This action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing Agreement No. 125 and Marketing Order No. 966, as amended (7 CFR part 966), regulating the handling of tomatoes grown in Florida. Part 966 referred to as “the Order” is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers of fresh tomatoes operating within the area of production.

The Agricultural Marketing Service (AMS) is issuing this proposed rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This proposed action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.

This proposed rule has been reviewed under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have Tribal implications. AMS has determined that this proposed rule is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

This proposed rule has been reviewed under Executive Order 12988—Civil Justice Reform. Under the Order now in effect, Florida tomato handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the proposed assessment rate would be applicable to all assessable tomatoes for the 2023-2024 fiscal period, and continue until amended, suspended, or terminated.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with the U.S. Department of Agriculture (USDA) a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This proposed rule would increase the assessment rate for Florida tomatoes handled under the Order from $0.025 per 25-pound container or equivalent, the rate that was established for the 2017-2018 and subsequent fiscal periods, to $0.035 per 25-pound container or equivalent for the 2023-2024 and subsequent fiscal periods.

Sections 966.41 and 966.42 authorize the Committee, with the approval of AMS, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members are familiar with the Committee's needs and with the costs of goods and services in their local area and are able to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.

For the 2017-2018 and subsequent fiscal periods, the Committee recommended, and AMS approved, an assessment rate of $0.025 per 25-pound container or equivalent of Florida tomatoes within the production area. That rate continues in effect from fiscal period to fiscal period until modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other information available to AMS.

The Committee met on September 20, 2023, and unanimously recommended 2023-2024 fiscal period expenditures of $1,155,764 and an assessment rate of $0.035 per 25-pound container or equivalent of Florida tomatoes handled for the 2023-2024 and subsequent fiscal periods. In comparison, last fiscal period's budgeted expenditures were $1,156,773. The proposed assessment rate of $0.035 per 25-pound container or equivalent is $0.01 higher than the rate currently in effect. The Committee has used financial reserves in previous seasons to help pay for budgeted expenses. Increasing the assessment rate would allow the Committee to replenish and maintain their financial reserves at the desired level of $250,000. The Committee projects handler receipts of approximately 22,000,000 25-pound containers or equivalent of assessable Florida tomatoes for the 2023-2024 fiscal period, an increase from the 21,815,350 containers handled for the 2022-2023 fiscal period.

The major expenditures recommended by the Committee for the 2023-2024 fiscal period include $350,000 for research; $340,000 for education and promotions; and $277,393 for management and staff. By comparison, budgeted expenses for these items during the 2022-2023 fiscal period were $350,000; $330,000; and $274,105, respectively.

At the current assessment rate of $0.025, the expected 22,000,000 25-pound containers or equivalent of assessable Florida tomatoes would generate $550,000 in assessment revenue (22,000,000 multiplied by $0.025 assessment rate). By increasing the assessment rate by $0.01 to $0.035, assessment income would generate $770,000 in assessment revenue (22,000,000 multiplied by $0.035 assessment rate) for the 2023-2024 fiscal period. This amount should be appropriate to ensure the Committee has sufficient revenue, along with an anticipated $265,501 in funds awarded through the Foreign Agricultural Service Market Access Program and $129,071 in other income, to fully fund its recommended 2023-2024 fiscal period budgeted expenditures, while maintaining financial reserves at around $250,000.

The Committee derived the recommended assessment rate by considering anticipated fiscal period expenses, expected shipments of Florida tomatoes, anticipated grant funds, and the amount of funds available in financial reserve. Income derived from handler assessments ($770,000), Foreign Agricultural Service Market Access Program grants ($265,501), and other sources including administrative and interest income ($129,071), would be adequate to cover budgeted expenses ($1,155,764). Funds available in the financial reserve (currently about $241,000) would be kept within the maximum permitted by the Order (approximately one fiscal period's expenses as authorized in § 966.44).

The proposed assessment rate would continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other available information. Although this assessment rate would be in effect for an indefinite period, the Committee would continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or AMS. Committee meetings are open to the public and interested persons may express their views at these meetings. AMS will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2023-2024 fiscal period budget, and those for subsequent fiscal periods, will be reviewed and, as appropriate, approved by AMS.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are 38 handlers of Florida tomatoes subject to regulation under the Order and approximately 50 producers of Florida tomatoes in the production area. At the time this analysis was prepared, the Small Business Administration (SBA) defined small agricultural producers of noncitrus fruit as those having annual receipts of less than $3,500,000 (NAICS code 111339, Other Non-citrus Fruit Farming), and small agricultural service firms as those whose annual receipts are less than $34,000,000 (NAICS code 115114, Postharvest Crop Activities) (13 CFR 121.201).

According to data from the AMS Market News Tomato Fax Report, the average price for fresh Florida tomatoes for the 2022-2023 season was approximately $21.94 per 25-pound carton, with total shipments of around 21,815,350 cartons. Based on the average terminal market price and shipment information, the number of handlers, and assuming a normal distribution, the majority of tomato handlers have estimated average annual receipts of significantly less than $34,000,000 ($21.94 multiplied by 21,815,350 cartons equals $478,628,779, divided by 38 handlers equals $12,595,494 per handler).

In addition, based on data from the National Agricultural Statistics Service (NASS), the average price producers received for fresh Florida tomatoes at the point of first sale during the 2022-2023 season was approximately $11.08 per 25-pound carton, with total shipments of around 21,815,350 cartons. Using the average price producers received and shipment information, the number of producers, and assuming a normal distribution, the majority of producers have estimated average annual receipts greater than $3.5 million ($11.08 multiplied by 21,815,350 cartons equals $241,714,078, divided by 50 producers equals $4,834,282 per producer). Thus, a majority of producers of Florida tomatoes may be classified as large entities, while a majority of handlers may be classified as small entities.

This proposal would increase the assessment rate collected from handlers for the 2023-2024 and subsequent fiscal periods from $0.025 to $0.035 per 25-pound container or equivalent of Florida tomatoes. The Committee unanimously recommended 2023-2024 fiscal period expenditures of $1,155,764 and an assessment rate of $0.035 per 25-pound container or equivalent of Florida tomatoes. The proposed assessment rate of $0.035 is $0.01 higher than the current rate. The Committee expects industry to handle 22,000,000 25-pound containers or equivalent of Florida tomatoes during the 2023-2024 fiscal period. Thus, the $0.035 rate per 25-pound container or equivalent should provide $770,000 in assessment income (22,000,000 containers multiplied by $0.035). The Committee expects to use an anticipated $265,501 in funds awarded through the Foreign Agricultural Service Market Access Program and $129,071 in other sources to cover remaining expenses. Income derived from handler assessments, Foreign Agricultural Service Market Access Program grants, and other sources including member fees and interest income, should be adequate to cover budgeted expenses.

The major expenditures recommended by the Committee for the 2023-2024 fiscal period include $350,000 for research; $340,000 for education and promotions; and $277,393 for management and staff. By comparison, budgeted expenses for these items during the 2022-2023 fiscal period were $350,000; $330,000; and $274,105, respectively.

The Committee recommended increasing the assessment rate after drawing down financial reserves in previous seasons. The Committee desires to maintain a financial reserve of around $250,000, and without increasing the assessment rate, the Committee would not be able to maintain financial reserves at this level. The Committee estimates production for the 2023-2024 fiscal period to be 22,000,000 25-pound containers or equivalent of Florida tomatoes. At the current assessment rate, assessment income would equal $550,000 (22,000,000 containers multiplied by $0.025). By increasing the assessment rate by $0.01, assessment income would be $770,000 (22,000,000 containers multiplied by $0.035). This amount, along with Foreign Agricultural Service Market Access Program grants, and other income, should provide sufficient funds to meet anticipated 2023-2024 fiscal period expenses, while maintaining financial reserves at around $250,000.

Prior to arriving at this budget and assessment rate, the Committee considered maintaining the current assessment rate of $0.025. However, the Committee would need to further draw down reserves to meet its expenses. The Committee members did not want to utilize additional funds from reserves to meet 2023-2024 fiscal period expenses. Consequently, the alternative of maintaining the current assessment rate was rejected.

A review of historical and preliminary information pertaining to the upcoming fiscal period indicates the average grower price for the 2023-2024 season should be approximately $11.00 per 25-pound container of tomatoes or equivalent. Therefore, the estimated assessment revenue for the 2023-2024 crop year as a percentage of total grower revenue would be about 0.32 percent ($0.035 divided by $11.00 multiplied by 100).

This proposed action would increase the assessment obligation imposed on Florida tomato handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, these costs are expected to be offset by the benefits derived by the operations of the Order.

The Committee's meetings are widely publicized throughout the Florida tomato industry and all interested persons are invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the September 20, 2023, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rule, including the regulatory and informational impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in those requirements would be necessary as a result of this proposed rule. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would not impose any additional reporting or recordkeeping requirements on either small or large Florida tomato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendations submitted by the Committee and other available information, USDA has determined that this proposed rule is consistent with and would effectuate the purposes of the Act.

A 30-day comment period is provided to allow interested persons to comment on this proposed rule. All written comments timely received will be considered before a final determination is made on this proposed rule.

For the reasons set forth in the preamble, the Agricultural Marketing Service proposes to amend 7 CFR part 966 as follows:

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

The FAA will consider all comments received by the closing date for comments. The FAA may change these proposed special conditions based on the comments received.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in title 14, Code of Federal Regulations (14 CFR) 11.35, the FAA will post all comments received, without change, to https://www.regulations.gov/, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact received about these special conditions.

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

On January 27, 2022, BETA applied for a type certificate for its Model H500A electric engines. The BETA Model H500A electric engine initially will be used as a “pusher” electric engine in a single-engine airplane that will be certified separately from the engine. A typical normal category general aviation aircraft locates the engine at the front of the fuselage. In this configuration, the propeller attached to the engine pulls the airplane along its flightpath. A pusher engine is located at the rear of the fuselage, so the propeller attached to the engine pushes the aircraft instead of pulling the aircraft.

The BETA Model H500A electric engine is comprised of a direct drive, radial-flux, permanent-magnet motor, divided in two sections, each section having a three-phase motor, and one electric power inverter controlling each three-phase motor. The magnets are arranged in a Halbach magnet array, and the stator is a concentrated, tooth-wound configuration. A stator is the stationary component in the electric engine that surrounds the rotating hardware; for example: the propeller shaft, that consists of a bonded core with coils of insulated wire, known as the windings. When alternating current is applied to the coils of insulated wire in a stator, a rotating magnetic field is created, which provides the motive force for the rotating components.

Under the provisions of 14 CFR 21.17(a)(1), generally, BETA must show that Model H500A engines meet the applicable provisions of 14 CFR part 33 in effect on the date of application for a type certificate.

If the Administrator finds that the applicable airworthiness regulations ( e.g., part 33) do not contain adequate or appropriate safety standards for the BETA Model H500A engines because of a novel or unusual design feature, special conditions may be prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other engine model that incorporates the same novel or unusual design feature, these special conditions would also apply to the other engine model under § 21.101.

The FAA issues special conditions, as defined in § 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.17(a)(2).

In addition to the applicable airworthiness regulations and special conditions, the BETA Model H500A engines must comply with the noise certification requirements of 14 CFR part 36.

The BETA Model H500A engines will incorporate the following novel or unusual design features:

An electric motor, motor controller, and high-voltage electrical systems that are used as the primary source of propulsion for an aircraft.

Electric propulsion technology is substantially different from the technology used in previously certificated turbine and reciprocating engines. Therefore, these engines introduce new safety concerns that need to be addressed in the certification basis.

A growing interest within the aviation industry involves electric propulsion technology. As a result, international agencies and industry stakeholders formed Committee F39 under ASTM International, formerly known as American Society for Testing and Materials, to identify the appropriate technical criteria for aircraft engines using electrical technology that has not been previously type certificated for aircraft propulsion systems. ASTM International is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services. ASTM International published ASTM F3338-18, “Standard Specification for Design of Electric Propulsion Units for General Aviation Aircraft,” in December 2018. 1 The FAA used the technical criteria from the ASTM F3338-18, the published Special Conditions No. 33-022-SC for the magniX USA, Inc. Model magni350 and magni650 engines, and information from the BETA Model H500A engine design to develop special conditions that establish an equivalent level of safety to that required by part 33.

Aircraft engines make use of an energy source to drive mechanical systems that provide propulsion for the aircraft. Energy can be generated from various sources such as petroleum and natural gas. The turbine and reciprocating aircraft engines certificated under part 33 use aviation fuel for an energy source. The reciprocating and turbine engine technology that was anticipated in the development of part 33 converts oxygen and fuel to energy using an internal combustion system, which generates heat and mass flow of combustion products for turning shafts that are attached to propulsion devices such as propellers and ducted fans. Part 33 regulations set forth standards for these engines and mitigate potential hazards resulting from failures and malfunctions. The nature, progression, and severity of engine failures are tied closely to the technology that is used in the design and manufacture of aircraft engines. These technologies involve chemical, thermal, and mechanical systems. Therefore, the existing engine regulations in part 33 address certain chemical, thermal, and mechanically induced failures that are specific to air and fuel combustion systems operating with cyclically loaded, high-speed, high-temperature, and highly stressed components.

The existing part 33 airworthiness standards for aircraft engines date back to 1965. As discussed in the previous paragraphs, these airworthiness standards are based on fuel-burning reciprocating and turbine engine technology. The BETA Model H500A engines are neither turbine nor reciprocating engines. These engines have a novel or unusual design feature, which is the use of electrical sources of energy instead of fuel to drive the mechanical systems that provide propulsion for aircraft. The BETA aircraft engine is subject to operating conditions produced by chemical, thermal, and mechanical components working together, but the operating conditions are unlike those observed in internal combustion engine systems. Therefore, part 33 does not contain adequate or appropriate safety standards for the BETA Model H500A engine's novel or unusual design feature.

BETA's proposed aircraft engines will operate using electrical power instead of air and fuel combustion to propel the aircraft. These electric engines will be designed, manufactured, and controlled differently than turbine or reciprocating aircraft engines. They will be built with an electric motor, motor controller, and high-voltage electrical systems that draw energy from electrical storage or electrical energy generating systems. The electric motor is a device that converts electrical energy into mechanical energy by electric current flowing through windings (wire coils) in the motor, producing a magnetic field that interacts with permanent magnets mounted on the engine's main rotor. The controller is a system that consists of two main functional elements: the motor controller and an electric power inverter to drive the motor. 2 The high-voltage electrical system is a combination of wires and connectors that integrate the motor and controller.

In addition, the technology comprising these high-voltage and high-current electronic components introduces potential hazards that do not exist in turbine and reciprocating aircraft engines. For example, high-voltage transmission lines, electromagnetic shields, magnetic materials, and high-speed electrical switches are necessary to use the physical properties of an electric engine for propelling an aircraft. However, this technology also exposes the aircraft to potential failures that are not common to gas-powered turbine and reciprocating engines, technological differences which could adversely affect safety if not addressed through these proposed special conditions.

Although the electric aircraft engines BETA proposes use novel or unusual design features that the FAA did not envisage during the development of its existing part 33 airworthiness standards, these engines share some basic similarities, in configuration and function, to engines that use the combustion of air and fuel, and therefore require similar provisions to prevent common hazards ( e.g., fire, uncontained high energy debris, and loss of thrust control). However, the primary failure concerns and the probability of exposure to these common hazards are different for the proposed BETA Model H500A electric engine. This creates a need to develop special conditions to ensure the engine's safety and reliability.

The requirements in part 33 ensure that the design and construction of aircraft engines, including the engine control systems, are proper for the type of aircraft engines considered for certification. However, part 33 does not fully address aircraft engines like the BETA Model H500A, which operates using electrical technology as the primary means of propelling the aircraft. This necessitates the development of special conditions that provide adequate airworthiness standards for these aircraft engines.

The requirements in part 33, subpart B, are applicable to reciprocating and turbine aircraft engines. Subparts C and D are applicable to reciprocating aircraft engines. Subparts E through G are applicable to turbine aircraft engines. As such, subparts B through G do not adequately address the use of aircraft engines that operate using electrical technology. Special conditions are needed to ensure a level of safety for electric engines that is commensurate with these subparts, as those regulatory requirements do not contain adequate or appropriate safety standards for electric aircraft engines that are used to propel aircraft.

Applicability: Proposed special condition no. 1 would require BETA to comply with part 33, except for those airworthiness standards specifically and explicitly applicable only to reciprocating and turbine aircraft engines.

Engine Ratings and Operating Limitations: Proposed special condition no. 2 would, in addition to compliance with § 33.7(a), require BETA to establish engine operating limits related to the power, torque, speed, and duty cycles specific to BETA Model H500A engines. The duty or duty cycle is a statement of the load(s) to which the engine is subjected, including, if applicable, starting, no-load and rest, and de-energized periods, including their durations or cycles and sequence in time. This special condition also requires BETA to declare cooling fluid grade or specification, power supply requirements, and to establish any additional ratings that are necessary to define the BETA Model H500A engine capabilities required for safe operation of the engine.

Materials: Proposed special condition no. 3 would require BETA to comply with § 33.15, which sets requirements for the suitability and durability of materials used in the engine, and which would otherwise be applicable only to reciprocating and turbine aircraft engines.

Fire Protection: Proposed special condition no. 4 would require BETA to comply with § 33.17, which sets requirements to protect the engine and certain parts and components of the airplane against fire, and which would otherwise be applicable only to reciprocating and turbine aircraft engines. Additionally, this proposed special condition would require BETA to ensure that the high-voltage electrical wiring interconnect systems that connect the controller to the motor are protected against arc faults. An arc fault is a high-power discharge of electricity between two or more conductors. This discharge generates heat, which can break down the wire's insulation and trigger an electrical fire. Arc faults can range in power from a few amps up to thousands of amps and are highly variable in strength and duration.

Durability: Proposed special condition no. 5 would require the design and construction of BETA Model H500A engines to minimize the development of an unsafe condition between maintenance intervals, overhaul periods, and mandatory actions described in the Instructions for Continued Airworthiness (ICA).

Engine Cooling: Proposed special condition no. 6 would require BETA to comply with § 33.21, which requires the engine design and construction to provide necessary cooling, and which would otherwise be applicable only to reciprocating and turbine aircraft engines. Additionally, this proposed special condition would require BETA to document the cooling system monitoring features and usage in the engine installation manual (see § 33.5) if cooling is required to satisfy the safety analysis described in proposed special condition no. 17. Loss of cooling to an aircraft engine that operates using electrical technology can result in rapid overheating and abrupt engine failure, with critical consequences to safety.

Engine Mounting Attachments and Structure: Proposed special condition no. 7 would require BETA and the proposed design to comply with § 33.23, which requires the applicant to define, and the proposed design to withstand, certain load limits for the engine mounting attachments and related engine structure. These requirements would otherwise be applicable only to reciprocating and turbine aircraft engines.

Accessory Attachments: Proposed special condition no. 8 would require the proposed design to comply with § 33.25, which sets certain design, operational, and maintenance requirements for the engine's accessory drive and mounting attachments, and which would otherwise be applicable only to reciprocating and turbine aircraft engines.

Rotor Overspeed: Proposed special condition no. 9 would require BETA to establish by test, validated analysis, or a combination of both, that—

(1) the rotor overspeed must not result in a burst, rotor growth, or damage that results in a hazardous engine effect;

(2) rotors must possess sufficient strength margin to prevent burst; and

(3) operating limits must not be exceeded in service.

The proposed special condition associated with rotor overspeed is necessary because of the differences between turbine engine technology and the technology of these electric engines. Turbine rotor speed is driven by expanding gas and aerodynamic loads on rotor blades. Therefore, the rotor speed or overspeed results from interactions between thermodynamic and aerodynamic engine properties. The speed of an electric engine is directly controlled by electric current, and an electromagnetic field created by the controller. Consequently, electric engine rotor response to power demand and overspeed-protection systems is quicker and more precise. Also, the failure modes that can lead to overspeed between turbine engines and electric engines are vastly different, and therefore this special condition is necessary.

Engine Control Systems: Proposed special condition no. 10(b) would require BETA to ensure that these engines do not experience any unacceptable operating characteristics, such as unstable speed or torque control, or exceed any of their operating limitations.

The FAA originally issued § 33.28 at amendment 33-15 to address the evolution of the means of controlling the fuel supplied to the engine, from carburetors and hydro-mechanical controls to electronic control systems. These electronic control systems grew in complexity over the years, and as a result, the FAA amended § 33.28 at amendment 33-26 to address these increasing complexities. The controller that forms the controlling system for these electric engines is significantly simpler than the complex control systems used in modern turbine engines. The current regulations for engine control are inappropriate for electric engine control systems; therefore, the proposed special condition no. 10(b) associated with controlling these engines is necessary.

Proposed special condition no. 10(c) would require BETA to develop and verify the software and complex electronic hardware used in programmable logic devices, using proven methods that ensure that the devices can provide the accuracy, precision, functionality, and reliability commensurate with the hazard that is being mitigated by the logic. RTCA DO-254, “Design Assurance Guidance for Airborne Electronic Hardware,” dated April 19, 2000, 3 distinguishes between complex and simple electronic hardware.

Proposed special condition no. 10(d) would require data from assessments of all functional aspects of the control system to prevent errors that could exist in software programs that are not readily observable by inspection of the code. Also, BETA must use methods that will result in the expected quality that ensures the engine control system performs the intended functions throughout the declared operational envelope.

The environmental limits referred to in proposed special condition no. 10(e) include temperature, vibration, high-intensity radiated fields (HIRF), and others addressed in RTCA DO-160G, “Environmental Conditions and Test Procedures for Airborne Electronic/Electrical Equipment and Instruments” dated December 08, 2010, which includes “DO-160G Change 1—Environmental Conditions and Test Procedures for Airborne Equipment” dated December, 16, 2014, and “DO-357—User Guide: Supplement to DO-160G” dated December 16, 2014. 4 Proposed special condition 10(e) would require BETA to demonstrate by system or component tests in proposed special condition no. 27 any environmental limits that cannot be adequately substantiated by the endurance demonstration, validated analysis, or a combination thereof.

Proposed special condition no. 10(f) would require BETA to evaluate various control system failures to assure that such failures will not lead to unsafe engine conditions. The FAA issued Advisory Circular (AC) AC 33.28-3, “Guidance Material for 14 CFR § 33.28, Engine Control Systems,” on May 23, 2014, for reciprocating and turbine engines. 5 Paragraph 6-2 of this AC provides guidance for defining an engine control system failure when showing compliance with the requirements of § 33.28. AC 33.28-3 also includes objectives for control system integrity requirements, criteria for a loss of thrust (or power) control (LOTC/LOPC) event, and an acceptable LOTC/LOPC rate. The electrical and electronic failures and failure rates did not account for electric engines when the FAA issued this AC, and therefore performance-based special conditions are proposed to allow fault accommodation criteria to be developed for electric engines.

The phrase “in the full-up configuration” used in proposed special condition no. 10(f)(2) refers to a system without any fault conditions present. The electronic control system must, when in the full-up configuration, be single-fault tolerant, as determined by the Administrator, for electrical, electrically detectable, and electronic failures involving LOPC events.

The term “local” in the context of “local events” used in proposed special condition no. 10(f)(4) means failures or malfunctions leading to events in the intended aircraft installation such as fire, overheat, or failures leading to damage to engine control system components. These local events must not result in a hazardous engine effect due to engine control system failures or malfunctions.

Proposed special condition no. 10(g) would require BETA to conduct a safety assessment of the control system to support the safety analysis in proposed special condition no. 17. This control system safety assessment provides engine response to failures, and rates of these failures that can be used at the aircraft-level safety assessment.

Proposed special condition no. 10(h) requires BETA to provide appropriate protection devices or systems to ensure that engine operating limits will not be exceeded in service.

Proposed special condition no. 10(i) is necessary to ensure that the controllers are self-sufficient and isolated from other aircraft systems. The aircraft-supplied data supports the analysis at the aircraft level to protect the aircraft from common mode failures that could lead to major propulsion power loss. The exception “other than power command signals from the aircraft,” noted in proposed special condition no. 10(i), is based on the FAA's determination that the engine controller has no reasonable means to determine the validity of any in-range signals from the electrical power system. In many cases, the engine control system can detect a faulty signal from the aircraft, but the engine control system typically accepts the power command signal as a valid value.

The term “independent” in the context of “fully independent engine systems” referenced in proposed special condition no. 10(i) means the controllers should be self-sufficient and isolated from other aircraft systems or provide redundancy that enables the engine control system to accommodate aircraft data system failures. In the case of loss, interruption, or corruption of aircraft-supplied data, the engine must continue to function in a safe and acceptable manner without hazardous engine effects.

The term “accommodated,” in the context of “detected and accommodated,” referenced in proposed special condition 10(i)(2) is to assure that, upon detecting a fault, the system continues to function safely.

Proposed special condition no. 10(j) would require BETA to show that the loss of electric power from the aircraft will not cause the electric engine to malfunction in a manner hazardous to the aircraft. The total loss of electric power to the electric engine may result in an engine shutdown.

Instrument Connection: Proposed special condition no. 11 would require BETA to comply with § 33.29(a), (e), and (g), which set certain requirements for the connection and installation of instruments to monitor engine performance. The remaining requirements in § 33.29 apply only to technologies used in reciprocating and turbine aircraft engines.

Instrument connections (wires, wire insulation, potting, grounding, connector designs, etc.) must not introduce unsafe features or characteristics to the aircraft. Proposed special condition no. 11 would require the safety analysis to include potential hazardous effects from failures of instrument connections to function properly. The outcome of this analysis might identify the need for design enhancements or additional ICA to ensure safety.

Stress Analysis: Section 33.62 requires applicants to perform a stress analysis on each turbine engine. This regulation is explicitly applicable only to turbine engines and turbine engine components, and it is not appropriate for the BETA Model H500A engines. However, the FAA proposes that a stress analysis particular to these electric engines is necessary to account for stresses resulting from electric technology used in the engine.

Proposed special condition no. 12 would require a mechanical, thermal, and electrical stress analysis to show that the engine has a sufficient design margin to prevent unacceptable operating characteristics. Also, the applicant must determine the maximum stresses in the engine by tests, validated analysis, or a combination thereof, and show that they do not exceed minimum material properties.

Critical and Life-Limited Parts: Proposed special condition no. 13 would require BETA to show whether rotating or moving components, bearings, shafts, static parts, and non-redundant mount components should be classified, designed, manufactured, and managed throughout their service life as critical or life-limited parts.

The term “low-cycle fatigue,” referenced in proposed special condition no. 13(a)(2), is a decline in material strength from exposure to cyclic stress at levels beyond the stress threshold the material can sustain indefinitely. This threshold is known as the “material endurance limit.” Low-cycle fatigue typically causes a part to sustain plastic or permanent deformation during the cyclic loading and can lead to cracks, crack growth, and fracture. Engine parts that operate at high temperatures and high mechanical stresses simultaneously can experience low-cycle fatigue coupled with creep. Creep is the tendency of a metallic material to permanently move or deform when it is exposed to the extreme thermal conditions created by hot combustion gasses, and substantial physical loads such as high rotational speeds and maximum thrust. Conversely, high-cycle fatigue is caused by elastic deformation, small strains caused by alternating stress, and a much higher number of load cycles compared to the number of cycles that cause low-cycle fatigue.

The engineering plan referenced in proposed special condition no. 13(b)(1) informs the manufacturing and service management processes of essential information that ensures the life limit of a part is valid. The engineering plan provides methods for verifying the characteristics and qualities assumed in the design data using methods that are suitable for the part criticality. The engineering plan informs the manufacturing process of the attributes that affect the life of the part. The engineering plan, manufacturing plan, and service management plan are related in that assumptions made in the engineering plan are linked to how a part is manufactured and how that part is maintained in service. For example, environmental effects on life limited electric engine parts, such as humidity, might not be consistent with the assumptions used to design the part. BETA must ensure that the engineering plan is complete, available, and acceptable to the Administrator.

The term “manufacturing plan,” referenced in proposed special condition no. 13(b)(2), is the collection of data required to translate documented engineering design criteria into physical parts, and to verify that the parts comply with the properties established by the design data. Because engines are not intentionally tested to failure during a certification program, documents and processes used to execute production and quality systems required by § 21.137 guarantee inherent expectations for performance and durability. These systems limit the potential manufacturing outcomes to parts that are consistently produced within design constraints.

The manufacturing plan and service management plan ensure that essential information from the engineering plan, such as the design characteristics that safeguard the integrity of critical and life-limited parts, is consistently produced and preserved over the lifetime of those parts. The manufacturing plan includes special processes and production controls to prevent inclusion of manufacturing-induced anomalies, which can degrade the part's structural integrity. Examples of manufacturing-induced anomalies are material contamination, unacceptable grain growth, heat-affected areas, and residual stresses.

The service-management plan ensures the method and assumptions used in the engineering plan to determine the part's life remain valid by enabling corrections identified from in-service experience, such as service-induced anomalies and unforeseen environmental effects, to be incorporated into the design process. The service-management plan also becomes the ICA for maintenance, overhaul, and repairs of the part.

Lubrication System: Proposed special condition no. 14 would require BETA to ensure that the lubrication system is designed to function properly between scheduled maintenance intervals and to prevent contamination of the engine bearings. This proposed special condition would also require BETA to demonstrate the unique lubrication attributes and functional capability of the BETA Model H500A engine design.

The corresponding part 33 regulations include provisions for lubrication systems used in reciprocating and turbine engines. The part 33 requirements account for safety issues associated with specific reciprocating and turbine engine system configurations. These regulations are not appropriate for the BETA Model H500A engines. For example, electric engines do not have a crankcase or lubrication oil sump. Electric engine bearings are sealed, so they do not require an oil circulation system. The lubrication system in these engines is also independent of the propeller pitch control system. Therefore, proposed special condition no. 14 incorporates only certain requirements from the part 33 regulations.

Power Response: Proposed special condition no. 15 would require the design and construction of the BETA Model H500A engines to enable an increase from the minimum—

(1) power setting to the highest rated power without detrimental engine effects, and

(2) within a time interval appropriate for the intended aircraft application.

The engine control system governs the increase or decrease in power in combustion engines to prevent too much (or too little) fuel from being mixed with air before combustion. Due to the lag in rotor response time, improper fuel/air mixtures can result in engine surges, stalls, and exceedances above rated limits and durations. Failure of the combustion engine to provide thrust, maintain rotor speeds below rotor burst thresholds, and keep temperatures below limits can have engine effects detrimental to the aircraft. Similar detrimental effects are possible in the BETA Model H500A engines, but the causes are different. Electric engines with reduced power response time can experience insufficient thrust to the aircraft, shaft over-torque, and over-stressed rotating components, propellers, and critical propeller parts. Therefore, this proposed special condition is necessary.

Continued Rotation: Proposed special condition no. 16 would require BETA to design the Model H500A engines such that, if the main rotating systems continue to rotate after the engine is shut down while in-flight, this continued rotation will not result in any hazardous engine effects.

The main rotating system of the BETA Model H500A engines consists of the rotors, shafts, magnets, bearings, and wire windings that convert electrical energy to shaft torque. For the initial aircraft application, this rotating system must continue to rotate after the power source to the engine is shut down. The safety concerns associated with this proposed special condition are substantial asymmetric aerodynamic drag that can cause aircraft instability, loss of control, and reduced efficiency; and may result in a forced landing or inability to continue safe flight.

Safety Analysis: Proposed special condition no. 17 would require BETA to comply with § 33.75(a)(1) and (a)(2), which require the applicant to conduct a safety analysis of the engine, and which would otherwise be applicable only to turbine aircraft engines. Additionally, this proposed special condition would require BETA to assess its engine design to determine the likely consequences of failures that can reasonably be expected to occur. The failure of such elements, and associated prescribed integrity requirements, must be stated in the safety analysis.

A primary failure mode is the manner in which a part is most likely going to fail. Engine parts that have a primary failure mode, a predictable life to the failure, and a failure consequence that results in a hazardous effect, are life-limited or critical parts. Some life-limited or critical engine parts can fail suddenly in their primary failure mode, from prolonged exposure to normal engine environments such as temperature, vibration, and stress, if those engine parts are not removed from service before the damage mechanisms progress to a failure. Due to the consequence of failure, these parts are not allowed to be managed by on-condition or probabilistic means because the probability of failure cannot be sensibly estimated in numerical terms. Therefore, the parts are managed by compliance with integrity requirements, such as mandatory maintenance (life limits, inspections, inspection techniques), to ensure the qualities, features, and other attributes that prevent the part from failing in its primary failure mode are preserved throughout its service life. For example, if the number of engine cycles to failure are predictable and can be associated with specific design characteristics, such as material properties, then the applicant can manage the engine part with life limits.

Complete or total power loss is not assumed to be a minor engine event, as it is in the turbine engine regulation § 33.75, to account for experience data showing a potential for higher hazard levels from power loss events in single-engine general aviation aircraft. The criteria in these proposed special conditions apply to an engine that continues to operate at partial power after a single electrical or electronic fault or failure. Total loss of power is classified at the aircraft level using proposed special condition nos. 10(g) and 33(h).

Ingestion: Proposed special condition no. 18 would require BETA to ensure that these engines will not experience unacceptable power loss or hazardous engine effects from ingestion. The associated regulations for turbine engines, §§ 33.76, 33.77, and 33.78, are based on potential performance impacts and damage from birds, ice, rain, and hail being ingested into a turbine engine that has an inlet duct, which directs air into the engine for combustion, cooling, and thrust. By contrast, the BETA electric engines are not configured with inlet ducts.

An “unacceptable” power loss, as used in proposed special condition no. 18(b), is such that the power or thrust required for safe flight of the aircraft becomes unavailable to the pilot. The specific amount of power loss that is required for safe flight depends on the aircraft configuration, speed, altitude, attitude, atmospheric conditions, phase of flight, and other circumstances where the demand for thrust is critical to safe operation of the aircraft.

Liquid and Gas Systems: Proposed special condition no. 19 would require BETA to ensure that systems used for lubrication or cooling of engine components are designed and constructed to function properly. Also, if a system is not self-contained, the interfaces to that system would be required to be defined in the engine installation manual. Systems for the lubrication or cooling of engine components can include heat exchangers, pumps, fluids, tubing, connectors, electronic devices, temperature sensors and pressure switches, fasteners and brackets, bypass valves, and metallic chip detectors. These systems allow the electric engine to perform at extreme speeds and temperatures for durations up to the maintenance intervals without exceeding temperature limits or predicted deterioration rates.

Vibration Demonstration: Proposed special condition no. 20 would require BETA to ensure the engine—

(1) is designed and constructed to function throughout its normal operating range of rotor speeds and engine output power without inducing excessive stress caused by engine vibration, and

(2) design undergoes a vibration survey.

The vibration demonstration is a survey that characterizes the vibratory attributes of the engine. It verifies that the stresses from vibration do not impose excessive force or result in natural frequency responses on the aircraft structure. The vibration demonstration also ensures internal vibrations will not cause engine components to fail. Excessive vibration force occurs at magnitudes and forcing functions or frequencies, which may result in damage to the aircraft. Stress margins to failure add conservatism to the highest values predicted by analysis for additional protection from failure caused by influences beyond those quantified in the analysis. The result of the additional design margin is improved engine reliability that meets prescribed thresholds based on the failure classification. The amount of margin needed to achieve the prescribed reliability rates depends on an applicant's experience with a product. The FAA considers the reliability rates when deciding how much vibration is “excessive.”

Overtorque: Proposed special condition no. 21 would require BETA to demonstrate that the engine is capable of continued operation without the need for maintenance if it experiences a certain amount of overtorque.

BETA's proposed electric engine converts electrical energy to shaft torque, which is used for propulsion. The electric motor, controller, and high-voltage systems control the engine torque. When the pilot commands power or thrust, the engine responds to the command and adjusts the shaft torque to meet the demand. During the transition from one power or thrust setting to another, a small delay, or latency, occurs in the engine response time. While the engine dwells in this time interval, it can continue to apply torque until the command to change the torque is applied by the engine control. The allowable amount of overtorque during operation depends on the engine's response to changes in the torque command throughout its operating range.

Calibration Assurance: Proposed special condition no. 22 would require BETA to subject the engine to calibration tests to establish its power characteristics and the conditions both before and after the endurance and durability demonstrations specified in proposed special condition nos. 23 and 26. The calibration test requirements specified in § 33.85 only apply to the endurance test specified in § 33.87, which is applicable only to turbine engines. The FAA proposes that the methods used for accomplishing those tests for turbine engines is not the best approach for electric engines. The calibration tests in § 33.85 have provisions applicable to ratings that are not relevant to the BETA Model H500A engines. Proposed special condition no. 22 would allow BETA to demonstrate the endurance and durability of the electric engine either together or independently, whichever is most appropriate for the engine qualities being assessed. Consequently, the proposed special condition applies the calibration requirement to both the endurance and durability tests.

Endurance Demonstration: Proposed special condition no. 23 would require BETA to perform an endurance demonstration test that is acceptable to the Administrator. The Administrator will evaluate the extent to which the test exposes the engine to failures that could occur when the engine is operated at up to its rated values, and determine if the test is sufficient to show that the engine design will not exhibit unacceptable effects in service, such as significant performance deterioration, operability restrictions, and engine power loss or instability, when it is run repetitively at rated limits and durations in conditions that represent extreme operating environments.

Temperature Limit: Proposed special condition no. 24 would require BETA to ensure the engine can endure operation at its temperature limits plus an acceptable margin. An “acceptable margin,” as used in the proposed special condition, is the amount of temperature above that required to prevent the least capable engine allowed by the type design, as determined by § 33.8, from failing due to temperature-related causes when operating at the most extreme engine and environmental thermal conditions.

Operation Demonstration: Proposed special condition no. 25 would require the engine to demonstrate safe operating characteristics throughout its declared flight envelope and operating range. Engine operating characteristics define the range of functional and performance values the BETA Model H500A engines can achieve without incurring hazardous effects. The characteristics are requisite capabilities of the type design that qualify the engine for installation into aircraft and that determine aircraft installation requirements. The primary engine operating characteristics are assessed by the tests and demonstrations that would be required by these special conditions. Some of these characteristics are shaft output torque, rotor speed, power consumption, and engine thrust response. The engine performance data BETA will use to certify the engine must account for installation loads and effects. These are aircraft-level effects that could affect the engine characteristics that are measured when the engine is tested on a stand or in a test cell. These effects could result from elevated inlet cowl temperatures, aircraft maneuvers, flowstream distortion, and hard landings. For example, an engine that is run in a sea-level, static test facility could demonstrate more capability for some operating characteristics than it will have when operating on an aircraft in certain flight conditions. Discoveries like this during certification could affect proposed engine ratings and operating limits. Therefore, the installed performance defines the engine performance capabilities.

Durability Demonstration: Proposed special condition no. 26 would require BETA to subject the engine to a durability demonstration. The durability demonstration must show that the engine is designed and constructed to minimize the development of any unsafe condition between maintenance intervals or between engine replacement intervals if maintenance or overhaul is not defined. The durability demonstration also verifies that the ICA is adequate to ensure the engine, in its fully deteriorated state, continues to generate rated power or thrust, while retaining operating margins and sufficient efficiency, to support the aircraft safety objectives. The amount of deterioration an engine can experience is restricted by operating limitations and managed by the engine ICA. Section 33.90 specifies how maintenance intervals are established; it does not include provisions for an engine replacement. Electric engines and turbine engines deteriorate differently; therefore, BETA will use different test effects to develop maintenance, overhaul, or engine replacement information for their electric engine.

System and Component Tests: Proposed special condition no. 27 would require BETA to show that the systems and components of the engine would perform their intended functions in all declared engine environments and operating conditions.

Sections 33.87 and 33.91, which are specifically applicable to turbine engines, have conditional criteria to decide if additional tests will be required after the engine tests. The criteria are not suitable for electric engines. Part 33 associates the need for additional testing with the outcome of the § 33.87 endurance test because it is designed to address safety concerns in combustion engines. For example, § 33.91(b) requires the establishment of temperature limits for components that require temperature-controlling provisions, and § 33.91(a) requires additional testing of engine systems and components where the endurance test does not fully expose internal systems and components to thermal conditions that verify the desired operating limits. Exceeding temperature limits is a safety concern for electric engines. The FAA proposes that the § 33.87 endurance test might not be the best way to achieve the highest thermal conditions for all the electronic components of electric engines because heat is generated differently in electronic systems than it is in turbine engines. Additional safety considerations also need to be addressed in the test. Therefore, proposed special condition no. 27 would be a performance-based requirement that allows BETA to determine when engine systems and component tests are necessary and to determine the appropriate limitations of those systems and components used in the BETA Model H500A electric engine.

Rotor Locking Demonstration: Proposed special condition no. 28 would require the engine to demonstrate reliable rotor locking performance and that no hazardous effects will occur if the engine uses a rotor locking device to prevent shaft rotation.

Some engine designs enable the pilot to prevent a propeller shaft or main rotor shaft from turning while the engine is running, or the aircraft is in-flight. This capability is needed for some installations that require the pilot to confirm functionality of certain flight systems before takeoff. The proposed BETA engine installations are not limited to aircraft that will not require rotor locking. Section 33.92 prescribes a test that may not include the appropriate criteria to demonstrate sufficient rotor locking capability for these engines. Therefore, this special condition is necessary.

The proposed special condition does not define “reliable” rotor locking but would allow BETA to classify the hazard as major or minor and assign the appropriate quantitative criteria that meet the safety objectives required by special condition no. 17 and the applicable portions of § 33.75.

