The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0763; Project Identifier AD-2023-00924-E” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Carol Nguyen, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

On July 8, 2022, an Airbus Model A320neo airplane powered by IAE LLC Model PW1127G-JM engines experienced an IFSD. A manufacturer investigation determined that the IFSD was caused by a fractured LPC IBR-1 which resulted from an aerodynamic excitation. The most likely cause of the aerodynamic excitation was a misaligned IGV located directly upstream of the IBR-1. As a result, Pratt & Whitney (PW) redesigned the LPC IGV arm assembly by adding a spacer to provide additional torque capability and to prevent a misaligned vane. PW also redesigned the IBR-1 to better withstand an aerodynamic excitation from a misaligned IGV. As a result, the FAA is proposing to require the removal and replacement of certain affected LPC key washers and affected LPC IBR-1, and installation of LPC IGV spacers. This condition, if not addressed, could result in damage to the engine, damage to the airplane, and possible loss of the airplane.

The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This proposed AD would require removal and replacement of affected LPC key washers and affected LPC IBR-1 and installation of LPC IGV spacers.

The FAA estimates that this AD, if adopted as proposed, would affect 215 engines installed on airplanes of U.S. registry.

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

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

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

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

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

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

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

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

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

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0755; Project Identifier AD-2023-00521-E” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Alexei Marqueen, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA was notified of a manufacturer evaluation, which consisted of a heat transfer analysis, that revealed significant changes in thermal gradients in certain areas of the high-pressure compressor rotor (HPCR) assembly on GE Model GEnx-1B64/P1, GEnx-1B64/P2, GEnx-1B67, GEnx-1B67/P1, GEnx-1B67/P2, GEnx-1B70, GEnx-1B70/75/P1, GEnx-1B70/75/P2, GEnx-1B70/P1, GEnx-1B70/P2, GEnx-1B70C/P1, GEnx-1B70C/P2, GEnx-1B74/75/P1, GEnx-1B74/75/P2, GEnx-1B76/P2, GEnx-1B76A/P2, GEnx-2B67, GEnx-2B67B, and GEnx-2B67/P engines. The results of the heat transfer analysis were used to determine that a lower life limit is required for certain areas of the HPCR. Consequently, the manufacturer re-checked the serviceable and repairable limits of the stages 6-10 spools to determine if they still maintained the threshold limit for serviceability, where it was discovered that two repair procedures listed in the ESM exceeded the updated repair limits at certain locations of the HPCR assembly.

Due to the findings of the previous evaluations, the manufacturer performed an updated analysis and determined that a new threshold for the repairable limits for blend-repaired stages 6-10 spools is necessary. The manufacturer also determined that certain areas of previous blend-repaired stages 6-10 spools may have a lower life limit than the ultimate life limit of the HPCR disks.

This condition, if not addressed, could result in fracture and potential uncontained failure of the stages 6-10 spools, with consequent uncontained debris release, damage to the engine, and damage to the aircraft.

The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

The FAA reviewed GE GEnx-1B Service Bulletin 72-0525, R00, dated October 4, 2023 (GEnx-1B SB 72-0525, R00), and GEnx-2B Service Bulletin 72-0460, R00, dated October 4, 2023 (GEnx-2B SB 72-0460, R00). This service information identifies the part numbers and serial numbers of affected stages 6-10 spools; and specifies instructions for a one-time inspection of the stages 6-10 spools for previously accomplished blend repairs, a one-time inspection of the blend repairs on the stages 6-10 spools for compliance with the updated allowable limits, and replacement if necessary. These documents are distinct since they apply to different engine models.

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 ADDRESSES section.

This NPRM would require accomplishing a one-time inspection of the stages 6-10 spools for previously accomplished blend repairs, a one-time inspection of the blend repairs on the stages 6-10 spools for compliance with the updated allowable limits, and replacement, if necessary, within compliance times specified in GE GEnx-1B SB 72-0525, R00 or GEnx-2B SB 72-0460, R00. Depending on the part numbers and serial numbers of the affected stages 6-10 spools, this NPRM proposes to require these actions to be accomplished at the next piece-part exposure after the effective date of this proposed AD, or before the affected stages 6-10 spool reaches the cyclic removal threshold of up to 11,894 cycles since new.

The FAA estimates that this AD, if adopted as proposed, would affect 6 engines installed on airplanes of U.S. registry.

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

The FAA estimates the following costs to do any necessary replacements that would be required based on the results of the proposed inspections. The agency has no way of determining the number of engines that might need this replacement:

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

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

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

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

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

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

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

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

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0761; Project Identifier AD-2023-01256-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Anthony Decaro, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone: 562-627-5374; email: Anthony.D.Decaro@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA has received a report indicating a production audit by the design approval holder found that the design of the NEADS cover plate assembly did not comply with the requirements for nitrogen generation system certification (14 CFR 25.981). It was discovered that the cover plate assembly was installed without a designed electrical bond for electrostatic dissipation. As a result, Boeing has changed the cover plate assembly installation procedure to include a new electrical bond between the cover plate assembly and vent stringer No. 15. In addition, new stainless steel alloy fasteners are used to attach the cover plate assembly to vent stringer No. 15. The accumulation of electrostatic charge in the cover plate assembly and the float valve assembly, which is attached to the cover plate assembly, could lead to electrostatic discharge to the surrounding structure. This condition, if not addressed, could result in an ignition source inside the fuel tank and subsequent fire or explosion.

The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

The FAA reviewed Boeing Alert Requirements Bulletin 777-47A0007 RB, dated November 21, 2023. This service information specifies procedures for removing the cover plate assembly and its attached float valve assembly, installing electrical bonding and grounding, measuring the bonding resistance between the bolt heads/cover plate assembly/float valve assembly mounting flange and the vent stringer No. 15 and between the nuts and the cover plate assembly, and installing the cover plate assembly with new fasteners. The service information also requires revising the operator's maintenance or inspection program, as applicable, by incorporating new airworthiness limitations (AWLs). 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 ADDRESSES .

This proposed AD would require accomplishing the actions specified in the service information already described, except for any differences identified as exceptions in the regulatory text of this proposed AD. For information on the procedures and compliance times, see this service information at regulations.gov under Docket No. FAA-2024-0761.

This proposed AD would require revisions to certain operator maintenance documents to include new actions ( e.g., inspections) and Critical Design Configuration Control Limitations (CDCCLs). Compliance with these actions and CDCCLs is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph (j) of this proposed AD.

The FAA estimates that this AD, if adopted as proposed, would affect 292 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the agency estimates the average total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

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

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

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

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

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

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

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

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

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0759; Project Identifier AD-2023-01040-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend the proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Gabriel Kim, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7343; email 9-avs-nyaco-cos@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA issued AD 2023-13-11, Amendment 39-22496 (88 FR 50011, August 1, 2023) (AD 2023-13-11), for certain AVOX Systems Inc. (formerly Scott Aviation) oxygen cylinder and valve assemblies; and oxygen valve assemblies; installed on but not limited to various transport airplanes. AD 2023-13-11 was prompted by reports of cylinder and valve assemblies having oxygen leakage from the valve assembly vent hole, caused by the absence of a guide that maintains appropriate spacing between certain parts, and by a determination that additional assemblies and parts are affected by the unsafe condition addressed by AD 2022-04-09, Amendment 39-21951 (87 FR 10958, February 28, 2022) (AD 2022-04-09) (which was superseded by AD 2023-13-11). AD 2023-13-11 requires an inspection of the oxygen valve assemblies, and oxygen cylinder and valve assemblies, to determine the serial number of the valve, cylinder, and entire assembly. For assemblies and parts with certain serial numbers, AD 2023-13-11 also requires a detailed inspection for correct spacing of the gap between the bottom of the packing retainer and top of the valve body on the assemblies, and replacement of assemblies having unacceptable gaps. AD 2023-13-11 also limits the installation of affected parts under certain conditions and requires reporting inspection results and returning certain assemblies to the manufacturer. The agency issued AD 2023-13-11 to address oxygen leakage from the cylinder and valve assemblies, which could result in decreased or insufficient oxygen supply during a depressurization event; and heating or flow friction, which could cause an ignition event in the valve assembly.

Since the FAA issued AD 2023-13-11, the manufacturer identified additional assemblies and parts, including a new part number 89794050 for oxygen cylinder and valve assemblies, that are subject to the unsafe condition. New service information has been issued that expands the population of discrepant parts, providing more serial numbers for which to inspect.

The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

The FAA reviewed the following service information. This service information specifies procedures for an inspection to determine the serial numbers of the oxygen cylinder and valve assemblies, and the oxygen valve assemblies, a detailed inspection for correct spacing of the gap between the bottom of the packing retainer and top of the valve body on the assemblies, parts marking, inspection report, and return of parts to the manufacturer. These documents are distinct since they apply to different assembly part numbers.

• AVOX Systems Inc. Alert Service Bulletin 10015804-35-01, Revision 04, dated November 9, 2023.

• AVOX Systems Inc. Alert Service Bulletin 10015804-35-02, Revision 06, dated August 30, 2023.

• AVOX Systems Inc. Alert Service Bulletin 10015804-35-03, Revision 05, dated September 29, 2023.

This AD also requires the following service information, which the Director of the Federal Register approved for incorporation by reference as of September 5, 2023 (88 FR 50011, August 1, 2023).

• AVOX Systems Inc. Alert Service Bulletin 10015804-35-01, Revision 03, dated June 7, 2021.

• AVOX Systems Inc. Alert Service Bulletin 10015804-35-02, Revision 03, dated March 11, 2022.

• AVOX Systems Inc. Alert Service Bulletin 10015804-35-03, Revision 03, dated June 18, 2021.

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.

This proposed AD would retain all of the requirements of AD 2023-13-11. This proposed AD would apply to additional assemblies and parts, including a new part number, 89794050, for oxygen cylinder and valve assemblies. This proposed AD would require accomplishing the actions specified in the service information described previously. This proposed AD would also limit the installation of affected parts under certain conditions and require returning the affected parts and sending the inspection results to the manufacturer.

The FAA estimates that this AD, if adopted as proposed, would affect 3,777 oxygen cylinder and valve assemblies, and oxygen valve assemblies, installed on various transport category airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0758; Project Identifier MCAI-2023-00671-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend the proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Steven Dzierzynski, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email 9-avs-nyaco-cos@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

Transport Canada, which is the aviation authority for Canada, has issued Transport Canada AD CF-2023-33, dated May 10, 2023 (Transport Canada AD CF-2023-33) (also referred to after this as the MCAI), to correct an unsafe condition on certain Bombardier, Inc., Model BD-100-1A10 airplanes. The MCAI states that during a review of the air data system, Bombardier discovered that a single-point failure exists within the left-hand and right-hand HCM units. The HCM unit is designed with a single programmable logic device (PLD), which is responsible for the control and monitoring functions of the HCM unit. The PLD could fail in a way that it would erroneously energize the heater control relay and switch the heaters off. This failure could lead to un-annunciated loss of ice protection on the air data probes, resulting in the potential display of misleading airspeed, and erroneous indications to the flightcrew.

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

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2024-0758.

The FAA reviewed Bombardier Service Bulletin 100-30-06 and Bombardier Service Bulletin 350-30-001, both dated December 29, 2022. The service information specifies procedures to install a monitoring circuit comprising relays external to the HCM units, including reworking the plate assembly, installing relay bracket assemblies, installing relays and a rail terminal module, installing wires for the relays, and performing operational testing. These documents are distinct since they apply to different airplane serial numbers.

The FAA also reviewed the following service information, which specifies new normal procedures to follow after installation of the monitoring circuit. These documents are distinct since they apply to different airplane serial numbers.

• BEFORE STARTING ENGINES section, Subsection 04-02, Chapter 4, Normal Procedures, Bombardier Challenger 300 AFM (Imperial Version), Publication No. CSP 100-1, Revision 72, dated May 11, 2023. (For obtaining the procedures for Bombardier Challenger 300 AFM (Imperial Version), Publication No. CSP 100-1, use Document Identification No. CH 300 AFM-I.)

• BEFORE STARTING ENGINES section, Subsection 04-02, Chapter 4, Normal Procedures, Bombardier Challenger 350 AFM, Publication No. CH 350 AFM, Revision 38, dated May 11, 2023. (For obtaining the procedures for Bombardier Challenger 350 AFM, Publication No. CH 350 AFM, use Document Identification No. CH 350 AFM.)

The FAA reviewed the following service information, which specifies non-normal procedures to follow after installation of the monitoring circuit. These documents are distinct since they apply to different airplane serial numbers.

• Subsection 05-27, Ice & Rain Protection, Chapter 5, Non-Normal Procedures, Bombardier Challenger 300 AFM (Imperial Version), Publication No. CSP 100-1, Revision 72, dated May 11, 2023. (For obtaining the procedures for Bombardier Challenger 300 AFM (Imperial Version), Publication No. CSP 100-1, use Document Identification No. CH 300 AFM-I.)

• Subsection 05-27, Ice & Rain Protection, Chapter 5, Non-Normal Procedures, Bombardier Challenger 350 AFM, Publication No. CH 350 AFM, Revision 38, dated May 11, 2023. (For obtaining the procedures for Bombardier Challenger 350 AFM, Publication No. CH 350 AFM, use Document Identification No. CH 350 AFM.)

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.

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 and service information referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This proposed AD would require accomplishing the actions specified in the service information already described. This AD also requires revising the existing AFM.

The FAA estimates that this AD, if adopted as proposed, would affect 343 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

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

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

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

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

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

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

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

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

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

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2024-0762; Project Identifier AD-2023-01194-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Katherine Venegas, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 562-627-5353; email: katherine.venegas@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA has received reports of several occurrences of a PTU control valve that failed to open when commanded on a non-Model 757 airplane. This condition is caused by the failure of a relay in the PTU control valve because of the voltage drop from its power source. A subsequent analysis of the Model 757 hydraulic system found that this PTU control valve is also used on Model 757 airplanes and is therefore a possible safety issue for Model 757 airplanes. Failure of the PTU control valve, in conjunction with a loss of the left engine and engine driven pump (EDP) during takeoff, may result in a failure of the landing gear to retract. This condition, if not addressed, could add drag, affect climb gradient, and prevent the airplane from clearing obstacles on takeoff. This condition can result in loss of continued safe flight and landing.

The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

The FAA reviewed Boeing Alert Requirements Bulletin 757-29A0071 RB, dated November 16, 2023. This service information specifies procedures for changing the wire bundle from circuit breaker C4054 to the P33 panel, installing new relays in the P33 panel, and changing wire bundles to the PTU control valve.

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 ADDRESSES .

This proposed AD would require accomplishing the actions specified in the service information already described, except for any differences identified as exceptions in the regulatory text of this proposed AD.

The FAA estimates that this AD, if adopted as proposed, would affect 467 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority, as it would amend Class E airspace in Nashua, NH. An airspace evaluation determined that this update is necessary to support IFR operations in the area.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.

The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.

Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

An electronic copy of this document may be downloaded through the internet at www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Operations Office (see ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except for Federal holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except on Federal holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, GA 30337.

Class E airspace designations are published in Paragraph 6004 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. These updates will be published in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the ADDRESSES section of this document.

FAA Order JO 7400.11 lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA proposes an amendment to 14 CFR part 71 to amend Class E airspace extending from the surface for Boire Field Airport, Nashua, NH by replacing the reference to “Manchester VOR/DME” which is scheduled to be decommissioned September 5, 2024. This action would not change the airspace boundaries or operating requirements.

Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations in the area.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures”, prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

This document contains proposed additions to 26 CFR part 1 (Income Tax Regulations) under section 6011 of the Internal Revenue Code (Code). The additions identify certain transactions as “listed transactions” for purposes of section 6011.

Section 6011(a) generally provides that, when required by regulations prescribed by the Secretary of the Treasury or her delegate (Secretary), “any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations.”

Section 1.6011-4(a) provides that every taxpayer that has participated in a reportable transaction within the meaning of § 1.6011-4(b) and who is required to file a tax return must file a disclosure statement within the time prescribed in § 1.6011-4(e). Reportable transactions are identified in § 1.6011-4 and include listed transactions, confidential transactions, transactions with contractual protection, loss transactions, and transactions of interest. See § 1.6011-4(b)(2) through (6). Section 1.6011-4(b)(2) defines a listed transaction as a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction.

Section 1.6011-4(c)(4) provides that a transaction is “substantially similar” if it is expected to obtain the same or similar types of tax consequences and is either factually similar or based on the same or similar tax strategy. Receipt of an opinion regarding the tax consequences of the transaction is not relevant to the determination of whether the transaction is the same as or substantially similar to another transaction. Further, the term substantially similar must be broadly construed in favor of disclosure. For example, a transaction may be substantially similar to a listed transaction even though it may involve different entities or use different Code provisions.

Section 1.6011-4(c)(3)(i)(A) provides that a taxpayer has participated in a listed transaction if the taxpayer's tax return reflects tax consequences or a tax strategy described in the published guidance that lists the transaction under § 1.6011-4(b)(2). Published guidance may identify other types or classes of persons that will be treated as participants in a listed transaction. Published guidance also may identify types or classes of persons that will not be treated as participants in a listed transaction.

Section 1.6011-4(d) and (e) provide that the disclosure statement Form 8886, Reportable Transaction Disclosure Statement (or successor form), must be attached to the taxpayer's tax return for each taxable year for which a taxpayer participates in a reportable transaction. A copy of the disclosure statement must be sent to the IRS's Office of Tax Shelter Analysis (OTSA) at the same time that any disclosure statement is first filed by the taxpayer pertaining to a particular reportable transaction.

Section 1.6011-4(e)(2)(i) provides that, if a transaction becomes a listed transaction after the filing of a taxpayer's tax return reflecting the taxpayer's participation in the listed transaction and before the end of the period of limitations for assessment for any taxable year in which the taxpayer participated in the listed transaction, then a disclosure statement must be filed with OTSA within 90 calendar days after the date on which the transaction becomes a listed transaction. This requirement extends to an amended return and exists regardless of whether the taxpayer participated in the transaction in the year the transaction became a listed transaction. The Commissioner of Internal Revenue (Commissioner) also may determine the time for disclosure of listed transactions in the published guidance identifying the transaction.

Participants required to disclose these transactions under § 1.6011-4 who fail to do so are subject to penalties under section 6707A of the Code. Section 6707A(b) provides that the amount of the penalty is 75 percent of the decrease in tax shown on the return as a result of the reportable transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes), subject to minimum and maximum penalty amounts. The minimum penalty amount is $5,000 in the case of a natural person and $10,000 in any other case. For a listed transaction, the maximum penalty amount is $100,000 in the case of a natural person and $200,000 in any other case.

Additional penalties also may apply. In general, section 6662A of the Code imposes a 20 percent accuracy-related penalty on any understatement (as defined in section 6662A(b)(1)) attributable to an adequately disclosed reportable transaction. If the taxpayer had a requirement to disclose participation in the reportable transaction but did not adequately disclose the transaction in accordance with the regulations under section 6011, the taxpayer is subject to an increased penalty rate equal to 30 percent of the understatement. See section 6662A(c). Section 6662A(b)(2) provides that section 6662A applies to any item that is attributable to any listed transaction and any reportable transaction (other than a listed transaction) if a significant purpose of such transaction is the avoidance or evasion of Federal income tax.

Participants required to disclose listed transactions who fail to do so also are subject to an extended period of limitations under section 6501(c)(10) of the Code. That section provides that the time for assessment of any tax with respect to the transaction shall not expire before the date that is one year after the earlier of the date the participant discloses the transaction or the date a material advisor discloses the participation pursuant to a written request under section 6112(b)(1)(A) of the Code.

Section 6111(a) provides that each material advisor with respect to any reportable transaction shall make a return setting forth: (1) information identifying and describing the transaction, (2) information describing any potential tax benefits expected to result from the transaction, and (3) such other information as the Secretary may prescribe. Such return shall be filed not later than the date specified by the Secretary.

Section 301.6111-3(a) of the Procedure and Administration Regulations provides that each material advisor with respect to any reportable transaction, as defined in § 1.6011-4(b), must file a return as described in § 301.6111-3(d) by the date described in § 301.6111-3(e).

Section 301.6111-3(b)(1) provides that a person is a material advisor with respect to a transaction if the person provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction, and directly or indirectly derives gross income in excess of the threshold amount as defined in § 301.6111-3(b)(3) for the material aid, assistance, or advice. Under § 301.6111-3(b)(2)(i) and (ii), a person provides material aid, assistance, or advice if the person provides a tax statement, which is any statement (including another person's statement), oral or written, that relates to a tax aspect of a transaction that causes the transaction to be a reportable transaction as defined in § 1.6011-4(b)(2) through (7).

Material advisors must disclose transactions on Form 8918, Material Advisor Disclosure Statement (or successor form), as provided in § 301.6111-3(d) and (e). Section 301.6111-3(e) provides that the material advisor's disclosure statement for a reportable transaction must be filed with the OTSA by the last day of the month that follows the end of the calendar quarter in which the advisor becomes a material advisor with respect to a reportable transaction or in which the circumstances necessitating an amended disclosure statement occur. The disclosure statement must be sent to the OTSA at the address provided in the instructions for Form 8918 (or successor form).

Section 301.6111-3(d)(2) provides that the IRS will issue to a material advisor a reportable transaction number with respect to the disclosed reportable transaction. Receipt of a reportable transaction number does not indicate that the disclosure statement is complete, nor does it indicate that the transaction has been reviewed, examined, or approved by the IRS. Material advisors must provide the reportable transaction number to all taxpayers and material advisors for whom the material advisor acts as a material advisor as defined in § 301.6111-3(b). The reportable transaction number must be provided at the time the transaction is entered into, or, if the transaction is entered into prior to the material advisor's receipt of the reportable transaction number, within 60 calendar days from the date the reportable transaction number is mailed to the material advisor.

Section 6707(a) of the Code provides that a material advisor who fails to file a timely disclosure, or files an incomplete or false disclosure statement, is subject to a penalty. Pursuant to section 6707(b)(2), for listed transactions, the penalty is the greater of (A) $200,000, or (B) 50 percent of the gross income derived by such person with respect to aid, assistance, or advice that is provided with respect to the listed transaction before the date the return is filed under section 6111.

Additionally, section 6112(a) provides that each material advisor with respect to any reportable transaction shall (whether or not required to file a return under section 6111 with respect to such transaction) maintain a list (1) identifying each person with respect to whom such advisor acted as a material advisor with respect to such transaction and (2) containing such other information as the Secretary may by regulations require. Material advisors must furnish such lists to the IRS in accordance with § 301.6112-1(e).

A material advisor may be subject to a penalty under section 6708 of the Code for failing to maintain a list under section 6112(a) and failing to make the list available upon written request to the Secretary in accordance with section 6112(b) within 20 business days after the date of such request. Section 6708(a) provides that the penalty is $10,000 per day for each day of the failure after the 20th day. However, no penalty will be imposed with respect to the failure on any day if such failure is due to reasonable cause.

Section 4965 of the Code is intended to deter certain “tax-exempt entities” (as defined in section 4965(c)) from facilitating “prohibited tax shelter transactions,” which include listed transactions. Section 4965(a)(1), in part, imposes an excise tax on a tax-exempt entity for the taxable year in which the tax-exempt entity becomes a party to a transaction that is a “prohibited tax shelter transaction” at the time it becomes a party to the transaction, and for any subsequent taxable year, in the amount determined under section 4965(b)(1) (section 4965 tax). Tax-exempt entities subject to the section 4965 tax are listed in section 4965(c)(1) through (3) and include, among others, entities and governmental units described in sections 501(c) and 170(c) of the Code (other than the United States). A tax-exempt entity that is a party to a prohibited tax shelter transaction generally also is subject to various reporting and disclosure obligations.

Additionally, section 4965(a)(2) imposes an excise tax on an “entity manager” if the manager approves the tax-exempt entity as a party (or otherwise causes the tax-exempt entity to be a party) to a prohibited tax shelter transaction and knows or has reason to know that the transaction is a prohibited tax shelter transaction. The amount of this excise tax is determined under section 4965(b)(2) (entity manager tax).

The amount of the section 4965 tax owed by a tax-exempt entity depends on whether the tax-exempt entity knows, or has reason to know, that a transaction is a prohibited tax shelter transaction at the time the entity becomes a party to the transaction. A tax-exempt entity is treated as knowing or having reason to know that a transaction is a prohibited tax shelter transaction if one or more of its entity managers knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time the entity manager(s) approved the tax-exempt entity as (or otherwise caused the entity to be) a party to the transaction. 1 The tax-exempt entity also is attributed the knowledge or reason to know of certain entity managers—those persons with authority or responsibility similar to that exercised by an officer, director, or trustee of an organization—even if the entity manager does not approve the entity as (or otherwise cause the entity to be) a party to the transaction.

Section 53.4965-4(a)(1) provides that a tax-exempt entity is a “party” to a prohibited tax shelter transaction if it facilitates a prohibited tax shelter transaction by reason of its tax-exempt, tax-indifferent, or tax-favored status. In addition, under § 53.4965-4(a)(2) and (b), the Secretary may issue published guidance to identify tax-exempt entities by type, class, or role that will or will not be treated as parties to a prohibited tax shelter transaction.

If the tax-exempt entity unknowingly becomes a party to a prohibited tax shelter transaction, the section 4965 tax generally equals the greater of (1) the product of the highest rate of tax under section 11 of the Code (currently 21 percent) and the tax-exempt entity's net income attributable to the prohibited tax shelter transaction, or (2) the product of the highest rate of tax under section 11 and 75 percent of the proceeds received by the tax-exempt entity that are attributable to the prohibited tax shelter transaction. If the tax-exempt entity knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time the tax-exempt entity became a party to the transaction, the section 4965 tax increases to the greater of (1) 100 percent of the tax-exempt entity's net income attributable to the prohibited tax shelter transaction, or (2) 75 percent of the tax-exempt entity's proceeds attributable to the prohibited tax shelter transaction.

The terms “net income” and “proceeds” are defined in § 53.4965-8. In general, a tax-exempt entity's net income attributable to a prohibited tax shelter transaction is its gross income derived from the transaction, reduced by those deductions that are attributable to the transaction and that would be allowed by chapter 1 of the Code (chapter 1) if the tax-exempt entity were treated as a taxable entity for this purpose, and further reduced by the taxes imposed by subtitle D of the Code (other than the section 4965 tax) with respect to the transaction. In the case of a tax-exempt entity that is a party to the transaction by reason of facilitating a prohibited tax shelter transaction by reason of its tax-exempt, tax-indifferent, or tax-favored status, the term “proceeds,” solely for purposes of section 4965, means the gross amount of the tax-exempt entity's consideration for facilitating the transaction, not reduced for any costs or expenses attributable to the transaction. Published guidance with respect to a particular prohibited tax shelter transaction may designate additional amounts as proceeds from the transaction for purposes of section 4965. In addition, for all tax-exempt entities that are parties to a prohibited tax shelter transaction, any amount that is a gift or a contribution to a tax-exempt entity and that is attributable to a prohibited tax shelter transaction is treated as proceeds for purposes of section 4965, unreduced by any associated expenses.

The amount of the entity manager tax determined under section 4965(b)(2) on an entity manager (as defined in section 4965(d)) equals $20,000 for each instance that the manager approves the tax-exempt entity as (or otherwise causes such entity to be) a party to a prohibited tax shelter transaction and knows or has reason to know that the transaction is a prohibited tax shelter transaction. This liability is not joint and several.

Section 53.6011-1 requires that a tax-exempt entity subject to the section 4965 excise tax must file Form 4720, Return of Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code, to report the liability and pay the tax due under section 4965(a)(1). Under § 1.6033-5, a tax-exempt entity that is a party to a prohibited tax shelter transaction must file Form 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction, to disclose that it is a party to a prohibited tax shelter transaction, the identity of any other party (whether taxable or tax-exempt) to such transaction that is known to the tax-exempt entity, and certain other information. Under § 1.6033-2, if the tax-exempt entity is required to file Form 990, Return of Organization Exempt From Income Tax, it must disclose on that form that it is a party to a prohibited tax shelter transaction, whether any taxable party notified the tax-exempt entity that it was or is a party to a prohibited tax shelter transaction, and whether the tax-exempt entity filed Form 8886-T.

Section 6011(g) and § 301.6011(g)-1 provide that any taxable party to a prohibited tax shelter transaction must disclose to each tax-exempt entity that the taxable party knows or has reason to know is a party to such transaction that the transaction is a prohibited tax shelter transaction.

For purposes of section 664 of the Code, section 664(d)(1) provides that a charitable remainder annuity trust (CRAT) is a trust:

(A) From which a sum certain (which is not less than 5 percent nor more than 50 percent of the initial fair market value (FMV) of all property placed in trust) is to be paid, not less often than annually, to one or more persons (at least one of which is not an organization described in section 170(c), and, in the case of individuals, only to an individual who is living at the time of the creation of the trust) for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals;

(B) From which no amount other than the payments described in section 664(d)(1)(A) and other qualified gratuitous transfers described in section 664(d)(1)(C) may be paid to or for the use of any person other than an organization described in section 170(c);

(C) Whose remainder interest, following the termination of the payments described in section 664(d)(1)(A), is to be transferred to, or for the use of, an organization described in section 170(c) or is to be retained by the trust for such a use or, to the extent the remainder interest is in qualified employment securities (as defined by section 664(g)(4)), all or part of such securities are to be transferred to an employee stock ownership plan (as defined in section 4975(e)(7) of the Code) in a qualified gratuitous transfer (as defined by 664(g)); and

(D) Whose remainder interest has a value (determined under section 7520) of at least 10 percent of the initial net FMV of all property placed in the trust.

Section 664(b) provides, in part, that amounts distributed by a CRAT are considered as having the following characteristics in the hands of a beneficiary to whom the annuity described in section 664(d)(1)(A) is paid:

(1) First, as amounts of income (other than gains, and amounts treated as gains, from the sale or other disposition of capital assets) includible in gross income to the extent of such income of the trust for the year and such undistributed income of the trust for prior years;

(2) Second, as a capital gain to the extent of the capital gain of the trust for the year and the undistributed capital gain of the trust for prior years;

(3) Third, as other income to the extent of such income of the trust for the year and such undistributed income of the trust for prior years; and

(4) Fourth, as a distribution of trust corpus.

Under section 664(c)(1), a CRAT is not subject to any tax imposed by subtitle A of the Code. Section 664(c)(2), in part, imposes an excise tax on a CRAT that has unrelated business taxable income (within the meaning of section 512, determined as if part III of subchapter F of chapter 1 applies to such trust) for a taxable year. That excise tax is equal to the amount of such unrelated business taxable income.

The Treasury Department and the IRS are aware of transactions in which taxpayers attempt to use a CRAT and a single premium immediate annuity (SPIA) to permanently avoid recognition of ordinary income and/or capital gain. Taxpayers engaging in these transactions claim that distributions from the trust are not taxable to the beneficiaries as ordinary income or capital gain under section 664(b) because the distributions constitute the trust's unrecovered investment in the SPIA, thus claiming that a significant portion of the distributions is excluded from gross income under section 72(b)(2) of the Code. Taxpayers also claim that the trust qualifies as a CRAT and thus is not subject to tax on the trust's realized ordinary income or capital gain under section 664(c)(1), even though the trust may not meet all of the requirements of section 664(d)(1).

In these transactions, a grantor creates a trust purporting to qualify as a CRAT under section 664. Generally, the grantor funds the trust with property having a FMV in excess of its basis (appreciated property) such as interests in a closely-held business, and/or assets used or produced in a trade or business. The trust then sells the appreciated property and uses some or all of the proceeds from the sale of the contributed property to purchase an annuity. On a Federal income tax return, the beneficiary of the trust treats the annuity amount payable from the trust as if it were, in whole or in part, an annuity payment subject to section 72, 2 instead of as carrying out to the beneficiary amounts in the ordinary income and capital gain tiers of the trust in accordance with section 664(b).

As result of treating section 72 as applying to the amounts received (typically paid by an insurance company) as part of the annuity amount, the beneficiary reports as income only a small portion of the amount the beneficiary received from the SPIA. The beneficiary treats the balance of the annuity amount as an excluded portion representing a return of investment. 3 The beneficiary thus claims that the beneficiary is taxed as if the beneficiary were the owner of the SPIA, rather than the SPIA being an asset owned by the CRAT, which the trustee purchased to fund the annuity amount payable from the trust. Under the beneficiary's theory, until the entire investment in the SPIA has been recovered, the only portion of the annuity amount includable in the beneficiary's income is that portion of the SPIA annuity required to be included in income under section 72. The beneficiary also maintains that the distribution is not subject to section 664(b), which would treat a substantial portion of the annuity amount as gain attributable to the sale of the appreciated property contributed to the CRAT.

The trustee also might take the position that the transfer of the appreciated property to the purported CRAT gives those assets a step-up in basis to FMV as if they had been sold to the trust. The transfer of property to a CRAT, however, does not give those assets a step-up in basis to FMV, as if they had been sold to the trust, giving the trust a cost basis under section 1012 of the Code. Instead, the transfer to the CRAT is a gift for Federal tax purposes. When a grantor transfers appreciated property to a CRAT, the CRAT's basis in the assets is determined under section 1015 of the Code. Under section 1015(a) and (d), property transferred by gift (whether or not in trust) retains its basis in the hands of the donor, increased (but not above FMV) by any gift tax paid on the transfer.

The claimed application of sections 664 and 72 to the transaction is incorrect. Proper application of the rules of sections 664 and 72 to the transaction results in annual ordinary income from the annuity payments from the SPIA being added to the section 664(b)(1) (ordinary income) tier of the CRAT's income each year, and a one-time amount being added to the section 664(b)(2) (capital gains) tier at the time of the sale of the property by the CRAT (assuming the asset is of a kind to produce capital gain). Assuming no other activity in the CRAT, under section 664(b), the beneficiary of the CRAT must treat the annuity amount each year as first consisting of the ordinary income portion of the annuity payments from the SPIA. The balance of the annuity amount must be treated as consisting of any accumulated ordinary income of the CRAT, then accumulated capital gain, and then other income of the CRAT, only reaching non-taxable corpus to the extent these three accounts have been exhausted.

In addition, certain features of the trust may cause the trust to fail to meet all of the requirements of section 664(d)(1). While the trust instrument generally resembles one of the eight sample CRAT forms provided in Rev. Proc. 2003-53, 2003-2 C.B. 230; Rev. Proc. 2003-54, 2003-2 C.B. 236; Rev. Proc, 2003-55, 2003-2 C.B. 242; Rev. Proc. 2003-56, 2003-2 C.B. 249; Rev. Proc. 2003-57, 2003-2 C.B. 257; Rev. Proc. 2003-58, 2003-2 C.B. 262; Rev. Proc. 2003-59, 2003-2 C.B 268; and Rev. Proc. 2003-60, 2003-2 C.B. 274 (Sample CRAT Revenue Procedures), it might have one or more significant modifications. For example, the trust instrument might provide that, in each taxable year of the trust, the trustee must pay to the beneficiary during the annuity period, an annuity amount equal to the greater of (1) an amount which meets the requirements of section 664(d)(1)(A) or (2) the payments received by the trustee from one or more SPIAs purchased by the trustee.

The trust instrument also might provide for a current payment to an organization described in section 170(c) (Charitable Remainderman) in lieu of the payment of the remainder interest described in section 664(d)(1)(C). For example, the trust instrument might state that, in lieu of transferring the remainder amount required pursuant to section 664(d)(1)(C) (Remainder Interest) to the Charitable Remainderman, the trustee, upon the availability of adequate funding, currently may pay to the Charitable Remainderman a cash sum equal to at least 10 percent of the initial FMV of the trust property plus a nominal amount of cash. The trust agreement also might provide that the trustee cannot make a distribution in kind to satisfy this cash distribution. This payment, equal to at least 10 percent of the initial FMV of the trust property, would be the only payment to the Charitable Remainderman. The governing instrument of a CRAT may provide for an amount other than the annuity amount described in § 1.664-2(a)(1) to be paid (or to be paid in the discretion of the trustee) to an organization described in § 170(c) provided that, in the case of distributions in kind, the adjusted basis of the property distributed is fairly representative of the adjusted basis of the property available for payment on the date of payment. See § 1.664-2(a)(4). However, nowhere in section 664(d)(1)(D) does it permit a current payment, determined based on the value of the trust at its funding, to be made in lieu of, and as a substitute for, the required payment of the remainder interest (that is, the entire corpus of the trust at termination of the annuity period) described in section 664(d)(1)(C) to the Charitable Remainderman.

The significant modifications identified in the prior paragraphs deviate from the Sample CRAT Revenue Procedures in ways that prevent the qualification of the trust as a valid CRAT under section 664, regardless of the actual administration of the CRAT. These modifications are made in these transactions in order to effectuate the structure. Specifically, a provision authorizing the payment of an annuity amount in excess of the amount described in section 664(d)(1)(A), and a provision authorizing a current payment in lieu of the payment of the remainder interest described in section 664(d)(1)(C), violate mandatory requirements of a valid CRAT.

On March 3, 2022, the Sixth Circuit issued an order in Mann Construction v. United States, 27 F.4th 1138, 1147 (6th Cir. 2022), holding that Notice 2007-83, 2007-2 C.B. 960, which identified certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies as listed transactions, violated the Administrative Procedure Act (APA), 5 U.S.C. 551-559, because the notice was issued without following the notice-and-comment procedures required by section 553 of the APA. The Sixth Circuit reversed the decision of the district court, which held that Congress had authorized the IRS to identify listed transactions without notice and comment. See Mann Construction, Inc. v. United States, 539 F.Supp.3d 745, 763 (E.D. Mich. 2021).

Relying on the Sixth Circuit's analysis in Mann Construction, three district courts and the Tax Court have concluded that IRS notices identifying listed transactions were improperly issued because they were issued without following the APA's notice and comment procedures. See Green Rock, LLC v. IRS, 2023 WL 1478444 (N.D. AL., February 2, 2023) (Notice 2017-10); GBX Associates, LLC, v. United States, 1:22cv401 (N.D. Ohio, Nov. 14, 2022) (same); Green Valley Investors, LLC, et al. v. Commissioner, 159 T.C. No. 5 (Nov. 9, 2022) (same); see also CIC Services, LLC v. IRS, 2022 WL 985619 (E.D. Tenn. March 21, 2022), as modified by 2022 WL 2078036 (E.D. Tenn. June 2, 2022) (Notice 2016-66, identifying a transaction of interest).

The Treasury Department and the IRS disagree with the Sixth Circuit's decision in Mann Construction and the subsequent decisions that have applied that reasoning to find other IRS notices invalid and are continuing to defend the validity of notices identifying transactions as listed transactions in circuits other than the Sixth Circuit. At the same time, however, to avoid any confusion and to ensure consistent enforcement of the tax laws throughout the nation, the Treasury Department and the IRS are issuing these proposed regulations to identify certain charitable remainder trust transactions as listed transactions for purposes of all relevant provisions of the Code and Treasury Regulations.

These proposed regulations propose to identify the charitable remainder trust transactions described in proposed § 1.6011-15(b), and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) and sections 6111 and 6112. In addition, they inform taxpayers that participate in these transactions, and persons who act as material advisors with respect to these transactions, that they would need to disclose the transaction in accordance with the final regulations and the regulations issued under sections 6011 and 6111. Material advisors must also maintain lists as required by section 6112.

Proposed § 1.6011-15(a) would identify a transaction that is the same as, or substantially similar to, the transaction described in proposed § 1.6011-15(b) as a listed transaction for purposes of § 1.6011-4(b)(2). “Substantially similar” is defined in § 1.6011-4(c)(4) to include any transaction that is expected to obtain the same or similar types of tax consequences and that is either factually similar or based on the same or a similar tax strategy.

A transaction is described in proposed § 1.6011-15(b) if it includes the following elements:

(i) The grantor creates a trust purporting to qualify as a CRAT under section 664;

(ii) The grantor funds the trust with property having a FMV in excess of its basis (contributed property);

(iii) The trustee sells the contributed property;

(iv) The trustee uses some or all of the proceeds from the sale of the contributed property to purchase an annuity; and

(v) On a Federal income tax return, the beneficiary of the trust (Beneficiary) treats the amount payable from the trust as if it were, in whole or in part, an annuity payment subject to section 72, instead of as carrying out to the Beneficiary amounts in the ordinary income and capital gain tiers of the trust in accordance with section 664(b).

Whether a taxpayer has participated in the listed transaction described in proposed § 1.6011-15(b) is determined under § 1.6011-4(c)(3)(i)(A). Participants include any person whose tax return reflects tax consequences or a tax strategy described in proposed § 1.6011-15(b). These tax consequences include those tax consequences described in proposed § 1.6011-15(b) that would affect any gift tax return, whether or not such gift tax return was filed. See § 25.6011-4. A taxpayer also has participated in a transaction described in proposed § 1.6011-15(b) if the taxpayer knows or has reason to know that the taxpayer's tax benefits are derived directly or indirectly from tax consequences, or a tax strategy, described in proposed § 1.6011-15(b).

Material advisors who make a tax statement with respect to transactions identified as listed transactions in proposed § 1.6011-15(b) would have disclosure and list maintenance obligations under sections 6111 and 6112. See §§ 301.6111-3 and 301.6112-1. One of the requirements to be a material advisor under section 6111(b)(1) is that the person must directly or indirectly derive gross income in excess of the threshold amount provided in 6111(b)(1)(B) for providing material aid, assistance, or advice with respect to the listed transaction. That threshold in the case of a listed transaction is reduced to $10,000 if substantially all of the tax benefits are provided to natural persons (looking through any partnerships, S corporations, or trusts), or to $25,000 for any other transaction. See § 301.6111-3(b)(3)(i)(B). The regulations under section 6111 provide that gross income includes all fees for a tax strategy, for services for advice (whether or not tax advice), and for the implementation of a reportable transaction. See § 301.6111-3(b)(2)(ii). However, a fee does not include amounts paid to a person, including an advisor, in that person's capacity as a party to the transaction. See § 301.6111-3(b)(3)(ii).

Participants required to disclose these transactions under § 1.6011-4 who fail to do so will be subject to penalties under section 6707A. Such disclosure also must include any gift tax consequences. See § 25.6011-4. Participants required to disclose these transactions under § 1.6011-4 who fail to do so also are subject to an extended period of limitations under section 6501(c)(10). Material advisors required to disclose these transactions under section 6111 who fail to do so are subject to penalties under section 6707. Material advisors required to maintain lists of investors under section 6112 who fail to do so (or who fail to provide such lists when requested by the IRS) are subject to penalties under section 6708(a). In addition, the IRS may impose other penalties on persons involved in these transactions or substantially similar transactions, including accuracy-related penalties under section 6662 or section 6662A, the penalty under section 6694 for understatements of a taxpayer's liability by a tax return preparer, the penalty under section 6700 for promoting abusive tax shelters, and the penalty under section 6701 for aiding and abetting understatement of tax liability.

In addition, material advisors have disclosure requirements with regard to transactions occurring in prior years. However, notwithstanding § 301.6111-3(b)(4)(i) and (iii), material advisors are required to disclose only if they have made a tax statement on or after [DATE 6 YEARS BEFORE DATE OF PUBLICATION OF FINAL RULE].

Because the IRS will take the position that taxpayers are not entitled to the purported tax benefits of the listed transactions described in the proposed regulations, taxpayers who have filed tax returns taking the position that they were entitled to the purported tax benefits should consider filing amended returns or otherwise ensure that their transactions are disclosed properly.

As stated in section 1 of this Explanation of Provisions, the transaction described in proposed § 1.6011-15(b) attempts to use a CRAT under section 664 to permanently avoid recognition of ordinary income and/or capital gain on the sale of contributed property having a FMV in excess of its basis. Under the mandatory requirements of section 664(d), a trust does not qualify as a CRAT unless, following the termination of the annuity payments described in section 664(d)(1)(A), the Remainder Interest is to be transferred to or for the use of an organization described in section 170(c).

As stated in section III of the Background, section 4965 provides, in part, that, if a transaction is a prohibited tax shelter transaction at the time a tax-exempt entity (which includes an organization described in section 170(c), other than the United States) becomes a party to the transaction, the entity must pay the section 4965 tax for the taxable year and any subsequent taxable year as determined under section 4965(b)(1). Section 4965(e)(1) provides in part that the term “prohibited tax shelter transaction” means any listed transaction (within the meaning of section 6707A(c)(2)). A tax-exempt entity that is a party to a prohibited tax shelter transaction generally is subject to various reporting and disclosure obligations. Additionally, an entity manager is subject to the entity manager tax imposed by section 4965(a)(2) if the entity manager approves the tax-exempt entity as a party (or otherwise causes the entity to be a party) to a prohibited tax shelter transaction and knows or has reason to know that the transaction is a prohibited tax shelter transaction. Section 53.4965-4(a) provides in part that a tax-exempt entity is a “party” to a prohibited tax shelter transaction if it facilitates a prohibited tax shelter transaction by reason of its tax-exempt, tax-indifferent, or tax-favored status.

The trust used in a transaction identified as a listed transaction in proposed § 1.6011-15(a) would not qualify as a CRAT unless the entire Remainder Interest is required to be transferred to or for the use of a Charitable Remainderman. Thus, the tax-exempt entity that the CRAT designates for the Remainder Interest facilitates the transaction by reason of its tax-exempt status because, absent that status, the CRAT would not satisfy the mandatory requirement of section 664(d)(1)(C). Accordingly, that designated tax-exempt entity would meet the definition of a party to a prohibited tax shelter transaction in § 53.4965-4(a)(1).

However, notwithstanding the general rule in § 53.4965-4(a), § 53.4965-4(b) provides that published guidance may identify, by type, class, or role, which tax-exempt entities will or will not be treated as parties to a prohibited tax shelter transaction. The Treasury Department and the IRS understand that, in a transaction described in proposed § 1.6011-15(b), an organization described in section 170(c) that is designated as the Charitable Remainderman might not become aware of its Remainder Interest in the purported CRAT until it receives a distribution from the trust. In that situation, it may be difficult for the organization described in section 170(c) to determine when section 4965 excise taxes and related reporting requirements apply. For this reason, these proposed regulations would provide that an organization described in section 170(c) that the purported CRAT designates as the recipient of the Remainder Interest will not be treated as a party under section 4965 to the listed transaction described in proposed § 1.6011-15 solely by reason of its status as a Charitable Remainderman.

As stated in section II of the Background, a taxpayer has participated in a listed transaction if the taxpayer's tax return reflects tax consequences or a tax strategy described in this proposed regulation. See § 1.6011-4(c)(3)(i)(A). Published guidance may identify other types or classes of persons that will be treated as participants in a listed transaction. Published guidance also may identify types or classes of persons that will not be treated as participants in a listed transaction. In general, the Treasury Department and the IRS do not expect that an organization described in section 170(c), whose only role or interest in the transaction described in these proposed regulations is as a Charitable Remainderman, would meet the definition of a participant under § 1.6011-4(c)(3)(i)(A). Nevertheless, to avoid potential uncertainty, the proposed regulations provide that an organization described in section 170(c) that the purported CRAT designates as the recipient of the Remainder Interest is not treated as a participant in the listed transaction described in these proposed regulations solely by reason of its status as a Charitable Remainderman.

As stated in section III of the Background, a person is a material advisor with respect to a transaction if the person provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction, and directly or indirectly derives gross income in excess of the threshold amount for the material aid, assistance, or advice. See section 6111(b)(1)(A). The regulations provide that gross income includes all fees for a tax strategy, for services or advice (whether or not tax advice), and for the implementation of a reportable transaction. However, a fee does not include amounts paid to a person, including an advisor, in that person's capacity as a party to the transaction. See § 301.6111-3(b)(3)(ii)).

The Treasury Department and the IRS request comments on whether the Charitable Remainderman ever provides material aid, assistance, or advice with respect to transactions described in proposed § 1.6011-15(b) and the nature of the services being provided. The Treasury Department and the IRS also request comments on what fees the Charitable Remainderman receives, either directly or indirectly, for providing such material aid, assistance or advice.

Before these proposed amendments to the regulations are adopted as final regulations, consideration will be given to comments regarding the notice of proposed rulemaking that are submitted timely to the IRS as prescribed under the ADDRESSES section. The Treasury Department and the IRS request comments on all aspects of the proposed regulations. All comments will be made available at https://www.regulations.gov. Once submitted to the Federal eRulemaking Portal, comments cannot be edited or withdrawn.

A public hearing has been scheduled for July 11, 2024, beginning at 10 a.m. ET, in the Auditorium at the Internal Revenue Service Building, 1111 Constitution Avenue NW, Washington, DC. Due to the building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. Participants alternatively may attend the public hearing by telephone.

The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present comments at the hearing must submit an outline of the topics to be discussed and the time to be devoted to each topic by May 24, 2024. A period of 10 minutes will be allocated to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be free of charge at the hearing. If no outline of topics to be discussed at the hearing is received by May 24, 2024, the public hearing will be cancelled. If the public hearing is cancelled, a notice of cancellation of the public hearing will be published in the Federal Register .

Individuals who want to testify in person at the public hearing must send an email to publichearings@irs.gov to have your name added to the building access list. The subject line of the email must contain the regulation number (REG-108761-22) and the language “TESTIFY In Person”. For example, the subject line may say: Request to TESTIFY In Person at Hearing for REG-108761-22.

Individuals who want to testify by telephone at the public hearing must send an email to publichearings@irs.gov to receive the telephone number and access code for the hearing. The subject line of the email must contain the regulation number REG-108761-22 and the language “TESTIFY Telephonically”. For example, the subject line may say: Request to TESTIFY Telephonically at Hearing for REG-108761-22.

Individuals who want to attend the public hearing in person without testifying also must send an email to publichearings@irs.gov to have their names added to the building access list. The subject line of the email must contain the regulation number REG-108761-22 and the language “ATTEND in Person”. For example, the subject line may say: Request to ATTEND Hearing In Person REG-108761-22. Requests to attend the public hearing must be received by 5 p.m. ET on July 9, 2024.

Individuals who want to attend the public hearing by telephone without testifying also must send an email to publichearings@irs.gov to receive the telephone number and access code for the hearing. The subject line of email must contain the regulation number (REG-108761-22 and the language “ATTEND Hearing Telephonically”. For example, the subject line may say: Request to ATTEND Hearing Telephonically for REG-108761-22. Requests to attend the public hearing must be received by 5 p.m. ET on July 9, 2024.

Hearings will be made accessible to people with disabilities. To request special assistance during a hearing, please contact the Publication and Regulations Section of the Office of Associate Chief Counsel (Procedure and Administration) by sending an email to publichearings@irs.gov (preferred) or by telephone at (202) 317-6901 (not a toll-free number) at least July 8, 2024.

Proposed § 1.6011-15 would identify charitable remainder annuity trust transactions described in proposed § 1.6011-15(b), and transactions that are substantially similar to those transactions, as listed transactions, effective as of the date the final regulations are published in the Federal Register .

The estimated number of taxpayers impacted by these proposed regulations is between 50 to 100 per year. No burden on these taxpayers is imposed by these proposed regulations. Instead, the collection of information contained in these proposed regulations is reflected in the collection of information for Forms 8886 and 8918 that have been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act (44 U.S.C. 3507(c)) under control numbers 1545-1800 and 1545-0865.

To the extent there is a change in burden as a result of these regulations, the change in burden will be reflected in the updated burden estimates for Forms 8886 and 8918. The requirement to maintain records to substantiate information on Forms 8886 and 8918 already is contained in the burden associated with the control number for the forms and remains unchanged.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

When an agency issues a proposed rulemaking, the Regulatory Flexibility Act (5 U.S.C. chapter 6) (Act) requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” that “describe[s] the impact of the proposed rule on small entities.” 5 U.S.C. 603(a). The term “small entities” is defined in 5 U.S.C. 601 to mean “small business,” “small organization,” and “small governmental jurisdiction,” which are also defined in 5 U.S.C. 601. Small business size standards define whether a business is “small” and have been established for types of economic activities, or industry, generally under the North American Industry Classification System (NAICS). See Title 13, Part 121 of the Code of Federal Regulations (titled “Small Business Size Regulations”). The size standards look at various factors, including annual receipts, number of employees, and amount of assets, to determine whether the business is small. See Title 13, Part 121.201 of the Code of Federal Regulations for the Small Business Size Standards by NAICS Industry.

Section 605 of the Act provides an exception to the requirement to prepare an initial regulatory flexibility analysis if the agency certifies that the proposed rulemaking will not have a significant economic impact on a substantial number of small entities. The Treasury Department and the IRS hereby certify that these proposed regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that the majority of the effect of the proposed regulations falls on trusts. Further, the Treasury Department and the IRS expect that the reporting burden is low; the information sought is necessary for regular annual return preparation and ordinary recordkeeping.

Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). This proposed rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Pursuant to the Memorandum of Agreement, Review of Treasury Regulations under Executive Order 12866 (June 9, 2023), tax regulatory actions issued by the IRS are not subject to the requirements of section 6 of Executive Order 12866, as amended. Therefore, a regulatory impact assessment is not required.

Guidance cited in this preamble is published in the Internal Revenue Bulletin and is available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

The principal author of these proposed regulations is Charles D. Wien, Office of Associate Chief Counsel (Passthroughs & Special Industries). However, other personnel from the IRS and the Treasury Department participated in the development of these regulations.

Accordingly, the Treasury Department and the IRS propose to amend 26 CFR part 1 as follows:

On December 8, 2023, an organization notified the Coast Guard that it will be conducting high-speed powerboat races from 6 a.m. through 6 p.m. from May 24, 2024, through May 26, 2024. The races will take place between mile marker 228.1 and mile marker 228.8 on the Red River, Shreveport, LA, and involve approximately 55 powerboats ranging from 14 to 18 feet in length. No spectator craft will be allowed in the regulated area. The Captain of the Port Sector Lower Mississippi River (COTP) has determined that potential hazards associated with the high-speed powerboat race would be a safety concern for participants, participant vessels, and general public.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70041.

The COTP is proposing to establish a SLR from 6 a.m. through 6 p.m. each day on May 24, 2024 through May 26, 2024. The SLR would cover all navigable waters from mile marker 228.1 to mile marker 228.8 on the Red River, Shreveport, LA. The duration of the zone is intended to ensure the protection of personnel, vessels, and the marine environment during this event. The proposed regulation would prohibit all persons and vessels, except those persons and vessels participating in the race, from entering, transiting through, anchoring in, or remaining within the area, unless authorized by the COTP or a designated representative. The Coast Guard will provide notice of the SLR and contact information by a Broadcast Notice to Mariners, and on-scene designated representatives. The regulatory text we are proposing appears at the end of this document.

We developed this proposed 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 NPRM has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size, location, duration, and time-of-day of the special local regulation, which will impact mile marker 228.1 to mile marker 228.8 on the Red River for 12 hours each day. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the regulated area, breaks in the racing will provide vessels opportunity to transit, and the rule allows vessels to seek permission to enter the zone.

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 proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the regulated area may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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 proposed rule. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would 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 proposed 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 proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would 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 proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

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 proposed rule would not result in such an expenditure, we do discuss the potential effects of this proposed rule elsewhere in this preamble.

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination 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 proposed rule involves a special local regulation lasting approximately 12 hours on three separate days that will prohibit entry of persons or vessels during the Red River Rumble F1 Powerboat Showdown high-speed powerboat races. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email 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.

We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments through the Federal Decision-Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2024-0177 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the https://www.regulations.gov Frequently Asked Questions web page. Also, if you click on the Dockets tab and then the proposed rule, you should see a “Subscribe” option for email alerts. The option will notify you when comments are posted, or a final rule is published.

We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 100 as follows:

On September 26, 2023, an organization notified the Coast Guard that it will be requesting a Regulated Navigation Area (RNA) at the NW Natural Gasco Sediments Site Project Area located in the Willamette River in Portland, Oregon. This will preserve the integrity of the In Situ Stabilization and Solidification (ISS) Field Pilot Study (FPS) post-construction sampling ports placed over the site as part of the U.S Environmental Protection Agency (EPA) Superfund cleanup action. The Captain of the Port Sector Columbia River (COTP) has determined that a regulated navigation area would mitigate potential hazards at this site.

The purpose of this rulemaking is to ensure activities do not disturb the sampling ports. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034.

The COTP is proposing to establish a regulated navigation area at river mile 6.5 on the Willamette River, Portland, OR. The FPS consists of a 1,750 square foot area that will undergo ISS treatment. The duration of the zone is intended last in perpetuity or until the EPA and NW Natural agree to modify the footprint as part of a future final site remedy. No vessel or person would be permitted to disturb ( e.g., anchor, drag lines, trawling, motoring) the regulated navigation area without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.

We developed this proposed 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 NPRM has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the RNA being limited in size and is outside the navigable channel.

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 proposed rule would not have a significant economic impact on a substantial number of small entities.

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

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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 proposed rule. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would 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 proposed 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 proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would 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 proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

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 proposed rule would not result in such an expenditure, we do discuss the potential effects of this proposed rule elsewhere in this preamble.

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination 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 proposed rule involves a regulated navigation area that prohibits certain maritime activities to protect the sampling ports. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email 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.

We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments through the Federal Decision-Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2023-0971 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the https://www.regulations.gov Frequently Asked Questions web page. Also, if you click on the Dockets tab and then the proposed rule, you should see a “Subscribe” option for email alerts. The option will notify you when comments are posted, or a final rule is published.

We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:

The Coast Guard published a notice of proposed rulemaking (NPRM) on January 19, 2024, proposing the establishment of shipping safety fairways along the Atlantic coast. 89 FR 3587. The proposed rule is intended to protect traditional shipping routes as well as to help facilitate development on the outer continental shelf (OCS). Since publication, we've received multiple requests from commenters requesting further public engagement from the Coast Guard. The Coast Guard is committed to the meaningful participation of stakeholders in the rulemaking process and to receiving the highest quality input and expertise that the private sector has to offer. In that spirit, we have decided to host a public meeting to gather further information on the potential impacts of the proposed fairways.

The meeting will be hosted at Stockton University at 6 p.m. on April 17, 2024. The meeting will be held at 101 Vera King Farris Drive, Galloway, NJ 08205 in the L-Wing Building, Classroom 112. The meeting will consist of a brief presentation by the Coast Guard followed by the submissions of public comments. This is not a question-and-answer session, but an opportunity for the public to hear from the Coast Guard and to provide feedback on the proposed fairways.

This document also extends the comment period for the Shipping Safety Fairways along the Atlantic Coast NPRM for 30 days in order to allow the public to gather their thoughts following the public meeting. The extended comment period will close on May 17, 2024. This document is issued under authority found in 5 U.S.C. 552(a).

This is a summary of the Commission's Notice of Proposed Rulemaking ( NPRM ), in MD Docket Nos. 24-85 and 24-86; FCC 24-31, adopted and released on March 13, 2024. The full text of this document is available at https://docs.fcc.gov/public/attachments/FCC-24-31A1.pdf.

Comment Filing Requirements. Interested parties may file comments and reply comments on or before the dates indicated in the DATES section above. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS).

Providing Accountability Through Transparency Act. The Providing Accountability Through Transparency Act, Public Law 118-9, requires each agency, in providing notice of a rulemaking, to post online a brief plain-language summary of the proposed rule. The required summary of the NPRM is available at https://www.fcc.gov/proposed-rulemakings.

Ex Parte Presentations. The Commission will treat this proceeding as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with 47 CFR 1.1206(b). In proceedings governed by 47 CFR 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

Initial Regulatory Flexibility Analysis. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) concerning the potential impact of the proposed rule and policy changes contained in the NPRM. The IRFA is set forth in appendix A of the FCC Document https://docs.fcc.gov/public/attachments/FCC-24-31A1.pdf and a summary is included below. Written public comments are requested on the IRFA. Comments must be filed by the deadlines for comments on the NPRM indicated on the DATES section of this document and must have a separate and distinct heading designating them as responses to the IRFA.

1. Pursuant to section 9 of the Communications Act of 1934, as amended, (Communications Act or Act), the Commission undertakes the Notice of Proposed Rulemaking ( NPRM ) to commence the assessment of regulatory fees for space and earth station payors for fiscal year (FY) 2024.

2. In January 2023, the Commission reorganized its International Bureau into: (1) a Space Bureau to handle policy and licensing matters related to satellite communications and other in-space activities under the Commission's jurisdiction; and (2) an Office of International Affairs to handle issues involving foreign and international regulatory authorities as well as international telecommunications and submarine cable licensing. When the Commission adopted regulatory fees for Fiscal Year (FY) 2023 in the FY 2023 Regulatory Fees Report and Order, 88 FR 63694 (Sept. 15, 2023), it noted that it would be the last year for doing so for the International Bureau, and that the creation of the Space Bureau and Office of International Affairs could result in changes in the assessment of regulatory fees due to changes in Full Time Equivalents (FTEs), due to increased oversight on various relevant industries. One FTE, sometimes also referring to a Full Time Employee, is a unit of measure equal to the work performed annually by a full-time person (working a 40-hour workweek for a full year) assigned to the particular job, and subject to agency personnel staffing limitations established by the Office of Management and Budget (OMB). In particular, the FY 2023 Regulatory Fees Report and Order stated that an examination of the regulatory fees and categories for non-geostationary orbit (NGSO) space stations would be useful in light of changes resulting from the creation of the Space Bureau. The Commission anticipated that the changes in the industry that resulted in the creation of the Space Bureau would likely also result in changes in the relative FTE burdens between and among space and earth station fee payors. Accordingly, the Commission found that it would be more efficient to seek comment on proposals to examine the categories of regulatory fees for NGSO space stations at the same time as other proposals that might arise as part of a “more holistic review” of the fee burden of the Space Bureau in FY 2024.

3. The NPRM commences that examination and review of regulatory fees for space and earth station payors that are regulated by the new Space Bureau. Specifically, the Commission seeks comment on a range of proposed changes related to the assessment of regulatory fees for space and earth stations under its existing methodology.

4. In addition, the Commission proposes an alternative methodology for assessing space station regulatory fees. Unlike the proposals made to adjust the existing methodology, the alternative methodology is a more comprehensive departure from the way that space station regulatory fees have been assessed since 1994 in that it eliminates the separate categories of regulatory fees for Geostationary Orbit (GSO) and NGSO space stations, as well as existing subcategories for NGSO space stations. It would retain the existing separate regulatory fee category for small satellites and spacecraft licensed under 47 CFR 25.122 through 25.123. For the reasons discussed in the NPRM, this alternative methodology may be more fair, administrable, and sustainable than the existing methodology, and the Commission seeks comment on all aspects of this alternative approach.

5. Section 9 of the Communications Act of 1934, as amended, 47 U.S.C. 159, obligates the Commission to assess and collect regulatory fees each year in an amount that can reasonably be expected to equal the amount of its annual salaries and expenses (S&E) appropriation. In accordance with the statute, each year, in an annual fee proceeding, the Commission proposes adjustments to the prior fee schedule under 47 U.S.C. 159(c) to reflect unexpected increases or decreases in the number of units subject to the payment of such fees, and result in the collection of the amount required by the Commission's annual appropriation. Pursuant to 47 U.S.C. 159A(b)(1) of the Act, the Commission must notify Congress immediately upon adoption of any adjustment. The Commission will also propose amendments to the fee schedule under 47 U.S.C. 159(d) if the Commission determines that the schedule requires amendment so that such fees reflect the full-time equivalent number of employees within the bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities. Pursuant to 47 U.S.C. 159A(b)(2), the Commission must notify Congress at least 90 days prior to making effective any amendments to the regulatory fee schedule.

6. The Commission initiates the proceeding to seek comment on possible changes to the existing methodology for assessing space and earth station regulatory fees, ahead of its annual Commission-wide regulatory fee proceeding for the fiscal year, to adopt amendments to the existing space and earth station regulatory fee categories or to adopt new regulatory fee categories in time for those changes to be effective for FY 2024. Because changes to the regulatory fee categories require 90-day prior notification to Congress to be effective for FY 2024, any changes to the space and earth station regulatory fee categories would have to be adopted and notification of the changes would have to be timely provided to Congress to become effective before the end of FY 2024. While the Commission initiates the examination and review of the existing methodology for assessing regulatory fees for space and earth station payors in NPRM, it will propose and finalize the regulatory fee rates for space and earth station payors as part of its annual Commission-wide regulatory fee proceeding for FY 2024. Commenters will have an opportunity in that proceeding to provide comments on the proposed regulatory fee rates for space and earth station payors.

7. The existing schedule of regulatory fees for space and earth station payors is contained in 47 CFR 1.1156. There are four current categories of space station payors: Space Stations (Geostationary Orbit); Space Stations (Non-Geostationary Orbit)—Less Complex; Space Stations (Non-Geostationary Orbit)—Other; and Space Station (Small Satellites). “Less Complex” NGSO systems are defined as NGSO satellite systems planning to communicate with 20 or fewer U.S. authorized earth stations that are primarily used for Earth Exploration Satellite Service (EESS) and/or Automatic Identification System (AIS). “Small Satellites” are space stations licensed pursuant to the streamlined small satellite process contained in 47 CFR 25.122. The Space Stations (Small Satellites) category also includes “small spacecraft” licensed pursuant to the analogous streamlined procedures of 47 CFR 25.123. In addition, there is a single category of earth station payors—Earth Stations: Transmit/Receive & Transmit only. Since the Commission's fiscal year 2020 proceeding, non-U.S. licensed space stations granted market access to the United States through a Petition for Declaratory Ruling or through earth station licenses are subject to regulatory fees.

8. For FY 2023, the regulatory fee amount per category of space and earth station payor were as follows:

9. Under the existing methodology of calculating regulatory fees for space and earth station payors, the Commission multiplies the space station and earth station FTE allocation percentages by the target goal of collections (overall total amount to collect), respectively, to determine the amount to be collected from each regulatory fee category. Since 2020, the space station allocation percentages reflect an 80/20 split between the GSO and NGSO regulatory fee categories, respectively. The amount to be collected by the space station and earth station regulatory fee categories, divided by the projected number of units, determines the fee rate. There are several space station regulatory fee categories—GSO, NGSO—Other, NGSO—Less Complex, and small satellites—and each of these regulatory fee categories has its own respective FTE allocation percentage to determine the fee rate. The small satellite fee rate is calculated by taking the average of the calculated fee rate for space stations in the NGSO—Other and NGSO§Less Complex categories. The average fee rate is then multiplied by 5% (1/20) and rounded to the nearest $5 to determine the small satellite fee rate. The small satellite fee rate is then multiplied by the number of small satellite units, and the amount derived is divided by an 80/20 split and reduced from the target goals of NGSO—Other and NGSO—Less Complex, respectively. After reducing the NGSO—Other and NGSO—Less Complex target goal amounts, the fee rates for both of these NGSO regulatory fee categories are re-calculated (dividing the revised target goal by its respective unit count) to reflect a slightly lower fee rate.

10. The units of assessment for GSO and NGSO space station regulatory fee categories differ in that the fee for Space Stations (Geostationary Orbit) is assessed per satellite in geostationary orbit, whereas the fee assessed for Space Stations (Non-Geostationary Orbit), either “less complex” or “other,” is per “system” of satellites, with no limit on the number of satellites per system. Fees for Space Stations (Small Satellites) are assessed per license/call sign, which can include up to 10 satellites or spacecraft. This means that the unit of regulatory fees for GSO space stations is a single satellite, whereas the unit of regulatory fees for NGSO space stations can include tens, if not thousands, of satellites. Thus, although the single highest regulatory fee for space stations for FY 2023 is $347,755 for Space Stations (Non-Geostationary Orbit)—Other, this fee reflects the regulatory burden associated with the licensing and oversight of numerous space stations in the system, usually subject to processing rounds, complex spectrum sharing arrangements, and providing global coverage. By contrast, the per unit fee for Space Stations (Geostationary Orbit) for FY 2023 is lower at $117,580, but an operator providing global coverage may be paying regulatory fees on multiple space stations in geostationary orbit, which could result in annual regulatory fee payments by a single fee payor in aggregate far greater than the regulatory fee for Space Stations (Non-Geostationary Orbit)—Other providing similar services and coverage. Earth station regulatory fees are assessed “per license or registration,” and each license or registration may include a single earth station, or multiple earth stations.

11. In addition, regulatory fees are assessed solely on “operational” space stations. A space station is considered to be operational when the operator reports under the Commission's reporting requirements for space stations that the space station or stations have been successfully placed into orbit and that operations conform to the terms and conditions of the space station authorization. Similarly, if an earth station's license limits its operational authority to a particular satellite system, a regulatory fee payment is not due until the first satellite in that system becomes operational.

12. For FY 2023, the number of units for the earth station fee category was 2,900. The number of units for Space Stations (Geostationary Orbit) was 136; the number of units for Space Stations (Non-Geostationary Orbit)—Other was nine; the number of units for Space Stations (Non-Geostationary Orbit)—Less Complex was six; and the number of units for Space Stations (Small Satellites) was seven. These unit counts and fees resulted in a total expected regulatory fee revenue of $21,656,110 from space and earth station payors for FY 2023, which is the sum of $1,667,500 expected to be paid by earth station payors (7.69% of all space and earth station regulatory fees), $15,990,880 expected to be paid by Space Stations (Geostationary Orbit) (73.84%), $3,129,795 expected to be paid by Space Stations (Non-Geostationary Orbit)—Other (14.45%), $782,430 expected to be paid by Space Stations (Non-Geostationary Orbit)—Less Complex (3.61%), and $85,505 expected to be paid by Space Stations (Small Satellites) (0.39%).

13. Pursuant to 47 U.S.C. 159(d), the Commission's methodology for assessing regulatory fees must reflect the full-time equivalent number of employees within the bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities. The Commission first sets forth the anticipated number of full-time equivalent number of employees, or FTEs, that will be in the new Space Bureau for purposes of assessing regulatory fees for FY 2024. The Commission previously anticipated that the changes in the satellite industry, which led to the reorganization of the International Bureau into the Space Bureau and the Office of International Affairs, might result in a larger number of FTEs devoted to space and earth station licensing, regulation, industry analysis, and oversight due to increased regulatory complexity that resulted from technological changes in the industry. Accordingly, the Commission stated that it would closely review the Space Bureau and Office of International Affairs FTEs to determine the appropriate number of FTEs in each entity as a result of the reorganization and how they will be apportioned among the different services.

14. The Commission's Human Resources Management office provided initial data identifying 54 FTEs in the Space Bureau to be counted for FY 2024. The Commission anticipates that these FTEs will be categorized as direct FTEs, with the exception of a small number of FTEs that work exclusively, or nearly exclusively, on administrative activities, with the staff of the Office of International Affairs on covering International Telecommunications Union (ITU) World Radiocommunications Conference (WRC) agenda items, or with the staff of the Commission's Office of Engineering & Technology on experimental licenses involving space or earth stations. The Commission expects such FTEs to be categorized as indirect FTEs, since such work does not focus on the oversight and regulation of a specific category of regulatory fee payors, but instead benefits the Commission, the telecommunications industry, or the public as a whole, or in the case of work done on experimental licenses, is in furtherance of licenses that are not subject to a regulatory fee. The Commission also anticipates that a small number of FTEs from the Office of Economic and Analytics and the Public Safety and Homeland Security Bureau will be attributed as direct FTEs to the Space Bureau. For the sake of efficiency, the Commission will make its final proposals regarding the Space Bureau's total share of all Commission direct FTEs, as part of a notice of proposed rulemaking to be released at a later date for the Commission-wide assessment of regulatory fees for FY 2024.

15. Nonetheless, the Commission anticipates that the number of direct FTEs in the Space Bureau for FY 2024 will be greater than the 28 direct FTEs that were allocated to the International Bureau for FY 2023. Based on initial estimates, the Space Bureau FTEs could account for 10.76% of all Commission direct FTEs for FY 2024, compared with the International Bureau accounting for 7.77% in FY 2023. The Commission also expects that space and earth station payors will pay significantly more in regulatory fees in FY 2024 than in FY 2023. This is chiefly because the Commission anticipates there will be more direct FTEs in the Space Bureau attributable to space and earth station fee payors than there were in the International Bureau, due to the increased regulatory complexity and oversight required, which will result in a larger percentage of overall regulatory fees being allocated to the Space Bureau, assuming there is no offsetting increase in the number of FTEs in other core bureaus and offices. Accordingly, there is increased importance in examining how FTEs are apportioned among the categories of Space Bureau fee payors to ensure that the fee apportionment methodology is administrable, fair, and sustainable.

16. If the existing methodology for assessing regulatory fees for space stations is maintained, the Commission proposes to change the allocation of the regulatory fees between GSO and NGSO fee payors to reflect more accurately the apportionment of current FTE work between these two classes of regulatory fee payors. Under the existing allocation adopted in 2020, 80% of space station regulatory fees are allocated to GSO space station fee payors and 20% of the space station regulatory fees to NGSO space station fee payors. For the reasons stated in the NPRM, the Commission proposes to change this allocation to 60% of space station regulatory fees being allocated to GSO space station payors and 40% to NGSO space station payors.

17. In proposing this change in allocation, the Commission employs the same methodology that was used by the Commission in 2020 in adopting the “80/20” split between GSO and NGSO space station fee payors. Specifically, the Commission focuses on three factors that collectively reflect its oversight of GSO and NGSO operators: the number of applications processed, the number of changes made to the Commission's rules, and FTEs devoted to oversight of each category of operators.

18. First, using the advanced search function of the International Communications Filing System (ICFS), the Commission identified all applications for space stations (service type: SAT) filed during the three most recent fiscal years (that is, FY 2021-2023) for both GSO (class of service: SSG) and NGSO (class of service: SSN). A total of 526 distinct applications for space stations were filed during this time period, with 322 applications being filed for GSO space stations (61%) and 204 applications for NGSO space stations (39%). Thus, the number of applications received during this three-year period supports a larger allocation of FTE time to GSO fee payors than to NGSO fee payors, but in a narrower range than the current 80/20 split.

19. Second, using compiled data through a search of the FCC's Electronic Comment Filing System (ECFS) and a cross check of items on the web pages of the FCC and the International Bureau/Space Bureau for the last three fiscal years, the Commission identified docketed proceedings originating from the International Bureau's Satellite Division, or from the Space Bureau, and considered to the involvement of GSO and NGSO space stations in each proceeding. The Commission analyzed the data to estimate whether a particular docketed proceeding involved GSO or NGSO space station payors, or both. It did not count docketed proceedings for transfer of control or assignment applications or other docketed proceedings that did not make changes to the Commission's rules. It included, however, a docketed proceeding to modify the conditions relating to the International Telecommunications Satellite Organization placed on the licenses of a GSO space station operator, even though it was not a rulemaking proceeding, because it involved changes to the conditions on a large number of space station licenses that required significant FTE resources to process.

20. The Commission identified 16 proceedings during FY 2021-2023, of which 8 substantively involved GSO space stations (50%) and 12 substantively involved NGSO space stations (75%). Accordingly, the data presented suggests that there were more rulemakings substantively involving NGSO space stations than GSO space stations. The Commission notes that quantifying only the most recent rulemaking activities does not take into account past rulemakings that are of continued relevance to space stations and are administered by Commission FTEs either through licensing, interpretation and application of those rules in other proceedings, or in consultation with the space station regulatees. Thus, attributing a value to rulemaking activities directly is not an exercise in scientific precision, but rather an exercise in reasonable analysis and a mechanism to verify the other data the Commission reviews. On balance, however, the Commission tentatively concludes that these rulemaking data support a greater allocation of regulatory fees to NGSO space station payors than is currently the case.

21. Third, the Commission considered whether it could examine FTE activities directly, but although there has been a change in the number of FTEs attributable to satellite regulatory activities due to the creation of the Space Bureau, it remains challenging to segregate the time spent by FTEs on work done on GSO versus NGSO matters. As was the case in the International Bureau, staff time spent in the Space Bureau on authorizations and rulemakings may benefit both categories of satellite operations. Based on its experience and judgement, the Commission estimates as closely as possible the relative percentage of FTEs that are attributable to benefitting either GSO or NGSO systems based on the factors above.

22. While there are issues of fact, law, engineering, and the physics of electromagnetic propagation that may be unique to GSO or NGSO space stations, many issues that Space Bureau staff work on are not segregable in a manner that is beneficial to clearly apportioning FTE time between GSO and NGSO regulatory fee categories. Taking all of the foregoing factors and data into consideration, the Commission tentatively concludes, however, that the GSO/NGSO ratio should be adjusted to reflect that GSO space stations derived roughly 60% of the benefit from the Commission's regulatory efforts and NGSO space stations derived roughly 40%. Accordingly, for FY 2024, the Commission proposes that GSO and NGSO space stations will be allocated 60% and 40% of space station regulatory fees, respectively. The Commission seeks comment on this tentative conclusion and proposal.

23. If the existing methodology for assessing regulatory fees for space stations is maintained, the Commission proposes to maintain the existing allocation of the regulatory fee burden between “Space Stations (Non-Geostationary Orbit)—Less Complex” and “Space Stations (Non-Geostationary Orbit)—Other.” Currently, 20% of NGSO space station regulatory fees are allocated to Space Stations (Non-Geostationary Orbit)—Less Complex and 80% are allocated to Space Stations (Non-Geostationary Orbit)—Other fee payors. As discussed elsewhere in the NPRM, the Commission has defined “less complex” NGSO systems as NGSO satellite systems planning to communicate with 20 or fewer U.S. authorized earth stations that are primarily used for EESS and/or AIS. The Commission has concluded that EESS systems are less burdensome to regulate than other types of services when the systems plan to communicate with 20 or fewer earth stations. NGSO satellite systems outside of this definition are included in the NGSO “other” fee category, unless they qualify as “small satellites” under Commission rules and are included in the regulatory fee category for small satellites.

24. The Commission tentatively concludes that there have not been any significant changes to the amount of FTE burdens allocated between these two fee categories since the “20/80” split of regulatory fees between NGSO “less complex” and NGSO “other” subcategories was adopted in 2021. As was the case in 2021, the Commission considers its experience and analysis of the time that FTEs in the International Bureau and the Space Bureau devote to oversight and regulation of “less complex” and “other” NGSO systems. Specifically, now—as then—the Commission considers the number of applications processed, the number of changes made to the Commission's rules, and the number of FTEs working on oversight for each category of operators. This methodology is the same as used for determining the allocation of regulatory fees among GSO and NGSO space station fee payors. In evaluating the FTE time devoted to the “less complex” and “other” subcategories, the Commission considers its adjudicatory role in connection with different types of NGSO systems, which is typically more intensive for those systems authorized as part of processing rounds. The Commission also considers the number of rulemakings over the last three fiscal years, as well as current rulemakings, and which types of NGSO systems are implicated in those rulemaking activities.

25. Based on its experience and judgement, the Commission estimates as close as possible the relative percentage of FTE time attributable to oversight of each subcategory of NGSO space stations. Its examination does not reveal any rulemaking proceedings in the last three fiscal years that are specific to EESS space stations eligible for the “less complex” NGSO subcategory, but did reveal several rulemakings in that same period specific to NGSO “other” systems. Similarly, an examination of applications filed over the previous three fiscal years (FY 2021-2023) shows that 44 NGSO applications out of 204 NGSO applications were by systems categorized as NGSO “less complex” (22%). The Commission's consideration of activities engaged in by staff and the time spent on oversight of different NGSO systems does not indicate any change from its consideration in 2021, which resulted in a determination that NGSO “other” were the majority beneficiaries of FTE efforts.

26. The Commission recognizes the considerable challenge of segregating the time spent by Space Bureau staff among the subcategories of NGSO space stations, nonetheless the considerations above support the tentative conclusion that more FTE time is spent on the NGSO “other” subcategory than on the NGSO “less complex” subcategory. The number of applications in the NGSO “less complex” subcategory received over the last three fiscal years supports a tentative conclusion that the relative regulatory burden of such “less complex” space stations remains consistent with the current 20% allocation. The Commission seeks comment on this tentative conclusion.

27. The Commission does not propose at this time to revisit the definition of “less complex” NGSO space stations, which has been adopted and affirmed over the course of several regulatory fee rulemaking proceedings. As expressly recognized, however, the Commission does not foreclose the possibility of designating other categories of NGSO systems as “less complex” systems in the future if the Commission's experience supports a finding that its regulatory work for such systems is significantly less than those for other NGSO systems. The Commission's experience to date has not supported such a designation for other types of NGSO systems, and the Commission does not have a sufficient record to make proposals for such designations at this time.

28. If the existing methodology for assessing regulatory fees for space stations is maintained, the Commission proposes to divide the existing regulatory fee subcategory of “Space Stations (Non-Geostationary Orbit)—Other” into two tiers: “Large Constellations” of more than 1,000 authorized space stations; and “Small Constellations” of 1,000 or fewer authorized space stations. Currently, there is a single subcategory for NGSO “other” space station systems, which assesses the same annual regulatory fee—$347,755 for FY 2023—for all NGSO space station systems that are not categorized as “less complex” or “small satellites.” NGSO space station payors have argued that this “one fee fits all” assessment is unfair, as it assesses the same regulatory fee on an NGSO system consisting of 100 space stations as the fee assessed for an NGSO system consisting of potentially 10,000 or more space stations. The current single regulatory fee for all NGSO “other” space station payors resulted in requests by fee payors of smaller NGSO systems seeking to be assessed regulatory fees as NGSO “less complex” systems, even though the record at the time did not support a finding that the regulatory work for such systems was significantly less than other types of NGSO systems. The Commission uses this proceeding to explore whether its existing regulatory fee structure can be better tailored to the varying nature of NGSO systems and differing levels of licensing and regulatory oversight burdens required for these various systems, while maintaining a system that is fair, administrable, and sustainable.

29. The unit of assessment for Space Stations (Non-Geostationary Orbit), either “less complex” or “other,” is “per system” of satellites. This unit of assessment reflects the ability of applicants to apply for, and be authorized to operate, a “system” of NGSO space stations, with no limit on the number of space stations per system. Each initial application for authority is granted under a single “call sign” as a regulatory identifier. In many cases the Commission has assessed a single regulatory fee for an NGSO system consisting of space stations requested and authorized under different call signs. The assessment of regulatory fees for NGSO space stations on a “per system” basis extends back to the first time that the Commission assessed regulatory fees for “Low Earth Orbit (LEO) Satellite Systems” in 1996. The choice of a “system” as the unit of assessment for LEO satellites was based in the original text of 47 U.S.C. 159, which included a “Schedule of Regulatory Fees” that the FCC was required to assess and collect, until amended by the Commission. The Schedule of Regulatory Fees included fee categories for “Space Station (per operational station in geosynchronous orbit)” and “Space Station (per system in low-earth orbit).” The Schedule of Regulatory Fees, however, was deleted from 47 U.S.C. 159 by the RAY BAUM's Act of 2018.

30. The sole exception made to assessment of NGSO space station regulatory fees on a “per system” basis is for small satellites, for which the Commission adopted a separate regulatory fee category in which small satellites are assessed on a “per license/call sign” basis. The Commission found that adopting the regulatory fee on a per-license basis would not only accurately reflect the increased oversight and regulation for these small satellite systems when an operator has multiple small satellite licenses, but also it would be more efficient and administrable because it avoids potential complications and additional FTE time spent in determining whether various sets of small satellites are part of the same system.

31. In creating the separate fee categories of “less complex” NGSO space stations and small satellites operating in non-geostationary orbit, the Commission has previously recognized that not all NGSO space stations are the same, and that different NGSO space stations can be assessed different regulatory fees based on the differing amount of FTE regulatory work is devoted to them, consistent with the statutory obligations of 47 U.S.C. 159. Accordingly, the default unit of fee assessment for NGSO space stations—the “system”—by itself does not indicate the amount of regulatory fees to be recovered from a particular NGSO space station payor. Instead, the Commission has used other factors as proxies for the amount of regulatory work required for a category of fee payors. For “less complex” space stations, the Commission relied on the primary service to be provided (EESS or AIS) and the number if U.S.-licensed earth station planned for communications (20 or fewer) as proxies for other factors for determining whether a category of NGSO space station system involved less staff resources to license and regulate than NGSO space station “other” systems: whether processing rounds are required, whether the system will have a global presence, the range and intensity of spectrum needs, and the variety of frequency bands, technical issues, and services presented.

32. The Commission in the NPRM seeks to explore whether the number of space stations requested for an NGSO system could serve as a proxy for the Commission's regulatory burden, when combined with other factors that went into determining whether an NGSO system is, or is not, “less complex” for regulatory fee assessment purposes. Does a greater number of space stations authorized per system equate to greater staff burdens to license and regulate, if the greater number of space stations per system also correlates to the other factors relevant to NGSO systems that do not qualify for inclusion in the NGSO space stations “less complex” subcategory (that is, they fall within the “other” NGSO fee category because they are subject to processing rounds, have a global presence, have significant spectrum needs, and present a variety of frequency bands, technical issues, and services)? If so, is it reasonable to assume that a greater number of space stations authorized per system would equate to greater amount of FTE time to license and regulate? Although the Commission has previously stated that number of space stations in an NGSO system does not always correspond to increased regulatory complexity, those statements were based on consideration of the regulatory impact of the number of space stations in isolation, not when considered in connection with the other factors relevant to non-“less complex” NGSO space station systems. Is it a reasonable expectation that, if an NGSO space station system is not found to be “less complex” for regulatory fee assessment purposes, the amount of FTE resources needed to license and regulate that system increases as the number of space stations increases because, on average, the greater the number of space station considered, the greater the amount of spectrum resources required for the system, the greater complexity of spectrum sharing with other systems, the more complicated the orbital debris mitigation plan will be, and the greater number of earth stations required to support the space station system? The Commission seeks comment on this expectation.

33. Accordingly, if the Commission maintains the existing space station regulator fee methodology, it proposes to transform the existing “Space Stations (Non-Geostationary Orbit)—Other” category into a two-tiered category, with one tier for “Large Constellations” and one tier for “Small Constellations.” The proposal to create tiers of NGSO space station regulatory fees is not new, being first made in 1999. As recently as 2021 and 2020, the Commission was presented with proposals to assess NGSO space station regulatory fees based on the total number of satellites deployed, but it declined to do so because the evidence in the record at the time was insufficient to establish different fees for different sized NGSO space station systems. The Commission proposes to use the NPRM to establish such a record to evaluate the appropriateness of adopting regulatory fees for large and small NGSO systems. Although the Commission acknowledges that it is inherently challenging to establish the dividing line between such tiers, it proposes 1,000 space stations as the dividing number for large and small systems. The Commission seeks comment on this proposal. Is 1,000 the right number, or is there a different number, greater or less than 1,000, that better reflects the delineation in the amount of FTE burdens to license and regulate NGSO systems of variable sizes (for example, 500 space stations)?

34. If the Commission adopts the tiered approach for the NGSO space station “other” category under its existing methodology, it proposes to create two tiers, rather than three or more tiers, in order to facilitate administrability, because there are relatively few units within the existing NGSO space station “other” category, and dividing that category into many tiers with a narrow range of space stations per tier may result in only one payor being responsible for the entire cost of the tier, or there being no payor for a particular tier in a fiscal year, shifting the costs of that tier to payors in other tiers. Importantly, it may be harder to justify the difference in FTE burdens when tiers are more narrowly defined. The Commission tentatively concludes that a two-tiered approach will not only appropriately account for differences in regulatory burdens between NGSO space station systems of different sizes, but also provide a measure of consistency from one year to the next in the number of payors and the per unit fee. The Commission seeks comment on the proposal to use two tiers in its approach and its tentative conclusion that a two-tiered approach will result in greater administrability than a multi-tiered approach. The Commission also proposes that its tiered approach be based on the number of authorized space stations in a system, rather than the number of space stations that are operational in a system at the moment that regulatory fees for a particular fiscal year are assessed. This proposal is consistent with its proposal elsewhere in the NPRM that all regulatory fees be assessed on authorized, rather than operational, space and earth stations. The Commission seeks comment on this proposal.

35. The Commission proposes to divide the total NGSO—“other” fees between the two subcategories on a 50/50 basis (that is, half of the NGSO “other” fees paid by “large constellations” and half paid by “small constellations”). It acknowledges the difficulty in allocating regulatory fee burdens between “large constellations” and “small constellations,” because staff in the Space Bureau may work on both types of constellations and rulemaking proceedings often do not differentiate between large and small constellations. The Commission accordingly seeks comment on its proposal to divide the total NGSO—“other” fees between small and large constellations on a 50/50 basis. If the fees are not divided on a 50/50 basis, what would be a more appropriate division and why? The Commission notes that although the total costs would be allocated evenly between “large” and “small” constellations, it expects that there will be a greater number of units in the “small constellations” tier than the “large constellations” tier, and that that number of units in the “small constellations” tier will increase in the future, thereby resulting in a smaller per payor fee for the “small constellations” tier for future years. By contrast, the Commission expects that there will be only two to three payors in the large constellation tier for FY 2024, and that it is unlikely that that number will increase substantially in the foreseeable future. The Commission seeks comment on this proposed division and its expectations.

26. The Commission finds that the proposal to create fee categories for NGSO large and small constellations would be an amendment as defined in 47 U.S.C. 159. Such an amendment must be submitted to Congress at least 90 days before it becomes effective pursuant to 47 U.S.C. 159A(b)(2).

27. The Commission also seeks comment on other possible proxies that might reasonably equate with the share of FTE burdens associated with each system within the “Space Stations (Non-Geostationary Orbit)—Other” category, as alternatives to the 50/50 two-tiered approach proposed elsewhere in the NPRM. Other possible proxies include assessing regulatory fees for NGSO space station “other” using any of the following individual metrics: (1) per space station; (2) per subscriber; (3) per unit of spectrum authorized; (4) per class of service provided; and (5) per unit of on-orbit mass. The NPRM describes each possible proxy.

38. Per Space Station. Under this metric, the overall FTE burden of a NGSO “other” system would be proxied on the basis of the number of authorized space stations in the system, without utilizing a tiered system. The fee would be assessed on a per space station basis, with the total fee amount attributable to Space Stations (Non-Geostationary)—Other being divided by the number of space stations authorized in that category to establish a per space station fee unit. Each space station in the system would add incrementally to the amount of regulatory fees paid by the system. This alternative avoids the situation where a system may exceed the number of space stations eligible for the small constellation tier by only a few space stations, which will result in the system paying the substantially higher fee for large constellations. The alternative potentially presents the situation, however, where systems with a very large number of authorized space stations (for example, 20,000 or more) could effectively end up paying all, or nearly all, the regulatory fees for the NGSO “other” category, since the number of space stations in that system could be more than all other systems combined in that category. Such an outcome may not accurately reflect the FTE burdens imposed by the various payors of the NGSO space stations “other” category by substantially underrepresenting the amount of FTE resources spent on all other fee payors in the NGSO “other” category. Could this concern be addressed by setting a “cap” or “ceiling” on the number of authorized space stations for which regulatory fees would be assessed or having a decreasing fee for each additional space station? Although the Commission has previously disagreed with proposals to assess space station regulatory fees on a per space station basis, it nonetheless seeks comment on the use of number of space stations as an alternative metric for assessing the regulatory fee burden for each NGSO “other” system.

39. Per Subscriber. Under this alternative, regulatory fees for NGSO space stations “other” would be assessed on a per subscriber basis, possibly using tiers of subscribers. The Commission observes, however, that not all NGSO systems have subscribers, and it does not currently collect information regarding subscriber numbers. Thus, to utilize subscriber information a review of an additional information collection may be required in order to assess regulatory fees on this basis. The time required to obtain the approval and collect the information would make the possibility of assessing fees on this basis for FY 2024 unlikely. The Commission also expects that it would require substantial FTE resources to calculate and assign fees for individual systems based on yearly subscriber numbers, which could in turn result in more FTEs being attributed to space station systems for regulatory fee recovery purposes. Furthermore, the Commission seeks comment on whether subscriber numbers are considered confidential by regulatees and, if so, how would that impact this approach?

40. Per Unit of Spectrum Authorized. An alternative proxy for the amount of FTE burden associated with a system in the NGSO space station “other” category could be the amount of spectrum resources authorized for the system. Systems that involve the use of a large amount of spectrum can require more FTE resources to license and regulate due to the likelihood of the increased need to coordinate with, and to address the interference concerns of, other spectrum users, compared to systems with smaller spectrum requirements. Thus, regulatory fees for NGSO space stations “other” could be assessed per unit of authorized spectrum, for example, per megahertz of spectrum authorized for the system. The Commission observes that the distinction between NGSO “other” and NGSO “less complex” already takes into account spectrum usage and ease of coordination in delineating between these two fee categories, so it is unclear what further delineation could be made within the NGSO space station “other” category based on authorized spectrum. In addition, not all spectrum is uniform in its complexity to license and regulate. For example, it may be easier to license and regulate an NGSO system operating in 500 megahertz of spectrum allocated to NGSO space station use on a primary basis than licensing and regulating an NGSO system operating in 20 megahertz of spectrum operating on a secondary or non-interference basis. The Commission has previously found that total bandwidth is not consistently indicative of the complexity of NGSO regulation. The NPRM seeks comment, however, on this alternative proxy and whether there any basis to question the Commission's previous conclusion that total bandwidth does not consistently reflect the complexity of NGSO regulation.

41. Per Class of Service Provided. Commenters in previous regulatory fee assessment proceedings have suggested that the type of services provided by NGSO space station systems could be used as a proxy for the amount of FTE resources dedicated to licensing and regulating such systems. In addition to the orbit used (GSO or NGSO), space stations are regulated by the type of service that they provide, for example mobile-satellite service (MSS), fixed-satellite service (FSS), direct broadcast satellite service (DBS), and satellite digital audio radio service (SDARS). The Commission has previously found that the type of service primarily being provided (EESS and/or AIS) was a relevant factor in determining whether an NGSO system was “less complex” for purposes of regulatory fee assessments, when combined with another factor (the number of earth stations authorized by the United States with which the system plans to communicate). The Commission has not found, however, that other types of satellite services warrant a determination that a NGSO system is “less complex” for regulatory fee purposes, although it did not rule out the possibility of doing so if the record supported such a finding. Although the Commission does not propose that any particular additional service be considered as a factor that an NGSO system is “less complex” for regulatory fee purposes, it may be possible to use the type of service provided as a proxy for FTE resources to delineate additional fee subcategories within the “Space Stations (Non-Geostationary Orbit)—Other” category. The NPRM seeks comment on this possibility. Comments should focus on the specific licensing and regulatory factors that differentiate the services and explain how the Commission would be able to allocate FTE time among these services. Comments should also address the administrability and sustainability of subcategories of regulatory fees in the NGSO space station “other” category based on the services provided by the space stations. For example, if a space station is authorized to provide multiple types of services, such as both FSS and MSS, how would it be determined which regulatory fee subcategory it belongs to? If it is determined based on the primary service that is authorized for a system, how should the Commission determine which service is primary? Would fee categories based on the service provided be relatively stable from year to year, or is it possible that there could be substantial changes in the number of fee payors in a service category year to year? Would every single service provided by a system need to be taking into account, or just the primary service? Would substantial FTE resources be needed to calculate and assign fees for individual systems based on primary services provided, which could in turn result in more FTEs being attributed to space station systems for regulatory fee recovery purposes?

42. Per Unit of On-Orbit Mass. Comments in previous years' regulatory fee assessment proceedings have suggested to use the mass of space stations as one proxy for an NGSO system's complexity. This suggestion is similar to the proposal in the NPRM to use of number of authorized space stations in an NGSO system as a proxy for regulatory burdens of systems in the NGSO space station “other” category, but considers the mass of the space stations in an NGSO system rather than the number of space stations. Thus, an NGSO system with 10 space stations with a mass of 1,000 kilograms each would pay more in regulatory fees than a system of 100 space stations with a mass of 10 kilograms each. Under this proposal, it is assumed that space station mass is a proxy for other factors relevant to the amount of FTE work required for the licensing and regulation of the system, such as how much spectrum the system will use, the number of earth stations that the space stations will communicate with, and the complexity of a system's orbital debris mitigation plan. Although the Commission has previously found that space station mass is not a key driver of NGSO system complexity, the NPRM seeks comment on using space station mass as a proxy for the regulatory burden involved with an NGSO system. Is it correct that regulatory complexity increases in proportion to the mass of the space stations in an NGSO system? If so, should mass be assessed on a per space station or on an aggregate basis for all space stations in the system? Would mass be addressed on a “wet” basis (that is, including the mass of fuel and other consumables) or “dry” basis (that is, the mass of the space station without fuel and consumables)? Which basis—wet or dry—would more accurately reflect regulatory burdens for that system? Furthermore, the Space Bureau no longer collects information regarding the mass of a space station as part of the technical information required as part of an application for a space station authorization or a petition for U.S. market access. Thus, to utilize this information in assessing regulatory fees may require a review of an additional information collection under the Paperwork Reduction Act. The Commission also observes that the time required for such review, together with the time needed to collect the information, would rule out the possibility of assessing fees on this basis for FY 2024. The NPRM seeks comment on the consequences of this observation. Although the mass of a space station may be a factor disclosed in the orbital debris mitigation plan provided as a part of a space station application, the spacecraft mass is disclosed for the specific purpose of that analysis, and it is not clear whether it should be relied on for the purpose of assessing regulatory fees. Even if it may be possible to obtain information about the mass of space stations from third party sources, the Commission questions whether it is reasonable to rely on information obtained from such sources rather than from the fee payors themselves. The NPRM seeks comments on these issues. In addition, would substantial FTE resources be needed to calculate and assign fees for individual systems based on on-orbit mass, which could in turn result in more FTEs being attributed to space station systems for regulatory fee recovery purposes?

43. The Commission finds that the creation of fee categories for “other” NGSO space stations based on any of these other possible proxies would be an amendment as defined in 47 U.S.C. 159(d). Such an amendment must be submitted to Congress at least 90 days before it becomes effective pursuant to 47 U.S.C. 159A(b)(2).

44. The Commission seeks comment on a proposal to set the regulatory fee for “Space Stations (per license/call sign in non-geostationary orbit) (47 CFR part 25) (Small Satellite)” for FY 2024 and future fiscal years at the level set for FY 2023 ($12,215), with only an annual adjustments to reflect the percentage change in the FCC appropriation, unit count, and FTE allocation percentage from the previous fiscal year. As explained elsewhere in the NPRM, the small satellite fee rate is calculated by taking the average of the calculated fee rate for space stations in the NGSO other and NGSO “less complex” categories, multiplying this average by 5% (1/20) and rounding it to the nearest $5. The small satellite fee rate is then multiplied by the number of small satellite units and deducted from the NGSO share of space station regulatory fees. This remaining amount is then divided between NGSO “other” and NGSO “less complex” based on an 80/20 split and reduced from the target goals of NGSO” “other” and NGSO “less complex” respectively. Because the small satellite fee is based on the fees assessed for NGSO other and NGSO “less complex” categories, the increased fees expected for these two categories would lead to greatly increased fees for the small satellite regulatory fee category beginning in FY 2024.

45. The Commission's examination reveals that the number of applications, rulemaking procedures, and FTE staff working on small satellite matters has not increased greatly since the original methodology of assessing regulatory fees for small satellites was adopted. To the contrary, the Commission expects that the additional FTE resources allocated to the Space Bureau as a result of the reorganization of the International Bureau are not intensively involved in the licensing and regulatory oversight of small satellites, so that the overall percentage of FTE burden for small satellites may be less than the 1/20th burden of NGSO space stations. The NPRM seeks comment on this expectation and whether it supports the reduction of fees paid by small satellites. In addition, the proposals made in the NPRM to create subcategories within the NGSO “other” category for “small” and “large” constellations will add to the complexity of determining the appropriate marker for determining the appropriate share of FTE resources allocated to small satellites. The Commission proposes the administrability and sustainability of its regulatory fees for small satellites would be better served by treating them as it has historically treated the regulatory fees for earth stations—that is, a fixed regulatory fee that is adjusted from year-to-year on, rather than as a percentage of the Space Bureau's overall share of regulatory fee allocation, or as a percentage of other categories of space station fee payors. The NPRM seeks comment on all these proposals, examinations, and expectations.

46. The Commission proposes, on an interim basis, to assess regulatory fees on spacecraft primarily performing Rendezvous and Proximity Operations (RPO) and On-Orbit Servicing (OOS) by including them in the existing regulatory fee category “Space Stations (per license/call sign in non-geostationary orbit) (Small Satellites)” regardless of the orbit in which they are designed to operate in. OOS and RPO missions can include satellite refueling, inspecting and repairing in-orbit spacecraft, capturing and removing debris, and transforming materials through manufacturing while in space. Due to the nascent nature of OOS and RPO industry, or more generally “in-space servicing” industries, there is not a distinct regulatory fee category for such operations, despite that fact that spacecraft have begun to operate under 47 CFR part 25 for radiocommunications while conducting these types of operations. Although the Commission has previously determined that the record is not sufficiently complete to adopt a separate regulatory fee category for spacecraft performing OOS and RPO, it tentatively concludes in the NPRM that it is appropriate to assess regulatory fees on RPO and OOS space stations as the Commission does for small satellites, rather than as Space Stations (Geostationary orbit) or Space Stations (Non-Geostationary Orbit)—Other. The Commission also tentatively concludes that it is appropriate to assess regulatory fees on Orbital Transfer Vehicles (OTV) in the same manner.

47. The Commission first considered adopting additional fee categories for RPO and OOS in the notice initiating the FY 2022 regulatory fee assessment proceeding. At that time, commenters proposing such additional fee categories cited the similarities between the characteristics of small satellites and RPO and OOS. The commenters distinguished between OOS spacecraft and traditional NGSO satellites in that OOS spacecraft have limited duration and scope of use, as well as a limited number of earth stations; require a smaller investment in OOS technology; require less ongoing regulation owing to the shorter duration of OOS spacecraft; will likely be licensed on a shared use of spectrum basis, and without the need for processing round procedures or post-processing round disputes over matters such as interference protection and spectrum priority. Commenters also submitted that a fee category for RPO services would provide much need permanency and clarity to support this nascent infrastructure.

48. The Commission found, however, that it was premature at that time to adopt new fee categories for OOS and RPO operations. It observed that there have been a limited number of such operations and these were treated on a case-by-case basis, without a specific license processing regime. It also expressed the expectation that most OOS and RPO operations would involve NGSO space stations, but tentatively concluded that it was too early to identify exactly where operations such as those in low-Earth orbit might fit into the regulatory fee structure in the future. Accordingly, it found that the record was insufficient to propose to establish fee categories or a methodology for assessing fees to such categories. The Commission sought comment on those tentative conclusions, as well as whether and how to assess fees for RPO and OOS spacecraft that operate near the GSO arc.

49. Since that time, the Commission has continued to find that the record was insufficient to adopt a new regulatory fee category for in-space servicing operations, such as OOS and RPO. In the order adopting regulatory fees for FY 2022, the Commission determined that the record was insufficient to support adopting new regulatory fee categories for OOS and RPO due to the nascent nature of these systems and the need for more experience with the operations of such systems and the FTE time required to support them. For the same reasons, the Commission declined to adopt separate fee categories for OOS and RPO in the FY 2023 regulatory fee proceeding, again finding that the record remained too incomplete and concluding that there was insufficient understanding of the nature and regulation of such spacecraft to consider concrete proposals for assessing regulatory fee categories for OOS and RPO space stations at that time. The Commission noted that it was still in the early stages of considering the regulatory environment for such services as a whole, and the definitions of which services would fit into OOS and RPO were yet to be adopted. Instead, the Commission stated it would continue to develop a record that would inform possible establishment of a fee category for OOS and RPO and an appropriate methodology for assessing fees for such a category.

50. In the NPRM, the Commission proposes that it should no longer delay adopting a regulatory fee category for OOS and RPO space stations, even if it has not yet adopted a separate regulatory environment for such services. In 2022, the Commission initiated a Notice of Inquiry, 87 FR 56365 (Sept. 14, 2022), regarding the regulatory needs related to in-space servicing, assembly, and manufacturing—or “ISAM”—that could include such services as RPO and OOS. The Commission has since adopted a Notice of Proposed Rulemaking, 89 FR 18875 (Mar. 15, 2024), seeking comment on a framework for licensing ISAM space stations. That proceeding is still in the early stages of considering the regulatory environment for such services. Nonetheless, the Space Bureau has considered applications for space stations performing RPO and OOS and issued licenses for such space stations under the existing regulatory framework of 47 CFR part 25, and such stations are already operational and subject to payment of regulatory fees. The Space Bureau anticipates that it will receive additional applications for such services in the near future, likely before the conclusion of any proceeding that may consider a separate licensing regime for such systems. Accordingly, there is a need to propose a method for assessing regulatory fees on spacecraft primarily performing RPO and OOS now, even while the consideration of the regulatory environment for such services is ongoing.

51. Although the record remains insufficient to propose a new category of regulatory fees for these services, the Commission proposes, on an interim basis, to include RPO and OOS within an existing category of regulatory fees. In this respect, the Commission tentatively concludes that the regulatory fee categories of Space Stations (Geostationary Orbit) and Space Stations (Non-geostationary Orbit)—Other do not reflect the amount of regulatory work required by these nascent RPO and OOS services. Those fee categories are reflective of the greater FTE burden associated with regulation of more numerous and more complex space stations that primarily provide “always on” communication services, using spectrum and orbital resources on a protected basis, subject to processing rounds or “first-come, first-served” procedures, and requiring the use of a large number of associated earth stations. The Commission also tentatively concludes that the regulatory fee category of “Space Stations (Non-geostationary Orbit)—Less complex” is not the most appropriate fit, since space stations providing primarily RPO and OOS do not fall within the existing definition of “less complex” NGSO space stations, which is limited to space stations primarily providing EESS and/or AIS and the regulatory framework for RPO and OOS space stations is not sufficiently clear at this time. The Commission does not propose to use the existing NGSO “less complex” fee category for RPO or OOS space stations, since it tentatively concludes that the regulatory burden of RPO and OOS space stations is currently far less than that of “less complex” NGSO space stations. The Space Bureau has received relatively few applications for RPO or OOS space stations, and although it anticipates receiving more in the near future, the amount of FTE resources required at the present time to regulate these services is not comparable to the resources required for regulation of NGSO “less complex” space stations. It is possible that, in the future, the regulatory burden of RPO and OOS may significantly increase and justify revisiting this tentative conclusion, but at the present moment the regulatory burden of RPO and OOS space stations is more similar to that presented by small satellite space station licensees, which are also few in number and involve a relatively small number of space stations that have limited duration and scope of use and operate using shared spectrum resources.

52. Although the Commission previously declined to adopt an interim fee for RPO and OOS space stations, including one equivalent to the fee assessed for small satellites, it did so due, in part, to time constraints that would not allow for the adoption of a new fee and the desire for more experience before adopting a separate fee for RPO and OOS space stations. In the NPRM, the Commission is not proposing to adopt a new fee for RPO and OOS space stations, but rather, on an interim basis, to assess fees using the existing Space Stations (Small Satellites) fee category. Given the immediate need to assess regulatory fees on RPO and OOS space stations now and in the near future, the Commission tentatively concludes that the purposes of 47 U.S.C. 159 would be best met by erring on the side of caution and assessing regulatory fees under the category of fees associated with the least-burdensome set of space station regulatees, rather than waiting for additional experience and in the interim potentially subjecting existing RPO and OOS space stations subject to regulatory fees for Space Stations (Geostationary Orbit) or Space Stations (Non-Geostationary Orbit)—Other, that may not reflect the amount of regulatory work required by these nascent services. As the Commission gains more experience with the regulation of RPO and OOS space stations, it will be in a better position to adopt a separate fee category for RPO and OOS space stations, if appropriate. The NPRM seeks comment on this proposal and tentative conclusions.

53. The Commission also proposes to assess RPO and OOS space stations using the small satellite fee category on an interim basis, regardless of the orbit utilized. Small satellites are limited to NGSO operations under 47 CFR part 25, and the Commission stresses that it is not proposing or suggesting that RPO or OOS space stations would meet the definition of a “small satellite” or “small spacecraft” under 47 CFR part 25. Instead, solely for the purpose of assessing regulatory fees, the Commission proposes to include RPO or OOS space stations within the existing Space Stations (Small Satellite) regulatory fee category, rather than creating a new regulatory fee category for RPO and OOS space stations. The Commission tentatively concludes that the rational above for using the small satellite regulatory fee category to assess fees on RPO and OOS space stations applies regardless of whether the RPO or OOS space stations operate in GSO or NGSO. The Commission also proposes to assess the regulatory fee for RPO or OOS space stations on a “per license/call sign” basis as is the case for small satellites payors, rather than on the “per system” basis used for Space Stations (Non-geostationary Orbit). In addition, the Commission proposes to assess regulatory fees on OTV space stations in the same manner; that is, to assess regulatory fees for OTV space stations using the existing regulatory fee category of small satellite space stations on a per license/call sign basis. Like RPO and OOS space stations, OTVs are also few in number and involve a relatively small number of space stations that have limited duration and scope of use and operate using shared spectrum resources in a manner that reduces the amount of FTE resources needed for their licensing and regulation. The Commission has already licensed OTV space stations under its existing 47 CFR part 25 regulatory framework, and it anticipates that additional applications for OTV will be filed in the near future. Accordingly, the same rationale applies to erring on the side of caution and assessing regulatory fees under the category of fees associated with the least-burdensome set of space station regulatees, at least until the Commission gains more experience in this matter. The NPRM seeks comment on these proposals and tentative conclusions. It also seeks comment on whether this proposed approach for assessing regulatory fees for RPO, OOS, and OTV could also be applied to all space stations that fall within the definition of ISAM.

54. The Commission finds that the proposal to assess regulatory fees for RPO, OOS, and OTV space stations using the existing fee category for small satellites would be an amendment as defined in 47 U.S.C. 159(d). Such an amendment must be submitted to Congress at least 90 days before it becomes effective pursuant to 47 U.S.C. 159A(b)(2).

55. Finally, the Commission proposes that RPO or OOS space stations that are attached to another space station as part of servicing or mission extension operations be assessed regulatory fees separate from, and in addition to, any regulatory fees assessed on the space station that is being serviced or that is having its mission extended. The Commission acknowledges that this tentative conclusion is the opposite of the Commission's prior tentative conclusion that RPO and OOS space stations joined to GSO space stations during servicing or mission extension operations should not be assessed separate regulatory fees, despite the RPO or OOS space stations being assigned their own call signs, which is the unit usually used to assess regulatory fees for space stations. This tentative conclusion was never adopted, and as such was only tentative in nature. Upon further consideration, the Commission tentatively concludes that the requirements and purpose of 47 U.S.C. 159 would be better met by assessing regulatory fees on such attached RPO or OOS space stations.

56. The premise underlying the prior tentative conclusion was that the RPO or OOS space station is operating as part of an existing GSO space station, rather than as a separate independent space station, and therefore there is no independent operating space station for a separate fee assessment and that the regulatory fee burden for the RPO or OOS space station would be included in the fees collected from the GSO space station fee payors. Upon further consideration, the Commission tentatively concludes that this premise is not correct. As long as a RPO or OOS space station retains a separate authorization, with its own call sign, it is a separate space station for the Commission's regulatory purposes, so that there is a space station for a separate fee assessment independent of the space station being serviced or having its mission extended. Regulatory work is associated with the licensing and regulation of the RPO or OOS space station that is separate and independent from the regulatory work associated with the space station that is being serviced or having its mission extended. FTE work expended on reviewing license applications, issuing licenses, and exercising regulatory supervision of the RPO or OOS space stations is completely separate from the FTE work associated with the licensing and regulation of the space station being serviced or having its mission extended. In addition, the Commission observes that it would be difficult to administer regulatory fees for RPO or OOS space stations under the Commission's prior tentative conclusion, since the status of the RPO or OOS space station for regulatory fee purposes would depend on whether the RPO or OOS space station is attached to another space station on the date when regulatory fees are assessed, or whether it may be operating unattached, for example, between servicing missions, which could lead to uncertainty as to whether regulatory fees are due or not, as well as potential gaming of regulatory fees through the timing of missions. Pursuant to 47 U.S.C. 159, the Commission is required to assess regulatory fees to recover all of its FTE work based on how FTE time is used. The Commission tentatively concludes that it would not be able to meet that requirement if it was to consider the RPO or OOS to be part of the serviced space station, and not subject to separate regulatory fees. The Commission seeks comment on its proposal and the reasoning in support of it.

57. The Commission proposes to assess regulatory fees on all authorized space and earth stations, not only on stations that are “operational.” Currently, regulatory fees for space stations are payable only when the space stations are certified by their operator to be operational. An earth station payor is required to pay a fee once it has certified that the earth station's construction is complete, but in the rare instances in which a license limits an earth station's operational authority to a particular satellite system, the fee is not due until the first satellite of the related system becomes “operational” within the meaning of the Commission's rules. A space station is authorized, in contrast, after an application or petition has been reviewed and granted by the Commission and the grant is effective. Because significant FTE resources are involved with the licensing of space and earth stations, the Commission tentatively concludes that the objectives of 47 U.S.C. 159 would be better met by assessing regulatory fees once a space or earth station is licensed, rather than when a space station becomes operational.

58. The origin for assessing regulatory fees on space stations when they become operational, rather than when licensed, was the statutory text of 47 U.S.C. 159 from 1993. The Omnibus Budget Reconciliation Act of 1993 that created 47 U.S.C. 159 and proposed regulatory fees in 47 U.S.C. 159(g), which identified two fee categories and amounts for space stations: (1) “Space Station (per operational station in geosynchronous orbit) (47 CFR part 25)” and (2) “Space Station (per system in low-earth orbit) (47 CFR part 25)”. The Commission adopted the requirement that GSO space stations be operational before regulatory fees are assessed as part of 1994 regulatory fee proceeding, basing that decision on the statutory language. In that same proceeding, the Commission also applied to NGSO space stations the requirement that space stations be operational before regulatory fees are payable, even though the text of 47 U.S.C. 159(g) did not include the word “operational” for systems in low-earth orbit, as it did for GSO space stations. The Commission has kept the “operational” requirement for assessing regulatory fees on space stations through subsequent annual regulatory fee assessment proceedings without comment or reevaluation.

59. The Commission tentatively concludes that there is no statutory bar to assessing regulatory fees on authorized, but not yet operational, space and earth stations. Pursuant to 47 U.S.C. 159, the Commission is explicitly given authority to adjust its regulatory fees by rule if it determines that the schedule of fees requires amendment, and such adjustment by rule is what is being proposed in the NPRM . In addition, Congress deleted 47 U.S.C. 159(g), which was the textual basis for the operational requirement for assessing regulatory fees on space stations, in the 2018 RAY BAUM's Act. Accordingly, the original textual language of 47 U.S.C. 159(g) appears no longer relevant to the Commission's amendments of regulatory fee schedules. The NPRM seeks comment on this tentative conclusion and the reasons underlying it.

60. In the NPRM, the Commission tentatively concludes that now is an appropriate time to reevaluate the current policy that a space station must be operational before regulatory fees can be assessed. The recent creation of Space Bureau provides an opportune time to revisit past conclusions about the regulatory burdens associated with space and earth station fee payors and how those fees should be assessed. The increased burdens of regulating space stations as a result of the changes in the satellite industry and the creation of the Space Bureau will increase the share of regulatory fees to be assessed on space and earth station regulatees, compared to the number of FTEs regulating space stations in the International Bureau, so the Commission should look to have as broad a base as possible for its regulatory fees in a manner that accounts for all regulatees that benefit from Space Bureau oversight as a matter of making its regulatory fees more fair.

61. The Commission observes that a licensee or grantee already benefits from the substantial FTE resources used to review and grant the application or petition, as well as from the FTE resources used to protect the benefits conferred by the grant of a license or of U.S. market access, such as use of spectrum and orbital resources and protection from interference, which convey upon issuance of the license or grant. Moreover, given the bespoke nature of many satellite systems, Space Bureau staff expertise is utilized by the industry before, during and after an application (including modifications thereof) or petitions for rulemaking are filed. In addition, as observed elsewhere in the NPRM, NGSO space stations are taking an increased share of FTE burdens relative to GSO space stations and are being assessed higher regulatory fees, so there is also increased importance to make sure that all NGSO beneficiaries of those FTE burdens are assessed fees. For example, if five NGSO FSS systems are licensed through a single processing round, FTE licensing work is necessitated by all five systems, but under the current policy only the operational systems would be required to pay regulatory fees, and the entire regulatory burden for that category of space stations would be paid only by operational systems. Systems that become operational later, or not at all, would not be assessed regulatory fees associated with that FTE work for potentially many years, or perhaps never. As a result, systems that become operational earlier than other licensed systems would bear the entire fee burden of regulatory work done on behalf of all regulated systems. The NPRM seeks comment on these observations.

62. The Commission proposes that the intent of Congress in 47 U.S.C. 159 would be better fulfilled by recovering the costs of licensing and regulatory oversight based on authorized space stations, rather than operational space stations. Congress has directed the FCC to recover its annual S&E appropriation through regulatory fees, and the S&E appropriation includes funding for FTE time spent reviewing and granting applications, which is accrued regardless of when a space station becomes operational. In most cases, the amount of FTE spent on reviewing applications corresponds to the number of space stations requested to be authorized, rather than the number that become operational, since Commission staff must spend resources assessing the space station system as proposed in the application, regardless of whether all the space stations actually become operational. In addition, once a space station is authorized, it is subject to regulatory oversight by the Space Bureau and is entitled to all the benefits and privileges that come with an FCC license or market access grant. The NPRM seeks comment on this proposal.

63. The Commission also proposes that assessing regulatory fees based on authorized space stations, rather than operational space stations, should not present challenges to administer. No additional information collection would be needed to determine whether a space station is authorized (as opposed to operational), since the FCC's license or grant of market access displays the authorization particulars, including the date of grant and the number of space stations authorized, and the grants and the information contained within the grants are readily available to the Commission and the public. The Commission proposes to continue its practice of publishing a list of the space stations and systems that would be subject to regulatory fees as U.S. licensed space stations or non-U.S. licensed space station that have been granted U.S. market access. As is the case now, the Commission proposes that any party identifying errors will be able to advise Commission staff of the error and seek correction. The Commission also proposes that NGSO licensees may seek to modify their licenses under existing 47 CFR part 25 requirements to have the number of authorized space stations modified to reflect the number of actual operational space stations if not as many space stations become operational as were applied for, or the number of authorized space stations diminishes due to the retirement of space stations at the end of their missions. The Commission acknowledges that permitting payors to reduce the number of authorized space stations after an application is granted could be inconsistent with the proposal that regulatory fees should be based on the number of space station licensed, rather than the number of operational space stations, but the Commission tentatively concludes that it is easier to administer its fees if they are based on the number of space stations authorized in the current license, rather than having to look back at previous iterations of license grants in order to fix the fee at the highest number of space stations licensed. Furthermore, the Commission does not anticipate that licensees or grantees will seek to reduce the number of authorized satellites significantly after authorization to avoid regulatory fees; rather, it anticipates that such reductions will be marginal and be due to business or operational considerations, rather than due to regulatory fee considerations. The Commission seeks comment on these proposals. It also seeks comment on whether, if the proposal to assess regulatory fees based on authorized, rather than operational, space stations is adopted, the Commission should assess fees on this basis in the current fiscal year, or whether it would be more appropriate to assess fees on this basis beginning in FY 2025.

64. The Commission recognizes that assessing regulatory fees before a GSO space station, or a system of NGSO space stations, is operational could lead to collateral effects that are outside the FTE-focused methodology required under 47 U.S.C. 159. For example, assessing regulatory fees on authorized, but non-operational, space stations could provide an incentive for applicants to request the Space Bureau to defer action on applications until after the period has passed for assessing which payors owe regulatory fees for the fiscal year, so as to defer the assessment of regulatory fees until the subsequent fiscal year. Alternatively, it could provide an incentive for space station operators to seek licensing outside the United States, and to apply for U.S. market access only once the system has become operational, thereby deferring the assessment of regulatory fees in a manner not available to U.S.-licensed space station operators. It could also increase the costs to the operator at the initial funding phases of a space station or system of space stations. The Commission seeks comment on these, or any other, potential collateral effects, and whether they weigh against assessing regulatory fees on authorized, but not yet operational, space stations. In addition, if the Commission does not adopt the proposal to begin to assess regulatory fees when a space station, or system of space stations, is authorized, could the benefits for the proposal still be realized in part by assessing regulatory fees on the number of authorized space stations in the system, once the system has been notified as operational, as defined under 47 CFR 25.121(d)(2)?

65. The Commission finds that the proposal to assess regulatory fees on authorized, rather than operational, space and earth stations would be an amendment as defined in 47 U.S.C. 159. Such an amendment must be submitted to Congress at least 90 days before it becomes effective pursuant to 47 U.S.C. 159A(b)(2).

66. Summarizing the proposed changes to the existing regulatory fee methodology for space stations, the Commission proposes to modify the fee categories for space stations contained in 47 CFR 1.1156 to read as follows:

67. The Commission proposes to increase the amount of regulatory fees assessed on earth stations in order to reflect more accurately the amount of FTE resources dedicated to their regulatory oversight. Currently, there is a single regulatory fee category for earth stations—Transmit/Receive & Transmit only (per authorization or registration). For FY 2023, the fee amount for this category per authorization or registration was $575. For the reasons set forth in the NPRM, the methodology used to assess regulatory fees for earth station payors may underestimate the FTE burdens associated with regulatory oversight of this category of fee payors, and the Commission seeks comment on proposals to adjust its regulatory fees to more accurately recover the amount of FTE resources devoted to licensing and regulation of earth stations.

68. The unit for assessing regulatory fees for earth stations—per authorization or registration—is not uniform. In some cases, an authorization can be for a single earth station, such as a feeder link station in the mobile-satellite service. In other cases, a single authorization could be for several thousand earth stations under what is often called a “blanket license.” When first established in 1994, the fee category for earth stations had four sub-categories with different fee amounts. These sub-categories were: (1) VSAT & Equivalent C-band antennas (per 100 antennas)—$6; (2) Mobile Satellite Earth Stations (per 100 antennas)—$6; (3) Less than 9 meters (per 100 antennas)—$6; and (4) 9 Meters or More—Transmit/Receive and Transmit Only (per meter)—$85; Receive Only (per meter)—$55. In 1995, the Commission deleted receive-only earth stations as a service subject to regulatory fee requirements and determined that assessing fees on a per authorization or registration basis was more equitable method than on a per meter or per 100 earth station basis. The Commission set the earth station regulatory fee per authorization or registration at $330 for all three remaining sub-categories ( i.e., VSAT, Mobile-Satellite Earth Stations, Fixed Earth Stations—Transmit/Receive & Transmit Only). 47 CFR 25.1156, however, lists only a single category and fee for earth station payors: Earth Stations: Transmit/Receive & Transmit only (per authorization or registration).

69. The Commission has not assessed earth station regulatory fees as a percentage of overall bureau regulatory burdens. Rather, the assessment of regulatory fees for earth stations has been based on the initial per unit fee for earth stations—Transmit/Receive & Transmit only (per authorization or registration) that was established by the Commission in 1995. This initial fee has been adjusted on a year-to-year basis, but usually only in terms of a percentage change in the fee to reflect the changes in the amount of appropriated S&E each year and the number of anticipated units of payors. Since 1995, the Commission has periodically discussed earth station regulatory fees or considered adjusting earth station regulatory fees for factors beyond a change in the annual S&E appropriation or the number of units of earth station fee payors. In 2014, the Commission increased the earth station regulatory fee per unit by 7.5%, from $275 in FY 2013 to $295 for FY 2014, in order to reflect more appropriately the number of FTEs devoted to the regulation and oversight of the earth stations in response to concerns raised by commenters that space stations paid an unreasonably high portion of the regulatory fees for the regulation of the satellite industry. The following year, in 2015, the Commission sought comment on whether to raise the earth station regulatory fees again but declined to do so finding that the issue required further analysis. In particular, due to comments suggesting that the Commission adopt different regulatory fees for different types of earth stations and an ongoing proceeding that held the possibility of affecting the distribution of FTE work, the Commission deferred the issue for the next year's proceeding. The Commission ceased consideration of different regulatory fees for different types of earth stations in 2016, however, when the commenter chiefly advocating for such consideration ceased to back its earlier proposal and no other entity commented on the record in favor of the proposal to assess different levels of regulatory fees on different types of earth station licensees. In 2020, commenters in the annual regulatory fee assessment proceeding proposed that the Commission review the apportionment of regulatory fees between earth and space station payors and implement different earth station subcategories for regulatory fee purposes. The Commission declined to do so, finding that there was insufficient evidence in the record at that time to increase apportionment of fees paid by earth station licensees or on which to base the creation of subcategories of earth station fees.

70. The Commission's focused examination of space and earth station fees as a result of the creation of the Space Bureau provides an opportunity to reconsider whether its regulatory fees adequately reflect the amount of FTE resources devoted to licensing and regulation of earth stations. The Commission tentatively conclude that they do not, and that a change in methodology in assessing regulatory fees for earth stations is required. Specifically, for the reason set forth in the NPRM, the Commission proposes to adopt an apportionment of the total regulatory fees allocated to the Space Bureau between space and earth station payors on a percentage basis, similar to the manner that space station fees are apportioned between GSO and NGSO space stations, and proposes that the apportionment be 20 percent for earth stations and 80 percent for space stations. The NPRM seeks comment on this proposal and apportionment.

71. For FY 2023, earth station licensees were assessed a total of $1,667,500 in regulatory fees, which amounted to 7.69% of the $21,656,110 in regulatory fees assessed for all space and earth station payors. Several factors lead to the Commission's tentative conclusion that this percentage underestimates the amount of FTE resources dedicated to earth station licensing and regulation. First, unlike the case for apportionment of space station fees between GSO and NGSO space stations, or among various subcategories of NGSO space stations, it may be feasible to attribute Space Bureau FTE resources that are dedicated exclusively, or nearly exclusively, to earth station licensing and regulation. Within the Space Bureau is the Earth Station Licensing Division (ESLD), which lists eleven staff members that work almost exclusively on earth station licensing and regulation and that are not routinely involved in matters of space station licensing or regulation. If each staff member were to account for an FTE, these eleven staff members would account for approximately 20% of the 54 FTEs that could be categorized as direct FTEs for the Space Bureau for FY 2024, minus a small number of FTEs that may be categorized as indirect FTEs as discussed elsewhere in the NPRM . The Commission tentatively concludes that apportioning regulatory fee percentages between earth and space station payors based on the percentage of direct FTEs involved the licensing and regulation of each category, where feasible to do so, is a reasonable way to fulfill Congress' mandate in 47 U.S.C. 159 that the Commission's regulatory fees must reflect the full-time equivalent number of employees within the bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities. The Commission seeks comment on whether using FTEs in the ESLD to determine the proportion of earth station fees relative to space station fees is reasonable and reflective of Congressional intent. Are there other factors that are reasonably related to the FTE resources provided to earth station licensees that are not reflected in the Commission's proposal? Are there alternatives to using the percentage of direct FTEs involved in earth station licensing and regulation that should be considered?

72. The Commission recognizes that the proposal to apportion 20% of all Space Bureau regulatory fees to earth station licensees beginning in FY 2024 will result in a substantial increase in the per unit regulatory fee paid by earth station licensees, both because the percentage share of Space Bureau regulatory fees is likely to increase as a whole due to the increased number of direct FTEs in the Space Bureau compared to the International Bureau, and because the percentage share of earth station fees of Space Bureau fees would increase from around from around 8% to 20% under the Commission's proposal. Nonetheless, the Commission tentatively concludes that the increase in earth station regulatory fees is consistent with the mandate given by Congress in 47 U.S.C. 159 for the Commission to recover its costs of regulation through fees that reflect the full-time equivalent number of employees within the Commission that provide the regulatory benefits to the payors. The NPRM seeks comment on this tentative conclusion and observation.

73. In light of the tentative conclusion that earth station licensees should be apportioned 20% of all fees allocated to Space Bureau fee payors, the Commission seeks to revisit the question of whether to create subcategories of earth station regulatory fee payors to better differentiate the amount of regulatory burdens associated with different types of earth station licenses. For example, should Very Small Aperture Terminal (VSAT), Mobile-Satellite Earth Stations, and Fixed Earth Stations—Transmit/Receive & Transmit Only be reinstated as distinct fee categories, each with a separate fee assessment? The Commission also seeks to develop a record as to whether there are types of earth station licenses that require more FTE resources to license and regulate, and that account for a higher share of FTE burdens than other categories of earth station licensees, for which a higher regulatory fee should be assessed. Likewise, are there categories of earth station licensees that require less FTE resources to license and regulate and therefore should be assessed a lower regulatory fee? For example, in the past commenters have suggested that blanket-licensed earth station licensees involving multiple antennas under a single authorization should pay higher fees than other earth station licensees because blanket-licensed earth stations require more regulatory oversight. The NPRM asks commenters to provide evidentiary support for their propositions and to provide specific proposals for what these categories should be and how to allocate fees among any categories. Furthermore, comments should address the administrability of any proposed categories and whether the Space Bureau would be able to assign costs of specific regulatory activities to any proposed categories of earth station regulatory fees.

74. The Commission finds that the creation of any new fee categories for earth stations would be an amendment as defined in 47 U.S.C. 159. Such an amendment must be submitted to Congress at least 90 days before it becomes effective pursuant to 47 U.S.C. 159A(b)(2).

75. If the proposals made in the NPRM are not adopted, the Commission seeks comment on whether it should, at a minimum, increase the amount of the per unit fee for the existing fee category of “Earth Station—Transmit/Receive & Transmit only (per authorization or registration)” in order to reflect the increase of the Space Bureau's share of overall Commission regulatory fees as compared to the International Bureau's share in FY 2023. If so, how should this increase be calculated and what should be the percentage increase over the FY 2023 fee?

76. The proposals made elsewhere in the NPRM are amendments or adjustments to the existing methodology of assessing regulatory fees for space stations. This existing methodology was founded on the original regulatory fees proposed by Congress in 1994, which provided for earth station regulatory fees and separate categories of space station fees depending on the orbit used by the space station(s): geostationary or non-geostationary. Since then, the Commission has created subcategories for NGSO space stations and has continuously tried to adjust the allocation of FTE burdens among GSO space stations and the various subcategories of NGSO space stations. The Commission now seeks comment on an alternative methodology for assessing space station regulatory fees that eliminates the distinction between GSO, NGSO, and all the subcategories of NGSO, while preserving a separate fee category for small satellites. For the reasons discussed in the NPRM, the Commission seeks comment on whether this alternative methodology would be more administrable, fair, and sustainable than the existing methodology, even if all the proposals made elsewhere in the NPRM are adopted.

77. The initial stages of the alternative methodology are the same as under the existing methodology. The Commission would first determine the Space Bureau's share of the total FCC annual S&E appropriation for the given fiscal year using the existing methodology used by the Commission. After the Space Bureau's share is determined, the Commission proposes that the share be allocated between earth station and space station fee payors proportional to the Space Bureau FTE resources that are involved in the licensing and regulation of each segment. As stated elsewhere in the NPRM, the Commission tentatively concludes that it is feasible to attribute Space Bureau FTE resources that are dedicated exclusively, or nearly exclusively, to earth station licensing and regulation. The Commission anticipates that the FTE resources attributed to earth stations will be 20 percent of the total Space Bureau share, resulting in 80 percent of regulatory fees to be attributed to space station regulatory fees. Earth station fees would be determined by dividing the total share attributable to earth station licensing and regulation by the number of units for the fiscal year, which were 2900 in FY 2023.

78. The Commission's alternative methodology also would preserve a separate fee category for Space Stations (per license/call sign) (Small Satellite), with the inclusion of RPO, OOS, OTV, and potentially other ISAM space stations in this category on an interim basis, as was proposed elsewhere in the NPRM . It would also retain the proposal to set this regulatory fee at the level set for FY 2023, with only an adjustment each year to reflect the percentage change in the FCC appropriation from the previous fiscal year. This fixed regulatory fee for Space Stations (Small Satellite) would be multiplied by the number of small satellite licenses/call signs required to pay regulatory fees for the fiscal year, and this total amount would be subtracted from the amount of space station regulatory fees to be assessed on all remaining space station payors. Fees would be assessed on authorized space stations, not just operational space stations, as proposed in the NPRM . This treatment of small satellite regulatory fees would be consistent with the Commission's existing methodology for assessing space station regulatory fees, taking into account the proposals made in the NPRM .

79. The main change from the existing methodology is a proposal to establish a common initial unit of regulatory fee payment for all space stations, regardless of which orbit they are designed to operate in, and to eliminate separate fee categories for Space Stations (Geostationary Orbit), Space Stations (Non-Geostationary Orbit)—Less complex, and Space Stations (Non-Geostationary Orbit)—Other. The alternative methodology would have a single space station fee category for “Space Stations (Per Call Sign in Geostationary Orbit or Per System in Non-Geostationary Orbit).” The category would be tiered, with a single GSO space station or a NGSO system with up to 100 authorized space stations constituting this initial tier and being counted as one unit for assessment of space station regulatory fees. Additional tiers would be created to account for NGSO systems with more than 100 authorized space stations, for example 500 or 1,000 space stations per NGSO system per additional tier. Each tier would be counted as an additional unit for assessment of space station regulatory fees. The total number of units (initial and additional units) would be added together and the total space station allocation of the Space Bureau share would be evenly divided among the total number of units, resulting in a per unit regulatory fee for the fiscal year.

80. If the unit tiers are defined per 500 additional authorized space stations, the initial unit range will be 1-100 authorized space stations, the first additional unit will be assessed to systems with 101-500 authorized space stations, and an additional unit will then be assessed for each additional block of 500 authorized space stations. Similarly, if the additional unit tiers are defined per 1,000 additional authorized space stations, the initial unit range will be 1-100 authorized space stations, the first additional unit will be assessed to systems with 101-1,000 authorized space stations, and an additional unit will then be assessed for additional block of 1,000 authorized space stations. For example, a single GSO space station or a NGSO system of 100 authorized space stations or fewer would be assessed one unit's share of space station regulatory fees. If that NGSO system were to have 500 authorized space stations, it would be assessed an additional unit's share of regulatory fees, regardless of whether the additional tiers are based on 500 or 1,000 additional space stations per NGSO system. If that NGSO system were to have 1,000 authorized space stations, it would either be assessed one additional unit's share (if the additional tiers are based per 1,000 authorized space stations) or two additional units' share (if the additional tiers are based per 500 authorized space stations). Accordingly, GSO payors and NGSO systems of 100 authorized space stations or fewer would be assessed the lowest regulatory fees, while payors with multiple authorized GSO space stations or with NGSO systems with more than 100 authorized space stations would be assessed higher regulatory fees, with the highest regulatory fees assessed to payors with a large number of GSO space stations and to payors with NGSO systems consisting of thousands of authorized space stations.

81. The Commission seeks comment on whether this alternative methodology would be more administrable, fair, and sustainable than the existing methodology. First, it could be more administrable because it does not require the Space Bureau to make the challenging determination of how FTE resources are allocated among space station payors. The Commission has previously recognized the considerable challenge of apportioning regulatory fees among space stations fee categories. Under the alternative methodology, tiered units are used as a proxy for the amount of FTE resources that are attributable to the system without having to repeatedly make challenging determinations of the amount of FTE resources attributable to particular categories or subcategories of space station regulatory fee payors. Furthermore, unless the number of authorized space stations substantially decreases over a year, the amount of regulatory fee assessed to a system on a per unit basis is unlikely to increase and is likely to remain stable (or possibly decrease) year to year. The alternative methodology does not utilize any characteristics of a space station system other than the number of authorized space stations in the system and is not dependent on potentially difficult evaluations of the complexity of a system under the Commission's licensing and regulatory framework. It would not require the Commission to collect more information from operators. Thus, the Commission anticipates that the alternative methodology can remain stable longer than the existing methodology for assessing space station regulatory fees. The NPRM seeks comment on these issues.

82. The Commission seeks comment on whether the alternative methodology is more fair than the existing methodology, because it better corresponds FTE resources spent on licensing and regulating space stations with the types of space station systems that benefit from the FTE resources, thereby decreasing the per unit regulatory fees for space station payors that benefit less from FTE resources. Under the alternative methodology, higher aggregate fees will be assessed to systems with large numbers of authorized space stations, GSO or NGSO, but the Commission expects those higher fees will be borne by payors that benefit from more FTE resources in support of licensing and regulating their systems. The alternative methodology also increases the number of units over which space station regulatory fees are spread, thereby decreasing the per unit regulatory fees for all space station payors as additional units are added, regardless of their orbital configuration. The tiered system also avoids the situation where systems with a very large number of authorized space stations could effectively end up paying all, or nearly all, space station regulatory fees, and where the fee per unit for a single GSO space station or a NGSO system of up to 100 authorized space stations would be diluted to an amount that may not adequately reflect the amount of FTE resources allocated to such fee payors.

83. In addition, under the existing methodology, regulatory fees for a particular category of fee payors go down per payor as more space stations or systems become operational in that category. Although such a decrease is beneficial for payors in that category, it may not reflect the increased amount of FTE resources required for that category of fee payors because of the additional resources needed for authorizing and regulating an increasing number of space stations or systems. This can lead to a discrepancy in that a category with rapidly increasing number of space stations or systems becoming operational is assessed lower regulatory fees than a category where the number of payors remains steady or even declines. This discrepancy continues until the Commission makes the challenging determination to alter the allocation of regulatory fees among the fee categories, which could take years to implement. For example, if additional NGSO systems become operational under the existing methodology, the regulatory fee per system for that particular subcategory of NGSO system would decrease because of the broader base over which the fees for that category would be spread, but it would not decrease the fees assessed on GSO space station payors or on NGSO space station payors in other NGSO subcategories—unless the Commission reallocates the percentage of space station regulatory fees among the GSO and NGSO categories. Under the alternative methodology this discrepancy is eliminated, because the addition of units of authorized space stations will automatically decrease the per unit regulatory fee for all space station regulatory fee payors, because the denominator used to divide the overall space station regulatory fee amount becomes larger. For example, the per unit regulatory fee for GSO space stations will decrease if the number of units assessed to NGSO space station systems increases, even if the number of units assessed to GSO space stations remains the same. Under this example, the per unit regulatory fee for all NGSO space stations would decrease as well. Furthermore, the alternative system avoids assessing the same regulatory fee on systems with a small number of authorized space stations as the fee assessed on systems with a large number of authorized space stations, as is the case under the existing NGSO space stations “other” subcategory. The NPRM seeks comment on these issues.

84. Finally, the Commission seeks comment on whether the alternative methodology is more sustainable than the existing methodology. The Commission has reason to expect that the number of authorized space stations will increase in the future, rather than decrease, which will result in an even broader base on which to assess space station regulatory fees and which will lower per unit fees for all space station payors, regardless of the orbit in which the space station operates or the services it provides. Because fees are spread across all space station payors, it avoids the situation where the loss of a single payor in an existing fee category could result in significant increases to the regulatory fees paid by the remaining payors in that category, absent Commission action to reexamine fee allocations. The NPRM seeks comment on these issues.

85. The Commission observes that this alternative methodology relies exclusively on the number of authorized space stations to assess space station regulatory fees, rather than the more nuanced approach of the existing methodology of assessing the complexity of a system (and thus the amount of FTE resources required to regulate the system) based on a number of factors. The Commission also acknowledges that it has previously found that the number of space stations in a system is not the key driver of the amount of FTE time devoted to regulatory oversight of such systems. For example, an NGSO system consisting of a single space station that is designed to operate in a novel manner, subject to a processing round, and in a way that requires extensive coordination of spectrum and orbital resources may require significantly more regulatory oversight than a NGSO system of hundreds of space stations having non-exclusive use of spectrum and operating under well-established parameters. But is it reasonable to assume that NGSO systems with hundreds or thousands of authorized space stations require more FTE resources, on average and ignoring outliers, than NGSO systems with 100 authorized space stations or fewer, since as the number of space stations in a system increases, the complexity of spectrum sharing, frequency usage, and orbital debris mitigation plans also increases, generally speaking? While the number of space stations in a system may not be the key driver of the amount of FTE devoted to regulatory oversight of such systems, the Commission expects that it may be a driver, and one that is easier to administer than the more nuanced approach of the existing methodology or the use of other possible proxies for complexity, such as spectrum usage, services provided, or on-orbit mass. In order to gain the potential advantages of the alternative methodology, the number of space stations authorized may be the more administrable metric to serve as a proxy for the amount of FTE resources devoted to a system in order to accomplish the objectives 47 U.S.C. 159, rather than to continue the challenging task of determining which categories or aspects of NGSO systems are more or less complex to regulate on a recurring basis, particularly as new technologies, services, and orbital operations rapidly develop. The NPRM seeks comment on these issues.

86. Although the regulatory fees that would be assessed under the alternative methodology for most space station fee payors may be roughly the same or potentially lower than those that would be assessed using the existing methodology, even with the changes proposed in the NPRM, the fees assessed for some space station payors could be substantially higher under the alternative methodology. For example, NGSO systems with more than 500 authorized space stations that are categorized as “less complex” under the existing methodology could pay more under the alternative methodology. For NGSO systems that are categorized as “less complex” under the Commission's existing methodology, it may be possible to reflect that categorization by allowing a greater number of space stations to be included in the first or second tier for those systems. For example, an NGSO system used primarily for EESS and/or AIS communicating with 20 or fewer U.S.-licensed earth stations with up to 500 authorized space stations could be assessed only the initial unit of fees, even though it exceeds the proposed limit of up to 100 authorized space stations for the initial unit. The NPRM seeks comment on these issues.

87. Furthermore, if NGSO systems have a significantly larger number of authorized space stations than is the case today, it is possible that tiers of units based on 500 or 1,000 space stations could result in such NGSO systems being assessed a very large percentage share of all space station regulatory fees. In this case, the concern is similar to using a “per space station” basis as a proxy for the complexity of a space station system that was discussed elsewhere in the NPRM . As discussed, the NPRM seeks comment on whether a “cap” or “ceiling” on the number of authorized space stations on which regulatory fees are assessed could alleviate this concern.

88. The use of tiers also presents the situation where a system with only a handful of authorized space stations over the cut off number of space stations in a tier would be assessed fees under the next higher tier. For example, under a tiered system where an additional unit of fees is assessed per 500 additional authorized space stations, an NGSO system with 501 authorized space stations would be assessed fees for three units (the initial tier of up to 100 authorized space stations, the second tier of up to 500 authorized space stations, and the third tier of 501-1,000 authorized space stations), even though it crossed the second tier threshold by a single authorized space station. While the payor in such a case could seek authorization for one less space station, or modify an existing space station license to remove an authorized space station from its license, this may not make sense from a systems engineering perspective, particularly if the “spill over” is 50 or 100 additional authorized space stations. A potential remedy for this situation is to allow partial units for assessing regulatory fees. For example, if the additional authorized space stations per unit is set at 500, and an NGSO system has 508 authorized space stations, it could be assessed 1.016 additional units (508/500) instead of rounding up and being assessed two additional units. If the same NGSO system had 580 authorized space stations, it could be assessed 1.16 additional units (580/500) instead of two additional units. This fractional approach could result in more granular assessments of regulatory fees than a tiered system using cut offs. The NPRM seeks comment on these issues, particularly on the feasibility of implementing such an approach and whether it requires too much precision in assessing the number of authorized space stations in a system.

89. The Commission seeks comment on all aspects of this alternative methodology for assessing space station regulatory fees. Would it be more administrable, fair, and sustainable than the existing methodology? Is it reasonable to use the number of authorized space stations in a system to reflect the amount of FTE resources devoted to a system, as proposed in the alternative methodology? Is the regulatory burden of one GSO space station approximate to the regulatory burden of an NGSO system of up to 100 authorized space stations? If tiers of units are utilized, what should the number of additional authorized space stations per tier be set at? Would 500 or 1,000 additional authorized space stations be a reasonable number? Should there be a cap on the number of space stations on which tiers of units are assessed, in order to prevent NGSO systems with tens of thousands of authorized space stations from potentially being assessed a fee that is disproportionate to the amount of FTE resources devoted to licensing and regulating such systems? Should partial units be utilized instead of cut offs for tiers, as discussed in the previous paragraph? Under the alternative methodology, should small satellite fees be fixed, as proposed for changes to the existing methodology elsewhere in the NPRM ?

90. Summarizing the proposed changes under the proposed alternative regulatory fee methodology for space stations above, 47 CFR 1.1156 would be proposed to read as follows:

91. The Commission finds that the proposal to use the alternative methodology to assess regulatory fees for space and earth stations would be an amendment as defined in 47 U.S.C. 159(d). Such an amendment must be submitted to Congress at least 90 days before it becomes effective pursuant to 47 U.S.C. 159A(b)(2).

92. Changing the Title of 47 CFR 1.1156. The Commission proposes to change the title of 47 CFR 1.1156 to make it clear that it contains space and earth station regulatory fees. Currently, satellite regulatory fees are contained in 47 CFR 1.1156, which is titled, “Schedule of regulatory fees for international services.” The Commission proposes to rename this section as “Schedule of regulatory fees for space and international services” to reflect more accurately that the section contains the regulatory fees for space and earth stations, as well as the fees for international bearer circuits and submarine cables regulated by the Office of International Affairs. The current title of 47 CFR 1.1156 was accurate when all categories of fees within it were regulated by the International Bureau. After the reorganization of the International Bureau into the Space Bureau and the Office of International Affairs, the current title can cause confusion by suggesting that only the fees for regulatees of the Office of International Affairs are contained within 47 CFR 1.1156. The Commission tentatively concludes that it would be easier to change the title of 47 CFR 1.1156 than to create a new section in 47 CFR part 1, subpart G, containing space and earth station regulatory fees. The Commission seeks comment on this tentative conclusion and proposal.

93. Digital Equity and Inclusion. The Commission, as part of its continuing effort to advance digital equity for all, including people of color, persons with disabilities, persons who live in rural or Tribal areas, and others who are or have been historically underserved, marginalized, or adversely affected by persistent poverty or inequality, invites comment on any equity-related considerations and benefits (if any) that may be associated with the proposals and issues discussed in the NPRM . Specifically, the Commission seeks comment on how its proposals may promote or inhibit advances in diversity, equity, inclusion, and accessibility, as well the scope of the Commission's relevant legal authority. The NPRM notes that diversity and equity considerations, however, do not allow the Commission to shift fees from one party of fee payors to another, nor to use fees under 47 U.S.C. 159 for any purpose other than as an offsetting collection in the amount of the Commission's annual S&E appropriation.

94. Space Innovation Agenda. The Commission has an open proceeding on advancing opportunities for innovation in the new space age by taking measures to expedite the application processes for space stations and earth stations, consistent with the Commission's objective to promote a competitive and innovative global telecommunications marketplace via space services” In September 2023, the Commission adopted a Report and Order (Dec. 6, 2023, 88 FR 84737) that further streamlined its application review process, including establishing clear timeframes for placing space and earth station applications on public notice. The Commission also sought comment on several proposed changes to further streamline the licensing process and reduce applicant and staff burdens in a Further Notice of Proposed Rulemaking (Dec. 8, 2023, 88 FR 85553). Finally, the Commission announced a Transparency Initiative with the goal of providing information and guidance, in a variety of forms, to interested parties so they can understand the Commission's procedures and what is needed to obtain authorization for their proposed space station and earth station operations. The Commission seeks comment, generally, how that proceeding and initiative might inform its consideration of the issues raised in the NPRM .

95. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in the NPRM . Written comments are requested on the IRFA. Comments must be filed by the deadlines for comments on the NPRM indicated on the DATES section of this document and must have a separate and distinct heading designating them as responses to the IRFA. The Commission will send a copy of the NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).

96. The Commission is required by Congress pursuant to 47 U.S.C. 159 to assess and collect regulatory fees each year to recover the regulatory costs associated with the Commission's oversight and regulatory activities in an amount that can reasonably be expected to equal the amount of its annual appropriation. As part of last year's adoption of regulatory fees, the Commission noted that FY 2023 would be the last year where the Commission will do so for the International Bureau, given the creation of the Space Bureau, and Office of International Affairs. The Commission also noted that an examination of the regulatory fees, and categories for NGSO space stations would be useful in light of changes resulting from the creation of the Space Bureau, and as part of a more holistic review of the FTE burden of the Space Bureau in FY 2024.

97. The NPRM commences the examination and review of regulatory fees for space and earth station payors regulated by the new Space Bureau, specifically seeking comment on a range of proposed changes to the assessment of regulatory fees for space and earth stations under the existing methodology. It proposes to: (1) change the allocation of fee burdens between GSO and NGSO space stations and maintain the existing allocation of fee burdens between the categories of “less complex” and “other” NGSO space stations; (2) create new fee categories within the existing fee category of “Space Station (Non-Geostationary Orbit)—Other” to make assessment of the Commission's regulatory fees fairer, more administrable, and more sustainable; (3) set the regulatory fee for “Space Stations (per license/call sign in non-geostationary orbit) (47 CFR part 25) (Small Satellite)” for FY 2024 and future fiscal years at the level set for FY 2023, annually adjusted to reflect the percentage change in the appropriation from the previous fiscal year; (4) include, on an interim basis, space stations that are principally used for RPO or OOS, including OTV, in the existing fee category for “small satellites” until the Commission can develop more experience in how these space stations will be regulated; (5) assess regulatory fees on all authorized space stations, not just on operational space stations, in order to adhere more closely to the framework of 47 U.S.C. 159, and to make the Commission's fees fairer, more administrable, and more sustainable; and (6) increase the allocation of fees payable by earth station licensees in order to reflect more accurately the fee burden attributable to their licensing and regulation and seek comment on whether additional earth station fee categories should be created.

98. Additionally, the NPRM proposes to amend the title of 47 CFR 1.1156, currently titled “Schedule of regulatory fees for international services,” to clarify that the rule includes space and earth station regulatory fees, following the reorganization of the Commission's International Bureau. The NPRM also proposes an alternative methodology for assessing space station regulatory fees by eliminating the separate categories of regulatory fees for GSO and NGSO space stations, as well as existing subcategories for NGSO space stations, while retaining the existing separate regulatory fee category for small satellites and spacecraft licensed under 47 CFR 25.122 through 25.123. The goal of these proposals is to update the regulatory fees and categories for earth and space stations in light of changes resulting from the creation of the Space Bureau and as part of a more holistic review of the regulatory fees for earth and space stations in FY 2024.

99. The proposed action is authorized pursuant to 47 U.S.C. 154(i) and (j), 159, 159A, and 303(r).

100. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

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

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

103. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2017 Census of Governments indicate that there were 90,075 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 36,931 general purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,040 special purpose governments—independent school districts with enrollment populations of less than 5ll governmental jurisdictions.”

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

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

106. Fixed Satellite Small Transmit/Receive Earth Stations. Neither the SBA nor the Commission have developed a small business size standard specifically applicable to Fixed Satellite Small Transmit/Receive Earth Stations. Satellite Telecommunications is the closest industry with an SBA small business size standard. The SBA size standard for this industry classifies a business as small if it has $38.5 million or less in annual receipts. For this industry, U.S. Census Bureau data for 2017 show that there was a total of 275 firms that operated for the entire year. Of this total, 242 firms had revenue of less than $25 million. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 65 providers that reported they were engaged in the provision of satellite telecommunications services. Of these providers, the Commission estimates that approximately 42 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, a little more than half of these providers can be considered small entities.

107. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems. Neither the SBA nor the Commission have developed a small business size standard specifically applicable to Fixed Satellite VSAT Systems. A VSAT is a relatively small satellite antenna used for satellite-based point-to-multipoint data communications applications. VSAT networks provide support for credit verification, transaction authorization, and billing and inventory management. Satellite Telecommunications is the closest industry with an SBA small business size standard. The SBA size standard for this industry classifies a business as small if it has $38.5 million or less in annual receipts. For this industry, U.S. Census Bureau data for 2017 show that there were a total of 275 firms that operated for the entire year. Of this total, 242 firms had revenue of less than $25 million. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 65 providers that reported they were engaged in the provision of satellite telecommunications services. Of these providers, the Commission estimates that approximately 42 providers have 1,500 or fewer employees. Consequently using the SBA's small business size standard, a little more than half of these providers can be considered small entities.

108. Home Satellite Dish (HSD) Service. Home Satellite Dish (HSD) or the large dish segment of the satellite industry is the original satellite-to-home service offered to consumers and involves the home reception of signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of unscrambled (free) programming and scrambled programming purchased from program packagers that are licensed to facilitate subscribers' receipt of video programming. Because HSD provides subscription services, HSD falls within the industry category of Wired Telecommunications Carriers. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated for the entire year. Of this total, 2,964 firms operated with fewer than 250 employees. Thus, under the SBA size standard, the majority of firms in this industry can be considered small.

109. Mobile Satellite Earth Stations. Neither the SBA nor the Commission have developed a small business size standard specifically applicable to Mobile Satellite Earth Stations. Satellite Telecommunications is the closest industry with a SBA small business size standard. The SBA small business size standard classifies a business with $38.5 million or less in annual receipts as small. For this industry, U.S. Census Bureau data for 2017 show that there were 275 firms that operated for the entire year. Of this number, 242 firms had revenue of less than $25 million. Thus, for this industry under the SBA size standard, the Commission estimates that the majority of Mobile Satellite Earth Station licensees are small entities. Additionally, based on Commission data as of February 1, 2024, there were 16 Mobile Satellite Earth Stations licensees. The Commission does not request nor collect annual revenue information and is therefore unable to estimate the number of mobile satellite earth stations that would be classified as a small business under the SBA size standard.

110. Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed transmission paths without using any public right-of-way. They acquire video programming and distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and condominiums, and commercial multiple tenant units such as hotels and office buildings. SMATV systems or PCOs are included in the Wired Telecommunications Carriers' industry which includes wireline telecommunications businesses. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this total, 2,964 firms operated with fewer than 250 employees. Thus, under the SBA size standard, the majority of firms in this industry can be considered small.

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

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

113. The NPRM does not propose any changes to the Commission's current information collection, reporting, recordkeeping, or compliance requirements for small entities. Small and other regulated entities are required to pay regulatory fees on an annual basis. The cost of compliance with the annual regulatory assessment for small entities is the amount assessed for their regulatory fee category and should not require small entities to hire professionals to comply.

114. Small entities that qualify can take advantage of the exemption from payment of regulatory fees allowed under the de minimis threshold. In addition, small entities may request a waiver, reduction, deferral, and/or installment payment of their regulatory fees. The waiver process is an easier filing process for smaller entities that may not be familiar with the Commission's procedural filing rules.

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

116. The NPRM seeks comment on a number of amendments to the existing methodology of assessing regulatory fees paid by space and earth station payors. While the NPRM initiates the examination and review of regulatory fees for space and earth station payors under the existing regulatory fee methodology, the Commission will propose and finalize the regulatory fee rates for space and earth station payors as part of its annual Commission-wide regulatory fee proceeding for FY 2024. Commenters will have an opportunity in that proceeding to provide comments on the proposed regulatory fee rates for space and earth station payors. The NPRM gives parties an opportunity to file comments on possible changes to the existing methodology for assessing space and earth station regulatory fees. If any of these proposals are adopted, it may reduce the regulatory fee burden on some satellite entities.

117. Specifically, the NPRM seeks comment on a proposal to divide the existing regulatory fee subcategory of “Space Stations (Non-Geostationary Orbit)—Other” into two tiers: “Large Constellations” of more than 1,000 authorized space stations; and “Small Constellations” of 1,000 or fewer authorized space stations. The current single regulatory fee for all NGSO “other” space station payors has resulted in requests by fee payors of smaller NGSO systems seeking to be assessed regulatory fees as NGSO “less complex” systems. If adopted, the proposal for the tiered approach for the NGSO space station “other” category would likely reduce the regulatory fee burden on smaller satellite constellations, and likely on smaller entities.

118. As another example, the NPRM notes that, based on preliminary calculations, the fee amount for the small satellite category for FY 2024 could be substantially greater than the fee assessed for FY 2023. The NPRM proposes that the administrability and sustainability of regulatory fees for small satellites would be better served by treating them as the Commission has historically treated the regulatory fees for earth stations—that is, a fixed regulatory fee that is adjusted from year-to-year on, rather than as a percentage of the Space Bureau's overall share of regulatory fee allocation, or as a percentage of other categories of space station fee payors. This proposal if adopted would significantly minimize the economic impact of regulatory fees potentially faced by small satellites.

119. The NPRM also proposes, on an interim basis, to assess regulatory fees on spacecraft primarily performing RPO and OOS by including them in the existing regulatory fee category “Space Stations (per license/call sign in non-geostationary orbit) (Small Satellites)” regardless of the orbit in which they are designed to operate in. The Space Bureau has received relatively few applications for RPO or OOS space stations, and although it anticipates receiving more in the near future, the amount of FTE resources required at the present time to regulate these services is more similar to that presented by small satellite space station licensees, which are also few in number, and involve a relatively small number of space stations that have limited duration and scope of use and operate using shared spectrum resources. Therefore, the NPRM tentatively concludes that the purposes of 47 U.S.C. 159 would be best met by erring on the side of caution and assessing regulatory fees under the category of fees associated with the least-burdensome set of space station regulates which would result in lower regulatory fees, and have less economic impact.

120. The NPRM also seeks comment on possibly creating subcategories of earth station regulatory fee payors to better differentiate the amount of regulatory burdens associated with different types of earth station licenses. This may reduce the regulatory fee burden on some smaller earth station payees who could face a substantial increase in the per unit regulatory fee if the Commission adopts the proposal in the NPRM to apportion 20% of all Space Bureau regulatory fees to earth station licensees beginning in FY 2024.

121. Finally, the NPRM seeks comment on an alternative methodology for assessing space station regulatory fees that eliminates the distinction between GSO, NGSO, and all the subcategories of NGSO, while preserving a separate fee category for small satellites. The alternative methodology would have a single category for “Space Stations (Per Call Sign in Geostationary Orbit or Per System in Non-Geostationary Orbit),” which would be tiered, with a single GSO space station or a NGSO system with up to 100 authorized space stations constituting the first tier and being counted as one unit for assessment of space station regulatory fees, and additional tiers added to account for NGSO systems with more than 100 authorized space stations, with the possibility of 500 or 1,000 additional space stations per NGSO system per tier. Each tier would be counted as an additional unit for assessment of space station regulatory fees. Accordingly, GSO payors and NGSO systems of 100 authorized space stations or fewer would be assessed the lowest regulatory fees, while payors with multiple authorized GSO space stations, or with NGSO systems with more than 100 authorized space stations would be assessed higher regulatory fees, with the highest regulatory fees assessed to payors with a large number of GSO space stations, and to payors with NGSO systems consisting of thousands of authorized space stations. The Commission believes this alternative methodology could be more administrable, fair, and sustainable than the existing methodology, and the NPRM seeks comment on all aspects of this alternative methodology for assessing space station regulatory fees.

122. None.

This is a summary of the Commission's Further Notice of Proposed Rulemaking (FNPRM), FCC 24-26, adopted March 14, 2024, and released March 15, 2024. The full text of this document is available by downloading the text from the Commission's website at: https://docs.fcc.gov/public/attachments/FCC-24-26A1.pdf.

1. In this FNPRM, we seek comment on additional declarations intended to provide consumers with assurances that the products bearing the FCC IoT Label do not contain hidden vulnerabilities from high-risk countries, that the data collected by the products does not sit within or transit high-risk countries, and that the products cannot be remotely controlled by servers located within high-risk countries. Specifically, we seek comment on whether we should require manufacturers to disclose to the Commission whether firmware and/or software were developed and manufactured in a “high-risk country,” as well as where firmware and software updates will be developed and deployed from. We also seek comment on whether to require manufacturers to disclose to consumers in the registry whether firmware and/or software were developed and manufactured in a “high-risk country,” as well as where firmware and software updates will be developed and deployed from. We propose to include as high-risk countries those foreign adversary countries defined by the Department of Commerce in 15 CFR 7.4. Are there other sources that the Commission should consider for identifying high-risk countries? Specifically, we seek comment on whether to require the applicant seeking to use the FCC IoT Label to make one of the following declarations under penalty of perjury to accompany its application to use the label:

a. No software or software update or part of any software or software update that runs on or controls the product was or will be developed or deployed from within a country on the Secretary of Commerce's list of high-risk countries, except that this commitment does not apply to the origin of open-source contributions not paid for directly or indirectly by us or our direct or indirect partners in offering this product; or

b. This device runs, or due to future software updates might run, software developed within the Secretary of Commerce's list of high-risk country or countries. Applicant is not aware of any backdoors or other sabotage, or any reason to believe that there is a particular heightened risk for such backdoors or sabotage relative other software developed within such a country, but we inform purchasers and users that the Department of Commerce has designated high-risk country or countries as jurisdictions whose conduct is significantly adverse to the national security of the United States or security and safety of United States persons.

2. We also seek comment on requiring manufacturers to disclose to the Commission whether the data collected by the product is stored in or transits a high-risk country or countries. We also seek comment on whether to require manufacturers to disclose to consumers in the registry whether the data collected by the product is stored in or transits a country or countries that are known to pose a national security risk to the United States. Does the manufacturer have sufficient knowledge of the data collected by the device to know where the servers hosting the collected data are located or where the servers remotely controlling the device will be located? Is it possible for the location of stored data to be changed without the manufacturer's knowledge? Are there other factors that would impact the manufacturer's ability to make these declarations. Specifically, we seek comment on requiring the applicant seeking to use the FCC IoT Label to make one of the following declarations under penalty of perjury to accompany its application to use the label:

a. No customer data collected by this product will be sent to servers located on the Department of Commerce's list of high-risk countries, defined at 15 CFR 7.4 or any successor regulation. No servers that remotely control the device will be located in such a country; or

b. Customer data collected by this product will be sent to servers located in a high-risk country or countries. We inform purchasers and users that the Secretary of Commerce has designated high-risk country or countries as jurisdictions whose conduct is significantly adverse to the national security of the United States or security and safety of United States persons.

3. If a manufacturer must disclose one of these exposures or potential exposures to a high-risk country, should it have to disclose additional information as well? Should it have to disclose the identity of the high-risk country or countries? Should it have to disclose the specific hardware or software components or server activities that did, will, or could originate from or take place in those countries? How could such disclosures help purchasers make informed decisions about product acquisitions? And what burdens would such additional disclosures place on manufacturers? Should we require manufacturers to include this information in the registry to inform consumers of these issues?

4. Alternatively, should the fact that software or firmware originates from such countries, that data will be stored in such countries, or that products can be remotely controlled by servers within such countries, make products ineligible for the label altogether? Are there certain product components, such as cellular interface modules, that pose elevated risks for which such a prohibition might specifically be warranted?

5. With respect to these declarations proposed to require the manufacturer to inform the Commission, would such information provide meaning to consumers? Should we require manufacturers to include this information in the registry to inform consumers of these issues? How would manufacturers inform users who are not purchasers? In addition, we seek comment on the possible costs and benefits of requiring any additional language in the relevant product's registry page. Should they encompass some or all of the same representations made in an application for authorization to use the FCC label, or should they be different or additional? Can such representations be made not just for the benefit of the purchaser or user, but also extend to any third parties who may be impacted by a security vulnerability in a labeled product attributable to a failure of the manufacturer, and what would the practical or legal implications of that be? How might this influence manufacturer participation in the program? Could the federal Magnuson-Moss Act be an additional legal overlay here, as well? How should those state and federal laws inform whether and how the Commission requires manufacturer or seller representations in the product's registry page?

6. Paperwork Reduction Act. This document contains proposed new or modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Bureau does not believe that the new or modified information collection requirements we adopt here will be unduly burdensome on small businesses.

7. In this present document, we have assessed the effects of the operational framework for a voluntary IoT cybersecurity labeling program. Since the IoT Labeling Program is voluntary, small entities who do not participate in the IoT Labeling Program will not be subject to any new or modified reporting, recordkeeping, or other compliance obligations. Small entities that choose to participate in the IoT Labeling Program by seeking authority to affix the Cyber Trust Mark on their products will incur recordkeeping and reporting as well as other obligations that are necessary to test their IoT products to demonstrate compliance with the requirements we adopt today. We find that, for the Cyber Trust Mark to have meaning for consumers, the requirements for an IoT product to receive the Cyber Trust Mark must be uniform for both small businesses and other entities. Thus, the Commission continues to maintain the view we expressed in the IoT Labeling NPRM, that the significance of mark integrity, and building confidence among consumers that devices and products containing the Cyber Trust Mark label can be trusted to be cyber secure, necessitates adherence by all entities participating in the IoT Labeling Program to the same rules regardless of size.

8. Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, we have prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in this Report and Order on small entities. The FRFA is set forth in Appendix B of the FCC's Report and Order and Further Notice of Proposed Rulemaking, FCC 24-26, adopted March 14, 2024, at this link: https://docs.fcc.gov/public/attachments/FCC-24-26A1.pdf.

9. We have also prepared an Initial Regulatory Flexibility Analysis (IRFA) concerning the potential impact of rule and policy change proposals on small entities in the FNPRM. The IRFA is set forth in Appendix C of the FCC's Report and Order and Further Notice of Proposed Rulemaking, FCC 24-26, adopted March 14, 2024, at this link: https://docs.fcc.gov/public/attachments/FCC-24-26A1.pdf. The Commission invites the general public, in particular small businesses, to comment on the IRFA. Comments must be filed by the deadlines for comments on the FNPRM indicated on the first page of this document and must have a separate and distinct heading designating them as responses to the IRFA.

10. OPEN Government Data Act. The OPEN Government Data Act requires agencies to make “public data assets” available under an open license and as “open Government data assets,” i.e., in machine-readable, open format, unencumbered by use restrictions other than intellectual property rights, and based on an open standard that is maintained by a standards organization. This requirement is to be implemented “in accordance with guidance by the Director” of the OMB. The term “public data asset” means “a data asset, or part thereof, maintained by the Federal Government that has been, or may be, released to the public, including any data asset, or part thereof, subject to disclosure under the Freedom of Information Act (FOIA).” A “data asset” is “a collection of data elements or data sets that may be grouped together,” and “data” is “recorded information, regardless of form or the media on which the data is recorded.” We delegate authority, including the authority to adopt rules, to the Bureau, in consultation with the agency's Chief Data Officer and after seeking public comment to the extent it deems appropriate, to determine whether to make publicly available any data assets maintained or created by the Commission within the meaning of the OPEN Government Act pursuant to the rules adopted herein, and if so, to determine when and to what extent such information should be made publicly available. Such data assets may include assets maintained by a CLA or other third-party, to the extent the Commission's control or direction over those assets may bring them within the scope of the OPEN Government Act, as interpreted in the light of guidance to be issued by OMB. 1 In doing so, the Bureau shall take into account the extent to which such data assets are subject to disclosure under the FOIA.

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

12. Comment Filing Procedures. Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

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

14. The proposed action is authorized pursuant to sections 1, 2, 4(i), 4(n), 302, 303(r), 312, 333, and 503, of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(n), 302a, 303(r), 312, 333, 503; and the IoT Cybersecurity Improvement Act of 2020, 15 U.S.C. 278g-3a through 278g-3e.

15. An Initial Regulatory Flexibility Act (IRFA) Analysis for the rules proposed in the FNPRM was prepared and can be found as Exhibit B of the FCC's Second Report and Order and Further Notice of Proposed Rulemaking, FCC 24-5, adopted January 26, 2024, at this link: https://docs.fcc.gov/public/attachments/FCC-24-26A1.pdf.

The Federal Transit Administration (FTA) has adopted the principles and methods of Safety Management System (SMS) as the basis for enhancing the safety of public transportation in the United States. As part of its internal SMS, FTA established a Safety Risk Management (SRM) program to proactively address safety concerns impacting the transit industry and to systematically apply FTA's statutory oversight authority to improve the safety of the nation's transit infrastructure through the Public Transportation Safety Program.

The process follows a five-step approach: (1) identify safety concerns; (2) assess safety risk; (3) develop mitigation; (4) implement mitigation; and (5) monitor safety performance. As a result of the first two steps, FTA may develop and advance appropriate mitigations to address a safety hazard, such as proposed safety regulations, general or special directives, safety advisories, or technical assistance and training activities.

In 2019, FTA began piloting the SRM process to focus on high-priority safety risks and identified the RWP safety concern as the second topic for analysis. Through the SRM process, FTA conducted a review of the existing approaches to RWP used by the rail transit industry. This review shows that on a national level, these approaches do not adequately protect transit workers from rail transit vehicles and other roadway hazards. As a result, FTA has determined that a Federal baseline RWP program is an appropriate mitigation and is proposing this regulation to reduce fatalities and serious injury events involving rail transit workers that occupy the rail roadway during hours of operation.

This NPRM would require RTAs covered by the SSO program under 49 CFR part 674 (Part 674) to implement a minimum, baseline RWP program to provide a standardized and consistent approach to protecting roadway workers industry-wide, overseen and enforced by SSOAs. Using the Federal standards as a baseline, FTA would expect RTAs to use their existing documented safety risk management processes to assess the associated safety risk and, based on the results of the safety risk assessment, identify the specific safety risk mitigations or strategies necessary to address the safety risk.

This NPRM would prohibit the use of individual rail transit vehicle detection as a sole form of protection for workers on the roadway. It would set requirements for RTAs to conduct a safety risk assessment to identify and establish redundant protections for each category of work roadway workers perform on the roadway or track. Redundant protections may include procedures, such as foul time and advance warning systems, and also physical protections to stop trains in advance of workers, such as derailers and shunts. The safety risk assessment and redundant protections would be reviewed and approved by the SSOA, along with other elements of the RTA's RWP program.

The safety risk assessment would be consistent with the RTA's Agency Safety Plan and the SSOA's Program Standard. RTAs may supplement the safety risk assessment with engineering assessments, inputs from the Safety Assurance process established under 49 CFR 673.27, the results of safety event investigations, and other safety risk management strategies and approaches.

To ensure effective implementation and oversight of the RWP program and redundant protections, this NPRM also would specify RWP training and compliance monitoring activities, supplemented by near-miss reporting and SSOA oversight and auditing.

Congress directed FTA to establish a Public Transportation Safety Program in the Moving Ahead for Progress in the 21st Century Act (Pub. L. 112-141) (MAP-21), which was reauthorized by the Fixing America's Surface Transportation (FAST) Act (Pub. L. 114-94). The Bipartisan Infrastructure Law, enacted as the Infrastructure Investment and Jobs Act (Pub. L. 117-58), continues FTA's authority to regulate public transportation systems that receive Federal financial assistance under Chapter 53. Title 49 U.S.C. 5329(f)(7) authorizes FTA to issue rules to carry out the public transportation safety program.

Title 49 U.S.C. 5329(b)(2) directs FTA to develop and implement a National Public Transportation Safety Plan (NSP) that includes minimum safety standards to ensure the safe operation of public transportation systems. In 2017, FTA published its first iteration of the National Safety Plan which was intended to be FTA's primary tool for communicating with the transit industry about its safety performance (82 FR 5628). Subsequently, on May 31, 2023, FTA published a second iteration of the NSP (88 FR 34917). While the NSP currently contains only voluntary standards, as FTA's safety program has matured, it is now appropriate for FTA to propose required minimum standards for RWP. Pursuant to the Administrative Procedure Act (5 U.S.C. 553), FTA is proposing these minimum standards for public notice and comment through the rulemaking process.

Rail transit employees and contractors who work on the roadway, also known as roadway workers, face numerous on-the-job hazards. Working on the roadway exposes workers to moving rail transit vehicles and electrified system components. Weather, including rain, snow, and heat can create conditions that cause slips, trips, and falls; hypothermia; and heat stroke. Surrounding automobile traffic can limit the ability to hear trains and warnings from watchpersons. Tight clearances, restricted visibility, varying distances from the track to places of safety, and the potential need to clear between rail transit vehicles make tunnels, bridges and aerial structures, locations with more than two tracks, and shared-use roadway ( e.g., streets with mixed traffic) make roadways particularly challenging work environments. Adjacent construction and public utilities pose additional safety challenges. Faster trains, more frequent headways, and shorter non-revenue maintenance windows all increase worker exposure to the risk of being struck by a train or electrocuted.

RTAs manage these risks using a variety of RWP programs, including systems and approaches designed to safeguard roadway workers through rules and procedures, training and supervision, communication protocols and technology, and on-track protection. Many existing RWP programs implemented by RTAs use elements from the Federal Railroad Administration (FRA) RWP regulations contained in 49 CFR part 214, subpart C—Roadway Worker Protection, modified to address the RTA's unique operating conditions and requirements. SSOAs typically review implementation of these RWP programs as part of their triennial audits of the RTAs in their jurisdictions.

Notwithstanding the use of RWP programs throughout the rail transit industry, roadway workers continue to be killed and seriously injured in roadway safety events. For example, in October 2022, two roadway workers on the Port Authority Transit Corporation (PATCO) roadway were struck and killed by a PATCO revenue service vehicle traveling through a close-clearance area. Preliminary information indicates the track was not taken out-of-service as expected, and the incident is currently under investigation by the National Transportation Safety Board (NTSB) (investigation number RRD23FR001). Roadway worker events continue to comprise the majority of transit worker fatalities for RTAs.

This NPRM follows FTA's review of safety events involving roadway workers, dating back to 2008, including information reported to the National Transit Database (NTD) and State Safety Oversight Reporting Tool (SSOR); investigations completed by NTSB, including 12 recommendations issued by NTSB to FTA since 2012 regarding needed improvements in the RWP programs administered in the U.S. rail transit industry; data and information submitted in response to FTA's request for information (RFI) on transit worker safety (86 FR 53143); and analysis completed as part of FTA's internal Safety Risk Management process.

FTA's review is also informed by older information on accidents involving roadway workers collected from the NTD and the SSO program dating back to 1994 and the results of an inventory of RWP practices used in the rail transit industry, collected in 2014 in response to FTA's Safety Advisory 14-1: Inventory of Practice and Analysis ( https://www.transit.dot.gov/oversight-policy-areas/safety-advisory-14-1-right-way-worker-protection-december-2013 ). Finally, FTA considered recommendations from the Transit Advisory Committee for Safety (TRACS), 1 voluntary safety standards developed by the American Public Transportation Association (APTA), and the results of research conducted by the Transit Cooperative Research Program (TCRP) (see: https://www.trb.org/Publications/Blurbs/166925.aspx ) and FTA's Office of Research, Demonstration and Innovation ( https://www.transit.dot.gov/research-innovation/fta-standards-development-program-rail-transit-roadway-worker-protection-report ).

FTA's review finds that, dating back to 1994, 52 rail transit workers have been killed and over 200 workers have experienced major injuries resulting from safety events on the roadway, primarily resulting from collisions with rail transit vehicles, falls and electrocution. More detailed data covering the almost 15-year period between January 1, 2008 and October 31, 2022 is available from the NTD. During this time, 22 workers have been killed and 120 workers seriously injured in accidents on the roadway. This equates to approximately 1.5 workers killed per year and just over eight workers seriously injured per year.

To ensure FTA's analysis of existing RWP practices compares reasonably similar RWP programs and outcomes, this analysis, dating back to 2008, which supports the cost benefit statement for this proposed NPRM, does not include incidents occurring in the State of California, where roadway workers have been protected by General Order 175-A, “Rules and Regulations Governing Roadway Worker Protection provided by Rail Transit Agencies and Rail Fixed Guideway Systems” since 2016. While there is evidence that dozens more workers are injured less seriously each year in incidents on the roadway, the NTD does not provide sufficient detail on these incidents to support substantive analysis.

Based on this review, FTA finds that existing programs used in the rail transit industry do not adequately mitigate the risks of placing workers on the roadway. FTA agrees with NTSB that weaknesses in current programs leave all RTAs “at risk for roadway worker fatalities and serious injuries” (see https://www.ntsb.gov/safety/safety-recs/RecLetters/R-13-039-040.pdf ). Further, FTA believes that SSOAs can do more to oversee and enhance the safety of roadway workers in their jurisdictions, in accordance with the SSOAs' authority under 49 CFR part 674.

Many of the safety events in FTA's review primarily or tangentially involve RWP protections that rely solely on the ability of the roadway worker to detect oncoming rail transit vehicles. This approach is vulnerable to human error, such as miscalculating sight distance and generally underestimating the time needed for workers to clear tracks. In many of the events reviewed by FTA, the roadway workers were not sufficiently aware of the immediate hazards they faced when working on the rail transit roadway. Many of these events were caused by roadway workers' lack of awareness of the presence or speed of approaching trains; lack of train visibility in curves or aerial structures; and the time required to move to a place of safety. Contributing to many of these events were the train operators' lack of awareness regarding the roadway workers' locations and insufficient time to slow and stop the trains before striking those workers.

FTA's review confirms that reliance on the roadway worker to detect rail transit vehicles lacks safety redundancy and does not provide sufficient physical or procedural protections to ensure worker safety. Physical redundant protections are technological or mechanical interventions that physically stop a train from striking a roadway worker, such as a derailer or shunt in the signal system. Procedural redundant protections are rules-based interventions that rely on worker training and compliance, such as the use of foul time to clear the track for workers.

FTA's review of these safety events also found that weaknesses in job safety briefings contributed to these events, placing roadway workers in situations where they may not have recognized the hazards of their work sites or the requirements of protection. Also, insufficient training and poor work scheduling practices left workers vulnerable to errors of judgement and fatigue that contributed to poor decision-making on the roadway.

While FTA's review finds that the majority of RWP fatalities and serious injuries have happened on heavy rail transit systems, other rail systems, including light rail and automated guideways, have also experienced fatal RWP accidents and serious injuries. Further, while most of these agencies have top train speeds in excess of 45 miles per hour, the conditions that make these events possible are present at all RTAs nationwide—even those agencies that provide service at slower speeds, with single rail cars, or more limited track configurations.

Since 2008, NTSB has issued 12 safety recommendations to FTA based on its investigation of rail transit RWP safety events. These recommendations focus on the need for Federal regulation, minimum RWP requirements, enhancements in job safety briefings, and RWP training programs for the rail transit industry. NTSB also has recommended that RTAs use redundant protection when workers are on the roadway. A discussion of roadway worker safety events that occurred on the roadway follows below, along with the relevant NTSB recommendation and associated FTA action.

On January 26, 2010, a hi-rail vehicle—a truck or automobile that can be operated on either highways or rails—struck and fatally injured two technicians who were working on the roadway replacing equipment between the tracks at the Washington Metropolitan Area Transit Authority (WMATA). On June 1, 2012, following its investigation at WMATA, NTSB recommended that FTA, “Issue guidelines to advise transit agencies and state oversight agencies on how to effectively implement, oversee, and audit the requirements of [the SSO program] using industry best practices, industry voluntary standards, and appropriate elements from 49 Code of Federal Regulations Part 214, Subpart C—Roadway Worker Protection [ sic ]. (R-12-34).”

To address this recommendation, FTA sent each RTA a package of RWP materials and guidance, including the results of FTA-sponsored research with the TCRP of the Transportation Research Board (TRB) at the National Academies of Science regarding RWP and rules compliance. FTA also provided updates on joint technology demonstration projects with the Metropolitan Atlanta Rapid Transit Authority (MARTA) and the Maryland Transit Administration (MTA) to support the piloting and testing of technology to help alert workers to the presence of trains and train operators to the presence of workers on the tracks. Finally, FTA re-issued an awareness video, developed in collaboration with WMATA, New York City Transit, and Transport Workers Union Local 100 in response to earlier RWP-related worker accidents, called “A Knock at Your Door” ( http://www.youtube.com/watch?v=31XyWpQCWRc ). This video is designed to reinforce the dangers and challenges of working on the rail transit right-of-way and now is used by RTAs in their track safety training programs.

In response to a December 19, 2013, safety event resulting in two roadway worker fatalities on the Bay Area Rapid Transit (BART) system, NTSB issued two urgent safety recommendations to FTA, citing concerns that the current RWP programs in place in the rail transit industry may not be effective. NTSB recommended that FTA immediately:

• Issue a directive to all rail transit properties requiring redundant protection for roadway workers, such as positive train control, secondary warning devices, or shunting (R-13-39); and

• Issue a directive to require transit properties to review their wayside worker rules and procedures and revise them as necessary to eliminate any authorization that depends solely on the roadway worker to provide protection from trains and moving equipment (R-13-40).

To respond initially to these urgent safety recommendations, on December 31, 2013, FTA issued Safety Advisory 14-1: Right-of-Way Worker Protection to provide guidance to SSOAs and RTAs on redundant protections for workers. Safety Advisory 14-1 also requested information from RTAs and SSOAs regarding RWP program elements and level of implementation in the rail transit industry, as well as assessments from each RTA documenting the safety hazards and mitigations in place at their agencies to protect workers on the roadway.

FTA's Safety Advisory 14-1 also included RWP best practices developed from the findings of 28 investigations of rail transit roadway worker fatalities from 2002 through 2013. Effective practices in flagging and redundant protection, roadway work scheduling, communication rules, and other practices were detailed in the advisory. Methods for improving existing practices, such as rules compliance testing, job safety briefings and training, were also detailed to assist transit agencies in improving their RWP processes and procedures.

In addition, FTA provided new resources to assist the SSO program and States in conducting activities such as audits, investigations, and inspections related to Safety Advisory 14-1. Beginning in Fiscal Year (FY) 2013, FTA established its grant program for SSOAs pursuant to 49 U.S.C. 5329(e)(6) and issued approximately $22 million per year to States to fund staffing and training for SSO program managers, staff, and contractors. FTA has continued to provide technical assistance and training to SSOA staff through the Transportation Safety Institute, the National Transit Institute, and a 2018 SSOA workshop session, including sessions focused on oversight of RWP program elements.

Further, on September 24, 2014, NTSB released its Special Investigation Report on Railroad and Rail Transit Roadway Worker Protection (SIR 14- 03). In this report, NTSB identified and discussed the circumstances of 15 railroad and rail transit worker deaths in 2013 and issued eight additional safety recommendations to FTA, including five directly related to proposals in this NPRM:

• Require initial and recurring training for roadway workers in hazard recognition and mitigation. Such training should include recognition and mitigation of the hazards of tasks being performed by coworkers (R-14-36);

• With assistance from the FRA and OSHA, establish roadway worker protection rules, including requirements for job briefings (R-14-38);

• Once the action specified in Safety Recommendation R-14-38 is completed, update the state safety oversight program to ensure that rail transit systems are meeting the safety requirements for roadway workers (R-14-39);

• Establish a national inspection program that specifically includes roadway worker activities (R-14-40); and

• Revise 49 CFR part 659 to require all federally funded rail transit properties to comply with 29parts 1904, 1910, and 1926 (R-14-41).

To respond to these recommendations, FTA has worked with the rail transit industry, SSOAs, and through its internal safety program regulatory processes to focus action on needed improvements in RWP safety. Through guidance, technical assistance, training, research projects, and now proposed regulation, transit worker safety, including RWP safety, has been a major focus for FTA's safety program.

On October 30, 2015, FTA staff participated in developing the APTA Standard for On-Track System Safety Requirements, APTA RT-OP-S-21-15, as part of a cooperative agreement with the Center for Urban Transportation Research. This voluntary standard addresses RWP programs by providing minimum safety requirements for key elements noted in NTSB's Special Investigation Report on Railroad and Rail Transit Roadway Worker Protection.

This standard augments existing APTA voluntary standards that address RWP by focusing specifically on the use and movement of on-track equipment, which includes hi-rail vehicles and equipment. This voluntary standard encourages RTAs to equip all existing and new on-track equipment with certain minimum design features such as automatic change-of-direction alarms; back up alarms which provide audible signals; and alarms that are distinguishable from surrounding ambient noise, all of which will serve as secondary warning systems. This standard also encourages RTAs to develop operating procedures and guidance for the use of on-track equipment in work zone areas and along the right-of-way.

Additionally, in response to recommendation R-14-038 and to further address recommendations R-13-039 and R-13-040, FTA contributed to the development of APTA's 2016 Roadway Worker Protection Program Requirements Standard, APTA RT-OP-S-016-11. This voluntary standard encourages adherence to clear rules and procedures, appropriate training, certification and retraining, and regular monitoring of right-of-way safety compliance. It also defines minimum elements in an RTA's on-track safety program and emphasizes opportunities for redundant protection and the use of advanced worker warning technology. In January 2017, FTA issued its National Public Transportation Safety Plan, which encouraged the adoption of these voluntary APTA standards.

In 2019, FTA initiated a safety risk analysis of the hazards associated with RWP. FTA conducted this analysis to determine additional mitigations for RWP risks as the agency worked to maintain vigilance in the protection of transit workers. FTA used the results of this safety risk assessment to support the drafting of this NPRM.

In 2021, as part of FTA's Standards Development Program, FTA issued Report No. 0212 on Rail Transit Roadway Worker Protection. This report summarized research that reviewed existing standards and best practices. The report also developed use cases, a risk assessment matrix, and high-level concepts of operations for rail transit RWP. The research report provided tools and resources that RTAs may use to address the safety risks of roadway workers performing tasks on and adjacent to rail tracks. By overlaying emerging technologies with existing policies and procedures, this report demonstrated that risk can be reduced for roadway workers.

As discussed in this report, the use of a hazard/risk assessment matrix that incorporates human factors and risk analyses and considers several use cases, and the use of secondary RWP protection devices, may help agencies to improve RWP. It also demonstrated that while available RWP technologies provide additional warning to roadway workers and train crews, they are not a primary protection source. Only through overlaying these technologies with existing procedures and practices can RTAs enhance RWP and reduce safety risk for workers.

In September 2021, FTA published a request for information in the Federal Register to solicit information from the public related to transit worker safety to inform the regulatory process (86 FR 53143). FTA asked for comment on current RWP practices in the industry, including redundant protections and training, and on minimum requirements the public expected to see if FTA pursued Federal requirements for transit RWP programs. FTA received comments suggesting that classroom and field training should be required, RWP program requirements should be responsive to modal differences and differences in operating characteristics, and suggestions for specific technology or practices to improve safety (Docket FTA-2021-0012). The section-by-section analysis below identifies where FTA proposals are responsive to these comments.

This NPRM would establish minimum safety standards to protect transit workers who may access the roadway in the performance of work.

The NPRM proposes that each RTA would adopt and implement an RWP program to improve transit worker safety that is consistent with Federal and State safety requirements and approved by the SSOA. The RWP program would be documented in a dedicated RWP manual, which would include: (1) terminology, abbreviations, and acronyms used to describe the RWP program activities and requirements; (2) RWP program elements; (3) a definition of RTA and transit worker responsibilities for the RWP program; (4) training, qualification, and supervision required for transit workers to access the roadway, by labor category or type of work performed; and (5) processes and procedures to provide adequate on-track safety for all transit workers who may access the roadway in the performance of their work, including safety and oversight personnel.

The RWP manual also would include or incorporate by reference a track access guide to support on-track safety. The track access guide would be based on a physical survey of the track geometry and condition of the transit system.

The RTA would be required to completely review and update its RWP manual not less than every two years. This includes updates to reflect current conditions, lessons learned in implementing the RWP program as described in the manual, and information provided by the SSOA and FTA. RTAs would be required to conduct a review within two years of the SSOA's initial approval of the RWP manual and not less than every two years thereafter.

FTA's proposed rules for Public Transportation Agency Safety Plans (PTASP) would also require rail transit agencies to include or incorporate by reference in their Agency Safety Plans (ASPs) the policies and procedures regarding rail transit workers on the roadway. The ASP, and any updates to the ASP, will require approval by a joint labor-management Safety Committee. The joint labor-management Safety Committee may also, as part of its statutory responsibilities, identify RWP related safety deficiencies and identify and recommend risk-based mitigations or strategies to address RWP hazards identified in the agency's safety risk assessment.

The NPRM would prohibit the use of any protections that rely solely on the roadway worker to detect rail transit vehicles. Each RTA would be required to conduct a safety risk assessment to identify redundant protections for all workers to be included in the RWP program and manual. Protections would be based on the category of work being performed. Tasks demanding more attention from roadway workers, including the use of tools and equipment, based on the results of the safety risk assessment, likely would require RTAs to implement greater levels of protection.

In addition, the NPRM would require comprehensive job safety briefings, a good faith safety challenge provision, and required reporting of near misses. Formal training and qualification programs would be required for all workers who access the roadway. RTAs also would adopt a program for RWP program compliance auditing and monitoring.

SSOAs would be responsible for approving, overseeing, and enforcing implementation of the requirements in the NPRM for each RTA in their jurisdiction, including the RWP Manual and supporting training and qualification programs.

This proposed rule, which sets minimum safety standards for RWP programs, would benefit roadway workers by reducing their risk of fatalities and injuries. To estimate benefits, FTA analyzed national transit worker safety data from 2008 to 2020 and identified accidents that would have been prevented if agencies had implemented the protections in the proposed rule. On average, the rule would prevent an estimated 1.4 fatalities and 3.9 injuries per year, resulting in annual safety benefits of $14.2 million in 2021 dollars. To meet the safety standards, RTAs and SSOAs would incur an estimated $2.0 million in start-up costs plus $11.3 million in ongoing annual costs. The largest ongoing annual costs are for redundant worker protections ($5.9 million) and roadway worker protection training ($4.5 million).

Table ES-1 summarizes the potential effects of the proposed rule over a ten-year analysis period from 2023 to 2032. In 2021 dollars, the rule would have annualized net benefits of $2.6 million at a 2 percent discount rate, discounted to 2023.

FTA proposes that this regulation would apply to RTAs that receive Federal financial assistance under 49 U.S.C. chapter 53 and to all SSOAs that oversee the safety of rail fixed guideway public transportation systems. It also specifies that this regulation would not apply to rail systems that are subject to the safety oversight of the Federal Railroad Administration.

FTA also proposes to specify that this regulation applies to transit workers who access any rail fixed guideway public transportation system in the performance of their work. FTA is proposing this applicability to encompass the RTAs and SSOAs in its SSO program and to establish protections for individuals under the RTA's purview as they access the roadway.

FTA proposes that section 671.3(a) will explain that this regulation establishes minimum safety standards for rail transit RWP. FTA proposes that each RTA and SSOA may prescribe additional or more stringent rules that are consistent with this part.

FTA further proposes that section 671.3(b) will explain that FTA has adopted the use of SMS as the basis for enhancing the safety of public transportation. Safety Risk Management and Safety Assurance, as required in part 673 of this chapter, form the basis of a transit agency's safety risk identification, assessment, mitigation, and monitoring programs. As such, FTA also proposes that any activities conducted to carry out this Part must be integrated into the RTA's SMS required under part 673 of this chapter.

FTA proposes definitions for terms used in this part to establish a standard RWP vocabulary.

This section also includes definitions of terms used throughout FTA's safety program. Some of these terms are included in FTA's PTASP NPRM, which was issued on April 26, 2023 (88 FR 25336). FTA's intent is for terms to have the same meaning across the safety program, and FTA will reconcile overlapping terms in the appropriate rulemakings. Readers should refer, specifically, to the definitions of “Accountable Executive,” “Equivalent Entity,” “Near-miss,” “Rail Fixed Guideway Public Transportation System,” “Rail Transit Agency,” “Roadway,” “Safety event,” “State Safety Oversight Agency,” and “Transit Worker.”

FTA is proposing definitions for this part that are not found in other parts of the FTA safety program. FTA is proposing to define “roadway worker protection” to mean the policies, processes, and procedures implemented by an RTA to prevent safety events for transit workers who must access the roadway in the performance of their work. FTA is proposing “roadway worker” to mean a transit worker whose duties involve inspection, construction, maintenance, repairs, or providing on-track safety such as flag persons and watchpersons on or near the roadway or right-of-way or with the potential of fouling track. FTA is proposing to define “fouling a track” to mean the placement of an individual or an item of equipment in such proximity to a track that the individual or equipment could be struck by a moving rail transit vehicle or on-track equipment and to further explain that any time an individual or equipment is within the track zone, it is fouling the track.

FTA is proposing to define “ample time” to mean the time necessary for a roadway worker to be clear of the track zone or in a place of safety 15 seconds before a rail transit vehicle moving at the maximum authorized speed on that track could arrive at the location of the roadway worker. As with the other requirements of this proposed regulation, FTA anticipates that some RTAs will exceed FTA's minimum requirements. In this case, FTA is proposing minimum ample time of 15 seconds to provide a baseline of safety that includes clearing the track zone or being in a place of safety. It is FTA's intent with this proposal to ensure that roadway workers receive adequate time to move sufficiently clear of moving vehicles or equipment determined not only by the amount of time needed to move physically off the tracks but also by the amount of time needed in that specific location to be sufficiently clear of moving vehicles.

FTA is proposing to define “place of safety” to mean a place an individual or individuals can safely occupy outside the track zone, sufficiently clear of any rail transit vehicle, including any on-track equipment, moving on any track. FTA is proposing to define “track zone” to mean an area identified by transit workers where a person or equipment could be struck by the widest equipment that could occupy the track and typically is an area within six feet of the outside rail on both sides of any track.

FTA is also proposing to define “individual rail transit vehicle detection” to mean a process by which a lone worker acquires on-track safety by visually detecting approaching rail transit vehicles and leaving the track in ample time. FTA is proposing to define “on-track safety” to mean a state of freedom from the danger of being struck by a moving rail transit vehicle or other equipment as provided by operating and safety rules that govern track occupancy by roadway workers, other transit workers, rail transit vehicles, and on-track equipment.

Finally, FTA is proposing to define “minor tasks” to mean those tasks performed without the use of tools during the execution of which a roadway worker or other transit worker can visually assess their surroundings at least every five seconds for approaching rail transit vehicles and that can be performed without violating ample time. This definition is part of FTA's proposal to identify appropriate redundant protections for individuals engaged in tasks that require varying levels of attention. FTA is proposing to define “redundant protection” to mean at least one additional protection beyond individual rail transit vehicle detection to ensure on-track safety for roadway workers and that redundant protections may be procedural, physical, or both.

FTA is also proposing definitions for “equivalent protection,” “flag person,” “foul time protection,” “job safety briefing,” “lone worker,” “maximum authorized speed,” “qualified,” “rail transit vehicle approach warning,” “roadway maintenance machine,” “roadway work group,” “roadway worker in charge,” “RWP manual,” “sight distance,” “track access guide,” “watchperson,” “working limits,” and “work zone.”

This subpart proposes minimum requirements for the RWP program, which must be adopted and implemented by each RTA. This subpart also proposes minimum requirements for the RWP manual. Similar to the relationship between the Agency Safety Plan and the SMS required by the PTASP regulation, the RWP manual documents the mechanisms by which the RTA will carry out its RWP program.

Section 671.11(a) proposes that each RTA must adopt and implement an RWP program designed to improve transit worker safety and that this program must be consistent with Federal and state requirements.

Section 671.11(b) proposes that the RWP program must include an RWP manual, described further in proposed section 671.13, and all of the RWP program elements described in proposed subpart D of this part.

Section 671.11(c) proposes that each RTA must submit its RWP manual and subsequent updates to its SSOA for review and approval, as described in proposed section 671.25.

Section 671.13(a) proposes that the RTA establish and maintain a separate, dedicated manual. The creation of this document as a separate, dedicated manual reflects FTA's expectation that this manual will be a critical safety component of an RTA's rail program. This proposal also reflects FTA's belief that separation from other manuals or documents will grant the RTA greater flexibility and responsiveness in updating and amending the RWP manual as needed.

Section 671.13(b) proposes that the RWP manual must include the terminology, abbreviations, and acronyms used by the RTA to describe its RWP program activities and requirements. This proposal reflects FTA's expectation that RTAs will continue use of, or, as necessary, create standard terminology, abbreviations, and acronyms used throughout the agency in relation to RWP.

Section 671.13(c) proposes the list of required elements that must be documented in the RWP manual. The proposed required elements of the manual include all elements of the RWP program required in subpart D of this part and a definition of RTA and transit worker responsibilities as described in subpart C of this part. FTA also proposes that the RWP manual must document the training, qualification, and supervision the RTA requires for transit workers to access the track zone, by labor category or type of work performed. Finally, FTA proposes to require the RWP manual to document the processes and procedures for all transit workers who may access the track zone in the performance of their work, including safety and oversight personnel. In addition, FTA proposes that procedures for SSOA personnel to access the roadway must conform with the SSOA's risk-based inspection program. By requiring an RWP manual to contain certain elements, FTA's intent is to ensure that all critical elements of an RWP program are documented in one manual. FTA expects this to reduce the potential for conflicting RWP program directions and provide a single authoritative source of RWP program information.

Section 671.13(d) proposes that the RWP manual must include or incorporate by reference a track access guide to support on-track safety. FTA believes that a track access guide is a critical element of on-track safety, as discussed in each subsection below. As FTA proposes that this guide must be based on a physical survey of the track geometry and condition of the track system, FTA is proposing flexibility for RTAs to choose to maintain this track access guide separately from their RWP manual to allow frequent updates as the condition of the track system changes.

FTA proposes in section 671.13(d)(1) that the track access guide includes locations with limited, close, or no clearance, including locations that have size or access limitations. Locations with size or access limitations may include but are not limited to, alcoves, recessed spaces, or other designated places or areas of refuge or safety. FTA understands that, although areas of refuge or safety should not be used in a way that limits access, such as being used to store or otherwise house tools, equipment, or materials, RTAs may use some of these areas to store or “stage” items used to repair, maintain, or inspect the roadway. FTA proposes including these areas in the physical survey to ensure roadway workers are aware of any such areas with access limitations.

Section 671.13(d)(2) proposes that the track access guide must also identify locations with increased rail vehicle or on-track equipment braking requirements.

Sections 671.13(d)(2), (3), (4), and (5) propose that the track access guide must identify areas with limited visibility, including locations with reduced rail transit operator visibility due to weather conditions; curves with limited or no visibility; locations with limited or no visibility due to obstructions or topography; and all portals with restricted views. Finally, section 671.13(d)(6) and (7) propose that the track access guide must identify locations with heavy outside noise or other environmental conditions that impact on-track safety and any other locations with access considerations.

In section 671.13(e), FTA proposes to require that the RTA must completely review and update its RWP manual at least every two years. FTA proposes that this includes updates to reflect current conditions, lessons learned in implementing the RWP program as described in the manual, and information provided by the SSOA and FTA. FTA proposes that this review and update occur within two years after the SSOA's initial approval of the RWP manual and not at least every two years thereafter.

FTA proposes a review and update cycle of not less than every two years to ensure that RWP manuals reflect current RTA conditions, policies and procedures, and lessons learned. This cycle is intended to balance the critical nature of this document and effort to review and update the same. As the track access guide must be included or incorporated by reference in the RWP manual, FTA's proposal includes the requirement that this complete review and update will include the track access guide, regardless of whether the guide is maintained as a separate document from the RWP manual. Further, in section 671.13(f), FTA requires RTAs to update both the RWP manual and the track access guide as soon as is practicable when a change in RTA conditions means either document does not reflect current conditions.

Section 671.13(g) proposes that the RTA must distribute the RWP manual to all transit workers who access the roadway and that the RTA distribute the revised manual to all transit workers who access the roadway after each revision. For RTAs that decide to maintain the track access guide separately from the RWP manual, this proposal includes the requirement that those RTAs distribute the track access guide to all transit workers who access the roadway and distribute the revised track access guide to all transit workers after each revision. FTA's intent is to ensure that this safety critical information is disseminated to those workers who access the roadway.

FTA is proposing RWP responsibilities for three distinct entities: the RTA, transit workers, and the SSOA.

Section 671.21 specifies responsibilities for the RTA, including establishing procedures and requirements for equipment and protection.

Section 671.21(a) proposes general requirements for the RTA, the intent of each is described below. Section 671.21(a)(1) proposes to require the RTA to establish procedures to provide ample time and determine appropriate sight distance based on maximum authorized track speeds. FTA's proposed definition for terms used in this part can be found in proposed section 671.5. As previously noted, it is FTA's intent with this proposal to ensure that roadway workers receive adequate time to move sufficiently clear of moving vehicles or equipment determined not only by the amount of time needed to move physically off the tracks but also by the amount of time needed in that specific location to be sufficiently clear of moving vehicles.

FTA's proposals reflect the expectation that RTAs include considerations for roadway work group size when making these determinations, to ensure ample time for all workers to be sufficiently clear of moving vehicles. For example, if the nearest place of safety is not sufficiently large to allow the entire roadway work group to be sufficiently clear of moving vehicles, the RTA must include additional time for members of the workgroup to access another location clear of moving vehicles.

Section 671.21(a)(2) proposes to prohibit the use of individual rail transit vehicle detection as the only form of protection in the track zone. This proposed prohibition reflects FTA's determination that a lone worker may not be able to reliably detect approaching rail transit vehicles or equipment in ample time and, further, that the safety risk associated with the practice of individual rail transit vehicle detection as the only form of protection in the track zone is unacceptable. This proposed prohibition also reflects public input to a September 2021 Request for Information (RFI) on transit worker safety mitigations including potential minimum safety standards for RWP programs. Respondents generally agreed that the use of individual detection of rail transit vehicles as the only method of RWP program did not adequately address all hazards for workers.

Sections 671.21(a)(3) and (4) propose that the RTA must establish procedures to provide job safety briefings to all transit workers who enter a track zone to perform work whenever a rule violation is observed. This is responsive both to FTA's determination that job safety briefings are a critical component of roadway safety and to RFI respondents' assertion that poor quality job safety briefings at different operational and organizational levels may contribute to safety risk for workers on the roadway.

Section 671.21(a)(5) proposes that the RTA must establish procedures to provide transit workers with the right to challenge and refuse in good faith any assignment based on on-track safety concerns and resolve such challenges and refusals promptly and equitably. This is often called a “good faith safety challenge” or “good faith challenge.” FTA's proposed good faith challenge process described in section 671.37 is modelled on and generally consistent with the existing FRA good faith challenge. FTA understands that many RTAs already implement a version of this procedure and that their version may encompass more than just on-track safety concerns. FTA is not proposing that these RTAs to revise their existing procedure and process, as long as they meet the minimums specified here.

Section 671.21(a)(6) proposes that the RTA must establish procedures to require the reporting of unsafe acts, unsafe conditions, and near-misses on the roadway to the Transit Worker Safety Reporting Program. This proposal creates additional safety reporting requirements for an RTA's Transit Worker Safety Reporting Program established under FTA's existing PTASP regulation (49 CFR 673.23(b)). FTA proposes that an RTA's Transit Worker Safety Reporting program must include mandatory reporting of three major categories of safety concerns on the roadway (unsafe acts, unsafe conditions, and near-misses). This proposed expansion of an RTA's safety reporting program reflects the safety critical nature of information related to RWP.

Section 671.21(a)(7) proposes to require the RTA to ensure that all transit workers who must enter a track zone to perform work understand, are qualified in, and comply with the RWP program. This proposal reflects industry practice and is intended to ensure that the RWP program is sufficiently broad in application to address all transit workers who may access a track zone.

Section 671.21(b) requires the RTA to establish requirements for on-track safety, including equipment and protection. This proposal reflects industry practice. Section 671.21(b)(1) proposes to require the RTA to establish requirements for equipment transit workers must have in order to access the roadway or track zone. In deference to the specific equipment different job functions may require, FTA specifies that the RTA must establish these requirements by labor category. FTA's intent is to ensure that RTAs establish minimum basic requirements for equipment and to encourage RTAs to consider which positions at their agency may require additional equipment and address those requirements accordingly.

Section 671.21(b)(2) proposes to require RTAs to establish requirements for credentials that transit workers must display while on the roadway or in the track zone. FTA's examples include a badge, wristband, or RWP card, but RTAs may identify alternate forms of credentialing. FTA proposes that RTAs must also establish a requirement for display of credentials such that they are visible when on the roadway or in the track zone. A physical indication of an individual's qualification to access the roadway or the track zone is reflective of industry best practices.

Section 671.21(b)(3) proposes to require the RTA to establish requirements for on-track safety, including protections for emergency response personnel who must access the roadway or the track zone. FTA is proposing this to support the safety of emergency personnel who need to access the roadway or track zone in the performance of their job duties.

Section 671.21(b)(4) proposes to require the RTA to establish protections for multiple roadway work groups within a common area in a track zone. This proposal is responsive to NTSB recommendations. FTA's proposal reflects its expectation that these protections include, at a minimum, information such as, when multiple work groups are present, who is considered the roadway worker in charge, whether one job safety briefing is sufficient or multiple job safety briefings must occur, and how track access is granted and released.

Section 671.23 proposes responsibilities for the transit worker. FTA is proposing specific responsibilities for transit workers in part to respond to common industry observations that, when regulations apply only directly to the transit agency, some transit agencies experience difficulty ensuring compliance from the workforce. FTA is also proposing specific responsibilities for transit workers as a reflection of the key role the individual transit worker plays in ensuring on-track safety. This approach is consistent with FRA's requirement for individual roadway workers in 49 CFR 214.313.

Section 671.23(a) proposes to require transit workers to follow the requirements of the RTA's RWP program as it applies to their position and labor category.

Section 671.23(b) proposes to prohibit transit workers from fouling the track until they have received appropriate permissions and redundant protections have been established as specified in the RWP manual.

Section 671.23(c) proposes to require transit workers to understand the protections that they will use for their on-track safety while performing the specific task that requires access to the roadway or track zone. Further, transit workers must acknowledge these protections in writing before they access the roadway or track zone.

Section 671.23(d) proposes to permit a transit worker to refuse to foul the track if the worker makes a good faith determination that the instructions to be applied at a job location do not comply with the RTA's RWP program or are otherwise unsafe. This proposal is the companion to proposed section 671.21(a)(5), which requires RTAs to provide transit workers the right to challenge and refuse in good faith any assignment based on on-track safety concerns.

Similarly, section 671.23(e) proposes to require transit workers to report unsafe acts and conditions and near-misses related to the RWP program as part of the RTA's Transit Worker Safety Reporting Program. This proposal is the companion to proposed section 671.21(a)(6).

Section 671.25 proposes responsibilities for the SSOA. FTA proposes to require the SSOA to fulfill these responsibilities for every RTA under their jurisdiction. Although not explicitly stated in this text, SSOAs who oversee an RTA that operates in a location that places the RTA under the jurisdiction of two or more SSOAs must work cooperatively with the other SSOA(s) having jurisdiction as required under 49 CFR 674.15.

Section 671.25(a) proposes to require the SSOA to review and approve the RWP manual and any subsequent updates for each RTA within their jurisdiction. This is reflective of the SSOA's primary safety oversight responsibility for such RTAs.

Section 671.25(a)(1) proposes to require that SSOA approve RWP program elements within 90 calendar days of receipt of the program. FTA's proposal reflects its expectation that this amount of time will allow SSOAs to complete full and detailed reviews of all program elements commensurate to the critical role the RWP program plays in ensuring transit worker safety. FTA encourages SSOAs and RTAs to collaborate early and often in the development of the initial RWP program to ensure that (1) the SSOA and RTA can meet their deadlines and (2) the RWP program developed is sufficient to ensure transit worker safety.

Section 671.25(a)(2) proposes to require the SSOA to submit all approved RWP program elements for each RTA in its jurisdiction, and any subsequent updates, to FTA within 30 calendar days of when the SSOA approves those elements. FTA is proposing this to ensure it can validate these safety critical elements.

Section 671.25(b) proposes to require the SSOA to update its Program Standard to explain the role of the SSOA in overseeing the RTA's execution of its RWP program. FTA believes that, as a key safety element of an SSOA's oversight program, the RWP program must be reflected in the SSOA's Program Standard. FTA encourages SSOAs and RTAs to work collaboratively on this update in conjunction with the recommended collaboration on the initial RWP program. FTA is proposing this approach to help SSOAs leverage RTA experience and vice versa, ultimately reducing the need for a prolonged RWP program review and revision process and strengthening both the RWP program and the SSOA's RWP program oversight.

Section 671.25(c)(1) proposes that the SSOA conduct an annual audit of the RTA's compliance with its RWP program. FTA's proposal includes the requirement that the audit include all required RWP program elements and be conducted for each RTA the SSOA oversees. FTA expects SSOAs to conduct these audits independently from any analogous RTA internal audit or compliance process. The proposal is responsive to NTSB recommendations to require SSOAs to ensure RTAs meet the safety requirements for roadway workers.

Section 671.25(c)(2) proposes to require the SSOA to issue a report with any findings and recommendations arising from the audit. FTA proposes that this report must include, at a minimum, (1) an analysis of the effectiveness of the RWP program; (2) recommendations for improvements, if necessary or appropriate; and (3) corrective action plan(s), if necessary or appropriate. FTA also proposes that the RTA must be given an opportunity to comment on any findings and recommendations. In making this proposal, FTA expects the SSOA to exercise judgment and incorporate changes to the findings or recommendations when presented with errors of fact or other reasonable requests from the RTA. FTA believes these audit reports will be a valuable tool for communicating the results of the SSOA's audit in a form that supports communication of these results to the RTA and, ultimately, resolution of any findings and incorporation of any recommendations as appropriate. Regarding the proposed requirement that SSO audit reports of the RWP program include corrective action plans if necessary or appropriate, FTA proposes that SSOAs and RTAs will follow processes established in part 674 for requiring, developing, approving, and executing corrective action plan(s) related to the RWP program audit.

FTA proposes that the analysis of the effectiveness of the RWP program included in the report must include a review of (1) all RWP-related events over the period covered by the audit; (2) all RWP-related reports made to the Transit Worker Safety Reporting Program over the period covered by the audit; (3) all documentation of instances where a transit worker(s) has challenged and refused in good faith any assignment based on on-track safety concerns and documentation on the resolution; (4) an assessment of the adequacy of the track access guide required in section 671.13(d), including whether the guide reflects current track geometry and conditions; (5) a review of training and qualification records for transit workers who must enter a track zone to perform work; (6) a representative sample of written job safety briefing confirmations as described in sections 671.33(b)(2) and (3); and (7) a review of the RWP compliance monitoring program as described in section 671.43.

FTA is proposing the following minimum RWP program element requirements: roadway worker in charge, job safety briefings, requirements for lone workers, good faith safety challenges, risk-based redundant protections, an RWP training and qualification program, and an RWP compliance monitoring program.

Section 671.31(a) proposes that the RTA must designate one roadway worker in charge for each roadway work group whose duties require fouling a track. FTA proposes that the roadway worker in charge must be qualified under the training and qualification program specified in proposed section 671.41 and is responsible for the on-track safety for all members of the roadway work group. This means that FTA expects the individual assigned as the roadway worker in charge to serve only the function of maintaining on-track safety for all members of their roadway work group and to perform no other unrelated job function. RTAs may designate a general roadway worker in charge or may designate a roadway worker in charge specifically for a particular work situation.

Section 671.31(b) proposes that the RTA must ensure the roadway worker in charge provides a job safety briefing to all roadway workers before any member of the roadway work group fouls a track. Additionally, FTA proposes that the roadway worker in charge must provide an updated job safety briefing before the on-track safety procedures change during the work period and immediately after any observed violation of on-track safety procedures before track zone work continues.

FTA understands that emergencies may occur such that roadway workers in charge may not be able to provide updated job safety briefings of changes to on-track safety. Therefore, FTA proposes section 671.31(b)(2) to specify that, in the event of an emergency, any roadway worker who cannot receive the updated job safety briefing in advance of a change to on-track safety procedures, must be removed from the roadway and must not return until on-track safety is re-established, and they have been given an updated job safety briefing.

FTA's proposals regarding job safety briefings largely reflect industry practice and propose explicitly requiring updated job safety briefings to address common situations where the on-track safety procedures change during a work period and to immediately respond to observed violations of on-track safety procedures.

Section 671.33 proposes specific requirements for job safety briefings. This proposal is responsive to NTSB safety recommendations about establishing requirements for job safety briefings and is consistent with FRA requirements.

Section 671.33(a) reiterates the proposed requirements that the RTA must ensure the roadway worker in charge provides any roadway worker who must foul a track with a job safety briefing prior to fouling the track, every time the roadway worker fouls the track.

Section 671.33(b) proposes the required minimum elements, as appropriate, of the job safety briefing that the roadway worker in charge must provide. FTA proposes the “as appropriate” language because not all of the elements may be relevant to each rail transit system. This proposal includes (1) a discussion of the nature of the work to be performed and the characteristics of the work, and includes work plans for instances where multiple roadway worker groups are working within a single area. FTA expects this to also include any relevant information for multiple roadway worker groups working in adjacent areas; (2) a discussion of the established working limits; (3) identification of any hazards involved in performing the work; (4) information on how track safety is being provided for each track identified to be fouled and identification and location of key personnel, such as a watchperson and the roadway worker in charge; (5) instructions for each on-track safety procedure to be followed, including appropriate flags and flag placement, placement; (6) roles and responsibilities for communication for all transit workers involved in the work, responsive to NTSB recommendations; (7) safety information about any adjacent track and identification of the roadway maintenance machines or on-track equipment that may foul adjacent tracks; (8) information on how to access the roadway worker in charge and instructions for alternative procedures in the event that the roadway worker in charge becomes inaccessible to members of the roadway work group; (9) personal protective equipment required for the work to be performed; (10) designated place(s) of safety; and (11) the means for determining how ample time will be provided.

FTA's intent is that the proposed discussion of the nature and characteristics of the work includes any relevant information for multiple roadway worker groups working in adjacent areas. The proposals that the job safety briefing include instructions for each on-track safety procedure to be followed and the role and responsibilities for communication for all transit workers involved in the work are responsive to NTSB recommendations.

Section 671.33(b)(10) proposes that the job safety briefing must identify designated place(s) of safety. FTA intends that the identified designated place(s) of safety will be sufficient for the number of transit workers in the roadway work group. This proposal reflects FTA's understanding that such designated places of safety must be accessible and clear of debris, tools, equipment, or any other material that hinders the ability to access and occupy the space. While not part of the proposal, FTA's expectation is that, where multiple work groups occupy overlapping or adjacent work locations, the associated roadway workers in charge coordinate to ensure their job safety briefings identify designated place(s) of safety sufficient for the combined number of transit workers in the roadway work group.

Section 671.33(c) proposes that, to complete a job safety briefing, the roadway worker in charge must confirm that each roadway worker understands the on-track safety procedures and instructions, each roadway worker acknowledges the briefing and accepts the required personal protective equipment in writing, and the roadway worker in charge verifies in writing each roadway worker's understanding and written acknowledgment of the briefing.

Section 671.33(d) proposes that, if there is any change in the scope of work or roadway work group after the initial job safety briefing, or if a violation of on-track safety is observed, a follow-up job safety briefing must be conducted. This follow-up safety briefing must be completed before any member of the work group reenters the roadway.

FTA proposes section 671.35 to address common industry and NTSB concerns and recommendations about the practice of permitting a single person to foul the track. Specifically, FTA proposes to allow RTAs to authorize lone workers to perform limited duties that require fouling a track only under the following circumstances: (1) the lone worker must be qualified as both as a roadway worker in charge and as a lone worker following the RTA's RWP training and qualification program; (2) the lone worker may perform only routine inspection or minor tasks and move from one location to another, may only access locations defined in the track access guide as appropriate for lone workers, and may not use power tools; and (3) the lone worker may not use individual rail transit vehicle detection as the only form of on-track safety. The proposal that lone workers may not use individual rail transit vehicle detection is a form of on-track safety is responsive to NTSB recommendations on lone workers. These proposed restrictions reflect the exponential increase in safety risk presented by workers fouling the track as individuals rather than as part of a roadway work group while respecting that certain job functions may be performed safely under these restrictions as a lone worker.

Section 671.35(b) proposes that each lone worker must communicate with a supervisor or other designated transit worker to receive an on-track safety briefing consistent with proposed section 671.33(b) prior to fouling the track. FTA proposes that this briefing must include a discussion of the planned work activities and the procedures they will use to establish on-track safety. FTA also proposes that the lone worker must acknowledge and document the job safety briefing in writing.

Section 671.37(a) proposes that the RTA must document its procedures that it provides to roadway workers the right to challenge and refuse in good faith any RWP assignment they believe is unsafe or would violate the RTA's RWP program. FTA proposes in section 671.37(b) that this written procedure must include methods or processes to ensure prompt and equitable resolution of any challenges and refusals made. Section 671.37(c) proposes that the written procedure must require the roadway worker to provide a description of the safety concern regarding on-track safety and that the roadway worker issuing a good faith safety challenge must remain clear of the roadway or track zone until the challenge and refusal is resolved. This process reflects common industry practice and provides a mechanism for transit workers, who often are the most familiar with the particular needs and hazards related to their specific job tasks, to appropriately address unsafe situations.

Section 671.39(a) proposes requirements for RTAs to identify and provide redundant protections for each category of work roadway workers perform on the roadway or track. This section also proposes to require the establishment of redundant protections to ensure on-track safety for multiple roadway work groups within a common area. This proposal is responsive to NTSB recommendations for FTA to require the use of redundant protections.

Section 671.39(b) proposes that the RTA must use the appropriate Safety Risk Management of its SMS established in part 673 to assess safety risk and establish mitigations in the form of redundant protections. This section proposes that the RTA must use the methods and processes established under part 673 to establish redundant protections for each category of work performed by roadway workers on the rail transit system, including workers, to the extent that lone workers are permitted under the agency's RWP program. This proposal reflects FTA's adoption of the principles of SMS as the mechanism for ensuring transit safety.

In section 671.39(b)(1), FTA proposes that this safety risk assessment must be consistent with the RTA's Agency Safety Plan and the SSOA's Program Standard. In section 671.39(b)(2), FTA is proposing that RTAs may supplement the safety risk assessment with engineering assessments, inputs from the Safety Assurance process established in part 673, the results of safety event investigations, and other safety risk management strategies and approaches.

Section 671.39(b)(3) proposes that the RTA must review and update the safety risk assessment at least every two years. This proposal is intended to ensure that the safety risk assessment reflects current conditions, lessons learned from safety events, actions the RTA has taken to address reports of unsafe acts and conditions and near-misses, and the results of the agency's monitoring of redundant protection effectiveness.

Section 671.39(b)(4) proposes that the SSOA may identify and require the RTA to implement alternate redundant protections based on the RTA's unique operating characteristics and capabilities. These redundant protections may supplant or be implemented alongside the RTA's identified redundant protections.

Section 671.39(c) proposes that the RTA must identify redundant protections for roadway workers performing different categories of work on the roadway and within track zones. This flexibility is intended to reflect the wide range of activities conducted on the roadway and to provide the opportunity for RTAs to “right size” protections based on the safety risk associated with different categories of work. This proposal would require RTAs to establish and layer redundant protections commensurate with the work being performed. FTA proposes that RTAs, at a minimum, identify redundant protections for the following categories of work, as appropriate: (1) roadway workers moving from one track zone to another; (2) roadway workers performing minor tasks; (3) roadway workers conducting visual inspections; (4) roadway workers using hand tools, machines, or equipment to test track system components or conduct non-visual inspections; (5) roadway workers using hand tools, machines, or equipment in performing maintenance, construction, or repairs; and (6) lone workers, to the extent that lone workers are permitted by the RTA's RWP program, accessing the roadway or track zone or performing visual inspections or minor tasks.

Section 671.39(d)(1) proposes that redundant protections may be procedural or physical. FTA has proposed definitions for each kind of protection as it is likely that RTAs will use a mix of procedural and physical redundant protections to ensure on-track safety. Allowing both physical and procedural redundant protections is responsive to RFI respondents, the majority of whom recommended that FTA allow both physical and redundant protections for workers on the roadway.

Section 671.39(d)(2) proposes example redundant protections. FTA is not proposing an explicit set of redundant protections; rather, FTA proposes that RTAs and SSOAs may use any of the redundant protections listed in this paragraph or identify, using the agency's Safety Risk Management process, redundant protections suitable to the specific circumstance under which they will be used.

Section 671.39(d)(3) proposes that redundant protections for lone workers must include, at a minimum, foul time or an equivalent protection approved by the SSOA.

Section 671.41(a) proposes the general requirement for an RTA to adopt an RWP training program. This proposal is responsive to NTSB recommendations. Section 671.41(a)(1) proposes that the training program must address all transit workers responsible for on-track safety by position. This proposal includes, but is not limited to, roadway workers, operation control center personnel, rail transit vehicle operators, operators of on-track equipment and roadway maintenance machines, and any other transit workers who play a role in providing on-track safety or fouling a track for the performance of work as transit workers who must be addressed by the RWP training program.

Section 671.41(a)(2) proposes that a transit worker must complete the RWP training program for the relevant position before the RTA may assign that transit worker to perform the duties of a roadway worker; to oversee or supervise access to the track zone from the operations control center; or to operate vehicles, on-track equipment, and roadway maintenance machines on the rail transit system.

Section 671.41(a)(3) proposes that the RWP training program must address RWP hazard recognition and mitigation. This proposal is responsive to an NTSB recommendation to require initial and recurring training for roadway workers in hazard recognition and mitigation. This section also specifies that the training program must address lessons learned through the results of compliance testing, near-miss reports, reports of unsafe acts or conditions, and feedback received on the training program.

Section 671.41(a)(4) proposes that the RWP training program must include both initial and refresher training by position and that refresher training must occur every two years at a minimum.

Section 671.41(a)(5) proposes that the RTA must review and update its RWP program not less than every two years. FTA proposes that this includes incorporating lessons learned in implementing the RWP program and information provided by the SSOA and FTA. FTA also proposes that the review and update process must include an opportunity for roadway worker involvement, to ensure potentially valuable safety information from workers executing tasks on the roadway can be collected and incorporated into the safety training program.

Section 671.41(b) proposes the required elements of the RWP training program. FTA is proposing these elements based on industry best practices and best practices for adult learners.

Section 671.41(b)(1) proposes that the RWP training program must include interactive training that provides the opportunity for workers to ask the RWP trainer questions and for workers and trainers to raise and discuss RWP issues. FTA proposes that the initial training must include experience in a representative field setting such that the initial training may not be classroom-only. FTA also proposes that both the initial and refresher training must include worker demonstrations and trainer assessments of the worker's ability to comply with RWP instructions.

Section 671.41(c) proposes minimum contents for the RWP training program. FTA proposes that the RWP training program include at a minimum: (1) how to interpret and use the RTA's RWP manual; (2) how to use the RTA's good faith challenge process; (3) how to make reports on unsafe acts, unsafe conditions, and near misses through the RTA's Transit Worker Safety Reporting Program and the mandatory duty to make such reports; (4) track zone recognition and an understanding of the space around the tracks within which on-track safety is required, including use of the track access guide; (5) the functions and responsibilities of all transit workers involved in on-track safety, by position; (6) proper compliance with on-track safety instructions; (7) signals and directions given by watchpersons, and the proper procedures to implement upon receiving a rail transit vehicle approach warning from a watchperson; (8) the hazards associated with working on or near rail transit tracks, including traction power, if applicable; (9) rules and procedures for redundant protections identified under section 671.37 and how they are applied to RWP; and (10) how to safely cross rail transit tracks in yards and on the mainline. These minimum proposed elements reflect industry best practice and provide a baseline for safety on the roadway.

Section 671.41(d) proposes specialized minimum training and qualifications for transit workers with additional responsibilities for on-track safety. FTA is proposing additional training for transit workers serving the function of watchpersons, flag persons, lone workers, roadway workers in charge, and any other transit workers with responsibilities for establishing, supervising, and monitoring on track safety. FTA proposes that this training must cover the content and application of the additional RWP program requirements carried out by the relevant position(s). FTA also proposes that this additional training must also address the relevant physical characteristics of the RTA's system where on-track safety may be established.

Similar to the general RWP training program, FTA proposes that this specialized training must include demonstration and assessment of the transit worker's ability to perform these additional responsibilities. FTA proposes that refresher training on these additional responsibilities must occur at least every two years. This proposal reflects the critical safety role these transit workers have in establishing, supervising, and monitoring on track safety.

Section 671.41(e) proposes that the RTA must ensure that those transit workers providing RWP training are qualified and have active RWP certification at the RTA. This proposal is intended to ensure that RTAs are providing effective RWP training. Section 671.41(e) further proposes that, at a minimum, the RTA must consider: (1) a trainer's experience and knowledge of effective training techniques in the chosen learning environment; (2) a trainer's experience with the RTA RWP program; (3) a trainer's knowledge of the RTA RWP rules, operations, and operating environment, including applicable operating rules; and (4) a trainer's knowledge of the training requirements specified in this part. FTA's intent with this proposal is to ensure that trainers providing RWP program training have the capacity to deliver effective training in the learning environment used at the agency; are experienced with the specifics of the RTA's individual RWP program, the RTA's rules, operations, and operating environment; and are knowledgeable about FTA's requirements for RWP program training.

Section 671.43 proposes that the RTA must develop and implement a program to monitor its own compliance with the requirements specified in its RWP program. This monitoring program is consistent with Safety Assurance principles and is intended to ensure consistent and effective RWP program implementation. FTA proposes that this program must include, at a minimum, inspections, observations, and audits consistent with the safety performance monitoring and measurement practices established in the RTA's Agency Safety Plan and the SSOA's Program Standard.

Section 671.43(b)(1) further proposes that the RTA must provide monthly reports to the SSOA documenting the RTA's compliance with and sufficiency of the RWP program and section 671.43(b)(2) specifies that the RTA must provide an annual briefing to the Accountable Executive and the Board of Directors, or equivalent entity, regarding the performance of the RWP program and any identified deficiencies requiring corrective action.

FTA proposes recordkeeping requirements related to the RWP program in keeping with the recordkeeping requirements established in part 673, which requires transit agencies to maintain document related to SMS implementation and the results of SMS processes and activities. As discussed above, an RWP program is a key element of Safety Risk Management and Safety Assurance in an RTA's SMS.

Section 671.51(a) proposes that the RTA must maintain the documents that set forth its RWP program, documents related to the implementation of its RWP program, and documentation of the results from the procedures, processes, assessments, training, and activities specified in this part for the RWP program.

Section 671.51(b) proposes that the RTA must maintain records of its compliance with this requirement, including transit worker RWP training and refresher training records, for a minimum of three years after the individual record is created.

Finally, Section 671.51(c) specifies that the RTA must make these documents available upon request by FTA or other Federal entity, or an SSOA having jurisdiction.

Executive Order 12866 (“Regulatory Planning and Review”), as supplemented by Executive Order 13563 (“Improving Regulation and Regulatory Review”) and Executive Order 14094 (“Modernizing Regulatory Review”), directs Federal agencies to assess the benefits and costs of regulations, to select regulatory approaches that maximize net benefits when possible, and to consider economic, environmental, and distributional effects. It also directs the Office of Management and Budget (OMB) to review significant regulatory actions, including regulations with annual economic effects of $200 million or more. OMB has determined that the proposed rule is not significant within the meaning of Executive Order 12866 and has not reviewed it under that order.

FTA has determined that unsafe practices and conditions place rail transit workers at risk of being killed or seriously injured while performing work on the roadway. According to data collected by FTA, roadway worker accidents have caused more transit worker fatalities than any other type of safety event. Since 1994, 52 rail transit workers have been killed and over 200 workers have experienced major injuries from roadway safety events, primarily from collisions with rail transit vehicles, falls, and electrocution. From January 1, 2008, to October 31, 2022, 22 workers have been killed and 120 workers seriously injured in roadway accidents. Currently, there are no Federal regulations or standards governing rail transit worker RWP, despite recommendations from NTSB and TRACS.

The proposed rule would establish RWP program standards for rail transit agencies in all states. The rule would establish minimum baseline standards and require risk-based redundant protections, defined as protections outside of the employee's individual ability to detect a train and move to a place of safety, such as shunts or derailers, for rail transit roadway workers occupying the rail roadway during hours of operations. The rule would require transit agencies to do the following:

1. Set minimum standards for RWP program elements, including an RWP manual and track access guide.

2. Meet requirements for on-track safety and supervision, job safety briefings, good faith safety challenges, and reporting unsafe acts and conditions and near-misses.

3. Develop and implement risk-based redundant protections for workers.

4. Establish RWP training, qualification, and compliance monitoring activities.

The proposed rule would apply to RTAs in the SSO program, SSOAs, and rail transit workers who access the roadway to perform work. SSOAs would oversee and enforce FTA's RWP program requirements.

FTA considered three regulatory options while developing the proposed rule. The key distinction between the three options is the use of redundant protections.

Option 1: FTA would require RTAs to perform a risk analysis to determine what types of redundant protections must be used in addition to the baseline RWP program.

Option 2: FTA would establish requirements for an RWP program but would not mandate the use of redundant protections.

Option 3: FTA would mandate the use of standard physical redundant protections to protect workers when accessing the roadway in additions to the baseline RWP program.

To assess the effects of the three regulatory options, FTA analyzed roadway worker injuries and fatalities outside California from January 1, 2008, to September 19, 2020 (12.7 years). The analysis excludes California because the state established RWP safety standards in 2016. 2 Agencies reported 97 injuries and 20 fatalities, for an annual average of 7.6 injuries and 1.6 fatalities. FTA used the annual averages as a baseline rate for fatalities and injuries in the absence of the proposed rule.

To estimate benefits and costs of the proposed rule, FTA used a ten-year analysis period from 2023-2032. All dollar amounts listed are in 2020 dollars. To estimate labor costs associated with meeting requirements, FTA used occupational wage data from the Bureau of Labor Statistics as of May 2020 for the “Urban Transit Systems” industry (North American Industry Classification System code 485100). 3 FTA used median hourly wages as a basis for the estimated labor costs, multiplied by 1.62 to account for employer benefits. 4

Transit subject-matter experts working with FTA reviewed injuries and fatalities reported in the NTD to determine if the regulatory options would have prevented them. FTA then calculated the average annual number of preventable injuries and fatalities to estimate the benefits of each regulatory option. One source of uncertainty for the analysis is that FTA does not have information on the RWP programs or protections that agencies may have adopted after the accidents. As a result, the analysis may slightly overestimate the benefits (and the associated costs) of the regulatory options.

Table 1 compares the average number of preventable injuries and fatalities for each regulatory option. Option 1 would result in an average annual reduction of 2.37 injuries and 1.18 fatalities. Option 2 results in an average annual reduction of 1.34 injuries and 0.87 fatalities. Option 3 results in an average annual reduction of 3.87 injuries and 1.42 fatalities.

To determine the monetized values for prevented fatalities and injuries, FTA used DOT's value of $11.6 million for a fatality and the KABCO Scale value of $210,000 for an injury with “Severity Unknown.”  5

Over the 10-year analysis period, the undiscounted benefits for Option 1 are $142.3 million, and the annualized benefits are $13.7 million at a 2 percent discount rate, discounted to 2023 (Table 2). For Option 2, the undiscounted benefits are $103.5 million, with annualized benefits of $10 million. For Option 3, the undiscounted benefits are $173 million, with annualized benefits of $16.6 million.

Agencies are expected to incur start-up and ongoing costs to implement RWP requirements. While some costs vary by regulatory option, many of the costs are fixed. Table 3 summarizes costs of the provisions over the 10-year analysis period. The largest fixed cost is for the Roadway Worker Protection Training program, which has estimated costs of $46 million. The largest difference in costs among the regulatory options stems from the Minimum Controls and Limitations (redundant worker protections) requirement, which has costs ranging from $0 for Option 2 to $118 million for Option 3.

RTAs would incur costs to develop and implement programs for ROW workers if they do not already have formal standalone programs. FTA estimates that 33 of the 55 RTAs outside California (60 percent) already have formal standalone programs, based on industry responses to FTA Safety Advisory 14-1, 6 and that 26 of the 33 RTAs already monitor the effectiveness of the programs.

For the remaining 22 RTAs (40 percent), FTA estimates that an RTA would need an average of 96 labor hours to develop and implement a formal standalone RWP program, plus 40 hours per year to monitor the program's effectiveness. The 40-hour estimate also applies to the 5 RTAs that already have programs but do not monitor their effectiveness. FTA assumes that the work is performed by a First-Line Supervisor of Mechanics, Installers, and Repairers with a median wage rate of $58.70 per hour. The program requirements have estimated one-time costs of $232,452 and annual recurring costs of $67,928 (Table 4).

The proposed rule would require agencies to establish initial and refresher training for roadway workers. FTA subject matter experts estimated resources needed for transit agencies to develop and implement the programs. FTA assumes that initial training and refresher trainings for roadway workers require 4.5 hours to complete per employee, training for all RTA employees requires 1 hour, and training for lone workers requires 8 hours. The resources needed for initial and refresher training are the same for each regulatory option.

FTA estimates that 90 percent of RTAs have already developed initial training programs for roadway workers and 79 percent of RTAs have already developed refresher training for roadway workers. FTA estimates that an RTA would need 60 hours to develop an initial or refresher training if it has not already. FTA assumes that no agencies have developed training for all employees or training for lone workers.

The training has estimated one-time costs of $560,000 and annual recurring costs of $4.5 million for all three regulatory options. Table 5 shows estimated costs by regulatory option for RWP training in the first year and subsequent years; Table 6 shows estimated costs by occupation.

The major cost driver for redundant worker protections is the number of full-time equivalent (FTE) employees needed to establish worker controls and access limitations. Option 1 requires RTAs to do a risk assessment to determine the types of redundant protections to use, Option 2 does not require redundant protections, and Option 3 requires all RTAs to use standard physical redundant protections.

Table 7 lists annual estimated costs for the additional FTEs needed under each regulatory option. The number of FTEs needed is derived from information in California's Public Utilities Commission General Order Number 175-A. FTA assumes a labor rate of $35.54 per hour for Maintenance and Repair Workers, General for this requirement. For Option 1, FTA assumes 80 additional FTEs (at 2080 hours per FTE) for an annual total of 166,400 hours and $5,913,856 in recurring costs. Option 3 assumes 160 additional FTEs for a total of 332,800 required hours, annually and $11,827,712 in recurring costs.

Additional cost elements for each regulatory option include:

FTA assumes that each option has the same staffing requirements and costs for the additional cost elements, unless stated otherwise. A breakdown of the costs is listed in Table 8.