Abbreviations and Terms Used in This Document ALJ—Administrative Law Judge ALPA—Air Line Pilots Association, International AOPA—Aircraft Owners and Pilots Association ATSA—The Aviation and Transportation Security Act of 2001 CFR—Code of Federal Regulations DHS—Department of Homeland Security FAA—Federal Aviation Administration FRAP—Federal Rules of Appellate Procedure Pt.—Part §—Section SES—Senior Executive Service SL—Senior Level SSI—Sensitive Security Information Stat.—United States Statutes at Large Subt.—Subtitle TSA—Transportation Security Administration TSOB—Transportation Security Oversight Board U.S.C.—United States Code Table of Contents I. Background and Purpose II. Summary of Comments on the IFR III. Discussion of the Final Rule and Summary of Changes IV. Regulatory Analyses A. Executive Order 12866 and Executive Order 13563 B. Regulatory Flexibility Act Assessment C. Unfunded Mandates Reform Act of 1995 D. Small Business Regulatory Enforcement Fairness Act of 1996 E. Executive Order 13132 F. Executive Order 12988, Civil Justice Reform G. Paperwork Reduction Act Assessment I. Background and Purpose A. Statutory History

Section 601(a) of the Vision 100—Century of Aviation Reauthorization Act (Vision 100 Act), Public Law 108-176, 117 Stat. 2490, 2561 (Dec. 12, 2003) (codified at 49 U.S.C. 46111(a)) requires the FAA Administrator to issue an order amending, modifying, suspending, or revoking all or part of an FAA certificate issued under title 49 of the U.S. Code when notified by the Administrator of the TSA that the certificate holder poses, or is suspected of posing, a risk of air piracy or terrorism or a threat to airline or passenger safety. The FAA Administrator may also hold in abeyance or deny an application for a certificate based on a Determination of Security threat, in accordance with 14 CFR 3.205. Following the FAA's issuance of such an order, abeyance, or denial, an adversely affected U.S. citizen may challenge the TSA's determination that they pose or are suspected of posing such a risk (called a Determination of Security Threat) at a hearing on the record before an ALJ. 49 U.S.C. 46111(b)-(c). Any party to the proceedings before the ALJ may appeal the ALJ's decision to a Review Panel appointed by the TSOB. 49 U.S.C. 46111(d). Any person who is substantially affected by the TSOB Review Panel's action may seek review by an appropriate U.S. Court of Appeals. 49 U.S.C. 46110(a) and 46111(e). The TSA Administrator may seek such review if it is determined that the Review Panel's action will have a significant adverse impact on carrying out 49 U.S.C. Subt. VII, Pt. A, which establishes Federal programs to ensure safety in aviation and air commerce.

Section 102(a) of the Aviation and Transportation Security Act of 2001 (ATSA), Public Law 107-71, 115 Stat. 597, 604 (Nov. 19, 2001) (codified at 49 U.S.C. 115) established the TSOB. The Secretary of Homeland Security, or the Secretary's designee, serves as the Chairperson of the TSOB. 49 U.S.C. 115(b)(2). The other statutory members of the TSOB are the Secretaries of Transportation, Defense, and the Treasury, the Attorney General, the Director of National Intelligence, or their designees, and one individual appointed by the President to represent the National Security Council. 49 U.S.C. 115(b)(1).

When the TSOB receives an appeal from an ALJ's decision regarding a TSA Determination of Security Threat, it must establish a Review Panel to review the decision. 49 U.S.C. 46111(d). The members of the Review Panel may not be TSA employees, and they must hold an appropriate security clearance. 49 U.S.C. 46111(d)(1) and (2). A TSOB Review Panel may affirm, modify, or reverse the ALJ's decision. 49 U.S.C. 46111(d)(3).

Following the terrorist attacks of September 11, 2001, Congress recognized the need for an entirely new and comprehensive regulatory regime focused on securing the transportation system. Congress enacted many laws requiring TSA to conduct security threat assessments (STAs) of individuals who perform security functions in or have access to the transportation system. At present, TSA conducts STAs for more than 28 million individuals every day. The vetted populations include airport workers, airline employees, air cargo handlers, FAA certificate holders, individuals seeking airspace waivers, drivers hauling hazardous materials in commerce, merchant mariners and longshoremen working in ports and on vessels, trusted travelers, flight students, chemical facility employees, and others. In accordance with governing statutes and fundamental principles of due process, TSA developed these vetting programs to collect ample biographic information to verify the identity of the applicant, conduct informed evaluations of the vetting results, and provide robust redress to protect against incorrectly designating an individual as a threat to national or transportation security, or of terrorism.

Of the approximately 30 million individuals TSA vets daily, over 5 million hold FAA certificates. To conduct this vetting, TSA uses the biographic information the FAA collects from applicants and certificate holders and compares it against several intelligence and law enforcement databases. As part of this vetting, TSA is required to ensure that individuals “are screened against all appropriate records in the consolidated and integrated terrorist watchlist maintained by the Federal Government before being certificated” by the FAA. 1 TSA's intelligence analysts review any derogatory information generated during the vetting to determine whether the individual poses or is suspected of posing a security threat. If TSA believes the individual poses, or is suspected of posing, a security threat, TSA issues a Determination of Security Threat, notifies the FAA of the Determination of Security Threat, and asks the FAA to amend, modify, suspend, or revoke the individual's certificates. Once the FAA takes action, the individual, if a U.S. citizen, may appeal the Determination of Security Threat underlying FAA's action to an ALJ.

The ALJs who hear these appeals are experienced judges who are frequently called upon to review TSA's eligibility determinations for other transportation worker populations and who possess the appropriate security clearance to review classified or otherwise protected information and evidence. The ALJs receive and assess information and evidence; hold and regulate the course of hearings; dispose of procedural motions; and examine witnesses. The ALJ conducts a de novo hearing, reviews the evidence and testimony presented (including the information on which TSA based its Determination of Security Threat), and issues a decision based on that review. Either party may appeal the ALJ's decision to the TSOB Review Panel.

Following the first FAA certificate appeal to the TSOB Review Panel in 2010, the TSOB Chairperson issued procedures in May 2011 for use in all such appeals. DHS provided these written procedures directly to litigants when they file an appeal of the ALJ's decision. All of the 2011 procedures governing briefs and motions, the conduct of proceedings, the treatment of sensitive documents, and the standard of review were closely aligned with the Federal Rules of Appellate Procedure (FRAP) and administrative practice procedures. The 2011 procedures ensured that parties have adequate time to seek review, prepare briefs, respond to opposing party assertions, request extensions of time, and request hearings. The 2011 procedures established the standard of review, substantial evidence on the record, for the Review Panel to apply when reviewing evidence and reaching a decision.

DHS determined it would be best to codify the appeal procedures to provide full transparency and consistency of process for all potential litigants and Review Panel members, and published the IFR in August 2022. 2 DHS based this decision on the likelihood of increasing numbers of appeals and to ensure all TSOB Review Panels apply consistent standards and procedures. 3

Requests for review of Determinations of Security Threat are on the rise. From 2011 to November 30, 2021, the TSOB received only one additional appeal, which was resolved by decision of the TSOB Review Panel on September 23, 2021. However, currently there are four Determinations of Security Threat regarding U.S. citizens pending review by an ALJ, and an additional six U.S. citizens have timely initiated the redress process in response to a Determination of Security Threat. Overall, TSA's caseload with respect to Determinations of Security Threat increased by over 100% between Fiscal Year 2019 and Fiscal Year 2022, in significant part due to rising investigations of domestic terrorism-related cases in which affected certificate holders may seek review of Determinations of Security Threat by an ALJ and then the TSOB. Given this trend, codifying the procedures helps ensure optimal transparency in the process for affected individuals, clear understanding of the procedures, and consistency in the application of the standards and procedures.

Under the Administrative Procedure Act (APA), rules involving “agency organization, procedure, or practice” like the TSOB Review Panel procedures, do not require advance notice and the opportunity to comment before becoming final. 4 The IFR was procedural within the meaning of the APA because it merely codified current practice and did not alter the rights of or substantive standards applied to an individual appearing before the TSOB Review Panel, such as whether the individual poses or is suspected of posing a threat. Nevertheless, DHS agrees with the views of the Administrative Conference of the United States (ACUS) that public comment serves a critical role in the development of sound policy, and that agencies should solicit comment when it is possible to do so. 5 Consequently, DHS requested comments on the IFR from the public.

The IFR generally codified the written 2011 TSOB Review Panel procedures with certain updates and clarifications where necessary for full transparency. The rule addressed appeals to the TSOB Review Panel from an ALJ's decision concerning TSA's Determination of Security Threat and did not apply to other matters that the TSOB oversees. The IFR established requirements for TSOB Review Panel members and the docket clerk; the standard of review applicable to appeals; timelines for appeals and responses; filing and supplementing the record; entry of appearance; motions, briefs, and the administration of hearings; procedures for the use of classified materials, sensitive security information, and other protected information; and the effect of the TSOB Review Panel action. 6

DHS received comments on the IFR from two organizations: the Air Line Pilots Association, International (ALPA) and the Aircraft Owners and Pilots Association (AOPA). ALPA represents the safety and security interests of over 66,000 professional airline pilots flying for 41 airlines in the United States and Canada. AOPA represents 300,000 members who operate 85% of all general aviation aircraft operating in the United States. Over 72,000 members of AOPA participate in AOPA's Pilot Protection Services, which provides legal services to individuals who are subject to FAA and TSA enforcement actions. The comments relate to some general matters and several specific topics, including the use of electronically/electronic service for service of documents; standard of review the TSOB Review Panel applies; process for non-governmental counsel to have access to protected information; precedential nature of TSOB Review Panel decisions; publication of TSOB Review Panel decisions; and the treatment of constitutional issues.

ALPA suggested that DHS include in this response to comments a full discussion of the procedures that currently apply to the appeal of an FAA certificate holder to an ALJ following revocation, suspension, or modification of the certificate. TSA provides each affected certificate holder actual notice of those procedures by letter when the certificate action is taken by the FAA. Also, TSA is in the process of amending its regulations to codify those procedures in 49 CFR part 1540. Because this rule concerns procedures applicable to an appeal to a TSOB Review Panel, we believe a full discussion of the current appeal process to an ALJ in this document is unnecessary and may be confusing to the public.

AOPA encourages DHS to periodically reexamine and update these regulations. For any future amendments to these rules, AOPA also encourages DHS to continue its practice of seeking public comment on procedural rules. DHS and its components periodically review all regulations in accordance with Executive Orders  7 and sound regulatory policy. This review may result in changes to existing rules, the development of new standards, or terminating standards that are no longer necessary. DHS will follow that same process with this rulemaking and revise the language as necessary.

AOPA supports filing and serving documents electronically, as permitted by § 126.13 of this rule, and suggests that the rule also address how to consent to electronic service, how to establish evidence of electronic service, and how to compute time when documents are filed or served electronically. Also, AOPA recommends that the rule establish a presumption of consent to future electronic service when a document is transmitted electronically and there is evidence to confirm its successful transmission. AOPA encourages the TSOB Review Panel to consider providing automated receipts in response to electronic filings made to the TSOB Docket Clerk. AOPA suggests adding the following language to § 126.13(b): `A party may consent to service via electronically/electronic service by filing a document expressly stating such a preference with the TSOB Docket Clerk and serving a copy on all other parties.' AOPA asks DHS to adopt language from the Federal Rule of Appellate Procedure (FRAP) 26, Computing and Extending Time, for use in the procedures before the TSOB Review Panel.

DHS Response: DHS agrees with adding the suggested language to § 126.13(b) to provide a method by which parties may consent to service of documents electronically. Therefore, we have revised the text in § 126.13(b) to state that a party may consent to electronic service by filing a document that expressly states such a preference with the TSOB Docket Clerk, and serving a copy on all other parties.

DHS is not inclined at this time to establish a presumption of consent to future electronic service when a document is transmitted electronically and there is evidence to confirm its successful transmission. To the extent we have individuals who initiate an appeal without counsel and use electronic means to do so, they may have no knowledge of the presumption this establishes for future service of documents. Generally, parties should knowingly and affirmatively consent to changes in service, not by presumption. Moreover, the new language in § 126.13(b) creates a simple process by which individuals may elect to establish a presumption of consent to future electronic service at any time.

DHS is not inclined to revise the rule text identifying the filing date and computation of time for documents filed through electronically/electronic service. The existing rule text in § 126.13(c) establishes that service of all documents, regardless of transmittal method, occurs on the date on which the TSOB Docket Clerk receives the document. We believe the Docket Clerk is in the best position to determine whether it is necessary to set up automated electronic receipts for documents filed through electronically/electronic service or whether another kind of action is preferable.

We believe adopting the FRAP Rule 26 for TSOB Review Panel proceedings is not advisable at this time. Rule 26 defines terms used in the text of the FRAP on time computation, including next day, last day, and legal holiday. These terms are not used in the TSOB Review Panel rulemaking, and thus, there is no need to define them. Also, the FRAP Rule 26 explains that Saturdays, Sundays, and legal holidays must be counted when computing timelines. We believe there is no need to add this language because the TSOB Review Panel rule does not suggest or provide exceptions for these days when computing time. The FRAP Rule 26 provides procedures that apply when the Clerk's Office is inaccessible; given the extensive use of electronically/electronic service for service of documents today, we believe there is little need to provide for circumstances when the “Clerk's Office” is inaccessible for TSOB Review Panel proceedings. The TSOB Review Panel does not rely on a typical “Clerk's Office” that has a stationary presence in courthouses and handles a high volume of judicial proceedings. Rather, the rule establishes that an individual from within the DHS Office of the General Counsel serves as the TSOB Docket Clerk, available to receive documents electronically at virtually any time. For all of these reasons, we believe the TSOB Review Panel rule text is sufficiently clear on the computation of time and changes are unnecessary.

Section 126.9(a) establishes that the standard of review the TSOB Review Panel applies is substantial evidence, and in paragraph (b) states that the Review Panel will not consider the constitutionality of any statute, regulation, Executive Order, or order issued by TSA. Both ALPA and AOPA commented on this section. AOPA seeks confirmation that while the TSOB Review Panel gives deference to an ALJ's factual findings supported by substantial evidence in the record, the Review Panel reviews legal determinations made by the ALJ using the de novo standard of review. Also, AOPA suggests that DHS either remove § 126.9(b) or amend it to include a statement that parties must raise constitutional issues at the agency level to preserve them for judicial review.

ALPA states that the substantial evidence standard of review is not indicated or required by 49 U.S.C. 46111(d). ALPA asserts that this standard of review is too restrictive to provide adequate procedural and substantive right protections. Also, ALPA suggests that because the rule does not include a definition of substantial evidence, it is open to interpretation by each TSOB Review Panel. ALPA asserts that DHS should amend § 126.9 to follow or incorporate the standard of review the National Transportation Safety Board (NTSB) uses in its Rules of Practice in Air Safety Proceedings, codified at 49 CFR 821.49. Those procedures apply to the NTSB review of ALJ decisions that affirm, modify, amend, or reverse FAA Certificate actions related to safety issues. The NTSB procedures permit the Board to consider if the “findings of fact are supported by a preponderance of reliable, probative, and substantial evidence.”

DHS Response: DHS is adding a definition of the term “substantial evidence” to the rule to make certain there is no room for confusion or interpretation as to what the standard means. It is a term that is widely used and generally not subject to varying interpretations, but a definition of it in the rule text provides optimum clarity for all parties associated with TSOB Review Panel proceedings. The definition is “substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” This is the standard of review that is applied in administrative review proceedings like those of the TSOB Review Panel.

In practical terms, the substantial evidence standard is more deferential to the decision below than the preponderance of the evidence standard of review. A preponderance of the evidence means there is a greater than 50% chance an assertion or decision is true, and typically applies to civil court cases. The substantial evidence standard does not require a reviewing body to find that the decision below is more likely than not to be true, but that the decision is reasonable given all of the information presented. The NTSB procedural rule that ALPA urges DHS to use for this rule requires the Board to find that the ALJ's findings of fact are supported by “a preponderance of reliable, probative, and substantial evidence,” which is a hybrid standard that combines preponderance of the evidence with substantial evidence and probative evidence.

DHS does not wish to apply the NTSB standard to TSOB Review Panel cases. DHS agrees with ALPA's statement that 49 U.S.C. 46111(d) does not reference or require the substantial evidence standard of review for TSOB Review Panel proceedings. However, use of the substantial evidence standard for appellate review of administrative proceedings at the Federal level is commonplace. 8 The use of this standard for reviewing an ALJ's decision recognizes the significant expertise ALJs bring to the Federal administrative process. ALJs handle a variety of subject matters, legal issues, motions, witness testimony, statutory and regulatory interpretation, and matters advanced by pro se appellants as well as those represented by counsel. Most ALJs have very active dockets that require sound and timely decision-making. To require a reviewing body like the TSOB Review Panel to use the less deferential de novo standard for reviewing ALJ proceedings would increase the time and resources needed to resolve appeals, with scant justification that is it necessary. Congress and agencies would not authorize the use of the substantial evidence standard of review so widely if evidence existed demonstrating that proceedings before ALJs were insufficient or wrought with problems.

In addition to the factors discussed above, it is important to note that § 126.7 of the current IFR authorizes the TSOB Review Panel to remand a matter to the ALJ to “address particular issues or consider additional testimony or evidence.” Thus, if the TSOB Review Panel has concerns about the outcome reached at the ALJ level or cannot reach a decision on appeal, it can send the matter back to the ALJ with instructions on examining issues and obtaining additional testimony or evidence. This section enables the TSOB Review Panel to seek correction or clarification of issues that are vague, questionable, or unsupported by the record, and essentially to correct the kind of procedural and substantive shortcomings ALPA expressed concern about in its comments. Also, ALPA suggests DHS amend § 126.19 to permit the TSOB Review Panel to remand the case to the ALJ for additional proceedings upon motion of the parties and “a showing of good cause.” DHS sees value in this suggested revision to the IFR and is adding this language as new § 126.19(b)(3). This addition to the rule text further minimizes the need to require a higher standard of review such as a preponderance of the evidence or the hybrid standard the NTSB uses in its appellate procedures.

Both ALPA and AOPA submitted comments asserting that an ALJ's legal determinations and prejudicial errors of law and procedure should receive special treatment by the TSOB Review Panel. AOPA seeks confirmation that while the TSOB Review Panel gives deference to an ALJ's factual findings based on substantial evidence in the record, the Review Panel applies de novo review to any legal determinations the ALJ makes. ALPA asserts that § 126.23(a)(2) should be revised to state that a party's objections to an ALJ's prejudicial errors of the law or procedure are reviewable by the TSOB Review Panel.

DHS Response: DHS confirms that appellate courts and administrative review panels such as the TSOB Review Panel apply the substantial evidence standard to factual issues, but apply essentially a de novo review of legal determinations an ALJ makes. Reviewing panels and courts retain the authority to review and determine purely legal questions to determine if they are erroneous as a matter of law when raised on appeal, without deference to the lower court. In FAA certificate holder cases appealed to the TSOB Review Panel, the sustainability of the underlying security threat determination is based on a factual determination, subject to the substantial evidence standard of review.

DHS is not inclined to revise § 126.23(a)(2) to state that a party's objections to an ALJ's prejudicial errors of law or procedure are reviewable by the TSOB Review Panel because it is unnecessary. The current language in § 126.23(a)(2) states the appellant must “enumerate the appellant's objections to the ALJ's decision” in the appellant's brief perfecting the appeal. This language is broad and permits the appellant to raise perceived prejudicial errors of law or procedure in the appeal.

AOPA and ALPA commented on the need for the appellant and counsel to have access to protected information during the TSOB Review Panel proceeding. Both organizations recommend DHS create a process for non-government counsel representing non-government parties in TSOB Review Panel actions to request designation as having a “need to know,” be appropriately vetted, and once designated, have access to classified and other protected information, and SSI.

The IFR rule text in § 126.17 addresses procedures for the use of classified, sensitive security, and other protected information. The rule defines “other protected information” as information the government is authorized to withhold under statute, regulation, or Executive Order. Paragraph (b) in § 126.17 prohibits the TSOB Review Panel from disclosing classified or other protected information to a non-government party or counsel, and prohibits disclosing SSI to those individuals unless TSA determines the party had a preexisting need to know specific SSI as a covered person under 49 CFR 1520.7 and 1520.11.

DHS Response: DHS believes it is inadvisable to establish a process for non-government individuals to have access to classified or other protected information during TSOB Review Panel proceedings. There is longstanding precedent on the need for strict controls over classified and protected information, and we do not find sufficient justification here to alter those policies and procedures. We believe unintended and serious consequences may occur as the circle of individuals with access to this information grows, particularly where there is very little ability to track or prevent additional sharing of the information. However, in accordance with the SSI regulations codified at 49 CFR part 1520, appellants and their counsel may have access to SSI that is associated with their TSOB Review Panel case. In other words, § 126.17(b) neither expands nor contracts a party's authorization to receive SSI in accordance with 49 CFR part 1520.

AOPA recommends that DHS revise § 126.27 to include a method for publishing TSOB Review Panel decisions in such a way as to protect an affected individual's identity. Also, AOPA recommends DHS revise § 126.29(b) to state that TSOB Review Panel actions are precedential for future ALJ decisions and TSOB Review Panel actions. AOPA asserts that providing precedential value to TSOB Review Panel decisions will bring greater consistency and efficiency to the process, and assist potential appellants in making litigation decisions.

DHS Response: DHS does not believe it is advisable or necessary to publish decisions or amend the rule to state that the decisions serve as precedent for future ALJ and TSOB cases. The number of cases is very low and the fact patterns so unique that it is difficult to see how one case could be precedential for another. Also, as security threats evolve over time, the factors that contribute to determining whether an individual poses a security threat may also evolve. Attaching precedential authority to older decisions may result in improper or incongruous results. Since DHS is not inclined to publish decisions at this point in time, it is not necessary to address AOPA's recommendation for a process to protect the identity of an affected party when publishing a decision.

AOPA recommends that DHS provide a mechanism for a party to file a motion to disqualify a TSOB Review Panel member due to conflict of interest concerns.

DHS Response: DHS does not believe there is sufficient justification for this recommendation. There are checks in the TSOB appointment process that minimize the risk that a Panel member would have a conflict of interest concerning a specific case. Panel members must be a member of the Senior Executive Service or a Senior Level employee, which typically means the individual has a longstanding career in the government and is subject to strict standards of ethics. Panel members also may not be employed by the FAA or TSA. These two requirements minimize the chance that a Panel member has a conflict related to a specific FAA certificate revocation or suspension.

ALPA recommends that DHS revise § 126.29 to include the Court of Appeals filing deadline, which is 60 days from the date the TSOB Review Panel issues its decision, under 49 U.S.C. 46110.

DHS Response: DHS is amending § 126.29 to state that an appeal of the TSOB Review Panel must be done in accordance with the requirements of 49 U.S.C. 46110, which allows for 60 days. This provides litigants with the information necessary to ensure timely appeals, and if the statute changes in the future, there would be no need to also amend this regulation.

AOPA recommends that DHS remove paragraph 126.9(b) or revise it to state that constitutional issues must be raised before the agency in order to be preserved for judicial review.

DHS Response: DHS is not inclined to remove or revise paragraph (b). The language states that a TSOB Review Panel will not review the constitutionality of any statute, regulation, Executive Order, or order issued by TSA. This sufficiently puts litigants on notice that constitutional matters do not fall within TSOB Review Panel authority, but we do not believe it necessary to provide litigants information on when or where those issues must be raised outside of the TSOB Review Panel proceedings.

The language below describes the rule text as it appears in the IFR and where DHS is changing the rule text in response to comments received.

Section 126.1 describes the general purpose and scope of part 126, which is to establish procedures by which a TSOB Review Panel is appointed and reviews an appeal from an ALJ's decision regarding a TSA Determination of Security Threat. The procedures apply to appeals involving applications for certificates that are denied or held in abeyance as well as orders to amend, modify, suspend or revoke FAA certificates. Congress left to DHS's discretion the development of detailed procedures for TSOB review of an appeal from an ALJ's decision.

Section 126.3 provides definitions of important terms that are used in the rule. The 2011 procedures did not include a definition section, but based on the experience DHS has gained in prior TSOB Review Panel cases and other administrative review programs DHS and its components administer, establishing definitions of key terms aids all parties engaged in the review process. These definitions are taken from existing statutory, regulatory, or Executive Order language, or reflect common usage meanings. DHS is adding a definition of the term “substantial evidence” as discussed in II.C. above.

`Classified information' has the same meaning the term has in Executive Order 13526, Classified National Security Information, or its successor Executive Order. The term `communication technology' means telephone or videoconferencing platform. The term `Sensitive Security Information' (SSI) is information described in 49 CFR 1520.5. The rule defines `other protected information' as any other information that the government is authorized by statute, regulation, or Executive Order to withhold. The rule defines `Transportation Security Oversight Board (TSOB)' as the board established pursuant to 49 U.S.C. 115. Finally, `Transportation Security Oversight Board (TSOB) Review Panel' is defined as the panel established pursuant to 49 U.S.C. 46111(d) to consider an appeal from a decision of an ALJ as the result of a hearing under 49 U.S.C. 46111(b).

Section 126.5(a) provides that TSOB members must designate individuals who meet specific criteria to serve in a pool of potential Panel members for a period of two years. The criteria for nominees are listed in paragraphs (a)(1) through (5). The nominee must be a member of the Senior Executive Service (SES) or a Senior Level (SL) employee to ensure that he or she possesses the appropriate level of experience to evaluate the issues and record before the Panel. The nominee must hold the appropriate security clearance to ensure that he or she can effectively review an administrative record that contains classified material. Nominees may not be employees of TSA or FAA, which ensures an unbiased review of TSA's security threat determination. Although 49 U.S.C. 46111(d) excludes only TSA employees from membership on a TSOB Review Panel, the TSOB Chairperson has determined that FAA employees should also be excluded. Exclusion of both TSA and FAA employees from participation in the TSOB Review Panel pool avoids the possible appearance of impartiality or lack of independent review. To the extent practicable, the nominee will have a legal background and be engaged in the practice of law on behalf of the U.S. government. Although these qualifications were not included in the 2011 procedures, through experience in this and other administrative appeal programs, DHS has found that individuals with this background enhance a Review Panel's ability to efficiently and accurately assess the legal arguments the parties assert during the appeal, and to prepare cogent decisions. Finally, to the extent practicable, a nominee will be familiar with transportation security issues. This factor was not included in the 2011 procedures, but DHS has found that such a background enhances the efficiency and accuracy of the review process.

Paragraph (b) provides that TSOB members must designate officials for the TSOB Review Panel when each two-year period expires. Paragraph (c) states that the General Counsel of the Department of Homeland Security, or the General Counsel's designee, will appoint an individual from within the Office of the General Counsel to serve as the TSOB Docket Clerk. The TSOB Docket Clerk serves as the Review Panel's point of contact for the public and the parties to ALJ proceedings. Paragraph (d) states that when the TSOB Docket Clerk receives a properly and timely filed appeal from an ALJ's decision, the TSOB Chairperson will select at least three individuals from the Review Panel pool to serve on a Review Panel to review the ALJ's decision. The TSOB Chairperson has discretion to choose which individuals from the pool will serve on a TSOB Review Panel. In making selections for a TSOB Review Panel, the TSOB Chairperson will, to the extent practicable, select at least one person with a legal background to serve as a Panel Member. A three-member Review Panel allows for appropriate deliberation and the exercise of independent judgment, and is similar to the size of other Federal Government administrative review panels and the panels that hear cases in the U.S. Courts of Appeals. 9

Section 126.7 requires a TSOB Review Panel to review an ALJ's decision and affirm, modify, or reverse that decision, or remand the matter to the ALJ for reconsideration.

Section 126.9(a) states that the standard of review a TSOB Review Panel uses in considering an ALJ's decision is whether the decision is supported by substantial evidence in the record. The term “standard of review” refers to the degree of deference a reviewing court gives to the court below. The 2011 procedures stated that the standard of review is whether the ALJ's decision reasonably supports the conclusion that the FAA certificate holder does or does not pose a security threat, which is equivalent to “substantial evidence in the record.” Substantial evidence means “such relevant evidence that a reasonable mind might accept as adequate to support a conclusion.”  10 In contrast, the ALJ applies a de novo standard of review to TSA's Determinations of Security Threat for FAA certificate holders. A “de novo” standard of review applies the least amount of deference to the court below; the reviewing court examines the evidence as though it is being considered for the first time, allowing the reviewing court to substitute its own judgment about the application of the law to the facts.

Generally, the substantial evidence standard of review is used in civil cases relating to administrative decisions at the Federal level. TSA administers several vetting programs with robust redress processes that, like the TSOB Review Panel procedures, include multiple levels of review. One transportation-related example is the review process for the Transportation Worker Identification Credential (TWIC) and Hazardous Materials Endorsement (HME) programs found at 49 CFR 1515.5 through 1515.11. TWIC and HME applicants undergo an STA that includes criminal, immigration, terrorist, and other database checks. See 49 CFR part 1572. If TSA determines a TWIC or HME applicant poses a security threat, TSA issues a written preliminary determination of threat assessment that includes information on how to appeal the assessment to TSA. TSA reviews all documents the applicant provides in the appeal, essentially providing de novo review of the case, and issues a final determination based upon its review of all relevant information available to TSA. The applicant may then appeal the final determination to an ALJ, and the ALJ applies the substantial evidence standard of review. An unsuccessful applicant may then appeal the ALJ's decision to the TSA Final Decision Maker, who also applies the substantial evidence standard of review. These regulations, issued through notice-and-comment rulemaking along with the corresponding STA requirements, have been in use for over a decade.

Cases that reach the TSOB Review Panel have undergone multiple levels of review within TSA and have been reviewed by an ALJ. TSA has access to all of the factual and intelligence information generated during the vetting of the FAA certificate holder, and the expertise to evaluate whether the information supports a security threat determination. Then, the ALJ applies a de novo standard of review to determine whether TSA correctly applied its standard on whether an individual poses or is suspected of posing a security threat. This de novo review includes the review of information and evidence; examining witnesses and weighing the veracity and probity of their testimony; and determining whether a preponderance of the evidence supports the security threat determination. Consequently, the TSOB Review Panel ought to apply the more deferential substantial evidence standard of review, not a de novo standard. This standard of review requires the Panel to determine whether a reasonable person might accept the evidence presented as adequate to support the ALJ's conclusion.

The 2011 and 2021 Review Panels relied on the 2011 procedures but applied different standards of review. Codifying procedures in this rule avoids future panels using different standards of review.

Paragraph (b) states that a TSOB Review Panel will not consider the constitutionality of any statute, regulation, Executive Order, or order issued by TSA. A TSOB Review Panel is an administrative body that lacks the authority or expertise to decide constitutional questions. 11 Constitutional claims or questions must be addressed by an appropriate U.S. Court of Appeals reviewing the TSOB Review Panel's action. When making its decisions, the Review Panel considers the entire record of the proceedings before the ALJ. The Review Panel may also consider additional materials that are properly added to the record through a duly filed motion, as permitted in § 126.19(b).

Section 126.11(a) gives all parties to proceedings before a TSOB Review Panel the right to be represented by counsel. Because Review Panel proceedings are civil proceedings that cannot result in a party's incarceration, the Federal Government is not required to provide legal counsel to represent a party who is unable to pay for an attorney. Thus, parties appearing before a TSOB Review Panel must obtain counsel at their own expense. TSA will designate legal counsel from among the attorneys in the DHS Office of the General Counsel who cover TSA's programs and issues on a daily basis, to represent TSA in Review Panel proceedings. This section also states that counsel for TSA must hold a security clearance commensurate with the information in the record on appeal. This requirement was not explicitly listed in the 2011 procedures, but has always been required for TSOB and similar administrative appeal procedures.

Section 126.11(b) provides that the General Counsel of DHS, or the General Counsel's designee, will appoint legal counsel who, in the General Counsel's discretion, has the requisite knowledge and experience to effectively assist a TSOB Review Panel reach a sound decision. The Review Panel's counsel facilitates communication between the Docket Clerk and the Review Panel, and assists with legal research, drafting documents, and similar tasks consistent with typical legal support. Appointed counsel must hold a security clearance that enables access to all materials in the record under review.

Section 126.13 instructs parties on how to request TSOB review of an ALJ's decision and how to serve notice on all other parties. Any party to proceedings before the ALJ may file a notice of appeal with the TSOB via certified mail or electronically/electronic service. DHS strongly encourages parties to file all documents and consent to service via electronically/electronic service to the TSOB Docket Clerk. Allowing parties to file a notice via electronically/electronic service will expedite the receipt of documents and the review process.

Section 126.13(a) provides that a notice of appeal must be filed within 60 calendar days of the date of issuance of the ALJ's decision. This time limit is drawn from Rule 4 of the FRAP, which generally allows parties to a civil action in U.S. District Court 60 days to file a notice of appeal with an appropriate U.S. Court of Appeals in a case in which the United States or a Federal agency is a party.

Section 126.13(b) provides the addresses for the TSOB Docket Clerk and instructions for filing any document with a TSOB Review Panel. As discussed in II.B above, DHS is adding language to this paragraph to permit litigants to expressly state a preference for service by electronically/electronic service.

Section 126.13(c) specifies the date on which a document is deemed filed. The date of filing is the date that the document is received by the TSOB Docket Clerk.

Section 126.13(d) provides that a TSOB Review Panel generally must reject and summarily dismiss a notice of appeal that is filed after the expiration of the 60-day deadline for appealing an ALJ's decision. The Review Panel, in its discretion, may accept the untimely notice upon a written showing of good cause for failing to meet the deadline.

Section 126.13(e) provides that if a party files a notice of appeal but fails to perfect the appeal by timely filing a supporting brief, a TSOB Review Panel may dismiss the appeal.

Section 126.13(f) explains that if an appeal is dismissed in accordance with paragraph (d) or (e), the ALJ's written decision becomes final. This provision did not appear in the 2011 procedures, but DHS is adding this to ensure all parties understand the practical effect of a dismissal.

Section 126.15 requires parties and counsel to enter appearances in writing before a TSOB Review Panel within 15 calendar days of being served with a notice of appeal. This requirement was not part of the 2011 procedures, but DHS is adding it to ensure efficiency and timeliness in the review process based on prior experience in TSOB. Also, the requirement to file an entry of appearance is consistent with Rule 12 of the FRAP.

Section 126.17 provides the procedures for handling classified information, SSI, and other protected information during proceedings before a TSOB Review Panel. This section did not appear in the 2011 procedures, but the processes outlined here reflect the current practice of the review panels. The procedures are consistent with the statutory provisions regarding the use of classified evidence in hearings pursuant to 49 U.S.C. 46111(g), and the protection of SSI set forth in 49 CFR 1520.9. This section sets deadlines for TSA with respect to protected information to aid efficiency and transparency in the process. Section 126.17(a) provides that TSA must file a notice of protected information within 30 calendar days of filing or being served with a notice of appeal. The notice of protected information must indicate whether the record of proceedings before the ALJ contains classified information or SSI. This notice will alert a TSOB Review Panel to take appropriate steps to protect the record from disclosure to non-government parties or the public. The TSOB Review Panel will review materials in the record containing classified information or SSI in camera or during an ex parte proceeding with TSA.

Section 126.17(b) provides that a TSOB Review Panel may not disclose classified information or SSI, except to government parties and government counsel who have the appropriate security clearance and a need to know the information to be disclosed.

Section 126.19(a) requires TSA to file a complete record of administrative proceedings, including a certified and un-redacted transcript of all proceedings before the ALJ and all material filed with the ALJ, with the TSOB Review Panel within 30 calendar days after filing or being served with a notice of appeal. The TSOB Review Panel needs the full record in order to conduct a comprehensive review of the ALJ's decision. To ensure that non-government parties have access to a redacted copy of the transcript of proceedings before the ALJ, this subsection permits non-government parties to file a motion requesting a redacted copy of any part of the full administrative record that they do not possess.

Section 126.19(b) permits a party to supplement the record presented to the TSOB Review Panel when (i) anything relevant to an issue on appeal occurs or is created after the ALJ issues a decision, or (ii) the party can show good cause for failing to submit material for the record at an earlier stage of the administrative proceedings. As discussed in II.C. above, DHS is adding paragraph (b)(3) to permit the TSOB to remand the case to the ALJ for additional proceedings upon motion of the parties and “a showing of good cause.”

Section 126.21(a) provides the procedures for filing a motion with a TSOB Review Panel. The requirements are the same as those for filing a brief, which are modeled on Rule 28 of the FRAP.

Section 126.21(b) explains the duty to confer with all other parties before filing any motion. If a party seeks relief from a TSOB Review Panel (for example, extension of a deadline), that party must file a motion requesting the relief. Before filing the motion, the party seeking relief must first confer, or make reasonable, good-faith efforts to confer, with all other parties in an effort to obtain their consent to the relief requested. The 2011 procedures do not include this section, but DHS added it to improve efficiency and communications. It is consistent with Rules 26(c)(1) and 37(a)(1) of the Federal Rules of Civil Procedure. After conferring or attempting to confer, the party seeking relief may file the motion with the TSOB Review Panel. The moving party shall state in the motion, or in a certificate attached to the motion, the specific efforts made to confer. The moving party shall also state in the motion the other parties' positions with regard to the relief requested. If no party opposes the relief requested in a motion, the moving party shall include “Unopposed” in the motion's title. These provisions are modeled on Local Rules of Practice adopted by many U.S. District Courts, including, for example, the Rules of the United States District Court for the District of Columbia, Local Rule 7(m) (September 2015), Local Rules for the United States District Court, Eastern District of Virginia, Local Civil Rule 7 and Local Criminal Rule 47 (December 1, 2020). They are designed to promote cooperation between the parties and help resolve issues quickly and efficiently.

Section 126.21(c) provides for motion hearings using communication technology. As defined in this rule, “communication technology” means telephone or a videoconferencing platform. Using videoconferencing to conduct motion hearings allows a TSOB Review Panel to efficiently resolve motions without burdening the parties. The Review Panel will consider the availability of adequate security protocols in making determinations concerning motions hearings.

Section 126.21(d) gives a TSOB Review Panel discretion to grant or deny a motion at any time after it is filed. This provision allows a Review Panel to quickly and efficiently resolve routine motions (for example, motions for an extension of a deadline) without waiting for all parties to file a response.

Section 126.21(e) permits a TSOB Review Panel to establish additional procedural requirements regarding motion practice in response to the exigencies of a particular appeal. Additional procedural requirements apply on a case-by-case basis. For example, if a motion raises an unusually complex issue, a Review Panel may find it appropriate to allow the non-moving parties to file a response that is longer than the default 35-page limit. Section 126.21(e) gives the Review Panel the discretion to modify the page limit. This discretion is crucial to establishing an efficient review process. Section 126.21(e) provides two other examples of additional procedural requirements that a Review Panel may wish to adopt in a particular case: time periods for filing responses and replies to motions and a deadline for concluding all motion practice. These examples are illustrative and not intended as an exhaustive list of permissible additional procedural requirements for motion practice. Section 126.21(e) only concerns basic procedural requirements regarding motion practice, and it does not afford a TSOB Review Panel discretion to adopt procedural requirements unrelated to motion practice or to fundamentally change the review process prescribed in this part. A TSOB Review Panel will communicate specific additional procedural requirements regarding motion practice to the parties during proceedings or by serving them with orders.

Section 126.23(a) and (b) enumerate the procedures and deadlines for filing briefs with a TSOB Review Panel. These subsections are modeled after Rule 28 of the FRAP. A party appealing the ALJ's decision (an appellant) must perfect the appeal by filing a brief within 60 calendar days after the date on which the TSA files the administrative record. An appellant's brief must contain a specific list of objections to the ALJ's decision. This requirement is modeled after Rule 28(a)(9) of the FRAP, which requires appellants to clearly list and describe their contentions. A party not appealing the ALJ's decision (an appellee) may file a brief in response to an appellant brief within 30 calendar days after being served with the appellant brief.

Section 126.23(c) provides the specific form for submitting briefs to a TSOB Review Panel. The specifications are modeled on Rule 28 of the FRAP, and they are intended to facilitate an efficient process with the least amount of burden to the parties and the Review Panel.

Section 126.25 provides for oral argument. A TSOB Review Panel will decide whether to grant oral argument upon receipt of a request for an oral argument contained in a brief pursuant to § 126.23(c)(5). The TSOB Review Panel has discretion to grant or deny a request for oral argument. The Review Panel may also order oral argument on its own initiative if it determines that oral argument is necessary to clarify the parties' arguments or that oral argument will improve the Panel's understanding of legal or factual issues material to the appeal.

If oral argument is held, the TSOB Review Panel has discretion to choose the method and location. Oral argument will typically be heard in Washington, DC, or via teleconference or videoconference. The TSOB Review Panel will consider expense and inconvenience to the parties, the need for information security, the quality and reliability of available communication technology, and concern for the efficient administration of proceedings when choosing the method and location of oral argument.

Section 126.25(c) provides that the TSOB Review Panel may also establish any necessary procedural rules to ensure the efficient administration of oral argument. This allows the Review Panel to adjust to the exigencies of a particular appeal. For example, the Review Panel may want to grant the parties a longer amount of time for argument if an appeal is complex and involves a large amount of evidence.

Section 126.25(d) provides that classified information and SSI may not be disclosed during oral argument, and that a Review Panel may hold ex parte proceedings to allow TSA to present such information.

Section 126.27 provides the procedures by which a TSOB Review Panel resolves an appeal. A Review Panel will consider the transcript of the ALJ's hearing, all material that the ALJ considered as part of the record for decision, any properly filed supplemental material, the parties' briefing, and, if applicable, oral argument. The Review Panel's deliberations are closed to the public, and any materials created by Panel members, the TSOB Docket Clerk, and the Panel's appointed counsel for use in deliberations are not part of the final administrative record and may not be disclosed to the public.

A TSOB Review Panel may affirm, reverse, or modify the ALJ's decision. It may also remand the matter to the ALJ with instructions to address particular issues or consider additional testimony or evidence. A TSOB Review Panel requires a simple majority to decide an action. A Review Panel is required to prepare a written explanation of its action and serve it on the parties. The Review Panel will endeavor to act to resolve an appeal and serve a written explanation within 60 calendar days after the last of the following events: (1) receipt of a timely filed appellant brief; (2) receipt of a timely filed appellee brief; or (3) oral argument. If a Panel member disagrees with the Panel's action or reasoning, that member may write a dissenting report to be served with the written explanation. A Review Panel must redact all classified information and SSI from the written explanation before serving it on non-government parties. The written explanation will not be made available to the public through publication.

Section 126.29 explains the effect of a TSOB Review Panel action. After the TSOB Review Panel acts to resolve an appeal and serves a written explanation of its action, any person substantially affected by the action, or the TSA Administrator if he decides that the Panel's action will have a significant adverse impact on Federal programs to ensure safety in aviation and air commerce, may obtain judicial review of the action in an appropriate U.S. Court of Appeals. If judicial review is not obtained, the action of the TSOB Review Panel is final and binding on the parties for the purpose of resolving the particular matter under review. As discussed in II. G. above, DHS is adding the statutory citation of 49 U.S.C. 46110 here, which establishes when an appeal must be filed so that litigants have that information.

Section 126.31(a) describes the authority of a TSOB Review Panel to adopt additional procedures consistent with those established in this part. This ensures that a Review Panel has the flexibility to adjust to the exigencies of a particular appeal. Additional procedures apply on a case-by-case basis, and a Review Panel will communicate specific additional procedures to the parties during proceedings or by serving them with orders. For example, if a party or a party's counsel suffers from poor health that renders participation in proceedings difficult, a Review Panel may find it appropriate to adopt additional procedures to accommodate such needs. Section 126.31(a) gives the Review Panel the discretion to make the necessary accommodations. This discretion is crucial to establishing an efficient review process. Other examples of exigencies that may necessitate the adoption of additional procedures include unexpected changes to the TSOB office facilities and technical issues that make communication between the parties and a Review Panel difficult. These examples are illustrative and not intended as an exhaustive list of permissible additional procedures. The discretion afforded by § 126.31(a) is similar to that afforded by § 126.21(e) above in that it also does not empower a TSOB Review Panel to fundamentally change the review process prescribed in this part.

Section 126.31(b) provides that proceedings before a TSOB Review Panel are rendered moot and closed if TSA withdraws its Determination of Security Threat. If TSA withdraws its Determination, TSA will notify the TSOB Review Panel of the withdrawal within five calendar days.

Section 126.31(c) provides that TSOB Review Panel proceedings are generally closed to the public. DHS is adding this provision to protect sensitive panel deliberations and discussions, and other kinds of sensitive or protected information from disclosure, including information regarding the conduct of individuals impacted by a Determination of Security Threat and witnesses to that conduct that may adversely impact these respective individuals' privacy interests. The Review Panel may, at its discretion, decide to open its proceedings to the public. No classified information, SSI or other protected information will be released during an open hearing.

Executive Orders 12866 (Regulatory Planning and Review), as amended by Executive Order 14094 (Modernizing Regulatory Review), and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has not been reviewed by OMB.

To evaluate properly the benefits and costs of regulations, it is important to define the baseline. DHS evaluates the impacts of this rule against both a no action and pre-statutory baseline. According to OMB Circular A-4, the no action baseline is what the world would be like if the rule is not adopted. 12 The pre-statutory baseline is what the world would be like if the relevant statute(s) had not been adopted.

Relative to the pre-statutory baseline, the IFR and this final rule increase costs. The statute mandates that an appeal from a decision of an ALJ is made to the TSOB Review Panel. The law provides the benefits of appeal, but it also requires government time to manage and execute the panel's responsibilities, time of the parties to the appeal, and time and potential associated legal fees for the appellant. The government also incurred costs in 2011 developing the procedures for use by the TSOB Review Panel. As of the date of this publication, the panel has reviewed two requests for appeal. The 2011 and 2021 Review Panels relied on the 2011 procedures, but applied different standards of review.

Without the IFR or this final rule, the TSOB still has the authority and duty to review appeals. As discussed above, a TSOB Review Panel has issued two decisions based upon the 2011 procedures. Significant attorney time and resources were spent developing the procedures used in those cases. In the absence of a codified set of procedural rules, this developmental process might need to be repeated each time an appeal is filed with the TSOB. While DHS believes the IFR did not impose any new costs (given that TSOB Review Panels would continue to issue decisions even if this rule was not promulgated), publication of the IFR did provide several benefits which are discussed qualitatively below.

Codifying TSOB Review Panel procedures before the conclusion of presently pending and future ALJ proceedings eliminate the need to rely on the 2011 procedures. In addition, codifying TSOB Review Panel procedures serves the public's interest in government transparency, consistency in administrative review processes, and certainty of expectations regarding government operation. In the absence of codified procedures, the public would not have notice of the details regarding how a TSOB Review Panel is selected and operates, and U.S. citizens who may be adversely affected by FAA certificate action would not have a complete picture of the administrative process by which they may challenge TSA's Determination of Security Threat. Codified procedures allow the public to be informed about the operation of the Federal Government. Codification also provides certainty to U.S. citizens who may be adversely affected by FAA certificate action. This allows them to make informed decisions about whether to challenge TSA's Determination, instill confidence that they will have a full and fair opportunity to be heard, and plan for the entire administrative review process. Codified procedures provide the public with confidence that all appeals will be reviewed in the same manner.

In addition, in this final rule, DHS makes four changes to the IFR in response to public comment. DHS is adding a citation to establish when an appeal must be filed, which will provide litigants with the information necessary to ensure timely appeals. DHS is adding a definition of the term “substantial evidence,” which will provide clarity for all parties on the standard of review. DHS is adding language to establish how allow litigants may consent to service via electronically/electronic service, which will make it easier for litigants to do so. Finally, DHS is adding language to provide a process to seek remand for a “showing of good cause.” Ensuring there is good cause to grant a motion to supplement the record through remand to the ALJ will ensure that additional proceedings are undertaken only when there is substantive reasoning for them.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, title II, 110 Stat. 847, 857-74, requires Federal agencies to consider the potential impact of regulations on small businesses, small governmental jurisdictions, and small organizations during the development of their rules. However, when a rule is exempt from APA notice and comment requirements the RFA does not require an agency to prepare a regulatory flexibility analysis. Because this rule does not trigger APA notice and comment requirements, DHS is exempt from preparing a regulatory flexibility analysis for this rule. DHS does note, however, that this rule regulates individuals, and individuals are not small entities as contemplated by the RFA.

This rule will not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by the Small Business Regulatory Enforcement Fairness Act of 1996. 5 U.S.C. 804(2). This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and export markets.

This rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

This interim final rule does not call for a collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq. This rule falls under the category of an administrative action or investigation involving an agency against specific individuals or entities and is therefore excluded from Paperwork Reduction Act requirements. 44 U.S.C. 3518(c)(1)(B) and 5 CFR 1320.4(a).

Can operators of digital comparison-shopping tools or lead generators violate the Consumer Financial Protection Act (CFPA) by preferencing products or services based on financial or other benefits to the operator?

Yes. Operators of digital comparison-shopping tools can violate the prohibition on abusive acts or practices if they distort the shopping experience by steering consumers to certain products or services based on remuneration to the operator. Similarly, lead generators can violate the prohibition on abusive practices if they steer consumers to one participating financial services provider instead of another based on compensation received. Where consumers reasonably rely on an operator of a digital comparison-shopping tool or a lead generator to act in their interests, the operator or lead generator can take unreasonable advantage of that reliance by giving preferential treatment to their own or other products or services through steering or enhanced product placement, for financial or other benefits.

For many households, the process of shopping for a financial product or service now includes interactions with digital intermediaries. These intermediaries include websites, applications, or chatbots that operate as comparison-shopping tools, which consumers turn to for help with researching, comparing, and selecting consumer financial products or services. Offering a comparison-shopping tool for consumers and generating leads for financial companies can and sometimes do operate as distinct business models, and for the purposes of this circular, comparison-shopping tools and lead generators are discussed separately. However, consumers often interact with them in similar ways and many digital intermediaries operate as both, presenting themselves as consumer-serving comparison-shopping tools while simultaneously increasing profits by directing leads based on financial benefit. Digital intermediaries commonly receive remuneration or other benefits, sometimes referred to as “bounties” by market participants.

Consumers are increasingly using digital comparison-shopping tools to find consumer financial products or services that fit their interests. 1 These tools facilitate comparison shopping by presenting information about the costs, features, or other terms for a set of comparable financial products or services, such as credit cards, student loans, and savings accounts, offered by different providers. In addition to presenting options offered by third-party providers of financial products and services, some operators of digital comparison-shopping tools offer their own financial products and services and include their own options in the comparison-shopping tool.

Comparison-shopping information can be presented in a static or interactive format. In the latter case, some operators allow people who use the tool to sort options based on different criteria or to otherwise customize the presentation of information and options (sometimes after a default presentation). Also, some operators collect information from consumers and then purport to provide a list of options tailored to the consumers' particular circumstances or preferences. In other cases, operators just present an ordered list of recommended providers. Increasingly, digital comparison-shopping tools are using algorithms that order recommendations or ranking lists based on multiple variables, such as consumer characteristics, product features, consumer ratings, the likelihood a consumer would be approved, various click-through and application completion or approval rates, and provider compensation or bids.

Operators of digital comparison-shopping tools enter various types of commercial arrangements with providers of consumer financial products and services that participate in a comparison-shopping tool. Some operators receive revenue in exchange for the provision of time or space for advertising that is clearly set apart from the content of the comparison-shopping tool, like banner ads or pop-up advertisements. 2 This kind of advertising is not at issue in this circular.

Instead, this circular focuses on compensation arrangements from providers for preferential treatment by an operator of a digital comparison-shopping tool. Operators are sometimes paid by product providers on a fee-per-action basis—for example, by receiving fees per click, per application, per conversion, per offer, or per sale. Often, operators allow firms to bid against each other for advantageous placement by paying bounties, which can be targeted at customers fitting the characteristics a provider wants to acquire or aimed at meeting certain volume goals. The degree to which these bounties affect product placement depends on the operator's business model and the weight given to provider compensation over other factors.

Lead generators in lending markets sell information about prospective customers to lenders. Lead generators sometimes perform this function without making any contact with the consumer—selling data on consumers as a specialty data broker. But these entities also collect data directly from consumers by advertising websites that present themselves as helping consumers get a loan or connect with lenders. 3

When consumers submit their information to a lead generator indicating an interest in obtaining a loan, the lead generator sells the consumer's information to lenders to complete a loan transaction. Lead generators decide which lender obtains a lead based on a variety of criteria depending on the firm. They sometimes deploy algorithms to use many variables simultaneously to make these automated decisions, similar to digital comparison-shopping tools. Sometimes lead generators collect more information from consumers to assist lenders in determining whether to purchase a lead, and lead generators sometimes perform underwriting or origination tasks on behalf of partner lenders. In fact, in some cases the automated decision on which a lender obtains a lead can be so quick that the consumer's user experience between navigating to a lead generator's website and obtaining a loan can be continuous.

Similar to compensation agreements for operators of digital shopping tools, lead generators are paid by participating lenders using a variety of pricing models. Payments can similarly be charged as a fee-per-action, such as for each lead, or each completed application. Lenders sometimes pay for a number of leads, or a number of leads meeting certain criteria. And, similarly, some lead generators send leads to providers who bid the highest for a specific type of lead. 4

The CFPA prohibits covered persons or service providers from engaging in any unfair, deceptive, or abusive act or practice. 5 An act or practice in connection with the provision of a consumer financial product or service is abusive if it “takes unreasonable advantage” of certain circumstances, including “the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.”  6

Protecting and facilitating people's ability to effectively compare and choose among options for consumer financial products or services is among the core statutory objectives of the CFPB. 7

Below, this circular first addresses how an operator of a digital comparison-shopping tool or a lead generator might leverage consumer reliance to take unreasonable advantage of consumers where the operator or lead generator preferences particular providers or products over others in exchange for financial or other benefits to the operator, as opposed to making presentation or lead distribution decisions using other factors not relating to the operator or lead generator's relative compensation from different providers. The circular then provides examples of potentially abusive acts or practices by digital comparison-shopping tool operators.

Digital comparison-shopping tool operators and lead generators can qualify as “covered persons” under CFPA section 1031(d)(2)(C). An operator or lead generator is a “covered person” if it offers or provides consumer financial products or services or is an affiliate of a person that offers or provides consumer financial products or services and acts as a service provider by including those products in the tool or providing leads. 8 Depending on the role that a digital comparison-shopping tool or lead generator plays in a consumer's shopping experience, it may be extending or brokering the credit products that consumers ultimately receive. 9 In addition, some digital comparison-shopping tools and lead generators may be providing financial advisory services to consumers as well. 10

Additionally, some operators or lead generators offer their own version of the consumer financial product or service that consumers seek to compare using the digital comparison-shopping tool or for which leads are generated—for example, where an operator of a credit-card digital comparison-shopping tool offers its own card on the tool. Other operators or lead generators offer consumer financial products or services of a different type from what consumers are using a tool to compare or for which leads are generated—for example, an operator of a credit-card digital comparison-shopping tool might use pop-up advertisements to promote credit-counseling or credit-repair services offered by itself or an affiliate.

Consumers sometimes reasonably rely on digital comparison-shopping tool operators or lead generators to act in their interests. Operators of digital comparison-shopping tools and lead generators can engender reasonable consumer reliance by virtue of playing the role of helping people select providers. They can also engender reasonable consumer reliance by virtue of their explicit and implicit representations and communications.

In particular, reasonable consumer reliance can exist because of a digital comparison-shopping tool's function in a market, such as when a tool operator assumes the role of acting on behalf of consumers or helping them to select products or services based on the consumer's interests. 11 The nature of people's interactions with the tool informs an evaluation of the digital comparison-shopping tool's function in the market. For example, consumers may reasonably rely on a tool that functions by “matching” people with consumer financial products or services, i.e., providing curated recommendations based partly on information provided by the consumer.

In addition, if an operator explicitly or implicitly holds its tool out as presenting information based on the interests of the consumer, it may be reasonable for consumers to rely on the tool to function accordingly. A tool operator sometimes explicitly holds itself out as presenting information based on the interests of the consumer by directly stating so, such as by, for example, claiming its recommendations are objective.

An operator can also implicitly hold itself out as presenting information based on the interests of the consumer even if it does not explicitly claim to make objective recommendations. For example, the operator may emphasize its “expertise” in helping consumers evaluate options; describe its tool as providing “research-based” rankings of options for consumers; state to consumers that it will “help you today” to “achieve your financial goals”; purport to match consumers with the “best” or “right” offers; or claim to “put consumers first” or to provide a “one stop shop” with all the information consumers need to make informed selections among potential providers.

In some contexts, background conditions, such as an association with a trusted institution, could factor into consumers' reasonable reliance on a digital comparison-shopping tool ( e.g., a financial aid and student loan advisory website that is associated with a college or university). 12 Other factors, such as evidence that consumers using the tool tend to not understand that elements of the tool's rankings or recommendations are influenced by financial considerations, also contribute to establishing the existence of reasonable consumer reliance.

Relatedly, consumer-facing lead generators can engender reasonable consumer reliance within the meaning of CFPA section 1031(d)(2)(C) through their role as intermediating between consumers and lenders and their explicit or implicit communications to consumers. In particular, when lead generators conceal their real role in the market and present themselves as a tool for consumers to connect with trusted lenders or receive the best available terms for a consumer financial product or service, given the consumer's individual circumstances, a consumer would likely be reasonable in relying on the entity to act in the consumer's interests. 13

Adjusting a digital comparison-shopping tool's presentation of consumer financial products and services based on fees or other benefits to tool operators will often not be in the interests of the consumer. In many cases where consumers use digital comparison-shopping tools, consumers have an interest in navigating a complex financial market to obtain products that are best for them. Consumer interests are not served when they are steered toward more expensive or less favorable products because those products are offered by the tool operator or its affiliates or because those products generate more revenue for the tool operator.

Similarly, consumer interests are not served when consumers are steered to more expensive or less favorable products by lead generators because one provider is bidding more for the lead than another. 14

A digital comparison-shopping tool operator or lead generator can take unreasonable advantage of the reasonable consumer reliance described above when they operate a business model that gives preferential treatment, such as through steering, to particular consumer financial products or services to increase financial or other benefits to the tool operator. For example, the operator may be taking unreasonable advantage of the consumer's reasonable reliance if the operator is able to generate more interest in its own financial products or services or is able to increase fees charged to third-party providers because the tool functions in a way that engenders the consumer's reasonable, but misguided, reliance on the tool to present information in a manner consistent with the interests of the consumer. In addition, benefits that accrue to the operator or lead generator include direct financial compensation or indirect or non-financial benefits, such as the ability to gather data that indirectly increases the operator's or lead generator's ability to obtain financial or other benefits. 15

Statement

Section 2 of DIDRA, which added section 1123 to Title XI of FIRREA, 1 authorizes the agencies to make exceptions to statutory and regulatory appraisal requirements for certain transactions. These exceptions are available for transactions involving real property located in an area in which the President has determined a major disaster exists, pursuant to 42 U.S.C. 5170, provided that the exception would facilitate recovery from the major disaster and is consistent with safety and soundness.

On August 10, 2023, the President declared that a major disaster existed in the State of Hawaii  2 due to damage resulting from wildfires beginning on August 8, 2023. The agencies have determined that granting relief from the appraisal requirements set forth in Title XI of FIRREA, and in the agencies' appraisal regulations, for real estate-related financial transactions in an area designated as adversely affected by the major disaster is consistent with the provisions of DIDRA.

The agencies have determined that the disruption of real estate markets in the area designated as adversely affected by the major disaster interferes with the ability of depository institutions  3 to obtain appraisals that comply with Title XI statutory and regulatory requirements. Further, the agencies have determined that the disruption may impede institutions in making loans and engaging in other transactions that would aid in the reconstruction and rehabilitation of the affected area. Accordingly, the agencies have determined that recovery from this major disaster would be facilitated by exempting certain transactions involving real estate located in the area designated as adversely affected by the wildfires from the real estate appraisal requirements of Title XI of FIRREA and its implementing regulations. 4

The agencies also have determined that the exceptions are consistent with safety and soundness, provided that the depository institution determines the following: (1) the transaction involves real property located in the area designated as adversely affected by the major disaster; (2) there is a binding commitment to fund the transaction  5 that was entered into on or after August 10, 2023, but no later than August 10, 2026; and (3) the value of the real property supports the institution's decision to enter into the transaction. In addition, the transaction must continue to be subject to review by management and by the agencies in the course of examinations of the institution.

Exceptions made under section 1123 of FIRREA may be provided for no more than three years after the President determines a major disaster exists in an area. 6 Accordingly, the exceptions provided for by this order shall expire three years after the date the President declared a major disaster existed in the State of Hawaii, which is August 10, 2026.

In accordance with section 2 of DIDRA, relief is hereby granted from the provisions of Title XI of FIRREA and the agencies' appraisal regulations for any real estate-related financial transaction that requires the services of an appraiser under those provisions, provided that the institution determines each of the following:

(1) The transaction involves real property located in Maui County, 7 which has been designated as adversely affected by a major disaster by the President as a result of the wildfires beginning on August 8, 2023.

(2) There is a binding commitment to fund the transaction  8 that was entered into on or after August 10, 2023, but no later than August 10, 2026.

(3) The value of the real property supports the institution's decision to enter into the transaction.

I. Background A. Proposed PTFC Rule

On September 26, 2023, FHFA published a Notice of Proposed Rulemaking (proposed PTFC rule) in the Federal Register to amend FHFA's PTFC Regulation. 1 The proposed PTFC rule proposed adding an exception to the PTFC Regulation's restrictions for loans on properties with PTFCs, and related securities, if the loans meet the shared equity loan program requirements for Resale Restriction Programs, other than the 100 percent of area median income (AMI) limit, in § 1228.34(d)(4)(i)(A) and (d)(4)(ii) of FHFA's Duty to Serve Regulation. 2 Thus, the Enterprises and Banks would be authorized to purchase, invest in, accept as collateral, or otherwise deal in loans on properties with PTFCs, or related securities, if the loans met the requirements for Duty to Serve Resale Restriction Programs, without regard to any household income limit. Relevant discussion from the proposed PTFC rule's preamble is included below.

FHFA received comments on the proposed PTFC rule from Fannie Mae, Freddie Mac, three nonprofit organizations, one trade association, and one individual. The Banks did not submit any comments. The comments are further discussed in Section VI. below.

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (Safety and Soundness Act), provides that the Director of FHFA has a duty to ensure that the operations and activities of the Enterprises foster liquid, efficient, competitive, and resilient national housing finance markets. 3 To achieve these goals, the Enterprises purchase residential mortgages that fall within the conforming loan limits established pursuant to 12 U.S.C. 1717 and 12 U.S.C. 1454, and issue guaranteed mortgage-backed securities backed by those loans.

In addition, the Safety and Soundness Act provides generally that the Enterprises “have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families.”  4 Section 1129 of the Housing and Economic Recovery Act of 2008 (HERA) amended section 1335 of the Safety and Soundness Act to establish a duty for the Enterprises to serve three specified underserved markets (Duty to Serve) in order to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for certain categories of borrowers in those markets. 5 Specifically, the Enterprises are required to provide leadership in developing loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages on housing for very low-, low-, and moderate-income families for the manufactured housing, affordable housing preservation, and rural housing markets. 6 FHFA's Duty to Serve Regulation, 7 which implements these Duty to Serve statutory requirements, is discussed further below.

The eleven Banks are wholesale financial institutions organized under the Federal Home Loan Bank Act to support housing finance and further affordable housing and community development. 8 The Banks are cooperatives and carry out their mission primarily by providing products and services to their member institutions. Bank members and eligible housing associates (nonmember mortgagee borrowers such as state housing finance agencies) may obtain access to secured loans, known as advances. 9 These must be fully secured by eligible collateral at the time of issuance or renewal, which may include, among other forms of collateral, residential mortgages and mortgage-backed securities. 10 In addition, the Banks issue standby letters of credit on behalf of members and housing associates, which may be secured by residential mortgages and mortgage-backed securities.

Most Banks also offer Acquired Member Assets (AMA) programs, under which they acquire eligible mortgages from participating members and housing associates, subject to parameters set forth in FHFA's AMA regulation. 11 The Banks are also authorized to invest in mortgage-backed securities and other mortgage-related investments meeting applicable requirements. 12 Finally, the Banks may serve as pass-through entities for mortgage loans acquired by another purchaser.

FHFA's PTFC Regulation, which was adopted in 2012, prohibits the Enterprises and Banks from purchasing, investing in, or otherwise dealing in any mortgages encumbered by PTFCs, or related securities, and prohibits the Banks from accepting such mortgages or securities as collateral for advances, unless such PTFCs are “excepted transfer fee covenants.”  13 Under the PTFC Regulation, the term “PTFCs” means obligations that purport to “run with the land” in the records of title to real property or to bind current owners of, and successors in title to, such real property, and that obligate a transferee or transferor to pay a private transfer fee upon transfer of the property. 14 A “private transfer fee” is defined in the PTFC Regulation as “a transfer fee, including a charge or payment, imposed by a covenant, restriction, or other similar document and required to be paid in connection with or as a result of a transfer of title to real estate, and payable on a continuing basis each time a property is transferred (except for transfers specifically excepted) for a period of time or indefinitely.”  15

In adopting the PTFC Regulation, FHFA was concerned that private transfer fees would: (1) be used to fund purely private continuous streams of income for select market participants, either directly or through securitized investment vehicles; (2) not benefit homeowners or the properties involved; and (3) interfere with accurate determination of property values. Therefore, FHFA concluded that mortgages on properties with PTFCs might impair the safety and soundness of the Enterprises and the Banks that purchase, invest in, or otherwise deal in, or in the case of the Banks, that accept as collateral, such mortgages. 16

The prohibition in the PTFC Regulation does not apply where the PTFC is an “excepted transfer fee covenant,” which is defined in the regulation as a covenant that requires payment to a “covered association” and that limits the use of such payment to purposes that provide a “direct benefit” to the real property. 17

In a final rule published on November 7, 2023 (88 FR 76625), SBA incorporated the Uniform Guidance at 2 CFR part 200 on receiving and using Federal awards; made various revisions to align the regulations with the text of the SBDC statute; and adopted the proposed rule with changes from the comments received in response to the publication of the NPRM. This correction to the final rule makes three clarifications. First, it clarifies the basis on which the Administrator may make an exception to the client privacy restriction of § 130.380. Second, it corrects the definition of “Overmatched amount” in § 130.110 to match the guidelines provided in § 130.450(g). Finally, it revises the last sentence in § 130.450(g)(3).

Accordingly, the Small Business Administration amends 13 CFR part 130 by making the following correcting amendments:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus SAS Model A350-941 and -1041 airplanes. The NPRM published in the Federal Register on November 3, 2023 (88 FR 75520). The NPRM was prompted by AD 2023-0102, dated May 17, 2023, issued by EASA, which is the Technical Agent for the Member States of the European Union (EASA AD 2023-0102) (also referred to as the MCAI). The MCAI states there are reports of corrosion on lavatory floor fittings at various locations on Model A350 airplanes.

In the NPRM, the FAA proposed to require repetitive general visual inspections of the affected parts, applicable corrective actions, and reporting of inspection results, as specified in EASA AD 2023-0102. The FAA is issuing this AD to address the corrosion, which could lead to lavatory module detachment, with consequent injury to cabin crew and passengers, and possibly result in reduced evacuation capacity from the airplane in case of an emergency.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-2141.

The FAA received no comments on the NPRM or on the determination of the cost to the public.

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 reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

EASA AD 2023-0102 specifies procedures for repetitive general visual inspections for corrosion and other damage (including cracks, pitting, discoloration, and dents) of the affected lavatory floor fittings and, depending on findings, corrective actions including repair or replacement. EASA AD 2023-0102 also requires reporting of the inspection results after each inspection. 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 the ADDRESSES section.

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

The FAA estimates that this AD would affect 32 airplanes of U.S. registry. The FAA estimates the following costs to comply with this 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 AD may be covered under warranty, thereby reducing the cost impact on affected operators.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

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.

This AD will not have federalism implications under Executive Order 13132. This AD will 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 that this AD:

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

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

(3) Will 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 amends 14 CFR part 39 as follows:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2021-20-13, Amendment 39-21751 (86 FR 57033, October 14, 2021) (AD 2021-20-13). AD 2021-20-13 applied to certain Bombardier, Inc., Model CL-600-2B16 (604 Variant) airplanes. AD 2021-20-13 required repetitive lubrication and repetitive DVI and NDT inspections of the MLG shock strut lower pins, and replacement if necessary. The FAA issued AD 2021-20-13 to correct an unsafe condition identified as cracking of the MLG shock strut lower pin part number 19146-3.

The NPRM published in the Federal Register on October 25, 2023 (88 FR 73265). The NPRM was prompted by AD CF-2023-32, dated May 9, 2023, issued by Transport Canada, which is the aviation authority for Canada (Transport Canada AD CF-2023-32) (also referred to as the MCAI). The MCAI states there is a new design solution for this potential failure of the shock strut lower pin, which involves replacing the training arm bushings at the attachment and reassembly of the MLG shock strut assembly to training arm assembly joint with new dynamic joint components. As a result, the MCAI requires this new design as terminating action for the requirements of Transport Canada AD CF-2020-54R1.

In the NPRM, the FAA proposed to continue to require the lubrication and inspections specified in AD 2021-20-13 until the MLG shock strut assembly is modified by replacing the trailing arm bushing and installing new dynamic joint components. The FAA is issuing this AD to address cracking of the MLG shock strut lower pin. The unsafe condition, if not addressed, could result in structural failure of one or both MLG.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-2001.

The FAA received comments from three commenters, including Executive Jet Management, Inc., NetJets, and Boeing. The following presents the comments received on the NPRM and the FAA's response to each comment.

Executive Jet Management, Inc. NetJets, and Boeing requested the FAA revise the proposed AD to allow using Bombardier Service Bulletin 604-32-031 Revision 01, dated March 17, 2023; Bombardier Service Bulletin 605-32-008 Revision 01, dated March 17, 2023; and Bombardier Service Bulletin 650-32-005 Revision 01, dated March 17, 2023. NetJets also requested that the proposed AD be revised to add credit for using the original issues of the service information.

The FAA agrees to update this final rule to reference Bombardier Service Bulletin 604-32-031 Revision 01, dated March 17, 2023; Bombardier Service Bulletin 605-32-008 Revision 01, dated March 17, 2023; and Bombardier Service Bulletin 650-32-005 Revision 01, dated March 17, 2023, which include minor changes that do not affect the substantive requirements proposed in the NPRM. The FAA has revised this AD to reflect the updated service bulletins. The FAA has also added paragraph (n) of this AD to provide credit for the original issues of the applicable service bulletins, and redesignated subsequent paragraphs accordingly.

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 reviewed the relevant data, considered the comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed the following Bombardier service information:

• Service Bulletin 604-32-031, Revision 01, dated March 17, 2023.

• Service Bulletin 605-32-008, Revision 01, dated March 17, 2023.

• Service Bulletin 650-32-005, Revision 01, dated March 17, 2023.

This service information contains procedures for disassembling the left- and right-hand MLG shock strut and trailing arm joint, replacing the trailing arm bushings at the attachment, and re-assembling the joint with new dynamic joint components. These documents are distinct since they apply to different airplane configurations.

This AD also requires the following Bombardier service information, which the Director of the Federal Register approved for incorporation by reference as of November 18, 2021 (86 FR 57033, October 14, 2021):

• Service Bulletin 604-32-030, dated June 30, 2020.

• Service Bulletin 605-32-007, dated June 30, 2020.

• Service Bulletin 650-32-004, dated June 30, 2020.

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

The FAA estimates that this AD affects 433 airplanes of U.S. registry.

The FAA estimates the following costs to comply with this AD:

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

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 AD will not have federalism implications under Executive Order 13132. This AD will 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 that this AD:

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

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

(3) Will 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 amends 14 CFR part 39 as follows:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Deutsche Aircraft GmbH (Type Certificate previously held by 328 Support Services GmbH; AvCraft Aerospace GmbH; Fairchild Dornier GmbH; Dornier Luftfahrt GmbH) Model 328-100 and 328-300 airplanes. The NPRM published in the Federal Register on December 6, 2023 (88 FR 84764). The NPRM was prompted by AD 2023-0137, dated July 12, 2023 (EASA AD 2023-0137) (also referred to as the MCAI), issued by EASA, which is the Technical Agent for the Member States of the European Union. The MCAI states that operators reported findings of damaged affected parts. The extent of the detected damage of the affected parts did not ensure that appropriately low electrical impedance is obtained and maintained through the affected bonding path. The unsafe condition, if not detected and corrected, could lead to the loss of bonding function and, in combination with a lightning strike, create a source of ignition in a fuel tank, possibly resulting in a fire or explosion.

In the NPRM, the FAA proposed to require a one-time detailed inspection of each affected part, and applicable corrective actions, as specified in EASA AD 2023-0137. The FAA is issuing this AD to address the unsafe condition on these products.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-2230.

The FAA received no comments on the NPRM or on the determination of the cost to the public.

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 reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

EASA AD 2023-0137 specifies procedures for a one-time detailed inspection of each affected part for worn and ruptured bonding straps, and applicable corrective actions (replacing the affected parts). 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 the ADDRESSES section.

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

The FAA estimates that this AD affects 35 airplanes of U.S. registry. The FAA estimates the following costs to comply with this 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 received no definitive data on which to base the cost estimates for the on-condition actions specified in this AD.

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

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

This AD will not have federalism implications under Executive Order 13132. This AD will 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 that this AD:

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

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

(3) Will 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 amends 14 CFR part 39 as follows:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Canada Limited Partnership Model BD-500-1A11 airplanes. The NPRM published in the Federal Register on August 31, 2023 (88 FR 60160). The NPRM was prompted by AD CF-2023-08, dated February 13, 2023, issued by Transport Canada, which is the aviation authority for Canada (Transport Canada AD CF-2023-08) (also referred to as the MCAI). The MCAI states that a manufacturing molding issue with an electrical connector may prevent the connector from self-locking. The connector may become loose over time, preventing the charging of EPSUs 3 and 4 and lead to the loss of emergency lights, possibly resulting in injury to occupants during an evacuation.

In the NPRM, the FAA proposed to require removing the affected connector, installing a new connector, and testing the EPSUs, as specified in Transport Canada AD CF-2023-08. The FAA is issuing this AD to address the unsafe condition on these products.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-1810.

The FAA received a comment from Delta Air Lines (DAL). The following presents the comment received on the NPRM and the FAA's response.

DAL stated that via the FAA U.S. registry, the four affected airplanes are not U.S.-registered. The FAA assumes Delta would like the AD to specify no U.S.-registered airplanes.

The FAA agrees that the affected airplanes are not registered in the United States. The Costs of Compliance section of the final rule has been changed accordingly.

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 reviewed the relevant data, considered the comment received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

Transport Canada AD CF-2023-08 specifies procedures for removing the affected connector, installing a new connector, and testing the EPSUs. 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 the ADDRESSES section.

Currently, there are no affected U.S.-registered airplanes. If an affected airplane is imported and placed on the U.S. Register in the future, the FAA provides the following cost estimates to comply with this AD:

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

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

This AD will not have federalism implications under Executive Order 13132. This AD will 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 that this AD:

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

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

(3) Will 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 amends 14 CFR part 39 as follows:

The Convention on Cultural Property Implementation Act (Pub. L. 97-446, 19 U.S.C. 2601 et seq. ) (CPIA), which implements the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (823 U.N.T.S. 231 (1972)) (the Convention), allows for the conclusion of an agreement between the United States and another party to the Convention to impose import restrictions on eligible archaeological and ethnological materials. Under the CPIA and the applicable U.S. Customs and Border Protection (CBP) regulations, found in §§  12.104 through 12.104i of title 19 of the Code of Federal Regulations (19 CFR 12.104 through 12.104i), the restrictions are effective for no more than five years beginning on the date on which an agreement enters into force with respect to the United States (19 U.S.C. 2602(b)). This period may be extended for additional periods, each extension not to exceed five years, if it is determined that the factors justifying the initial agreement still pertain and no cause for suspension of the agreement exists (19 U.S.C. 2602(e); 19 CFR 12.104g(a)).

On March 12, 2004, the United States entered into a bilateral agreement with the Republic of Honduras (Honduras) to impose import restrictions on certain archaeological material representing the Pre-Columbian cultures of Honduras and ranging in date from approximately 1200 B.C. to 1500 A.D. On March 16, 2004, CBP published a final rule (CBP Dec. 04-08) in the Federal Register (69 FR 12267), which amended 19 CFR 12.104g(a) to reflect the imposition of these restrictions, and included a list designating the types of archaeological materials covered by the restrictions.

The import restrictions were subsequently extended three times in accordance with 19 U.S.C. 2602(e) and 19 CFR 12.104g(a), and the designated list was amended once. On March 11, 2009, CBP published a final rule (CBP Dec. 09-05) in the Federal Register (74 FR 10482), which amended § 12.104g(a) to reflect the extension of these import restrictions for an additional five years. On March 12, 2014, CBP published a final rule (CBP Dec. 14-03) in the Federal Register (79 FR 13873), which amended § 12.104g(a) to reflect the extension of these import restrictions for an additional five years as well as amending the Designated List to add restrictions on ecclesiastical ethological material dating to the Colonial period of Honduras, c. A.D. 1502 to 1821.