Teardown Inspection: Proposed special condition no. 29 would require BETA to perform a teardown or non-teardown evaluation after the endurance, durability, and overtorque demonstrations, based on the criteria proposed in special condition no. 29(a) or (b).

Proposed special condition no. 29(b) includes restrictive criteria for “non-teardown evaluations” to account for electric engines, sub-assemblies, and components that cannot be disassembled without destroying them. Some electrical and electronic components like BETA's are constructed in an integrated fashion that precludes the possibility of tearing them down without destroying them. The proposed special condition indicates that, if a teardown cannot be performed in a non-destructive manner, then the inspection or replacement intervals must be established based on the endurance and durability demonstrations. The procedure for establishing maintenance should be agreed upon between the applicant and the FAA prior to running the relevant tests. Data from the endurance and durability tests may provide information that can be used to determine maintenance intervals and life limits for parts. However, if life limits are required, the lifing procedure is established by special condition no. 13, Critical and Life-Limited Parts, which corresponds to § 33.70. Therefore, the procedure used to determine which parts are life-limited, and how the life limits are established, requires FAA approval, as it does for § 33.70. Sections 33.55 and 33.93 do not contain similar requirements because reciprocating and turbine engines can be completely disassembled for inspection.

Containment: Proposed special condition no. 30 would require the engine to have containment features that protect against likely hazards from rotating components, unless BETA can show the margin to rotor burst does not justify the need for containment features. Rotating components in electric engines are typically disks, shafts, bearings, seals, orbiting magnetic components, and the assembled rotor core. However, if the margin to rotor burst does not unconditionally rule out the possibility of a rotor burst, then the proposed special condition would require BETA to assume a rotor burst could occur and design the stator case to contain the failed rotors, and any components attached to the rotor that are released during the failure. In addition, BETA must also determine the effects of subsequent damage precipitated by a main rotor failure and characterize any fragments that are released forward or aft of the containment features. Further, decisions about whether the BETA engine requires containment features, and the effects of any subsequent damage following a rotor burst, should be based on test or validated analysis. The fragment energy levels, trajectories, and size are typically documented in the installation manual because the aircraft will need to account for the effects of a rotor failure in the aircraft design. The intent of this proposed special condition is to prevent hazardous engine effects from structural failure of rotating components and parts that are built into the rotor assembly.

Operation with a Variable Pitch Propeller: Proposed special condition no. 31 would require BETA to conduct functional demonstrations, including feathering, negative torque, negative thrust, and reverse thrust operations, as applicable, based on the propeller's or fan's variable pitch functions that are planned for use on these electric engines, using a representative propeller. The requirements of § 33.95 prescribe tests based on the operating characteristics of turbine engines equipped with variable pitch propellers, which include thrust response times, engine stall, propeller shaft overload, loss of thrust control, and hardware fatigue. The electric engines BETA proposes have different operating characteristics that substantially affect their susceptibility to these and other potential failures typical of turbine engines. Because BETA's proposed electric engines may be installed with a variable pitch propeller, the proposed special condition is necessary.

General Conduct of Tests: Proposed special condition no. 32 would require BETA to—

(1) include scheduled maintenance in the engine ICA;

(2) include any maintenance, in addition to the scheduled maintenance, that was needed during the test to satisfy the applicable test requirements; and

(3) conduct any additional tests that the Administrator finds necessary, as warranted by the test results.

For example, certification endurance test shortfalls might be caused by omitting some prescribed engine test conditions, or from accelerated deterioration of individual parts arising from the need to force the engine to operating conditions that drive the engine above the engine cycle values of the type design. If an engine part fails during a certification test, the entire engine might be subjected to penalty runs, with a replacement or newer part design installed on the engine, to meet the test requirements. Also, the maintenance performed to replace the part, so that the engine could complete the test, would be included in the engine ICA. In another example, if the applicant replaces a part before completing an engine certification test because of a test facility failure and can substantiate the part to the Administrator through bench testing, they might not need to substantiate the part design using penalty runs with the entire engine.

The term “excessive” is used to describe the frequency of unplanned engine maintenance, and the frequency of unplanned test stoppages, to address engine issues that prevent the engine from completing the tests in proposed special condition nos. 32(b)(1) and (2), respectively. Excessive frequency is an objective assessment from the FAA's analysis of the amount of unplanned maintenance needed for an engine to complete a certification test. The FAA's assessment may include the reasons for the unplanned maintenance, such as the effects test facility equipment may have on the engine, the inability to simulate a realistic engine operating environment, and the extent to which an engine requires modifications to complete a certification test. In some cases, the applicant may be able to show that unplanned maintenance has no effect on the certification test results, or they might be able to attribute the problem to the facility or test-enabling equipment that is not part of the type design. In these cases, the ICA will not be affected. However, if BETA cannot reconcile the amount of unplanned service, then the FAA may consider the unplanned maintenance required during the certification test to be “excessive,” prompting the need to add the unplanned maintenance to mandatory ICA to comply with the certification requirements.

Engine electrical systems: The current requirements in part 33 for electronic engine control systems were developed to maintain an equivalent level of safety demonstrated by engines that operate with hydromechanical engine control systems. At the time § 33.28 was codified, the only electrical systems used on turbine engines were low-voltage, electronic engine control systems (EEC) and high-energy spark-ignition systems. Electric aircraft engines use high-voltage, high-current electrical systems and components that are physically located in the motor and motor controller. Therefore, the existing part 33 control system requirements do not adequately address all the electrical systems used in electric aircraft engines. Proposed special condition no. 33 is established using the existing engine control systems requirement as a basis. It applies applicable airworthiness criteria from § 33.28 and incorporates airworthiness criteria that recognize and focus on the electrical power system used in the engine.

Proposed special condition no. 33(b) would ensure that all aspects of an electrical system, including generation, distribution, and usage, do not experience any unacceptable operating characteristics.

Proposed special condition no. 33(c) would require the electrical power distribution aspects of the electrical system to provide the safe transfer of electrical energy throughout the electric engine.

Proposed special condition no. 33(d) would require the engine electrical system to be designed such that the loss, malfunction, or interruption of the electrical power source, or power conditions that exceed design limits, will not result in a hazardous engine effect.

Proposed special condition no. 33(e) requires BETA to identify and declare, in the engine installation manual, the characteristics of any electrical power supplied from the aircraft to the engine, or electrical power supplied from the engine to the aircraft via energy regeneration, and any other characteristics necessary for safe operation of the engine.

Proposed special condition no. 33(f) requires BETA to demonstrate that systems and components will operate properly up to environmental limits, using special conditions, when such limits cannot be adequately substantiated by the endurance demonstration, validated analysis, or a combination thereof. The environmental limits referred to in this proposed special condition include temperature, vibration, HIRF, and others addressed in RTCA DO-160G, “Environmental Conditions and Test Procedures for Airborne Electronic/Electrical Equipment and Instruments.”

Proposed special condition 33(g) would require BETA to evaluate various electric engine system failures to ensure that these failures will not lead to unsafe engine conditions. The evaluation would include single-fault tolerance, would ensure no single electrical or electronic fault or failure would result in hazardous engine effects, and ensure that any failure or malfunction leading to local events in the intended aircraft application do not result in certain hazardous engine effects. The special condition would also implement integrity requirements, criteria for LOTC/LOPC events, and an acceptable LOTC/LOPC rate.

Proposed special condition 33(h) would require BETA to conduct a safety assessment of the engine electrical system to support the safety analysis in special condition no. 17. This safety assessment provides engine response to failures, and rates of these failures, that can be used at the aircraft safety assessment level.

These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards for reciprocating and turbine aircraft engines.

As discussed above, these proposed special conditions are applicable to BETA Model H500A engines. Should BETA apply at a later date for a change to the type certificate to include another model on the same type certificate, incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

This action affects only BETA Model H500A engines. It is not a rule of general applicability.

The authority citation for these special conditions is as follows:

(a) Unless otherwise noted in these special conditions, the engine design must comply with the airworthiness standards for aircraft engines set forth in 14 CFR part 33, except for those airworthiness standards that are specifically and explicitly applicable only to reciprocating and turbine aircraft engines or as specified herein.

(b) The applicant must comply with this part using a means of compliance, which may include consensus standards, accepted by the Administrator.

(c) The applicant requesting acceptance of a means of compliance must provide the means of compliance to the FAA in a form and manner acceptable to the Administrator.

In addition to § 33.7(a), the engine ratings and operating limits must be established and included in the type certificate data sheet based on:

(a) Shaft power, torque, rotational speed, and temperature for:

(1) Rated takeoff power;

(2) Rated maximum continuous power; and

(3) Rated maximum temporary power and associated time limit.

(b) Duty cycle and the rating at that duty cycle. The duty cycle must be declared in the engine type certificate data sheet.

(c) Cooling fluid grade or specification.

(d) Power-supply requirements.

(e) Any other ratings or limitations that are necessary for the safe operation of the engine.

The engine design must comply with § 33.15.

The engine design must comply with § 33.17(b) through (g).

(a) The design and construction of the engine and the materials used must minimize the probability of the occurrence and spread of fire during normal operation and failure conditions and must minimize the effect of such a fire.

(b) High-voltage electrical wiring interconnect systems must be protected against arc faults that can lead to hazardous engine effects as defined in special condition no. 17(d)(2) of these special conditions. Any non-protected electrical wiring interconnects must be analyzed to show that arc faults do not cause a hazardous engine effect.

The engine design and construction must minimize the development of an unsafe condition of the engine between maintenance intervals, overhaul periods, or mandatory actions described in the applicable ICA.

The engine design and construction must comply with § 33.21. In addition, if cooling is required to satisfy the safety analysis as described in special condition no. 17 of these special conditions, the cooling system monitoring features and usage must be documented in the engine installation manual.

The engine mounting attachments and related engine structures must comply with § 33.23.

The engine must comply with § 33.25.

(a) A rotor overspeed must not result in a burst, rotor growth, or damage that results in a hazardous engine effect, as defined in special condition no. 17(d)(2) of these special conditions. Compliance with this paragraph must be shown by test, validated analysis, or a combination of both. Applicable assumed rotor speeds must be declared and justified.

(b) Rotors must possess sufficient strength with a margin to burst above certified operating conditions and above failure conditions leading to rotor overspeed. The margin to burst must be shown by test, validated analysis, or a combination thereof.

(c) The engine must not exceed the rotor speed operational limitations that could affect rotor structural integrity.

(a) Applicability. The requirements of this special condition apply to any system or device that is part of the engine type design that controls, limits, monitors, or protects engine operation, and is necessary for the continued airworthiness of the engine.

(b) Engine control. The engine control system must ensure that the engine does not experience any unacceptable operating characteristics or exceed its operating limits, including in failure conditions where the fault or failure results in a change from one control mode to another, from one channel to another, or from the primary system to the back-up system, if applicable.

(c) Design Assurance. The software and complex electronic hardware, including programmable logic devices, must be—

(1) Designed and developed using a structured and systematic approach that provides a level of assurance for the logic commensurate with the hazard associated with the failure or malfunction of the systems in which the devices are located; and

(2) Substantiated by a verification methodology acceptable to the Administrator.

(d) Validation. All functional aspects of the control system must be substantiated by test, analysis, or a combination thereof, to show that the engine control system performs the intended functions throughout the declared operational envelope.

(e) Environmental Limits. Environmental limits that cannot be adequately substantiated by endurance demonstration, validated analysis, or a combination thereof must be demonstrated by the system and component tests in special condition no. 27 of these special conditions.

(f) Engine control system failures. The engine control system must—

(1) Have a maximum rate of loss of power control (LOPC) that is suitable for the intended aircraft application. The estimated LOPC rate must be specified in the engine installation manual;

(2) When in the full-up configuration, be single-fault tolerant, as determined by the Administrator, for electrical, electrically detectable, and electronic failures involving LOPC events;

(3) Not have any single failure that results in hazardous engine effects as defined in special condition no. 17(d)(2) of these special conditions; and

(4) Ensure failures or malfunctions that lead to local events in the aircraft do not result in hazardous engine effects, as defined in special condition no. 17(d)(2) of these special conditions, due to engine control system failures or malfunctions.

(g) System safety assessment. The applicant must perform a system safety assessment. This assessment must identify faults or failures that affect normal operation, together with the predicted frequency of occurrence of these faults or failures. The intended aircraft application must be taken into account to assure that the assessment of the engine control system safety is valid. The rates of hazardous and major faults must be declared in the engine installation manual.

(h) Protection systems. The engine control devices and systems' design and function, together with engine instruments, operating instructions, and maintenance instructions, must ensure that engine operating limits that can lead to a hazard will not be exceeded in service.

(i) Aircraft supplied data. Any single failure leading to loss, interruption, or corruption of aircraft-supplied data (other than power-command signals from the aircraft), or aircraft-supplied data shared between engine systems within a single engine or between fully independent engine systems, must—

(1) Not result in a hazardous engine effect, as defined in special condition no. 17(d)(2) of these special conditions, for any engine installed on the aircraft; and

(2) Be able to be detected and accommodated by the control system.

(j) Engine control system electrical power.

(1) The engine control system must be designed such that the loss, malfunction, or interruption of the control system electrical power source will not result in a hazardous engine effect, unacceptable transmission of erroneous data, or continued engine operation in the absence of the control function. Hazardous engine effects are defined in special condition no. 17(d)(2) of these special conditions. The engine control system must be capable of resuming normal operation when aircraft-supplied power returns to within the declared limits.

(2) The applicant must identify and declare, in the engine installation manual, the characteristics of any electrical power supplied from the aircraft to the engine control system, including transient and steady-state voltage limits, and any other characteristics necessary for safe operation of the engine.

The applicant must comply with § 33.29(a), (e), and (g).

(a) In addition, as part of the system safety assessment of special condition nos. 10(g) and 33(h) of these special conditions, the applicant must assess the possibility and subsequent effect of incorrect fit of instruments, sensors, or connectors. Where practicable, the applicant must take design precautions to prevent incorrect configuration of the system.

(b) The applicant must provide instrumentation enabling the flight crew to monitor the functioning of the engine cooling system unless evidence shows that:

(1) Other existing instrumentation provides adequate warning of failure or impending failure;

(2) Failure of the cooling system would not lead to hazardous engine effects before detection; or

(3) The probability of failure of the cooling system is extremely remote.

(a) A mechanical and thermal stress analysis, as well as an analysis of the stress caused by electromagnetic forces, must show a sufficient design margin to prevent unacceptable operating characteristics and hazardous engine effects as defined in special condition no. 17(d)(2) of these special conditions.

(b) Maximum stresses in the engine must be determined by test, validated analysis, or a combination thereof, and must be shown not to exceed minimum material properties.

(a) The applicant must show, by a safety analysis or means acceptable to the Administrator, whether rotating or moving components, bearings, shafts, static parts, and non-redundant mount components should be classified, designed, manufactured, and managed throughout their service life as critical or life-limited parts.

(1) Critical part means a part that must meet prescribed integrity specifications to avoid its primary failure, which is likely to result in a hazardous engine effect as defined in special condition no. 17(d)(2) of these special conditions.

(2) Life-limited parts may include but are not limited to a rotor or major structural static part, the failure of which can result in a hazardous engine effect, as defined in special condition no. 17(d)(2) of these special conditions, due to a low-cycle fatigue (LCF) mechanism. A life limit is an operational limitation that specifies the maximum allowable number of flight cycles that a part can endure before the applicant must remove it from the engine.

(b) In establishing the integrity of each critical part or life-limited part, the applicant must provide to the Administrator the following three plans for approval:

(1) an engineering plan, as defined in § 33.70 (a);

(2) a manufacturing plan, as defined in § 33.70 (b); and

(3) a service-management plan, as defined in § 33.70 (c).

(a) The lubrication system must be designed and constructed to function properly between scheduled maintenance intervals in all flight attitudes and atmospheric conditions in which the engine is expected to operate.

(b) The lubrication system must be designed to prevent contamination of the engine bearings and lubrication system components.

(c) The applicant must demonstrate by test, validated analysis, or a combination thereof, the unique lubrication attributes and functional capability of (a) and (b).

(a) The design and construction of the engine, including its control system, must enable an increase—

(1) From the minimum power setting to the highest rated power without detrimental engine effects;

(2) From the minimum obtainable power while in-flight and while on the ground to the highest rated power within a time interval determined to be appropriate for the intended aircraft application; and

(3) From the minimum torque to the highest rated torque without detrimental engine effects in the intended aircraft application.

(b) The results of (a)(1), (a)(2), and (a)(3) of this special condition must be included in the engine installation manual.

If the design allows any of the engine main rotating systems to continue to rotate after the engine is shut down while in-flight, this continued rotation must not result in any hazardous engine effects, as defined in special condition no. 17(d)(2) of these special conditions.

(a) The applicant must comply with § 33.75(a)(1) and (a)(2) using the failure definitions in special condition no. 17(d) of these special conditions.

(b) The primary failure of certain single elements cannot be sensibly estimated in numerical terms. If the failure of such elements is likely to result in hazardous engine effects, then compliance may be shown by reliance on the prescribed integrity requirements of § 33.15 and special condition nos. 9 and 13 of these special conditions, as applicable. These instances must be stated in the safety analysis.

(c) The applicant must comply with § 33.75(d) and (e) using the failure definitions in special condition no. 17(d) of these special conditions, and the ICA in § 33.4.

(d) Unless otherwise approved by the Administrator, the following definitions apply to the engine effects when showing compliance with this condition:

(1) A minor engine effect does not prohibit the engine from performing its intended functions in a manner consistent with § 33.28(b)(1)(i), (b)(1)(iii), and (b)(1)(iv), and the engine complies with the operability requirements of special condition no. 15 and special condition no. 25 of these special conditions, as appropriate.

(2) The engine effects in § 33.75(g)(2) are hazardous engine effects with the addition of:

(i) Electrocution of the crew, passengers, operators, maintainers, or others; and

(ii) Blockage of cooling systems that could cause the engine effects described in § 33.75(g)(2) and special condition 17(d)(2)(i) of these special conditions.

(3) Any other engine effect is a major engine effect.

(e) The intended aircraft application must be taken into account when performing the safety analysis.

(f) The results of the safety analysis, and the assumptions about the aircraft application used in the safety analysis, must be documented in the engine installation manual.

(a) Rain, ice, and hail ingestion must not result in an abnormal operation such as shutdown, power loss, erratic operation, or power oscillations throughout the engine operating range.

(b) Ingestion from other likely sources (birds, induction system ice, foreign objects—ice slabs) must not result in hazardous engine effects defined by special condition no. 17(d)(2) of these special conditions, or unacceptable power loss.

(c) If the design of the engine relies on features, attachments, or systems that the installer may supply, for the prevention of unacceptable power loss or hazardous engine effects, as defined in special condition no. 17(d)(2) of these special conditions, following potential ingestion, then the features, attachments, or systems must be documented in the engine installation manual.

(a) Each system used for lubrication or cooling of engine components must be designed and constructed to function properly in all flight attitudes and atmospheric conditions in which the engine is expected to operate.

(b) If a system used for lubrication or cooling of engine components is not self-contained, the interfaces to that system must be defined in the engine installation manual.

(c) The applicant must establish by test, validated analysis, or a combination of both that all static parts subject to significant pressure loads will not:

(1) Exhibit permanent distortion beyond serviceable limits, or exhibit leakage that could create a hazardous condition when subjected to normal and maximum working pressure with margin;

(2) Exhibit fracture or burst when subjected to the greater of maximum possible pressures with margin.

(d) Compliance with special condition no. 19(c) of these special conditions must take into account:

(1) The operating temperature of the part;

(2) Any other significant static loads in addition to pressure loads;

(3) Minimum properties representative of both the material and the processes used in the construction of the part; and

(4) Any adverse physical geometry conditions allowed by the type design, such as minimum material and minimum radii.

(e) Approved coolants and lubricants must be listed in the engine installation manual.

(a) The engine must be designed and constructed to function throughout its normal operating range of rotor speeds and engine output power, including defined exceedances, without inducing excessive stress in any of the engine parts because of vibration and without imparting excessive vibration forces to the aircraft structure.

(b) Each engine design must undergo a vibration survey to establish that the vibration characteristics of those components subject to induced vibration are acceptable throughout the declared flight envelope and engine operating range for the specific installation configuration. The possible sources of the induced vibration that the survey must assess are mechanical, aerodynamic, acoustical, internally induced electromagnetic, installation induced effects that can affect the engine vibration characteristics, and likely environmental effects. This survey must be shown by test, validated analysis, or a combination thereof.

When approval is sought for a transient maximum engine overtorque, the applicant must demonstrate by test, validated analysis, or a combination thereof, that the engine can continue operation after operating at the maximum engine overtorque condition without maintenance action. Upon conclusion of overtorque tests conducted to show compliance with this special condition, or any other tests that are conducted in combination with the overtorque test, each engine part or individual groups of components must meet the requirements of special condition no. 29 of these special conditions.

Each engine must be subjected to calibration tests to establish its power characteristics, and the conditions both before and after the endurance and durability demonstrations specified in special conditions nos. 23 and 26 of these special conditions.

The applicant must subject the engine to an endurance demonstration, acceptable to the Administrator, to demonstrate the engine's limit capabilities. The endurance demonstration must include increases and decreases of the engine's power settings, energy regeneration, and dwellings at the power settings or energy regeneration for sufficient durations that produce the extreme physical conditions the engine experiences at rated performance levels, operational limits, and at any other conditions or power settings that are required to verify the limit capabilities of the engine.

The engine design must demonstrate its capability to endure operation at its temperature limits plus an acceptable margin. The applicant must quantify and justify the margin to the Administrator. The demonstration must be repeated for all declared duty cycles and ratings, and operating environments, that would impact temperature limits.

The engine design must demonstrate safe operating characteristics, including but not limited to power cycling, starting, acceleration, and overspeeding throughout its declared flight envelope and operating range. The declared engine operational characteristics must account for installation loads and effects.

The engine must be subjected to a durability demonstration to show that each part of the engine has been designed and constructed to minimize any unsafe condition of the system between overhaul periods, or between engine replacement intervals if the overhaul is not defined. This test must simulate the conditions in which the engine is expected to operate in service, including typical start-stop cycles, to establish when the initial maintenance is required.

The applicant must show that systems and components that cannot be adequately substantiated in accordance with the endurance demonstration or other demonstrations will perform their intended functions in all declared environmental and operating conditions.

If shaft rotation is prevented by locking the rotor(s), the engine must demonstrate:

(a) Reliable rotor locking performance;

(b) Reliable rotor unlocking performance; and

(c) That no hazardous engine effects, as specified in special condition no. 17(d)(2) of these special conditions, will occur.

(a) Teardown evaluation.

(1) After the endurance and durability demonstrations have been completed, the engine must be completely disassembled. Each engine component and lubricant must be eligible for continued operation in accordance with the information submitted for showing compliance with § 33.4.

(2) Each engine component, having an adjustment setting and a functioning characteristic that can be established independent of installation on or in the engine, must retain each setting and functioning characteristic within the established and recorded limits at the beginning of the endurance and durability demonstrations.

(b) Non-Teardown evaluation. If a teardown cannot be performed for all engine components in a non-destructive manner, then the inspection or replacement intervals for these components and lubricants must be established based on the endurance and durability demonstrations and must be documented in the ICA in accordance with § 33.4.

The engine must be designed and constructed to protect against likely hazards from rotating components as follows—

(a) The design of the stator case surrounding rotating components must provide for the containment of the rotating components in the event of failure, unless the applicant shows that the margin to rotor burst precludes the possibility of a rotor burst.

(b) If the margin to burst shows that the stator case must have containment features in the event of failure, then the stator case must provide for the containment of the failed rotating components. The applicant must define by test, validated analysis, or a combination thereof, and document, in the engine installation manual, the energy level, trajectory, and size of fragments released from damage caused by the main-rotor failure, and that pass forward or aft of the surrounding stator case.

The applicant must conduct functional demonstrations including feathering, negative torque, negative thrust, and reverse thrust operations, as applicable, with a representative propeller. These demonstrations may be conducted in a manner acceptable to the Administrator as part of the endurance, durability, and operation demonstrations.

(a) Maintenance of the engine may be made during the tests in accordance with the service and maintenance instructions submitted in compliance with § 33.4.

(b) The applicant must subject the engine or its parts to any additional tests that the Administrator finds necessary if—

(1) The frequency of engine service is excessive;

(2) The number of stops due to engine malfunction is excessive;

(3) Major engine repairs are needed; or

(4) Replacement of an engine part is found necessary during the tests, or due to the teardown inspection findings.

(c) Upon completion of all demonstrations and testing specified in these special conditions, the engine and its components must be—

(1) Within serviceable limits;

(2) Safe for continued operation; and

(3) Capable of operating at declared ratings while remaining within limits.

(a) Applicability. Any system or device that provides, uses, conditions, or distributes electrical power, and is part of the engine type design, must provide for the continued airworthiness of the engine, and must maintain electric engine ratings.

(b) Electrical systems. The electrical system must ensure the safe generation and transmission of power, and electrical load shedding, and that the engine does not experience any unacceptable operating characteristics or exceed its operating limits.

(c) Electrical power distribution.

(1) The engine electrical power distribution system must be designed to provide the safe transfer of electrical energy throughout the electrical power plant. The system must be designed to provide electrical power so that the loss, malfunction, or interruption of the electrical power source will not result in a hazardous engine effect, as defined in special condition no. 17(d)(2) of these special conditions or detrimental engine effects in the intended aircraft application.

(2) The system must be designed and maintained to withstand normal and abnormal conditions during all ground and flight operations.

(3) The system must provide mechanical or automatic means of isolating a faulted electrical energy generation or storage device from affecting the safe transmission of electric energy to the electric engine.

(d) Protection systems. The engine electrical system must be designed such that the loss, malfunction, interruption of the electrical power source, or power conditions that exceed design limits, will not result in a hazardous engine effect, as defined in special condition no. 17(d)(2) of these special conditions.

(e) Electrical power characteristics. The applicant must identify and declare, in the engine installation manual, the characteristics of any electrical power supplied from—

(1) the aircraft to the engine electrical system, for starting and operating the engine, including transient and steady-state voltage limits, or

(2) the engine to the aircraft via energy regeneration, and any other characteristics necessary for safe operation of the engine.

(f) Environmental limits. Environmental limits that cannot adequately be substantiated by endurance demonstration, validated analysis, or a combination thereof must be demonstrated by the system and component tests in special condition no. 27 of these special conditions.

(g) Electrical system failures. The engine electrical system must—

(1) Have a maximum rate of loss of power control (LOPC) that is suitable for the intended aircraft application;

(2) When in the full-up configuration, be single-fault tolerant, as determined by the Administrator, for electrical, electrically detectable, and electronic failures involving LOPC events;

(3) Not have any single failure that results in hazardous engine effects; and

(4) Ensure failures or malfunctions that lead to local events in the intended aircraft application do not result in hazardous engine effects, as defined in special condition no. 17(d)(2) of these special conditions, due to electrical system failures or malfunctions.

(h) System safety assessment. The applicant must perform a system safety assessment. This assessment must identify faults or failures that affect normal operation, together with the predicted frequency of occurrence of these faults or failures. The intended aircraft application must be taken into account to assure the assessment of the engine system safety is valid.

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0454; Project Identifier MCAI-2023-00923-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Joseph Catanzaro, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7366; email 9-avs-nyaco-cos@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

Transport Canada, which is the aviation authority for Canada, has issued Transport Canada AD CF-2023-59, dated July 26, 2023 (Transport Canada AD CF-2023-59) (also referred to as the MCAI), to correct an unsafe condition for all Airbus Canada Limited Partnership Model BD-500-1A10 and BD-500-1A11 airplanes. The MCAI states that there have been multiple in-service failures of engine feed check valves, which have resulted in fuel imbalance conditions in flight. An investigation found that the engine feed check valve is subject to abnormal wear out failures due to a severe operating environment in the engine fuel feed line. In the event of a failure of the check valve, flapper valve assembly items can become dislodged and contaminate the fuel system, potentially resulting in severe fuel imbalance or loss of fuel flow to the engine.

The FAA is proposing this AD to address the unsafe condition on these products.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2024-0454.

The FAA reviewed Transport Canada AD CF-2023-59, which specifies procedures for repetitive replacement of the left- and right-side engine feed check valves with new engine feed check valves. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in ADDRESSES .

This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in Transport Canada AD CF-2023-59 described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate Transport Canada AD CF-2023-59 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with Transport Canada AD CF-2023-59 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Service information required by Transport Canada AD CF-2023-59 for compliance will be available at regulations.gov under Docket No. FAA-2024-0454 after the FAA final rule is published.

The FAA considers that this proposed AD would be an interim action. If final action is identified, the FAA might consider further rulemaking then.

The FAA estimates that this AD, if adopted as proposed, would affect 80 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

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

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

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

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

(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0455; Project Identifier MCAI-2023-00997-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Hassan Ibrahim, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: 206-231-3653; email: hassan.m.ibrahim@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

ANAC, which is the aviation authority for Brazil, has issued ANAC AD 2023-08-03R01, effective November 2, 2023 (ANAC AD 2023-08-03R01) (also referred to as the MCAI), to correct an unsafe condition for Embraer S.A. Model EMB-550 and EMB-545 airplanes. The MCAI states premature cracks have occurred in the outer layer of left-hand and right-hand flight deck side windows with part number (P/N) NP-200402-7 or P/N NP-200402-8, caused by interference due to manufacturing tolerances.

The FAA is proposing this AD to address cracks, delamination, and any other damage with the affected left-hand and right-hand flight deck side windows. The unsafe condition, if not addressed, may subject the inner layer of the window to unpredicted loads for several flights, which could result in window failure and subsequent in-flight depressurization events.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2024-0455.

ANAC AD 2023-08-03R01 specifies procedures for initial and repetitive general visual inspections of the left-hand and right-hand flight deck side windows to detect cracks, delamination, and any other damage (such as scratches, chipping, erosion, and crazing). ANAC AD 2023-08-03R01 specifies replacing any cracked window with a new window P/N NP-200402-9 or P/N NP-200402-10, as applicable. ANAC AD 2023-08-03R01 also prohibits the installation of flight deck side windows with P/N NP-200402-7 or P/N NP-200402-8, on any airplane.

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

This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in ANAC AD 2023-08-03R01 described previously, except as specified under “Difference Between this Proposed AD and the Service Information,” and except for any differences identified as exceptions in the regulatory text of this proposed AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate ANAC AD 2023-08-03R01 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with ANAC AD 2023-08-03R01 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Service information required by ANAC AD 2023-08-03R01 for compliance will be available at regulations.gov under Docket No. FAA-2024-0455 after the FAA final rule is published.

The FAA estimates that this AD, if adopted as proposed, would affect 44 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

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

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

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

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

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

(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

On November 1, 2022, VA published a proposal to amend VA's existing IRRRL regulation at 38 CFR 36.4307 to reflect current statutory requirements set forth by section 309 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, Public Law 115-174, 132 Stat. 1296, and section 2 of the Protecting Affordable Mortgages for Veterans Act of 2019, Public Law 116-33, 133 Stat. 1038. See Loan Guaranty: Revisions to VA-Guaranteed or Insured Interest Rate Reduction Refinancing Loans, 87 FR 65700 (Nov. 1, 2022). That rulemaking notice proposed that the lender of an IRRRL must provide the Secretary with a certification that the Veteran would recoup all fees, closing costs, and expenses (other than taxes, amounts held in escrow, and fees paid under 38 U.S.C. chapter 37) on or before the date that is 36 months after the IRRRL's note date. VA has determined that the due date of the first payment on the IRRRL, rather than the note date, would further more practical implementation of the statutory text than the initial proposal and that it would better fit with the expectations of key stakeholders, including Veterans, Congress, and the loan industry.

With this SNPRM, VA seeks to clarify the effect of the recoupment standard and address important considerations and reasons for VA's proposed changes. To accomplish this, VA is proposing additional edits to 38 CFR 36.4307, as explained in more detail below. VA will address all of the comments received on the proposed rule and any comments VA receives on this SNPRM in our final rulemaking.

Section 3709(a), title 38, United States Code, requires that the issuer of an IRRRL certify to the Secretary as to the recoupment period for certain fees, closing costs, and expenses. See 38 U.S.C. 3709(a). The term “issuer” is not a term used in VA's program elsewhere, but VA has interpreted it to mean a lender. The statute also provides a broad methodology for calculating the recoupment period. For a loan to meet the statutory recoupment requirements, the certification must show that all fees and incurred costs are (i) scheduled to be recouped on or before the date that is 36 months after the date of loan issuance; and (ii) the recoupment is calculated through lower regular monthly payments (minus certain enumerated items) as a result of the refinanced loan.

Several statutory provisions introduced a number of new terms and ambiguous phrasings. As VA has pointed out in both its interim final cash-out refinance rule and proposed IRRRL rule notices, the text of section 3709 can reasonably lead to multiple interpretations. See Loan Guaranty: Revisions to VA-Guaranteed or Insured Cash-Out Home Refinance Loans, 83 FR 64459, 64460-64461 (Dec. 17, 2018); 87 FR 65700, 65701-65706 (Nov. 1, 2022). VA also pointed out in both notices that VA would attempt to situate the provisions within the coherent and consistent framework of the newly enacted statute, as well as the whole of chapter 37, title 38, U.S.C. See 83 FR at 64461-64462; 87 FR at 65702, 65707.

Before 38 U.S.C. 3709 was signed into law, the term “loan issuance” was not mentioned within chapter 37 or commonly used by VA in the VA home loan program. The legislative history of Public Law 115-174 does not include a definition of the term or provide sufficient context from which to infer the intended meaning.

The term could derive from the Government National Mortgage Association (Ginnie Mae) mortgage-backed securities (MBS) program. The Ginnie Mae MBS program is the primary source of liquidity for lenders that participate in VA's program. An eligible issuer “creates pools of mortgages, loan packages of mortgages,” and is responsible for servicing the pooled mortgages until maturity or termination. See Ginnie Mae MBS Guide, Chap. 1, Part 10, available at https://www.ginniemae.gov/issuers/program_guidelines/MBSGuideLib/Chapter_01.pdf. Although the Ginnie Mae MBS program can include mortgages purchased from multiple originators and serviced by third parties, Ginnie Mae looks only to the eligible issuer of the MBS to ensure that the servicing meets Ginnie Mae's standards. See Ginnie Mae: How Does it Work and What Does it Do?, Bipartisan Policy Center, available at https://bipartisanpolicy.org/download/?file=/wp-content/uploads/sites/default/files/GinnieMae-final.pdf#:~:text=The Government National Mortgage Association%28or Ginnie Mae%29.

In the proposed rule notice, VA settled on proposing the note date as “the date of loan issuance,” which means that if VA were to adopt the standard as proposed, the note date would serve as the point at which the calculation of the 36-month recoupment period would begin. See 87 FR at 65701. Although VA did not explain the rationale in-depth, VA's proposal was consistent with the terms “to issue” and “date of issue/issue date,” as used in other related contexts ( e.g., the Ginnie Mae MBS Guide, insurance policies, bonds, and a regulatory definition relating to the Thrift Savings Plan). 1 VA also believed the note date would be a date all stakeholders could easily track.

VA did not receive public comments specific to what “date of loan issuance” means. In preparation for the final rule, however, VA re-examined the text of section 3709, VA's proposed recoupment formula, comments of internal VA staff, potential outcomes for Veterans, ongoing industry implementation of the statutory recoupment standard, and a range of other sources, 2 and identified reasons why the initial proposal may not have reflected the best interpretation. Because VA now sees that “date of loan issuance” is subject to various reasonable interpretations, VA believes that it is prudent to reopen the public comment period for this specific issue. This will allow all stakeholders to provide input on whether the first payment due date better reflects the coherent and consistent statutory scheme and provides a more workable standard for Veterans, VA, and the loan industry.

Section 3709 provides that “recoupment is calculated through lower regular monthly payments.” See 38 U.S.C. 3709(a)(3). VA's proposed formula reflected this, in that it presented a comparison between that which the Veteran would pay for principal and interest under the loan being refinanced and that which the Veteran would pay for principal and interest under the IRRRL. See 87 FR at 65701.

Using the IRRRL's note date, however, may not give full meaning to Congress's emphasis on the way “costs are scheduled to be recouped . . . through lower regular monthly payments.” See 38 U.S.C. 3709(a). The loan closing and servicing processes generally result in a borrower missing one or two of the payments that would normally have been made under the loan being refinanced. Generally, the borrower must pay for the principal and interest corresponding to the missed loan payments up-front during the IRRRL closing or include the amounts in the balance of the IRRRL. If VA were to use the note date as the start of the recoupment period, there could consistently be one or two months where VA could not make a direct comparison of monthly payments to determine the borrower's costs and savings.

The missed payments highlight two outcomes that could harm Veterans and contradict section 3709. First, a lender could try to count those one or two missed payments toward the IRRRL savings (Note: VA refers to “missed payments” here solely to mean they are not due and payable when they would have been scheduled as such under the loan being refinanced). For example, if a Veteran's next two scheduled payments of $2,000 would be $0.00 under the IRRRL, the lender could try to assert the $4,000 as a complete savings, thereby reducing the recoupment period. Two scenarios where this could harm the Veteran are: (i) the missed payments would go toward recoupment even though the Veteran would be responsible for the amounts (at closing or in the loan balance), and (ii) a predatory lender could profit by exploiting “the savings” and justifying new, unnecessary charges to the Veteran.

Second, if VA were to exclude from the recoupment period the two months when payments were not due, the Veteran would be limited to 34 monthly payments to meet the recoupment, rather than the full 36, to offset the IRRRL's transaction costs. See 38 U.S.C. 3709(a)(2) (“all of the fees and incurred costs . . . [must be] scheduled to be recouped on or before the date that is 36 months after the date of loan issuance”). Because VA must adhere to the 36-month statutory requirement, VA is concerned a de facto 34-month requirement would not meet the statute's terms.

In addition, it is VA's understanding that the concerns that led to the enactment of section 3709—whether concerns of VA or those of consumer advocates—were not necessarily about missed payments in and of themselves. Few Veterans would argue that being able to retain one or two months of mortgage payments is intrinsically predatory or more costly. The main concern was the way certain lenders marketed the missed payments, misleading Veterans to believe as if they were no longer responsible for those payments. However, the Veteran was still responsible for paying them, albeit in different ways, as discussed above.

Because the payment structure could reduce the recoupment period from 36 months to 34, VA must confront another potential area for concern. If the recoupment period is conditioned upon making up the missed payments, VA seemingly characterizes the missed payments as a new charge to the Veteran, something the Veteran would not have been responsible for paying had the loan not been refinanced. In short, it could be asserted that VA's decision about the note date is tantamount to VA defining a missed payment as a “fee, closing cost, or expense,” that must be recouped. See 38 U.S.C. 3709(a)(1).

One way to address these issues would be to keep the note date as “the date of loan issuance” but substantively change or introduce a new, more complex formula that accounts for the missed payments. But VA is concerned that adding complexity and substantive change to the proposed calculation would make the refinance process frustrating to Veterans and lenders alike, as well as lead to unnecessary errors in origination and oversight. Thus, VA believes the best approach is to keep the straightforward formula, as proposed in the November 2022 notice, and simply change the start date of the recoupment period, as described above. See 87 FR at 65701. The formula would continue to appear as follows:

To sum up the options VA considered with respect to the recoupment standard, VA could—

1. Finalize the rule using the note date as “the date of loan issuance,” which could be seen as tantamount to defining missed payments as “a fee, closing cost, or expense,” that must be recouped;

2. Propose a different definition of “the date of loan issuance,” where such date is the date that the first payment under the IRRRL is due; or

3. Propose a new formula to account for the missed payments in a meaningful, accurate way, regardless of additional complexity, potential for error, and potential for stakeholder frustration.

VA does not believe a fourth option, one where a lender could count the missed payments as savings, would be consistent with the purpose of section 3709, which is to protect Veterans from predatory lending. See 87 FR at 65702.

Based on VA's additional analysis (discussed above), VA now proposes an updated revision to the language of § 36.4307(a)(8). Specifically, VA proposes a different definition for “the date of loan issuance,” one that would be specific to IRRRLs and section 3709. VA proposes to begin the 36-month recoupment period on the date that is the first payment due date of the IRRRL. In other words, VA proposes to interpret the date the Veteran is required to make the first regular payment under the IRRRL—regardless of whether the Veteran actually makes the payment—as “the date of loan issuance” set by section 3709(a)(2). To illustrate the difference between VA's definition as described by the November 2022 notice and this updated proposal: if a Veteran signs a note on April 10, 2025, and the first payment due date of the IRRRL is June 1, 2025, the recoupment period under VA's proposed rule would begin April 10, 2025. Under this SNPRM, the recoupment period would begin June 1, 2025. VA believes that, for the reasons described above, this new approach would be consistent with the text and context of section 3709, result in more advantageous outcomes for Veterans, and be an easy standard for lenders to compute and follow.

With respect to the formula provided in the preamble of the proposed rule, VA is clarifying that provided the result of the formula, i.e., the months to recoup, is less than or equal to 36, the IRRRL would meet recoupment. VA would maintain the proposed rule's formula, but clarify that when the result of the calculation, i.e., the “months to recoup costs” in the figure above, is less than or equal to 36, the recoupment requirement for the IRRRL would be met. In other words, VA proposes that the statutory recoupment requirement would be met when:

In revised proposed § 36.4307(a)(8)(i), VA would require that the lender of the refinancing loan provide the Secretary with a certification that all fees, closing costs, and expenses (other than taxes, amounts held in escrow, and fees paid under 38 U.S.C. chapter 37) that would be incurred by the Veteran as a result of the refinance are scheduled to be recouped on or before the date that is 36 months after the date that is the first payment due date of the refinancing loan.

To reiterate, VA is seeking comments on this issue only. VA will not review new comments on any another aspect of the proposed rulemaking.

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 (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 www.regulations.gov.

VA believes that the discrete change in recoupment start date contained in this SNPRM would not affect the way lenders have, in practice, calculated recoupment of applicable fees, closing costs, and expenses over 36 monthly payments. On this basis, the Secretary hereby certifies that this SNPRM would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

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 rule would have no such effect on State, local, and tribal governments, or on the private sector.

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

Denis McDonough, Secretary of Veterans Affairs, signed and approved this document on March 1, 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 proposes to amend 38 CFR part 36 as set forth below:

The revisions and additions read as follows:

The revisions read as follows:

On May 31, 2023, KDAQ, on behalf of the District, submitted changes to the Jefferson County portion of the Kentucky SIP for EPA approval. 1 In this proposed rulemaking, EPA is proposing to approve changes to Jefferson County Regulation 1.02, Definitions. 2

The May 31, 2023, SIP revision contains a version of Regulation 1.02, Definitions, that was adopted by the District on March 15, 2023 (referred to as “Version 16” by the District). The District requests that EPA incorporate Version 16 into the SIP and identifies changes in Regulation 1.02 between Version 16 and Version 15, which is the version of the rule currently in the SIP.

The District's first proposed change is the addition of Appendix B to Section 1, which lists “trivial activities,” and the modification to the definition of “trivial activities” at subsection 1.80 to reference Appendix B. 3 The SIP-approved definition of “trivial activities” states that the District will maintain a list of trivial activities that shall be made available to the public upon request. This list has not changed since it was created in 1995 in response to the EPA White Paper for Streamlined Development of Part 70 Permit Applications. 4 This change would only incorporate the list into the SIP and would not alter the activities listed therein.

The District's second proposed change is to the definition of “volatile organic compound” at subsection 1.84. Subsection 1.8.4.1 incorporates by reference 40 CFR 51.100(s)(1) which lists compounds excluded from the Federal definition of “volatile organic compounds (VOC)” at 40 CFR 51.100(s). The change updates the incorporation by reference date from July 1, 2018, to July 1, 2022, which has the effect of adding an organic compound, cis-1,1,1,4,4,4-hexafluorobut-2-ene (also known as HFO-1336mzz-Z), to the list of compounds excluded from the definition of VOC. EPA exempted this compound from the Federal definition of “volatile organic compounds (VOC)” because its contribution to the formation of tropospheric ozone is negligible. See 83 FR 61127 (November 28, 2018).

The District's third proposed change is a set of minor grammatical changes. For example, the Section 1 preamble is changed from “in the District's regulations” to “in District regulations.” Given the nature of this change and the changes described above, the SIP revision will not interfere with any applicable requirement concerning attainment of the national ambient air quality standards, reasonable further progress, or any other applicable requirement of the CAA. 5 EPA is proposing to approve all changes to Regulation 1.02 except for the grammatical edit to the term “acute noncancer effect,” because that term is not in the SIP. 6

In this document, 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, and as discussed in Section II of this preamble, EPA is proposing to incorporate by reference Jefferson County Regulation 1.02, Definitions (except for the definition of “Acute noncancer effect”), Version 16, District-effective on March 15, 2023, which updates exclusions to the definition of “volatile organic compound” and includes Appendix B which lists “trivial activities.” EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

EPA is proposing to approve the changes to Regulation 1.02, Definitions (except for the change to the definition of “Acute noncancer effect”), of the Jefferson County portion of the Kentucky SIP, submitted by the Commonwealth on May 31, 2023, for the reasons discussed above. The SIP revision updates the current SIP-approved version of Regulation 1.02 (Version 15) to Version 16.

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 proposed 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 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 et seq. );

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

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

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

• Is not 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 proposed action. Due to the nature of the action being proposed here, this proposed 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 proposed 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.

Yes, documents that form the basis for the EPA's evaluation and scoring of the sites in this proposed rule are contained in public dockets located both at the EPA Headquarters in Washington, DC, and in the regional offices. An electronic version of the public docket is available through https://www.regulations.gov (see table above for docket identification numbers). Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facilities.

The Headquarters docket for this proposed rule contains the following information for the sites proposed in this rule: Hazard Ranking System (HRS) score sheets; documentation records describing the information used to compute the score; information for any sites affected by particular statutory requirements or the EPA listing policies; and a list of documents referenced in the documentation record. These documents are also available online at https://www.regulations.gov.

The regional dockets for this proposed rule contain all of the information in the Headquarters docket plus the actual reference documents containing the data principally relied upon and cited by the EPA in calculating or evaluating the HRS score for the sites. These reference documents are available only in the regional dockets.

You may view the primary documents that support this proposed rule online at https://www.regulations.gov or by contacting the EPA HQ docket. You may view the primary documents plus the references by contacting the regional dockets. The hours of operation for the headquarters docket are from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal holidays. Please contact the individual regional dockets for hours. The contact information for the regional dockets is as follows:

• Holly Inglis, Region 1 (CT, ME, MA, NH, RI, VT), U.S. EPA, Superfund Records and Information Center, 5 Post Office Square, Suite 100, Boston, MA 02109-3912; (617) 918-1413.

• James Desir, Region 2 (NJ, NY, PR, VI), U.S. EPA, 290 Broadway, New York, NY 10007-1866; (212) 637-4342.

• Lorie Baker, Region 3 (DE, DC, MD, PA, VA, WV), U.S. EPA, 4 Penn Center, 1600 John F. Kennedy Boulevard, Mail code 3SD12, Philadelphia, PA 19103; (315) 814-3355.

• Sandra Bramble, Region 4 (AL, FL, GA, KY, MS, NC, SC, TN), U.S. EPA, 61 Forsyth Street SW, Mail code 9T25, Atlanta, GA 30303; (404) 562-8926.

• Todd Quesada, Region 5 (IL, IN, MI, MN, OH, WI), U.S. EPA Superfund Division Librarian/SFD Records Manager SRC-7J, Metcalfe Federal Building, 77 West Jackson Boulevard, Chicago, IL 60604; (312) 886-4465.

• Michelle Delgado-Brown, Region 6 (AR, LA, NM, OK, TX), U.S. EPA, 1201 Elm Street, Suite 500, Mail code SED, Dallas, TX 75270; (214) 665-3154.

• Kumud Pyakuryal, Region 7 (IA, KS, MO, NE), U.S. EPA, 11201 Renner Blvd., Mail code SUPRSTAR, Lenexa, KS 66219; (913) 551-7956.

• David Fronczak, Region 8 (CO, MT, ND, SD, UT, WY), U.S. EPA, 1595 Wynkoop Street, Mail code 8SEM-EM-P, Denver, CO 80202-1129; (303) 312-6096.

• Leslie Ramirez, Region 9 (AZ, CA, HI, NV, AS, GU, MP), U.S. EPA, 75 Hawthorne Street, Mail code SFD-6-1, San Francisco, CA 94105; (415) 972-3978.

• Brandon Perkins, Region 10 (AK, ID, OR, WA), U.S. EPA, 1200 Sixth Avenue, Mail code 13-J07, Seattle, WA 98101; (206) 553-6396.

You may also request copies from the EPA Headquarters or the regional dockets. An informal request, rather than a formal written request under the Freedom of Information Act, should be the ordinary procedure for obtaining copies of any of these documents. Please note that due to the difficulty of reproducing them, oversized maps may be viewed only in-person. The EPA dockets are not equipped to copy and mail out such maps, nor are they equipped to scan them for electronic distribution.

You may use the docket at https://www.regulations.gov to access documents in the Headquarters docket. Please note that there are differences between the Headquarters docket and the regional dockets, and those differences are outlined in this preamble above.

Follow the online instructions detailed above in the ADDRESSES section for submitting comments. Once submitted, comments cannot be edited or removed from the docket. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission ( i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

The EPA considers all comments received during the comment period. Significant comments are typically addressed in a support document that the EPA will publish concurrently with the Federal Register document if, and when, the site is listed on the NPL.

Comments that include complex or voluminous reports, or materials prepared for purposes other than HRS scoring, should point out the specific information that the EPA should consider and how it affects individual HRS factor values or other listing criteria ( Northside Sanitary Landfill v. Thomas, 849 F.2d 1516 (D.C. Cir. 1988)). The EPA will not address voluminous comments that are not referenced to the HRS or other listing criteria. The EPA will not address comments unless they indicate which component of the HRS documentation record or what particular point in the EPA's stated eligibility criteria is at issue.

Generally, the EPA will not respond to late comments. The EPA can guarantee only that it will consider those comments postmarked by the close of the formal comment period. The EPA has a policy of generally not delaying a final listing decision solely to accommodate consideration of late comments.

During the comment period, comments are placed in the Headquarters docket and are available to the public on an “as received” basis. A complete set of comments will be available for viewing in the regional dockets approximately one week after the formal comment period closes.

All public comments, whether submitted electronically or in paper form, will be made available for public viewing in the electronic public docket at https://www.regulations.gov as the EPA receives them and without change, unless the comment contains copyrighted material, CBI or other information whose disclosure is restricted by statute. Once in the public dockets system, select “search,” then key in the appropriate docket ID number.

In certain instances, interested parties have written to the EPA concerning sites that were not at that time proposed to the NPL. If those sites are later proposed to the NPL, parties should review their earlier concerns and, if still appropriate, resubmit those concerns for consideration during the formal comment period. Site-specific correspondence received prior to the period of formal proposal and comment will not generally be included in the docket.

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 (“CERCLA” or “the Act”), in response to the dangers of uncontrolled releases or threatened releases of hazardous substances, and releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. CERCLA was amended on October 17, 1986, by the Superfund Amendments and Reauthorization Act (“SARA”), Public Law 99-499, 100 Stat. 1613 et seq.

To implement CERCLA, the EPA promulgated the revised National Oil and Hazardous Substances Pollution Contingency Plan (“NCP”), 40 CFR part 300, on July 16, 1982 (47 FR 31180), pursuant to CERCLA section 105 and Executive Order 12316 (46 FR 42237, August 20, 1981). The NCP sets guidelines and procedures for responding to releases and threatened releases of hazardous substances or releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. The EPA has revised the NCP on several occasions. The most recent comprehensive revision was on March 8, 1990 (55 FR 8666).

As required under section 105(a)(8)(A) of CERCLA, the NCP also includes “criteria for determining priorities among releases or threatened releases throughout the United States for the purpose of taking remedial action and, to the extent practicable taking into account the potential urgency of such action, for the purpose of taking removal action.” “Removal” actions are defined broadly and include a wide range of actions taken to study, clean up, prevent or otherwise address releases and threatened releases of hazardous substances, pollutants or contaminants (42 U.S.C. 9601(23)).

The NPL is a list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States. The list, which is appendix B of the NCP (40 CFR part 300), was required under section 105(a)(8)(B) of CERCLA, as amended. Section 105(a)(8)(B) defines the NPL as a list of “releases” and the highest priority “facilities” and requires that the NPL be revised at least annually. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is only of limited significance, however, as it does not assign liability to any party or to the owner of any specific property. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

For purposes of listing, the NPL includes two sections, one of sites that are generally evaluated and cleaned up by the EPA (the “General Superfund section”), and one of sites that are owned or operated by other Federal agencies (the “Federal Facilities section”). With respect to sites in the Federal Facilities section, these sites are generally being addressed by other Federal agencies. Under Executive Order 12580 (52 FR 2923, January 29, 1987) and CERCLA section 120, each Federal agency is responsible for carrying out most response actions at facilities under its own jurisdiction, custody or control, although the EPA is responsible for preparing a Hazard Ranking System (“HRS”) score and determining whether the facility is placed on the NPL.

There are three mechanisms for placing sites on the NPL for possible remedial action (see 40 CFR 300.425(c) of the NCP): (1) A site may be included on the NPL if it scores sufficiently high on the HRS, which the EPA promulgated as appendix A of the NCP (40 CFR part 300). The HRS serves as a screening tool to evaluate the relative potential of uncontrolled hazardous substances, pollutants or contaminants to pose a threat to human health or the environment. On December 14, 1990 (55 FR 51532), the EPA promulgated revisions to the HRS partly in response to CERCLA section 105(c), added by SARA. On January 9, 2017 (82 FR 2760), a subsurface intrusion component was added to the HRS to enable the EPA to consider human exposure to hazardous substances or pollutants and contaminants that enter regularly occupied structures through subsurface intrusion when evaluating sites for the NPL. The current HRS evaluates four pathways: ground water, surface water, soil exposure and subsurface intrusion, and air. As a matter of agency policy, those sites that score 28.50 or greater on the HRS are eligible for the NPL. (2) Pursuant to 42 U.S.C. 9605(a)(8)(B), each State may designate a single site as its top priority to be listed on the NPL, without any HRS score. This provision of CERCLA requires that, to the extent practicable, the NPL include one facility designated by each State as the greatest danger to public health, welfare or the environment among known facilities in the State. This mechanism for listing is set out in the NCP at 40 CFR 300.425(c)(2); (3) The third mechanism for listing, included in the NCP at 40 CFR 300.425(c)(3), allows certain sites to be listed without any HRS score, if all of the following conditions are met:

• The Agency for Toxic Substances and Disease Registry (ATSDR) of the U.S. Public Health Service has issued a health advisory that recommends dissociation of individuals from the release.

• The EPA determines that the release poses a significant threat to public health.

• The EPA anticipates that it will be more cost-effective to use its remedial authority than to use its removal authority to respond to the release.

The EPA promulgated an original NPL of 406 sites on September 8, 1983 (48 FR 40658) and generally has updated it at least annually.

A site may undergo remedial action financed by the Trust Fund established under CERCLA (commonly referred to as the “Superfund”) only after it is placed on the NPL, as provided in the NCP at 40 CFR 300.425(b)(1). (“Remedial actions” are those “consistent with permanent remedy, taken instead of or in addition to removal actions. * * *” 42 U.S.C. 9601(24).) However, under 40 CFR 300.425(b)(2) placing a site on the NPL “does not imply that monies will be expended.” The EPA may pursue other appropriate authorities to respond to the releases, including enforcement action under CERCLA and other laws.

The NPL does not describe releases in precise geographical terms; it would be neither feasible nor consistent with the limited purpose of the NPL (to identify releases that are priorities for further evaluation), for it to do so. Indeed, the precise nature and extent of the site are typically not known at the time of listing.

Although a CERCLA “facility” is broadly defined to include any area where a hazardous substance has “come to be located” (CERCLA section 101(9)), the listing process itself is not intended to define or reflect the boundaries of such facilities or releases. Of course, HRS data (if the HRS is used to list a site) upon which the NPL placement was based will, to some extent, describe the release(s) at issue. That is, the NPL site would include all releases evaluated as part of that HRS analysis.

When a site is listed, the approach generally used to describe the relevant release(s) is to delineate a geographical area (usually the area within an installation or plant boundaries) and identify the site by reference to that area. However, the NPL site is not necessarily coextensive with the boundaries of the installation or plant, and the boundaries of the installation or plant are not necessarily the “boundaries” of the site. Rather, the site consists of all contaminated areas within the area used to identify the site, as well as any other location where that contamination has come to be located, or from where that contamination came.

In other words, while geographic terms are often used to designate the site ( e.g., the “Jones Co. Plant site”) in terms of the property owned by a particular party, the site, properly understood, is not limited to that property ( e.g., it may extend beyond the property due to contaminant migration), and conversely may not occupy the full extent of the property ( e.g., where there are uncontaminated parts of the identified property, they may not be, strictly speaking, part of the “site”). The “site” is thus neither equal to, nor confined by, the boundaries of any specific property that may give the site its name, and the name itself should not be read to imply that this site is coextensive with the entire area within the property boundary of the installation or plant. In addition, the site name is merely used to help identify the geographic location of the contamination; and is not meant to constitute any determination of liability at a site. For example, the name “Jones Co. Plant site,” does not imply that the Jones Company is responsible for the contamination located on the plant site.

The EPA regulations provide that the remedial investigation (“RI”) “is a process undertaken . . . to determine the nature and extent of the problem presented by the release” as more information is developed on site contamination, and which is generally performed in an interactive fashion with the feasibility Study (“FS”) (40 CFR 300.5). During the RI/FS process, the release may be found to be larger or smaller than was originally thought, as more is learned about the source(s) and the migration of the contamination. However, the HRS inquiry focuses on an evaluation of the threat posed and therefore the boundaries of the release need not be exactly defined. Moreover, it generally is impossible to discover the full extent of where the contamination “has come to be located” before all necessary studies and remedial work are completed at a site. Indeed, the known boundaries of the contamination can be expected to change over time. Thus, in most cases, it may be impossible to describe the boundaries of a release with absolute certainty.

Further, as noted previously, NPL listing does not assign liability to any party or to the owner of any specific property. Thus, if a party does not believe it is liable for releases on discrete parcels of property, it can submit supporting information to the agency at any time after it receives notice it is a potentially responsible party.

For these reasons, the NPL need not be amended as further research reveals more information about the location of the contamination or release.

The EPA may delete sites from the NPL where no further response is appropriate under Superfund, as explained in the NCP at 40 CFR 300.425(e). This section also provides that the EPA shall consult with States on proposed deletions and shall consider whether any of the following criteria have been met:

In November 1995, the EPA initiated a policy to delete portions of NPL sites where cleanup is complete (60 FR 55465, November 1, 1995). Total site cleanup may take many years, while portions of the site may have been cleaned up and made available for productive use.

The EPA also has developed an NPL construction completion list (“CCL”) to simplify its system of categorizing sites and to better communicate the successful completion of cleanup activities (58 FR 12142, March 2, 1993). Inclusion of a site on the CCL has no legal significance.

Sites qualify for the CCL when: (1) Any necessary physical construction is complete, whether or not final cleanup levels or other requirements have been achieved; (2) the EPA has determined that the response action should be limited to measures that do not involve construction ( e.g., institutional controls); or (3) the site qualifies for deletion from the NPL. For more information on the CCL, see the EPA's internet site at https://www.epa.gov/superfund/construction-completions-national-priorities-list-npl-sites-number.

The Sitewide Ready for Anticipated Use measure (formerly called Sitewide Ready-for-Reuse) represents important Superfund accomplishments, and the measure reflects the high priority the EPA places on considering anticipated future land use as part of the remedy selection process. See Guidance for Implementing the Sitewide Ready-for-Reuse Measure, May 24, 2006, Office of Solid Waste and Emergency Response (OSWER) 9365.0-36. This measure applies to final and deleted sites where construction is complete, all cleanup goals have been achieved, and all institutional or other controls are in place. The EPA has been successful on many occasions in carrying out remedial actions that ensure protectiveness of human health and the environment for current and future land uses, in a manner that allows contaminated properties to be restored to environmental and economic vitality. For further information, please go to https://www.epa.gov/superfund/about-superfund-cleanup-process#reuse.

In order to maintain close coordination with States and tribes in the NPL listing decision process, the EPA's policy is to determine the position of the States and tribes regarding sites that the EPA is considering for listing. This consultation process is outlined in two memoranda that can be found at the following website: https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

The EPA has improved the transparency of the process by which State and Tribal input is solicited. The EPA is using the Web and where appropriate more structured State and Tribal correspondence that: (1) Explains the concerns at the site and the EPA's rationale for proceeding; (2) requests an explanation of how the State intends to address the site if placement on the NPL is not favored; and (3) emphasizes the transparent nature of the process by informing States that information on their responses will be publicly available.

A model letter and correspondence between the EPA and States and tribes where applicable, is available on the EPA's website at https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

In this proposed rule, the EPA is proposing to add three sites to the NPL, all to the General Superfund section. All of the sites in this rulemaking are being proposed for NPL addition based on an HRS score of 28.50 or above.

The sites are presented in the table below.

This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM) in PS Docket Nos. 15-94, FCC 24-23, adopted on February 15, 2024, and released on February 16, 2024. The full text of this document is available at https://www.fcc.gov/document/fcc-proposes-solution-expand-multilingual-emergency-alerts-0.

The EAS is a national public warning system through which TV and radio broadcasters, cable systems, direct broadcast satellite service providers, digital audio radio service providers and other service providers (“EAS Participants”) deliver alerts to the public to warn them of impending emergencies and dangers to life and property. EAS alerts are initiated by local, state and national alert originators (such as State Governor's offices, state and county emergency management authorities, Public Safety Answering Points, state and county fire departments, National Weather Service, etc.). In terms of its architecture, the EAS is comprised of both a broadcast-based, or “legacy,” system and an internet-based, or “Common Alerting Protocol (CAP)” system. The legacy EAS distributes alerts over-the-air from one broadcast station antenna to another. Alerts can also be sent over the internet in CAP format for distribution to EAS Participants via the Federal Emergency Management Agency's Integrated Public Alert and Warning System. Alerts can be initiated in multiple languages in both the legacy and CAP-based EAS architectures.

The Commission has taken various actions over the years to promote multilingual alerting, such as tasking bodies with examining multilingual alerting, issuing occasional guidance on multilingual alerting, and conducting a multilingual alerting workshop to develop and share information on multilingual strategies. The Commission also collects information on EAS Participants' multilingual EAS activities as well as the primary languages spoken in their service areas. Data reported to the Commission suggests that there are a range of non-English languages that are spoken on a primary basis in EAS Participant service areas across the country, but only minimal issuance of EAS messages in languages other than English.

The NPRM seeks to address the shortfall in multilingual alert accessibility by enabling alert originators to issue alerts that have already been translated into non-English languages. Specifically, the NPRM proposes a model for distributing multilingual alerts by which the Commission would create brief, pre-scripted (or “template”) alerts in Arabic, Chinese, French, German, Haitian Creole, Hindi, Italian, Korean, Portuguese, Russian, Spanish, Tagalog, and Vietnamese, as well as in English, for selected emergency events (such as earthquake, wildfire, etc.). The template scripts (in all languages) would be stored in EAS devices to serve as the visual portion of the alert. Translated audio for each template also would be provided as audio files or links to streaming audio. EAS Participants would be required to transmit template alerts using the template audio and script in the template language that corresponds to the EAS Participants' primary language ( i.e., the language of their programming content); where the EAS Participant offers multiple channels, it would transmit on such channels the template audio and script in the template language that corresponds to the programming content on each channel ( e.g., the Spanish language template would be transmitted on channels that provide Spanish language programming, and the English language template would be transmitted on channels that provide English language programming).

The NPRM seeks comment on the proposed template alert distribution model, generally, as well as on wide range of specific technical, operational, cost and implementation timing issues related thereto.

The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for notice and comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” As required by the RFA, the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in the NPRM. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).

In the NPRM, the Commission seeks comment on the efficacy and feasibility of implementing a process for distributing template-based EAS messages in the 13 most commonly spoken non-English languages (according to U.S. Census data)—Arabic, Chinese, French, German, Haitian Creole, Hindi, Italian, Korean, Portuguese, Russian, Spanish, Tagalog, and Vietnamese—as well as in English. The Commission proposes an approach for processing multilingual template EAS alerts that is fairly consistent with existing procedures for processing EAS alerts, and requests comment on specific relevant alerting elements, such as template-specific event codes, template script-based visual messages, and template audio. In a departure from existing procedures, however, the Commission also proposes that EAS Participants would be required to transmit the template alerts in the non-English or English template language corresponds to the programming content of their channel(s); EAS Participants that provide multiple channels of programming (other than satellite-based EAS Participants that transmit on a nationwide basis) would transmit the template visual and audio messages on each channel in the language that corresponds to the programming content carried on such channel.

The Commission also evaluates and seeks comment on whether for EAS templates alerts, it should follow a similar approach to that followed in the Third Report and Order in PS Docket Nos. 15-94, 15-91, 88 FR 86824 (Dec. 15, 2023) (Final rule; correction, 89 FR 2885 (Jan. 17, 2024)), where the Commission directed the Public Safety and Homeland Security Bureau (Bureau) to propose and seek comment on a set of emergency alert messages for support via templates in English, the 13 most commonly spoken languages in the U.S., and to seek comment on the most common messages used by alerting authorities, as well as the most time-sensitive messages which are likely critical for immediate comprehension. Lastly, the Commission explores and requests comment on implementation related matters, including revising or amending the ECIG Implementation Guide, time requirements for manufacturers to develop, test and release any necessary software updates, and whether a template-based alert processing model would present any unique challenges or require modification of EAS Participant transmission processing systems upstream or downstream from the EAS device that would affect implementation timeframes.

The proposed action is authorized pursuant to: sections 1, 2, 4(i), 4(n), 303, 335, 624(g), 706 and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(n), 303, 335, 544(g), 606, and 613.

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.

There are small entities among the current EAS Participants, which include 17,521 radio broadcasters and 8,133 other participants, including television broadcasters, cable operators, satellite operators, and other businesses in the industry segments discussed below, that could be impacted by the changes proposed in the NPRM.

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

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

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

Radio Stations. This industry is comprised of “establishments primarily engaged in broadcasting aural programs by radio to the public.” Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA small business size standard for this industry classifies firms having $41.5 million or less in annual receipts as small. U.S. Census Bureau data for 2017 show that 2,963 firms operated in this industry during that year. Of this number, 1,879 firms operated with revenue of less than $25 million per year. Based on this data and the SBA's small business size standard, we estimate a majority of such entities are small entities.

The Commission estimates that as of September 30, 2023, there were 4,452 licensed commercial AM radio stations and 6,670 licensed commercial FM radio stations, for a combined total of 11,122 commercial radio stations. Of this total, 11,120 stations (or 99.98%) had revenues of $41.5 million or less in 2022, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Database (BIA) on October 4, 2023, and therefore these licensees qualify as small entities under the SBA definition. In addition, the Commission estimates that as of September 30, 2023, there were 4,263 licensed noncommercial (NCE) FM radio stations, 1,978 low power FM (LPFM) stations, and 8,928 FM translators and boosters. The Commission however does not compile, and otherwise does not have access to financial information for these radio 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 radio station licensees, we presume that all of these entities qualify as small entities under the above SBA small business size standard.

We note, however, that in assessing whether a business concern qualifies as “small” under the above definition, business (control) affiliations must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, another element of the definition of “small business” requires that an entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific radio or television broadcast station is dominant in its field of operation. Accordingly, the estimate of small businesses to which the rules may apply does not exclude any radio or television station from the definition of a small business on this basis and is therefore possibly over-inclusive. An additional element of the definition of “small business” is that the entity must be independently owned and operated. Because it is difficult to assess these criteria in the context of media entities, the estimate of small businesses to which the rules may apply does not exclude any radio or television station from the definition of a small business on this basis and similarly may be over-inclusive.

FM Translator Stations and Low Power FM Stations. FM translators and Low Power FM Stations are classified in the industry for Radio Stations. The Radio Stations industry comprises establishments primarily engaged in broadcasting aural programs by radio to the public. Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA small business size standard for this industry classifies firms having $41.5 million or less in annual receipts as small. U.S. Census Bureau data for 2017 show that 2,963 firms operated during that year. Of that number, 1,879 firms operated with revenue of less than $25 million per year. Therefore, based on the SBA's size standard we conclude that the majority of FM Translator stations and Low Power FM Stations are small. Additionally, according to Commission data, as of September 30, 2023, there were 8,928 FM Translator Stations and 1,978 Low Power FM licensed broadcast stations. The Commission however does not compile and otherwise does not have access to information on the revenue of these stations that would permit it to determine how many of the stations would qualify as small entities. For purposes of this regulatory flexibility analysis, we presume the majority of these stations are small entities.

Television Broadcasting. This industry is comprised of “establishments primarily engaged in broadcasting images together with sound.” These establishments operate television broadcast studios and facilities for the programming and transmission of programs to the public. These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA small business size standard for this industry classifies businesses having $41.5 million or less in annual receipts as small. 2017 U.S. Census Bureau data indicate that 744 firms in this industry operated for the entire year. Of that number, 657 firms had revenue of less than $25,000,000. Based on this data we estimate that the majority of television broadcasters are small entities under the SBA small business size standard.

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.

Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, contains a size standard for a “small cable operator,” which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than one percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” For purposes of the Telecom Act Standard, the Commission determined that a cable system operator that serves fewer than 677,000 subscribers, either directly or through affiliates, will meet the definition of a small cable operator based on the cable subscriber count established in a 2001 Public Notice. Based on industry data, only six cable system operators have more than 677,000 subscribers. Accordingly, the Commission estimates that the majority of cable system operators are small under this size standard. We note however, that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Therefore, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

Cable Companies and Systems (Rate Regulation). The Commission has developed its own small business size standard for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Based on industry data, there are about 420 cable companies in the U.S. Of these, only seven have more than 400,000 subscribers. In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Based on industry data, there are about 4,139 cable systems (headends) in the U.S. Of these, about 639 have more than 15,000 subscribers. Accordingly, the Commission estimates that the majority of cable companies and cable systems are small.

Satellite Telecommunications. This industry comprises firms “primarily engaged in providing telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.” Satellite telecommunications service providers include satellite and earth station operators. The SBA small business size standard for this industry classifies a business with $38.5 million or less in annual receipts as small. U.S. Census Bureau data for 2017 show that 275 firms in this industry operated for the entire year. Of this number, 242 firms had revenue of less than $25 million. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 65 providers that reported they were engaged in the provision of satellite telecommunications services. Of these providers, the Commission estimates that approximately 42 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, a little more than half of these providers can be considered small entities.

All Other Telecommunications. This industry is comprised of establishments primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Providers of internet services ( e.g. , dial-up ISPs) or Voice over internet Protocol (VoIP) services, via client-supplied telecommunications connections are also included in this industry. The SBA small business size standard for this industry classifies firms with annual receipts of $35 million or less as small. U.S. Census Bureau data for 2017 show that there were 1,079 firms in this industry that operated for the entire year. Of those firms, 1,039 had revenue of less than $25 million. Based on this data, the Commission estimates that the majority of “All Other Telecommunications” firms can be considered small.

Broadband Radio Service and Educational Broadband Service. Broadband Radio Service systems, previously referred to as Multipoint Distribution Service (MDS) and Multichannel Multipoint Distribution Service (MMDS) systems, and “wireless cable,” transmit video programming to subscribers and provide two-way high speed data operations using the microwave frequencies of the Broadband Radio Service (BRS) and Educational Broadband Service (EBS) (previously referred to as the Instructional Television Fixed Service (ITFS)). Wireless cable operators that use spectrum in the BRS often supplemented with leased channels from the EBS, provide a competitive alternative to wired cable and other multichannel video programming distributors. Wireless cable programming to subscribers resembles cable television, but instead of coaxial cable, wireless cable uses microwave channels.

In light of the use of wireless frequencies by BRS and EBS services, the closest industry with a SBA small business size standard applicable to these services is Wireless Telecommunications Carriers (except Satellite). The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

According to Commission data as December 2021, there were approximately 5,869 active BRS and EBS licenses. The Commission's small business size standards with respect to BRS involves eligibility for bidding credits and installment payments in the auction of licenses for these services. For the auction of BRS licenses, the Commission adopted criteria for three groups of small businesses. A very small business is an entity that, together with its affiliates and controlling interests, has average annual gross revenues exceed $3 million and did not exceed $15 million for the preceding three years, a small business is an entity that, together with its affiliates and controlling interests, has average gross revenues exceed $15 million and did not exceed $40 million for the preceding three years, and an entrepreneur is an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $3 million for the preceding three years. Of the ten winning bidders for BRS licenses, two bidders claiming the small business status won 4 licenses, one bidder claiming the very small business status won three licenses and two bidders claiming entrepreneur status won six licenses. One of the winning bidders claiming a small business status classification in the BRS license auction has an active license as of December 2021.

The Commission's small business size standards for EBS define a small business as an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $55 million for the preceding five (5) years, and a very small business is an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $20 million for the preceding five (5) years. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

Direct Broadcast Satellite (“DBS”) Service. DBS service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic “dish” antenna at the subscriber's location. DBS is included in the Wired Telecommunications Carriers industry which comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution; and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.

The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that 3,054 firms operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Based on this data, the majority of firms in this industry can be considered small under the SBA small business size standard. According to Commission data however, only two entities provide DBS service—DIRECTV (owned by AT&T) and DISH Network, which require a great deal of capital for operation. DIRECTV and DISH Network both exceed the SBA size standard for classification as a small business. Therefore, we must conclude based on internally developed Commission data, in general DBS service is provided only by large firms.

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment. The SBA small business size standard for this industry classifies businesses having 1,250 employees or less as small. U.S. Census Bureau data for 2017 show that there were 656 firms in this industry that operated for the entire year. Of this number, 624 firms had fewer than 250 employees. Thus, under the SBA size standard, the majority of firms in this industry can be considered small.

The proposed changes for which comment is sought in the NPRM, if adopted, would impose new or modified reporting, recordkeeping or other compliance obligations on certain small, as well as other, entities required to distribute EAS alerts to the public ( i.e., “EAS Participants”), and entities that manufacture EAS equipment. The changes likely would require EAS participants to acquire and/or update software, or modify equipment. Specifically, the Commission's proposals could require development and installation in existing EAS equipment Text-to-Speech (TTS) functionalities, audio files, video files, text files and additional memory capacity, displaying EAS messages in a secondary language when requested by an alert originator, using predefined and installed text, audio and video files, that likely would require EAS equipment manufacturers to develop software updates to implement such changes in deployed EAS equipment and EAS equipment in production. EAS Participants would have to acquire, and install such software updates in their EAS devices to enable the operational changes described above.

Without knowing precisely what changes would be required in EAS devices and potentially involved in interconnected transmission processing systems, it is difficult to estimate the total costs of implementing a template alert processing approach in EAS. However, based on the cost analyses discussed in the NPRM, which expects the costs to implement a template-based alerting system model to be similar to the mandatory software updates costs discussed in the Comprehensive Alerts Order, the Commission estimates the total costs for implementing the template alert processing approach discussed in the NPRM would be approximately $12 million. This estimate assumes that template alert processing approach described above can be implemented via a regular software update patch that EAS Participants install in the normal course of business, and is based upon the costs of software installation, labor, and testing required to install the patch developed in the prior proceedings involving similar actions. The estimated $12 million cost includes five hours of software labor time industry-wide, which was multiplied by the 25,519 estimated broadcasters and cable head- ends, plus 2 DBS and 1 SDARS providers, resulting in 127,610 hours of software-related labor time. The hourly wage was calculated using an average hourly wage of $60.07 for software and web developers, programmers, and testers, and factoring in a 45% markup of hourly wage for benefits, and a 5.5% inflation adjustment between 2022 and 2023, resulting in an hourly wage of $91.89. Based on the estimate of 5 hours labor time at a cost of $91.89 per hour (which we round up to $92 per hour), the total estimated labor cost for each EAS Participant to install a software patch that configures the template mechanism in the EAS device is $460, and the aggregate labor cost of approximately $12 million. In addition to the costs accounted for in our estimate, the Commission is mindful that small and other entities may incur other costs to add memory capacity and/or firmware to EAS devices, for downstream transmission processing system changes that may be required, and costs associated with older EAS devices currently in use that may not be able to be updated, or modified to incorporate a template-based alert processing model. Thus, our cost estimate may need to be adjusted.

To help the Commission more fully evaluate the cost of compliance for small entities if we were to adopt the proposed rule changes in the NPRM, the Commission requested comments on the cost implications and cost estimates to implement these proposals, and asked whether there are more efficient and less burdensome alternatives that might achieve the same results, including alternatives specific to smaller entities. At this time the Commission is not currently in a position to determine whether, if adopted, the proposed changes will require small entities to hire attorneys, engineers, consultants, or other professionals to comply. Since small entities have had to implement similar types of changes in prior proceedings, we do not foresee a compliance obligation for these entities to implement a template-based alert processing model will impose a significant burden. However, the Commission expects the information we receive in comments including cost and benefit analyses, to help us identify and evaluate relevant matters for small entities, including compliance costs and other burdens that may result if the changes discussed in the NPRM involving implementation of a template-based alert processing model were adopted.

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

In the NPRM, the Commission's proposals on implementing multilingual template-based alerts in EAS are designed to minimize economic impacts for small entities. The multilingual template approach would entail installing pre-scripted “template” text files in up to 13 non-English languages, and English, along with matching audio files (or possibly URL links to remotely stored audio files or streaming audio), depending upon the EAS Participant's programming content. EAS Participants would be required to transmit template alerts in the language of their programming content, thus, if the only programming content offered by the EAS Participant is in English, that EAS Participant would need only install the English language script and audio file for each template alert adopted; an EAS Participant that offered multiple channels of programming content that included channels carrying programming content in, for example, English, Spanish, German and Creole would install the English, Spanish, German and Creole language scripts and audio files for each template alert adopted. The Commission expects that the operational, and EAS device changes required to implement the template system would entail installing a software update of the kind that is routinely installed by EAS Participants in the normal course of business, which is another cost saving measure for small entities. The Commission also seeks comment on whether streaming template audio from an external source where the template messages would be produced by the Commission, would be a more efficient mechanism for generating the audio message. The template scripts and audio files would be produced by the Commission; small businesses would not be subject to the costs associated with translating the templates and instead would install pre-made templates via software update.

The Commission also sought comment on whether template alerts should be transmitted to the public consistent with the procedures in the ECIG Implementation Guide, and considered, if operationally and technically feasible, whether increasing the existing 2-minute limit for template alerts to accommodate multilingual alert combinations would be a sensible approach to facilitate multilingual alerting. Other template alert transmission alternatives considered by the Commission were: (1) whether to require small and other EAS Participants to transmit templates only in the language that corresponds to the language of the programming content of their channel(s), as a way of reducing the potential programming interruption; and (2) whether, where an EAS Participant's programming content is not in one of the proposed 13 non-English template languages, or English, the English language template script and audio should be transmitted on that channel.

Having data on the various issues the Commission has raised and requested comment on in the NPRM relating to the technical feasibility, costs, benefits and the potential impact of any resulting EAS rule changes, particularly information specific to smaller entities, will assist with the Commission's evaluation of the economic impact on small entities, and help to determine if any rule changes are adopted, how to minimize any significant economic for small entities and identify any potential alternatives not already considered. The Commission expects to more fully consider the economic impact and alternatives for small entities following the review of comments and reply comments filed in response to the NPRM. Moreover, the Commission's evaluation of the comments will shape the final alternatives it considers, the final conclusions it reaches, and the actions it ultimately takes in this proceeding to minimize any significant economic impact that may occur on small entities.

None.

The NPRM may contain potential new or revised information collection requirements. Therefore, we seek comment on potential new or revised information collections subject to the Paperwork Reduction Act of 1995. If the Commission adopts any new or revised information collection requirements, the Commission will publish a notice in the Federal Register inviting the general public and the Office of Management and Budget to comment on the information collection requirements, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection burden for small business concerns with fewer than 25 employees.

Consistent with the Providing Accountability Through Transparency Act, Public Law 118-9, a summary of this document is available on https://www.fcc.gov/proposed-rulemakings.

Pursuant to §§  1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated in the DATES section above. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998), https://transition.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf.

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

Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 4(n), 303, 335, 624(g), 706 and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(n), 303, 335, 544(g), 606, 613, that this Notice of Proposed Rulemaking is adopted.

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

The king and Tanner crab fisheries in the exclusive economic zone of the BSAI are managed under the Crab FMP. The Crab FMP was prepared by the Council under the Magnuson-Stevens Act as amended by the Consolidated Appropriations Act of 2004 (Pub. L. 108-199, section 801). Regulations implementing the Crab FMP, including the CR Program, are primarily located at 50 CFR part 680.

NMFS implemented the CR Program as a limited access privilege program, also called a catch share program, for nine crab fisheries in the BSAI on March 2, 2005 (70 FR 10174). The CR Program FMP has been amended seventeen times since 2005.

Amendments 54 and 55 to the Crab FMP and this proposed rule would revise two provisions of the CR Program to: (1) change active participation requirements for quota share established for CR Program vessel operators and crew, and (2) expand exemptions for custom processing from processor use caps and remove the processor facility use caps.

The CR Program includes nine crab fisheries in the BSAI: Bristol Bay red king crab (BBR) ( Paralithodes camtschaticus ), Western Aleutian Islands (Adak) golden king crab (WAG) ( Lithodes aequispinus )—West of 174° W, Eastern Aleutian Islands (Dutch Harbor) golden king crab (EAG)—East of 174° W, Western Aleutian Islands (Adak) red king crab (WAI)—West of 179° W, Saint Matthew Island blue king crab ( P. platypus ) (SMB), Pribilof Islands blue and red king crab (PIK), Western Bering Sea Tanner crab (WBT) ( Chionoecetes bairdi )—West of 166° W, Eastern Bering Sea Tanner crab (EBT)—East of 166° W, and Bering Sea snow crab (BSS) ( C. opilio ). In this document, the phrases “crab fishery” and “crab fisheries,” quota share (QS),” “individual fishing quota (IFQ)” refer to these fisheries and the associated CR Program, unless otherwise specified.

The CR Program includes QS and processor quota share (PQS) that are revocable privileges and allow the holder to harvest or process a specific percentage of the annual total allowable catch (TAC) in a crab fishery, reduced by the allocation to the Western Alaska Community Development Quota (CDQ) Program and the Adak Community Development Allocation. CDQ entities are allocated 10 percent of the crab TACs and Adak is issued an annual allocation of 10 percent of the WAG TAC to provide BSAI communities the opportunity to participate and invest in the crab fisheries. This annual calculation is explained in regulations at §  680.40(h).

The CR Program initially assigned QS to persons based on their historic participation in one or more of the nine crab fisheries during a specific time period. Under the CR Program, NMFS issued four types of QS: catcher vessel owner (CVO) QS was assigned to holders of License Limitation Program (LLP) licenses who delivered their catch to shoreside crab processors or to stationary floating crab processors; catcher/processor owner (CPO) QS was assigned to LLP license holders who harvested and processed their catch at sea; catcher/processor crew (CPC) QS was issued to operators and crew on board catcher/processor vessels; and catcher vessel crew (CVC) QS was issued to operators and crew on board catcher vessels. Each crab fishing year, which is the period from July 1 of one calendar through June 30 of the following calendar year (§ 680.2), a person who holds QS in one or more of the crab fisheries may receive an exclusive harvest privilege for a portion of the annual TAC of a crab fishery, called IFQ. CVC QS and CPC QS, also called C shares, are described later in this preamble in C Shares and Active Participation Requirements.

A person's QS holdings equates to specific pounds of IFQ that are calculated on an annual basis for use in the corresponding crab fishing year. Each year, a QS holder submits a timely and complete application for a crab IFQ permit in order to receive IFQ for each crab fishery in which the person holds QS (§  680.40(g)). IFQ provides the crab QS holder with an annual allocation of pounds of crab for harvest in a specific crab fishery during the year in which it was allocated. The amount of each annual IFQ allocation is based on the amount of QS held by a person in relation to the total QS pool in a crab fishery (§  680.40(h)). For example, a person's QS equaling one percent of the QS pool in a crab fishery would receive IFQ to harvest one percent of the annual TAC allocated to QS in that crab fishery.

NMFS also issued PQS to CR Program processors based on their historic participation in one or more of the nine crab fisheries during a specific period. Each year, PQS yields an exclusive privilege to process a portion of the IFQ for each crab fishery. This annual exclusive processing privilege is called individual processor quota (IPQ).

Only a portion of the QS issued yields IFQ that is required to be delivered to a processor with IPQ also known as “share matching.” Share matching requires IFQ holders to match up shares with IPQ holders that have available IPQ. CVO QS is subject to designation as either Class A IFQ or Class B IFQ. Ninety percent of the IFQ derived from CVO QS is designated as Class A IFQ, and the remaining 10 percent is designated as Class B IFQ. Class A IFQ must be matched and delivered to a processor with IPQ. Class B IFQ is not required to be delivered to a processor holding IPQ for that fishery. Each year, there is a one-to-one match of the total pounds of Class A IFQ with the total pounds of IPQ issued in each crab fishery.

Annually, QS holders must submit a timely and complete “Application for Annual Crab Individual Fishing Quota (IFQ) Permit” for allocations of IFQ for the upcoming crab fishing year in order to receive IFQ. IFQ applicants must indicate whether or not they are joining a cooperative. Each cooperative submits an annual IFQ application that includes the QS holder's annual IFQ application (or a copy of that application). Because IPQ is not subject to cooperative management, a PQS holder applies for IPQ directly to NMFS, and NMFS issues IPQ directly to the PQS holder. Under regulations at §  680.4(f), all applications for IFQ, IPQ, and cooperative IFQ must be filed with the NMFS Restricted Access Management (RAM) Division by June 15. Unresolved applications at the time of IFQ and IPQ issuance can result in a mismatch of A share IFQ to the IPQ it must be matched with.

Although the crab fishing year begins on July 1 and runs through June 30 of the following calendar year, individual crab fisheries open at various times. For instance, the WAG and EAG crab fisheries typically open on August 1 and the remaining seven crab fisheries open on October 15 or later in the crab fishing year. Therefore, NMFS prioritizes review of IFQ and IPQ applications based on the timing of fishery openings. To aid QS and PQS holders in meeting the June 15 application deadline, NMFS provides application forms on its website (see ADDRESSES ), highlights the application deadline on the website, and sends notices to QS and PQS holders near the end of the crab fishing year reminding them to apply for IFQ or IPQ for the next crab fishing year.

Crab fisheries are also subject to provisions intended to maintain crab processing activity in communities that had historic crab processing activity. Crab fisheries participants, such as catcher vessels, are subject to regional delivery and processing requirements, commonly known as regionalization. Certain crab fisheries, the WBT, EBT, and a portion of the WAG QS, are not regionalized. Crab fisheries are also subject to the right-of-first-refusal (ROFR) provisions included in the CR Program, with the exception of WBT, EBT, WAG and WAI. The ROFR provisions provide certain Eligible Crab communities (ECC) (§ 680.2) with an option to purchase PQS or IPQ that would otherwise be transferred outside of the community holding the ROFR.

The CR Program limits the amount of QS that a person can hold ( i.e., own), the amount of IFQ that a person can use ( i.e., harvest crab), and the amount of IFQ that can be used on board a vessel ( i.e., vessel harvest cap). Similarly, the CR Program limits the amount of PQS that a person, such as a crab processor, can hold ( i.e., own), the amount of IPQ that a person can use ( i.e., process crab), and the amount of IPQ that can be processed or custom processed at a given facility CR Program facility ( i.e., processor cap). These limits are commonly referred to as QS ownership caps and use caps. The CR Program limits on IPQ use and holding and the amount of IPQ that can be processed at a given facility are discussed later in this preamble in the IPQ Use Caps and Custom Processing Arrangements section.

The following sections of this preamble focus on the two proposed actions and describe (1) background information on CVC QS and CPC QS and active participation requirements, the annual IFQ and IPQ application process, IPQ use caps and custom processing arrangements, and the facility use cap; (2) the need for Amendment 54 to the Crab FMP; (3) the need for Amendment 55 to the Crab FMP; and (4) the specific provisions and impacts of this proposed rule.

NMFS initially allocated 3 percent of the QS to individuals holding State of Alaska Commercial Fisheries Entry Commission Interim Use Permits, generally vessel operators, who met specific historic and recent participation requirements in crab fisheries. After the initial issuance of CVC QS and CPC QS (collectively referred to as C shares), individuals may only acquire CVC QS or CPC QS through transfer ( i.e., purchasing QS on the open market). The following CVC QS and CPC QS provisions are the subject of this action.

An individual's CVC QS or CPC QS holdings equate to specific pounds of IFQ that are calculated on an annual crab fishing year basis. By June 15 of each crab fishing year, a CVC QS or CPC QS holder who wishes to participate in that crab fishing year's crab fishery must submit a timely and complete application for a crab IFQ permit in one or more crab fisheries in which that person holds QS.

Both in original CR Program design and subsequently reinforced through Amendment 31 (discussed below) to the Crab FMP (80 FR 15891, March 26, 2015), the Council and NMFS intended that individuals holding CVC QS and CPC QS be active participants in CR Program crab fisheries. Since June 2018 (3 years after implementation of Amendment 31), in order to receive an annual allocation of CVC IFQ or CPC IFQ, the regulations require a CVC QS and CPC QS holder to have met either of the following conditions to demonstrate active participation:

(1) Participated as crew in at least one delivery in a CR Program crab fishery in the 3 crab fishing years preceding the crab fishing year for which the holder is applying for IFQ; or

(2) If the individual was an initial recipient of CVC QS or CPC QS, participated as crew in at least 30 days of fishing in a commercial fishery managed by the of State of Alaska or a U.S. commercial fishery in Federal waters off Alaska during the 3 crab fishing years preceding the crab fishing year for which the QS holder is applying for IFQ (§  680.40(g)(2)).

However, if a CVC QS or CPC QS holder holds QS in only a single crab fishery and that crab fishery is closed to fishing for an entire crab fishing year, NMFS will exclude that year when determining whether the CVC QS or CPC QS holder has satisfied the active participation requirement. If the CVC QS or CPC QS holder does not successfully demonstrate active participation over a 3-year period, the holder will not be issued IFQ for that subsequent crab fishing year.

While a CVC QS and CPC QS holder has 3 years in which to demonstrate active participation in order to receive IFQ, there is a different period of time applied in order for the CVC QS and CPC QS holder to prevent revocation of the QS altogether. In order to retain CVC QS and CPC QS, an individual has 4 crab fishing years to meet these same participation requirements (§  680.40(m)). The Council recommended revocation of CVC QS and CPC QS if the QS holder continues to be inactive as an incentive for CVC QS and CPC QS holders to divest so that the QS is not held by inactive individuals for extended periods of time. CVC QS and CPC QS holders are exempt from meeting the active participation requirements in order to receive CVC IFQ and CPC IFQ under two circumstances. First, CVC QS and CPC QS holders are exempt if they have held QS for less than 3 crab fishing years in order to receive annual allocation of IFQ (§ 680.40(g)(2)(iii)) and less than 4 crab fishing years in order to retain QS (§ 680.40(m)(5)). Second, CVC QS and CPC QS holders are exempt if they have at least 150 fishing days of sea time as part of a harvesting crew in any U.S. commercial fishery and was either an initial recipient of QS or participated as crew in at least one crab delivery in a crab fishery in any 3 of the 5 crab fishing years prior to the CR Program implementation (§ 680.41(c)(1)(vii)(B)).

In summary, and unless exempt from one of the requirements described in the preceding paragraph, if a CVC QS or CPC QS holder fails to satisfy the participation requirements for 3 consecutive crab fishing years, NMFS will send that individual a notice of withholding and will not issue IFQ for the subsequent crab fishing year (§  680.40(g)(3)(i)). If a CVC QS or CPC QS holder fails to satisfy the participation requirements for 4 consecutive crab fishing years and does not divest their CVC QS or CPC QS, NMFS will revoke the QS (§  680.40(m)(4)). CVC QS and CPC QS holders are permitted to lease their IFQ and join cooperatives; however, CVC QS and CPC QS holders must meet the participation requirements in order to receive IFQ and retain QS (§  680.40(m)). Regulations specifying eligibility to receive CVC or CPC QS or IFQ by transfer at § 680.41(c)(2)(ii)(C) would continue to apply and are unchanged by this proposed rule.

Annually, CVC QS and CPC QS holders must submit a timely and complete “Application for Annual Crab Individual Fishing Quota (IFQ) Permit” for allocations of IFQ for the upcoming crab fishing year.

Prior to the fishing season each year, NMFS will alert crab fishery participants about their QS status. NMFS's notification process for CVC QS and CPC QS holders who fail to file their IFQ applications by the June 15 deadline or fail to meet participation requirements are similar. NMFS will issue a Notice of C Share QS Inactivity after reviewing the QS holder's annual crab IFQ permit application if NMFS has determined that the QS holder has failed to meet the participation requirements or failed to file an IFQ application by the June 15 deadline. To ensure correct issuance of IFQ and IPQ (including the prescribed distribution of Class B IFQ derived from PQS holder affiliations), NMFS does not process any transfers of QS and PQS from the date applications for IFQ and IPQ are due (June 15) until issuance of those IFQ and IPQ (§  680.41(b)(1)). Therefore, for crab fisheries that open in October, a CVC QS or CPC QS holder may not have an opportunity to transfer their QS after they receive an official Notice of C Share QS Inactivity.

Further information regarding the period to submit evidence of participation for CVC QS and CPC QS holders who receive a Notice of C share QS Inactivity and the Initial Administrative Determination (IAD) process when submitted evidence fails to demonstrate active participation is available for IFQ withholding under § 680.40(g)(3) and for QS revocations under § 680.43. The process and timelines for the evidentiary period remain unchanged by this proposed rule and are explained in the following paragraphs. There are two different deadlines within which a CVC QS and CPC QS holder may submit evidence of participation if the holder received a notice of inactivity. A CVC QS or CPC QS holder who receives a Notice of C Share QS Inactivity will have 30 days to provide the information demonstrating participation as crew in at least one crab delivery that meets the requirements when the IFQ may be withheld. The CVC QS or CPC QS has holder has 60 days to submit evidence of participation when the QS may be revoked. Following the expiration of the 30- or 60-day evidentiary period, NMFS will then send an Initial Administrative Determination (IAD) to the CVC QS or CPC QS holder if NMFS determines that the submitted evidence fails to demonstrate active participation as crew in at least one crab delivery or if the additional information or evidence is not provided within the time period specified. The IAD will explain the basis for the withholding of IFQ or for the revocation of QS determination.

A CVC QS or CPC QS holder who receives an IAD may appeal under the procedures set forth at 15 CFR part 906. To ensure that access to an annual allocation is not lost should a QS holder prevail on appeal of the IAD, NMFS holds in reserve the amount of IFQ in dispute until final agency action on the IAD. In some instances, final agency action is reached before NMFS issues IFQ for the upcoming crab fishing year, allowing NMFS to either issue the IFQ to the successful appellant or return the IFQ to the general pool for distribution if the IAD was not appealed or the appellant was unsuccessful in the appeal. However, in instances where a final agency action is not reached before NMFS issues IFQ for the upcoming crab fishing year, NMFS must continue to hold the disputed IFQ in reserve due to being unable to recalculate and redistribute pounds of IFQ after the crab season opens. Therefore, if an appeals process continues after issuances of IFQ and the CVC QS or CPC QS holder is not able to provide appropriate evidence to their case, this IFQ could be held in reserve and left unharvested for that year. However, if a CVC QS or CPC QS holder is issued a Notice of C Share QS Inactivity for the withholding of IFQ or revocation of QS, they have no evidence to provide, and their appeal is resolved prior to the issuance of IFQ, those pounds of crab may be able to be redistributed to the other CVC QS and CPC QS holders.

To ensure correct issuance of IFQ and IPQ (including the prescribed distribution of Class B IFQ derived from PQS holder affiliations), NMFS does not process any transfers of QS and PQS from the date applications for IFQ and IPQ are due (June 15) until issuance of those IFQ and IPQ (§  680.41(b)(1)). Therefore, for crab fisheries that open in October, a CVC QS or CPC QS holder may not have an opportunity to transfer their QS after they receive an official Notice of C Share QS Inactivity.

When the Council recommended the CR Program, it expressed concern about the potential for excessive consolidation of QS and PQS, in which too few persons control all of the QS or PQS and the resulting annual IFQ and IPQ. The Council determined that excessive consolidation could have adverse effects on crab markets, price setting negotiations between harvesters and processors, employment opportunities for harvesting and processing crew, tax revenue to communities in which crab are landed, and other factors considered and described in the Program EIS. To address these concerns, the CR Program limits the amount of QS that a person can hold ( i.e., own), the amount of IFQ that a person can use, and the amount of IFQ that can be used onboard a vessel. Similarly, the CR Program limits the amount of PQS that a person can hold, the amount of IPQ that a person can use ( i.e., the amount of crab they can process), and the amount of IPQ that can be processed and custom processed at a given facility. Collectively, these limits are commonly referred to as use caps.

There are two use caps that are the subject of this action. In most of the crab fisheries ( i.e., EAG, WAG, BSS, WAI, and BBR), § 680.42(b)(1) limits a person to hold no more than 30 percent of the PQS initially issued in the fishery, and to use no more than the amount of IPQ resulting from 30 percent of the initially issued PQS in a given fishery. Four crab fisheries do not have PQS use caps. There is a limited use cap exemption for persons receiving more than 30 percent of the initially issued PQS. Exceeding this cap is prohibited under § 680.7(a)(7), which prohibits an IPQ holder from using more IPQ than the maximum amount of IPQ that may be held by that person. Only two PQS holders in the EAG, WAG, BSS, WAI, and BBR crab fisheries currently have holdings greater than 30 percent of the initially issued PQS based on their initial issuance (see Section 3.3.1.2 of the Analysis). With the exception of these PQS holders, no person may use, i.e., process, an amount of EAG, WAG, BSS, WAI, or BBR IPQ greater than an amount resulting from 30 percent of the initially issued PQS for that crab fishery. The rationale for the IPQ use caps is further described in the Program EIS and the final rule implementing the CR Program (70 FR 10174, March 2, 2005).

The CR Program is also designed to keep a person from evading the PQS ownership and IPQ use caps through corporate affiliations or other legal relationships. Section 680.42(b)(3)(iv) provides that IPQ use by an entity (other than a CDQ group) is calculated by summing the total amount of IPQ held by that entity and any of its affiliates. “Affiliation” is defined in §  680.2 to mean a relationship between two or more entities, where one entity directly or indirectly owns or controls 10 percent or more of the other entity. Additional elements of the definition of “affiliation” are described in §  680.2.

Under §  680.7(a)(7), in addition to the IPQ crab held by the owner of a processing facility, any IPQ crab that is custom processed at a facility an IPQ holder owns will also be applied against the IPQ use cap of the facility owner. For the purposes of the regulation, an ownership interest in the facility is attributed to all IPQ holders who have a 10 percent or greater direct or indirect ownership interest in the facility. A custom processing arrangement exists when an IPQ holder has a contract with the owners of a processing facility to have their crab processed at that facility and the IPQ holder does not have an ownership interest in that processing facility or is otherwise affiliated with the owners of that processing facility. In custom processing arrangements, the IPQ holder contracts with a processing facility operator to have the IPQ crab processed according to that IPQ holder's specifications. Custom processing arrangements commonly occur when an IPQ holder does not have an ownership interest in a shoreside processing facility in that region or cannot economically operate a stationary floating crab processor. Thus, custom processing ensures CR Program crab can be processed even when the IPQ holder is remote and unable to process their own IPQ.

Although custom processing would typically be counted in calculating whether an IPQ holder has exceeded a use cap, there are several exemptions for IPQ crab processed under a custom processing arrangement. Shortly after implementation of the CR Program, the Council submitted and NMFS approved Amendment 27 to the Crab FMP (74 FR 25449, May 28, 2009). Amendment 27 was designed to improve operational efficiencies in crab fisheries with historically low TACs or that occur in more remote regions by exempting certain IPQ crab processed under a custom processing arrangement from applying against the IPQ use cap of the owner of the facility at which IPQ crab are custom processed. For ease of reference, this preamble refers to this exemption as a “custom processing arrangement exemption.”

NMFS refers the reader to the preamble to the final rule implementing Amendment 27 to the Crab FMP for additional information regarding the rationale for custom processing arrangement exemptions in specific BSAI crab fisheries (74 FR 25449, May 28, 2009). Additionally, Amendment 47 added EBT and WBT IPQ crab to the custom processing arrangement exemption, allowing a facility to process more crab without triggering the IPQ use cap (81 FR 92697, December 20, 2016). This exemption was necessary to allow all of the EBT and WBT Class A IFQ crab to be processed at facilities currently processing EBT and WBT crab to prevent potential loss of benefits due to forgone crab harvests.

Section 680.42(b)(7) describes the three requirements that must be met for the custom processing arrangement exemption to apply. First, the custom processing arrangement exemption applies to IPQ issued for BSS with a North Region designation, EAG, EBT, PIK, SMB, WAG processed west of 174° W, and WAI or WBT. As described later in this preamble, the custom processing arrangement exemption does not apply to custom processing arrangements to IPQ issued for: BSS with a South region designation; WAG processed east of 174° W; or BBR.

Second, the custom processing arrangement exemption applies only when there is no affiliation between the person whose IPQ crab is processed at that facility and the IPQ holders who own that facility. As noted earlier, “affiliation” is defined at §  680.2 as a relationship between two or more entities where one directly or indirectly owns or controls 10 percent or more of the other entity. Under §  680.42(b)(7)(i), NMFS does not count IPQ crab that are custom processed at a facility as IPQ crab “used” by the owner of that facility when the person whose IPQ crab is being custom processed is not affiliated with an IPQ holder with 10 percent or greater direct or indirect interest in that facility. In such a case, NMFS credits a person who holds IPQ and who owns the processing facility only with the amount of IPQ crab held by that person, or any affiliates of that person, when calculating IPQ use caps.

In summary, these regulations allow processing facility owners who also hold IPQ to use their facility, or facilities, to establish custom processing arrangements with other IPQ holders to process more crab without exceeding IPQ use caps. This increases the amount of crab available for processing at the facility and provides a more economically viable processing operation. These regulations allow more than 30 percent of the IPQ for these crab fisheries ( i.e., BSS with a North Region designation, EAG, EBT, PIK, SMB, WAG processed west of 174° W, and WAI or WBT) to be processed at a facility when the person whose IPQ crab is being processed is not affiliated with an IPQ holder with 10 percent or greater direct or indirect interest in that facility (§ 680.42(b)(7)).

Third, a custom processing arrangement exemption applies if the facility at which the IPQ crab are custom processed meets location requirements specified at § 680.42(b)(7)(ii)(B). Namely, the facility must be located within the boundaries as established by the State of Alaska of a home rule, first class, or second class city in Alaska in existence on the effective date of regulations implementing Amendment 27 (June 29, 2009). Additionally, the facility must be either (1) a shoreside crab processor or (2) a stationary floating crab processor that is located within a harbor and moored at a dock, docking facility, or other permanent mooring buoy, except for if the stationary floating processor is located within the boundaries of the city of Atka. Additional information on the location requirements for these facilities is found in the preamble to the final rule implementing Amendment 27 (74 FR 25449, May 28, 2009).

Finally, there is a prohibition against corporate entities owning a processing facility, if they are not linked through common ownership to a corporation holding IPQ, from processing more than 30 percent of the IPQ crab at the facility. Section 680.7(a)(8) specifically prohibits a shoreside crab processor or a stationary floating crab processor from receiving more than 30 percent of the IPQ issued for a particular crab fishery. Although this regulation was intended to foreclose an IPQ holder from excluding custom-processed crab from its 30 percent use cap calculation by creative corporate structuring, Amendment 27 exempted custom-processed IPQ crab from the exempt crab fisheries under § 680.42(b)(7)(ii)(A).

Regulations implementing Amendment 27 also created a custom processing exemption for IPQ crab subject to ROFR provisions (§  680.42(b)(7)(ii)(C) and section 3.2.5 of the Analysis). This custom processing exemption applies to IPQ crab from any of the crab fisheries and is triggered when the IPQ crab is derived from PQS that is subject to a ROFR, is transferred to another person who is not the initial recipient of the PQS, and who is located within the boundaries of the ECC for which the PQS is, or was, designated in the ROFR.

In addition to exempting custom processing from counting towards the IPQ use caps, Amendment 27 also prohibited a person from processing more than 60 percent of the IPQ issued for the WAI or EAG crab fisheries in a crab fishing year at a single processing facility east of 174° W. This provision applies to all IPQ crab processed at a shoreside crab processor or stationary floating crab processor, and does not exempt IPQ crab that are delivered under a custom processing arrangement from IPQ use cap calculations. This provision was intended to limit the potential consolidation of IPQ ownership that could occur under the custom processing exemptions and to prevent excessive consolidation of the number of processors available to harvesters, a scenario that is more likely in these fisheries compared to the other fisheries with custom processing exemptions given their historically relatively small TACs compared to other crab fisheries.

Amendment 54 and this proposed rule are intended to provide CVC QS and CPC QS holders greater flexibility in meeting participation requirements and more clarity as to what those requirements are. Amendment 54 would modify participation requirements for all CVC QS and CPC QS holders by instituting the following: (1) restarting the 3- and 4-year rolling timeframes for meeting active participation requirements for all CVC QS and CPC QS holders, (2) authorizing NMFS to reissue QS that was revoked between July 1, 2019 and the effective date of a final rule implementing Amendment 54, (3) standardizing and expanding participation requirements by allowing all CVC QS and CPC QS holders—both initial recipients and new entrants—to participate in 30 days of fishing in any commercial fishery off Alaska including crew on a tender vessel, (4) clarifying that the requirement to participate as crew in at least one crab delivery also includes participating in the fishing trip that results in a crab landing, and (5) clarifying the exemption for CVC QS or CPC QS holders who hold QS exclusively in closed crab fisheries applies to more than just a single closed crab fishery. The purpose of Amendment 54 and the proposed rule is to provide CVC QS and CPC QS holders greater flexibility in maintaining and meeting active participation requirements for the annual issuance of IFQ and the retention of QS due to low crab abundance and reduced crew opportunities. Since 2020, there have been limited opportunities for crew to participate actively in the crab fisheries because of low crab abundance and because of the impacts of the COVID-19 pandemic.

On July 15, 2022, NMFS issued an emergency rule (87 FR 42390) to provide CVC QS and CPC QS holders 1 additional year to demonstrate active participation in any crab fishery for receiving IFQ or maintaining CVC QS or CPC QS, regardless of participation status in the preceding 4 years. At the same time the Council requested that emergency action, the Council also initiated an analysis of alternatives for changes to CVC QS and CPC QS participation requirements to address the reduced crew opportunities due to the COVID-19 pandemic and unforeseen decline in abundance of crab in the BSS fishery.

As described in section 3.3.1 of the Analysis prepared for Amendment 54, the crab fisheries are currently in a state of flux with historical and recent closures continuing for a number of crab fisheries that have been declared overfished or in the process of rebuilding (Pribilof Islands blue king crab, SMB, and BSS) and are experiencing variable stock health dynamics impacted by environmental change ( e.g., BBR, WBT, EBT, and BSS). Only two crab fisheries are considered unaffected by recent declines in abundance ( e.g., WAG and EAG).

The Council and NMFS established CVC QS and CPC QS, which are transferrable with participation requirements, as a mechanism to keep a portion of the crab QS in the hands of active fishery participants and provide opportunities for new entrants into the fishery. In developing Amendment 54, the Council recognized that some fishery participants struggled to maintain active participation during the COVID-19 pandemic and recent closures of crab fisheries due to low abundance, but the Council wanted to retain an active participation requirement. This action provides additional flexibility to existing CVC QS and CPC QS and continues to ensure that CVC QS and CPC QS is held and the associated IFQ is used by active fishery participants.

The Council recommended and NMFS supports revisions to the active participation requirements due to the variability in crab stock abundance to allow CVC QS and CPC QS holders greater flexibility in meeting participation requirements for crab fisheries in order to receive annual allocation of IFQ and retention of QS, while clarifying the active or “at-sea” participation requirement. The Council recommended continued support for designating CVC QS and CPC QS for active participants in the crab fishery and encouraged those who are no longer active in the crab fishery to divest their CVC QS or CPC QS to maintain opportunity for new entrants to obtain QS. Re-implementation of the active participation requirements would provide a new opportunity for CVC QS and CPC QS holders to demonstrate active participation before any QS holder would have their QS revoked. Furthermore, this proposed rule would revise CVC QS and CPC QS holder participation requirements so that the requirements are the same for both initial recipients and new entrants.

Amendment 55 and this proposed rule are intended to improve crab processor efficiency by (1) exempting custom processing activity for the remaining three crab fisheries from processor use caps, and (2) removing the facility use cap. Amendment 55 would exempt custom processing of BSS IPQ with a south region designation, BBR IPQ, and WAG IPQ processed east of 174° W from being counted against a processor IPQ use cap. By exempting custom processing in these three crab fisheries, this action would align the application of the IPQ use caps across all crab fisheries. Further, Amendment 55 would remove the CR Program processor facility use cap applicable to the EAG and WAI fisheries. The EAG and WAI crab fisheries are the only two crab fisheries subject to a cap on the amount of IPQ that can be used as a facility (as distinguished from the IPQ use caps, which are specific to the IPQ holder). Processors in all crab fisheries would continue to be subject to the PQS use caps specified at § 680.42(b)(1).

Amendment 55 and this proposed rule are intended to provide additional flexibility for IPQ holders, processing facilities, and harvesters that participate in the affected crab fisheries. Many IPQ holders do not own a processing facility and rely on custom processing agreements with plants to process crab. Exempting custom processing from counting towards the cap on the amount of crab that an IPQ holder can process provides IPQ holders with a potentially larger market ( i.e., additional crab processing facilities) to custom process their crab.

The Council and NMFS recognize that the existing crab processing facility and IPQ use caps were designed and implemented when crab TACs in all crab fisheries were at a much higher level than recent years. Without the proposed action, four unaffiliated crab processing facilities would need to operate to fully process the crab fisheries. This is due to share matching requirements in order to custom process the crab in the BBR, south designated BSS, and WAG east of 174° W. Given the high costs of operating a processing facility in the BSAI, this is not economically viable when very low amounts of crab are available. Amendment 55 would allow for more custom processing opportunities but would also benefit the processing sector overall by not forcing more facilities than are needed to process relatively small TACs.

Amendment 55 would also provide an exemption to a regulatory constraint, which is expected to benefit participants in the BBR and WAG crab fisheries by expanding opportunities to fully harvest allocated QS. The proposed action is expected to improve processing efficiency in the fisheries. Additionally, the proposed action is expected to minimize processing costs and avoid unnecessary duplication by simplifying regulations and reducing resources needed to monitor and enforce the use caps. The proposed action would assist CR Program harvesters by ensuring that all available A share IFQ harvested crab have an opportunity to be processed rather than leaving a portion of the A share IFQ stranded if there are not enough processors operating, which could also benefit communities with processing facilities. Amendment 55 does not impact B share IFQ due to not having share matching requirements and can deliver to any registered crab receiver (RCR).

The 30 percent PQS holding cap specified in regulations at § 680.42(b)(1)(i) would continue to apply to all crab fishery processors and is not modified by the proposed rule. NMFS expects that additional processors would enter the crab fisheries in years where the crab TACs are sufficiently high to make processing activity economically viable.

This proposed rule would make several changes to regulations at 50 CFR part 680 to implement Amendments 54 and 55. Specifically, the following proposed changes are described in the sections below: (1) restart active participation requirements and reissue QS that NMFS revoked between July 1, 2019 until the final rule implementing Amendment 54 is implemented; (2) standardize participation requirements for all CVC QS and CPC QS holders, both initial issues and new entrants, and expand the 30-day participation requirement to include serving as crew on a tender vessel; (3) clarify crew participation during at least one fishing trip; (4) adjust exemptions for CVC QS and CPC QS holders with QS exclusively in closed crab fisheries; (5) expand exemptions for custom processing from processor use caps; and (6) remove the facility use cap.

This proposed rule revises § 680.40 to modify participation requirements that a CVC QS or CPC QS holder must satisfy to be eligible to receive an annual allocation of IFQ and retain QS. First, under proposed regulations at § 680.40(g)(2) and (m)(1), the timing for when the active participation requirement would apply is restarted. The consecutive 3- and 4-year rolling requirement would apply starting on the date the final rule implementing Amendment 54 goes into effect. A CVC QS or CPC QS holder would then have 3 years to demonstrate participation in order to receive their allocation of IFQ and 4 years to demonstrate participation to retain QS and avoid QS revocation (§ 680.43).

This proposed rule adds a regulation at § 680.40(m)(6) to allow a CVC QS or CPC QS holder to request NMFS to reissue any QS that NMFS revoked from July 1, 2019, through the date a final rule implementing Amendment 54 goes into effect. In order to initiate reissuance of previously revoked CVC QS or CPC QS, NMFS would add a field on the annual application for a crab IFQ permit to be available for two application cycles. This would provide approximately 1 year, to encompass two application cycles (due on June 15 each year), for an individual to request reissuance of their revoked CVC QS or CPC QS.

For example, if this action were approved, and a final rule was effective on June 1, 2024, which is prior to the application deadline of June 15, 2024, for the 2024/2025 crab fishing year, QS that had been revoked between July 1, 2019, and June 1, 2024, would be reissued to those CVC QS and CPC QS holder who applied for reissuance as part of the annual application for crab IFQ between the application period of June 1, 2024, through June 15, 2025. This would provide CVC QS and CPC QS holders two annual crab IFQ application opportunities to apply for QS reissuance. Active participation requirements would restart for the 2024/2025 crab fishing year and CVC QS and CPC QS holders would not need to demonstrate active participation until the 2027/2028 crab fishing year for annual issuance of IFQ and in 2028/2029 for retention of QS. In order to receive IFQ for the 2027/2028 crab fishing year, a CVC QS or CPC QS holder would have to satisfy the participation requirements during the 2024/2025, 2025/2026, or 2026/2027 crab fishing years. For retention of QS in the subsequent 2028/2029 crab fishing year, a CVC QS or CPC QS holder would have to satisfy participation requirements during the 2024/2025, 2025/2026, 2026/2027, or 2027/2028 crab fishing years.

This proposed rule would modify regulations at § 680.40(g)(2) and (m)(2) to remove the distinction between initial recipients and new entrants. This proposed rule would expand and clarify participation requirements for new entrants to match the requirements of initial recipients where all CVC QS and CPC QS holders can satisfy the participation requirements by either participating in at least one fishing trip with a delivery of crab in any crab fishery or by participating in a combination of crew activity on a fishing vessel or tender vessel in State of Alaska or Federal commercial fisheries in waters off Alaska for at least 30 days during the crab fishing year immediately preceding the crab fishing year for which the CVC QS or CPC QS holder is filing an annual application for a crab IFQ permit.

This proposed rule would also clarify the standard for meeting participation requirements by participating in one crab delivery to also include the fishing trip that results in a delivery of crab in any crab fishery. This proposed rule would modify the definition of “fishing trip” to specify that the definition is also applicable for purposes of participation requirements at § 680.40(g) and (m).

This proposed rule would expand the closed fishery participation exemption for CVC QS and CPC QS holders who only hold QS in closed crab fisheries. This exemption would apply when a CVC QS or CPC QS holder holds only QS in one or more crab fisheries and all those crab fisheries are closed to fishing for an entire crab fishing year. In that situation, NMFS will exclude that crab fishing year when determining if the individual has satisfied the participation requirement for annual issuance of IFQ and revocation of QS. An individual with CVC QS or CPC QS in multiple crab fisheries would have to satisfy the participation requirement for any of the crab fisheries that are open and in which they hold QS.

This proposed rule would revoke regulations at § 680.7(a)(9) to remove the cap on shoreside crab processors and stationary floating crab processors east of 174° W from processing more than 60 percent of the IPQ issued in the EAG and WAI crab fisheries. The EAG and WAI crab fisheries are the only two crab fisheries subject to a 60 percent cap on the amount of IPQ that can be used at a facility. This change would remove this restriction that is specific to only the EAG and WAI crab fisheries and help ensure that allocated IFQ would not be stranded if there is not more than one processing facility operating for each of these crab fisheries.

This proposed rule would make numerous regulatory changes to exempt custom processing of BSS IPQ with a south-region designation, BBR IPQ, and WAG IPQ processed east of 174° W from the IPQ use caps and would simplify regulations pertaining to facility use caps associated with custom processing.

First, this proposed rule would revise regulations at § 680.42(b) to exempt custom processed crab from the IPQ use cap. Amendment 55 would add the BSS, BBR, and WAG crab fisheries to the list of fisheries in which custom processing is exempt from the IPQ use cap. This would mean that custom processing would only count toward the IPQ use cap under rare situations involving processing outside of specific geographic boundaries. As such, this proposed rule would remove regulations at § 680.42(b)(7) and (8), the circumstances under which custom processing does not count in calculating IPQ use caps, and would revise remaining regulations (included at § 680.42(b)(1) through (9) of this proposed rule) to specify how IPQ use caps shall be calculated under the proposed action.

To simplify the application of the IPQ use cap, this proposed rule would modify the definition of “custom processing” at § 680.2 to specifically define ownership interest consistent with terminology used by in regulations governing the previous IPQ use caps exemptions at §§ 680.7(a)(7) and 680.42(b)(7). This proposed rule would then insert the term “custom processing” at § 680.42(b) to clarify that IPQ crab that is custom processed, as that term is defined under § 680.2, in any crab fishery would no longer count towards IPQ use caps. This proposed rule also would revise § 680.7(a)(7) to add a reference to § 680.42(b) to indicate where the reader can find the calculation of IPQ crab used for use caps.

This proposed rule would also remove paragraph § 680.7(a)(8) that prohibits using a corporate form to circumvent the IPQ use cap by arranging custom processing. This regulation meant that IPQ crab processed under a custom processing arrangement would not apply against the limit on the maximum amount of IPQ crab that can be processed at a facility in which no IPQ holder has a 10 percent or greater ownership interest. But this proposed action would exempt custom processing in all fisheries from counting towards the IPQ use cap if processed within certain geographic boundaries. Thus, the prohibition at § 680.7(a)(8) is no longer needed and this proposed rule would remove it.

Additionally, this proposed rule would modify § 680.42(b)(1) to specify that a person may not use IPQ in excess of the amount of IPQ resulting from the PQS held by that person unless that person received an initial allocation of PQS exceeding the 30 percent holding cap, is subject to an exemption specified at § 680.4(p), or is used for custom processing at a facility within specific boundaries identified under Amendment 27 as specified at proposed § 680.42(b)(1)(ii)(C)( 2 ).

This proposed rule would also modify § 680.42(b)(2) introductory text and subparagraph (ii) to make technical corrections to the regulations and correctly reference the proposed custom processing exemption.

Regulations at § 680.42(b)(3) through (6) would be reorganized for improved clarity and understanding and included in the proposed regulations as paragraphs § 680.42(b)(3) through (9). The substance of these reorganized regulations at § 680.42(b)(3) through (6) has not been modified, but rather renumbered and edited for clarity.

This proposed rule also includes various technical edits and corrections to the regulations to remove typographical errors and improve their clarity.

At § 680.41(j), this proposed rule would correct a typographical error to change the word “and” to “an”.

At § 680.42(a)(3)(i), this proposed rule would strike the phrase “more than”, which is redundant of the phrase “in excess of”, which precedes it.

At § 680.42(b)(1)(i), this proposed rule would replace the phrase “more than” with the phrase “PQS in excess of” to make the language consistent with similar language at § 680.42(b)(1)(ii) that applies to use of IPQ.

At § 680.42(b)(2), this proposed rule would replace the phrase “more than” with the phrase “IPQ in excess of” to make the language consistent with similar language at § 680.42(a).

Pursuant to sections 304(b)(1)(A) and 305(d) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with Amendments 54 and 55, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that the proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The factual basis for this determination is as follows: A description of the proposed rule, why it is being considered, and the objectives of, and legal basis for this proposed rule are contained at the beginning of this the proposed rule in the preamble and in the summary section of the preamble. The Magnuson-Stevens Act provides the statutory basis for this rulemaking. No duplicative, overlapping, or conflicting Federal rules have been identified.

The RIRs prepared for Amendments 54 and 55 contain a description of the purpose and need for the proposed actions, the statutory authority for the proposed actions, and a description of the alternatives, including a description of the status quo. Entities that would be directly regulated by this proposed rule include (1) 13 IPQ holders (2) 6 crab processing facilities (3) 160 CVC QS and CPC QS holders.

The proposed regulatory changes to implement Amendment 55 are intended to increase operational efficiency for these entities by removing the facility use cap for IPQ and/or removing custom processing from the accounting of IPQ caps for certain crab species when processed east of 174° W. Therefore, it is expected that the proposed action would have a beneficial on small entities.

The proposed regulatory changes to implement Amendment 54 are intended to respond to the recent combined impacts of the COVID-19 pandemic and the recent and substantial decline in crab abundance and fishery closures which have substantially reduced opportunities for crew to participate in crab fisheries. The proposed action also addresses concerns about future diminished opportunities for crew if crab stocks remain low. Therefore, the proposed actions are intended to provide more flexibility (relative to status quo) for CVC QS and CPC QS holders when there are diminished opportunities for crew positions on crab fishery vessels. Therefore, this action is expected to benefit CVC QS and CPC QS holders relative to the no action alternative.

The costs and benefits of the proposed action relative to the status quo are described qualitatively and quantitatively. The RIRs also provide information about potential indirect effects and distributional effects of the alternatives, and a description of the net benefits to the Nation under the preferred alternative. Therefore, the RIRs conclude that the proposed actions would result in a net benefit to the Nation.

The analysis was developed through the Council process from 2021 through 2023. The information presented in the analyses was developed through the Council process, with numerous opportunities for individuals and entities that may be affected by the proposed action to provide input about potential economic impacts. CR participants provided extensive input to the Council and its advisory bodies on the anticipated impacts of the proposed action.

The proposed provisions provide flexibility to all directly regulated entities. Therefore, no directly regulated entities are expected to be adversely impacted by the proposed action.

The information provided above supports a determination that the actions would not have a significant economic impact on a substantial number of small entities. Because the proposed rule, if implemented, is not expected to have a significant economic impact on any small entities, an initial regulatory flexibility analysis is not required and none has been prepared.

This proposed rule contains a collection-of-information requirement subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). This rule revises the existing requirements for the collection of information OMB Control Number 0648-0514 (Alaska Region Crab Permits). Because of a concurrent action for 0648-0514, the revision to that collection of information for this proposed rule will be assigned a temporary control number that will later be merged into 0648-0514.

This collection would be revised to add an option to the Application for Annual Crab IFQ Permit for a CVC QS and CPC QS holder to request reissuance of previously revoked CVC QS or CPC QS. This revision does not change the number of respondents, responses, burden hours, or burden cost for this application. The public reporting burden for the Application for Annual Crab IFQ Permit is estimated to average 2.5 hours, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Public comment is sought regarding the following: whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Submit comments on these or any other aspects of the collection of information at https://www.reginfo.gov/public/do/PRAMain.

Notwithstanding any other provisions of the law, no person is required to respond to, nor shall any person by subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

For the reason set out in the preamble, NMFS proposes to amend 50 CFR part 680 as follows:

The addition and revision read as follows:

The revisions and additions read as follows: