegates it to a third party that is conducting onsite supervision and then reports that to the employer, then the same analysis regarding the employer's supervision would apply. Finally, to Gale Healthcare's concern regarding training, while it may be indicative of other factors in the economic reality test (
UFCW commended the Department's focus on providing additional context to the control factor analysis, specifically the ways in which an employer might use technology to supervise its workforce. However, as discussed in the section on examples used in the preamble, UFCW, several of its locals, and the AFL-CIO would also have the Department go further by providing additional examples of ways in which employers use technology, including surveillance, data collection, and algorithmic management tools, to supervise workers. According to UFCW, since “employers in all industries are rapidly exploiting electronic surveillance to supervise workers,” the final rule “should additionally explain that a company's use of nontransparent computer algorithms (programming codes) to manage workers is evidence indicative of employer control.”
The Department agrees with commenters like the AFL-CIO that control over the performance of work that is exercised by means of data, surveillance, or algorithmic supervision is relevant to the control inquiry under the economic reality test. Such tools could be used directly by the employer or on their behalf to supervise the performance of the work. Digital tools are many times developed, controlled, and deployed to assist in (or independently conduct) supervision in ways that would have otherwise required in-person oversight. However, the Department believes that such tools, including algorithmic control, if used by the employer to supervise the performance of the work, are already captured by the regulatory text addressing a potential employer's use of “technological means of supervision (such as by means of a device or electronically).” Relatedly, the Department declines to add additional language suggesting actions like mere data collection would constitute supervision for the purposes of control. Like monitoring, an employer may collect data on business operations for purposes unrelated to its relationship to workers. Yet, the Department recognizes that where the employer collects information that then is used for the purposes of supervision and thus goes beyond information collection, that may be probative of an employer's control under this factor.
Several commenters disagreed with the Department's approach regarding supervision. CWI noted that a lack of supervision may in fact reflect that a worker is an independent contractor as independent contractors are often “retained precisely because they perform work that the putative employer does not,” which results in less supervision. CWI further contended that a lack of supervision should edge toward a finding of independent contractor status in most cases. This concern was echoed by N/MA, which suggested that the Department's approach “turns the control factor upside down by effectively ignoring a lack of putative employer control.” Many independent contractors, N/MA contended, function without supervision precisely because of the specialized or technical services they render. N/MA asserted that “work that does not require supervision by the hiring entity is exactly the type of work that should be recognized as more likely to result in a determination of a lack of control over the manner and means by which the work is performed, and indicative of independence.”
The Department agrees with commenters that a lack of supervision may be probative of a worker's independent contractor status. That fact is reflected in case law as well as the Department's proposal.
CWI further suggested that the Department's proposal missed a critical distinction. By focusing merely on the fact that supervision may be maintained by technological means, they asserted that the proposal did not distinguish between supervision through technology that is “targeted toward the direction of the manner in and means by which the worker performs his work” and monitoring that is “targeted toward the particular goods or services at issue.”
CWI also stated, however, that technological supervision “coupled with some manner of corrective direction about the means and manner of performance may evidence employment,” yet they commented that the Department's proposal “sweeps too broadly.” The Coalition of Business
The Department agrees with commenters such as CWI and WPI that employers may at times use technology to track information critical to their business or, as the CA Chamber notes, the mere status of work performed by a worker. Such actions can be performed consistent with an independent contractor relationship with a worker, even when the data being collected is generated from the actions of the worker. The Department thus agrees with CWI, for example, that the proposed regulatory text missed this nuanced distinction. However, as CWI noted, where such tracking is then paired with supervisory action on behalf of the employer such that the performance of the work is being monitored so it might then be directed or corrected, then this type of behavior may suggest that the worker is under the employer's control. Thus, the Department is adding additional language to the control factor to clarify that the relevant consideration is not simply the employer's use of technology to supervise, but the use of technology “to supervise the performance of the work.” This is why the Department disagrees with Flex's call to eliminate any reference to technology and WPI's assertion that the use of technology never implicates the analysis under the economic reality test. Such a complete bar would suggest that a worker's performance of the work can never be controlled or directed by technology, which is not correct, especially when such tools are not only ubiquitous in many employment settings, but also are specifically deployed by some employers to supervise and direct the means through which a worker performs their job. Moreover, the Department does not believe that the inclusion of a reference to technology, as noted by the Coalition of Business Stakeholders, would act as an unbounded factor, pulling in all forms of technology used in modern workplaces. The only forms of technology referenced by the rule are those that are deployed by the employer as a means of supervising the performance of the work which are thus probative of economic dependence, not all technologies that the employer might be using in their business.
The Department notes that comments received regarding the proposal's discussion of an employer's reserved control over the worker, including reserved rights to supervise, are addressed in the discussion of reserved rights in section V.D.
The Department is finalizing the supervision portion of the control factor at § 795.105(b)(4) with the revisions discussed herein.
Regarding the control factor's treatment of the ability to set a price or rate for goods or services, the Department proposed that this factor consider whether the “employer controls economic aspects of the working relationship . . . including control over prices or rates for services.”
At the outset, the Department noted that workers in business for themselves are generally able to set (or at least negotiate) their own prices for services rendered.
Conversely, the Department noted that when a worker negotiates or sets prices, those facts weigh in favor of independent contractor status.
The Department also noted that the price of goods and services may sometimes be included in contracts between a business and an independent contractor.
Multiple commenters supported the Department's inclusion and description of price setting under the control factor. For example, the LA Fed & Teamsters Locals stated that this inclusion is a “recognition of the great significance of an employer's control over setting prices for services” which is “much more reliable indicia of entrepreneurial status than less significant aspects of control.” Such an approach, it suggested, will prevent employers from “offering [workers] minor forms of control while effectively setting a ceiling on the workers' earnings by maintaining control over the rates offered to customers.” The law firm Nichols Kaster noted that the proposal “expounds on this important point and provides focus and clarity on what `economic aspects' means.” NELP stated that the Department's discussion of price setting appropriately recognized that price-setting is a form of control, since an independent contractor “controls, and has the right to control, all important business decisions,” including “what good or service to sell and at what price.” As NELP further noted, “without the power to set prices for goods or services, a worker will likely be economically dependent on an employer for work, and if she wants to increase earnings, her only option is to work longer, harder, or more jobs.” REAL Women in Trucking commended the Department for providing “helpful clarity” regarding price setting generally, providing an example of a worker's ability to negotiate rates where drivers select jobs from a “free-market load board” where they can negotiate the rates for their services and sign a rate contract directly with brokers.
Some commenters suggested revisions to the proposed regulatory language. For example, UFCW urged the Department to amend the discussion regarding control to include a discussion of information asymmetries, noting that where a company conceals pricing data, that would indicate that a worker is not an independent contractor, since the worker lacks key information regarding price that would affect entrepreneurial decisions they might make. ACRE et al. similarly suggested that the Department “clarify in the rule that another factor in determining if workers are considered employees must include if a corporation exercises control over workers through pay structures,” specifically bonus pay systems used by some transportation network companies that encourage workers to drive more. ACRE et al. also suggested that the Department clarify that price (or wage) setting is so critical to the analysis that “workers who can not independently set their own wage rates are,
The Department agrees that the lack of information regarding prices may prevent a worker from negotiating prices to further their own business. The Department believes that this concept was captured in the proposed language that the Department is finalizing which states that “[w]hether the employer controls economic aspects of the working relationship” should be considered, including “control over prices or rates for services.”
Some commenters were opposed to the inclusion of price setting or the extent to which it may be used to illuminate the control factor of the economic reality test. For instance, the CA Chamber noted that while it “generally agree[s] with the description of this facet of the control factor,” it was concerned that it may receive too much weight in the analysis because some employees, “such as salaried white-collar workers” can negotiate their pay, while others, like an “hourly employee on an assembly line” may not. Therefore, the CA Chamber stated that considerations regarding price control, “should have limited use in the analysis because it is not a defining feature of employment generally.”
The IFA noted its concern with the Department's treatment of price as it related to franchising relationships. IFA explained, “[f]ranchisors commonly suggest resale prices for offerings across the franchise system and, subject to applicable law, may set minimum or maximum prices for products or services, or have uniform advertising requirements for system-wide promotions.” IFA requested that the Department, “expressly state that, in the franchise context, the fact that a franchisor sets prices for goods or services is not probative of an employment relationship.” Similarly, ACLI shared that considerations regarding price are misplaced for the insurance industry, as “neither insurers nor insurance agents have unlimited discretion to adjust prices however they see fit.” In fact, “[c]onsistent with the requirement of financial solvency, insurance agents and advisors have no say or influence over the price of the products that they sell on behalf of firms, and they are prohibited by law from `rebating' any of the commissions earned from those sales,” a fact that “effectively bars them from getting involved in, or setting, pricing.” The Alternative and Direct Investment Securities Association noted a similar arrangement among some investment advisors, who cannot fully negotiate rates for commissions because such rates are, in part, determined by the application of SEC regulations. Similarly, C.A.R. noted that real estate industry commission payments in California are required to be paid through a broker (with a written
CWI commented that considerations around prices or rates are superfluous because “[a] worker's ability to negotiate or otherwise impact the amounts that he earns for his work is already fully incorporated in the opportunity-for-profit-or-loss factor.” Thus, CWI suggested that since this consideration should be withdrawn as it is redundant. The N/MA similarly noted that such overlapping analysis results in “improper[ ] double counting.”
The Department declines to adopt commenters' proposals to de-emphasize the relevance of control over prices or rates of service. Just as the Department declined the suggestion that it elevate the role of control over prices, the Department concludes that giving this consideration less weight would similarly undermine a totality-of-the-circumstances analysis. An employer's control over pricing should be one fact among all other facts considered under the control factor as it may be probative of a worker's economic dependence on a potential employer.
The Department recognizes that many industries, occupations, or even business sectors set prices and rates for goods or services in ways that are unique, as noted by commenters like ACLI and IFA. However, workers who are truly in business for themselves will generally control the fundamental economic components of their business, including the prices to charge customers or clients for the goods or services offered. As discussed in section V.C.4.a, the Department is revising the final regulatory text of this factor to state: “Actions taken by the potential employer for the sole purpose of complying with a specific, applicable Federal, State, Tribal, or local law or regulation are not indicative of control.” However, beyond those obligations, where the potential employer exerts control to set rates or prices for services, the worker is more likely to be “receiving the compensation the organization dictates,” and thus less likely to be in business for themself.
In addition, the Department disagrees with commenters such as CWI and N/MA contending that the discussion of price in both the nature and degree of control and opportunity for profit and loss factors is not warranted. In the former, the analysis is focused on the employer's actions that would control the economic aspects of the working relationship, while the discussion of the latter focuses on ways in which the individual has opportunities for profit or loss based on managerial skill (including initiative or business acumen or judgment) that affect the worker's economic success or failure in performing the work. Each discusses prices from different analytical points of view, an effort that is consistent with this final rule's approach, which is to analyze the working relationship in all its facets.
Finally, the Department declines commenter suggestions to omit any discussion of price setting under the control factor. The Department continues to believe, consistent with case law, that a potential employer's general control over the prices or rates for services—paid to the workers or set by the employer—is indicative of employee status. When an entity other than the worker sets a price or rate for the goods or services offered by the worker, or where the worker simply accepts a predetermined price or rate without meaningfully being able to negotiate it, this is relevant under the control factor. As such, the Department declines to create a carve-out for certain business models or industries, as requested by some commenters, although the Department emphasizes that this position is intended to be consistent with the case law on this issue and is not creating a novel interpretation. Importantly, however, as with all considerations discussed under all the factors, the Department does not intend for this fact to presuppose the outcome of employment classification decisions in any particular industry, occupation, or profession.
The Department is finalizing the price setting portion of the control factor at § 795.105(b)(4) as proposed.
Another consideration that the Department proposed under the control factor was whether the employer “explicitly limits the worker's ability to work for others” or “places demands on workers' time that do not allow them to work for others.”
As explained in the NPRM, where an employer exercises control over a worker's ability to work for others, this is indicative of the type of control over economic aspects of the work that is associated with an employment relationship rather than an independent contractor relationship.
The NPRM also recognized that some courts find that less control is exercised by a potential employer where the worker is not prohibited from working for others, particularly competitors, and that this may be indicative of an independent contractor relationship.
Ultimately, as stated in the NPRM, the question is “whether a [worker's] freedom to work when she wants and for whomever she wants reflects economic independence, or whether those freedoms merely mask the economic reality of dependence.”
Several commenters supported the way the Department's proposal framed consideration of the ability to work for others within the control factor, including both direct and indirect means of limiting individuals' ability to work for others.
Some commenters requested that the Department provide a description of this aspect of the control factor that would address the workers' ability to work for others, not just the employer's actions, and state that where an individual has the ability to work for others, including competitors, this weighs in favor of independent contractor status.
CWI also contended that the “employer-centric focus” of the proposed regulatory text addressing a worker's ability to work for others was “misguided” because, as the Department noted in the NPRM, there is appellate authority acknowledging “a worker's ability to work for others—and thus develop multiple sources of business—as evidence of independent contractor status.” CWI did not feel it
The Department notes that the mere fact that a worker earns income from more than one employer does not mean that the worker is not economically dependent on one or all of those employers, as a matter of economic reality. Economic dependence is based on an analysis of the multifactor economic reality test, not whether a worker is less financially dependent on the income they earn from any one employer.
Similarly, N/MA argued that the focus should be on the worker's right to control and not the employer's control, because “a freelancer may perform multiple projects among multiple separate (and sometimes competing) entities,” and N/MA felt that the right to control factor should consider “the totality of the worker's business . . . including control over whether the worker subcontracts any part of the work necessary to complete a project, whether and how the worker may advertise their services, and whether the worker determines to prioritize, stagger, or overlap projects from multiple entities.” The Department views N/MA's comment to be advocating for a totality-of-the-circumstances test that is congruent with the economic reality test, including consideration not just of control, but also factors like opportunity for profit or loss, investment, and use of specialized skills in connection with business-like initiative. Whether a potential employer restricts a worker's ability to work for others would certainly not be the only consideration under control, nor would it preclude consideration of the other factors listed in N/MA's comment. Further, the Department notes that even within the control factor, the regulatory text acknowledges that “more indicia of control by the worker favors independent contractor status.”
Several commenters pointed out the increased fluidity in terms of working for others that can be associated with using applications or platforms to access work. DoorDash explained with respect to its business that workers “are free to work with anyone they want, including our competitors. Most importantly . . . they can do it in real time—even while they're logged into our app. If [they] find a better work opportunity (or work that's simply more appealing to them), they can switch back and forth.” CEI noted that “rideshare drivers often work for different app-based companies simultaneously. Anyone who calls for a ride using [Uber] has noticed the driver's car also bearing a Lyft sticker. . . This situation is common in gig work, where the companies are, in effect, bidding for the same workers.” CEI further noted the Department's concern that the framing in the 2021 IC Rule, which indicated independent contractor status if a worker had the ability to work for others, fails to distinguish between work relationships where a worker has multiple jobs in which they are dependent on each employer and do not exercise the control associated with being in business for oneself, and relationships where the worker has sought out multiple clients in furtherance of their business. CEI stated: “The framing does not distinguish between the two scenarios because there is no significant distinction. A worker who has `sought out multiple clients in furtherance of their business' is no less dependent on those clients than the hypothetical worker with multiple jobs.” CEI suggested that the only solution to this problem was beyond the scope of this rulemaking and would require Congress to amend the FLSA to “carve out specific professions.” UFCW, however, did not view “multi-apping” as a unique concept that could not be addressed within the economic reality test, arguing that a “worker who attempts to leverage earnings between two app-based platforms (`multi-apping') [is] now simply dependent on two platform companies for which the employee is waiting around for work to perform. This is not indicative of the worker exercising initiative to develop a business for themselves independent of these platform companies.”
The Department does not believe that the ability to use applications or platforms to access work necessitates changing how the ability to work for others is weighed when determining employee or independent contractor status. The Department reiterates that as always, the overall test is economic dependence. Even if a worker has the ability to more fluidly move among potential employers while performing work by using multiple applications, this does not necessarily mean that the entire control factor weighs in favor of independent contractor status. Nor is it dispositive of whether the worker is in business for themself rather than being subject to the control of the entity for whom they are performing work at any given time.
While SHRM posited that the Department's proposal “adopts an antiquated view of economic independence in its consideration of a worker's ability to work for others under the control factor” because “low-wage earners may, in fact,
After considering these comments, the Department declines to add a statement to the regulatory text stating that a worker's ability to work for others indicates independent contractor status. The Department believes that having multiple jobs can too often be necessary for financial survival in the modern economy, as many commenters and courts have noted.
Some commenters urged the Department to create an exception for industries like trucking where legal requirements make it more complicated for drivers to use the same equipment to work for another motor carrier.
This situation was addressed by the Seventh Circuit in a recent decision where the company retained sole discretion to deny the driver's request to haul freight for another carrier, and it also reserved the right to arrange for third-party monitoring of compliance with federal safety regulations at the driver's expense if he drove for other carriers.
Although the Department is recognizing in this final rule that actions taken by a potential employer for “the sole purpose of complying with a specific, applicable Federal, State, Tribal, or local law or regulation” are not indicative of control, the Department continues to believe that where a business goes beyond compliance with the law or regulation in a way that serves the business's own compliance methods—for example, the system described in
Moreover, commenters and the
UFCW urged the Department to add additional considerations that are related to a potential employer limiting a worker's ability to work for others. First, it contended that platform companies essentially coerce workers to continuously accept work (which would preclude them from working for others) by threatening to terminate workers from the platform or reduce the availability of work shifts unless the worker continuously accepts jobs. Additionally, it noted that an employer may prohibit workers from developing their own business or customer base, for example, by prohibiting a platform worker from doing any independent work for customers they connect with through the app. The LCCRUL & WLC also described clients—a tow truck driver and a cannabis dispensary delivery driver—who similarly were not able to work for others because they were expected to be on call all day waiting for assignments. The Department agrees that these types of facts could be relevant to whether a potential employer has either explicitly limited the worker's ability to work for others or has placed demands or other restrictions on workers that do not allow them to work for others. However, the Department views these as encompassed within the final regulatory text, such that there is no need to add additional language.
Finally, OOIDA encouraged the Department to view the ability to work for others within a working arrangement as “relevant, but not determinative of the relationship” and as “one of several considerations within the `control' factor.” The Department reaffirms that the ability to work for others is just one consideration within the control factor and agrees with the commenter that it is relevant, but not determinative, of whether the worker is an employee or independent contractor. Moreover, the control factor itself is not determinative of a worker's status—the economic reality test is a totality-of-the-circumstances test where no one factor is dispositive.
The Department is finalizing the ability to work for others portion of control factor at § 795.105(b)(4) with the revisions discussed herein.
A registered nurse provides nursing care for Alpha House, a nursing home. The nursing home sets the work schedule with input from staff regarding their preferences and determines where in the nursing home each nurse will work. Alpha House's internal policies prohibit nurses from working for other nursing homes while employed with
Another registered nurse provides specialty movement therapy to residents at Beta House. The nurse maintains a website and was contacted by Beta House to assist its residents. The nurse provides the movement therapy for residents on a schedule agreed upon between the nurse and the resident, without direction or supervision from Beta House, and sets the price for services on the website. In addition, the nurse simultaneously provides therapy sessions to residents at Beta House as well as other nursing homes in the community. The facts—that the nurse markets their specialized services to obtain work for multiple clients, is not supervised by Beta House, sets their own prices, and has the flexibility to select a work schedule-indicate independent contractor status under the control factor.
In § 795.110(b)(5), the Department proposed to return to framing this factor as “whether the work performed is an integral part of the employer's business.”
The Department explained that the 2021 IC Rule's integral formulation relied on a rigid reading of
The Department explained that most courts adopt a common-sense approach to determining whether the work or service performed by a worker is an integral part of a potential employer's business.
The Department emphasized that the judicial treatment of the integral factor reflects the understanding that a worker who performs work that is integral to an employer's business is more likely to be employed by the business, whereas a worker who performs work that is more peripheral to the employer's business is more likely to be independent from the employer.
Many commenters expressed agreement with the Department's decision to return to the framing of this factor as the extent to which the work performed is an integral part of the potential employer's business.
IBT expressed support for the Department's proposed articulation of the integral factor and recommended “that guidance for this factor make explicitly clear the focus of the factor is on the work performed, not the individual worker.” Outten & Golden also stated that the final regulatory text should incorporate the text from the NPRM stating that “the focus of the integral factor is on the work performed, not the individual worker.” As the Department explained in the NPRM, this approach evaluates whether the worker performs work that is central to the employer's business, not whether the worker possesses some unique qualities that render them indispensable as an individual.
Some commenters urged the Department to maintain the 2021 IC Rule's framing of this factor as “integrated unit of production,” expressing the view that the 2021 IC Rule's approach is more consistent with
NELP agreed with the Department's framing of the integral factor but stated that “[t]o provide further clarity on this factor, the DOL should recognize that the question of integration is not an either/or proposition” noting that “[w]hether the work is integral such that the business could not offer its goods or services without it . . . is important to consider” but “it does not define the outer limits of this factor.” NELP explained that “[a]s the Supreme Court has recognized[,] whether the work is part of an `integrated unit of production' also informs whether the worker is more likely to be an employee or independent contractor.”
After considering these comments, the Department is retaining the approach proposed in the NPRM, which considers whether the work performed by the worker is an integral part of the employer's business. As discussed below, the Department believes that its proposed approach to the integral factor is more consistent with longstanding judicial precedent and decades of Department guidance than the 2021 IC Rule's articulation of this factor, which focused on whether the worker is part of a “integrated unit of production.” The Department notes, however, that it does not intend to preclude consideration of the potential relevance of the Supreme Court's discussion of the “integrated unit of production” in
Commenters' claims that the 2021 IC Rule's emphasis on the “integrated unit of production” is more consistent with applicable judicial precedent than the approach proposed in the NPRM stands in sharp contrast to decades of judicial precedent and Departmental guidance. The Supreme Court's decision in
Commenters attempted to cast aside decades of judicial precedent by employing an overly rigid understanding of
The Department disagrees with the commenters' contention that the approach proposed by the Department and taken by nearly every federal court of appeals is a result of a misunderstanding of
A number of commenters expressed concerns that the Department's proposed articulation of the integral factor was an attempt to adopt one of the prongs of the ABC test.
Although there may be conceptual overlap between the Department's proposed integral factor and Prong B of the ABC test, as discussed above, the Department is not adopting an ABC test. The assertion that the Department's proposal regarding the integral factor is an attempt to insert Prong B of an ABC test in this rule is baseless. First, the integral factor is but one factor in a
Several commenters expressed concerns that the integral factor would lead to virtually every worker being classified as an employee since most, if not all, work performed for a business could theoretically be considered critical or necessary to an employer's business.
As a threshold matter, the Department reiterates that, as with the other enumerated factors of the economic reality test, the integral factor is just one area of inquiry that is considered along with the other factors to reach the ultimate determination of economic dependence or independence. The Department again emphasizes that it is “not always true that workers whose work is integral are employees.”
Some commenters requested clarification for their specific industries, expressing concerns that in certain industries laws and regulations mandate relationships such that the work performed would be considered an integral part of the potential employer's business. For example, NAR commented “that the extent to which the work is performed as an integral part of the employer's business within the real estate industry context, is mandated by state laws and regulations.” NAR suggested the Department's rule “should recognize such industry nuances, understanding that compliance with state statutory and regulatory provisions does not conflict with the ability to work as an independent contractor under the test.” ACLI similarly commented that “if insurance and/or securities industry laws and regulations compelling agents and registered representatives to affiliate with licensed insurers and broker dealers were sufficient to negate independent contractor status, this factor would perpetually weigh against independent contractor status for insurance industry relationships.” ACLI requested the Department “categorically affirm that where laws or regulations dictate that an insurance worker must be affiliated with a company in the same business . . . the integral part of the business factor be viewed as at most a neutral factor.”
As the Department repeatedly states throughout this final rule, no one factor is dispositive, and the ultimate question is whether as matter of economic reality the worker is in business for themself or is economically dependent on the potential employer for work. If the work being performed is necessarily integral to the business of the potential employer, the integral factor may weigh in favor of employee status, but it is only one part of the inquiry. It is not dispositive. Where the other factors weigh in favor of independent contractor status, and the economic reality as a whole indicates the worker is in business for themself, the overall conclusion may likely be that the worker is an independent contractor; notably, compliance with specific, applicable legal obligations is addressed in the discussion of the control factor, section V.C.4.a of this preamble. This inquiry, however, is specific to the
After consideration of the comments received, the Department reiterates its belief that the extent to which the work performed is an integral part of the potential employer's business sheds light on the ultimate inquiry of whether a worker is economically dependent on the potential employer for work or is in business for themself. The Department is returning to this framing of the integral factor in this final rule because this approach is more consistent with Supreme Court precedent, decades of judicial precedent in the federal courts of appeals, and the totality-of-the-circumstances approach than the 2021 IC Rule's “integrated unit of production” framing of this factor. The Department is adopting the integral factor as proposed in the NPRM with minor wording changes to provide additional clarity (adding “of the business” to the end of the second sentence of the regulatory text to state “whether the function they perform is an integral part
The Department is finalizing the integral factor (§ 795.110(b)(5)) as discussed herein.
A large farm grows tomatoes that it sells to distributors. The farm pays workers to pick the tomatoes during the harvest season. Because picking tomatoes is an integral part of farming tomatoes, and the company is in the business of farming tomatoes, the tomato pickers are integral to the company's business. These facts indicate employee status under the integral factor.
Alternatively, the same farm pays an accountant to provide non-payroll accounting support, including filing its annual tax return. This accounting support is not critical, necessary, or central to the principal business of the farm (farming tomatoes), thus the accountant's work is not integral to the business. Therefore, these facts indicate independent contractor status under the integral factor.
The Department proposed that the skill and initiative factor consider “whether the worker uses specialized skills to perform the work and whether those skills contribute to business-like initiative.” The Department stated that “[t]his factor indicates employee status where the worker does not use specialized skills in performing the work or where the worker is dependent on training from the employer to perform the work.” The Department further stated that, “[w]here the worker brings specialized skills to the work relationship, it is the worker's use of those specialized skills in connection with business-like initiative that indicates that the worker is an independent contractor.”
The Department explained that the proposed regulatory text for this factor would reaffirm the longstanding principle that this factor indicates employee status where the worker lacks specialized skills. The Department further explained that it believed that the application of initiative in connection with specialized skills is useful in answering the overarching inquiry of whether the worker is economically dependent on the employer for work or is in business for themselves, and that, as a result, it was “proposing to reintegrate initiative into this factor and no longer exclude consideration of initiative when applying this factor, as provided in the 2021 IC Rule.” The Department then discussed the case law supporting its position that a worker's lack of specialized skills when performing the work generally indicates employee status, but also reiterated that no one factor is dispositive, consistent with the overarching economic realities analysis. Because both employees and independent contractors can be highly skilled and/or bring specialized skills to the work relationship, the Department discussed how focusing on whether the worker uses “the specialized skills in connection with business-like initiative” is helpful in distinguishing between the two classifications and further discussed the case law and its prior guidance supporting such an approach. Finally, the Department acknowledged that some facts showing an exercise of initiative can be relevant under the skill factor and another factor, and explained that considering facts showing an exercise of initiative under more than one factor to the extent appropriate depending on the facts of a case is consistent with and furthers the totality-of-the-circumstances approach to assessing the economic realities of the work relationship.
In addition to the numerous comments generally supporting the Department's six-factor analysis, a number of commenters expressed support for the NPRM's discussion of the skill and initiative factor. For example, NDWA stated that the NPRM's analysis “is helpful because requiring initiative as well as skill better answers the questions of whether a worker is in business for themselves.” The Shriver Center agreed. The Leadership Conference similarly stated that the NPRM's analysis “is helpful because we believe that all work is skilled work in the colloquial sense of the term, and elevating the question of whether a worker can exercise initiative as well as skill better answers the question of whether a worker is in business for themselves.” Gale Healthcare Solutions advised that for nurses, “adding business initiative to skill is an appropriate measure for distinguishing workers who should be classified as independent contractors . . . from those who, while they employ nursing skills in the performance of their work, do not do so in combination with the business-like initiative needed to grow a nursing practice.” The LA Fed & Teamsters Locals commented that the NPRM “appropriately recognizes that while a lack of specialized skills indicates employee status, the exercise of such specialized skills does not indicate independent contractor status absent the worker's using business-like initiative in relation to those skills.” And ROC United stated that the NPRM's “decision to include skill and initiative as a stand-alone factor is another improvement over the 2021 Rule,” and that the NPRM “correctly recognizes that most work that does not require specialized skills is not performed by independent contractors (
Some other commenters that generally supported the Department's proposal requested changes to or clarifications of the skill and initiative factor. For example, SMACNA stated that “[t]his is correct as far as skills” but added that, “for workers who are highly skilled, the `skill and initiative' factor should not be
Farmworker Justice stated that “courts have made clear that `most farm labor jobs require little specialized skill' ” and “encourage[d] the DOL to include reference to such cases in the Final Rule, as it has for workers in numerous other industries, such as janitors, security guards, landscape workers, and call center workers.” The Department agrees with this characterization of the case law regarding “most farm labor jobs” and notes that it has taken that position in its own enforcement actions.
NELA stated that, “[a]lthough the Proposed Rule correctly reestablishes the link between skill and business-like initiative as the
The Department, however, believes that it is unnecessary to add the following sentence that NELA suggested incorporating into the regulatory text: “To indicate possible independent contractor status, the worker's skills should demonstrate that they exercise independent business judgment.” This sentence would be duplicative of the existing regulatory text language that it “is the worker's use of those specialized skills in connection with business-like initiative that indicates that the worker is an independent contractor.” The Department further believes that adding “only” to this existing regulatory text language (as NELA requested) so that it would read that it “is only the worker's use . . .” would not provide clarification, especially considering the changes that the Department is making to the regulatory text.
Numerous commenters opposed, disagreed with, and/or requested changes to, or clarifications of, the proposed skill and initiative factor. For example, CWI stated that, although it agrees that “both skill and initiative may play a role in the independent contractor calculus,” it “fundamentally disagrees, however, that those considerations should be treated as a standalone factor in the economic realities calculus.” And N/MA stated that “[c]onsideration of skill and initiative as a stand-alone factor creates confusion and ambiguity, and results in the considerations under that factor being provided outsized weight in the totality of the circumstances analysis.”
SHRM commented that the NPRM “purports to convert a standard consideration utilized by myriad independent contractor classification tests—the degree of skill required by the work—into an assessment of a worker's business acumen.”
FSI, Coalition of Business Stakeholders, and NRF & NCCR similarly objected to the inclusion of initiative in this factor. FSI stated that including initiative in the skill factor contravenes
FSI further stated that emphasizing “entrepreneurial drive” may “lead to erroneous classification decisions because, among other considerations, some workers may strongly prefer to work as independent contractors, not for the flexibility to grow their businesses, but for the flexibility to control their workloads and to work when they want to.” It added that, “while initiative is an appropriate consideration in favor of independent contractor status, its absence does not indicate that a worker is not pursuing independence.” 4A's similarly stated that the “the proposed rule could create uncertainty for agencies that utilize legitimate independent contractor relationships to carry out important business functions, but their freelance talent does not have entrepreneurial drive or take personal initiative to expand their business to working with other agencies or in house marketing shops.” The Department continues to believe that whether workers with specialized skills use those skills in connection with business-like initiative is probative of their status as employees or independent contractors. Using such skills to “grow” or “expand” their work is a prime example of business-like initiative as the commenters recognize, but there may be other ways in which workers can use such skills in connection with business-like initiative. Of course, the determination of a worker's status ultimately requires consideration of the totality of the circumstances—not just the skill and initiative factor.
DSA stated that “[a]n individual could not have a specialized skill, but still take the initiative of an independent business or vice versa. If the rule were to go forward as proposed, and each factor pointed in different directions, there could be confusion as to where a ruling may come down on this one factor.” The Department does not believe this to be the case when applying the skill and initiative factor. As explained in the NPRM, courts have often recognized that a worker's lack of specialized skills to perform the work indicates that the worker is an employee. As the Tenth Circuit, for example, has explained, “the lack of the requirement of specialized skills is indicative of employee status.”
The U.S. Chamber similarly commented that the NPRM was “wrong to focus on `specialized skills' as probative in determining independent contractor status.” The U.S. Chamber further commented that “a focus on `the amount of skill required' separate from a worker's initiative that impacts the worker's profits is an unnecessarily restrictive view of independent work currently being performed in the U.S. economy.” In making these arguments, however, the U.S. Chamber did not rebut the substantial case law relied on by the Department explaining that the use of specialized skills in an independent or business-like way is what makes this factor probative of employee or independent contractor status. The Department grounds this factor in that case law. Citing drivers among other occupations, the U.S. Chamber added that “[e]ven low-skilled workers can work as independent contractors if they have a skill that they can market to customers.”
MEP described the Department's articulation of this factor as “unreasonably narrow” and stated that the Department “should recognize a wide variety of skills that demonstrate an individual's business-like initiative.” It added that the Department “should not be in the business of judging which skills are considered specialized or nonspecialized or place high or low value on the skills independent contractors provide.” As noted in the NPRM, courts have identified some occupations where workers were found to lack specialized skills (for example, security guards, traffic control officers, drivers, janitorial work, landscaping, and call center workers).
NRF & NCCR recommended that “specialized skills” be changed to “skill, talent or creativity,” referencing singers at restaurants among other examples. Again, the Department is not seeking to limit the types of work that involve skills or taking the position that any particular occupation lacks specialized skills. Instead, consistent with the bulk of case law, the Department is focusing this factor on whether the worker uses their specialized skills in connection with business-like initiative—rather than only considering whether the worker has specialized skills—because that focus is probative of the ultimate question of economic dependence.
Regarding the NPRM's statement that “[n]umerous courts have found that driving is not a specialized skill,” NHDA commented that “a number of courts have found professional driving, including driving that requires a commercial driver's license (CDL), involves specialized skills” (footnote omitted).
CPIE stated that “the NPRM's interpretation would ignore any initiative that is not attributable to an individual's specialized skill,” expressed concern that this factor may not always align with the ultimate outcome, and “respectfully urges DOL to interpret this factor to consider any business initiative that demonstrates an individual's economic independence, regardless of whether the initiative is attributable to any skills.” As an initial matter, the Department notes that it is not unusual when applying a multifactor economic realities analysis for one factor to not align with the ultimate outcome when the analysis is applied and the totality of the circumstances is considered. Regardless, any business initiative by a worker is plainly relevant to the analysis and may be considered under the opportunity for profit or loss depending on managerial skill factor and other factors, as the landscaper example in the NPRM's discussion of the skill and initiative factor demonstrates. Accordingly, this rulemaking accounts for IBA's comment that “[a] true measure of economic independence would not restrict the analysis of skill and initiative to considering only specialized skills and only initiative attributable to those skills but instead would consider `all major components open to initiative,' such as `business management skills.' ” If not under the skill and initiative factor, the factors comprising the economic realities analysis certainly consider all types of initiative and business management skills by the worker.
Fight for Freelancers asserted that, in the case of a highly skilled worker who is asked by “one of her regular clients” to do “a task that requires far less skill”
Coalition of Business Stakeholders stated that the Department's articulation of this factor “dispenses with all independent consideration of a worker's specialized skills obtained or developed separate and apart from the hiring entity” and “all but ensures consideration of this factor will preclude an independent contractor finding.” This comment overlooks the totality-of-the-circumstances nature of the analysis; no one factor can preclude an independent contractor or employee finding. Contrary to this commenter's assertion, the Department believes that the worker's skills developed separate and apart from the hiring entity are relevant. The regulatory text providing that this factor indicates “employee status . . . where the work is dependent on training from the employer to perform the work” reflects that bringing skills to the work relationship (
Regarding training, America Outdoors Association stated that it “may benefit an outfitter to train an independent contractor, or pay for a first aid certification class, in order for the contractor to better serve out the terms of the contract.” Referencing a labor shortage in its industry, WFCA stated that “the mere fact that a contractor or dealer is willing to pay to train independent contractor should not make the worker an employee” and asked that the regulatory text be revised to reflect that.
The Department is finalizing the skill and initiative factor (§ 795.110(b)(6)) as discussed herein.
A highly skilled welder provides welding services for a construction firm. The welder does not make any independent judgments at the job site beyond the decisions necessary to do the work assigned. The welder does not determine the sequence of work, order additional materials, think about bidding the next job, or use those skills to obtain additional jobs, and is told what work to perform and where to do it. In this scenario, the welder, although highly skilled technically, is not using those skills in a manner that evidences business-like initiative. These facts indicate employee status under the skill and initiative factor.
A highly skilled welder provides a specialty welding service, such as custom aluminum welding, for a variety of area construction companies. The welder uses these skills for marketing purposes, to generate new business, and to obtain work from multiple companies. The welder is not only technically skilled, but also uses and markets those skills in a manner that evidences business-like initiative. These facts indicate independent contractor status under the skill and initiative factor.
Section 795.105(d)(2)(iv) of the 2021 IC Rule stated that additional factors may be considered if they are relevant to the ultimate question of whether the workers are economically dependent on the employer for work or in business for themselves.
The Department explained in the NPRM that retaining this provision would “reiterate[ ] that the enumerated factors are not to be applied mechanically but should be viewed along with any other relevant facts in light of whether they indicate economic dependence or independence.”
Like in the 2021 IC Rule, the Department proposed not to identify any specific additional factors, and specifically declined to identify the “degree of independent business organization and operation,” a factor considered in prior departmental guidance, as a seventh factor in the analysis. The Department explained that given the “focus in this proposed rulemaking on reflecting the economic reality factors commonly used by the circuit courts of appeals, the Department chose not to include the worker's `degree of independent business organization and operation' as a seventh factor.”
A few commenters expressed support for the Department's proposed section on additional factors.
Several commenters expressed concerns with a perceived vagueness and lack of clarity arising from inclusion of additional factors, and some requested that the Department delete the additional factors section from the final rule entirely. For example, IEC commented that “[t]he proposed rule does little to further define `additional factors' which will only lead to employers, employees, and independent contractors” speculating about “how to apply this in their analysis.” SBA expressed concerns with what it described as an “open-ended factor” and recommended the Department delete it. Inline Translation Services similarly commented that “[t]he catch all phrase `additional factors' should be removed entirely,” stating that “this open ended clause could introduce innumerable other factors during labor audits with very uncertain and unpredictable outcomes.” AFPF expressed concerns that “[s]takeholders will have no clarity as to what additional factors may be considered in any particular case.”
Goldwater Institute commented that “[t]o the extent an employer has concluded its economic dependence analysis and finds that the worker is indeed an independent contractor, this final consideration could ostensibly swallow the rule.” The National Restaurant Association also expressed concerns with the Department's decision not to define specific additional factors, commenting that the undefined additional factors section could create confusion as it offers “little guidance to the regulated community.”
NAFO commented that “this catch-all factor provides [the Department] a vague and highly discretionary means by which it can determine whether there is something that `indicates' whether a worker is economically dependent on an employer for work without historical precedent or guidance.” The Coalition of Business Stakeholders similarly expressed that “the [Department] inserts into the Proposed Rule a mechanism whereby it can hinge its classification decision on anything it deems to `indicate' that a worker is either in business for themselves or economically dependent on an employer, regardless of whether such consideration has historically, or ever, been considered as part of the classification analysis.”
Contrary to some of the commenters' assertions, the Department reiterates that the proposed regulatory language on additional factors is consistent with and reflects decades of Supreme Court and federal appellate court precedent—as well as guidance from the Department including the 2021 IC Rule—emphasizing that the enumerated economic realities factors are not exhaustive. For example, the Supreme Court explained in
The Department continues to believe that the additional factors section is entirely consistent with how the courts and the Department have approached the economic realities inquiry for decades, including in the 2021 IC Rule. Commenters expressing concerns that the consideration of additional factors will lead to confusion and uncertainty overlook several important considerations. First, as mentioned, this has been the approach of the courts and the Department for decades—the enumerated economic realities factors are not exhaustive, all relevant facts should be considered, and the focus of the determination should be grounded in the economic realities as opposed to any isolated factors. There is no basis for the concern that the retention of a regulatory provision stating what courts, the Department, and the regulated community have understood to be part of the economic reality test under the FLSA for over 75 years will result in confusion and uncertainty as opposed to consistency and familiarity. Second, the additional factors section is not
Moreover, the Department recognizes that, in many instances, consideration of additional factors will not be necessary because the relevant factual considerations can and will be considered under one or more of the enumerated factors. The additional factors section is simply a recognition by the Department, consistent with decades of case law, that a rule applying to varying economic relationships across sectors of the economy must be applied in a non-mechanical fashion and must focus on the totality of the circumstances.
The U.S. Chamber expressed concern that the additional factors section “has the potential to swallow the six defined factors,” and that “[b]usinesses and workers alike are being asked to consider, weigh, and make significant business decisions under a test that has unlimited undefined possibilities.” The U.S. Chamber distinguished the NPRM's additional factors section from the 2021 IC Rule's section on additional factors, asserting that the 2021 IC Rule constrained or narrowed the additional factors application by, first, explicitly assigning more weight to core factors than any potentially relevant additional factors, and second, by identifying relevant additional factors.
Some commenters suggested that the Department assign the category of potentially relevant additional factors less weight than the enumerated factors.
Other commenters asked the Department to specifically recognize certain additional factors. For example, DSA suggested that the Department identify as an additional factor “the recognition of independent contractor status for businesses under other statutes, such as the Internal Revenue Code and numerous state statutes.” TechServe Alliance urged the Department to “consider the degree of independent business formalization (incorporation, licenses, taxes) in analyzing” independent contractor status. ACRE et al. requested that the Department consider the degree of transparency provided to a worker about the nature of the work, such as the location, scope, and pay for a particular task, as an additional factor. SIFMA commented that the Department should recognize employment or independent contractor agreements as an additional factor relevant to the economic reality inquiry. ABC suggested the Department recognize as an additional factor “whether it is a recognized, longstanding practice for a large segment of the industry to treat certain types of workers as independent contractors.” A legal blogger urged the Department to clarify some additional factors courts have used in determining whether there is an employment relationship, stating that, for example, “the courts have considered whether the potential employer has the right to terminate the worker for any reason at any time; whether the parties are subject to an agreement indicating an intent to establish an independent contractor relationship; and whether the worker operates in the form of a corporate entity, including as a limited liability company.”
After further consideration, and consistent with the NPRM, the Department declines to identify in this final rule any particular additional factors that may be relevant. The Department believes that the regulatory text addressing additional factors, which focuses on whether the additional factors are indicative of whether the worker is in business for themselves or is economically dependent on the potential employer for work, is sufficiently constrained to narrow the possible relevant considerations and sufficiently flexible to capture potentially relevant factual considerations that fall outside the enumerated factors. In light of this, the Department believes it is unnecessary to specify any additional factors. The Department previously identified the “degree of independent business organization and operation” as a seventh factor that it considered in its analysis.
Finally, Flex requested that the Department clarify whether it still agrees with guidance as to the lack of relevance of certain factors expressed in WHD Fact Sheet #13. Flex urged the Department to “add guidance to the proposed rule that mirrors the subregulatory guidance in Fact Sheet #13 and make clear that the same factors previously deemed not relevant are still deemed not relevant.” While the Department declines to identify specific factors as never relevant to the inquiry of whether a worker is economically dependent or in business for themselves, the Department agrees that certain factors are generally immaterial
The Department is finalizing the additional factors section (§ 795.110(b)(7)) as proposed with one minor editorial change as explained.
The Department proposed to remove § 795.110 of the 2021 IC Rule and use that section for the discussion of the economic reality factors.
In its proposal, the Department acknowledged that contractual authority may in some instances be less relevant, but noted that the 2021 IC Rule's position that actual practice is always more relevant is incompatible with an approach that does not apply the factors mechanically but looks to the totality of the circumstances in evaluating the economic realities. The Department explained that the focus is always on the economic realities rather than mere labels, but contractual provisions are not always mere labels. Instead, contractual provisions sometimes reflect and influence the economic realities of the relationship. The Department explained that within each factor of the test, there may be actual practices that are relevant, and there may also be contractual provisions that are relevant and that this examination will be specific to the facts of each economic relationship and cannot be predetermined.
In the NPRM, the Department also discussed the 2021 IC Rule's response to “comments asserting that prioritizing actual practice would make the economic reality test impermissibly narrower than the common law control test.”
Multiple commenters expressed support for the Department's decision to remove the 2021 IC Rule's provision on the primacy of actual practice. For example, the State AGs agreed with the NPRM's reasoning, noting “that unexercised contractual powers among the parties may be equally as relevant to determining economic dependence as exercised powers” and stating that “[t]he Department rightly recognizes that the parties' actual practice is not more relevant than any other factor as to the question of economic dependence.” The LA Fed & Teamsters Locals stated “a worker cannot be said to be acting independently in running their own business if they are unable to make and effectuate certain decisions because another entity has reserved power over those decisions.” Similarly, NELP commented that the NPRM rightly recognized “that contractual provisions can be powerful silencers; a right that is never exercised may be more significant evidence of control than a right that is routinely ignored.” Justice at Work Pennsylvania commented that they support the Department's position on the primacy of actual practice “which would restore the broad, holistic test for FLSA employment, as intended by Congress.” Gale Healthcare Solutions similarly commented that they “agree with DOL's proposal to remove Section 795.110 of the 2021 IC Rule, as every fact that is relevant to economic dependence should be considered in the analysis of economic dependence, and contractual possibilities—not just actual practices—should be considered.”
A number of commenters, however, expressed disagreement with the Department's proposal to remove this provision of the 2021 IC Rule. For example, FMI commented that “control has always been evaluated based upon the actual exercise of control, that is, what the actual practice of the business and worker is—not the theoretical reservation of control.” Cambridge Investment Research commented that “[m]erely because an independent contractor elects not to take advantage of his or her independence or freedom says nothing about whether in fact the worker is properly classified.” The U.S. Chamber expressed concern that the NPRM “contradicts the principle that `[i]t is not significant how one “could have” acted under the contract terms. The controlling economic realities are reflected by the way one actually acts.' ” N/MA urged the Department to maintain the 2021 IC Rule's position “that unexercised contractual rights are not irrelevant, they are simply not as informative as the actual experience of the parties,” expressed concerns that the NPRM “turns the economic realities test into a focus on economic possibilities,” and noted that “[c]ontractual provisions that are truly important necessarily manifest in the actual experiences of the worker.” CWI similarly commented: “To be clear, the 2021 IC Rule does not provide that unexercised rights are irrelevant. It merely states the obvious:
Upon considering the comments, the Department is finalizing the removal of § 795.110 of the 2021 IC Rule (Primacy of actual practice). Consistent with case law and the Department's historical position prior to the 2021 IC Rule, the Department declines to create a novel bright line rule that assigns a predetermined and immutable weight or level of importance to reserved rights. As explained in the NPRM, the Department believes a less prescriptive approach is more faithful to the totality-of-the-circumstances, economic-reality analysis, and contractual or other reserved rights should be considered like any other fact under each factor to the extent they indicate economic dependence.
Several commenters expressed concerns that the proposed removal of the primacy of actual practice provision was inconsistent with longstanding case law and previous guidance issued by the Department.
Contrary to these comments, the Department's approach to this issue is consistent with both prior Departmental guidance as well as judicial precedent. As the Department explained in the NPRM, AI 2015-1 recognized six economic realities factors that followed the six factors used by most federal courts, including a control factor described as “the degree of control exercised or retained by the employer.”
As the Department emphasizes in this final rule, it in no way intends to depart from case law which similarly emphasizes consideration of the actual behavior of the parties in deciding the economic reality inquiry.
This case law, however, does not require or even support the adoption of a generally applicable rule that in all circumstances reserved or unexercised rights, such as the right to control, are in every instance less indicative of the economic reality than the actual practices of the parties. Such a rule would be inconsistent with federal appellate court precedent recognizing that reserved rights may be more probative, such as the temporary nurse staffing agency in
Some commenters seemingly conflated the terms “economic reality” and “actual practice.”
Moreover, none of the case law cited by commenters—and to the best of the Department's knowledge, no existing case law—stands for the proposition that reserved or unexercised rights cannot under any circumstances be indicative of the economic realities, nor does the 2021 IC Rule's provision state that reserved rights are never relevant. Rather, as discussed, the case law is more consistent with the approach the Department is adopting in this final rule, which recognizes that while mere contractual language is not generally driving the economic reality inquiry, reserved contractual rights, like reserved control, may in certain cases be equally as, or more, indicative of the economic reality than the actual practice of the parties.
N/MA expressed their view that the Department “failed to identify any scenarios in which a contractual, but unexercised right would be more relevant than the parties' actual practices in assessing a worker's day-to-day economic realities.” The NPRM illustrated how reserved rights might be more indicative of the economic reality than actual practice where, for example, a potential employer reserves the right to supervise workers despite rarely making supervisory visits.
Several commentors also expressed concerns that the NPRM's approach will lead to an inconsistent application of the economic reality test and a lack of certainty and clarity for employers, workers, and factfinders. For example, SHRM urged the Department to retain the actual practice provision from the 2021 IC Rule, noting the NPRM “implies that unexecuted contractual rights may be more important than real-world practices” and “will require HR professionals to speculate on how WHD or a court may interpret each individual criterion” which will “surely result in inconsistencies in application and the resulting confusion will lead to continued uncertainty for employers and workers.” NAHB expressed similar concerns about clarity, noting that “actual practice is more relevant than what may be contractually or theoretically possible . . . and it provides a clearer and simpler federal test for determining worker status for regulated employers and small businesses.” Because the entirety of the economic reality must be considered in the analysis, the Department finds that it cannot reduce the inquiry to only actual practice and that the 2021 IC Rule's predetermined elevation of actual practice above unexercised or reserved rights is not fully consistent with the economic reality inquiry that the Department and courts have followed for decades.
The Coalition of Business Stakeholders expressed concerns that the Department failed to “specify just how important such `reserved control' is” and stated that the NPRM exacerbates “the uncertainty with which the Proposed Rule may be implemented” and “apparently directs the factfinder to weigh the control factor in favor of employee classification if a hiring entity
IWF expressed concerns that NPRM's approach to the primacy of actual practice was inconsistent, noting that “even accepting the Department's focus on theory, the proper application of this factor is far from clear. . . . The Proposed Rule states both that (1) `[i]t is often the case that the actual practice of the parties is more relevant to the economic dependence inquiry than contractual or theoretical possibilities,' and (2) `in other cases the contractual possibilities may reveal more about the economic reality than the parties' practices.' ” The Department's recognition that actual practice is often more relevant to the economic dependence inquiry than contractual possibilities is not at all inconsistent with its position that, in some factual circumstances, reserved contractual rights can be more or equally as indicative of the economic reality as the actual practices of the parties. The Department is rejecting the overly broad and mechanical approach that in all factual circumstances, for every worker in every industry and occupation, actual practice is always more indicative of the economic reality than reserved rights or contractual possibilities. The Department's position is more consistent with the case law, which does not deem these two concepts to be mutually exclusive and instead requires a nuanced consideration of all relevant facts.
Some commenters felt that the Department was focusing solely on how reserved rights might be used to find employee status. For example, IWF stated that the Department was interested in reserved rights only to the extent they support finding employee status.
The Club for Growth Foundation expressed concerns with the Department's statement that a reserved right to supervise workers, even unexercised, “may strongly influence the behavior of the worker in [his or her] performance of the work,” and this “may be more indicative of the reality of the economic relationship between the worker and the company than the company's apparent hands-off practice,” noting that “even under this example a company that does not intervene is surely exercising less control than one that does.” This comment misunderstands the relevant inquiry. The question is not whether a potential employer who reserves the right to control their workers can be said to exercise more control than a different potential employer who in actual practice exercises control over their workers. Rather, the inquiry is whether, as a matter of economic reality, a potential employer's reserved right of control is probative of a worker's economic dependence. The 2021 IC Rule mechanically provided that actual practice is always more relevant than reserved control. By removing that provision, this final rule takes the position that all relevant aspects of the working relationship, including reserved rights, should be considered, without placing a thumb on that scale.
The U.S. Chamber also raised concerns that having “contractual language eclipse actual practice would flip the economic realities on its head” and “would also prohibit certain facts from being introduced into evidence: namely, the actual practice of the parties, which according to the Supreme Court is the touchstone of the analysis.” The Department reiterates firmly that this final rule neither tips the scales in favor of contractual language over actual practice nor excludes the consideration of any relevant facts demonstrating economic dependence. Rather, the Department is merely declining to adopt a bright-line rule predetermining how relevant facts may be considered, recognizing that in some factual circumstances reserved rights may be as indicative of the economic reality as the actual practice of the parties. Additionally, the Department's final rule does not prohibit any subset of facts from being introduced into evidence before a factfinder, and certainly does not prohibit facts about the actual practices of the parties from being introduced into evidence. To the contrary, the purpose of eliminating the actual practice provision from the 2021 IC Rule is to ensure that all facts relevant to inquiry of economic dependence or independence may be considered.
For all of the foregoing reasons, the Department is finalizing the removal of § 795.110 of the 2021 IC Rule (Primacy of actual practice). As discussed in section V.C, § 795.110 of this rule contains a new provision discussing the economic reality test and the economic reality factors.
Several commenters addressed the examples that the Department provided in the proposed rule to illustrate the application of each factor of the economic reality test as applied to various factual scenarios. The Department provided these examples in the preamble of the proposal rather than in the final text of the regulations—as was the case with the 2021 IC Rule—to provide readers an application of the proposed factor immediately following the detailed description of each factor along with the discussion of the case law and rationale.
Several commenters found the examples generally helpful or applied them to their industry practices. For instance, the Advisor Group applied the Department's skill and initiative example to financial advisors. A freelance writer and editor found the examples provided in the preamble to be reasonable, though they suggested that sections describing each factor were narrower than the examples suggested. The AFL-CIO commended the Department's “decision to provide examples of how each of the various factors have been applied in commonly-occurring fact patterns.”
Other commenters had concerns regarding the examples or suggested alterations to various examples. For instance, the CA Chamber suggested that the investment factor example was confusing since the relative investments of a graphic designer would be dwarfed by a design firm, leading to different outcomes depending on whether the graphic designer worked for a large firm or a sole proprietor. In addition, a comment from two fellows at the Heritage Foundation suggested that this example was ambiguous because it was unclear if all the facts in the example, including the worker's investment in equipment, office space, and marketing, were required for the analysis.
Regarding the investment factor example, the Department discussed relative investments in the first scenario, where a worker occasionally purchased and used their own drafting tools while working for a commercial design firm. These tools were minor investments that do not further the worker's independent business beyond completing specific jobs for the commercial design firm. Regarding the CA Chamber's concern that the size of the business would alter a relative investment analysis, the example was not intended to alter the size of the hypothetical employer. However, to avoid confusion, the Department is aligning the examples to ensure that both feature a “commercial design firm” as the hypothetical employer. Additionally, the regulatory text for the investments factor explains that, in addition to comparing the sizes of the worker's and the employer's investments, the focus should be on comparing the nature of their investments to determine whether the worker is making similar types of investments as the employer that suggest that the worker is operating independently.
Further, commenters were concerned that the same facts that point toward independent contractor status under the investment prong example would point toward employee status under the integral prong. As the Department stated in the NPRM, however, the examples are intended to be aids to apply the discussion of each proposed factor; the examples are not designed to illustrate the application of the full totality-of-the-circumstances test. For instance, the Department's investment example intentionally does not address whether the designer is integral to the commercial design firm, which would necessitate a separate analysis.
Regarding the integral factor, IWF was concerned that the examples were unhelpful because they covered two different industries and did not illuminate what kinds of activities would be considered central or important. The Department's intent regarding this factor was to illuminate those tasks that are core to the functioning of the business,
Similarly, ABC was concerned that the example for the opportunity for profit or loss factor did not differentiate the facts between the two workers in a way that would demonstrate which facts were determinative of the analysis. As they noted, even if a worker relies on word of mouth instead of traditional advertising or only works for one client at a time, they can still be found to be independent contractors. However, the example of the landscaper includes a scenario where the first landscaper does not actively market their services and a second where the landscaper does market their services. The inclusion of these facts in the example does not indicate that the Department believes that traditional marketing is required for a worker to be classified as an independent contractor, only that such affirmative marketing may be probative of the worker acting in a way consistent with being in business for themself. Put another way, the Department intentionally drafted the examples to avoid giving the impression that certain facts are always less or always more probative to the analysis of any given factor.
SMACNA noted that the Department's second example for skill and initiative featuring a welder should omit the fact that the welder has specialty skills, since that should not change the general analysis under this factor. Instead, it suggested that the example should clarify how the welder “ `markets those skills in a manner that evidences business-like initiative.' ” Similarly, the DSA's comment noted that the skill and
The Department chose to display both workers as having high technical skills to illuminate the discussion regarding skill in the NPRM. Specialized skills are required for this factor to point to independent contractor status, but specialized skills alone are not sufficient; it is the use of those specialized skills to “contribute to business-like initiative that is consistent with the worker being in business for themself instead of being economically dependent on the employer.”
Several comments suggested that the Department include new industry-specific examples for various factors. For instance, Gale Healthcare Solutions requested that the Department provide an example that would apply to on-demand nursing staffing scenarios. 4A's requested that specific industries, such as “video production professionals, web designers, freelance writers, [and] fashion workers” be included as examples. And NAFO requested that a forestry example be included in the section of the rule discussing the integral factor.
The Department recognizes that examples specific to an industry can provide helpful guidance for that segment of the regulated community. As the Department explained, however, its intent is for the examples to provide general guidance to regulated parties in this rulemaking. Adding examples specific to commenter industries would reduce their general applicability to other parties and would require more facts and detail than can be included to create succinct, yet helpful, examples. The Department mentions various industries or occupations in the examples to provide recognizable context for the reader; the examples do not provide the Department's definitive view on the ultimate outcome of the totality-of-the-circumstances analysis.
Some commenters suggested that the Department add examples to capture newer facets of the economic reality factors. For instance, one commenter suggested that the Department should include an example to show how an employer's collection of data related to how a worker performs and use of that data to enhance their operations could be part of the economic reality analysis. The AFL-CIO similarly suggested that the Department should include an example where an employer implements control using algorithms.
In addition, commenters suggested that the Department should provide more examples of how current facets of the economic reality test would be applied. For instance, LeadingAge requested more examples of how the Department views reserved control and more examples regarding situations in which a worker's ability to work for others is constrained by the number of hours or days they need to work. Flex suggested that if the Department were to retain language under the control factor related to regulatory or contractual control, then the Department should provide “a comprehensive set of examples to illustrate that such cases would be rarities.” And CPIE requested additional examples of where the Department would find a worker to be properly classified as an independent contractor, particularly under the control, investment, and skill and initiative factors.
The Department agrees with commenters like the AFL-CIO that topics like control over data or algorithmic supervision are highly relevant to some workers and could have an impact on the economic reality test. However, as noted above, the purpose of the examples is to provide aids to applying the information just discussed in the preamble as to each factor. The Department intends for the examples to provide general guidance to regulated parties and not to be tied to the specifics of certain businesses or jobs. The examples reflect the Department's enforcement experience in some of the most commonly occurring scenarios.
In addition, the Department understands that commenters such as LeadingAge would prefer more context regarding reserved control. However, the Department declines to add that additional context to the current examples, which were drafted to address common themes regarding each factor to illuminate the preamble discussion, not present every fact or issue presented in the proposed rule. The Department is also concerned that additional results-oriented examples—such as those requested by NAHB specifically addressing when a worker would be classified as an independent contractor under certain factors—would not be helpful to the broader public. Such examples could leave the impression that the proper classification of workers rests on one or a handful of factors. To the contrary, the Department believes the current examples' focus on illustrating the basic analysis under a single factor and noting that the results indicate potential classification under each factor, but not the ultimate result, provides more useful guidance for this rule. Moreover, industry- or profession-specific examples relaying how a worker's ultimate classification would be resolved are best addressed in subregulatory guidance after the issuance of this final rule as necessary.
Commenters suggested that the Department provide examples that mix and compare the factors together. For instance, Grantmakers in the Arts suggested that the Department include examples that demonstrate the resolution of a worker's status after applying multiple factors and ArcBest Corporation provided an example applying the full economic reality test to an owner operator in the trucking industry. The Department declines to offer such examples in this rulemaking. While a multifactor example might appear helpful, the Department is also concerned that such an example could potentially prejudge a specific case in a specific industry or occupation not yet before the Department or a court, without adequate factual predicates. Moreover, such an example would undermine the Department's efforts to align the economic reality analysis with current precedent, which requires a consideration of all the factors. Finally, any multifactor analysis would require a larger number of facts to be useful, which may be less generally useful to workers and businesses who may not be able to analogize the given example to their current working relationships.
IBA commented that some examples were too similar to prior withdrawn subregulatory guidance. The Department notes that it assembled these examples, in part, by reviewing case law, opinion letters, the 2021 IC Rule, and other subregulatory guidance. Each source was consulted and helped the Department arrive at the examples provided.
Other commenters requested that the Department keep examples that were provided in the 2021 IC Rule. For instance, the Arizona Trucking Association suggested that the Department keep the trucking example from the 2021 IC Rule. Similarly, NAWBO noted how helpful the trucker and home repair examples were in the 2021 IC Rule. As explained above, some facets of the 2021 IC Rule's examples no longer align with the approach in this final rule. For instance, the 2021 IC Rule's app-based home repair example discusses investment as a component of the opportunity for profit or loss factor. As proposed in the NPRM and finalized here, however, the two factors are separate and evaluated independently.
Finally, some commenters suggested that the Department include examples in the final rule's regulatory text, as was done with the 2021 IC Rule. For instance, the author of an independent contractor legal blog requested that more examples be provided in the regulatory text, including those related to the integral factor. 4A's similarly requests that examples be included in the regulatory text and that they better correlate with modern trends in employment.
The Department recognizes that examples are helpful to workers and businesses alike. The Department continues to believe, however, that the examples provided in the NPRM currently provide the greatest value by residing in the preamble to the final rule following the detailed discussion of the relevant factor. In this way, the examples can provide a capstone for each section's discussion of the relevant economic reality factor, rather than being disconnected from that discussion and appearing only in regulatory text. The Department is confident that the examples initially provided in the NPRM preamble, as modified in the preamble to this final rule in response to comments received, serve this explanatory purpose. Over time, the Department will continue providing guidance where necessary through subregulatory guidance.
As it did in the NPRM, the Department is including examples of each factor in the preamble to this final rule. As discussed above, the example of the investment factor has been clarified. In addition, non-substantive changes have been made to the final sentence of each paragraph in each example to clearly indicate which factor is under discussion and that the facts of each example indicate employee or independent contractor status under that factor.
The Department proposed that the regulatory text include a severability provision.
In addition, the Department explained in the NPRM that rescission of the 2021 IC Rule would be separate from the new regulations regarding employee and independent contractor status promulgated to replace the 2021 IC Rule: “That rescission would operate independently of the new content in any new final rule, as the Department intends it to be severable from the substantive proposal for adding a new part 795.” The Department further explained that, even if the “substantive provisions” (
Few commenters addressed severability, and the focus of their comments was more on the severability of the rescission of the 2021 IC Rule from the proposed regulations to replace it than the proposed severability provision at 29 CFR 795.115. Several commenters supported the Department's position that the rescission of the 2021 IC Rule is severable from the proposed regulations to replace it. For example, Farmworker Justice stated that “[b]oth the rescission of the 2021 IC Rule and the newly proposed portion of the [NPRM] are critical to reinstating stability and clarity in the Department's approach to defining an employee.” It advocated that the “Department should expressly state that it intends for the rescission of the 2021 IC Rule to be severable from the new portion of the [NPRM].” The AFL-CIO agreed that “the severability clause and DOL's explanation of that clause in the preamble to the NPRM make clear that, in the unlikely event a court were to decide to enjoin some portion of the Final Rule addressing the economic reality test, DOL intends that the rescission of the 2021 IC Rule should still take effect.” It described this approach as “cautious” and “prudent” and added that “the severance clause makes clear that DOL intended that the rescission of the 2021 IC Rule stands on its own.” LIUNA also supported “the Department's decision to render rescission of the 2021 IC Rule severable from the substantive proposal for adding further regulatory guidance.” It added that the Department was “correct to conclude that, in the unlikely event its substantive proposals are `invalidated, enjoined, or otherwise not put into effect,' the 2021 IC Rule should still not become operative.”
Several other commenters criticized the Department's position that the rescission of the 2021 IC Rule is severable from the proposed regulations to replace it. For example, Freedom Foundation stated that “[t]he rescission of the [2021 IC Rule] and the adoption of the proposed rule should not be severable” and added that the Department's “promise that in the absence of a regulation it would provide subregulatory guidance has a hollow ring.” Raymond James described the Department's position as “present[ing] workers and business with a Hobson's Choice: either accept the new regulations, or there will be no regulations at all.” It stated that, “[c]onsidering that the Department will not even consider making discrete changes, it does not seem appropriate to require businesses and workers to accept a wholesale re-write or face the risks of having no rule at all.” And CWI asserted that the reference to “ `substantive' provisions” in the NPRM's severability discussion were
Having considered the comments, the Department is finalizing the severability provision in 29 CFR 795.115 as proposed and finalizing its proposal that the rescission of the 2021 IC Rule set forth in this final rule is separate and severable from the new part 795 regulations for determining employee or independent contractor status under the FLSA set forth in this final rule. No commenter questioned the well-settled legal principle that one portion of a rule may remain operative if another portion is deemed impermissible as long as the agency would independently adopt the remaining portion and the remaining portion can operate sensibly without the impermissible portion.
Finally, in addition to the proposed regulations at part 795, the Department proposed to amend existing regulatory provisions addressing employee or independent contractor status under the FLSA in particular contexts at
The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
Under Executive Order 12866, as amended by Executive Order 14094, the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) determines whether a regulatory action is significant and, therefore, subject to the requirements of the Executive Order and OMB review.
Executive Order 13563 directs agencies to, among other things, propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; that it is tailored to impose the least burden on society, consistent with obtaining the regulatory objectives; and that, in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits.
In this rule, the Department is rescinding and replacing regulations addressing the classification of workers as employees or independent contractors under the Fair Labor Standards Act (FLSA or Act) to be more consistent with judicial precedent and the Act's text and purpose as interpreted by the courts. For decades, the Department and courts have applied an economic reality test to determine whether a worker is an employee or an independent contractor under the FLSA. The ultimate inquiry is whether, as a matter of economic reality, the worker is economically dependent on the employer for work (and is thus an employee) or is in business for themself (and is thus an independent contractor). To answer this ultimate inquiry of economic dependence, the courts and the Department have historically conducted a multifactor totality-of-the-circumstances analysis, considering multiple factors with no factor or factors being dispositive to determine whether a worker is an employee or an independent contractor under the FLSA.
In January 2021, the Department published a rule titled “Independent Contractor Status Under the Fair Labor Standards Act” (2021 IC Rule) that
Therefore, the Department is rescinding the 2021 IC Rule and replacing it with an analysis for determining employee or independent contractor status under the Act that is more consistent with existing judicial precedent and the Department's longstanding guidance prior to the 2021 IC Rule. Of particular note, the regulations set forth in this final rule do not use “core factors” and instead return to a totality-of-the-circumstances analysis of the economic reality test in which the factors do not have a predetermined weight and are considered in view of the economic reality of the whole activity. Regarding the economic reality factors, this final rule returns to the longstanding framing of investment as its own separate factor, and integral as an integral part of the potential employer's business rather than an integrated unit of production. The final rule also provides broader discussion of how scheduling, remote supervision, price setting, and the ability to work for others should be considered under the control factor, and it allows for consideration of reserved rights to control while removing the provision in the 2021 IC Rule that minimized the relevance of retained rights. Further, the final rule discusses exclusivity in the context of the permanency factor, and initiative in the context of the skill factor. The Department also made several adjustments to the proposed regulations after consideration of the comments received, including revisions to the regulations regarding the investment factor and the control factor (specifically addressing compliance with legal obligations).
The Department believes this rule is more grounded in the ultimate inquiry of whether a worker is in business for themself or is economically dependent on the employer for work. Workers, employers, and independent businesses should benefit from affirmative regulatory guidance from the Department further developing the concept of economic dependence and how each economic reality factor is probative of whether the worker is economically dependent on the employer for work or is in business for themself.
When evaluating the economic impact of this rule, the Department has considered the appropriate baseline with which to compare changes. As discussed in section II.C.3., on March 14, 2022, in a lawsuit challenging the Department's delay and withdrawal of the 2021 IC Rule, a federal district court in the Eastern District of Texas issued a decision vacating the delay and withdrawal of the 2021 IC Rule and concluded that the 2021 IC Rule became effective on March 8, 2021.
Because the Department does not have data on the number of misclassified workers and because there are inherent challenges in determining the extent to which the rule would reduce this misclassification, much of the analysis is presented qualitatively, aside from rule familiarization costs, which are quantified.
As discussed above, the 2021 IC Rule is the appropriate baseline to represent what the world could look like going forward in the absence of this rule. However, this baseline may not fully reflect what the world would look like absent this rule. Until March 2022, the Department had not been using the framework for analysis from the 2021 IC Rule when assessing independent contractor status in its enforcement and compliance assistance activities because the Department had published final rules delaying the effective date of, and subsequently withdrawing, the 2021 IC Rule. (As described in section II.C., a federal district court in March 2022 vacated the Department's Delay and Withdrawal Rules and ruled that the 2021 IC Rule had taken effect in March
The Coalition to Promote Independent Entrepreneurs agreed that the 2021 IC Rule is the correct baseline to analyze the recission of the rule, but not the separate issue of issuing new regulations “containing a new interpretation of the multifactor economic reality test.” This commenter appeared to disagree with the Department's explanation that “under the
The Department does not believe, as reflected in this analysis, that this rule will result in widespread reclassification of workers. That is, for workers who are properly classified as independent contractors, the Department does not, for the most part, anticipate that the guidance provided in this rule will result in these workers being reclassified as employees. Especially compared to the guidance that was in effect before the 2021 IC Rule, the test put forth in this rule would not make independent contractor status significantly less likely. Rather, impacts resulting from this rule will mainly be due to a reduction in misclassification. If the 2021 IC Rule had been retained, the risk of misclassification could have increased. As noted previously in section III, the 2021 IC Rule's elevation of certain factors and its preclusion of consideration of relevant facts under several factors, which is a departure from judicial precedent applying the economic reality test, could result in misapplication of the economic reality test and may have conveyed to employers that it might be easier than it was prior to the 2021 IC Rule to classify certain workers as independent contractors rather than FLSA-covered employees. This rule could therefore help prevent this misclassification by providing employers with guidance that is more consistent with longstanding precedent.
Many commenters who wrote in opposition to the proposed rule were concerned that, because of this rule, many independent contractors would be reclassified as employees, and that there would be a large negative impact associated with this reclassification. For example, a senior research fellow at the Mercatus Center said “DOL implicitly assumes that 100 percent of potential contracting jobs will be turned into employment jobs; this assumption is extremely optimistic and downplays very significant consequences in connection with the rule in question.” Cambridge Investment Research Inc. stated that the practical result of the Proposed Rule would be that many workers will be reclassified as employees, including those who want to be independent contractors. However, the proposed rule explicitly noted that the Department does not expect any widespread reclassification of independent contractors as employees, and at no point assumed that 100 percent of contracting jobs would be turned into employment jobs. The Department believes that concerns about widespread reclassification are not realistic because the Department is adopting guidance in this rule that is essentially identical to the standard it applied for decades prior to the 2021 IC Rule, derived from the same analysis that courts have applied for decades and have been continuing to apply since the 2021 IC Rule took effect.
The Department received multiple comments discussing the negative impacts of widespread reclassification and citing research about potential job losses and loss of earnings. For example, Littler's Workplace Policy Institute says, “[A] study published last April concluded that widespread reclassification would destroy as many as 769,000 work opportunities and wipe out $9.1 billion in earnings.
While the Department responds throughout this economic analysis to comments about the potential negative impacts of the rule from those who are in opposition, it is important to note that any reclassification or job loss estimates associated with a nationwide ABC test are not appropriate to apply to this rule because this rule does not adopt an ABC test and are therefore not included in the Department's estimated impacts.
To provide some context on the prevalence of independent contracting, the Department first estimated the number of independent contractors. There are a variety of estimates of the number of independent contractors spanning a wide range depending on methodologies and how the population is defined.
The Department believes that the Current Population Survey (CPS) Contingent Worker Supplement (CWS) offers an appropriate lower bound for
The U.S. Census Bureau conducts the CPS, and it is published monthly by the Bureau of Labor Statistics (BLS). The sample includes approximately 60,000 households and is nationally representative. Periodically since 1995, and most recently in 2017, the CPS included a supplement to the May survey to collect data on contingent and alternative employment arrangements. Based on the CWS, there were 10.6 million independent contractors in 2017, amounting to 6.9 percent of workers.
The BLS's estimate of independent contractors includes “[w]orkers who are identified as independent contractors, independent consultants, or freelance workers, regardless of whether they are self-employed or wage and salary workers.” BLS asks two questions to identify independent contractors:
• Workers reporting that they are self-employed are asked: “Are you self-employed as an independent contractor, independent consultant, freelance worker, or something else (such as a shop or restaurant owner)?” (9.0 million independent contractors). We refer to these workers as “self-employed independent contractors” in the remainder of the analysis.
• Workers reporting that they are wage and salary workers are asked: “Last week, were you working as an independent contractor, an independent consultant, or a freelance worker? That is, someone who obtains customers on their own to provide a product or service.” (1.6 million independent contractors). We refer to these workers as “other independent contractors” in the remainder of the analysis.
It is important to note that independent contractors are identified in the CWS in the context of the respondent's “main” job (
The CWS's large sample size results in small sampling error. However, the questionnaire's design may result in some non-sampling error. For example, one potential source of bias is that the CWS only considers independent contractors during a single point in time—the survey week (generally the week prior to the interview).
These numbers will thus underestimate the prevalence of independent contracting over a longer timeframe, which may better capture the size of the population.
The CWS also uses proxy responses, which may underestimate the number of independent contractors. The RAND
Another potential source of bias in the CWS is that some respondents may not self-identify as independent contractors. For example, Abraham et al. (2020) estimated that 6.6 percent of workers in their study initially responded that they are employees but were then determined (by the researcher) to be independent contractors based on their answers to follow-up questions.
Conversely, another source of bias in the CWS is that some workers who self-identify as independent contractors may misunderstand their status or may be misclassified by their employer. These workers may answer the survey in the affirmative, despite not truly being independent contractors. While precise and representative estimates of nationwide misclassification are unavailable, multiple studies suggest its prevalence in numerous sectors in the economy.
Because reliable data on the potential magnitude of the biases discussed above are unavailable, and so the net direction of the biases is unknown, the Department has not attempted to calculate how these biases may impact the estimated number of independent contractors.
As noted above, integrating the estimated proportions of workers who are independent contractors on secondary or otherwise excluded jobs produces an estimate population of 22.1 million, representing the total number of workers working as independent contractors in any job at a given time. Given the prevalence of independent contractors who work sporadically and earn minimal income, adjusting the estimate according to these sources captures some of this population. It is likely that this figure is still an underestimate of the true independent contractor pool. This is because, in part, the CWS estimate represents only the number of workers who worked as independent contractors on their primary job during the survey reference week, which is why the Department applied the research literature and adjusted this measure to include workers who are independent contractors in a secondary job or who were excluded from the CWS estimate due to other factors.
To further consider the range of estimates available, the Department conducted a literature review, the findings of which are presented in Table 1. Other studies were also considered but are excluded from this table because the study populations were broader than just independent contractors, limited to one state, or include workers outside of the United States.
Jackson et al. (2017)
The Department's estimate of the number of independent contractors, 22.1 million, is based primarily on 2017 data. Because COVID-19 has had a substantial impact on the labor market, it is possible that this estimate is not currently appropriate. The Department conducted a search for more recent data to indicate any trends in the number of independent contractors since 2017. The findings are inconclusive but generally do not indicate an increase.
The Federal Reserve Board's annual Survey of Household Economics and Decisionmaking (SHED) provides measures of the economic well-being of U.S. households. The Federal Reserve Board publishes a report “Economic Well-Being of U.S. Households” summarizing the findings of each survey.
MBO Partners, a company with the goal of connecting enterprise organizations and top independent professionals, also conducts an annual survey and prepares a research report of the findings.
A few commenters said that the Department underestimated the number of independent contractors in the U.S. because the estimate is based on outdated data. Commenters such as the Coalition for Workforce Innovation referenced a more recent study from Upwork, which found that “59 million workers performed freelance work in the past 12 months, representing 36%—or more than one-third—of the entire U.S. workforce.”
The Department reviewed demographic information on independent contractors using the CWS, which, as stated above, only measures those who say that their independent contractor job is their primary job and that they worked at the independent contractor job in the survey's reference week. According to the CWS, these primary independent contractors are most prevalent in the construction and professional and business services industries. These two industries comprise 44 percent of primary independent contractors. Independent contractors tend to be older and predominately male (64 percent). Millennials (defined as those born 1981-1996) have a significantly lower prevalence of primary independent contracting than older generations: 4.2 percent for Millennials compared to 7.2 percent for Generation X (defined as those born 1965-1980) and 10.2 percent for Baby Boomers and Matures (defined as individuals born before 1965).
According to the CWS, 64 percent of primary independent contractors are men. Additionally, Garin and Koustas (2021) find that men comprise both a larger share of independent contractors who perform work through traditional contracting arrangements and those who secure work through online platforms.
According to the CWS, white workers are somewhat overrepresented among primary independent contractors; they comprise 85 percent of this population but only 79 percent of the population of workers. Conversely, Black workers are somewhat underrepresented (comprising 8 percent and 13 percent, respectively).
An individual commenter wrote that because the COVID-19 pandemic created specific burdens for women and people of color and resulted in the increased participation of both groups in self-employment, the use of 2017 data reduces the inclusion of these workers. The commenter cited a study from the Center for Economic Policy and Research (CEPR), which found “[t]he share of employed women who report being self-employed rose from 7.5 percent in the pre-pandemic period to 8.2 percent: an increase of 0.7 percentage points. By contrast, the share of employed men who report being self-employed rose by just 0.3 percentage points (from 12.1 percent to 12.4 percent).”
Regulatory familiarization costs represent direct costs to businesses and current independent contractors associated with reviewing the new regulation. To estimate the total regulatory familiarization costs, the Department used (1) the number of establishments and government entities using independent contractors, and the current number of independent contractors; (2) the wage rates for the employees and for the independent contractors reviewing the rule; and (3) the number of hours that it estimates employers and independent contractors will spend reviewing the rule. This section presents the calculation for establishments first and then the calculation for independent contractors.
Regulatory familiarization costs may be a function of the number of establishments or the number of firms.
To estimate the number of establishments incurring regulatory familiarization costs, the Department began by using the Statistics of U.S. Businesses (SUSB) to define the total pool of establishments in the United States.
This universe is then restricted to the subset of establishments that engage independent contractors. In 2019, Lim et al. used extensive IRS data to model the independent contractor market and found that 34.7 percent of firms hire independent contractors.
The Department assumes that a Compensation, Benefits, and Job Analysis Specialist (SOC 13-1141) (or a staff member in a similar position) will review the rule.
For regulatory familiarization costs for independent contractors, the Department used its estimate of 22.1 million independent contractors and assumed each independent contractor will spend 30 minutes to review the regulation. In the proposed rule, the Department assumed that it would take independent contractors an average of 15 minutes to review the regulation but has also increased this estimate in the final rule in response to commenters' concerns. The average time spent by independent contractors is estimated to be shorter than for establishments and governments. This difference is in part because the Department believes independent contractors are likely to rely on summaries of the key elements of the rule change published by the Department, worker advocacy groups, media outlets, and accountancy and consultancy firms, as has occurred with other rulemakings. This time is valued at $23.46, which is the median hourly wage rate for independent contractors in the CWS of $19.45 updated to 2022 dollars using the gross domestic product (GDP) deflator.
The total one-time regulatory familiarization costs for establishments, governments, and independent contractors are estimated to be $408 million. Regulatory familiarization costs in future years are assumed to be de minimis. Employers and independent contractors would continue to familiarize themselves with the applicable legal framework in the absence of the rule, so this rulemaking is not expected to impose costs after the first year. This amounts to a 10-year annualized cost of $56.4 million at a discount rate of 3 percent or $54.3 million at a discount rate of 7 percent.
Multiple commenters said that they were concerned that the Department's rule familiarization cost estimate was too low. Commenters asserted that the Department's initial estimate of 30 minutes to review the rule was too short, and that it would take firms much longer to read and understand the final rule. For example, a comment from two fellows at the Heritage Foundation estimated that “[e]ven individuals with very high rates of reading and comprehension” would need more than two hours to read the full proposal. The Coalition for Workforce Innovation said that while a person could simply read the rule in 30 minutes, it wouldn't be enough time to understand the rule and translate the understanding into advice to be communicated within the organization. The U.S. Chamber of Commerce commented, “[a]n economically appropriate approach for gauging the scale of familiarization costs is to assume no less than one hour of familiarization time for both affected workers and hiring establishments.” The Modern Economy Project commented that the complexity of the rulemaking and of the issue of worker classification necessitates more time for review. Other commenters echoed similar sentiments. In response to all the comments received on this topic, the Department reconsidered the time for rule familiarization and doubled its original estimates, increasing them to 1 hour for potentially affected firms and 30 minutes for independent contractors. The Department believes that a longer time estimate would not be appropriate because this estimate represents an average of the firms who may spend more time for review, and those who will not spend any time reviewing the rule.
Some commenters also expressed concerns with the Department's assumption that the rule would be read by a Compensation, Benefits, and Job Analysis Specialist. For example, the Coalition for Workforce Innovation stated, “businesses task their high-level, well-trained human resources workers, in-house attorneys, and outside counsel with this responsibility at an hourly rate well exceeding $50.” The U.S. Chamber of Commerce wrote that the “Department's selection of `Compensation, Benefits and Job Analysis Specialist' as the model reviewer for its calculation of familiarization costs misunderstands and misrepresents the seriousness and complexity of the regulation being proposed.” The Department acknowledges that in some cases, higher-paid senior workers could be charged with reading this rule, but believes that the use of the Compensation, Benefits, and Job Analysis Specialist hourly wage is consistent with other rules released by the Wage and Hour Division and the Department, including the 2021 IC Rule.
Some commenters asserted that the Department did not properly consider all of the potential costs of the regulation. For example, commenters such as the Financial Services Institute said that the Department did not consider substantial costs of the rule, such as the cost that will arise from businesses being forced to provide health insurance and other benefits to their former independent contractors or the indirect costs of higher taxes. The Department notes that these costs would be considered transfers and are discussed in section VII.E of this economic analysis. Other commenters mentioned that the rule would lead to significant compliance costs for firms. For example, two fellows from the Heritage Foundation commented that in addition to familiarizing themselves with the rule, the firm would have to perform an individualized assessment of the economic relationship with each of their contractors, renegotiate or cancel existing contracts, spend time converting independent contractors into employees, engage with labor unions and elections, and deal with enforcement actions. The Cetera Financial Group said that the ongoing cost of compliance for employers is considerable. They stated that applying this rule only to independent financial professionals would create an obligation for employers to track the earnings and hours worked for more than 140,000 independent financial professionals in the U.S. As discussed above, the Department does not believe that this rule will lead to widespread reclassification (and additional tracking of hours and earnings), and for the limited cases in which reclassification could occur, many of these costs should already be incurred by firms. For example, as a matter of good practice, firms should already be assessing the economic relationship of contractors when they engage in business with them.
Other commenters wrote that the rule would actually reduce compliance costs. For example, the Laborers' International Union of North America (LIUNA) urged the Department to consider reduced compliance costs as an important impact of the rule. They stated that the rule will improve public understanding of legal obligations because it codifies judicial precedent in a comprehensive, accessible, and reliable format.
This rule presents a detailed analysis for determining employee or independent contractor status under the Act that is more consistent with existing judicial precedent and the Department's longstanding guidance prior to the 2021 IC Rule. This analysis will provide more consistent guidance to employers in properly classifying workers as employees or independent contractors, as well as useful guidance to workers on whether they are correctly classified as employees or independent contractors. The analysis will provide a consistent approach for those businesses that engage (or wish to engage) independent contractors, who the Department recognizes play an important role in the economy. The rule's consistency with judicial precedent could also help to reduce legal disputes.
This rule will provide consistent guidance to employers in properly classifying workers as employees or independent contractors, as well as useful guidance to workers on whether they are correctly classified as employees or independent contractors. This clear guidance could help reduce the occurrence of misclassification.
The prevalence of misclassification of employees as independent contractors is unclear, but the literature indicates it is substantial. A 2020 National Employment Law Project (NELP) report, for example, reviewed state audits and concluded that “these state reports show that 10 to 30 percent of employers (or more) misclassify their employees as independent contractors.”
Misclassification disproportionately affects Black, indigenous, and people of color (BIPOC) because of the disparity in occupations affected by misclassification.
Misclassification contravenes one of the purposes of the FLSA: eliminating “unfair method[s] of competition in commerce.”
Multiple commenters also provided data on the prevalence and harms of misclassification, specifically in the construction industry. For example, the Illinois Economic Policy Institute (ILEPI), the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW), the United Brotherhood of Carpenters and Joiners (UBC), and North America's Building Trades Unions (NABTU), among others, all cite to a study from Russell Ormiston et al., which found that between 12 and 21 percent of the construction industry workforce were either misclassified as independent contractors or working “off-the-books.”
Misclassification of independent contractors culminates in a reduced social safety net starting with the individual and cascading out through the local, state, and federal programs. Employees who are misclassified as independent contractors generally do not receive employer-sponsored health and retirement benefits, potentially resulting in or contributing to long-term financial insecurity.
Employees are more likely than independent contractors to have health insurance. According to the CWS, 75.4 percent of independent contractors have health insurance, compared to 84.0 percent of employees. This gap between independent contractors and employees is also true for low-income workers. Using CWS data, the Department compared health insurance rates for workers earning less than $15 per hour and found that 71.0 percent of independent contractors have health insurance compared with 78.5 percent of employees. Lastly, the Department considered whether this gap could be larger for traditionally underserved groups or minorities. Considering the subsets of independent contractors who are female, Hispanic, or Black, only the Hispanic independent contractors have a statistically significant difference in the percentage of workers with health insurance (estimated to be about 18 percentage points lower).
Additionally, a major source of retirement savings is employer-sponsored retirement accounts. According to the CWS, 55.5 percent of employees have a retirement account with their current employer; in addition, the BLS Employer Costs for Employee Compensation (ECEC) found that in 2022, employers paid 5.1 percent of employees' total compensation in retirement benefits on average ($2.16/$42.48).
To the extent that this rule would reduce misclassification, it could result in transfers to workers in the form of employer-provided benefits like health care and retirement benefits. The National Retail Federation questioned this assumption, asserting that “it does not take into account the myriad of insurance arrangements that are available to individuals and their families.” While some independent contractors do have health insurance, as evidenced in the data discussed above, they are insured at a lower rate than employees.
As shown in Table 3 below, using data from BLS Employer Costs for Employee Compensation, the Department has calculated the average cost to employers for various benefits as a percentage of the average cost to employers for wages and salaries. This share was then applied to the median weekly wage of both full-time and part-time independent contractors to estimate the value of these benefits to an average independent contractor if they were to begin receiving these benefits. The Department estimated that the value of these benefits could average more than $15,000 annually for full-time independent contractors and more than $6,000 annually for part-time independent contractors. This example transfer estimate could be reduced if there is a downward adjustment in the worker's wage rate to offset a portion of the employer's cost associated with these new benefits.
As self-employed workers, independent contractors are legally obligated to pay both the employee and employer shares of the Federal Insurance Contributions Act (FICA) taxes. Thus, if workers' classifications change from independent contractors to employees, there could be a transfer in federal tax liabilities from workers to employers.
The Coalition to Promote Independent Entrepreneurs contended that the Department's analysis of transfers is problematic and that the claim that employers are likely to keep the status of most workers the same across all benefits and requirements is legally incorrect. In the Department's enforcement experience, employers generally classify workers as employees or independent contractors for all purposes. The Department is not making any statement regarding employers' compliance with other laws that use different standards for employee classification than the FLSA.
In addition to affecting tax liabilities for workers, this rule could have an impact on state tax revenue and budgets. Misclassification results in lost revenue and increased costs for states because states receive less tax revenue than they otherwise would from payroll taxes, and they have reduced funds to unemployment insurance, workers' compensation, and paid leave programs.
Generally, employer requirements pertaining to unemployment insurance, disability insurance, or worker's compensation are on behalf of employees, therefore independent contractors do not have access to those benefits. Reduced unemployment insurance, disability insurance, and worker's compensation contributions result in reduced disbursement capabilities. Misclassification of employees as independent contractors thus impacts the funds paid into such state programs. Even if the misclassified worker is unaffected because they need no assistance, the employer has not paid into the programs as required. As a result, the state has diminished funds for those who require the benefits. For example, in Tennessee, from September 2017 to October 2018, the Uninsured Employers Fund unit “assessed 234 penalties against employers for not maintaining workers' compensation insurance, for a total assessment amount of $2,730,269.60.”
When workers are properly classified as independent contractors, the minimum wage, overtime pay, and other requirements of the FLSA no longer apply. The 2017 CWS data indicate that independent contractors are more likely than employees to report earning less than the FLSA minimum wage of $7.25 per hour (8 percent for self-employed independent contractors, 5 percent for other independent contractors, and 2 percent for employees). Concerning overtime pay, not only do independent contractors not receive the overtime pay premium, but the number of overtime hours worked (more than 40 hours in a workweek) by independent contractors is also higher. Analysis of the CWS data indicated that, before conditioning on covariates, primary self-employed independent contractors are more likely to work overtime at their main job than employees, as 29 percent of self-employed independent contractors reported working overtime versus just 17 percent for employees.
As discussed above, compared to the 2021 IC Rule, this rule could result in reduced misclassification of employees as independent contractors. Any reduction in misclassification that occurs because of this rule would lead to an increase in the applicability of these FLSA protections for workers and subsequently may result in transfers relating to minimum wage and overtime pay. Specifically, to the extent misclassified workers were not earning the minimum wage, reduced misclassification would increase hourly wages for these workers to the federal minimum wage. Similarly, to the extent misclassified workers were not receiving the applicable overtime pay, reduced misclassification would increase overtime pay for any overtime hours they continued to work. However, compared to the current economic and legal landscape where courts and parties outside the Department are not necessarily using the 2021 IC Rule's framework for analyzing employee or independent contractor classification
In addition to increased compliance with minimum wage and overtime pay requirements, potential transfers may also result from this rulemaking as a consequence of differences in earnings between employees and independent contractors.
The Department used an approach similar to Katz and Krueger (2018).
Both analyses found similar results. A simple comparison of mean hourly wages showed that independent contractors tend to earn more per hour than employees (
Based on these results, the Department believes it is inappropriate to conclude independent contractors generally earn a higher hourly wage than employees. The Department ran another hourly wage rate regression including additional variables to determine if independent contractors in underserved groups are impacted differently by including interaction terms for female independent contractors, Hispanic independent contractors, and Black independent contractors. The results indicate that in addition to the lower wages earned by Black workers in general, Black independent contractors also earn less per hour than independent contractors of other races; however, this is not statistically significant at the most commonly used significance level.
A group of DC economists provided a comment discussing an analysis they performed using aggregate data and analysis from individual-level IRS tax data from Washington, DC.
The Coalition for Workforce Innovation asserted that the Department failed to consider additional studies reconfirming that independent contractors earn more than traditional employees. They cite the Upwork study, saying “[t]he number of freelancers who earn more by freelancing than in their traditional jobs continues to grow: 44% of freelancers say they earn more freelancing than with a traditional job in 2021, . . . up from 39% in 2020 and 32% in 2019.”
The Economic Policy Institute (EPI) also submitted a comment with a quantitative analysis of the difference in the value of a job to a worker who is classified as an independent contractor rather than as an employee. Their analysis reviewed data for workers in 11 occupations identified as particularly vulnerable to misclassification: construction workers, truck drivers, janitors and cleaners, home health and personal care aides, retail sales workers, housekeeping cleaners, landscaping workers, call center workers, security guards, light truck delivery drivers, and manicurists and pedicurists.
Pursuant to its obligations under Executive Order 12866,
The Department had previously considered and rejected two of these alternatives in the 2021 IC Rule—adopting either a common law or ABC test for determining employee or independent contractor status.
For a third alternative, the Department considered a rule that would not fully rescind the 2021 IC Rule and instead retain some aspects of that rule. As the Department has noted throughout this final rule, there are multiple instances in which it is consistent or in agreement with the 2021 IC Rule. However, the numerous ways in which the 2021 IC Rule described the factors were in tension with judicial precedent and longstanding Department guidance and narrowed the economic reality test by limiting the facts that may be considered as part of the test, facts which the Department believes are relevant in determining whether a worker is economically dependent on the employer for work or in business for themself. For these reasons, and as discussed in sections III and IV above, the Department has ultimately concluded that a complete recission and replacement of the 2021 IC Rule is needed.
For a fourth alternative, the Department considered rescinding the 2021 IC Rule and providing guidance on employee and independent contractor classification through subregulatory guidance. For more than 80 years prior to the 2021 IC Rule, the Department primarily issued subregulatory guidance in this area and did not have generally applicable regulations on the classification of workers as employees or independent contractors. The Department considered rescinding the 2021 IC Rule and continuing to provide subregulatory guidance for stakeholders through existing documents (such as Fact Sheet #13) and new documents (for example a Field Assistance Bulletin). Rescinding the 2021 IC Rule without issuing a new regulation would have lowered the regulatory familiarity costs associated with this rulemaking. As explained in sections III, IV, and V above, however, the Department continues to believe that replacing the 2021 IC Rule with regulations addressing the multifactor economic reality test that more fully reflect the case law and continue to be relevant to the modern economy will be helpful for both workers and employers. Specifically, issuing regulations with an explanatory preamble allows the Department to provide in-depth guidance. Additionally, issuing regulations allowed the Department to formally collect and consider a wide range of views from stakeholders by electing to use the notice-and-comment process. Finally, because courts are accustomed to considering relevant agency regulations, providing guidance in this format may further improve consistency among courts regarding this issue. Therefore, the Department is not rescinding the 2021 IC Rule and providing only subregulatory guidance.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601
As discussed in section II.C.3., on March 14, 2022, a district court in the Eastern District of Texas issued a decision vacating the Department's delay and withdrawal of the 2021 IC Rule and concluding that the 2021 IC Rule became effective on March 8, 2021. The Department believes that the 2021 IC Rule does not fully comport with the FLSA's text and purpose as interpreted by the courts and, had it been left in place, would have had a confusing and disruptive effect on workers and businesses alike due to its departure from decades of case law describing and applying the multifactor economic reality test. Therefore, the Department believes it is appropriate to rescind the 2021 IC Rule and set forth an analysis for determining employee or independent contractor status under the Act that is more consistent with existing judicial precedent and the Department's longstanding guidance prior to the 2021 IC Rule.
The Department is rescinding and replacing regulations addressing whether workers are employees or independent contractors under the FLSA. Of particular note, the regulations set forth in this final rule do not use “core factors” and instead return to a totality-of-the-circumstances analysis of the economic reality test in which the factors do not have a predetermined weight and are considered in view of the economic reality of the whole activity. Regarding the economic reality factors, this final rule returns to the longstanding framing of investment as a separate factor, and integral as an integral part of the potential employer's business rather than an integrated unit of production. The final rule also provides broader discussion of how scheduling, remote supervision, price setting, and the ability to work for others should be considered under the control factor, and it allows for consideration of reserved rights while removing the provision in the 2021 IC Rule that minimized the relevance of retained rights. Further, the final rule discusses exclusivity in the context of the permanency factor, and initiative in the context of the skill factor. The Department also made several adjustments to the proposed regulations after consideration of the comments received, including revisions to the regulations regarding the investment factor and the control factor (specifically addressing compliance with legal obligations).
The Department believes that rescinding the 2021 IC Rule and replacing it with regulations addressing the multifactor economic reality test—in a way that both more fully reflects the case law and continues to be relevant to the evolving economy—will be helpful for both workers and employers. The Department believes this rule will help protect employees from misclassification while at the same time providing a consistent approach for those businesses that engage (or wish to engage) independent contractors as well as for those who wish to work as independent contractors.
Several commenters submitted feedback in response to the NPRM's Initial Regulatory Flexibility Analysis (IRFA) or otherwise addressing the potential impact of this rulemaking on small entities. Commenters, including the Small Business Administration Office of Advocacy (SBA) contended that the Department has severely underestimated the economic impacts of this rule on small businesses and independent contractors. For example, several commenters criticized the rule familiarization time estimates referenced in the IRFA, with the Independent Electrical Contractors, the Small Business & Entrepreneurship
As explained in section VII.C., the Department considered all of the comments received on this topic and has increased the regulatory familiarization cost estimate for this rule to 1 hour for firms and 30 minutes for independent contractors, who may be small businesses themselves. The Department believes that this time estimate is appropriate because it represents an average, in which some small businesses will spend more time reviewing the rule and others will spend no time reviewing.
Some commenters asserted that the Department failed to identify other potential costs of this rulemaking. For example, SBA wrote that “DOL has failed to estimate any costs for small businesses and independent contractors to reclassify workers as independent contractors, for lost work, and for business disruptions.” Similarly, SBE Council wrote that the IRFA did “not include the cost to a small business or small entity if an independent contractor is determined to be `misclassified,' or if a small business or small entity loses business revenue due to the loss of human capital, or the cost to comply with the new rule, or if an independent contractor loses business due to potential or actual misclassification.” As discussed in greater detail in section III(C) and VII(A), the Department does not believe that this rule will lead to widespread reclassification.
SBA claimed that the IRFA for failed to address certain employment-related costs related to the reclassification of independent contractors as employees (
SBA also commented that “many independent contractors or freelance workers, who may also be small businesses, believe they will lose work because of this rule.” The Department does not believe that this rule will lead to job losses because most workers who were properly classified as independent contractors before the 2021 IC Rule will continue to retain their status as independent contractors.
Finally, AFL was concerned about the Department “treating small businesses the same as all other entities” and asserted that Section 223 of the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”) requires the Department to creation an exemption waiving the application of civil money penalties for small entities “that will inevitably misapply the confusing and inconsistent `economic reality' test.”
The Department used the Small Business Administration size standards, which determine whether a business qualifies for small-business status, to estimate the number of small entities.
Additionally, as discussed in section VII.B., the Department estimates that there are 22.1 million independent contractors. Some of these independent contractors may be considered small businesses and may also be impacted by this rule.
This rule provides guidance for analyzing employee or independent contractor status under the FLSA. It does not create any new reporting or
In the Regulatory Impact Analysis, the Department estimates that regulatory familiarization to be one hour per entity and one-half hour per independent contractor. The per-entity cost for small business employers is the regulatory familiarization cost of $52.80, or the fully loaded median hourly wage of a Compensation, Benefits, and Job Analysis Specialist multiplied by 1 hour. The per-entity rule familiarization cost for independent contractors, some of whom would be small businesses, is $11.73 or the median hourly wage of independent contractors in the CWS multiplied by 0.5 hour.
The RFA requires agencies to discuss “any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.”
As explained in section VII.F., the Department considered two other regulatory alternatives: a rule that would not fully rescind the 2021 IC Rule and instead retain some aspects of that rule in the new rule; and completely rescinding the 2021 IC Rule and providing guidance on employee or independent contractor classification through subregulatory guidance, as the Department had done for over 80 years prior to the 2021 IC Rule. The Department believes that the overall economic impact of retaining some portions of the 2021 IC Rule while issuing a rule to revise other portions of the rule would not minimize the economic impact on small entitles as they would incur costs to familiarize themselves with the new regulation. Similarly, the Department believes that the overall economic impact of fully rescinding the 2021 IC Rule and providing subregulatory guidance, would not necessarily minimize the economic impact on small entities as they would incur some costs to familiarize themselves with any subregulatory guidance. Moreover, as explained in sections III, IV, and V above, the Department believes that replacing the 2021 IC Rule with regulations addressing the multifactor economic reality test that more fully reflect the case law and continue to be relevant to the modern economy will be helpful for both workers and employers, particularly over the long term.
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, requires agencies to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing any unfunded Federal mandate that may result in excess of $100 million (adjusted annually for inflation) in expenditures in any one year by State, local, and tribal governments in the aggregate, or by the private sector. Adjusting the threshold for inflation using the GDP deflator, using a recent annual result (2021), yields a threshold of $165 million. Therefore, this rulemaking is expected to create unfunded mandates that exceed that threshold.
The Department has reviewed this rule in accordance with Executive Order 13132 regarding federalism and determined that it does not have federalism implications. The rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.
This rule will not have tribal implications under Executive Order 13175 that require a tribal summary impact statement. The rule will not 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.
Agriculture, Child labor, Wages.
Forests and forest products, Wages.
Employment, Wages.
For the reasons set out in the preamble, the Wage and Hour Division, Department of Labor amends Title 29 CFR chapter V, as follows:
Secs. 1-19, 52 Stat. 1060, as amended; 75 Stat. 65; 29 U.S.C. 201-219. Pub. L. 105-78, 111 Stat. 1467.
(b) In determining whether such individuals are employees or independent contractors, the criteria set forth in §§ 795.100 through 795.110 of this chapter are used.
Secs. 1-19, 52 Stat. 1060, as amended; 29 U.S.C. 201-219.
(a) In determining whether individuals are employees or independent contractors, the criteria set forth in §§ 795.100 through 795.110 of this chapter are used.
29 U.S.C. 201-219.
This part contains the Department of Labor's (the Department) general interpretations for determining whether workers are employees or independent
(a)
(b)
(a)
(2) The six factors described in paragraphs (b)(1) through (6) of this section should guide an assessment of the economic realities of the working relationship and the question of economic dependence. Consistent with a totality-of-the-circumstances analysis, no one factor or subset of factors is necessarily dispositive, and the weight to give each factor may depend on the facts and circumstances of the particular relationship. Moreover, these six factors are not exhaustive. As explained in paragraph (b)(7) of this section, additional factors may be considered.
(b)
(2)
(3)
(4)
(5)
(6)
(7)
If any provision of this part is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, or stayed pending further agency action, the provision shall be construed so as to continue to give the maximum effect to the provision permitted by law, unless such holding shall be one of utter invalidity or unenforceability, in which event the provision shall be severable from this part and shall not affect the remainder thereof.
Office of Assistant Secretary for Community Planning and Development and Office of Assistant Secretary for Public and Indian Housing, HUD.
Proposed rule.
HUD is proposing to revise the Community Development Block Grant (CDBG) and related Section 108 loan guarantee program regulations to make it easier for recipients to promote economic development and recovery in low- and moderate-income communities and support investments in underserved areas. This proposed rule also would revise provisions related to Consolidated Plan and citizen participation requirements for the CDBG program and institute quarterly reporting to improve performance with respect to timeliness. HUD is also proposing to make certain corresponding changes to the Indian Community Development Block Grant (ICDBG) program regulations to align the ICDBG program with the revisions being made to the CDBG program regulations.
Comments are due by March 11, 2024.
Interested persons are invited to submit comments regarding this rule. Communications must refer to the above docket number and title. There are two (2) methods for submitting public comments. All submissions must refer to the above docket number and title.
To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the rule.
Copies of all comments submitted are available for inspection and downloading at
Jessie Handforth Kome, Director, Office of Block Grant Assistance, Room 7282, U.S. Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; telephone (202) 708-3587 (this is not a toll-free number) for the CDBG and Section 108 loan programs. Heidi Frechette, Deputy Assistant Secretary for Native American Programs, Room 4108 U.S. Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; telephone (202) 402-6321 (this is not a toll-free number) for the ICDBG program. 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
Title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301-5320) (hereinafter “the Act”) establishes the CDBG and complementary Section 108 loan guarantee (Section 108) programs, and the ICDBG program. HUD's regulations implementing: (1) the Consolidated Plan and citizen participation requirements governing the CDBG program are located at 24 CFR part 91, entitled, “Consolidated Submissions for Community Planning and Development Programs;” (2) the CDBG program are located at 24 CFR part 570, entitled “Community Development Block Grants;” and (3) the Section 108 program are located at 24 CFR 570 subpart M, entitled “Loan Guarantees.” The Consolidated Plan regulations were promulgated in 1994 and 1995 (60 FR 1878 and 60 FR 1943; January 5, 1994, and January 5, 1995, respectively), and amended HUD's existing regulations to replace the then-current Comprehensive Housing Affordability Strategies with a rule that combined into a single consolidated submission the planning and application aspects of, among others, the CDBG program. The Consolidated Plan regulations reflected HUD's view that the purpose of the Consolidated Plan submission is to enable States and localities to examine their needs and design ways to address those needs that are appropriate to their circumstances. The ICDBG program regulations, which are located at 24 CFR part 1003, entitled “Community Development Block Grants for Indian Tribes and Alaska Native Villages,” were promulgated in 1996 (61 FR 40084, July 31, 1996), and set forth the requirements and procedures for awarding CDBG funds to Indian Tribes.
The CDBG program and its loan guarantee component, the Section 108 program, are some of the most potent Federal tools for local governments to assist community and economic development. State and local governments nationwide—each State, more than 1,200 cities and counties, the District of Columbia, Puerto Rico, and four U.S. territories—rely on annual formula CDBG funds to develop meaningful projects and provide essential services that create sustainable, healthy, and prosperous communities for primarily low- and moderate-income persons. The programs' unique flexibility allows grantees to use CDBG funds, as well as Section 108 guaranteed loan proceeds
The limitations under the current regulations have thus deprived grantees of viable alternatives when developing programs that would best address their needs, and in some cases prevented communities from using CDBG funds to stimulate potentially transformative economic revitalization outcomes. By removing the impediments and disincentives to the use of CDBG funds for economic development activities, the proposed changes could result in a greater proportion of available CDBG funds being used for economic development. It does not follow, however, that spending more on economic development must result in less spending on other activities, because the additional economic development spending could be funded with loans guaranteed under the Section 108 program. For example, if a grantee wants to undertake an economic development activity but also wishes to carry out another activity,
Under the ICDBG program, HUD provides competitive grants annually to Indian Tribes to carry out eligible activities. The program regulations largely mirror the CDBG program regulations.
HUD and CDBG grantees experienced an unusual opportunity to employ new program policies before making them part of the CDBG program's regulatory canon. The COVID-19 pandemic created a historical economic crisis resulting in the closure of small businesses, significant job loss, and other economic hardship with notable disparities in underserved communities. These exposed and exacerbated impacts and inequities that largely affected underserved persons and communities across the United States, particularly among low-income and underserved populations who were already economically marginalized and lacked housing security. Historically marginalized communities of color, particularly those in racially or ethnically concentrated areas of poverty, disproportionately experienced disinvestment and have been denied economic opportunities. In 2020, HUD oversaw the Community Development Block Grant CARES Act (CDBG-CV) program to provide grants to States, insular areas, and local governments to prevent, prepare for, and respond to the spread of COVID-19. Lessons learned from the quick deployment of CDBG-CV accelerated the grantees' and HUD's understanding of needed program improvements.
The insights gleaned from the CDBG-CV Program informed this important but routine opportunity to update CDBG and ICDBG regulations to introduce pre-tested flexibilities, mainly related to economic development activities; is responsive to feedback from HUD communities; and is informed by the implementation of CDBG and ICDBG over the past several decades. The new regulatory flexibilities implemented with $5 billion in CDBG-CV for communities revealed longstanding hindrances to long-term economic growth, particularly for low- and moderate-income persons.
The flexibilities, waivers and alternative requirements introduced through CDBG-CV for Economic Development Activities enabled grantees to move quickly to help small businesses, particularly for underserved communities while retaining sufficient regulatory controls to ensure program benefit is planned and delivered compliantly. This Proposed Rule enables the Federal Government to continue bolstering economic recovery through job creation while addressing economic inequities, by, for example, strengthening small businesses and investing in enduring job opportunities in underserved communities. On January 20, 2021, the President issued Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (86 FR 7009), and in February 2023, the President issued Executive Order 14091, Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (88 FR 10825), both which call for a whole-of-government effort to advance racial equity and support underserved communities. Further, through Executive Order 14002, Economic Relief Related to the COVID-19 Pandemic (86 FR 7229), issued on January 22, 2021, the President directed Federal agencies to use their full resources to address the economic crisis, specifically to reduce unnecessary barriers and improve coordination among programs funded by the Federal Government. The approach seeks to create opportunities for the improvement of communities that have been historically underserved.
Consistent with Executive Orders 13985, 14002, and 14091 and in response to changed market conditions, HUD seeks to provide authority that would allow CDBG grantees and Section 108 borrowers (hereinafter referred to collectively as “recipients”) to implement funding more effectively and efficiently in their communities.
The proposed changes also would enhance the CDBG program's goal of primarily benefitting low- and moderate-income (“LMI”) persons while removing obstacles that prevent the use of the program in targeted areas and for economic development activities. The proposed changes will not have any impact on the allocation of CDBG funds among recipients. The changes would particularly benefit underserved communities, including historically marginalized communities of color experiencing disproportionate disinvestment and denial of economic opportunities.
The proposed rule also aims to improve data collection to measure effectiveness and improve program outcomes through more effective use of CDBG funds, while ensuring CDBG and
Further, the proposed rule would make corresponding changes to the ICDBG regulations in part 1003, where appropriate, to ensure that the CDBG and ICDBG regulations continue to [align. Finally, the proposed rule would remove outdated provisions and make technical corrections.
The proposed rule could result in incentivizing investment in communities by streamlining and improving mechanisms for greater flexibility of funds to flow to economically distressed communities while signaling the Federal Government's willingness to support these investments. These investments would enable communities to encourage, build, and expand activities that revitalize communities.
HUD wants CDBG and Section 108 recipients to make greater use of CDBG funds in economically distressed communities, particularly those designated through other Federal or State programs. The proposed rule addresses aspects of 24 CFR part 570 that HUD considers to be unnecessarily cumbersome to economic development activities and otherwise proposes to revise or add additional flexibility for CDBG and Section 108 recipients in facilitating economic development. The proposed rule would make it easier for CDBG and Section 108 recipients to carry out job creation and retention activities while reducing recordkeeping burdens on CDBG and Section 108 recipients and assisted businesses
HUD's regulations at §§ 570.208,
The most widely used national objective for economic development activities under the CDBG program is the creation or retention of permanent jobs where at least 51 percent of those jobs, computed on a full-time equivalent basis, involve the employment of LMI persons. To demonstrate compliance with the LMI job creation/retention national objective (§§ 570.208(a)(4), 570.483(b)(4), and 1003.208(d)), the activity must be designed to create or retain jobs where at least 51 percent of those jobs are held by or made available to LMI persons. For the retention of jobs, the recipient must also demonstrate that the jobs would be lost without CDBG assistance, and the jobs are known to be held by LMI persons and/or the job(s) can reasonably be expected to turn over within the following two years and that steps will be taken to ensure that the job(s) will be filled by or made available to LMI persons upon turnover. The primary CDBG-assisted activity that uses these national objectives criteria is a special economic development activity carried out under § 570.203 for Entitlement Communities and activities under section 105(a)(17) of the Act by units of general local government in a State's nonentitlement areas.
Based on programmatic experience, documenting whether a job is held by or made available to an LMI person can present a financial and administrative burden on recipients due to the data that recipients must gather and collect from assisted businesses. To help alleviate this burden, HUD is proposing to make changes to the presumptions provided in current §§ 570.208(a)(4)(iv), 570.483(b)(4)(iv), and 1003.208(d) (with references to, respectively, §§ 570.208(a)(4)(v) and 570.483(b)(4)(v)) to add a presumption based on the location of an assisted business. Revising the criteria for the presumption would significantly clarify the standards for recipients and encourage greater use of CDBG and ICDBG funds for job creation and retention activities in LMI areas.
The proposed revised regulations accomplish these goals by: (1) standardizing the presumptive poverty
HUD proposes to revise the definition of labor market area (LMA) to allow CDBG grantees and Section 108 recipients more flexibility in providing assistance to relocating businesses. Currently, §§ 570.210(a) (for CDBG entitlement recipients) and 570.482(h) (for States) prohibit grantees from directly assisting businesses that relocate from one LMA to another if the relocation is likely to result in a significant loss of employment in the LMA from which the relocation occurs. Sections 570.210(b)(2) and 570.482(h)(2)(ii) also prevent communities from combining metropolitan LMAs or metropolitan LMAs with non-metropolitan LMAs so that they can provide assistance to a business that relocates within a (combined) LMA. This revision leaves the prohibition intact but provides CDBG and Section 108 recipients with greater flexibility (through revisions of §§ 570.210(b)(2) and 570.482(h)(2)(ii)
While the prohibition in §§ 570.210(b)(2) and 570.482(h)(2)(ii) is intended to prevent communities from using CDBG funds to “shift” jobs from other communities, it has on balance made it unnecessarily difficult for grantees to provide assistance to businesses even when relocation would not necessarily cause job losses in another community. The definition of LMA (as defined by the Bureau of Labor Statistics) has changed multiple times since HUD instituted the prohibition in 2006, the boundaries of LMAs have changed, and some communities have fallen outside the definitions of both metropolitan and non-metropolitan LMAs. Further, logistics and supply chain changes and developmental changes across communities could allow businesses to retain jobs within a newly defined LMA within commuting distance of the old location (thus not poaching jobs from another community).
For example, a business with a processing plant in a metropolitan LMA received a code enforcement violation that required the business to either expand the plant to remedy the violation or relocate. Since the business was in a denser metropolitan area, it did not have the space to expand the plant. The business identified a location within commuting distance of the plant in an adjacent non-metropolitan LMA. The State CDBG grantee wanted to provide assistance through the non-entitlement unit of general local government to the business as part of the relocation but was prohibited by § 570.482(h)(1) because the relocation would have resulted in job loss in the metropolitan LMA from which the relocation would have occurred. The business could not find other assistance to relocate the plant, and as a result had to close the plant and terminate the jobs at the plant.
Therefore, HUD proposes to allow grantees to combine a metropolitan LMA and a non-metropolitan LMA if the relocation is necessary for business reasons such as code enforcement compliance, or expansion. This would allow CDBG grantees to provide assistance to businesses for relocation for valid business reasons while still preventing communities from poaching jobs from nearby communities.
HUD also proposes to revise the criteria for activities that address slums and blight on an area basis. Some of the criteria for activities to address slums or blight on an area basis are subjective and difficult for HUD to verify and monitor. The proposed revisions to §§ 570.208(b)(1)(ii) and 570.483(c)(1)(ii) would allow the recipient to determine the type of objectively verifiable data that demonstrates that the area is experiencing physical or economic distress, such as abandoned properties and properties with known or suspected environmental contamination. The proposed rule also would update recordkeeping requirements for this revision at § 570.506(b)(8)(ii).
For activities that address slums or blight on a spot basis, the proposed revisions at §§ 570.208(b)(2) and 570.483(c)(2) would remove the requirement that rehabilitation activities be limited to eliminating conditions detrimental to public health and safety. HUD has interpreted “detrimental to public health and safety” to mean that the condition must pose a threat to the general public. This requirement presents a major hurdle for recipients seeking to address slums and blight in their communities because it limits rehabilitation activities that recipients can carry out.
For example, a recent Section 108 applicant sought to redevelop a blighted former hotel into a modern mixed-use commercial and residential development; the project required extensive environmental remediation. However, the requirement that rehabilitation activities eliminate conditions detrimental to public health and safety prevented the applicant from allocating CDBG funds toward uses of the project because the conditions were contained within the blighted site and therefore did not pose a threat to the general public. Although the applicant was eventually able to allocate CDBG
Section 570.506 (for entitlement CDBG and Section 108 recipients) requires each recipient to establish and maintain records sufficient to enable HUD to determine whether the recipient has met applicable requirements, including whether activities meet the criteria for national objectives at § 570.208. Recipients may meet those criteria by carrying out activities (
The proposed rule would make two changes to the documentation requirements at § 570.506 to reduce the burden on businesses in documenting jobs held by or made available to LMI persons. First, HUD proposes to clarify that the recipient, instead of the assisted business, may collect information regarding the size and annual income of the person's family to document compliance with the national objective for economic development activities (HUD notes that the recipient may still choose to require that the assisted business collect the data if it prefers). Second, HUD proposes to allow the recipient to substitute records (such as, for example, a certification by the assisted business) showing the annual wages or salary of the job claimed to be held by an LMI person in lieu of maintaining records of the person's family size and income to reduce the information collection burden. Absent evidence to the contrary,
As an example of how this would change how potential LMI jobs are evaluated, under HUD's current policy if an assisted business employed an individual at an LMI-eligible wage, but that individual lived in a family with multiple incomes that, in total, exceeded the LMI-eligibility threshold, then the recipient would not be able to claim that the individual was in an LMI-created or retained job. However, under our proposal, a recipient would now be able to demonstrate eligibility simply through examining the income provided by the job instead of the income received by the job-holder's family. As a result, the assisted business would now be able to claim this individual was in an LMI-created or retained job. HUD notes that while this may, on the margins, result in certain jobs being newly identified as LMI, overall HUD expects this change will substantially reduce burden on documenting these jobs while broadly still identifying the same set of jobs. Moreover, working at the business/position level has the added advantage for auditors of allowing cross checking with State labor databases, which may allow for improved oversight.
This clarification and alternative method would streamline the documentation process, reduce the burden on assisted businesses, and remove a disincentive to use CDBG funds for job creation and retention activities. Presently, the burden of collecting information on family income often falls on the businesses assisted with CDBG funds. Recipients are typically more willing and better equipped than the assisted businesses to collect information regarding the size and annual income of the person's family. This burden operates as a disincentive to many businesses that would otherwise be willing to partner with recipients to carry out job creation and retention activities.
Other entities that receive funding from CDBG recipients to carry out activities, such as non-profit subrecipients, are typically viewed as “standing in the shoes of the grantee” and, as such, are required to fulfill the responsibilities that would otherwise belong to the grantee. Businesses, on the other hand, are not subrecipients and typically are inexperienced in executing the functions required of a grantee or a subrecipient, such as collecting income data on family members (
Section 570.203 governs the use of CDBG funds for special economic development activities and includes an illustrative list of eligible forms of assistance to private for-profit businesses. Section 570.203(b) already lists forms of support by which recipients can provide assistance to private, for-profit businesses where the assistance is appropriate to carry out an economic development project. HUD has previously interpreted this provision to allow CDBG assistance to New Markets Tax Credit (NMTC) investment vehicles. The proposed revisions would explicitly allow recipients to provide assistance to an economic development project through a for-profit entity that passes the funds through a financing mechanism (
HUD proposes to clarify at § 570.203(c) the types of eligible job training or employment services. Currently, to be eligible as an economic development service under § 570.203(c), the job training or employment support services must be provided to or involve specific job positions resulting from the assistance being provided. HUD has discovered numerous situations in which grantees have provided CDBG funds for general employment readiness programs (such as interviewing skills or resume-writing classes) and attempted to categorize such classes as economic development services. To be eligible economic development services, the beneficiaries must either have been selected for or be under active consideration for specific job positions. If the individuals are not receiving training for specific positions at a specific business, general employment readiness programs or trainings for individuals in career fields are eligible only as public service activities or, in limited cases, as part of a § 570.204 community economic development project carried out by a Community-Based Development Organization.
HUD notes that it is not proposing any changes that would expand microenterprise assistance under § 570.203. Section 570.201(o) of the Code of Federal Regulations and section 105(a)(22) of the Act provide thorough avenues for CDBG grantees to assist microenterprise activities; likewise, sufficient authority currently exists for Section 108 borrowers to assist many microenterprise activities through economic development activities authorized under § 570.203(b).
Section 570.209 contains guidelines and standards for carrying out economic development activities under § 570.203 and, in some instances, § 570.204.
HUD established these standards in 1995 as required by section 806(a) of the Housing and Community Development Act of 1992 (the “1992 Act”) (Pub. L. 102-550, 106 Stat. 3672). This provision of the 1992 Act required HUD to establish by regulation guidelines to assist CDBG recipients to evaluate and select economic development activities for assistance with CDBG funds. Subsequent inflation has resulted in CDBG funds no longer supporting the same proportion of the costs of creating and retaining jobs as they did when HUD created the standards. This precludes recipients from using CDBG funds for some economic development activities and has made recipients increasingly less able to feasibly implement economic development activities. For example, in program year 2012, approximately $238 million in CDBG funds were used to support almost 2,000 economic development activities, whereas, by 2022, only $69 million in CDBG funds were used to support about 1,100 economic development activities. Further, HUD believes the two options do not provide recipients enough flexibility in demonstrating a public benefit.
The proposed changes re-envision the public benefit standards for economic development activities and would allow recipients to better support business development, stimulate job growth, and provide needed goods and services to LMI persons. HUD can facilitate economic development while simultaneously furthering the purpose of the 1992 Act through the following proposed reforms to the public benefit standards: (1) eliminating the aggregate standard; (2) raising the individual standard to $100,00 per full-time equivalent, permanent job created or retained and $2,000 per LMI person to whom goods or services are provided by the activity; (3) adding an alternative standard which HUD must approve in writing whereby recipients can demonstrate that the activity would create a significant public benefit despite not meeting the jobs or services standards (such as being part of a hazard mitigation and climate change resilience
First, HUD's proposal to eliminate the aggregate standard at §§ 570.209(b)(1) and 570.482(f)(2) stems from the disincentive it has created to use CDBG funds for economic development and because it is burdensome beyond any observed benefit. (The Public Benefit Standards are applied to the average of the expenditures for the activities funded over a 12-month period.) In particular, recipients with low-volume economic development programs effectively apply the aggregate standards to individual activities in an effort to reduce the risk of failing to comply. In other words, the original intention to an aggregate standard was to give recipients flexibility to occasionally target activities that were more costly. That flexibility has not worked out in practice.
For example, a grantee may identify a high-impact project at the beginning of its program year that would create one job per $50,000 of CDBG assistance; however, local market conditions could make it difficult to predict how many other economic development activities would be assisted and how many jobs would be created. Faced with this uncertainty, the grantee may hesitate to provide funds to the high-impact project for fear of not meeting the aggregate standard. This scenario reflects how the aggregate standard restricts the ability of recipients to leverage CDBG funds for high-impact investments in their communities, particularly through Section 108 loan guarantees, because providing funds at the maximum level of the individual standard for one activity would require funding other economic development activities at public benefit levels significantly below the aggregate standard.
Additionally, the number of exceptions from the aggregate standard creates confusion for borrowers in planning their economic development programs, making the standard overly burdensome. (See current §§ 570.209(b)(2)(v)(A) through (N) and 570.482(f)(3)(v)(A) through (N)).
Second, HUD proposes to raise the dollar thresholds at §§ 570.209(b)(3)(i)(A) and (B) and 570.482(f)(4)(i)(A) and (B) for the individual standard. Maintaining the current standards would continue to hinder recipients' ability to use CDBG funds for future economic development activities and limit recipients' ability to leverage CDBG funds through revolving loan funds and Section 108 loan guarantees. The $100,000 and $2,000 amounts approximate the inflation-adjusted value of the current standards. HUD believes that updating these standards to reflect market conditions would allow CDBG funds to be more competitive for use in economic development activities. By comparison, the Small Business Administration (SBA) 504 Loan program allows a benefit of up to $100,000 per job created depending on the type of activity. HUD also proposes to include a provision at §§ 570.209(b)(5) and 570.482(f)(6) that would permit HUD to issue periodic notices to update those values (and the net present values for Section 108 borrowers, as described below) to reflect inflation.
Third, the public benefit standards provide a narrow choice of two measures for determining a public benefit: amount of assistance per job created or retained or amount per LMI person served by the activity. HUD believes these measures provide insufficient options to measure the public benefit a project may provide. For example, the SBA 504 Loan program offers recipients who cannot meet the minimum jobs requirement an alternative of meeting one of eighteen community development, public policy, or energy reduction measures. While HUD understands the value of having objective and uniform benchmarks for demonstrating public benefit, the current standards unduly restrict recipients' ability to demonstrate public benefit through use of CDBG funds for economic development activities. Further, CDBG assistance for small businesses may be used with funding under another Federal program (
Fourth, HUD proposes to add a new option for Section 108 applicants at §§ 570.209(b)(3)(ii) and 570.482(f)(4)(ii) that would address the concerns expressed by program participants regarding a disparity in treatment of economic development assistance in the form of a loan and other forms of assistance, such as grants, when measuring public benefit. When a recipient uses CDBG funds for an economic development activity in the form of a loan to a third party (
Entitlement and State recipients must identify in their citizen participation plans how they will publish their Consolidated Plans in a manner that permits their residents, public agencies, and other interested parties an opportunity to examine their contents and submit comments. HUD expects each grantee to undertake a multifaceted approach to publication after considering the nature of the jurisdiction and its citizens. The principle for jurisdictions is to create and implement a citizen participation plan designed to get program-related information to and from persons who will be affected by the contents of the Consolidated Plan or who may seek to participate in the grantee's programs.
HUD proposes to amend §§ 91.105(b)(2) and 91.115(b)(2) to encourage grantees to use additional forms of communication to make citizens aware of publication of the Consolidated Plan. The proposal adds methods of making the Consolidated Plan publicly accessible to persons with disabilities and provide meaningful access to limited English proficient persons, such as: email; text message (SMS); social media; media advertisements; public service announcements; notifying neighborhood organizations; and placement of hard copies of the Plan in public places such as libraries and neighborhood centers, and notifications on grocery store bulletin boards. These sections illustrate new examples of optional publication methods but are not required. HUD already considers these proposed methods to be valid and useful methods of publishing Consolidated Plans and encourages grantees to update citizen participation plans to include these methods. Recipients are reminded that section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, and the implementing regulations at 24 CFR part 8, which provides rights to persons with disabilities in HUD-funded programs and activities, continue to require grantees to ensure effective communication for persons with disabilities, and that Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d
Section 91.105(c)(1) requires an entitlement grantee to identify in its citizen participation plan what it considers to be a substantial amendment to its Consolidated Plan. This provision also states that a recipient must consider a change in the use of CDBG funds from one eligible activity to another as a substantial amendment to its Consolidated Plan. However, the provision does not state that adding activities not previously listed in a recipient's Consolidated Plan or Action Plan is a substantial amendment.
Since a recipient is required to notify the public of all the activities it intends to carry out with CDBG funds, HUD proposes to clarify that adding an activity not previously identified in the Consolidated Plan or Action Plan must be considered a substantial amendment in the citizen participation plan.
Section 91.215(a)(1) requires local government recipients to identify the general priorities for allocating investment geographically within the jurisdiction. HUD has observed that many grantees target some or all activities geographically. To the extent that a local government recipient chooses to target investment (as opposed to undertaking jurisdiction-wide activities), HUD proposes to require recipients to set at least one quantitative, neighborhood-level outcome goal in their Consolidated Plan and to report performance in the Consolidated Annual Performance and Evaluation Reports (CAPERs). This would enable HUD to assess local government recipients' progress in addressing housing, homeless assessment, and other identified needs on a sub-jurisdiction level and provide a richer understanding of how grant funds enable grantees to achieve local community development objectives. HUD proposes to change § 91.520(d) to require an entitlement grantee to report in the CAPER at least one quantitative, neighborhood-level outcome goal accomplishment related to one or more sub-jurisdiction priority, if established pursuant to § 91.215(a)(1).
Section 91.215(g) encourages entitlement recipients, through the Consolidated Plan, to identify locally designated areas that are being targeted for neighborhood revitalization efforts that are carried out through multiple activities in a concentrated or coordinated manner. In this rule, HUD proposes to add examples of areas that may be targeted for neighborhood revitalization efforts. These areas can include areas that were designated as economically distressed areas by the Federal Government or the State that exhibit significantly high levels of poverty or low median income, including historically underserved and marginalized communities. HUD believes that encouraging entitlement recipients to consider targeting efforts in these areas during the planning process will result in recipients developing a more holistic understanding of the needs of these areas and how they can best use CDBG funds to revitalize such areas.
Mixed-use properties have become increasingly popular as development trends across the country have encouraged locating residential units, office space, and/or commercial space on the same property and often in the same building. Section 570.200(b)(1) contains special policies governing facilities containing both eligible and ineligible uses. It allows recipients to provide funds for a public facility otherwise eligible for assistance under the CDBG program even if it is part of a multiple-use building containing ineligible uses. Recipients may also provide funds for an eligible activity in a multiple-use property (that is not a public facility), but the existing regulation lacks clarity on the circumstances when such use is permissible. This lack of clarity limits recipients from using CDBG funds for eligible activities in mixed-use properties.
HUD proposes to revise § 570.200(b)(1) to clarify that recipients can assist eligible activities if they are part of mixed-use properties that also contain ineligible uses, so long as the recipient expends CDBG funds only on the eligible use. The revised provision would continue to allow for CDBG and Section 108 guaranteed loan funds to be involved in such a project so long as there is an eligible activity that costs can be allocated to cover. While the prohibition on new housing construction is applicable for both Section 108 borrowers and CDBG recipients pursuant to § 570.207(b)(3), costs in mixed-use and mixed finance developments may be allocable under the new draft regulation and our current interpretation of the requirements. HUD expects this revision would facilitate economic development by expanding the scope of activities for which recipients can use CDBG funds. The proposed rule also would add a definition of “mixed-use property” at § 570.3.
HUD proposes to amend the CDBG closeout regulations at § 570.509 to conform with 2 CFR 200.344 and with the proposed modifications to timeliness at § 570.902. Under this proposal, HUD would have the flexibility to separately cancel a grantee's financial access to a grant and remove the grant's availability from the line of credit while allowing some additional time, if needed, for a grantee to meet certain program requirements, such as meeting a national objective. HUD expects that each grantee will expend all funds and close out each grant financially by the end of the eighth program year of the grant.
For example, a grantee uses the remainder of one grant's funds to acquire a school to convert to housing. The grantee uses funds from other sources for construction costs. Under this proposal, HUD could cancel the financial account while explicitly retaining the ability to enforce compliance with all program requirements related to the activity underway, particularly those bearing on national objectives. The regulations would continue to govern change of use requirements (
HUD recognizes that there are many things that could disrupt a grantee's intended timeline for activity completion: litigation, disasters, limited construction seasons due to weather, or other extenuating circumstances. To complete all program activities, including, but not limited to, meeting national objectives and satisfying reporting requirements, grantees are permitted to request an extension of up to two years of the six-year period of performance proposed in the
Sections 570.495 (for State recipients) and 570.910 (for entitlement recipients) provide corrective and remedial actions that HUD may impose on recipients when HUD identifies deficiencies in recipient performance. HUD may disallow costs if recipients expend CDBG funds for ineligible activities or for activities that do not meet a national objective, or do not comply with 2 CFR part 200, subpart E, cost principles. Currently, HUD advises recipients to reimburse their CDBG program account or letter of credit with non-Federal funds based on 2 CFR 200.405(c), which states that any cost allocable to a particular Federal award (or cost objective) under the principles provided for in 2 CFR part 200 may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude the non-Federal entity from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards. In addition, 2 CFR 200.441 states that costs resulting from non-Federal entity violations of, alleged violations of, or failure to comply with, Federal, State, Tribal, local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the Federal award, or with prior written approval of the Federal awarding agency.
However, part 570 does not clearly state the source of repayments as the result of such violations. The proposed rule would explicitly do so in §§ 570.495(a)(4) and 570.910(b)(5) and would also make clear that recipients must make repayments for disallowed costs with non-Federal funds. In lieu of such repayments, HUD proposes to revise § 570.495(a)(4) and add § 570.910(c) to permit a recipient to request a voluntary grant reduction (VGR) from a current or future year's allocation of funds. VGRs have long been used in lieu of repayment, and this proposed rule would codify the policy and the procedure for requesting a VGR.
This rule proposes to revise § 570.902 to institute regular quarterly public reporting by HUD on grant progress for entitlement grantees, with each grant labeled (
Section 104(e)(1) of the Act requires that HUD annually determine whether each CDBG grantee has carried out its activities in a timely manner. HUD must also assess whether each grantee has continuing capacity to carry out activities in a timely manner. Under the existing entitlement regulations at § 570.902, HUD measures timely performance at a single, annual point in time and communicates any issues to a grantee via letter. In accordance with the existing regulations, an entitlement grantee must meet an “all open CDBG grants” portfolio standard, requiring it to have a total undisbursed portfolio balance no greater than 1.5 times its most recent annual grant amount remaining in the line of credit. HUD conducts this test 60 days prior to the end of the grantee's program year, and in recent years, HUD has put increased emphasis on enforcing timely expenditure using this standard.
HUD considers a grantee to have timely performance issues if its portfolio balance exceeds 1.5 times its most recent annual grant amount for two years in a row. If this happens, HUD first offers the grantee a chance for an informal consultation with program officials prior to determining a corrective action or sanction. A common course of action for HUD in cases of continued grantee timeliness issues is reducing the next year's grant allocation of a grantee.
Although the timeliness regulations and procedures comply with the statutory direction, the combination of the annual 1.5 standard with the adoption of grant-based accounting and stagnant CDBG grant amounts appears to have created an unintended—and undesired—consequence. HUD has observed grantees budget and use more funds for annual “soft” expenditures, such as code enforcement, administration, planning, public services, and salaries for activity delivery, and less funds directly assisting major brick-and-mortar activities. HUD's observations and grantee feedback indicate that HUD's enforcement of the existing timeliness standard has resulted in pressuring grantees' local funding decisions away from large brick-and-mortar activities, which characteristically deliver greater benefits but require longer expenditure timeframes. Grantees are making funding and priority decisions based less on long-term community needs than on a need to comply with the portfolio balance requirement. For example, a large Midwest city recently identified the need to comply with the 1.5 requirement as the reason for its choice to assist an activity providing sidewalk improvements in low-income neighborhoods even though it believed a better fit for its community development priorities would be a significant multi-unit, multi-structure, housing rehabilitation project. HUD has noted numerous other similar examples during informal timeliness consultations.
This concerns HUD because the objectives of the CDBG program at section 101(c) of the Act emphasize development of viable urban communities by providing suitable living environments. If the timeliness enforcement standard is causing grantees to shift funding decisions away from activities generating long-lasting improvements, the standard undercuts the purposes of the Act.
Further, the current timeliness standard incorrectly captures both high- and low-capacity grantees. An adjusted line of credit balance in excess of 1.5 times the grant amount, measured at a point in time in the grantee's program year, is not always an indicator of poor performance. Higher-capacity grantees who try to budget substantial portions of two or more grants for a major local project are identified incorrectly by the existing standard as low-performing. These grantees do not typically exhibit non-compliance in other areas of their portfolio and their HUD Field office grant managers frequently vouch for their capacity to deliver the expected project benefits. Current timeliness requirements can discourage activities that if not for these requirements would otherwise advance statutory program objectives. Conversely, low-capacity grantees with known problems across a decade or more, have sometimes not been captured under this current requirement.
Lessons learned from implementation of other programs incorporating the CDBG framework, including the Neighborhood Stabilization Program (NSP) and other CDBG-DR appropriations, helped inform this proposal. Several versions of obligation, expenditure, and other progress standards have existed in these programs, with mixed results. For example, obligation deadlines in the first NSP funding round and some early CDBG-DR grants caused grantees to select some projects less aligned with community needs and goals. Recent CDBG-DR rules, which combine a period of performance based on actual community development practice with public tracking reports, have provided a simple, workable standard that enables local choices while enhancing transparency and accountability. The takeaway from HUD's experience with timeliness is that the enforcement mechanism influences local choices towards or away from significant construction activities and may affect the pace of grant disbursement, and that applying a new standard for CDBG grantees will better serve the purpose of the Act.
This proposal seeks to enhance oversight of timeliness while reducing pressure on grantees to fund minor, quickly implementable activities or soft costs rather than providing assistance for larger projects with more significant local community development outcomes. This approach would set a standard for a clear lack of continuing capacity for timely implementation, comply with the Act, and better accommodate eligible major construction activities. The rule would also set, for the first time, a separate standard for grantee continuing capacity (see below for further detail).
Note that the rules related to the intersection of timeliness and program income would not change under this proposal. The Act and the current regulations provide that program income received by a grant recipient or subrecipient is additional CDBG funds. The regulations would continue to require that grantees use available program income prior to additional drawdown of line of credit funds. However, revolving funds are a special case. This proposed rule addresses revolving funds because some grantees have inappropriately used these accounts to simply hold program income, effectively evading timely expenditure requirements. The proposed timely expenditure standard for revolving funds is that grantees use at least one half of a fund's balance (taken at the beginning of the program year) for eligible revolving fund activities or re-program the unused amount each year. The proposed rule seeks to prevent grantees from placing program income in revolving funds indefinitely with new language at § 570.504(f) that would permit HUD to take corrective actions against entitlement grantees with inactive or excessive revolving funds. HUD also
The current regulations do not provide a standard for determining that a grantee no longer has the continuing capacity to carry out activities in a timely manner. Although this proposed rule does not change HUD's ability to assess capacity on a case-by-case basis to determine capacity, it would add a data-driven measure of lack of capacity: a portfolio consideration of a grantee's continuing capacity to deliver activities in a timely manner based on overall progress under multiple grants over a rolling four-quarter period rather than by a single annual snapshot of the aggregate balance. At any given time, each grantee will have up to six grants (or up to eight if a period of performance waiver is provided) available in its CDBG line of credit. Proposed § 570.902(a)(4) would provide that if any three or more of those grants are simultaneously identified as Slow Spenders for four or more consecutive quarters, HUD would determine that the grantee lacks the continuing capacity to undertake timely program activities, will provide an opportunity for an informal consultation meeting, and will then take appropriate action, including corrective action or sanction up to and including a reduction to the grant amount for the succeeding program year.
The proposed rule would add a time period for CDBG-assisted activities to meet one of the three national objectives of the CDBG program. Currently, there is no time period in which CDBG-assisted activities must meet a national objective. This lack of a defined period of time for an activity to meet a national objective undercuts the primary purpose of the Act because recipients cannot demonstrate that they are using CDBG-funded activities to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for LMI persons.
To ensure that recipients fulfill the purpose of the Act and that CDBG-assisted activities benefit LMI persons and households, HUD proposes that activities be given six years from the initial drawdown of CDBG funds to meet a national objective or the length of the period of performance and any extension permitted under § 570.509, whichever is shorter. HUD believes that six years is an adequate time period for recipients to demonstrate that an activity will meet a national objective. HUD proposes to revise § 570.200(a)(2) requiring recipients to demonstrate that activities carried out under Subpart C meet a national objective within six years of the initial drawdown of CDBG funds for an activity.
HUD also proposes to remove multiple references in §§ 570.208(a) (for entitlement recipients) and 570.483 (for State recipients) to sources of data recipients should use in determining income characteristics, such as poverty and income levels, of potential beneficiaries or areas served. Notice CPD-19-02, published February 14, 2019 (
Recipients and subrecipients may incur costs related to carrying out specific activities eligible under §§ 570.201-570.204 and 570.703, which are typically referred to as “activity delivery costs.” Unlike program administrative costs that are eligible under § 570.206 for overall program management, coordination, monitoring, and evaluation, a recipient incurs activity delivery costs on an activity-by-activity basis. The regulations do not specifically define this term; therefore, HUD proposes to add a definition at § 570.3. HUD proposes to define activity delivery costs as the allowable costs of work performed by a recipient, subrecipient, or contractor in carrying out specific activities eligible under §§ 570.201-570.204 (for CDBG entitlement recipients) and 570.703 (for Section 108 borrowers). For example, under this proposal, a grantee could charge 20 percent of an employee's salary and related expenses (
Recipients, subrecipients, and contractors must use the cost principles at 2 CFR part 200, subpart E in determining the allowability of the costs. In particular, recipients, subrecipients, and contractors must ensure that activity delivery costs consisting of staff salaries are allocable to the specific activity and adequately documented. HUD proposes a new reference in the introductions to § 570.206 to emphasize that activity delivery costs for CDBG entitlement recipients are separate from program administrative costs.
CDBG recipients and subrecipients carry out public services that specifically benefit elderly persons. Recipients across the United States have widely varying definitions of “elderly” that they use for CDBG-assisted activities that specifically target this population. Because part 570 does not define the term “elderly,” HUD has received requests for guidance regarding the definition of elderly. Although “elderly person” is defined at § 5.100, HUD believes including the definition at § 570.3 would make clear the definition of “elderly” for certain CDBG-assisted activities. HUD proposes to add the definition of elderly at § 570.3 that states that for activities pursuant to § 570.202, “elderly” means a person 62 years of age or older. This definition would align CDBG-assisted housing activities with other HUD programs. However, HUD would continue to permit CDBG recipients and subrecipients to define “elderly” consistent with State law to permit recipients the flexibility to carry out non-housing activities that benefit elderly persons.
The definition of entitlement amount contains a reference to “a metropolitan city and an urban county.” Periodically, OMB issues bulletins that contain revised delineations of metropolitan statistical areas, micropolitan statistical areas, and combined statistical areas. These bulletins update OMB's designations of metropolitan areas, counties included in metropolitan areas, and principal cities of those metropolitan areas. These principal cities usually have populations below the statutory threshold of 50,000 to become a metropolitan city but are considered principal cities of the metropolitan areas in which they are located. Therefore, HUD proposes to add the term “principal cities” as designated by OMB in the definition of “entitlement amount” at § 570.3 because HUD considers principal cities entitlement recipients that will receive a CDBG grant if they accept entitlement status.
HUD proposes to add a definition of “period of performance” in §§ 570.3 and 570.481(a)(4) that would provide recipients a six-year time period to expend a grant's funds or the length of the origin year grant's period of availability for expenditure in accordance with §§ 570.200(k) or 570.480(h), whichever is shorter, beginning on HUD's approval of a grant agreement for a given grant. The proposed definition would apply to the proposed closeout procedures at § 570.509 and timeliness requirements at § 570.902. For Section 108 loan guarantees, the period of performance begins on the date of HUD's guarantee of a promissory note or other obligation and confers the same six-year time limit.
Under the Federal financial rules at 2 CFR 200.211(b)(5) every Federal grant must have a designated period of performance. For CDBG grants, HUD began adopting these rules in 2015. Under CDBG appropriations, HUD has allowed the period of performance to be the statutory availability of grant funds. In general, HUD has up to three years to obligate grants, and there are five additional years of funding availability. For example, grants from the 2014 appropriation are no longer available for expenditure after September 30, 2021.
Drawing from lessons learned, HUD looked to CDBG-DR grantees' fund expenditure patterns. In developing the CDBG-DR timely expenditure expectations, HUD reviewed the spending performance of CDBG-DR grants awarded in response to disasters in 2006 and 2008. In May 2013, HUD reviewed historical data on quarterly disbursements of funds from these appropriations. This analysis concluded that most CDBG-DR-funded recovery activity is completed within three to four years, and the recovery of CDBG-DR grantees is largely complete after six years. For an average grant, the third year following grant agreement execution typically shows the peak amount of expenditures. Program experience with annual CDBG grantees, who generally have fewer challenging programs than do CDBG-DR grantees, indicates that a six-year period of performance would be generous for both entitlements and State grantees.
Section § 570.200(a)(3) currently states that entitlement recipients, non-entitlement CDBG recipients in Hawaii, and recipients of insular area funds must ensure that over a period of time specified in their certification, not to exceed three years, not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities meeting the criteria under § 570.208(a), (d)(5), or (6) for benefiting LMI persons. These recipients must ensure that during their chosen period of certification not less than 70 percent of the aggregate of CDBG funds expended during that period benefit LMI persons. This requirement is identified in the Act at section 101(c) and cannot be waived. Therefore, HUD proposes to revise § 570.200(a)(3) to reinforce that recipients may not expend more CDBG funds in a subsequent certification period to meet the statutory requirement.
HUD proposes to make a slight revision to § 570.200(h)(1)(iii), which requires that costs and activities funded are in compliance with the environmental review procedures stated in 24 CFR part 58. There has been some confusion whether the intent of this provision is just to apply whatever part 58 requirements would otherwise apply, or to actually extend applicability of part 58 choice-limiting prohibitions even to pre-application activities that aren't prohibited under Part 58 itself. In order to clarify that this provision is not meant to add a prohibition on reimbursement of expenses for activities that began before application for CDBG, where the pre-application activities commenced prior to a completed environmental review and Release of Funds, the revision would refer to compliance with “applicable” environmental review procedures in 24 CFR part 58.
Section 570.201(a) currently permits grantees to use CDBG funds to acquire real property by long-term lease. However, it does not specify the length of time that constitutes a long-term lease for the purpose of compliance with § 570.201(a). “Long-term lease” has been interpreted in various ways. The 1998 Guide to National Objectives and Eligible Activities for Entitlement Communities defines a long-term lease as 15 years or more. Consistent with this guidance, HUD proposes to add a parenthetical statement to § 570.201(a) that would clearly define a “long-term lease” as 15 years or more.
Section 2 of the Tornado Shelters Act (Pub. L. 108-146; 117 Stat. 1883, enacted December 3, 2003) amended section 105(a) of the Act to permit the construction or improvement of tornado shelters for residents of manufactured housing in certain neighborhoods as an eligible activity under the CDBG program. The Tornado Shelters Act permits tornado shelters as an eligible activity if they are located in a neighborhood that (1) contains at least 20 manufactured housing units within such proximity to the shelter that the shelter is available to the resident in the event of a tornado, (2) consists predominantly of persons of low and moderate income (
HUD proposes at § 570.207(a)(4) to explicitly list general administrative and operating expenses of public or nonprofit entities as an ineligible activity. HUD's experience is that these entities believe that general administrative costs and operating expenses are eligible activities under §§ 570.201-570.206. However, while recipients may use CDBG funds for program administrative costs, the regulations do not allow public or nonprofit entities to do so. HUD believes that the proposed addition of this ineligible activity, in addition to the proposed addition of the definition of “activity delivery costs” in § 570.3, would provide greater clarity to public and nonprofit entities and encourage them to use CDBG funds directly for activities (as well as for activity delivery costs). Public and nonprofit entities also cannot categorize these ineligible expenses as providing technical assistance; the proposed rule would revise the definition of “technical assistance” at § 570.201(p) to reflect that prohibition.
HUD proposes to clarify eligible uses of CDBG funds for loan repayment, issuance, underwriting, servicing, and other cost associated with Section 108 activities. Although already described at § 570.705(c), HUD believes that adding a cross-reference in subpart C (with a new § 570.201(s)) may provide potential borrowers a better understanding of their ability to finance Section 108 activities with CDBG funds.
Reconstruction of buildings or structures has been eligible for CDBG assistance since 1996. Section 105(a)(4) of the Act states that clearance, removal, reconstruction, and rehabilitation of buildings and improvements (including interim assistance and financing public or private acquisition for reconstruction or rehabilitation, and reconstruction or rehabilitation of privately owned properties, and including the renovation of closed school buildings) is an eligible CDBG-assisted activity. Buildings reconstructed with CDBG funds may be publicly or privately owned and residential or non-residential.
Unlike other parts of the CDBG regulations that explicitly state that recipients and subrecipients may use CDBG funds to reconstruct public facilities and improvements (§ 570.201(c)), privately owned utilities (§ 570.201(l)), and commercial/industrial structures as part of a special economic development activity (§ 570.203(a)), § 570.202 does not clearly identify reconstruction as an eligible activity related to housing. To make clear that reconstruction is an eligible activity under § 570.202, HUD proposes to add the words “and reconstruction” to the introductory language at § 570.202(a).
The provision at § 570.206(g), Administrative expenses to facilitate housing, is no longer an eligible activity in the CDBG program because the provision applied only to units identified in a grantee's Housing Assistance Plan (HAP). HUD discontinued use of the HAP by CDBG grant recipients in the mid-1990s. Section 570.206(g) cannot be read to just substitute costs related to the Consolidated Plan for costs formerly eligible in connection with the HAP. Therefore, HUD proposes to remove § 570.206(g) and replace it with a provision addressing how CDBG funds may be used to support eligible administrative and planning costs for the HOME Investment Partnerships Program (HOME).
Section 570.206(h) refers to the Rental Rehabilitation and the Housing Development programs that were authorized by Section 17 of the United States Housing Act of 1937 (“the 1937 Act”), Public Law 75-412, 50 Stat. 888. Congress repealed Section 17 in Section 289 of the Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 12839) and terminated assistance to these programs. HUD therefore proposes to remove and reserve § 570.206(h). HUD similarly proposes to remove and reserve § 570.201(m), which allowed CDBG funds to be used for construction of housing under Section 17 of the 1937 Act, as well as to remove a corresponding cross-reference to § 570.201(m) at § 570.207(b)(3)(ii).
Section 108 borrowers can undertake site preparation activities related to redeveloping real property that borrowers have acquired or rehabilitated with Section 108 funds or that is for an economic development purpose. The wording of § 570.703(f) makes it unclear that all such site preparation activities must relate to either of those two purposes. This proposed rule would clarify this requirement.
Finally, the proposed rule would remove and reserve an eligible activity, § 570.703(j), related to activities authorized under section 17(d) of the 1937 Act (42 U.S.C. 1437o(d)); such authorized activities are no longer carried out since the repeal of the statute in 1991.
HUD seeks to ensure that the recipients use CDBG-funded activities to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for LMI persons. CDBG-funded activities that fail to meet a national objective within a reasonable timeframe undercut the purpose of the Act. HUD proposes to require at § 570.200(a)(2) that recipients demonstrate that the acquisition meets a national objective within six years of the date of the initial drawdown of CDBG funds for the activity or the length of the period of performance and any extension permitted under 24 CFR 570.509, whichever is shorter. To reinforce this requirement in the national objectives criteria sections of part 570, HUD proposes to insert the six-year timeframe to meet a national objective at §§ 570.208(e) and 570.483(g).
For example, recipients may acquire real property but fail or struggle to meet a national objective based on unforeseen circumstances. The recipient or subrecipient may acquire property with the intention of constructing a public facility such as a recreation center on the site or making infrastructure improvements where affordable housing will later be developed, but unforeseen circumstances prevent the proposed activity from occurring as planned. Rather than change the use of the real property for a purpose that will meet the planned or other national objective, the recipient or subrecipient may simply hold the property indefinitely. In this circumstance, Office of Inspector General audits have documented that the length of time between acquiring
To demonstrate compliance with the national objective of benefit to LMI persons on an area basis (§§ 570.208(a)(1) and 570.483(b)(1)), a CDBG-assisted activity must have a defined service area. The service area must be primarily residential, and at least 51 percent of the residents in this service area must be LMI persons. Certain exception requirements at § 570.208(a)(1)(ii) allow a threshold of lower than 51 percent in limited circumstances. When designating the service area for a CDBG-assisted activity, the service area should be accurately described and proportionate to the size of the CDBG-assisted activity. For example, a recipient cannot automatically presume a large park serves just the neighborhood in which it is located; it may serve the entire jurisdiction of the recipient. To meet the criteria at § 570.208(a)(1) or § 570.483(b)(1), the recipient must use the most recent Census Bureau data provided by HUD or conduct a survey to determine if a minimum of 51 percent of the residents in the defined service area are LMI.
To demonstrate compliance with the national objective of benefit to LMI persons-limited clientele (§§ 570.208(a)(2) and 570.483(b)(2)), a CDBG-assisted activity must: (1) benefit members of a group presumed to be LMI, as such groups are described in § 570.208(a)(2)(i)(A) and § 570.483(b)(2)(ii)(A); (2) require information on family size and income to demonstrate that not less than 51 percent of the beneficiaries are LMI; (3) be restricted to low- and moderate-income persons; or (4) be of such nature and be in such location that it may be concluded that the beneficiaries of the CDBG-assisted activity are low and moderate income, as such nature and locations are described in §§ 570.208(a)(2)(i)(D) and 570.483(b)(2)(ii)(D). The LMI limited clientele national objective is often met by CDBG-assisted activities that are: restricted to children, such as tutoring and recreation programs; senior services, such as Meals on Wheels; the removal of architectural barriers; and public facilities for special populations such as the homeless and domestic violence shelters.
HUD proposes revisions to the limited clientele provision that would state the requirements more clearly and that would provide better guidance to recipients. In addition to the proposed definition of “elderly” at § 570.3, HUD proposes references to that definition at §§ 570.208(a)(2)(i)(A) and 570.483(b)(2)(ii)(A) with parenthetical statements after “elderly persons.”
Further, HUD proposes to clarify the presumed LMI group of “illiterate adults.” Some CDBG recipients have interpreted the term “illiterate adults” to mean illiterate in a person's native language, while other recipients have interpreted it to mean adults that are illiterate in English. Neither the Act nor part 570 define illiteracy. HUD's position at one time was that, for the CDBG program, an illiterate adult is one who is unable to read or write in any language. However, HUD has reconsidered that definition and proposes to codify HUD's current interpretation at §§ 570.208(a)(2)(i)(A) and 570.483(b)(2)(ii)(A) that illiterate adults are adults unable to read and write in English and in their first language, if the adult's first language is not English.
HUD also proposes to broaden the application of the presumed LMI group of “battered spouses” to cover all survivors of domestic violence. Survivors of dating violence, sexual assault, and stalking are categories included in survivors of domestic violence. The current category of “battered spouses” limits the presumption to spouses. However, unmarried survivors of violence may be presumed to be LMI. Therefore, HUD proposes to remove “battered spouses” from the presumed categories of LMI persons and replace it with “survivors of domestic violence” at §§ 570.208(a)(2)(i)(A) and 570.483(b)(2)(ii)(A). HUD interprets “battered spouses” to be a subcategory of “survivors of domestic violence” still presumed to be LMI under those provisions.
Furthermore, HUD proposes to interpret survivors of human trafficking to be a subcategory of homeless persons, which is presumed to be LMI under these provisions. HUD considers human trafficking, including both labor and sex trafficking, to be “other dangerous or life-threatening conditions that relate to violence against the individual or family member” under paragraph 4 of the definition of “homeless” at § 578.3. Where an individual or family is fleeing, or is attempting to flee human trafficking, that has either taken place within the individual's or family's primary nighttime residence or has made the individual or family afraid to return to their primary nighttime residence; and the individual or family has no other residence; and the individual or family lacks the resources or support networks to obtain other permanent housing; HUD would consider that individual or family to qualify as “homeless” under the definition. By including survivors of human trafficking as a subcategory of homeless, HUD would be better able to ensure that they have access to the benefits and services necessary for their safety, protection, and basic well-being.
Finally, HUD proposes to add categories of groups of persons at §§ 570.208(a)(2)(i)(A) and 570.483(b)(2)(ii)(A) that, when served exclusively or in combination with groups of persons in other listed categories, may be presumed to benefit persons, 51 percent of whom are LMI, barring any evidence to the contrary: persons who meet the Federal poverty guidelines and persons who are insured by Medicaid. The Federal poverty guidelines, established by the Department of Health and Human Services based on poverty thresholds published by the Census Bureau, estimate the minimum amount of income needed to cover basic needs. Medicaid coverage varies by State and other eligibility requirements, but income qualification is generally less than four times the Federal poverty guidelines. Further, while nearly all jurisdictions in the U.S. have more LMI persons than persons in poverty, in a small number of jurisdictions more persons are in poverty than are LMI. Allowing grantees to presume that persons in poverty are LMI will address
To demonstrate compliance with the LMI housing national objective (§§ 570.208(a)(3) and 570.483(b)(3)), a CDBG-assisted residential structure must be occupied by predominantly LMI households. Unlike the other LMI national objectives, meeting the LMI housing national objective is based on households rather than individuals or families. A household is all the persons that occupy a housing unit, whether related or unrelated. Meeting the LMI housing national objectives criteria is also based on the number of housing units. Each single-unit structure must be occupied by an LMI household. In a two-unit structure, one unit must be so occupied. Where there are three or more units in a structure, a minimum of 51 percent of the households must be occupied by LMI households. CDBG-assisted activities that may meet this national objective include homeownership assistance, housing rehabilitation (single and multifamily), and acquisition of real property where a recipient or subrecipient will construct housing units using another funding source. Pursuant to § 570.207(b)(3), recipients or subrecipients may not use CDBG or Section 108 funds for new housing construction unless it is provided under the last resort housing provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601
Some exceptions permit eligible activities to meet the LMI housing national objective where less than 51 percent of multifamily units are occupied by LMI households. Such activities include assistance for an eligible activity to reduce the development cost of the new construction of a multifamily, non-elderly rental housing project where not less than 20 percent of the units will be occupied by LMI households at affordable rents. In addition, the proportion of the total cost of developing the project to be paid with CDBG funds must be no more than the proportion of units in the project that will be occupied by LMI households (§§ 570.208(a)(3)(i) and 570.483(b)(3)(i)). The proposed rule would add as additional exceptions substantial rehabilitation (as defined at § 5.100) and conversion of a nonresidential structure to a multifamily, non-elderly rental housing project. This change would align treatment of substantial rehabilitation with new construction for purposes of meeting the national objectives criteria for housing activities.
Some recipients believe that a Consolidated Plan that is not disapproved by HUD pursuant to § 91.500(a) constitutes an approval of the eligibility of the activities for the applicable programs identified in the plan. Because the Consolidated Plan is a planning document, HUD is unable to determine that a grantee will carry out the activity in compliance with program requirements, including eligible activity requirements. Grantees may amend plans, including planned activities, at any time and amendments are not subject to HUD review. However, because the Plan describes a substantial number of activities for many different CPD programs; reviewing each individual activity within the plan for compliance would be burdensome for CPD field offices and significantly lengthen review of the Consolidated Plan and delay grantees' ability to carry out activities. CPD seeks to ensure the eligibility of activities through risk analysis and monitoring after grantees have carried out activities. Therefore, HUD proposes to add language to § 91.500(a) stating that the fact that HUD has not disapproved the Consolidated Plan does not constitute approval of the activities identified in the Plan as being compliant with relevant program requirements and does not confer a determination of the eligibility of the activities in the Consolidated Plan.
Currently, § 570.307 requires the Secretary to determine, after reviewing qualification documentation from an urban county, whether the county is qualified to receive CDBG funds. Each year, HUD publishes a notice,
Section 217(b)(3) of title II of the Cranston-Gonzalez National Affordable Housing Act, as amended (NAHA) (42 U.S.C. 12747(b)(3)), and §§ 92.50(a) and 92.101(a)(1) require that, in order to receive a HOME formula allocation for a fiscal year as a consortium, units of general local government be qualified/requalified as consortia in accordance with HOME requirements by the last day of the prior fiscal year, which is September 30 of each year. Most urban counties and HOME consortia select the same three-year qualification period to simplify the qualification process for both entities, and HOME consortia may change their three-year qualification cycles so that they coincide with the urban county's three-year qualification period. Because the CDBG program does not currently have a deadline to complete the process, however, an urban county that is also a HOME consortium may not complete the qualification process for the consortium by September 30 because of an issue that arises with a participating unit of local government with regard to its participation in the urban county's CDBG program. While this will not affect a consortium's CDBG funding, such an action may result in a loss of its HOME funding for that fiscal year. Therefore, a September 30 deadline for the urban county qualification process may help align the programs and eliminate problems that arise regarding a consortium's timely completion of its qualification or requalification as a HOME consortium under the requirements in 24 CFR part 92.
HUD proposes to remove language from § 570.500(a)(4)(ii) that excludes from the definition of “program income” revenues generated by certain activities financed by a Section 108 loan guarantee. HUD adopted § 570.500(a)(4)(ii) to promote the use of Section 108 financing for economic development activities. However, the regulations are confusing to recipients
Currently, § 570.504(b)(2)(iii) requires each recipient to calculate the amount of program income cash balances on hand at the end of each program year (except those needed for immediate cash needs, cash balances of a revolving loan fund, cash balances in lump sum drawdown accounts, and cash and investments held for Section 108 loan guarantee security needs). After all deductions, the recipient must determine if the cash balances as of the end of the program year exceed
In the definition of program income for the State CDBG program at § 570.489(e)(2)(iv)(C), an exclusion allows a unit of general local government funded by a State to retain up to $100 per year in interest on deposit of grant funds before disbursement of the funds for activities for CDBG administrative expenses. The amount of $100 previously aligned with § 85.21(h)(2)(i), which has been replaced by 2 CFR 200.305(b)(9), and which currently allows a unit of general local government funded by a State to retain up to $500 per year. Therefore, HUD proposes to update § 570.489(e)(2)(iv)(C) by replacing the dollar amount with a reference to 2 CFR 200.305(b)(9).
HUD proposes to add a requirement at § 570.507(d) to require a recipient to collect and report data on its use of CDBG funds in the Integrated Disbursement and Information System (IDIS). HUD has required recipients to report program activity and expenditure data in IDIS since 1996, but part 570 requires only that recipients must generally “submit such other reports and information as HUD determines are necessary.” The revision would make it clear to recipients that they must use IDIS to submit such reports as required by § 570.507.
Currently, §§ 570.489(h)(4)(i) (for State recipients) and 570.611(d)(1)(i) (for entitlement recipients) require that when recipients request that HUD consider an exception to the conflict-of-interest requirements, recipients must have documentation of disclosure of the nature of the conflict accompanied by an assurance that there has been a public disclosure of the conflict and a description of how the public disclosure was made. The regulations do not make clear what “public disclosure” means. Some recipients define public disclosure as public hearings or publication in a newspaper of general local circulation; others believe that posting it on the recipient's website is sufficient. To clarify and make standard what public disclosure means, HUD proposes to add language to §§ 570.489(h)(4)(i) and 570.611(d)(1)(i) that would define public disclosure as disclosure through any of the following media: publication on the recipient's website, including social media; electronic mailings; media advertisements; public service announcements; and display in public areas such as libraries, grocery store bulletin boards, and neighborhood centers. HUD also clarifies the existing requirement to make it explicit that grantees must provide HUD evidence of the public disclosure.
The Section 108 application submission requirements at § 570.704(b) state that an applicant should provide the application “to the appropriate HUD Office,” but do not distinguish whether the application should go to the applicant's local HUD Field office or Headquarters. The proposed rule would explicitly state that applicants should submit applications for Section 108 loan guarantee assistance to HUD Headquarters, ensuring that HUD Headquarters can promptly review such applications concurrently with HUD Field office staff.
Prior to 2015, the regulations implied, but did not clearly state, that HUD Field offices reviewed applications first and then forwarded the application together with its recommendation for approval or disapproval to HUD Headquarters. HUD removed this provision in a 2015 rulemaking, leaving the rule silent as to which HUD office(s) applicants should submit an application. In concert with the 2015 rulemaking, CPD's Financial Management Division (FMD) at HUD Headquarters (which administers the Section 108 program) implemented a concurrent review process with CPD Field office staff. However, some applicants have continued to submit applications only to HUD Field offices. HUD Field office staff are responsible for many CPD programs and may not review a submitted application as promptly as FMD or notify FMD that they have received a new application. Applications submitted only to HUD Field offices may therefore result in a delay in the start of the concurrent review process.
The submission requirements also do not clearly reiterate the basic information an applicant needs to include in an application: specifically, the proposed eligible activity under § 570.703 and the source of the payment of fees under § 570.712 (in addition to the national objectives criteria at § 570.208, which is already identified in the current program regulation at § 570.704(b)(1)). Other parts of subpart M include these requirements, but the proposed rule would reiterate those requirements to clearly identify what information the Section 108 application must contain. HUD proposes to add these references to § 570.704(b)(1) and (2), respectively.
Finally, HUD proposes to better organize the submission requirements at
The limitations on commitments at § 570.705(a)(1)(iii) permit HUD to place a higher priority on applications containing activities to be carried out in areas designated as empowerment zones/enterprise communities by the Federal Government or a State. Statutory authorization for such activities has lapsed, removing the need to place a higher priority on activities carried out in such areas. Therefore, HUD proposes to delete the language in § 570.705(a)(1)(iii) referring to empowerment zones/enterprise communities and replace it with language describing areas designated as economically distressed by the Federal Government or by any State.
Security requirements outlined in § 570.705(b) list examples of acceptable forms of additional security (other than CDBG funds) for loan guarantees that the loan guarantee contract between HUD and a borrower will specify. However, the limited examples of security may mislead potential applicants into believing that the regulations limit the security pledged for loan guarantees to the listed types of security. Publishing such information through guidance documents and marketing materials and engaging in direct outreach to potential applicants are clearer and more effective ways to communicate the types of security that a borrower may pledge. Therefore, HUD proposes to remove and reserve the examples of security HUD may accept at § 570.705(b)(3)(i) through (iv).
Additionally, HUD proposes to delete subsections that are unnecessary or inconsistent with other provisions. Section 570.705(a)(2)(iii)(A) through (C) appear to provide three methods of calculating limitations on commitments to guarantee loans for recipients that receive grants under subpart F. However, paragraph (a)(2)(iii)(A) is duplicative of 570.705(a)(2)(iii), and paragraphs (a)(2)(iii)(B) and (C), which allow for using an average of the three most recent grants, are inconsistent with § 570.705(a)(2)(iii).
HUD also proposes certain corresponding changes to Part 1003, where appropriate, that are intended to align the ICDBG program with the CDBG program.
HUD proposes amending the Definitions section to include “activity delivery costs.” Similar to CDBG recipients and subrecipients, ICDBG recipients and subrecipients may incur costs typically referred to as “activity delivery costs” related to carrying out specific ICDBG eligible activities. The ICDBG regulations do not specifically define this term; therefore, HUD proposes to add a definition at § 1003.4. This addition makes clear that recipients and subrecipients must use the cost principles at 2 CFR part 200, subpart E, in determining the allowability of the costs. In particular, recipients and subrecipients must ensure that activity delivery costs consisting of staff salaries are allocable to the specific activity and adequately documented.
HUD proposes to add a new § 1003.201(r) to clarify that recipients can assist eligible activities if they are part of mixed-use properties that also contain ineligible uses, so long as the recipient expends ICDBG funds only on the eligible use. The proposed rule also would add a definition of “mixed-use property” to the new § 1003.201(r). This is a conforming change to the ICDBG regulations to align them with the proposed changes to the CDBG regulations in this proposed rule.
Additionally, the Tornado Shelters Act (Pub. L. 108-146; 117 Stat. 1883, enacted December 3, 2003) (42 U.S.C. 5301, note), authorized the construction or improvement of tornado shelters in certain neighborhoods and manufactured housing communities as an eligible activity under the CDBG program. Consistent with the change to § 570.201, HUD proposes to insert a provision at § 1003.201(p) that would codify the use of ICDBG funds for tornado safe shelters as an eligible activity under certain conditions. As discussed above with respect to CDBG, this activity is already eligible under ICDBG. HUD is simply codifying in regulations a statutory change that has been codified in law for many years.
Finally, consistent with CDBG, HUD proposes to add a new paragraph (q) to clarify that essential repairs and operating expenses necessary to maintain the habitability of housing units acquired through tax foreclosures is also an eligible activity.
HUD proposes to amend § 1003.202(a) to clarify that reconstruction of housing is an eligible ICDBG activity. Reconstruction of buildings or structures, including housing, has been an eligible ICDBG activity since 1996. However, the program regulations do not clearly and expressly identify reconstruction as an eligible activity related to housing. To make clear that reconstruction is an eligible activity under § 1003.202(a), HUD proposes to add the words “and reconstruction” to the introductory language at § 1003.202(a). This update will be a conforming change for the ICDBG regulations to align them with the same proposed changes to the CDBG regulations in this proposed rule.
HUD proposes to amend § 1003.203(b) governing special economic development activities. Section 1003.203 governs the use of ICDBG funds for special economic development activities and includes an illustrative list of eligible forms of assistance to private for-profit businesses. The ICDBG regulations already list forms of support by which recipients can provide assistance to private, for-profit businesses where the assistance is appropriate to carry out an economic development project. HUD has previously interpreted this provision to allow ICDBG assistance to New Markets Tax Credit (NMTC) investment vehicles. The proposed revisions would explicitly indicate that ICDBG recipients are allowed to provide assistance to an economic development project through a for-profit entity that passes the funds through a financing mechanism (
HUD proposes to amend § 1003.206 to add a reference to the new proposed definition of “activity delivery costs” in § 1003.4 to help ICDBG recipients distinguish between administrative costs and activity delivery costs. This update is a conforming change to the ICDBG regulations to align them with the proposed changes to the CDBG regulations in this proposed rule.
HUD's regulation at § 1003.208 provides the criteria for determining whether an ICDBG-assisted activity complies with one or more of the national objectives. HUD proposes conforming changes to paragraphs (b), (c), and (d) Limited Clientele activities, Low- and Moderate-Income Housing Activities, and Job creation or retention activities. This update is a conforming change to the ICDBG regulations to align them with the proposed changes to the CDBG regulations in this proposed rule.
With respect to Limited Clientele activities, HUD proposes revisions to paragraph (b) to clarify requirements and provide better guidance to recipients. Consistent with the reasons stated above in section III.E with respect to the CDBG program, HUD proposes to clarify in the ICDBG program that the presumed LMI group of “illiterate adults” means adults unable to read and write in English and in their first language, if the adult's first language is not English. HUD also proposes to broaden the application of the presumed LMI group of “battered spouses” to cover all survivors of domestic violence. The current category of “battered spouses” limits the presumption to spouses. However, unmarried survivors of violence may be presumed to be LMI. Therefore, HUD proposes to remove “battered spouses” from the presumed categories of LMI persons and replace it with “survivors of domestic violence.” HUD interprets “battered spouses” to be a subcategory of “survivors of domestic violence” still presumed to be LMI under the ICDBG regulations. As stated earlier, HUD also proposes to interpret survivors of human trafficking to be a subcategory of homeless persons, which is presumed to be LMI under these provisions, in order to ensure that they have access to the benefits and services necessary for their safety, protection, and basic wellbeing.
Finally, HUD proposes to add categories of groups of persons at § 1003.208(b)(1)(i) that, when served exclusively or in combination with groups of persons in other listed categories, may be presumed to benefit persons, 51 percent of whom are LMI, barring any evidence to the contrary: persons who meet the Federal poverty guidelines and persons who are insured by Medicaid. As stated in reference to the same changes being proposed in CDBG in §§ 570.208(a)(2) and 570.483(b)(2), the Federal poverty guidelines, established by the Department of Health and Human Services based on poverty thresholds published by the Census Bureau, estimate the minimum amount of income needed to cover basic needs. Medicaid coverage varies by State and other eligibility requirements, but income qualification is generally less than four times the Federal poverty guidelines. Further, while nearly all jurisdictions in the U.S. have more LMI persons than persons in poverty, in a small number of jurisdictions more persons are in poverty than are LMI. Allowing ICDBG grantees to presume that persons in poverty are LMI will address such anomalies and simplify requirements across other Federal programs that also provide benefits to persons who meet the Federal poverty guidelines.
With respect to the Low- and Moderate-Income Housing activities in paragraph (c), to demonstrate compliance with the LMI housing national objective, an ICDBG-assisted residential structure must be occupied by LMI households. Meeting the LMI housing national objective is based on households rather than individuals or families. A household is all the persons that occupy a housing unit, whether related or unrelated. Meeting the LMI housing national objectives criteria is also based on the number of housing units. Generally, ICDBG funds may only be used to assist housing units occupied by LMI households. Accordingly, in order for an activity to meet the LMI housing national objective, each single-unit structure that is assisted with ICDBG funds must be occupied by an LMI household. When ICDBG funds are used to assist a two-unit structure, to meet the LMI housing national objective, at least one unit must be so occupied. Where there are three or more units in a structure, a minimum of 51 percent of the units must be occupied by LMI households. ICDBG-assisted activities that may meet this national objective include homeownership assistance, housing rehabilitation (single and multifamily), and acquisition of real property where a recipient or subrecipient will construct housing units using another funding source.
Some exceptions permit eligible activities to meet the LMI housing national objective where less than 51 percent of multifamily units are occupied by LMI households. Such activities include assistance for an eligible activity to reduce the development cost of the new construction of a multifamily, non-elderly rental housing project where not less than 20 percent of the units will be occupied by LMI households at affordable rents. In addition, the proportion of the total cost of developing the project to be paid with ICDBG funds must be no more than the proportion of units in the project that will be occupied by LMI households. The proposed rule would add as additional exceptions substantial rehabilitation and conversion of a nonresidential structure to a multifamily, non-elderly rental housing project. This change would align treatment of substantial rehabilitation with new construction, as is also proposed in the CDBG section 24 CFR 570.208(a)(3)(i) and 570.483(b)(3) of this rule for purposes of meeting the national objectives criteria for housing activities.
Finally, with respect to job creation or retention activities in paragraph (d), documenting whether a job is held by or made available to an LMI person can present a financial and administrative burden on ICDBG recipients due to the data that recipients must gather and collect from assisted businesses. This aligns with changes proposed in CDBG regulations at 24 CFR 570.208(a)(4) and 570.483(b)(4) above. As noted there, to help alleviate this burden, HUD is proposing to revise the regulations to add a presumption based on the location of an assisted business and based on where the person holding the job resides. The revised regulation would provide that, for purposes of determining whether a job is held by or made available to a low or moderate income person, the person may be presumed to be a low or moderate income person if: he/she resides within a census tract where not less than 70 percent of the residents have incomes at or below 80 percent of the area median; or, if he/she resides in a census tract designated as economically distressed by the Federal Government; or, if the assisted business is located in and the job under consideration is to be located in such a tract or area. Revising the criteria for the presumption would significantly clarify the standards for recipients and encourage greater use of ICDBG funds for job creation and
HUD is proposing to amend the due dates for annual status and evaluation reports (ASERs) in § 1003.506(a) to accommodate ICDBG grantees that have a Tribal program year different than the Federal Fiscal year. The term “Tribal program year” is defined in the Indian Housing Block Grant (IHBG) regulations at § 1000.10 as the fiscal year of the IHBG recipient. Under the proposed rule, ASERs would be due 90, rather than 45 days, after the end of the grantee's Tribal program year, or after the end of the Federal fiscal year if the grantee has a Tribal program year that ends on the same date the Federal fiscal year ends. The amendment would align the ASER due dates with the due dates for Annual Performance Reports under the IHBG program to assist grantees of both programs to more easily track and schedule submission of reports due to HUD. ASERs would also continue to be required at grant close-out in accordance with the requirements of § 1003.508.
HUD also proposes to revise the language in § 1003.506(a) with respect to the form of ASER reports. The current regulation requires a narrative for the ASER which has resulted in significant variations in the reports submitted as well as difficulty in capturing relevant and useful data. HUD intends in the future, through the PRA process, to develop and promulgate a standardized ASER form with drop down boxes and set data points to assist recipients in meeting the reporting requirements in a consistent manner, which will both improve the usefulness of the data received and facilitate data retention and analysis. The proposed revision to the current language will make it easier for HUD to implement such a form in the future.
To clarify and standardize the meaning of the term “public disclosure,” HUD proposes to add language to § 1003.606 that would define public disclosure as disclosure through any of the following media: publication on the recipient's website, including social media; electronic mailings; media advertisements; public service announcements; and display in public areas such as libraries, grocery store bulletin boards, and neighborhood centers. Currently, § 1003.606 requires that when recipients request that HUD consider an exception to the conflict-of-interest requirements, recipients must have documentation of disclosure of the nature of the conflict accompanied by an assurance that there has been a public disclosure of the conflict and a description of how the public disclosure was made. The regulations do not make clear what “public disclosure” means. Some recipients define public disclosure as public hearings or publication in a newspaper of general local circulation; others believe that posting it on the recipient's website is sufficient. This update will clarify the meaning of the term and is a conforming change for the ICDBG regulations to align them with the proposed changes to the CDBG regulations in this proposed rule. HUD also clarifies the existing requirement to make it explicit that grantees must provide HUD evidence of the public disclosure.
HUD proposes the following technical corrections:
Sections 91.225(b)(2) (for entitlement recipients) and 91.325(b)(3) (for State recipients) refer to § 570.2 in certifying the consolidated housing and community development plan; however, § 570.2 was removed from the regulations in 1996. The provisions should instead refer to implementing the primary objective of the Act at § 570.200(a)(3). Therefore, HUD proposes to replace the citation to § 570.2 with a citation to § 570.200(a)(3).
HUD proposes to correct a typographical error in § 570.201(k), which refers to section 105(a)(21) of the Act concerning assistance to institutions of higher education but should instead refer to housing services activities under section 105(a)(20) of the Act.
HUD proposes to redesignate § 570.205(a)(6) as § 570.205(b), as HUD originally intended policy, planning, management, and capacity building activities to be a subheader for the activities below and separate from paragraph (a).
HUD proposes to correct a reference in § 570.207 to a non-existent section of § 570.3. The definitions in section 570.3 are undesignated; however, § 570.207(a)(1) contains a reference to § 570.3(d), which does not exist.
HUD proposes to correct § 570.208(d)(5), which refers to § 91.215(e) in discussing area revitalization strategy areas, but should refer to § 91.215(g), which discusses neighborhood revitalization.
HUD proposes to correct references in § 570.307 to non-existent sections of § 570.3. The definitions in section 570.3 are undesignated; however, § 570.307(b)(1) and (d)(1) both contain references to § 570.3(3), which does not exist.
HUD proposes to correct §§ 570.482(c)(1) and 570.482(c)(2)(i), which cite to section 105(a)(23) of the Act, which concerns treatment of property acquired in tax foreclosure proceedings; but should instead cite to section 105(a)(22) of the Act, which discusses microenterprise assistance activities.
HUD proposes to restore § 570.489(e)(3)(ii)(C), which was mistakenly omitted from the Code of Federal Regulations in 2015.
HUD proposes to correct the citation in § 570.490(a)(2) to § 91.320(j)(1), which should instead be to CDBG requirements in the action plan at § 91.320(k)(1).
HUD proposes to correct § 570.504(c) regarding the disposition of program income by subrecipients, which states that subrecipients holding program income after the expiration of a subrecipient agreement shall pay such funds to the recipient as required by § 570.503(b)(8). However, the correct citation is to § 570.503(b)(7).
The proposed rule would delete subparts E and G of part 570. Subpart E governs a variety of special purpose grants that no longer exist. Subpart G governs Urban Development Action Grants, which likewise no longer exist. In concert, HUD proposes revisions to remove references to subparts E and G in the definition of “CDBG funds” at § 570.3; the conflict-of-interest requirements at § 570.611(a)(2); and subpart K applicability at § 570.600(a).
The proposed rule would also remove § 570.613, “Eligibility restrictions for certain resident aliens.” This section provides restrictions for “certain newly legalized aliens” as they were described in 24 CFR part 49, which no longer exists. The rule was intended to address the 1986 amendments to the Immigration and Naturalization Act of 1952, which prohibited certain noncitizens from receiving Federal financial assistance furnished on the basis of financial need for a period of five years. (Section 245A(h) of the Immigration and Nationality Act, 8 U.S.C. 1255a(h)). As this provision applied to newly legalized aliens that entered the country before January 1, 1982, and admitted for lawful residence in accordance with the 1986 amendments, HUD has removed 24 CFR part 49, which described this population, and is now removing the regulation that referenced this statutory requirement.
HUD proposes to revise Uniform Relocation Act (URA) citations in the CDBG and ICDBG program regulations
HUD acknowledges that this proposed rule proposes to amend sections of the Code of Federal Regulations that HUD has also previously proposed to amend in its Affirmatively Furthering Fair Housing (AFFH NPRM), published February 9, 2023 (88 FR 8516). Both rules propose amendments to §§ 91.105(b)(2) and (c) and 91.115(b)(2). The AFFH NPRM and this NPRM propose to amend these provisions in different ways that do not conflict with each other.
HUD will consider public comments received on each proposed rule. The public comment period on the AFFH NPRM closed on April 24, 2023, and HUD is considering the public comments received on the AFFH NPRM's proposed changes to the referenced provisions as part of that rulemaking. HUD invites the public to comment on the revisions and additions proposed as part of this rulemaking.
Although the proposed regulatory amendments in this NPRM do not reflect the amendments proposed in the AFFH NPRM, HUD intends this rule to ultimately be consistent with a final AFFH rule. HUD will consider all relevant comments received on the AFFH NPRM, as well as on this NPRM. HUD will reconcile the regulatory language in its final rules, ensuring that the final version of this rule, if published after a final AFFH rule is codified, is consistent with all changes made in that published final AFFH rule.
For example, both NPRMs propose to add new language to 24 CFR 91.115(b)(2). The AFFH NPRM proposes to apply certain requirements of this provision to the Equity Plans that could be established by an AFFH final rule. The proposed language in this NPRM does not account for such Equity Plan requirements since that is not the subject of this rulemaking. However, if HUD adds Equity Plan requirements to 24 CFR 91.115(b)(2) in its AFFH final rule, a subsequent final rule published as part of this rulemaking will include that change, and appropriately reconcile the additions made in each rule.
Pursuant to Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant, and therefore, subject to review by OMB in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. Executive Order 14094 entitled “Modernizing Regulatory Review” (hereinafter referred to as the “Modernizing E.O.”) amends section 3(f) of Executive Order 12866 (Regulatory Planning and Review), among other things.
HUD believes that this proposed rule, by revising the Community Development Block Grant (CDBG) and related Section 108 loan guarantee program regulations to make it easier for recipients to promote economic development and recovery in low- and moderate-income communities and support investments in underserved areas, together with corresponding changes in the ICDBG program, will increase the effectiveness of these grant programs. The proposed rule has been determined to be a “significant regulatory action,” as defined in section 3(f) of Executive Order 12866, but not economically significant under section 3(f)(1) of the Order. The docket file is available for public inspection online at
The information collection requirements contained in this rule are currently approved by OMB and have been given OMB Control Numbers 2506-0077, 2506-0085, and 2577-0191. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.
The Regulatory Flexibility Act (5 U.S.C. 601
As discussed in the preamble, the proposed rule would update CDBG's and ICDBG's economic development regulations to make it easier for recipients to promote economic development and recovery in low- and moderate-income communities and support investments in underserved areas. Because the CDBG economic development regulations and standards have not been updated since 1995, the proposed rule would provide a much-needed update to ease the expenditure of funds for economic development activities. The proposed rule would lessen the economic impact on grantees, small entities and recipients by reducing eligibility and recordkeeping burdens. This would likely result in increased economic development activities and the associated creation of economic opportunities principally for low- and moderate-income persons.
The proposed rule would primarily impact CDBG, Section 108 borrowers, and ICDBG grantees. CDBG grantees and section 108 borrowers are State and local governments, some of which are small government entities, and ICDBG grantees are Indian Tribes and Tribal organizations which are eligible under Title I of the Indian Self-Determination and Education Assistance Act. These grantees administer the CDBG, section 108, and ICDBG programs, are familiar with the regulatory requirements, and are ultimately responsible for program compliance. While some impacts may filter down to smaller governmental and non-governmental entities, the expected impact would be a decrease in economic burden, as discussed above. As such, the proposed rule would likely have a positive impact on small businesses and entities. The purpose of the proposed rule would be to make more funding available for all types of economic development projects. For small entities, including small governments, the lessening of regulatory burden would likely benefit those that receive CDBG, ICDBG, and section 108 funds.
Accordingly, it is HUD's determination that this proposed rule will not have a significant economic impact on a substantial number of small
A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant Impact is available for public inspection between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, Room 10276, Department of Housing and Urban Development, 451 Seventh Street SW, Washington, DC 20410-0500. The FONSI is also available through the Federal eRulemaking Portal at
Executive Order 13132 (entitled “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 the Act does not require those costs; or the rule 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 nor preempt State law within the meaning of the Executive Order.
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This proposed rule does not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of UMRA.
HUD strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and Tribal sovereignty. HUD has evaluated this proposed rule under the Department's consultation policy and under the criteria in Executive Order 13175 and has determined that Tribal consultation is necessary regarding the proposed changes. A Dear Tribal Leader was sent out to Indian Tribes on November 15, 2021, seeking comments on the proposed changes to the ICDBG regulations in this proposed rule. HUD received comments from two Tribes and one grant writer with experience providing grant writing services to Tribes under the ICDBG program. The three Tribal commenters were generally supportive of the proposed rule. Two of the three commenters did suggest additional areas for expansion of the proposed rule and/or areas that may be appropriate for separate rulemaking. Among the suggestions were clarification of the term “economically distressed” as it relates to census tracts and overall improvements to the ICDBG application process. One Tribal commenter expressed general agreement with the proposed changes but went on to comment that the entire ICDBG regulation is overdue for an overhaul. Among this commenter's specific concerns were rules governing the use of ICDBG funds for new housing construction and rehabilitation, as well as HUD's weighting of criteria in Notices of Funding Opportunity. In developing this proposed rule, HUD considered all Tribal feedback provided and HUD will conduct additional consultation before issuing a final rule.
Aged, Grant programs—housing and community development, Homeless, Individuals with disabilities, Low- and moderate-income housing, Reporting and recordkeeping requirements.
Administrative practice and procedure; American Samoa; Community development block grants; Grant programs—education; Grant programs—housing and community development; Guam; Indians; Loan programs—housing and community development; Low- and moderate-income housing; Northern Mariana Islands; Pacific Islands Trust Territory; Puerto Rico; Reporting and recordkeeping requirements; Student aid; Virgin Islands.
Alaska; Community development block grants; Grant programs—housing and community development; Grant programs—Indians; Indians; Reporting and recordkeeping requirements.
Accordingly, for the reasons described in the preamble, HUD proposes to amend 24 CFR parts 91, 570, and 1003 as follows:
42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-11388, 12701-12711, 12741-12756, and 12901-12912.
(b) * * *
(2) The citizen participation plan must require the jurisdiction to publish the proposed consolidated plan in a manner that affords its residents, public agencies, and other interested parties a reasonable opportunity to examine its content and to submit comments. The citizen participation plan must set forth how the jurisdiction will publish the proposed consolidated plan and give reasonable opportunity to examine the document's content. The requirement for publishing may be met by publication of a summary of the document in one or more newspapers of general circulation or on the jurisdiction's official government website. The summary must describe the content and purpose of the consolidated plan and must include a list of the locations where copies of the entire proposed document may be examined. Such listings of locations shall include libraries and government offices. A jurisdiction is encouraged to use all available social media and electronic communication at its disposal to make citizens and residents aware of the availability of the proposed consolidated plan for comment and to include such methods in its citizen participation plan, as appropriate. This includes but is not limited to: emails; text messaging (SMS); media advertisements; public service announcements made through broadcast media or through a pre-recorded message delivered by using an automatic telephone dialing system; and electronic notifications to public and private agencies identified in accordance with § 91.100. A jurisdiction may also make citizens and residents
(c) * * *
(1) The citizen participation plan must specify the criteria the jurisdiction will use for determining what changes in the jurisdiction's planned or actual activities constitute a substantial amendment to the consolidated plan. (See § 91.505.) The citizen participation plan must include, among the criteria for a substantial amendment, changes in the use of CDBG funds from one eligible activity to another and adding an activity not previously identified in the Consolidated Plan or Action Plan.
(b) * * *
(2) The citizen participation plan must require the State to publish the proposed consolidated plan in a manner that affords residents, units of general local governments, public agencies, and other interested parties a reasonable opportunity to examine the document's content and to submit comments. The citizen participation plan must set forth how the State will make publicly available the proposed consolidated plan and give reasonable opportunity to examine the document's content. To ensure that the consolidated plan and the PHA plan are informed by meaningful community participation, program participants should employ communications means designed to reach the broadest audience. The requirement for publishing may be met by publication of a summary of the document in one or more newspapers of general circulation or on the State's official government website. The summary must describe the content and purpose of the consolidated plan and must include a list of the locations where copies of the entire proposed document may be examined. Such listings of locations shall include libraries and government offices. A State is encouraged to use all available social media and electronic communication at its disposal to make citizens and residents aware of the availability of the proposed consolidated plan for comment and to include such methods in its citizen participation plan, as appropriate. This includes but is not limited to, emails, text messaging (SMS); media advertisements, public service announcements made through broadcast media or through a pre-recorded message delivered by using an automatic telephone dialing system, and electronic notifications to public and private agencies identified in accordance with § 91.100. A State may also make citizens and residents aware of the availability of the proposed consolidated plan for comment through postings in public places such as grocery store bulletin boards and neighborhood centers. Publications must be accessible to persons with disabilities. Publications must also provide meaningful access to limited English proficient persons as more fully described in paragraph (a)(4) of this section. In addition, the State must provide a reasonable number of free copies of the plan to its residents and groups that request a copy of the plan.
(a)
(a) * * *
(1) Based on information available to the jurisdiction, the plan must describe the significant characteristics of the jurisdiction's housing market, including the supply, demand, and condition and cost of housing and the housing stock (including manufactured housing) available to serve persons with disabilities, and to serve other low-income persons with special needs, including persons with HIV/AIDS and their families.
(a) * * *
(1) Indicate the general priorities for allocating investment geographically within the jurisdiction and among different eligible activities and needs. Also provide quantitative, neighborhood-level outcome goal accomplishments in the performance report as required at § 91.520.
(g)
(a)
(a) * * *
(1) Based on data available to the State, the plan must describe the significant characteristics of the State's housing markets (including such aspects as the supply, demand, condition, cost, and type of housing, including manufactured housing).
(a) * * * The fact that HUD has not disapproved the plan does not constitute approval of the activities identified therein as meeting the applicable statutory and regulatory requirements.
(d) * * * Except for States, the report shall also identify quantitative, neighborhood-level outcome goal accomplishments related to one or more non-jurisdiction-wide activities.
12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 3535(d) and 5301-5320.
The additions and revisions read as follows:
(a) * * *
(2)
(3)
(b) * * *
(1)
(i) The assisted activity is eligible and will occupy a designated and discrete area within the larger property; and
(ii) The recipient can determine the costs attributable to the eligible activity as separate and distinct from the overall costs of the multiple-use property.
(iii) Allowable costs are limited to those allocable to the eligible activity.
(h) * * *
(1) * * *
(iii) The costs and activities funded are in compliance with the requirements of this part and with applicable Environmental Review Procedures in 24 CFR part 58.
The revisions and additions to read as follows:
(a)
(e)
(1) To be eligible for CDBG assistance, a public service must either be a new service or provide a quantifiable increase in the level of an existing service above that which has been provided by or on behalf of the unit of general local government (through funds raised by the unit or received by the unit from the State in which it is located) in the 12 calendar months before the submission of the action plan. (An exception to this requirement may be made if HUD determines that any decrease in the level of a service was the result of events not within the control of the unit of general local government.)
(2) The amount of CDBG funds used for public services shall not exceed the amounts outlined in paragraph (e)(2)(i) or (ii) of this section, as applicable:
(p)
(r)
(1) Contains at least 20 manufactured housing units within such proximity to the shelter that the shelter is available to the resident in the event of a tornado,
(2) Consists predominantly of persons of low and moderate income
(3) Is located within a State in which a tornado has occurred during the fiscal year for which with amounts to be used were made available or the preceding 3 fiscal years, as determined by the Secretary in consultation with the Administrator of the Federal Emergency Management Agency.
(s)
(a)
(b) The provision of assistance to a private for-profit business, including, but not limited to, grants, loans, loan guarantees, interest supplements, loan participations, technical assistance, and other forms of support (including use of pass-through financing structures), for any activity where the assistance is appropriate to carry out an economic development project, excluding those described as ineligible in § 570.207(a).
(c) Economic development services in connection with activities eligible under this section, including, but not limited to, outreach efforts to market available forms of assistance; screening of applicants; reviewing and underwriting applications for assistance; preparation of all necessary agreements; management of assisted activities; the screening, referral, and placement of applicants for employment opportunities generated by CDBG-eligible economic development activities and the costs of providing necessary training for persons filling those specific positions. Training connected with job placement in specific businesses is considered an economic development activity and not a public service under § 570.201(e). If individuals are not receiving training for specific positions at a specific business, general employment readiness programs or trainings for individuals in career fields are only eligible as public service activities under § 570.201(e) or, in limited cases, as part of a community economic development project under § 570.204.
The revisions read as follows:
Payment of reasonable program administrative costs and carrying charges related to the planning and execution of community development activities assisted in whole or in part with funds provided under this part. This does not include activity delivery costs as defined at § 570.3.
(g)
The addition reads as follows:
(a) * * *
(4)
The following criteria shall be used to determine whether a CDBG-assisted activity complies with one or more of the national objectives as required under § 570.200(a)(2):
(a)
(1)
(ii) For metropolitan cities and urban counties, an activity, the benefits of which are available to all the residents in a primarily residential area, where less than 51 percent of the residents are low- and moderate-income persons, but where the proportion of such low- and moderate-income persons residing in the area is within the highest quartile of all areas in the recipient's jurisdiction in terms of the degree of concentration of residents who are low- and moderate-income persons. In applying this exception, HUD will determine the lowest proportion a recipient may use to qualify an area for this purpose, as follows:
(A) All census block groups in the recipient's jurisdiction shall be rank ordered from the block group of highest proportion of low and moderate income persons to the block group with the lowest. For urban counties, the rank ordering shall cover the entire area constituting the urban county and shall not be done separately for each participating unit of general local government.
(B) In any case where the total number of a recipient's block groups does not divide evenly by four, the block group which would be fractionally divided between the highest and second quartiles shall be considered to be part of the highest quartile.
(C) The proportion of low- and moderate-income persons in the last census block group in the highest quartile shall be identified. Any service area located within the recipient's jurisdiction and having a proportion of low- and moderate-income persons at or above this level shall be considered to be within the highest quartile.
(D) If block group data are not available for the entire jurisdiction, other data acceptable to the Secretary may be used in the above calculations.
(iii) An activity to develop, establish, and operate for up to two years after the establishment of, a uniform emergency telephone number system serving an area having less than the percentage of low- and moderate-income residents required under paragraph (a)(1)(i) or (as applicable) paragraph (a)(1)(ii) of this section, provided the recipient obtains prior HUD approval. To obtain such approval, the recipient must:
(A) Demonstrate that the system will contribute significantly to the safety of the residents of the area. The request for approval must include a list of the emergency services that will participate in the emergency telephone number system;
(B) Submit information that serves as a basis for HUD to determine whether at least 51 percent of the use of the system will be by residents who are low- and moderate-income persons. As available, the recipient must provide information that identifies the total number of calls actually received over the preceding 12-month period for each of the emergency services to be covered by the emergency telephone number system and relates those calls to the geographic segment (expressed as nearly as possible in terms of census tracts, block groups, or combinations thereof that are contained within the segment) of the service area from which the calls were generated. In analyzing this data to meet the
(C) Demonstrate that other Federal funds received by the recipient are insufficient or unavailable for a uniform emergency telephone number system. For this purpose, the recipient must submit a statement explaining whether the lack of funds is due to the insufficiency of the amount of the available funds, restrictions on the use of such funds, or the prior commitment of funds by the recipient for other purposes; and
(D) Demonstrate that the percentage of the total costs of the system paid for by CDBG funds does not exceed the percentage of low- and moderate-income persons residing in the service area of the system. For this purpose, the recipient must include a description of the boundaries of the service area of the emergency telephone number system, the census divisions that fall within the boundaries of the service area (census tracts or block groups), the total number of persons and the total number of low- and moderate-income persons residing within each census division, the percentage of low- and moderate-income persons residing within the service area, and the total cost of the system.
(iv) An activity for which the assistance to a public improvement that provides benefits to all the residents of an area is limited to paying special assessments (as defined in § 570.200(c)) levied against residential properties owned and occupied by persons of low- and moderate-income.
(v) For purposes of determining qualification under this criterion, activities of the same type that serve different areas will be considered separately on the basis of their individual service area.
(vi) In determining whether there is a sufficiently large percentage of low- and moderate-income persons residing in the area served by an activity to qualify under paragraph (a)(1)(i), (ii), or (vii) of this section, the most recently available Census Bureau data provided by HUD must be used to the fullest extent feasible, together with the section 8 income limits that would have applied at the time the income information was collected by the Census Bureau. Recipients that believe that the census data does not reflect current relative income levels in an area, or where census boundaries do not coincide sufficiently well with the service area of an activity, may conduct (or have conducted) a current survey of the residents of the area to determine the percent of such persons that are low- and moderate-income. HUD will accept information obtained through such surveys, to be used in lieu of the census data, where it determines that the survey was conducted in such a manner that the results meet standards of statistical reliability that are comparable to that of census data for areas of similar size. Where there is substantial evidence that provides a clear basis to believe that the use of the census data would substantially overstate the proportion of persons residing there that are low and moderate income, HUD may require that the recipient rebut such evidence in order to demonstrate compliance with section 105(c)(2) of the Act.
(vii) Activities meeting the requirements of paragraph (d)(5)(i) of this section may be considered to qualify under this paragraph, provided that the area covered by the strategy is either a Federally-designated Empowerment Zone or Enterprise Community or primarily residential and contains a percentage of low- and moderate-income residents that is no less than the percentage computed by HUD pursuant to paragraph (a)(1)(ii) of this section or 70 percent, whichever is less, but in no event less than 51 percent. Activities meeting the requirements of paragraph (d)(6)(i) of this section may also be considered to qualify under this paragraph (a)(1).
(2)
(A) Benefit at least one of the following clientele, which are presumed to be low- and moderate-income persons: abused children; survivors of domestic violence; elderly persons (see 570.3 for definition of elderly); adults meeting the Bureau of the Census' Current Population Reports definition of “severely disabled;” homeless persons; illiterate adults (adults unable to read and write in English and in their first language, if their first language is not English); persons living with AIDS; migrant farm workers; persons who meet the Federal poverty guidelines; persons insured by Medicaid; or
(B) Require information on family size and income that demonstrates that at least 51 percent of the clientele are persons whose family income does not exceed the low- and moderate-income limit; or
(C) Have income eligibility requirements which limit the activity exclusively to low- and moderate-income persons; or
(D) Be of such nature and be in such location that it may be concluded that the activity's clientele will primarily be low- and moderate-income persons.
(ii) An activity that serves to remove material or architectural barriers to the mobility or accessibility of elderly persons or of adults meeting the Bureau of the Census' Current Population Reports definition of “severely disabled” will be presumed to qualify under this criterion if it is restricted, to the extent practicable, to the removal of such barriers by assisting:
(A) The reconstruction of a public facility or improvement, or portion thereof, that does not qualify under paragraph (a)(1) of this section;
(B) The rehabilitation of a privately owned nonresidential building or improvement that does not qualify under paragraph (a)(1) or (4) of this section; or
(C) The rehabilitation of the common areas of a residential structure that contains more than one dwelling unit and that does not qualify under paragraph (a)(3) of this section.
(iii) A microenterprise assistance activity carried out in accordance with the provisions of § 570.201(o) with respect to those owners of microenterprises and persons developing microenterprises assisted under the activity during each program year who are low- and moderate-income persons. For purposes of this paragraph, persons determined to be low and moderate income may be presumed to continue to qualify as such for up to a three-year period.
(iv) An activity designed to provide job training and placement and/or other employment support services, including, but not limited to, peer support programs, counseling, child care, transportation, and other similar services, in which the percentage of low- and moderate-income persons assisted is less than 51 percent may qualify under this paragraph in the following limited circumstance:
(A) In such cases where such training or provision of supportive services assists business(es), the only use of CDBG assistance for the project is to
(B) The proportion of the total cost of the project borne by CDBG funds is no greater than the proportion of the total number of persons assisted who are low or moderate income.
(v) The following kinds of activities may not qualify under this paragraph (a)(2): activities that provide benefits to all the residents of an area; activities involving the acquisition, construction or rehabilitation of property for housing; or activities where the benefit to low- and moderate-income persons to be considered is the creation or retention of jobs, except as provided in paragraph (a)(2)(iv) of this section.
(3)
(i) When less than 51 percent of the units in a structure will be occupied by low- and moderate- income households:
(A) The assistance is for an eligible activity to reduce the development cost of the substantial rehabilitation or conversion of a nonresidential structure to a multifamily, non-elderly rental housing project, or the new construction of a multifamily, non-elderly rental housing project;
(B) At least 20 percent of the units will be occupied by low- and moderate-income households at affordable rents; and
(C) The proportion of the total cost of developing the project to be borne by CDBG funds is no greater than the proportion of units in the project that will be occupied by low and moderate income households.
(ii) When CDBG funds are used to assist rehabilitation eligible under § 570.202(b)(9) or (10) in direct support of the recipient's Rental Rehabilitation program authorized under 24 CFR part 511, such funds shall be considered to benefit low and moderate income persons where not less than 51 percent of the units assisted, or to be assisted, by the recipient's Rental Rehabilitation program overall are for low and moderate income persons.
(iii) When CDBG funds are used for housing services eligible under § 570.201(k), such funds shall be considered to benefit low- and moderate-income persons if the housing units for which the services are provided are HOME-assisted and the requirements at 24 CFR 92.252 or 92.254 are met.
(4)
(i) For an activity that creates jobs, the recipient must document that at least 51 percent of the jobs will be held by, or will be available to, low- and moderate-income persons.
(ii) For an activity that retains jobs, the recipient must document that the jobs would actually be lost without the CDBG assistance and that either or both of the following conditions apply with respect to at least 51 percent of the jobs at the time the CDBG assistance is provided:
(A) The job is known to be held by a low- or moderate-income person; or
(B) The job can reasonably be expected to turn over within the following two years and that steps will be taken to ensure that it will be filled by, or made available to, a low- or moderate-income person upon turnover.
(iii) Jobs that are not held or filled by a low- or moderate-income person may be considered to be available to low- and moderate-income persons if:
(A) The assisted business does not require as a prerequisite special skill that can only be acquired with substantial training or work experience or education beyond high school, or the business agrees to hire unqualified persons and provide training; and
(B) The recipient and the assisted business take actions to ensure that low- and moderate-income persons receive first consideration for filling such jobs.
(iv) For purposes of determining whether a job is held by or made available to a low- or moderate-income person, the person may be presumed to be a low- or moderate-income person if:
(A) The person resides, or the assisted business through which the person is employed is located, within a census tract that meets the requirements of paragraph (a)(4)(v) of this section; or
(B) The person resides within a census tract that has at least 70 percent of its population who are low- and moderate-income persons.
(v) A census tract qualifies for the presumptions permitted under paragraph (a)(4)(iv)(A) of this section if it has a poverty rate of at least 20 percent and meets at least one of the following standards:
(A) The specific activity being undertaken is located in a block group that has a poverty rate of at least 20 percent; or
(B) Upon the written request by the recipient, HUD determines that the census tract exhibits other objectively determinable signs of general distress such as high incidence of crime, narcotics use, homelessness, abandoned housing, deteriorated infrastructure, or substantial population decline.
(vi) Each assisted business shall be considered to be a separate activity for purposes of determining whether the activity qualifies under this paragraph, except:
(A) In certain cases such as where CDBG funds are used to acquire, develop or improve a real property (
(B) Where CDBG funds are used to pay for the staff and overhead costs of an entity making loans to businesses exclusively from non-CDBG funds, this requirement may be met by aggregating the jobs created by all of the businesses receiving loans during each program year.
(C) Where CDBG funds are used by a recipient or subrecipient to provide technical assistance to businesses, this requirement may be met by aggregating the jobs created or retained by all of the businesses receiving technical assistance during each program year.
(D) Where CDBG funds are used for activities meeting the criteria listed at § 570.209(b)(2)(v), this requirement may be met by aggregating the jobs created or retained by all businesses for which CDBG assistance is obligated for such activities during the program year, except as provided at paragraph (d)(7) of this section.
(E) Where CDBG funds are used by a Community Development Financial Institution to carry out activities for the purpose of creating or retaining jobs, this requirement may be met by aggregating the jobs created or retained by all businesses for which CDBG assistance is obligated for such activities during the program year, except as provided at paragraph (d)(7) of this section.
(F) Where CDBG funds are used for public facilities or improvements which will result in the creation or retention of jobs by more than one business, this requirement may be met by aggregating the jobs created or retained by all such businesses as a result of the public facility or improvement.
(
(
(b)
(1)
(i) The area, delineated by the recipient, meets a definition of a slum, blighted, deteriorated or deteriorating area under State or local law;
(ii) The recipient demonstrates, supported by quantifiable data, that at least 25 percent of properties throughout the area experience a condition relating to physical or economic distress, such as abandoned or vacant properties, and/or known or suspected environmental contamination.
(iii) The assisted activity addresses one or more of the conditions which contributed to the deterioration of the area. Rehabilitation of residential buildings carried out in an area meeting the above requirements will be considered to address the area's deterioration only where each such building rehabilitated is considered substandard under local definition before rehabilitation, and all deficiencies making a building substandard have been eliminated if less critical work on the building is undertaken. At a minimum, the local definition for this purpose must be such that buildings that it would render substandard would also fail to meet the Housing Quality Standards (24 CFR 982.401).
(2)
Activities which aid in the prevention or elimination of slums or blight: Despite the restrictions in paragraphs (b)(1) and (2) of this section, any rehabilitation activity which benefits low- and moderate-income persons pursuant to paragraph (a)(3) of this section can be undertaken without regard to the area in which it is located or the extent or nature of rehabilitation assisted.
(c)
(d)
(2) Where the assisted activity is relocation assistance that the recipient is required to provide, such relocation assistance shall be considered to address the same national objective as is addressed by the displacing activity. Where the relocation assistance is voluntary on the part of the grantee the recipient may qualify the assistance either on the basis of the national objective addressed by the displacing activity or on the basis that the recipients of the relocation assistance are low and moderate income persons.
(3) In any case where the activity undertaken for the purpose of creating or retaining jobs is a public improvement and the area served is primarily residential, the activity must meet the requirements of paragraph (a)(1) of this section as well as those of paragraph (a)(4) of this section in order to qualify as benefiting low and moderate income persons.
(4) CDBG funds expended for planning and administrative costs under § 570.205 and § 570.206 will be considered to address the national objectives.
(5) Where the grantee has elected to prepare an area revitalization strategy pursuant to the authority of 24 CFR
(i) Activities undertaken pursuant to the strategy for the purpose of creating or retaining jobs may, at the option of the grantee, be considered to meet the requirements of this paragraph under the criteria at paragraph (a)(1)(vii) of this section in lieu of the criteria at paragraph (a)(4) of this section; and
(ii) All housing activities in the area for which, pursuant to the strategy, CDBG assistance is obligated during the program year may be considered to be a single structure for purposes of applying the criteria at paragraph (a)(3) of this section.
(6) Where CDBG-assisted activities are carried out by a Community Development Financial Institution whose charter limits its investment area to a primarily residential area consisting of at least 51 percent low- and moderate-income persons, the grantee may also elect the following options:
(i) Activities carried out by the Community Development Financial Institution for the purpose of creating or retaining jobs may, at the option of the grantee, be considered to meet the requirements of this paragraph under the criteria at paragraph (a)(1)(vii) of this section in lieu of the criteria at paragraph (a)(4) of this section; and
(ii) All housing activities for which the Community Development Financial Institution obligates CDBG assistance during the program year may be considered to be a single structure for purposes of applying the criteria at paragraph (a)(3) of this section.
(7) Where an activity meeting the criteria at § 570.209(b)(2)(v) may also meet the requirements of either paragraph (d)(5)(i) or (d)(6)(i) of this section, the grantee may elect to qualify the activity under either the area benefit criteria at paragraph (a)(1)(vii) of this section or the job aggregation criteria at paragraph (a)(4)(vi)(D) of this section, but not both. Where an activity may meet the job aggregation criteria at both paragraphs (a)(4)(vi)(D) and (E) of this section, the grantee may elect to qualify the activity under either criterion, but not both.
(e)
The revision and additions read as follows:
(b) * * *
(3)
(A) $100,000 per full-time equivalent, permanent job created or retained; or
(B) $2,000 per low- and moderate-income person to which goods or services are provided by the activity.
(ii) Any activity subject to these guidelines carried out pursuant to subpart M may be assisted with CDBG funds if HUD, through written approval, calculates that the cost of the activity on a net present value basis does not exceed the following amount of CDBG assistance:
(A) $50,000 per full-time equivalent, permanent job created or retained; or
(B) $1,000 per low- and moderate-income person to which goods or services are provided by the activity.
(iii) An activity subject to these guidelines may be assisted with CDBG funds, if HUD determines in writing, based upon the written request of the recipient, that the recipient has demonstrated that the activity would result in a significant contribution to the goals and purposes of the CDBG program and the activity:
(A) Would not result in a violation of a statutory provision or any other regulatory provision; and
(B) Would not result in undue hardship to the recipient or beneficiaries of the activity.
(iv) Any activity which consists of or includes any of the following will be considered by HUD to provide insufficient public benefit and may not be assisted with CDBG funds:
(A) General promotion of the community as a whole (as opposed to the promotion of specific areas and programs);
(B) Assistance to professional sports teams;
(C) Assistance to privately-owned recreational facilities that serve a predominantly higher-income clientele, where the recreational benefit to users or members clearly outweighs employment or other benefits to low- and moderate-income persons;
(D) Acquisition of land for which the specific proposed use has not yet been identified; and
(E) Assistance to a for-profit business while that business or any other business owned by the same person(s) or entity(ies) is the subject of unresolved findings of noncompliance relating to previous CDBG assistance provided by the recipient.
(4) * * *
(iv) The cost of an activity pursuant to (b)(3)(ii) of this section shall be determined by applying the procedures described in a notice issued by HUD.
(5)
(b) * * *
(2)
The addition reads as follows:
(h)
(a) * * *
(4)
The revisions and additions read as follows:
(f) * * *
(4)
(A) $100,000 per full-time equivalent, permanent job created or retained; or
(B) $2,000 per low- and moderate-income person to which goods or services are provided by the activity.
(ii) Any activity subject to these standards carried out pursuant to subpart M may be assisted with CDBG funds if HUD, through written approval, calculates that the cost of the activity on a net present value basis does not exceed the following amount of CDBG assistance:
(A) $50,000 per full-time equivalent, permanent job created or retained; or
(B) $1,000 per low- and moderate-income person to which goods or services are provided by the activity.
(iii) An activity subject to these standards may be assisted with CDBG funds, if HUD determines in writing, based upon the written request of the recipient, that the recipient has demonstrated that the activity would result in a significant contribution to the goals and purposes of the CDBG program and the activity:
(A) Would not result in a violation of a statutory provision or any other regulatory provision; and
(B) Would not result in undue hardship to the recipient or beneficiaries of the activity.
(iv) Any activity which consists of or includes any of the following will be considered by HUD to provide insufficient public benefit and may not be assisted with CDBG funds:
(A) General promotion of the community as a whole (as opposed to the promotion of specific areas and programs);
(B) Assistance to professional sports teams;
(C) Assistance to privately-owned recreational facilities that serve a predominantly higher-income clientele, where the recreational benefit to users or members clearly outweighs employment or other benefits to low- and moderate-income persons;
(D) Acquisition of land for which the specific proposed use has not yet been identified; and
(E) Assistance to a for-profit business while that business or any other business owned by the same person(s) or entity(ies) is the subject of unresolved findings of noncompliance relating to previous CDBG assistance provided by the recipient.
(5) * * *
(iv) The cost of an activity pursuant to paragraph (b)(3)(ii) of this section shall be determined by applying the procedures described in a notice issued by HUD.
(6)
(h) * * *
(2) * * *
(ii)
(a)
(b)
(1)
(ii) An activity, where the assistance is to a public improvement that provides benefits to all the residents of an area, that is limited to paying special assessments levied against residential properties owned and occupied by persons of low and moderate income.
(iii)(A) An activity to develop, establish and operate (not to exceed two years after establishment), a uniform emergency telephone number system serving an area having less than 51 percent of low and moderate income residents, when the system has not been made operational before the receipt of CDBG funds, provided a prior written determination is obtained from HUD. HUD's determination will be based upon certifications by the State that:
(
(
(
(
(B) The certifications of the State must be submitted along with a brief statement describing the factual basis upon which the certifications were made.
(iv) Activities meeting the requirements of paragraph (e)(4)(i) of this section may be considered to qualify under this paragraph (b)(1).
(v) HUD will consider activities meeting the requirements of paragraph (e)(5)(i) of this section to qualify under paragraph (b)(1) of this section, provided that the area covered by the strategy meets one of the following criteria:
(A) The area is in a federally designated Empowerment Zone or Enterprise Community;
(B) The area is primarily residential and contains a percentage of low and moderate income residents that is no less than 70 percent;
(C) All of the census tracts (or block numbering areas) in the area have poverty rates of at least 20 percent, at least 90 percent of the census tracts (or block numbering areas) in the area have poverty rates of at least 25 percent, and the area is primarily residential. (If only part of a census tract or block numbering area is included in a strategy area, the poverty rate shall be computed for those block groups (or any part thereof) which are included in the strategy area.)
(D) Upon request by the State, HUD may grant exceptions to the 70 percent low and moderate income or 25 percent poverty minimum thresholds on a case-by-case basis. In no case, however, may a strategy area have both a percentage of low and moderate income residents less than 51 percent and a poverty rate less than 20 percent.
(2)
(ii) To qualify under this paragraph (b)(2), the activity must meet one or the following tests:
(A) Benefit at least one of the following clientele, which are presumed to be low- and moderate-income persons: abused children; survivors of domestic violence; elderly persons (see 570.3 for definition of elderly); adults meeting the Bureau of the Census' Current Population Reports definition of “severely disabled;” homeless persons; illiterate adults (adults unable to read and write in English and in their first languages if their first language is not English); persons living with AIDS; migrant farm workers; persons who meet the Federal poverty guidelines; persons insured by Medicaid; or
(B) Require information on family size and income that demonstrates that at least 51 percent of the clientele are persons whose family income does not exceed the low- and moderate-income limit; or
(C) It must have income eligibility requirements which limit the activity exclusively to low and moderate income persons; or
(D) It must be of such a nature, and be in such a location, that it may be concluded that the activity's clientele will primarily be low and moderate income persons.
(iii) An activity that serves to remove material or architectural barriers to the mobility or accessibility of elderly persons or of adults meeting the Bureau of the Census' Current Population Reports definition of “severely disabled” will be presumed to qualify under this criterion if it is restricted, to the extent practicable, to the removal of such barriers by assisting:
(A) The reconstruction of a public facility or improvement, or portion thereof, that does not qualify under paragraph (b)(1) of this section;
(B) The rehabilitation of a privately owned nonresidential building or improvement that does not qualify under paragraph (b)(1) or (4) of this section; or
(C) The rehabilitation of the common areas of a residential structure that contains more than one dwelling unit and that does not qualify under paragraph (b)(3) of this section.
(iv) A microenterprise assistance activity (carried out in accordance with the provisions of section 105(a)(23) of the Act or § 570.482(c) and limited to microenterprises) with respect to those owners of microenterprises and persons developing microenterprises assisted under the activity who are low- and moderate-income persons. For purposes of this paragraph, persons determined to be low and moderate income may be presumed to continue to qualify as such for up to a three-year period.
(v) An activity designed to provide job training and placement and/or other employment support services, including, but not limited to, peer support programs, counseling, child care, transportation, and other similar services, in which the percentage of low- and moderate-income persons assisted is less than 51 percent may qualify under this paragraph in the following limited circumstances:
(A) In such cases where such training or provision of supportive services is an integrally-related component of a larger project, the only use of CDBG assistance for the project is to provide the job training and/or supportive services; and
(B) The proportion of the total cost of the project borne by CDBG funds is no greater than the proportion of the total number of persons assisted who are low or moderate income.
(vi) The following kinds of activities may not qualify under paragraph this (b)(2): activities that provide benefits to all the residents of an area; activities involving the acquisition, construction or rehabilitation of property for housing; or activities where the benefit to low- and moderate-income persons to be considered is the creation or retention of jobs, except as provided in paragraph (b)(2)(iv) of this section.
(3)
(i) When less than 51 percent of the units in a structure will be occupied by low- and moderate-income households, CDBG assistance may be provided in the following limited circumstances:
(A) The assistance is for an eligible activity to reduce the development cost of the substantial rehabilitation or conversion of a nonresidential structure to a multifamily, non-elderly rental housing project, or the new construction of a multifamily, non-elderly rental housing project;
(B) At least 20 percent of the units will be occupied by low- and moderate-income households at affordable rents; and
(C) The proportion of the total cost of developing the project to be borne by CDBG funds is no greater than the proportion of units in the project that will be occupied by low and moderate income households.
(ii) Where CDBG funds are used to assist rehabilitation delivery services or in direct support of the unit of general local government's Rental Rehabilitation Program authorized under 24 CFR part 511, the funds shall be considered to benefit low and moderate income persons where not less than 51 percent of the units assisted, or to be assisted, by the Rental Rehabilitation Program overall are for low and moderate income persons.
(iii) When CDBG funds are used for housing services eligible under section 105(a)(21) of the Act, if the housing units for which the services are provided are HOME-assisted and the requirements at 24 CFR 92.252 or 92.254 are met.
(4)
(ii) For an activity that retains jobs, the unit of general local government must document that the jobs would actually be lost without the CDBG assistance and that either or both of the following conditions apply with respect to at least 51 percent of the jobs at the time the CDBG assistance is provided: The job is known to be held by a low or moderate income person; or the job can reasonably be expected to turn over within the following two years and that it will be filled by, or that steps will be taken to ensure that it is made available to, a low or moderate income person upon turnover.
(iii) Jobs that are not held or filled by a low- or moderate-income persons may be considered to be available to low- and moderate-income persons if:
(A) The assisted business does not require as a prerequisite special skills that can only be acquired with substantial training or work experience or education beyond high school, or the business agrees to hire unqualified persons and provide training; and
(B) The unit of general local government and the assisted business take actions to ensure that low and moderate income persons receive first consideration for filling such jobs.
(iv) For purposes of determining whether a job is held by or made available to a low- or moderate-income person, the person may be presumed to be a low- or moderate-income person if:
(A) The person resides, or the assisted business through which the person is employed is located, within a census tract that meets the requirements of paragraph (b)(4)(v) of this section; or
(B) The person resides within a census tract that has a population of low- and moderate-income persons of at least 70 percent of the block group.
(v) A census tract qualifies for the presumptions permitted under paragraph (b)(4)(iv)(A) of this section if it has a poverty rate of at least 20 percent and meets at least one of the following standards:
(A) The specific activity being undertaken is located in a block group that has a poverty rate of at least 20 percent; or
(B) Upon the written request by the recipient, HUD determines that the census tract exhibits other objectively determinable signs of general distress such as high incidence of crime, narcotics use, homelessness, abandoned housing, deteriorated infrastructure, or substantial population decline.
(vi) Each assisted business shall be considered to be a separate activity for purposes of determining whether the activity qualifies under this paragraph, except:
(A) In certain cases such as where CDBG funds are used to acquire, develop or improve a real property (
(B) Where CDBG funds are used to pay for the staff and overhead costs of an entity specified in section 105(a)(15) of the Act making loans to businesses exclusively from non-CDBG funds, this requirement may be met by aggregating the jobs created by all of the businesses receiving loans during any one-year period.
(C) Where CDBG funds are used by a recipient or subrecipient to provide technical assistance to businesses, this requirement may be met by aggregating the jobs created or retained by all of the businesses receiving technical assistance during any one-year period.
(D) Where CDBG funds are used for activities meeting the criteria listed at § 570.482(f)(3)(v), this requirement may be met by aggregating the jobs created or retained by all businesses for which CDBG assistance is obligated for such activities during any one-year period, except as provided at paragraph (e)(6) of this section.
(E) Where CDBG funds are used by a Community Development Financial Institution to carry out activities for the purpose of creating or retaining jobs, this requirement may be met by aggregating the jobs created or retained by all businesses for which CDBG assistance is obligated for such activities during any one-year period, except as provided at paragraph (e)(6) of this section.
(F) Where CDBG funds are used for public facilities or improvements which will result in the creation or retention of jobs by more than one business, this requirement may be met by aggregating the jobs created or retained by all such businesses as a result of the public facility or improvement.
(
(
(5)
(c)
(1)
(i) The area, delineated by the unit of general local government, meets a definition of a slum, blighted, deteriorated or deteriorating area under State or local law;
(ii) The unit of general local government demonstrates, supported by quantifiable data, that at least 25 percent of properties throughout the area experience a condition relating to physical or economic distress, such as abandoned or vacant properties, and/or known or suspected environmental contamination.
(iii) The assisted activity addresses one or more of the conditions which contributed to the deterioration of the area. Rehabilitation of residential buildings carried out in an area meeting the above requirements will be considered to address the area's deterioration only where each such building rehabilitated is considered substandard under local definition before rehabilitation, and all deficiencies making a building substandard have been eliminated if less critical work on the building is undertaken. At a minimum, the local definition for this purpose must be such that buildings that it would render substandard would also fail to meet the Housing Quality Standards (24 CFR 982.401).
Documentation is to be maintained by the unit of general local government on the boundaries of the area and the conditions and standards used that qualified the area at the time of its designation. The unit of general local government shall maintain records to substantiate how the area met the slums or blighted criteria. The designation of an area as slum or blighted under this section is required to have been determined within the last 10 years. Documentation must be retained pursuant to the recordkeeping requirements contained at § 570.506(b)(8)(ii).
(2)
Activities which aid in the prevention or elimination of slums or blight: Despite the restrictions in paragraphs (c)(1) and (2) of this section, any rehabilitation activity which benefits low and moderate income persons pursuant to paragraph (a)(3) of this section can be undertaken without regard to the area in which it is located or the extent or nature of rehabilitation assisted.
(d)
(e)
(2) Where the assisted activity is acquisition of real property, a preliminary determination of whether the activity addresses a national objective may be based on the planned use of the property after acquisition. A final determination shall be based on the actual use of the property, excluding any short-term, temporary use. Where the acquisition is for the purpose of clearance which will eliminate specific conditions of blight or physical decay, the clearance activity shall be considered the actual use of the property. However, any subsequent use or disposition of the cleared property shall be treated as a “change of use” under § 570.489(j).
(3) Where the assisted activity is relocation assistance that the unit of general local government is required to provide, the relocation assistance shall be considered to address the same national objective as is addressed by the displacing activity. Where the relocation assistance is voluntary, the unit of general local government may qualify the assistance either on the basis of the national objective addressed by the displacing activity or, if the relocation assistance is to low and moderate income persons, on the basis of the national objective of benefiting low and moderate income persons.
(4) Where CDBG-assisted activities are carried out by a Community Development Financial Institution whose charter limits its investment area to a primarily residential area consisting of at least 51 percent low- and moderate-income persons, the unit of general local government may also elect the following options:
(i) Activities carried out by the Community Development Financial Institution for the purpose of creating or retaining jobs may, at the option of the unit of general local government, be considered to meet the requirements of this paragraph under the criteria at paragraph (b)(1)(iv) of this section in lieu of the criteria at paragraph (b)(4) of this section; and
(ii) All housing activities for which the Community Development Financial Institution obligates CDBG assistance during any one-year period may be considered to be a single structure for purposes of applying the criteria at paragraph (b)(3) of this section.
(5) If the unit of general local government has elected to prepare a community revitalization strategy pursuant to the authority of 24 CFR 91.315(e)(2), and the State has approved the strategy, the unit of general local government may also elect the following options:
(i) Activities undertaken pursuant to the strategy for the purpose of creating or retaining jobs may, at the option of the grantee, be considered to meet the requirements of paragraph (b) of this section under the criteria at paragraph (b)(1)(v) of this section instead of the criteria at paragraph (b)(4) of this section; and
(ii) All housing activities in the area undertaken pursuant to the strategy may be considered to be a single structure for purposes of applying the criteria at paragraph (b)(3) of this section.
(6) If an activity meeting the criteria in § 570.482(f)(3)(v) also meets the requirements of either paragraph (e)(4)(i) or (e)(5)(i) of this section, the unit of general local government may elect to qualify the activity either under the area benefit criteria at paragraph (b)(1)(iv) or (v) of this section or under the job aggregation criteria at paragraph (b)(4)(vi)(D) of this section, but not under both. Where an activity may meet the job aggregation criteria at both paragraphs (b)(4)(vi)(D) and (E) of this section, the unit of general local government may elect to qualify the activity under either criterion, but not both.
(f)
(g)
The revisions and additions read as follows:
(e) * * *
(2) * * *
(iv) * * *
(C) Interest income received by units of general local government on deposits of grant funds before disbursement of the funds for activities, except that the unit of general local government may keep interest payments in an amount not to exceed the amount provided by 2 CFR 200.305(b)(9) per year for administrative expenses otherwise permitted to be paid with CDBG funds.
(3) * * *
(ii) * * *
(C) The State must require units of general local government, to the maximum extent feasible, to disburse program income that is subject to the requirements of this subpart before requesting additional funds from the State for activities, except as provided in paragraph (f) of this section.
(f) * * *
(4) A State is responsible for ensuring that funds in a revolving loan fund are being used to continue the activity which generated the program income.
(h) * * *
(4) * * *
(i) A disclosure of the nature of the conflict, accompanied by an assurance that there has been public disclosure of the conflict (public disclosure is considered a combination of any of the following: publication on the recipient's website, including social media; electronic mailings; media advertisements; public service announcements; and display in public areas such as libraries, grocery store bulletin boards, and neighborhood centers), evidence of the public disclosure, and a description of how the public disclosure was made;
(a) * * *
(4) Advise the State to reimburse its grant in any amounts improperly expended, using non-Federal funds. In lieu of reimbursing its grant, the State may elect to request a voluntary grant reduction from a current or future year's allocation of funds. A request for a voluntary grant reduction must be signed by the State's chief elected official. In its request, the State must waive its right to a hearing pursuant to § 570.496;
(b) * * *
(7) * * *
(i) Used to meet one of the national objectives in § 570.208 until six years after expiration of the agreement, or for such longer period of time as determined to be appropriate by the recipient; or
The revision and addition read as follows:
(b) * * *
(2) * * *
(iii) At the end of each program year, the aggregate amount of program income cash balances and any investment thereof (except those needed for immediate cash needs, cash balances of a revolving loan fund, cash balances from a lump-sum drawdown, or cash or investments held for section 108 loan guarantee security needs) that, as of the last day of the program year, exceeds one-twelfth of the most recent grant made pursuant to § 570.304 shall be remitted to HUD as soon as practicable thereafter and sent to the United States Treasury FRB New York, New York, NY, U.S. Department of Housing and Urban Development, ABA Routing Number 021030004, Account Number 86010300. The memorandum section should read: Recipient Name (
(f)
(b) * * *
(5) * * *
(ii) * * *
(C) * * * For each such low- and moderate-income person hired, the size and annual income of the person's family prior to the person being hired for the job. In lieu of businesses obtaining information regarding the size and annual income of the person's family, the recipient may obtain and maintain such information.
(7) For purposes of documenting, pursuant to paragraph (b)(5)(i)(B), (b)(5)(ii)(C), or (b)(6)(iii) or (v) of this section that the person for whom a job was either filled by or made available to a low- or moderate-income person:
(i) In lieu of maintaining records showing the person's family size and income, the recipient may substitute records showing for each person employed, the name of the business, type of job, and the annual wages or salary of the job. HUD will consider the person income-qualified if the annual wages or salary of the job is at or under the HUD-established income limit for a one-person family.
(ii) Based upon the census tract where the person resides or in which the business is located, the recipient, in lieu of maintaining records showing the person's family size and income, may substitute records showing either the person's address at the time the determination of income status was made or the address of the business providing the job, as applicable, the census tract in which that address was located, the percent of persons residing in that tract who either are in poverty or who are low- and moderate-income, as applicable, the data source used for determining the percentage, and a description of the pervasive poverty and general distress in the census tract in sufficient detail to demonstrate how the census tract met the criteria in § 570.208(a)(4)(v), as applicable.
(8) For each activity determined to aid in the prevention or elimination of slums or blight based on addressing one or more of the conditions which qualified an area as a slum or blighted area:
(i) The boundaries of the area;
(ii) A designation, within the last 10 years, of the area as slum or blighted; and
(iii) Quantifiable data substantiating the conditions and standards that qualified the area at the time of its designation.
(c) * * *
(1) Records that demonstrate that the recipient has made the determinations required as a condition of eligibility of certain activities, as prescribed in §§ 570.201(e)(1), (f), (i)(2), (p), and (q), 570.202(b)(3), 570.206(f), 570.209, 570.210, and 570.309.
(d) Records which demonstrate compliance with § 570.503(b)(7) and (8) or § 570.505 regarding maintenance of property condition and change of use of real property acquired or improved with CDBG assistance.
(e) Records that demonstrate compliance with the citizen participation requirements prescribed in 24 CFR part 91, subpart B, for entitlement recipients, or in 24 CFR part 91, subpart C, for HUD-administered small cities recipients, and subpart F for all recipients.
(d)
(2)
This section implements 2 CFR 200.344 as applicable in the context of the CDBG program. This section specifies the actions a grantee and HUD must take to complete the closeout process.
(a)
(b)
(c)
(1) Account closeout, in which HUD removes the recipient's access to grant funds and removes the grant from the grantee's line of credit.
(2) Programmatic closeout, which marks completion of all programmatic requirements associated with a grant. Programmatic requirements include but are not limited to: physical completion of all activities for which funds were expended from the original year grant; all activities have met a national objective under § 570.208; and the grantee has reported on all accomplishments resulting from the activities.
(d)
(i) If the grantee has expended all grant funds at the time the final reports are due to HUD, but has not yet completed one or more activities to meet programmatic requirements, as defined in paragraph (c)(2) of this section, HUD may authorize an extension of the end date of the period of performance by up to two years for completion of an activity(ies) and up to the time period allowed at § 570.208 to meet a national objective.
(ii) However, this extension does not apply to the availability of any funds remaining in a grant's line of credit and HUD will initiate account closeout.
(iii) The recipient must submit an interim version of the final reports in accordance with and as required in paragraph (a) of this section, specifically noting any incomplete assisted activity. At the end of the extension period, or when the activity(ies) is completed, whichever is earlier, the grantee must submit the final reports including any required information regarding that activity(ies).
(2) Specific extensions for good cause. A grantee may request, and HUD may provide, an extension of the period of performance, deadlines for reporting, or deadline for obligation liquidation for a grant provided good cause is demonstrated.
(e)
(f)
(g)
(1) HUD will cancel any unused portion of the awarded grant, as shown in the executed grant closeout agreement. Any unused grant funds disbursed from the U.S. Treasury which are in the possession of the recipient shall be refunded to HUD. Any funds which have exceeded the statutory time limit on the use of funds will be recaptured by the U.S. Treasury pursuant to 24 CFR 570.200(k).
(2) Any costs paid with CDBG funds which were not audited previously shall be subject to coverage in the recipient's next single audit performed in accordance with HUD regulations implementing the Single Audit Act requirements at 2 CFR part 200. The recipient may be required to repay HUD any disallowed costs based on the results of the audit, or on additional HUD reviews provided for in the closeout agreement.
(3) Prior to completing account closeout, HUD will identify for the grant recipient any unused grant funds to be canceled by HUD and provide the grant recipient an opportunity to respond.
(h)
(i) Closeout costs (
(ii) Use of real property assisted with CDBG funds in accordance with the principles described in §§ 570.503(b)(7) and 570.505;
(iii) Compliance with requirements governing future program income or
(iv) Ensuring that flood insurance coverage for affected property owners is maintained for the mandatory period; and
(v) Other provisions appropriate to any special circumstances of the grant closeout, in modification of or in addition to the obligations of this section.
(2) The recipient is responsible for:
(i) Compliance with all program requirements, certifications, and assurances in using any remaining CDBG funds available for closeout costs and contingent liabilities;
(ii) Use of real property assisted with CDBG funds in accordance with the principles described in §§ 570.503(b)(7) and 570.505;
(iii) Compliance with requirements governing future program income or receivables generated from activities funded from the origin year grant, as described in § 570.504(b)(4) and (5);
(iv) Ensuring that flood insurance coverage for affected property owners is maintained for the mandatory period; and
(v) Other provisions appropriate to any special circumstances of the grant closeout, in modification of or in addition to the obligations of this section.
(i) Status of consolidated plan after closeout. The Consolidated Plan will remain in effect after closeout until the expiration of the program year covered by the last approved consolidated plan pursuant to 24 CFR 91.520.
(j)
(2)
(a) * * *
(2) In all cases not governed by 2 CFR 200.317 and 200.318, the provisions of this section shall apply. Such cases include the acquisition and disposition of real property and the provision of assistance by the recipient or by its subrecipients to individuals, businesses, and other private entities under eligible activities that authorize such assistance (
(d) * * *
(1) * * *
(i) A disclosure of the nature of the conflict, accompanied by an assurance that there has been public disclosure of the conflict (public disclosure is considered a combination of any of the following: publication on the recipient's website, including social media; electronic mailings; media advertisements; public service announcements; and display in public areas such as libraries, grocery store bulletin boards, and neighborhood centers), evidence of the public disclosure, and a description of how the public disclosure was made; and
The revision reads as follows:
(f) Site preparation either related to the redevelopment or use of the real property acquired or rehabilitated pursuant to paragraphs (a) and (b) of this section, or for an economic development purpose, including:
(1) Construction, reconstruction, installation of public and other site improvements, utilities or facilities (other than buildings); or
(2) Remediation of properties (remediation can include project-specific environmental assessment costs not otherwise eligible under § 570.205) with known or suspected environmental contamination.
The revisions and additions read as follows:
(a) * * *
(2) * * *
(i) * * *
(B) Activities that may be undertaken with guaranteed loan funds;
(b)
(1) A description of how each of the activities to be carried out with the guaranteed loan funds meets the eligible activity criteria in § 570.703 and the national objectives criteria in § 570.208 or § 570.483, as applicable.
(2) A schedule for repayment of the loan which identifies the sources of repayment, together with a statement identifying the entity that will act as borrower and issue the debt obligations, and the source of the payment of fees required by § 570.712.
(8) * * *
(iii) It has, prior to submission of its application to HUD: furnished citizens with information required by paragraph
(v) It will affirmatively further fair housing, and the guaranteed loan funds will be administered in compliance with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d
(ix) (Where applicable, the public entity may also include the following additional certification.) It lacks sufficient resources from funds provided under this subpart or program income to allow it to comply with the provisions of § 570.200(c)(2), and it must therefore assess properties owned and occupied by moderate income persons, to recover the non-guaranteed loan funded portion of the capital cost without paying such assessments on their behalf from guaranteed loan funds;
(xi) It possesses the legal authority to make the pledge of grants required under § 570.705(b)(2).
(xii) It has made efforts to obtain financing for activities described in the application without the use of the loan guarantee, the public entity will maintain documentation of such efforts for the term of the loan guarantee, and the public entity cannot complete such financing consistent with the timely execution of the program plans without such guarantee.
(c) * * *
(3) * * *
(vii) Activities to be undertaken with the guaranteed loan funds do not meet the public benefit standards under § 570.209.
(4) HUD will notify the public entity or State in writing that the loan guarantee request has either been approved (in the requested amount or a portion thereof) or disapproved. If the request is approved in an amount less than requested or disapproved, the public entity or State shall be informed of the specific reasons for disapproval or partial approval. If the request is approved, either in full or in part, HUD shall issue an offer of commitment to guarantee debt obligations of the borrower identified in the application subject to compliance with this part, including the requirements under § 570.705(b), (d), (g) and (h) for securing and issuing debt obligations, the conditions for release of funds described in paragraph (d) of this section, and such other conditions as HUD may specify in the commitment documents in a particular case.
The revisions read as follows:
(a) * * *
(1) * * *
(iii) The amount any one public entity may receive may be limited to such amount as is necessary to allow HUD to give priority to applications containing activities to be carried out in areas designated as economically distressed by the Federal Government or by any State.
(b) * * *
(3) Furnish, at the discretion of HUD, such other security as may be deemed appropriate by HUD in making such guarantees. Such other security shall be specified in the contract entered into pursuant to paragraph (b)(1) of this section.
The revisions read as follows:
HUD will review the rate of disbursement of each entitlement, HUD-administered small cities, non-entitlement counties in the State of Hawaii, and Insular Areas grant quarterly to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner and whether it has the continuing capacity to do so.
(a)
(2) Based on the sum of draw vouchers both submitted and completed in the designated online system during the reporting quarter, HUD will identify each grant as:
(i)
(ii)
(iii)
(iv)
(3) If a grantee is not spending at a pace to disburse an entire grant during the period of performance (phase 1), HUD will evaluate the grantee's capacity and will provide technical assistance to improve timely performance.
(4) Absent contrary evidence satisfactory to HUD, HUD will consider an insular area, an entitlement recipient, or a non-entitlement CDBG grantee in Hawaii to be failing to carry out its CDBG activities in a timely manner and to lack continuing capacity to carry out activities in a timely manner if three or more of its grants are designated Slow Spender in each quarter during four consecutive calendar quarters.
(5) In determining appropriate corrective actions or sanctions, HUD will consider:
(i) A grantee's demonstration, to HUD's satisfaction, that the lack of timeliness or capacity has resulted from factors beyond the grantee's reasonable control.
(ii) The likelihood that the recipient will improve its disbursement rate for the majority of its non-First-Year open grants to On Pace within 120 days. For these purposes, HUD will take into account the extent to which funds on hand have been obligated by the recipient and its subrecipients for specific activities at the time the finding is made and other relevant information.
(b) * * *
(5) Advise the recipient to reimburse with non-Federal funds its program account or letter of credit in any amounts improperly expended and reprogram the use of the funds in accordance with applicable requirements;
(c)
42 U.S.C. 3535(d) and 5301
(a)
(c)
(m)
(p)
(1) Contains at least 20 manufactured housing units within such proximity to the shelter that the shelter is available to the resident in the event of a tornado,
(2) Consists predominantly of persons of low and moderate income
(3) Is located within a State in which a tornado has occurred during the fiscal year for which with amounts to be used were made available or the preceding 3 fiscal years, as determined by the Secretary in consultation with the Administrator of the Federal Emergency Management Agency.
(q)
(r)
(a) Types of buildings and improvements eligible for rehabilitation or reconstruction assistance. ICDBG funds may be used to finance the rehabilitation and reconstruction of:
(b) The provision of assistance to a private for-profit business, including, but not limited to, grants, loans, loan guarantees, interest supplements, loan participations, technical assistance, and other forms of support (including use of pass-through financing structures), for any activity where the assistance is necessary or appropriate to carry out an economic development project, excluding those described as ineligible in § 1003.207(a). In order to ensure that any such assistance does not unduly enrich the for-profit business, the grantee shall conduct an analysis to determine that the amount of any financial assistance to be provided is not excessive, considering the actual needs of the business in making the project financially feasible and the
ICDBG funds may be used for the payment of reasonable administrative costs and carrying charges related to the planning and execution of community development activities assisted in whole or in part with funds provided under this part. No more than 20 percent of the sum of any grant plus program income received shall be expended for activities described in this section and in § 1003.205. This does not include staff and overhead costs directly related to carrying out activities eligible under §§ 1003.201 through 1003.204, since those costs are eligible as part of such activities. These costs are activity delivery costs as defined in § 1003.4. In addition, technical assistance costs associated with developing the capacity to undertake a specific funded activity are also not considered program administration costs. These costs must not, however, exceed 10 percent of the total grant award.
The revisions and addition read as follows:
(b) * * *
(1) An activity which benefits a limited clientele, at least 51 percent of whom are low or moderate income persons. The activity must meet one of the following tests:
(i) Benefit at least one of the following clientele who are generally presumed to be principally low and moderate income persons: abused children, survivors of domestic violence, elderly persons, adults meeting the Census Bureau's Current Population Reports definition of “severely disabled,” homeless persons, illiterate adults (adults unable to read and write in English and in their first language, if their first language is not English), persons living with AIDS, migrant farm workers, persons who meet the Federal poverty guidelines, persons insured by Medicaid; or
(ii) Require information on family size and income that demonstrates that at least 51 percent of the clientele are persons whose family income does not exceed the low- and moderate-income limit; or
(5) The following kinds of activities may not qualify under this paragraph (b): activities that provide benefits to all the residents of an area; activities involving the acquisition, construction or rehabilitation of property for housing; or activities where the benefit to low- and moderate-income persons to be considered is the creation or retention of jobs, except as provided in paragraph (b)(4) of this section.
(c) * * *
(1) * * *
(i) The assistance is for an eligible activity to reduce the development cost of the substantial rehabilitation of (as defined at 24 CFR 5.100), conversion of a nonresidential structure to, or new construction of, a multifamily, non-elderly rental housing project;
(ii) At least 20 percent of the units will be occupied by low- and moderate-income households at affordable rents; and
(2) When ICDBG funds are used for housing services eligible under § 1003.201(j), if the housing for which the services are provided is to be occupied by low-and moderate-income households.
(d)
(1) For an activity that creates jobs, the grantee must document that at least 51 percent of the jobs will be held by, or made available to, low- and moderate-income persons.
(2) For an activity that retains jobs, the grantee must document that the jobs would be lost without the ICDBG assistance and that at least one of the following conditions applies with respect to at least 51 percent of the jobs at the time the ICDBG assistance is provided:
(i) The job is known to be held by a low- or moderate-income person; or
(ii) The job can reasonably be expected to turn over within the following two years and that steps will be taken to ensure that it will be filled by, or made available to, a low- or moderate-income person upon turnover.
(3) Jobs will be considered to be available to low- and moderate-income persons only if:
(i) The assisted business does not require as a prerequisite special skills that can only be acquired with substantial training or work experience or education beyond high school or the business agrees to hire unqualified persons and provide training; and
(ii) The grantee and the assisted business take actions to ensure that low- and moderate-income persons receive first consideration for filling such jobs.
(a)
(d) * * *
(1) * * *
(i) A disclosure of the nature of the possible conflict, accompanied by an assurance that there has been public disclosure of the conflict (public disclosure is considered a combination of any of the following: publication on the grantee's website, including social media; electronic mailings; media advertisements; public service announcements; and display in public areas such as libraries, grocery store bulletin boards, and neighborhood centers), evidence of the public disclosure, and a description of how the public disclosure was made; and