Subsequently, on March 5, 2019, the United States and Honduras entered into a superseding memorandum of understanding (MOU), that extended the import restrictions for an additional five years. On March 12, 2019, CBP published a final rule (CBP Dec. 19-03) in the Federal Register (84 FR 8807), which amended §  12.104g(a) to reflect the extension of these import restrictions for an additional five years. These import restrictions are due to expire on March 12, 2024.

On August 8, 2023, the United States Department of State proposed in the Federal Register (88 FR 53576) to extend the MOU. On January 24, 2024, after considering the views and recommendations of the Cultural Property Advisory Committee, the Assistant Secretary for Educational and Cultural Affairs, United States Department of State, made the necessary determinations to extend the import restrictions for an additional five years. Following an exchange of diplomatic notes, the United States Department of State and the Government of the Republic of Honduras have agreed to extend the restrictions for an additional five-year period, through March 12, 2029.

Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect the extension of these import restrictions. The restrictions on the importation of archaeological and ecclesiastical ethnological material from Honduras will continue in effect through March 12, 2029. Importation of such material from Honduras continues to be restricted through that date unless the conditions set forth in 19 U.S.C. 2606 and 19 CFR 12.104c are met.

The Designated List and additional information may also be found at the following website address: https://eca.state.gov/cultural-heritage-center/cultural-property/current-agreements-and-import-restrictions by selecting the material for “Honduras.”

This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure under 5 U.S.C. 553(a)(1). For the same reason, a delayed effective date is not required under 5 U.S.C. 553(d)(3).

Executive Orders 12866 (as amended by Executive Order 14094) and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. CBP has determined that this document is not a regulation or rule subject to the provisions of Executive Orders 12866 and 13563 because it pertains to a foreign affairs function of the United States, as described above, and therefore is specifically exempted by section 3(d)(2) of Executive Order 12866 and, by extension, Executive Order 13563.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, requires an agency to prepare and make available to the public a regulatory flexibility analysis that describes the effect of a proposed rule on small entities ( i.e., small businesses, small organizations, and small governmental jurisdictions) when the agency is required to publish a general notice of proposed rulemaking for a rule. Since a general notice of proposed rulemaking is not necessary for this rule, CBP is not required to prepare a regulatory flexibility analysis for this rule.

This regulation is being issued in accordance with 19 CFR 0.1(a)(1) pertaining to the Secretary of the Treasury's authority (or that of the Secretary's delegate) to approve regulations related to customs revenue functions.

Troy A. Miller, the Senior Official Performing the Duties of the Commissioner, having reviewed and approved this document, has delegated the authority to electronically sign this document to the Director (or Acting Director, if applicable) of the Regulations and Disclosure Law Division for CBP, for purposes of publication in the Federal Register .

For the reasons set forth above, part 12 of title 19 of the Code of Federal Regulations (19 CFR part 12), is amended as set forth below:

Electronic Availability

This document and additional information concerning OFAC are available on OFAC's website: www.treas.gov/ofac.

On June 29, 2018, OFAC issued the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (83 FR 30541, June 29, 2018) (the “Regulations”), to implement the Global Magnitsky Human Rights Accountability Act (22 U.S.C. 10101-10103 (the “Global Magnitsky Act”)) and Executive Order (E.O.) 13818 of December 20, 2017, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption” (82 FR 60839, December 26, 2017), pursuant to authorities delegated to the Secretary of the Treasury. The Regulations were initially issued in abbreviated form for the purpose of providing immediate guidance to the public. OFAC is revising the Regulations to further implement the Global Magnitsky Act and E.O. 13818. OFAC is amending and reissuing the Regulations as a more comprehensive set of regulations that includes additional interpretive guidance and definitions, general licenses, and other regulatory provisions that will provide further guidance to the public. Finally, OFAC is adding the Uyghur Human Rights Policy Act of 2020, as amended, (22 U.S.C. 6901 note; Pub. L. 116-145, 134 Stat. 648) to the authority citation of 31 CFR part 583. Due to the number of regulatory sections being updated or added, OFAC is reissuing the Regulations in their entirety.

On December 23, 2016, the President signed the Global Magnitsky Act into law. The Global Magnitsky Act, in section 1263 (22 U.S.C. 10102), authorizes the President to impose targeted sanctions on any foreign person the President determines, based on credible evidence: (1) is responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights committed against individuals in any foreign country who seek (A) to expose illegal activity carried out by government officials; or (B) to obtain, exercise, defend, or promote internationally recognized human rights and freedoms, such as the freedoms of religion, expression, association, and assembly, and the rights to a fair trial and democratic elections; (2) acted as an agent of or on behalf of foreign persons in a matter related to an activity described in (1); (3) is a government official, or a senior associate of such an official, that is responsible for, or complicit in, ordering, controlling, or otherwise directing, acts of significant corruption including the expropriation of private or public assets for personal gain, corruption related to government contracts or the extraction of natural resources, bribery, or the facilitation or transfer of the proceeds of corruption to foreign jurisdictions; or (4) has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, an activity described in (3).

On September 8, 2017, the President delegated authority to the Secretary of the Treasury, in coordination with the Secretary of State, to administer the financial sanctions under section 1263 of the Global Magnitsky Act (22 U.S.C. 10102), which provides for the blocking of all property and interests in property of a foreign person described in section 1263(a) of the Global Magnitsky Act if such property and interests in property are in the United States, come within the United States, or are or come within the possession of or control of a United States person (82 FR 45411, September 28, 2017).

On December 20, 2017, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq. ) (IEEPA) and the Global Magnitsky Act, issued E.O. 13818, effective at 12:01 a.m. eastern standard time on December 21, 2017, to implement and build upon the Global Magnitsky Act. In E.O. 13818, the President found that the prevalence and severity of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, such as those committed or directed by persons listed in the Annex to E.O. 13818, have reached such scope and gravity that they threaten the stability of international political and economic systems. The President determined that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with that threat.

Section 1(a) of E.O. 13818 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of: (i) the persons listed in the Annex to E.O. 13818; (ii) any foreign person determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General: (A) to be responsible for or complicit in, or to have directly or indirectly engaged in, serious human rights abuse; (B) to be a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in: (1) corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery; or (2) the transfer or the facilitation of the transfer of the proceeds of corruption; (C) to be or have been a leader or official of: (1) an entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsection 1(ii)(A), (B)(1), or (B)(2) of E.O. 13818 relating to the leader's or official's tenure; or (2) an entity whose property and interests in property are blocked pursuant to this order as a result of activities related to the leader's or official's tenure; (D) to have attempted to engage in any of the activities described in subsection 1(ii)(A), (B)(1), or (B)(2) of E.O. 13818; and (iii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General: (A) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of: (1) any activity described in subsection 1(ii)(A), (B)(1), or (B)(2) of E.O. 13818 that is conducted by a foreign person; (2) any person whose property and interests in property are blocked pursuant to E.O. 13818; or (3) any entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsection 1(ii)(A), (B)(1), or (B)(2) of E.O. 13818, where the activity is conducted by a foreign person; (B) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; or (C) to have attempted to engage in any of the activities described in subsection 1(iii)(A) or (B) of E.O. 13818. The property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any United States person, of the persons described above may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

Section 1(b) of E.O. 13818 provides that the prohibitions in Section 1(a) of E.O. 13818 apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to E.O. 13818, and notwithstanding any contract entered into or any license or permit granted before the effective date of E.O. 13818.

In Section 3 of E.O. 13818, the President determined that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to E.O. 13818 would seriously impair the President's ability to deal with the national emergency declared in E.O. 13818. The President therefore prohibited the donation of such items except to the extent provided by statutes, or in regulations, rulings, instructions, orders, directives, or licenses that may be issued pursuant to E.O. 13818.

Section 4 of E.O. 13818 provides that the prohibition on any transaction or dealing in blocked property or interests in property includes the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to E.O. 13818, and the receipt of any contribution or provision of funds, goods, or services from any such person.

Section 5 of E.O. 13818 prohibits any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in E.O. 13818, as well as any conspiracy formed to violate such prohibitions.

Section 8 of E.O. 13818 authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including adopting rules and regulations, and to employ all powers granted to the President by IEEPA and the Global Magnitsky Act, as may be necessary to implement E.O. 13818 and section 1263(a) of the Global Magnitsky Act (22 U.S.C. 10102(a)). Section 8 of E.O. 13818 also provides that the Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States.

To further implement the Global Magnitsky Act and E.O. 13818, OFAC is amending and reissuing the Regulations. The Regulations implement targeted sanctions that are directed at persons determined to meet the criteria set forth in § 583.201(a) of the Regulations, as well as sanctions that may be set forth in any further Executive orders issued pursuant to the national emergency declared in E.O. 13818. The sanctions in E.O. 13818 do not generally prohibit trade or the provision of banking or other financial services to a certain country. Instead, the sanctions in E.O. 13818 apply where the transaction or service in question involves property or interests in property that are blocked pursuant to these authorities.

Subpart A of the Regulations clarifies the relation of this part to other laws and regulations. Subpart B of the Regulations implements the prohibitions contained in sections 1, 3, 4, and 5 of E.O. 13818, which implement and build upon the prohibitions set forth in the Global Magnitsky Act, the prohibitions contained in any further Executive orders issued pursuant to the national emergency declared in E.O. 13818. Persons identified in the Annex to E.O. 13818, designated by or under the authority of the Secretary of the Treasury pursuant to E.O. 13818, or otherwise blocked pursuant to E.O. 13818, as well as persons who are blocked pursuant to any further Executive orders issued pursuant to the national emergency declared in E.O. 13818, are referred to throughout the Regulations as “persons whose property and interests in property are blocked pursuant to § 583.201.” The names of persons designated or identified as blocked pursuant to E.O. 13818, or any further Executive orders issued pursuant to the national emergency declared therein, are published on OFAC's SDN List, which is accessible via OFAC's website. Those names also are published in the Federal Register as they are added to the SDN List.

Sections 583.202 and 583.203 of subpart B detail the effect of transfers of blocked property in violation of the Regulations and set forth the requirement to hold blocked funds, such as currency, bank deposits, or liquidated financial obligations, in interest-bearing blocked accounts. Section 583.204 of subpart B provides that all expenses incident to the maintenance of blocked tangible property shall be the responsibility of the owners and operators of such property, and that such expenses shall not be met from blocked funds, unless otherwise authorized. The section further provides that blocked property may, in OFAC's discretion, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.

Section 583.205 of subpart B prohibits any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in section 583.201 of the Regulations, and any conspiracy formed to violate such prohibitions.

Section 583.206 of subpart B details transactions that are exempt from the prohibitions of the Regulations pursuant to section 203(b) of IEEPA (50 U.S.C. 1702(b)).

In subpart D, which contains interpretive sections regarding the Regulations, certain provisions have been renumbered and others added to those in the prior abbreviated set of regulations. Section 583.411 of subpart D explains that the property and interests in property of an entity are blocked if the entity is directly or indirectly owned, whether individually or in the aggregate, 50 percent or more by one or more persons whose property and interests in property are blocked, whether or not the entity itself is incorporated into OFAC's SDN List.

Transactions otherwise prohibited by the Regulations but found to be consistent with U.S. policy may be authorized by one of the general licenses contained in or issued pursuant to subpart E of the Regulations or by a specific license issued pursuant to the procedures described in subpart E of 31 CFR part 501. General licenses and statements of licensing policy relating to this part also may be available through the Global Magnitsky sanctions page on OFAC's website: www.treas.gov/ofac.

Subpart F of the Regulations refers to subpart C of part 501 for recordkeeping and reporting requirements. Subpart G of the Regulations describes the civil and criminal penalties applicable to violations of the Regulations, as well as the procedures governing the potential imposition of a civil monetary penalty or issuance of a Finding of Violation. Subpart G also refers to appendix A of part 501 for a more complete description of these procedures.

Subpart H of the Regulations refers to subpart E of part 501 for applicable provisions relating to administrative procedures and contains a delegation of certain authorities of the Secretary of the Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction Act notice.

Because the Regulations involve a foreign affairs function, the provisions of E.O. 12866 of September 30, 1993, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), as amended, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

For the reasons set forth in the preamble, OFAC revises 31 CFR part 583 to read as follows:

The proposed rule was published in the Federal Register (88 FR 27832-27839) on May 3, 2023. Four submissions were received and are summarized below.

A commenter suggested DoD should redefine terms and should change the regulations for the program. However, the commenter did not provide any additional detail which would allow DoD to consider possible changes.

A commenter suggested DoD use this opportunity to run a targeted marketing campaign to assist small businesses with explaining a medium assurance certificate's purpose and procuring the hardware in advance of needing it.

After consideration, DoD is modifying the requirement for industry to obtain a medium assurance certificate. Medium assurance certificates can be used to validate digital identity and facilitate the exchange of encrypted information. However, it is not the only technical solution available to support identity proofing requirements. So, DoD is revising paragraph (e) in § 236.4, and separately in Department of Defense Instruction (DoDI) 8582.01, “Security of Non-DoD Information Systems Processing Unclassified Nonpublic DoD Information,” to require registration with Procurement Integrated Enterprise Environment (PIEE)  1 when submitting mandatory cyber incident reports. This change will reduce the burden of having to procure a medium assurance certificate which costs approximately $175 annually. All DoD contracts contain Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.232-7003 (48 CFR 252.232-7003), which specifies requirements for electronic submission of payment requests. In order to access the electronic systems associated with electronic payments the contractor must also complete the required identity proofing and registration process with PIEE.

Multiple commenters provided input on the accuracy of the burden estimates. One commentor recommended allowing one report to cover multiple contracts to reduce the administrative reporting burden on all parties and enhance consistency across DoD data. Another commentor noted that many firms will lack in-depth familiarity with existing policy, compliance requirements, and other details of the DIB CS Program and, as such, the estimate of 30 minutes for new entrants to familiarize themselves with the rule is an underestimate.

As DoD is modifying the requirement for industry to obtain a medium assurance certificate with this final rule, the Department believes the burden to companies participating in the DIB CS Program is being reduced. In response to concerns about submitting a nearly identical report for multiple contracts, DoD would like to clarify that a contractor may submit one report for an event that impacts multiple contracts. Finally, DoD would like to clarify the estimate of 30 minutes to review changes to this final rule and choose whether to apply to the voluntary DIB CS Program does not include time for contractors to develop in-depth familiarity with existing policies and compliance requirements. It is expected DoD contractors will invest time to familiarize themselves with contractually mandated requirements in addition to this estimate.

A commenter highlighted the revision to the DIB CS Program omits a key component of the Critical Infrastructure Protection Act (CIPA) of 2001, and the revisions to the DIB CS Program will exclude operationally critical support (OCS) contractors from its provisions unless such contractors have covered defense information (CDI) resident in their information systems (IS). The commenter recommended including contractors performing under contracts that are designated as providing OCS, regardless of whether those IS contain CDI.

In accordance with 10 U.S.C. 391, the DoD must include mechanisms for Department personnel to, if requested, assist operationally critical contractors in detecting and mitigating penetrations. Pursuant to section 1642(b) of the National Defense Authorization Act for Fiscal Year 2019 DoD has authority to engage with the DIB that is complementary to, but distinct from, the DIB Cybersecurity Activities that implement the requirements levied upon the Department in 10 U.S.C. 391 and 393. To meet the requirements specified in 10 U.S.C. 391, the DIB CS program will refer ineligible applicants to other U.S. Government Departments and Agencies sharing cybersecurity equities to ensure Federal unity of effort.

A commenter posed several questions about the role of third-party service providers seeking to understand if a third-party service provider may submit reports on behalf of a client, and if a third-party service provider must own or operate covered contractor information systems.

Currently, a contractor may authorize a third-party service provider to report incidents on behalf of the contractor. If that contractor and the third-party service provider are interested in participating in the DIB CS Program, an amendment to the DIB CS Program Framework Agreement is available to authorize the third-party service provider access to DIB CS resources. This agreement details whether the third-party service provider will provide on-site or off-site support; clarifies the respective roles of the contractor and the third-party service provider regarding accessing the government-furnished information on the DIB CS web portal and voluntary reporting of cyber incidents and indicators to the Government. The Framework Agreement and all Program amendments are made available through https://dibnet.dod.mil to an eligible company after the company has been verified by the DoD. The third-party service provider does not need to own or operate a covered defense system.

Two commenters reiterated the need for training and best practices but did not indicate if they are familiar with DoD's current training programs or if they believe the programs are adequate.

DoD notes the DIB CS Program offers training and best practices through in-person and virtual meetings and provides information about digital resources on https://dibnet.dod.mil.

One commenter stated a link or a copy of the “standardized” Government Framework Agreement on the website will help contractors better understand their ability to meet the requirement before submitting an application—potentially saving all parties time and resources.

DoD notes factsheets and informational materials are publicly available on https://dibnet.dod.mil. The Framework Agreement between the Government and a DIB participant is made available after the company applies to the program and DoD verifies the company meets the eligibility requirements set forth in § 236.7.

A commenter suggested access and information for cleared companies should remain as it is today and recommended an “impact statement” to information released to uncleared firms to help contextualize the information and the reason for disseminating it.

The Privacy Impact Assessment (PIA) for DoD's DIB CS Activities provides procedures on how the Government handles personally identifiable information (PII), as well as other forms of sensitive contractor information ( e.g., contractor attributional/proprietary). The PIA is publicly available at https://dodcio.defense.gov/Portals/0/Documents/DIB_PIA.pdf and no changes to the PIA are being proposed. The Security Classification Guide (SCG)  2 is the tool used by DoD Personnel to identify and safeguard national security information when derivatively classifying information. All information will be designated and handled in accordance with the DIB CS Activities SCG, the NISPOM Program as defined in 32 CFR part 117 and the Controlled Unclassified Information (CUI) Program as defined in 32 CFR part 2002.

A commenter asked about a future opportunity to map the level of access to DIB CS resources to a company's certification(s) level or assessment scoring.

DoD notes all companies currently participating in the DIB CS Program are eligible to receive Government Furnished Information (GFI) under the voluntary DIB CS Program and cybersecurity information is shared to the greatest extent possible in accordance with the Program's SCG. Information about a company's certification level or assessment score is controlled information and not available to the DIB CS Program at this time.

A commenter recommended providing consistent controls and data access channels to help companies synthesize and apply the threat information to their market.

The DIB CS Program marks all documents in accordance with the SCG  3 and DIBNet remains the primary channel for disseminating threat products. DoD has recently relaunched DIBNet to provide an API-based data access channel to complement the ability for a DIB CS Participant to download PDF, TXT, and CSV based products which should allow a participating company to analyze threat information unique to their market.

A commenter recommended adding headers to § 236.4 for paragraph (f), (g), (j), and (o) to increase uniformity.

DoD has added headers to § 236.4 for paragraphs (f), (g), and (o). Paragraph (j) has a header, and an administrative correction will be made to correct the format of paragraph (n).

A commenter asked if the rights and responsibilities for submittals under the DIB CS Program have changed with respect to Freedom of Information Act (FOIA).

The rights and responsibilities for submittals under the DIB CS Program have not changed with respect to Freedom of Information Act (FOIA). The Office of the Assistant to the Secretary of Defense for Privacy, Civil Liberties, and Transparency (OATSD(PCLT)) maintains a DoD FOIA Handbook available at https://open.defense.gov/Transparency/FOIA/FOIAHandbook.aspx.

The DIB means the DoD, Government, and private sector worldwide industrial complex with capabilities to perform research and development, design, produce, and maintain military weapon systems, subsystems, components, or parts to satisfy military requirements. The DIB Cybersecurity Program is a voluntary program to enhance and supplement participants' capabilities to safeguard DoD information that resides on, or transits, DIB unclassified information systems. The program encourages greater threat information sharing to complement mandatory aspects of DoD's DIB cybersecurity activities which are contractually mandated through DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting. 4 This program supports and complements DoD-specific authorities at 10 U.S.C. 2224 and the Federal Information Security Management Act (FISMA 2002) as amended by the Federal Information Security Modernization Act, 2014. Cyber threat information sharing activities under this final rule also fulfill important elements of DoD's critical infrastructure protection responsibilities, as the sector risk management agency for the DIB (see Presidential Policy Directive 21 (PPD-21), 5 “Critical Infrastructure Security and Resilience”). This program is aligned with the requirements of the Controlled Unclassified Information (CUI) program established in Executive Order 13556. Expanding eligibility requirements for the DIB CS Program will augment DoD's information sharing activities with the DIB.

Currently, the DIB CS Program has the following objectives:

• Establish a voluntary, mutually acceptable framework to protect information from unauthorized access.

• Protect the confidentiality of information exchanged to the maximum extent authorized by law.

• Create a trusted environment to maximize network defense and remediation efforts by:

1. Sharing cyber threat information and incident reports.

2. Providing mitigation/remediation strategies and malware analysis.

This program is part of DoD's larger portfolio of work to protect DoD information handled by the DIB by understanding and sharing information, building security partnerships, implementing long-term risk management programs, and maximizing efficient use of resources. It supports two-way information sharing and maintains meaningful relationships and frequent dialogue across the diverse array of eligible defense contractors. For eligible defense contractors, the program maintains a capability for companies to access classified government cyber threat information providing additional context to better understand the cyber threats targeting their networks and information systems.

In May 2012, DoD published an interim final rule establishing the voluntary DIB CS Program and the bilateral information sharing model still used today. 6 The 2012 rule established a voluntary cyber threat information sharing program for cleared defense contractors (CDC) with the ability to safeguard classified information, estimated at 2,650 in 2012. Under the rule CDC is defined as a private entity granted clearance by DoD to access, receive, or store classified information for the purpose of bidding for a contract or conducting activities in support of any program of DoD. The 2012 rule stated DoD would maintain a website to facilitate the following aspects of program participation: (1) sharing information regarding eligibility and participation in the program with potential participants, (2) applying to the program online, and 3) executing the necessary agreements with the Government. DoD has established this capability as an online portal referred to as “DIBNet,” located at https://dibnet.dod.mil. A final rule responding to public comments was published in October 2013. 7 In October 2015, responding to new statutory requirements for cyber incident reporting for DoD contractors, subcontractors, and those providing operationally critical support, DoD published another interim final rule  8 to expand eligibility to all cleared defense contractors (estimated at 8,500 in 2015 and 12,000 in 2022), subject to program eligibility requirements. The 2015 rule removed the requirement that CDCs be able to safeguard classified information to participate in the program. The rule also removed the mandatory program eligibility requirement to have or acquire a Communications Security (COMSEC) account  9 and obtain access to DoD's secure voice and data transmission systems, although participants still have to fulfill these requirements to receive classified cyber threat information electronically. A final rule responding to public comments was published in October 2016. 10

With this rule, the Department is expanding eligibility requirements to allow greater program participation and increase the benefits of bilateral information sharing, which helps protect DoD controlled unclassified information from cyberattack, as well as to better align the voluntary DIB CS Program with DoD's mandatory cyber incident reporting requirements. The current eligibility requirements, based on the October 2016 rule, requires a company to be a cleared defense contractor  11 who:

• Has DoD-approved medium assurance certificates;  12

• Has an existing facility clearance  13 to at least the Secret level; and

• Can execute the standardized Framework Agreement  14 provided to interested contractors after the Department has verified the DIB company is eligible.

The program has experienced steady growth, with the annual number of applications more than tripling since 2016 (80 total applications received in 2016, 266 total applications received in 2022). It has also seen a steady increase in the percentage of defense contractors who are interested in participating but do not meet current eligibility requirements. The percentage of applications received from ineligible defense contractors has risen at an average rate of 5% per year since 2016; 10% of applications received in 2016 were from ineligible defense contractors, while 45% of applicants in 2022 were ineligible. The steady increase in DIB applicants indicates an increasing desire amongst defense contractors to participate in a cyber threat information sharing program.

In addition, the Department has actively engaged defense associations, universities, and companies in the DIB, as well as participated in many public forums discussing cyber threats and the way forward. The overwhelming feedback was for the Department to facilitate engagement with the broader community of defense contractors beyond just the cleared defense community. In general, smaller defense contractors have fewer resources to devote to cybersecurity, which may provide a vector for adversaries to access information critical to national security. In addition, the Department is working on providing more tailored threat information to support the needs of a broader community of defense contractors with varying cybersecurity capabilities. The gap in eligibility in the current program, feedback from interested but ineligible contractors, a vulnerable DoD supply chain, and a pervasive cyber threat have prompted DoD to propose revising the eligibility requirements of the DIB CS Program to allow participation by non-cleared defense contractors.

The maximum number of defense contractors estimated to be subject to mandatory cyber incident reporting under DFARS clause 252.204-7012 is 80,000. The presence of the clause in a contract does not establish that covered defense information is shared. DoD is working on reporting mechanisms to better assess contractors managing covered defense information. The population of defense contractors in possession of covered defense information and subject to mandatory incident reporting requirements far exceeds the population of defense contractors currently eligible to participate in the voluntary DIB CS Program. With the changes to the eligibility criteria, an estimated additional 68,000 defense contractors will be eligible to participate in the voluntary DIB CS Program. Based on prior participation statistics, it is estimated that about 10% of the eligible contractors (12,000 + 68,000 = 80,000) will actually apply to join the voluntary DIB CS Program (80,000 × 0.10 = 8,000).

Currently, the DIB CS Program has approximately 1,000 cleared defense contractors participating in the program. Program participants have access to technical exchange meetings, a collaborative web platform (DIBNet-U), and threat information products and services through the DoD Cyber Crime Center (DC3). DC3 implements the program's operations by sharing cyber threat information and intelligence with the DIB, and offering a variety of products, tools, services, and events. DC3 serves as the single clearinghouse for unclassified Mandatory Incident Reports (MIRs) and voluntary threat information sharing reports.

In addition to the program eligibility changes described above, DoD is also finalizing the following changes.

1. Access to media—This definition is being removed as it is no longer used in the rule text.

2. DIB CS Program participant—This definition has been revised to align with the revised eligibility requirements set forth in this final rule.

3. Government furnished information (GFI)—This definition was revised to adopt the convention of referring to the DIB CS Program with a capital `P'.

DoD is amending § 236.4 (Mandatory cyber incident reporting procedures), in response to public comments received about the burden associated with medium assurance certificates. The amendment will require contractors to obtain PIEE account in conjunction with mandatory cyber incident reporting. This change will align the identity proofing processes used by DoD for the majority of DIB companies and will eliminate the cost associated with procuring medium assurance certificates. DoD will continue to accept medium assurance certificates to fulfil identity proofing requirements.

DoD is amending § 236.5 (DoD's DIB CS program) in order to align the program description with the revised eligibility requirements. As a result, references to cleared defense contractors have been replaced with contractors that own or operate a covered contractor information system. Security clearance information is only collected, when applicable, if a company elects and is eligible to participate in classified information sharing. In addition, the language stating participation is typically three to ten company-designated points of contact (POC) has been removed, to avoid confusion regarding the number of POCs, as some larger companies may wish to nominate a larger number of POCs and smaller companies may wish to nominate fewer.

DoD is amending § 236.7 (DoD's DIB CS program requirements) to remove the requirement that a company have an existing active facility clearance (FCL) to at least the Secret level granted under 32 CFR part 117, National Industrial Security Program Operating Manual (NISPOM), 15 to be eligible to participate in the DIB CS Program. In addition, references to cleared defense contractors have been replaced with contractors that own or operate a covered contractor information system.

A foundational element of the activities described in § 236.7 is the recognition that the information shared between DoD and DIB CS Program participants pursuant to the DIB CS Program includes CUI, 16 which requires protection. For additional information regarding the Government's safeguarding of information received from contractors that requires protection, see the Privacy Impact Assessment (PIA) for the DIB Cybersecurity Activities located at: https://dodcio.defense.gov/Portals/0/Documents/DIB_PIA.pdf. The PIA provides detailed procedures for handling personally identifiable information (PII), attributional information about the strengths or vulnerabilities of specific covered contractor information systems, information providing a perceived or real competitive advantage on future procurement action, and contractor information marked as proprietary or commercial or financial information. In addition, personnel information is covered by Office of the Secretary of Defense (OSD) System of Records Notice (SORN) DCIO 01 ( https://dpcld.defense.gov/Portals/49/Documents/Privacy/SORNs/OSDJS/DCIO-01.pdf ). No changes to the PIA or SORN are being made in conjunction with this final rule.

Comments were received on the cost of a DoD-approved medium assurance certificates and the accuracy of estimates relating to familiarization costs and attending meetings. DoD is removing the requirement for the DIB to have a DoD-approved medium assurance certificate to report cyber incidents. The requirement is being replaced with the requirement to register in PIEE which has established procedures to perform digital identity proofing. The basis for the cost estimate for a company to familiarize themselves with changes to this rule and determine if they would like to apply to the DIB CS Program does not include time for a company to perform an in-depth review of preexisting contractually mandated requirements. The basis for the cost estimate to participate in meetings uses the assumption a company sends the equivalent of an Information Security Analyst with the mean wage estimate published by the Bureau of Labor Statistics. If the company elects to send more senior representatives the cost will be higher. The economic analysis is being finalized without changes.

DoD believes the cost impact of the changes to this final rule is not significant, as the changes primarily expand the availability of the established DIB CS Program to additional defense contractors. The newly eligible population of defense contractors may incur costs to familiarize itself with the rule and those who elect to participate in the program will incur costs related to program participation. The Government will continue to incur costs related to operating the program. The DIB CS Program conducts outreach activities to defense contractors through press releases, participation in defense-oriented conferences, speaking engagements, and through digital media. The program will leverage pre-established channels to message changes to the program and engage with the eligible population of defense contractors. Based on the program growth experienced that during the last phase of program expansion the program is forecasting annual growth at just over 1% of the eligible population. At a growth rate of 1% per year it will take the program approximately 10 years to achieve the estimated 10% participation rate of the eligible DIB.

In order to join the DIB CS Program there is an initial labor burden for a defense contractor to familiarize themselves with the rule and subsequently apply to the program and provide POC information. In total, if it takes each contractor 30 minutes to read and familiarize him/herself with the rule, it will take contractors 4,000 hours to familiarize themselves with the rule (8,000 participants x .5 = 4,000 hours). At an hourly wage of $108.92, the total cost incurred by contractors for rule familiarization will amount to $217,840 ($108.92 × .5 hours = $54.46 × 4,000 hours = $217,840). The hourly labor cost is based on the mean wage estimate from the Bureau of Labor Statistics for an Information Security Analysts, Occupational Employment and Wages, May 2021 and is covered under information collection 0704-0490. This hourly wage is adjusted upward by 100% to account for overhead and benefits, which implies a value of $108.92 per hour.

The estimated annual burden for a company to apply to the program or for a participating company to update POC information is $36.31, with a total annual cost to all participants of $319,498.67 at peak program participation. This calculation is based on 8,000 participants submitting an average of one application per year and 10% of the population (800 participants) submitting an update each year, with 20 minutes of labor per submission, at a cost of $108.92 per hour ($108.92 × 1/3 hours = $36.31 × 8,800 events = $319,498.67).

There is an estimated annual burden projected at $1,089.20 for defense contractors voluntarily sharing cyber threat information. This is based on a defense contractor electing to submit an average of five informational reports per year with two hours of labor per voluntary submission, at a cost of $108.92 per hour ($108.92 × 2 hours = $217.84 × 5 reports = $1,089.20). It is estimated that 1% of the newly eligible population will elect to join the DIB CS Program annually, which currently has approximately 1,000 participants, with program growth plateauing at 10% of the population by Year 9. The table below shows the costs to industry to voluntarily sharing cyber threat information over a 9-year period. If, in the first year of the program expanding there are 980 participants and 800 new participants join the program, there will be a total of 1,780 participants. Assuming each participant responds five times, this totals 8,900 annual responses times $217.84 per response and will equal $1,938,776 in total annual cost to participants, which is covered in information collection 0704-0489.

In addition, DIB CS Program participants may choose to attend meetings in conjunction with the DIB CS Program. All new participants are invited to attend an orientation session and all existing participants are invited to attend meetings on a quarterly basis. If a defense contractor chooses to send an employee to a day-long meeting each quarter, the defense contractor would incur a cost of $3,485.44 ($108.92 × 8 hours = $871.36 × 4 meetings = $3,485.44).

The DoD has identified general areas of costs related to the operation of this program. First, DoD incurs costs to implement this program operationally by responding to inquiries, processing application submissions and collecting, sharing, and managing POC information for program administration and management purposes. Second, DoD incurs costs to collect, analyze, and disseminate threat information.

DoD responds to an average of 2,000 questions each year and these responses are estimated to take 20 minutes per response. If it takes 20 minutes to respond to each question, it will take 667 hours to respond to questions. At an hourly wage of $51.16, 17 it will cost the DoD $34,107 dollars to respond to questions ($51.16 × (.333 × 2,000) = $34,107). Costs to the government are incurred when a company applies to the DIB CS Program to validate and store POC information and to perform follow-up activities with a company when the information is outdated. The processing time for these activities is estimated to be one hour per company.

If, by Year 9, 8,000 companies participate in the program and 10% of the companies update information with the program annually the labor cost to the government is expected to be $72,647.20 = (620 + 800 × $51.16).

In addition, there is a cost incurred by the DoD to receive cyber threat information submitted by defense contractors to have it analyzed by cyber threat experts at DC3. By year 9 of the expanded program, it is estimated DC3 will receive 40,000 responses per year, based on the estimate that each participating company elects to submit 5 informational reports (8,000 participants × 5 reports). Each product takes approximately two hours to create and incurs an hourly labor cost of $51.16 per hour. This equals $102.32 (2 hours × 51.16) per response. The labor cost to the government is forecasted to be $4,092,800 annually after 9 years of growth. In addition to processing cyber threat information, the DoD incurs operational and maintenance costs for the system receiving and storing cyber threat information. This system costs the DoD $5,100,000 annually to maintain (covered under information collection 0704-0489).

This program benefits the Department by increasing the overall security of the DIB through increasing awareness and improving assessments of cyber incidents that may affect mission critical capabilities and services. It continues to be an important element of the Department's comprehensive effort to defend DoD information, protect U.S. national interests against cyber-attacks, and support military operations and contingency plans worldwide. Once a defense contractor joins the program, they are encouraged to share information, including cyber threat indicators, that they believe may be of value in alerting the Government and others, as appropriate, of adversary activity to enable the development of mitigation strategies and proactively counter threat actor activity. DC3 develops written products that include analysis of the threat, mitigations, and indicators of adversary activity. Even cyber incidents that are not compromises of covered defense information may be of interest to DoD for situational awareness purposes. This information is disseminated as anonymized threat products that are shared with authorized DoD personnel, other Federal agencies, and company-designated POCs participating in the DIB CS Program. With the revisions to the eligibility criteria, the Department will be able to reduce the impact of cyber threat activity on DIB networks and information systems and, in turn, preserve its technological advantage and protect DoD information and warfighting capabilities. The mitigation of the cyber threat targeting defense contractors reinforces the nation's national security and economic vitality.

For DIB participants, this program provides unique cyber threat information and technical assistance through analyst-to-analyst exchanges, mitigation and remediation strategies, and cybersecurity best practices in a collaborative environment. The shared unclassified and classified cyber threat information is used to bolster a company's cybersecurity posture and mitigate the growing cyber threat. The program's tailored support for small, mid-size, and large companies with varying cybersecurity maturity levels is an asset for participants. The program remains a key element of DoD's cybersecurity efforts by providing services to help protect DIB CS Program participants and the sensitive DoD information they handle.

Executive Order 12866 directs agencies to assess all costs, benefits, and available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated “significant,” under Executive Order 12866.

Pursuant to the Congressional Review Act, this final rule has not been designated a major rule, as defined by 5 U.S.C. 804(2). This final rule will not have an economic effect above the $100 million threshold defined in 5 U.S.C. 804(2) or spur a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

The Office of the DoD Chief Information Officer certified that this final rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. This final rule will have a significant positive impact on small entities that will become eligible to participate in and receive benefits through the DIB CS Program. For DIB participants, this program provides cyber threat information and technical assistance through analyst-to-analyst exchanges, mitigation and remediation strategies, and cybersecurity best practices in a collaborative environment. The shared threat information is used to bolster a company's cybersecurity posture and mitigate the growing cyber threat. The program's tailored support for small, mid-size, and large companies with varying cybersecurity maturity levels is an asset for participants, and in fact can avoid expending resources to obtain threat intelligence from private sources if the company elects to participate in services offered by the DoD that directly integrate threat intelligence.

Participation in the DIB CS Program is voluntary. Program application and participation costs are described in the cost analysis section of this final rule. These costs are voluntarily incurred and associated with the labor and resource costs to complete the required program paperwork, including execution of the Framework Agreement, to submit information to the Government, and to receive information from the Government. The costs associated with applying to the DIB CS Program are associated exclusively with labor costs and estimated to be $18.15 per company. None of the program's offering come at an additional fee to DIB participants and additional costs related to participation are estimated based on the time investment (labor hours) required to obtain the benefits as described in the cost analysis of this preamble. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. When the Federal Government passes legislation requiring a State, local, or tribal government to perform certain actions or offer certain programs but does not include any funds for the actions or programs in the law, an unfunded mandate is the result. This final rule will not mandate any requirements for State, local, or tribal governments, and will not mandate private sector incurred costs above the $100 million threshold defined in 2 U.S.C. 1532.

Section 236.2 of this rule contains information collection requirements. As required by the Paperwork Reduction Act (44 U.S.C. Chapter 35), DoD submitted information collection requests to the Office of Management and Budget for review and approval. In response to DoD's invitation in the proposed rule to comment on any potential paperwork burden associated with this rule, there were no comments from the public. This final rule contains the following information collection requirements under the Paperwork Reduction Act (PRA) of 1995.

• OMB Control Number 0704-0489, “DoD's Defense Industrial Base (DIB) Cybersecurity (CS) Activities Cyber Incident Reporting,”

• OMB Control Number 0704-0490, “DoD's Defense Industrial Base (DIB) Cybersecurity (CS) Points of Contact (POC) Information.”

The System of Records Notice associated with these information collections (DCIO 01, “Defense Industrial Base (DIB) Cybersecurity (CS) Activities Records”) published on May 17, 2019. The Federal Register citation for the SORN is 84 FR 22477.

The Privacy Impact Assessment for the Defense Industrial Base (DIB) Cybersecurity (CS) Activities is posted at: https://dodcio.defense.gov/Portals/0/Documents/DIB_PIA.pdf.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has federalism implications. This final rule will not have a substantial effect on State and local governments.

Executive Order 13175 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct compliance costs on one or more Indian tribes, preempts tribal law, or effects the distribution of power and responsibilities between the Federal Government and Indian tribes. This final rule will not have a substantial effect on Indian tribal governments.

Accordingly, DoD amends 32 CFR part 236 as follows:

The proposed rule published in the Federal Register (88 FR 60411-60413) on September 1, 2023. Comments were accepted for 60 days until October 31, 2023. No comments were received.

In finalizing this rule, DoD is exempting portions of this system of records titled, DoD-0019, “Information Technology Access and Audit Records,” from certain provisions of the Privacy Act of 1974. The purpose of this system of records is to support information systems being established within the DoD using the same categories of data for the same purposes. This system of records covers DoD's maintenance of records related to requests for user access, attempts to access, granting of access, records of user actions for DoD information technology (IT) systems, and user agreements. This includes details of programs, databases, functions, and sites accessed and/or used, and the information products created, received, or altered during the use of IT systems. The system consists of both electronic and paper records and will be used by DoD components and offices to maintain records about individuals who have user agreements, user access to and activity on networks, computer systems, applications, databases, or other digital technologies.

The Privacy Act allows Federal agencies to exempt eligible records in a system of records from certain provisions of the Act, including those that provide individuals with a right to request access to and amendment of their own records. If an agency intends to exempt a particular system of records, it must first go through the rulemaking process pursuant to 5 U.S.C. 553(b)(1)-(3), (c), and (e). The OSD is amending 32 CFR part 310 to add a new Privacy Act exemption rule for this system of records. The DoD is adding exemptions for this system of records pursuant to 5 U.S.C. 552a(k)(1) and (2) because some of its records may contain classified national security information or investigatory material compiled for law enforcement purposes. The DoD is claiming an exemption from several provisions of the Privacy Act, including various access, amendment, disclosure of accounting, and certain recordkeeping and notice requirements, to avoid, among other harms, frustrating the underlying purposes for which the information was gathered.

Executive Orders 12866 (as amended by Executive Order 14094) 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, of reducing costs, of harmonizing rules, and of promoting flexibility. It has been determined that this rule is not a significant regulatory action under these Executive orders.

The Congressional Review Act (5 U.S.C. 801 et seq. ) generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. DoD will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule may take effect no earlier than 60 calendar days after Congress receives the rule report or the rule is published in the Federal Register , whichever is later. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4; 2 U.S.C. 1532(a)) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates may result in the expenditure by State, local and Tribal governments in the aggregate, or by the private sector, in any one year of $100 million in 1995 dollars, updated annually for inflation. This rule will not mandate any requirements for State, local, or Tribal governments, nor will it affect private sector costs.

The Assistant to the Secretary of Defense for Privacy, Civil Liberties, and Transparency has certified that this rule is not subject to the Regulatory Flexibility Act (Pub. L. 96-354; 5 U.S.C. 601 et seq. ) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. This rule is concerned only with the administration of Privacy Act systems of records within the DoD. Therefore, the Regulatory Flexibility Act, as amended, does not require DoD to prepare a regulatory flexibility analysis.

The Paperwork Reduction Act (PRA) (Pub. L. 96-511; 44 U.S.C. 3501 et seq. ) was enacted to minimize the paperwork burden for individuals; small businesses; educational and nonprofit institutions; Federal contractors; State, local and Tribal governments; and other persons resulting from the collection of information by or for the Federal Government. The Act requires agencies to obtain approval from the Office of Management and Budget before using identical questions to collect information from ten or more persons. This rule does not impose reporting or recordkeeping requirements on the public.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a rule that has federalism implications, imposes substantial direct requirement costs on State and local governments, and is not required by statute, or has federalism implications and preempts State law. This rule will not have a substantial effect on State and local governments.

Executive Order 13175 establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct compliance costs on one or more Indian Tribes, preempts Tribal law, or affects the distribution of power and responsibilities between the Federal Government and Indian Tribes. This rule will not have a substantial effect on Indian Tribal governments.

Accordingly, 32 CFR part 310 is amended as follows:

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to 5 U.S.C. 553(b). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. Space Exploration Technologies Corporation (SpaceX) will begin operation of its Starship/Super Heavy launch operations on March 14, 2024, through March 26, 2024, each day. There is insufficient time between now and then to provide notice of a proposal to create these safety zones, consider comments received, and publish a final rule.

In addition, the Coast Guard finds that good cause also exists under 5 U.S.C. 553(d)(3) for making this rule effective less than 30 days after publication in the Federal Register because the safety zones must be in effect in fewer than 30 days to serve their purpose and it would be contrary to the public interest to delay their effective date until after the hazardous activities begin.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port, Sector Corpus Christi (COTP) has determined that hazards inherent in rocket launching activity necessitate provisions to protect personnel, vessels, and the marine environment while it is taking place. The hazards inherent in SpaceX's rocket launching activities include free falling debris and/or descending vehicles or vehicle components.

This rule is subject to enforcement from 6 a.m. to noon each day, from March 14, 2024, through March 26, 2024. No vessel or person will be permitted to enter the temporary safety zones during the period in which the rule is subject to enforcement without obtaining permission from the COTP or a designated representative, who may be contacted on Channel 16 VHF-FM (156.8 MHz) or by telephone at 361-939-0450. The Coast Guard will issue Broadcast Notices to Mariners, Local Notices to Mariners, and/or Safety Marine Information Broadcasts as appropriate.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size, location, and duration of the safety zones. The safety zones cover approximately 4.5 square mile area of the South Bay and approximately 115 square mile area of the Gulf of Mexico offshore Boca Chica, Beach, TX. The temporary safety zones will be subject to enforcement for a period of 6 hours a day, from March 14, 2024, through March 26, 2024. The rule does not completely prohibit vessel traffic within the waterway and it allows mariners to request permission to enter the zones.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the temporary safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial, direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishment of two temporary safety zones for navigable waters in the Gulf of Mexico and South Bay. The safety zones are needed to protect personnel, vessels, and the marine environment from potential hazards created by rocket launching activity that may include free falling debris and/or descending vehicles or vehicle components under various means of control. It is categorically excluded from further review under paragraph L60(c), in Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

Purpose of Program: The NPD program, authorized by sections 3111(c)(1)(C) and 3131 of the ESEA, provides grants to IHEs or public or private entities with relevant experience and capacity, in consortia with State educational agencies (SEAs) or local educational agencies (LEAs), to implement pre-service and in-service professional development activities intended to improve instruction for ELs and assist education personnel working with ELs to meet high professional standards.

Program Authority: 20 U.S.C. 6861.

We published a notice of proposed priorities, requirements, and definitions (NPP) for this program in the Federal Register on September 15, 2023 (88 FR 63543). The NPP contained background information and our reasons for proposing the priorities, requirements, and definitions. As discussed in the Analysis of Comments and Changes section of this document, we revised the definition of “pre-service” to ensure that GYO programs are part of, and aligned with, State-approved, State-registered pre-service programs. In addition, we added a priority (Final Priority 2) to specifically address the recruitment, preparation, and retention needs of emergent bilingual or multilingual teacher candidates ( i.e., not yet bilingual or multilingual, or not yet fully licensed or certified as a teacher, or both) and adjusted the numbering of the priorities accordingly. Next, we revised Priority 4 (formerly Proposed Priority 3) to include school leaders and individuals who are pursuing an additional credential to work in a multilingual setting. Additionally, we consolidated the strategies in Final Priority 1 along with clarifying that the term “evidence-based” in Final Priorities 1, 2, and 4 is as defined in 34 CFR 77.1(c). Finally, we simplified the definition of “low-income” for clarity and opted for the term “student from a low-income background” instead of “low-income student” as well as clarified the definition of “bilingual or multilingual.”

Public Comment: In response to our invitation in the NPP, 35 parties submitted comments addressing the proposed priorities, requirements, and definitions. We group major issues according to subject. Generally, we do not address technical and other minor changes or suggested changes that the law does not authorize us to make under the applicable statutory authority.

Analysis of Comments and Changes: An analysis of the comments and of any changes in the priorities, requirements, and definitions since publication of the NPP follows.

Comment: Eighteen commenters expressed support for the Department's efforts to meet the needs of our Nation's multilingual students by addressing the teacher shortage. Many of these commenters applauded the Department's emphasis on GYO strategies. Several commenters noted the timeliness of the proposed priorities and the Secretary's Raise the Bar initiative. More specifically, a couple of commenters emphasized the need for such pre-service programs while others emphasized the importance of the in-service training articulated in Final Priority 4.

Discussion: We appreciate the support for the NPD program and for the specific emphasis on increasing the numbers of bilingual and multilingual teachers, specifically through GYO strategies, improving instruction for ELs, and promoting pathways to multilingualism for all students.

Changes: None.

Comment: Three commenters offered broad strategies for the Department and the field to consider, noting the importance of incentives to encourage participation. One of these commenters expressed the importance of incentivizing participation specifically in GYO programs. In addition, this commenter detailed numerous strategies to address the shortage of multilingual teachers. Two of the three commenters recommended that the Department provide targeted incentives for current teachers to pursue and obtain bilingual certifications.

Discussion: The Department appreciates the suggestions for increasing the number of bilingual or multilingual teachers and recognizes the importance of incentives to encourage participation in teacher professional development programs. The NPD program allows for projects that incentivize participation through preparation stipends and tuition payments.

Changes: None.

Comment: One commenter agreed that, to provide an equitable education to students, it is critical to increase the number of teachers with bilingual or ESL certification. Two commenters highlighted the importance of ensuring equitable access to bilingual opportunities for emergent bilingual students and children with disabilities. One of these commenters offered several suggestions, including incentivizing schools to create policies to honor emergent bilingual students' multilingualism with the seal of biliteracy and incentivizing teachers to pursue dual certification in bilingual education and special education to improve bilingual services for emergent bilingual students with disabilities.

Discussion: We appreciate these comments and have designed these priorities with the goal of expanding pathways to multilingualism for all students, including English learner students and students with disabilities. While this regulatory action does not focus specifically on special education, applications that incorporate opportunities for certification in bilingual education for special education candidates are allowable and encouraged in the NPD program.

Changes: None.

Comment: One commenter highlighted the distinction between the terms “bilingual educator” and “English language learner teacher” with regards to the way instruction is delivered.

Discussion: We appreciate this comment and recognize that the language used to describe educators and students in the field of multilingual and English learner education varies.

Changes: None.

Comment: One commenter noted the challenge to effective multilingual education due to teachers having large caseloads of students and recommended imposing a cap on teachers' caseloads.

Discussion: While we acknowledge the commenter's suggestion that there should be a Federal cap on caseloads, which we interpret to mean class size, we are unable to establish Federal requirements that are beyond the scope of the statutory authority for Department programs and therefore have not added the requested cap to this rule.

Changes: None.

Comment: One commenter recommended increasing teacher salaries and establishing regulations on the number of hours teachers work beyond the educational day. In addition, this commenter suggested that schools provide more supplies and other resources.

Discussion: We recognize the importance of teacher salaries and workloads and encourage states to ensure that all teachers are paid a livable and competitive wage. However, we are unable to establish Federal requirements beyond the scope of the statutory authority for Department programs.

Changes: None.

Comment: One commenter proposed recommendations for improving the number and quality of qualified bilingual and multilingual programs/classes in their State.

Discussion: We appreciate this comment. However, the systems and structures at the State and district levels that were recommended are beyond the scope of the statutory authority of this Federal program.

Changes: None.

Comment: One commenter detailed their organization's efforts and support for GYO programs designed to increase the number of multilingual teachers via various pathways.

Discussion: We appreciate the work of the commenter to address the shortage of multilingual teachers.

Changes: None.

Comment: Two commenters urged funding for in-service English as a Second Language (ESL) teachers as well as the school districts who employ them to promote bilingualism, particularly advocating for increased language opportunities for teachers who only speak English. The commenters also shared that support should be directed towards enhancing literacy instruction.

Discussion: The Department thanks the commenters for these suggestions and recognizes the importance of in-service training. There is already an established NPD priority for projects that provide in-service professional development to improve instruction for ELs. This is inclusive of all educators who work with ELs. We agree with the importance of literacy instruction but do not think it is necessary to prescribe specific content areas within the priorities. We believe that applicants should propose the content areas they believe will best prepare education personnel who are serving ELs, such as literacy instruction.

Changes: None.

Comment: One commenter suggested requirements for entities offering accredited pre-service training programs, including that the programs be specialized according to content area and be composed of at least 18 hours of training to prepare teachers to support linguistically diverse students. In addition, this commenter stated that SEAs and LEAs need models and guidance for supporting newcomer students and migratory youth, and the commenter highlighted benefits of universal bilingual kindergarten.

Discussion: We recognize the importance of teacher preparation and programs that provide teachers with the skills needed to support classrooms that include students who speak multiple languages and students with varying levels of language proficiency in these languages. We appreciate the commenter's suggestions for supporting newcomer students and migratory youth and the support for early childhood education. Rather than prescribing specific types of instruction for pre-service training programs, we encourage applicants to propose programs that are evidence-based and that will best prepare education personnel who are serving ELs.

Changes: None.

Comment: Five commenters explained the importance of supporting educational programs in rural communities where there are a growing number of multilingual and English learner students. Three of these commenters suggested that the NPD program incorporate a priority for bilingual and multilingual educators in rural school districts. One of these commenters expressed concern that peer reviewers from past competitions were not aware of the needs of rural communities.

Discussion: We appreciate the commenters' recommendation to support rural communities and recognize the growing number of multilingual and EL students attending schools in rural communities. Eligible rural-serving entities are encouraged to apply for NPD program grants. The Department offers a variety of supports for all applicants, including those who have not received an NPD program grant in prior years. For example, the Department offers a pre-application webinar and responds to questions as part of every NPD competition. The Department also provides more general resources that are available to entities applying for any grant program. Please see https://www2.ed.gov/fund/grant/ about/discretionary/index.html. We did not create a new priority or expand an existing priority to focus on rural communities in the final priorities because there is an administrative priority for rural applicants (85 FR 13640)  1 that remains in effect and is available for use by the NPD program. Finally, the Department's procedures for awarding discretionary grants include a variety of safeguards and technical assistance to ensure fair grant competitions. For example, for almost all the Department's grant competitions, program staff recruit application reviewers from outside the Federal Government. Peer reviewers for the NPD program are recruited and selected based on their qualifications and experience in serving EL students. And, while Department staff screen applications to ensure that they meet all program requirements, the non-Federal reviewers read and independently score the applications assigned to them.

Changes: None.

Comment: Two commenters noted the importance of training multilingual teachers for children aged five and under. One of these commenters asked that we expand Priority 1 to specifically include early childhood educators. The second commenter advocated for making Proposed Priorities 1 and 3 (Final Priorities 1 and 4) absolute priorities and weighting Proposed Priority 2 (Final Priority 3) heavily as a competitive preference priority.

Discussion: The Department appreciates the support of these commenters and shares the belief in the importance of expanding the number of bilingual and multilingual educators supporting early learning. We encourage applications that incorporate training for bilingual and multilingual teachers on how best to support children aged five and under. In general, we believe this type of training is allowable under Final Priorities 1, 2, and 4. Therefore, we do not believe it is necessary to modify the priorities or requirements. We think it is important to allow flexibility for applicants to propose projects they believe will best prepare teacher candidates for serving ELs and based on the need at the time.

Details about future competitions, including absolute and competitive preference priorities, will be published in the Federal Register in future notices inviting applications.

Changes: None.

Comment: One commenter, writing on behalf of their association, explained the importance of supporting students and educators from Latino backgrounds. This commenter specifically advocated for Proposed Priority 3 (Final Priority 4), stating that it would help eliminate the educator shortage, increase services for students who are ELs, and expand pathways to multilingualism for all students.

Discussion: We appreciate the commenter's recommendations to ensure that the priorities and strategies for the NPD program address the unique considerations of specific linguistic and cultural communities, and we acknowledge the commenter's support for Proposed Priority 3 (Final Priority 4). Because the NPD program is statutorily authorized to serve all ELs, and we intend for the final priorities, requirements, and definitions to expand capacity to support culturally and linguistically diverse students and educators, we have not changed the priorities to focus explicitly on specific communities.

Changes: None.

Comment: Two commenters highlighted that consideration should be made for varying language proficiency within certain contexts, particularly within specific languages and populations, such as indigenous and refugee communities. One of the commenters advised that there may be certain languages where there may not be a large population of advanced speakers, and some advanced speakers may not have advanced proficiency in all domains of the language. A second commenter advocated for targeted programming and support for Native American languages as defined in section 104 of the Native American Language Act of 1990 (NALA 1990) and in ESEA sections 3127 and 3124(3). Both commenters made specific recommendations for the explicit inclusion of Native American languages within the priorities and an adjustment of the definition of “bilingual or multilingual” to allow for various levels of proficiency for Native American languages. Finally, the second commenter also recommended allowing projects to support teacher candidates' language development in Native American languages given that many Native American languages have declining numbers of individuals who are highly proficient.

Discussion: We recognize the importance of strengthening and revitalizing Native American languages through the recruitment, retention, and empowerment of Native American educators, and encourage projects designed to foster a high level of proficiency in Native American languages. The Department is actively supporting Native American language revitalization through this and other programs.

The NPD program is designed to support professional development for educators working with ELs who speak all languages, including Native American languages as defined by NALA 1990 and amended by the Durbin Feeling Languages Act. For this reason, we do not believe it is appropriate to reference specific languages.

We do not believe it is appropriate to revise the definition of “bilingual or multilingual” to allow for various levels of proficiency for Native American languages, as we hope to maintain a focus on high levels of proficiency across all languages. At the same time, we appreciate the importance of supporting educators and teacher candidates in reaching proficiency. To meet this need, we added a new priority (Final Priority 2) that allows for pre-service programs that support teacher candidates who are acquiring an additional language but may not yet be highly proficient in the four domains of listening, speaking, reading, and writing. We also revised the definition of “bilingual or multilingual” to include languages with fewer than four domains (listening, speaking, reading, and writing), by clarifying that “bilingual or multilingual” applies to those with a high level of proficiency in the domains that exist for the language. It is expected that applicants will identify appropriate indicators for measuring proficiency in these languages and equip educators to teach in these languages, and that teacher candidates will finish the pre-service program highly proficient in two or more languages and with a teaching credential.

Additionally, in support of strengthening and revitalizing Native American languages through Native American educators, the Department recently announced  2 new awards totaling more than $11 million for the new Native American Language Resource Centers (NALRC) program, the first-ever Native American Teacher Retention Initiative (NATRI) program, and the State Tribal Education Partnership (STEP) program. Through these awards, the Department seeks to strengthen the vitality of Native American languages in schools, support Native American teachers, and ensure Tribal Educational Agencies can coordinate grant resources alongside State and local partners.

Changes: The Department added new Final Priority 2 and revised the definition of “bilingual or multilingual” to include all languages, including those with fewer than four domains.

Comment: One commenter suggested that current multilingual educators be offered pathways to other content area certifications. A second commenter recommended opening multilingual teacher training to educators of all content areas, not solely to EL educators.

Discussion: We appreciate the work of bilingual and multilingual teachers and recognize the importance of professional development opportunities to support them in other content areas. The NPD program provides professional development to improve instruction for ELs. This is inclusive of all educators who work with ELs across content areas.

Furthermore, in response to the comment about the availability of training for all teachers of ELs, not just EL educators, we revised Final Priority 4 (formerly Proposed Priority 3) to clarify that current educators of ELs, including content area educators, are eligible for additional development to work in multilingual contexts serving EL students.

Changes: We have revised Final Priority 4 (formerly Proposed Priority 3) to clarify that current educators of ELs, including content area educators, are eligible for additional development to work in multilingual contexts serving EL students.

Comment: Six commenters suggested that the Department support pathways for in-service school leaders to further their knowledge of multilingual learner education. This focus would help to ensure that multilingual teachers have support and guidance from school administration.

Discussion: We agree that school leadership is important in the provision of multilingual education. We added language to Final Priority 4 to clarify that applicants may propose projects to create pathways for school leaders to further their knowledge of multilingual learner education.

Changes: We have added “school leaders” to the list of examples of education personnel who may receive in-service professional development under Final Priority 4.

Comment: One commenter recommended that multilingual teacher education programs be encouraged to think strategically about how teachers are prepared to teach content in other languages. Another commenter stated that educators must know English language basics to teach English as a second language in a bilingual classroom. The commenter suggested that professional development should be focused on English language phonics and phonemic awareness for all educators. Finally, a third commenter requested that the Department provide guidance on the types of professional development addressed under these final priorities. The commenter wanted to ensure that the NPD program supports comprehensive training for teachers.

Discussion: We recognize the importance of fully equipping bilingual and multilingual teachers with the knowledge and skills to teach across content areas and languages. The NPD program allows applicants to prepare their pre-service and in-service programs in response to the unique needs of their respective settings, which could include a comprehensive approach or a more targeted focus, such as on a specific content area or on teaching English as a second language in a bilingual classroom.

Changes: None.

Comment: One commenter questioned whether there are enough personnel to guide and oversee newly trained teachers in bilingual education and ensure high-quality teaching.

Discussion: We appreciate the commenter's concern. While this comment referred to oversight on a nationwide scale and cannot be addressed solely through this program, applicants that propose a grant under this program are encouraged to incorporate teacher supervision into their grant proposal to ensure that teachers, in both pre-service and in-service programs, are meeting the expectations of the preparation program.

Changes: None.

Comment: Several commenters commended the efforts to increase opportunities for bilingual education for multilingual learners, stating that increased pre-service opportunities are important and needed. One commenter expressed that there might be confusion created by using the term “pre-service” given that, as proposed, this term includes paraprofessionals and those with other teaching credentials who are not currently multilingual teachers. This commenter wanted to ensure that pathways are expanded to diversify the teacher pipeline rather than limited by traditional notions of “pre-service.” In addition, two commenters suggested that education and training opportunities be made available to bilingual and multilingual educational assistants working in schools who do not have a college degree or education credentials, and to multilingual, English learner, and emergent bilingual teachers who would like to become credentialed as bilingual educators.

Discussion: While we acknowledge the commenters' concerns, the definition of “pre-service” is intended to capture the broad array of pathways to becoming a certified bilingual or multilingual teacher. These pathways can include pre-service programs in which bilingual or multilingual paraprofessionals, who work in schools and are interested in obtaining their teaching credential to support ELs directly, are enrolled. We envision other bilingual and multilingual individuals who are already teachers to be eligible for projects proposed under Final Priority 1 to the extent that they want to move into teaching in bilingual or multilingual education settings. Additionally, we revised Final Priority 4 (formerly Proposed Priority 3) to include individuals who have a teaching credential but have not been teaching in bilingual or multilingual education settings and are pursuing an additional credential to do so.

Changes: We revised Final Priority 4 to include individuals who may have a teaching credential but have not been teaching in bilingual or multilingual education settings and are pursuing an additional credential to do so.

Comment: One commenter expressed support for both Proposed Priority 1 and Proposed Priority 3 (Final Priority 4) as both will help address the teacher shortage for ELs and multilingual learners.

Discussion: The Department appreciates the commenter's support of ELs and their teachers and looks forward to working collectively to address the nationwide teacher shortage of multilingual educators.

Changes: None.

Comment: Eight commenters addressed Proposed Priority 2 (Final Priority 3). Two of these commenters supported the priority because it would create more equitable pathways for aspiring teachers from low-income populations. One of the commenters asked for clarity on how applicants could meet the conditions within Final Priority 3. Another one of these commenters suggested that the Department expand the definition of “low-income” to factor in other socioeconomic considerations beyond Pell Grant eligibility. Another of the commenters encouraged the Department to use available data to target programs that serve socioeconomically diverse students. Four of the commenters raised concerns that Proposed Priority 2 would exclude individuals who are not low-income as defined or do not have the support to apply for Pell grants. Two of the commenters addressed the importance of serving first-generation college applicants as part of Proposed Priority 2.

Discussion: We appreciate the commenters' suggestions. We believe Final Priority 3 will, by design, target programs that are serving socioeconomically diverse students, while allowing for inclusion of students who do not meet the definition of “low-income.” Under Final Priority 3 (formerly Proposed Priority 2), 30, 40, or 50 percent of the candidates in a pre-service program must meet the definition of “low-income.” This priority imposes a minimum, but outside of this minimum, a project could meet this priority by serving a group of potential candidates that is comprised of 50 to 70 percent of individuals who do not meet the definition of “low-income.” Given that the priority would allow for a large percentage of candidates who are not from low-income backgrounds and the importance of building a diverse and representative teacher workforce, we do not believe it is necessary to make changes to the priority.

Finally, we believe that Pell eligibility is a reasonable indicator of low-income status, due to its use as such in other contexts, its validity and reliability, and its availability to institutions. We note that Pell eligibility requirements factor in family size, which is an important consideration in qualifying as low-income. Furthermore, the definition does not require that students have applied for or received Pell Grants, but rather that they would be eligible for, or meet the financial threshold for, a Pell Grant. Accordingly, the definition would not exclude students who lack the support to complete a FAFSA, which is used to determine Pell eligibility. Further, outreach may be conducted as part of an NPD project to help students complete the FAFSA. The purpose of this priority is, in part, to encourage applicants to use funding to work with and recruit students from low-income backgrounds, including those who live in rural areas or who are first-generation candidates, as they transition to and enroll in postsecondary education.

To simplify the definition of “low-income student,” we are removing the reference to section 484(a)(5) of the Higher Education Act. This revision does not substantively change the defined term.

Changes: In the definition of “low-income,” we have removed the reference to section 484(a)(5) of the Higher Education Act.

Comment: Four commenters suggested that the Department explicitly include alternative teacher training pathways in its definition of “pre-service” programs rather than only including traditional IHE teacher preparation programs. One of the four commenters recommended that we revise the definition of “pre-service” to include individuals who are participating in State-approved programs offered by non-traditional educational providers. Another of the four commenters explained that alternative pathways programs train new teachers more practically, and such pathways may better serve candidates who come from low-income backgrounds, consistent with the focus of Proposed Priority 2 (Final Priority 3).

Discussion: The Department recognizes the value of comprehensive, high-quality alternative pathways programs for preparing new teachers and the importance of responding to the needs of socioeconomically diverse bilingual and multilingual teacher candidates through these programs which can provide more flexibility. We revised the definition of “pre-service” to clarify that teacher candidates are not limited to programs solely provided by IHEs; rather they include State-accredited pre-service programs that lead to State-approved full certification or licensure.

Changes: We revised the definition of “pre-service” such that it is not limited to teacher education programs only through IHEs.

The Department establishes the following four priorities for this program. We may use one or more of these priorities in any year in which this program is in effect.

Final Priority 1—Increase the Number of Bilingual or Multilingual Teachers Through a Grow-Your-Own (GYO) Pre-Service Program that Recruits Teacher Candidates who are Bilingual or Multilingual.

Projects that propose to increase the number of fully licensed or certified bilingual or multilingual teachers working in language instruction educational programs or serving ELs, and improve their qualifications and skills, through evidence-based (as defined in 34 CFR 77.1(c)) pre-service programs. Applicants must describe their plan for recruiting, supporting, and retaining teacher candidates who are bilingual or multilingual. Applicants must include in their proposed plan for a pre-service program, one or more of the following GYO strategies that are designed to address shortages of bilingual or multilingual teachers and increase the diversity of qualified individuals entering the educator workforce:

(a) Implementing evidence-based GYO strategies for bilingual or multilingual individuals ( e.g., creating dual enrollment, early college, and Career and Technical Education programs in teaching for middle and high school students paired with offering seals of biliteracy or supporting bilingual or multilingual paraprofessionals actively working in P-12 schools in becoming teachers).

(b) Recruiting bilingual or multilingual individuals who may have a teaching credential, but who are not certified to teach bilingual or multilingual education, and supporting them in earning the additional certification.

(c) Implementing evidence-based teacher residencies in bilingual or multilingual education, including scaling these evidence-based pathways through a registered teacher apprenticeship program.

Final Priority 2—Increase the Number of Bilingual or Multilingual Teachers Through a Grow-Your-Own (GYO) Pre-Service Program that Recruits Teacher Candidates who are Emergent Bilinguals or Multilinguals.

Projects that propose to increase the number of fully licensed or certified bilingual or multilingual teachers working in language instruction educational programs or serving ELs, and improve their qualifications and skills, through evidence-based (as defined in 34 CFR 77.1(c)) pre-service programs that recruit teacher candidates who are emergent bilinguals or multilinguals. Applicants must describe their plan for recruiting, supporting, and retaining teacher candidates who are not yet, but are aspiring to be, teachers who are bilingual or multilingual, and their plan for ensuring that teacher candidates complete the pre-service program as fully licensed or certified teachers who are also bilingual or multilingual. Applicants must include in their proposed plan for a pre-service program, one or more of the following GYO strategies that are designed to address shortages of bilingual or multilingual teachers and increase the diversity of qualified individuals entering the educator workforce:

(a) Implementing evidence-based GYO strategies for bilingual or multilingual individuals ( e.g., creating dual enrollment, early college, and Career and Technical Education programs in teaching for middle and high school students paired with offering seals of biliteracy or supporting paraprofessionals actively working in P-12 schools in becoming bilingual or multilingual teachers).

(b) Recruiting individuals who may have a teaching credential, but who are not certified to teach bilingual or multilingual education, and supporting them in earning the additional certification.

(c) Implementing evidence-based teacher residencies in bilingual or multilingual education, including scaling these evidence-based pathways through a registered teacher apprenticeship program.

Final Priority 3—Service to Students from Low-income Backgrounds.

Projects that propose to recruit, prepare, and retain in the pre-service program classes of participants for which one or more of the following conditions are met:

(a) At least 30 percent of the participants are from low-income backgrounds.

(b) At least 40 percent of the participants are low-income students.

(c) At least 50 percent of the participants are low-income students.

Final Priority 4—Improve In-Service Professional Development Programs Targeting Bilingual or Multilingual Educational Personnel Who Serve English Learners.

Projects that propose evidence-based (as defined in 34 CFR 77.1(c)) in-service professional development programs designed to expand the number, and improve the qualifications and skills, of educational personnel working in language instruction educational programs or serving ELs, including—

• Bilingual or multilingual educational paraprofessionals and personnel who are not certified or licensed as teachers;

• Bilingual or multilingual individuals who have a teaching credential but have not been teaching in bilingual or multilingual education settings and are pursuing an additional credential to do so;

• School leaders who are furthering their knowledge and skills to support bilingual or multilingual educators working in language instruction educational programs or serving Els; and

• Other bilingual or multilingual individuals who can benefit from in-service professional development with the goal of increasing the number and skills of individuals working in language instruction educational programs or serving ELs.

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register . The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

The Department establishes the following requirements for this program. We may apply one or more of these requirements in any year in which this program is in effect.

Final Application Requirements: An applicant must provide the indicators it proposes to use to determine if a participant meets the definition of “bilingual or multilingual.” Applicants may provide this information in response to the selection criteria, or otherwise as applicable, in their applications.

The Department establishes the following definitions for this program. We may apply one or more of these definitions in any year in which this program is in effect.

Bilingual or multilingual means able to listen, speak, read, and write in two or more languages with at least a high level of proficiency in each language, as determined based on indicators of proficiency established by the grantee. Note, bilingual or multilingual means a high level of proficiency in the domains that exist for the language, which may be fewer than four domains for some languages.

Student from a low-income background means a student—

(a) Who is eligible to receive a Federal Pell Grant for the award year for which the determination is made; or

(b) Who meets the financial threshold to receive a Federal Pell Grant for the year for which the determination is made.

Pre-service means the period of preparation for a person who does not have a teaching certificate or license and who is enrolled in a State-approved teacher education program that leads to a State-approved full certificate or license.

This document does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.

Note: This document does not solicit applications. In any year in which we choose to use one or more of these priorities, requirements, or definitions, we invite applications through a notice in the Federal Register .

Under Executive Order 12866, the Office of Management and Budget (OMB) must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by OMB. Section 3(f) of Executive Order 12866, as amended by Executive Order 14094, defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $200 million or more (adjusted every three years by the Administrator of OIRA for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlements grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise legal or policy issues for which centralized review would meaningfully further the President's priorities, or the principles set forth in this Executive order, as specifically authorized in a timely manner by the Administrator of OIRA in each case.

This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866, as amended by Executive Order 14094.

We have also reviewed this regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866, as amended by Executive Order 14094. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing these final priorities, requirements, and definitions only on a reasoned determination that their benefits would justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We also have determined that this regulatory action does not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.

In accordance with these Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

This document provides early notification of our specific plans and actions for this program.

The Secretary certifies that these final priorities, requirements, and definitions would not have a significant economic impact on a substantial number of small entities.

The small entities that this final regulatory action would affect are IHEs, or public or private entities with relevant experience and capacity, in consortia with LEAs or SEAs applying for and receiving funds under this program. The Secretary believes that the costs imposed on applicants by the final priorities, requirements, and definitions would be limited to paperwork burden related to preparing an application and that the benefits would outweigh any costs incurred by applicants.

Participation in this program is voluntary. For this reason, the final priorities, requirements, and definitions would impose no burden on small entities in general. Eligible applicants would determine whether to apply for funds and can weigh the requirements for preparing applications, and any associated costs, against the likelihood of receiving funding and the requirements for implementing projects under the program. Eligible applicants most likely would apply only if they determine that the likely benefits exceed the costs of preparing an application. The likely benefits include the potential receipt of a grant as well as other benefits that may accrue to an entity through its development of an application, such as the use of that application to seek funding from other sources to address a shortage in bilingual or multilingual teachers working in a language instruction education program or serving ELs.

These final priorities, requirements, and definitions do not contain any information collection requirements.

Accessible Format: On request to the program contact person listed under FOR FURTHER INFORMATION CONTACT , individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or other accessible format.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

The EPA published a notice of proposed rulemaking (NPRM) for the State of South Carolina on February 14, 2023 (88 FR 9409). In the NPRM, the EPA proposed the approval of a CAA section 111(d) State plan submitted by the SCDHEC on January 19, 2022. The EPA's analysis of the South Carolina State plan may be found in the aforementioned NPRM and the technical support document (TSD) associated with this docket. Comments on the EPA's proposed approval of the South Carolina State plan for existing MSW landfills were due on or before March 16, 2023. The EPA received no comments during the public comment period.

The EPA is finalizing approval of South Carolina's section 111(d) State plan for MSW landfills. The State plan was submitted in full compliance with the requirements of 40 CFR part 60, subparts B and Cf. Therefore, EPA is amending 40 CFR part 62, subpart PP to reflect this approval action. This approval is based on the rationale provided in the NPRM and discussed in further detail in the TSD associated with this rulemaking. The EPA's approval is in accordance with the general provisions of plan approval found in 40 CFR part 60, subpart B and 40 CFR part 62, subpart A, and is pursuant to the Agency's role under 42 U.S.C. 7411(d). The EPA's approval of the South Carolina plan is limited to those landfills that meet the criteria established in 40 CFR part 60, subpart Cf, and grants the State authority to implement and enforce the performance standards and source requirements of the EG, except in those cases where authorities are specifically reserved for the EPA Administrator or his designee. Authorities retained by the EPA Administrator are those listed in 40 CFR 60.30f(c).

In accordance with requirements of 1 CFR 51.5, the EPA is finalizing regulatory text that includes incorporation by reference of South Carolina Code Annotated Regulations (S.C. Code Ann. Regs.) 61-62.60, Subpart Cf, which became effective in the State of South Carolina on November 26, 2021. This incorporation establishes emission standards and compliance times for the control of air pollutants from certain MSW landfills that commenced construction, modification, or reconstruction on or before July 17, 2014. S.C. Code Ann. Regs. 61-62.20, Subpart Cf provides details regarding South Carolina's adoption of the applicability provisions, compliance times, emission guidelines, operational standards, test methods, compliance provisions, monitoring requirements, reporting guidelines, recordkeeping guidelines, specifications for active landfill gas collection systems, and definitions contained in EPA's emission guidelines for existing municipal solid waste landfills (40 CFR part 60, subpart Cf). The emissions standards and compliance times established within the South Carolina State plan are at least as stringent as those required by the EG for existing MSW landfills subject to Subpart Cf. The EPA has made, and will continue to make, these materials generally available through the docket for this action, EPA-R04-OAR-2022-0741, at https://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). This incorporation by reference has been approved by the Office of the Federal Register as of April 11, 2024, and the plan is federally enforceable under the CAA as of the effective date of this final rulemaking.

In reviewing State plan submissions, EPA's role is to approve State choices, provided they meet the criteria of the CAA. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this action:

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

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

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

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

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

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

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

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

Executive Order 12898 (59 FR 7629, February 16, 1994) directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations (people of color and/or Indigenous peoples) and low-income populations.

The EPA believes that the human health and environmental conditions that exist prior to this action do not result in disproportionate and adverse effects on people of color, low-income populations, and/or Indigenous peoples. EPA performed a screening-level analysis using EPA's EJSCREEN to identify environmental burdens and susceptible populations in communities surrounding MSW landfill facilities in the State. The EJSCREEN did not identify any such communities surrounding the MSW landfill facilities in the State. The results of the demographic analysis are presented in the EJ Screening Report for Municipal Solid Waste Landfills, a copy of which is available in the docket for this action, Docket ID No. EPA-R04-EPA-2022-0741.

The EPA believes that this action is not likely to result in new disproportionate and adverse effects on people of color, low-income populations, and/or Indigenous peoples because the State plan would reduce emissions of landfill gas, which contains both nonmethane organic compounds and methane. Nonmethane organic compounds can contain various organic hazardous air pollutants (HAPs) and volatile organic compounds (VOCs). Nearly 30 organic HAPs have been identified in uncontrolled landfill gas, with at least one identified as a known human carcinogen. VOC emissions are precursors to particulate matter and ozone formation, both of which are associated with health effects such as premature mortality for adults and infants, cardiovascular morbidity such as heart attacks, and respiratory morbidity such as asthma attacks, acute bronchitis, and other respiratory symptoms. Additionally, the State plan is expected to result in a reduction of carbon dioxide due to reduced demand by landfills for electricity from the grid, as landfills will generate electricity from landfill gas. These abated emissions will improve air quality and reduce the effects associated with exposure to landfill gas emissions, protecting public health and welfare. The EPA has determined that this action increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or income or environmental effects on any population, including any minority, low-income, or indigenous populations. To the extent that any minority, low-income, or indigenous subpopulation is disproportionately impacted by landfill gas emissions due to the proximity of their homes to sources of these emissions, that subpopulation also stands to see increased environmental and health benefit from the emission reductions called for by this action.

In addition, this proposed approval of South Carolina's State plan for existing MSW landfills does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the State plan is not approved to apply in Indian country located in the State, and the EPA notes that it will not impose substantial direct costs on Tribal governments or preempt Tribal law.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 13, 2024. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

For the reasons stated in the preamble, the Environmental Protection Agency amends 40 CFR part 62 as follows:

In the final rule published January 26, 2024, the Commission amended 47 CFR 64.1200. One of the amendments revises paragraph (f)(9)(i), effective January 27, 2025. However, the instruction for the revision incorrectly stated the entire paragraph (f)(9) is revised, which would result in the loss of paragraph (f)(9)(ii), as it was not provided in the revised text. The Commission did not intend to remove paragraph (f)(9)(ii), and this correction lists the specific revision to paragraph (f)(9).

In FR Rule Doc. No. 2023-28832 appearing on page 5098 in the Federal Register of Friday, January 26, 2024, the following correction is made: