I. Background

Pursuant to E.O. 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents,” OPM published a final rule (85 FR 65651, October 16, 2020) that established the procedures and requirements regarding the issuance, revision, and withdrawal of guidance documents codified at 5 CFR part 120. On January 20, 2021, President Biden issued E.O. 13992, “Revocation of Certain Executive Orders Concerning Federal Regulation” (86 FR 7049, January 25, 2021), which revoked several E.O.s, including E.O. 13891, and directed agencies to take the necessary steps to rescind regulations implemented pursuant to E.O. 13891. This rule fulfills that requirement. In accordance with E.O. 13992, OPM is removing 5 CFR part 120 from the Code of Federal Regulations.

In addition to the procedural requirements established at 5 CFR part 120, OPM created a “Guidance” web page at https://www.opm.gov/guidance pursuant to E.O. 13891. OPM has found that it is impracticable to maintain a single, comprehensive, and up-to-date collection of guidance documents. In fact, most of OPM's website at https://www.opm.gov consists of guidance for prospective, current, and former employees; retirees and annuitants; and agencies. Very little of that guidance was issued as stand-alone documents susceptible to the processes set forth in 5 CFR part 120. Therefore, after consideration and review, OPM has concluded that the existing regulations create unnecessary burden for the agency and deprive the agency of necessary flexibility to determine how best to issue public guidance.

Accordingly, OPM rescinds 5 CFR part 120 in its entirety and will remove the Guidance web page. As has been OPM's practice predating the rule, OPM will continue to make guidance available to the public on its website at https://www.opm.gov.

Under the Administrative Procedure Act, an agency may waive the normal notice and comment procedures if the action is a rule of “agency organization, procedure, or practice.” See 5 U.S.C. 553(b)(A). The Civil Service Reform Act's additional provisions for rulemaking by OPM incorporate this exception. See 5 U.S.C. 1105. Since, like the rule it is rescinding, this rule is not a substantive rule but a rule of agency procedure, notice and comment are not necessary.

This rule removes regulations pertaining to OPM's internal procedures on issuing guidance documents. As such, they were for the use of OPM personnel only and did not create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its agencies or other entities, its officers or employees, or any other person. 5 CFR 120.12. Accordingly, we expect the economic impact of removing those regulations, if any, to be minimal.

OPM has examined the impact of this rule as required by Executive Orders 12866, 13563, and 14094, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public, health, and safety effects, distributive impacts, and equity). OMB has determined this rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094.

A Regulatory Flexibility Analysis is not required for this final rule because OPM is not required to publish a general notice of proposed rulemaking for this matter. See 5 U.S.C. 601(2), 604(a).

OPM has examined this rule in accordance with Executive Order 13132, “Federalism,” and has determined that this rule will not have any negative impact on the rights, roles and responsibilities of State, local, or Tribal governments. Therefore, in accordance with Executive Order 13132, “Federalism,” OPM has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This regulation meets the applicable standards set forth in Executive Order 12988.

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

This rule will not impose any reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. 3501-3521.

This action pertains to agency organization, procedure, or practice, and does not substantially affect the rights or obligations of non-agency parties. Accordingly, it is not a “rule” as that term is used in the Congressional Review Act, 5 U.S.C. 804(3)(C), and the reporting requirement of 5 U.S.C. 801 does not apply.

The National Environmental Policy Act, as amended, (42 U.S.C. 4321 et seq. ) requires Federal agencies to provide a detailed statement regarding the environmental impacts of proposals for major Federal actions significantly affecting the quality of the human environment. The Council on Environmental Quality (CEQ) regulations implementing NEPA (40 CFR parts 1500-1508) require agencies to develop their own NEPA implementing procedures to apply the CEQ regulations to their specific programs and decision-making processes (40 CFR 1507.3). DOE promulgated its regulations entitled “National Environmental Policy Act Implementing Procedures” (10 CFR part 1021) on April 24, 1992 (57 FR 15122), revised these regulations on five subsequent occasions, 1 and now revises these regulations again with this rule.

NEPA establishes three types of environmental review for Federal proposed actions—environmental impact statement, environmental assessment, and categorical exclusion—each involving different levels of information and analysis. An environmental impact statement is a detailed analysis of reasonably foreseeable environmental effects prepared for a major Federal action significantly affecting the quality of the human environment (42 U.S.C. 4332(2)(C) and 40 CFR part 1502 and section 1508.1(j)). An environmental assessment is a concise public document prepared by a Federal agency to set forth the basis for its finding of no significant impact or its determination that an environmental impact statement is necessary (42 U.S.C. 4336(b)(2) and 40 CFR 1501.5, 1501.6, and 1508.1(h)). A categorical exclusion is a category of actions that the agency has determined, as established in its agency NEPA procedures, normally does not have a significant effect on the human environment and therefore does not require preparation of an environmental assessment or environmental impact statement (40 CFR 1501.4, 1507.3(e)(2)(ii), and 1508.1(d)). DOE's procedures for applying categorical exclusions require the Department to consider several conditions (described in section II of this document), including whether extraordinary circumstances exist such that a normally excluded action may have a significant environmental effect.

CEQ issued guidance in 2010 on establishing, applying, and revising categorical exclusions under NEPA (75 FR 75628; December 6, 2010). CEQ explained, “Categorical exclusions are not exemptions or waivers of NEPA review; they are simply one type of NEPA review. To establish a categorical exclusion, agencies determine whether a proposed activity is one that, on the basis of past experience, normally does not require further environmental review. Once established, categorical exclusions provide an efficient tool to complete the NEPA environmental review process for proposals that normally do not require more resource intensive [environmental assessments or environmental impact statements]. The use of categorical exclusions can reduce paperwork and delay, so that [environmental assessments or environmental impact statements] are targeted toward proposed actions that truly have the potential to cause significant environmental effects.”

DOE establishes and revises categorical exclusions pursuant to a rulemaking, such as this one, for defined classes of actions that the Department determines are supported by a record showing that the actions normally do not have significant environmental impacts, individually or cumulatively. To establish the record in this rulemaking, DOE evaluated environmental assessments prepared by DOE and by other Federal agencies, categorical exclusions established by DOE and by other Federal agencies, categorical exclusion determinations, technical reports, applicable requirements, industry practices, and other publicly available information. DOE summarized this information in the preamble to the notice of proposed rulemaking and in a Technical Support Document that was issued alongside the notice of proposed rulemaking (88 FR 78681; November 16, 3023). DOE provided the public with an opportunity to review and comment on DOE's proposed changes. DOE reviewed all comments received on the notice of proposed rulemaking, added information to the Technical Support Document, revised the categorical exclusions addressed in this rule (section III of this document), and prepared responses to public comments (section IV of this document).

In addition to developing a substantiation record to support the establishment or revision of a categorical exclusion, DOE also conducts a project-specific environmental review when determining whether one or more categorical exclusions applies to a proposed action. This entails evaluation of a proposed action against several requirements included in DOE's NEPA regulations. DOE must determine on a case-by-case basis, in accordance with 10 CFR 1021.410(b), that: (1) the proposed action fits within a categorical exclusion listed in appendix A or B to subpart D of part 1021, including (in the case of categorical exclusions listed in appendix B) the integral elements set forth in appendix B; (2) there are no extraordinary circumstances  2 related to the proposal that may affect the significance of the environmental impacts of the proposed action and require preparation of an environmental assessment or environmental impact statement, consistent with 40 CFR 1501.4(b)(1) and (b)(2); and (3) the proposal has not been improperly segmented  3 to meet the definition of a categorical exclusion, there are no connected or related actions with cumulatively significant impacts, and the proposed action is not precluded by 40 CFR 1506.1 or 10 CFR 1021.211 as an impermissible interim action.

As part of its determination of whether the proposed action fits within a categorical exclusion, DOE evaluates whether the proposed action satisfies conditions included within the text of the individual categorical exclusion. These conditions are discussed generally in this section and in more detail in section III of this document, which describes the changes that DOE is making in this final rule. For example, each of the categorical exclusions included in this rulemaking contains requirements that the proposed action incorporate applicable standards and follow best management practices. These standards and practices can vary by technology and location. Also, they change over time to reflect lessons learned and to address emerging technologies and practices. The Technical Support Document provides links to and summarizes information on some of the relevant standards and best management practices for the categorical exclusions that are included in this rulemaking. As another example, the changes included in this rulemaking specify conditions regarding siting proposed actions on previously disturbed or developed land. DOE defines previously disturbed or developed as “land that has been changed such that its functioning ecological processes have been and remain altered by human activity. The phrase encompasses areas that have been transformed from natural cover to non-native species or a managed state, including, but not limited to, utility and electric power transmission corridors and rights-of-way, and other areas where active utilities and currently used roads are readily available” (10 CFR 1021.410(g)(1)). As DOE explained in a 2011 notice of proposed rulemaking, “In DOE's experience, the potential for certain types of actions to have significant impacts on the human environment is generally avoided when that action takes place within a previously disturbed or developed area, i.e., land that has been changed such that the former state of the area and its functioning ecological processes have been altered” (76 FR 218; January 3, 2011). DOE's experience reviewing proposed projects across the United States since 2011 supports this same conclusion. As another example, in categorical exclusion B4.14 for certain energy storage systems, DOE allows siting within a small area contiguous to a previously disturbed or developed area. DOE also has more than a decade of experience implementing categorical exclusions that allow construction on land that is contiguous to previously disturbed or developed areas. The area of contiguous land affected would be small as discussed in 10 CFR 1021.410(g)(2). Any proposed use of contiguous land is subject to review against all the conditions relevant to the categorical exclusion, including the integral elements that require consideration of effects on threatened and endangered species and their habitat, historic properties, and other environmentally sensitive resources. The Technical Support Document includes summaries of environmental assessments for projects proposed on previously disturbed or developed land and on contiguous land.

As previously noted, DOE's NEPA regulations also include “integral elements” that apply to all categorical exclusions listed in appendix B to subpart D of part 1021 (appendix B, paragraphs (1) through (5)). Although the integral elements are not repeated for each categorical exclusion, they are part of the definition of each categorical exclusion listed in appendix B, and DOE must consider them as part of its determination whether the proposed action fits within a categorical exclusion (10 CFR 1021.410(b)(1)). Integral elements require that, to fit within a categorical exclusion, the proposed action must not threaten a violation of applicable environment, safety, and health requirements; require siting and construction or major expansion of waste storage, disposal, recovery, or treatment facilities; disturb hazardous substances, pollutants, or contaminants that preexist in the environment such that there would be uncontrolled or unpermitted releases; have the potential to cause significant impacts on environmentally sensitive resources; or involve governmentally designated noxious weeds or invasive species, unless certain conditions are met. 4 DOE defines “environmentally sensitive resource” as a resource that has typically been identified as needing protection through Executive order, statute, or regulation by Federal, state, or local government, or a federally recognized Indian tribe. Environmentally sensitive resources include historic properties, threatened and endangered species or their habitat, floodplains, and wetlands, among others (10 CFR part 1021, subpart D, appendix B).

In determining whether a proposed action fits within a categorical exclusion, DOE may review information provided by an applicant, in its application and during follow-up requests; information from systems maintained by DOE, another Federal agency, or external party ( e.g., geographic information systems); information from site visits; information from discussions or consultations with Federal, state, local, or tribal governments; and information from other sources as needed. At any point during this review, DOE can determine that additional information is needed to make a categorical exclusion determination or decide to prepare an environmental assessment or environmental impact statement.

Only if DOE determines that all the applicable requirements and conditions of the categorical exclusion (including the integral elements, as applicable) have been met will it proceed to review the proposed action for extraordinary circumstances, and potentially proceed to issue a categorical exclusion determination. DOE regularly posts its categorical exclusion determinations at www.energy.gov/nepa/doe-categorical-exclusion-cx-determinations.

In this final rule, DOE adds a categorical exclusion for certain energy storage systems and revises categorical exclusions for upgrading and rebuilding powerlines and for solar photovoltaic (PV) systems. DOE also makes conforming changes to other categorical exclusions, to a class of actions normally requiring an environmental assessment, and to a class of actions normally requiring an environmental impact statement (10 CFR part 1021, subpart D, appendices B, C, and D). DOE's process for developing the proposed changes is described in the notice of proposed rulemaking. The final changes, including differences from what was included in the notice of proposed rulemaking, are discussed in sections III.B through III.D of this final rule. These changes do not require any changes to or otherwise affect categorical exclusion determinations completed prior to the effective date of this final rule.

In addition, the notice of proposed rulemaking mistakenly included the text of paragraph (b) of categorical exclusion B5.1, Actions to conserve energy or water, and a new paragraph at B5.1(c). DOE did not intend to include that regulatory text in the notice of proposed rulemaking and has removed it from this final rule. DOE is not making changes to categorical exclusion B5.1 paragraph (b) or adding paragraph (c) at this time but may propose such changes in a future rulemaking.

Powerlines are a critical component of the electric grid that move electricity from facilities that generate electricity to our communities, businesses, and factories. Upgrading and rebuilding  5 powerlines extends their useful life. Upgrades and rebuilds also can help reduce the need for new powerlines and can allow the replacement of components with newer, more efficient and resilient technology.

One example is reconductoring. Conductors are the wires that carry electricity. Most of the existing electric grid uses conductors with a steel core for strength surrounded by aluminum for the electrical current. More recently, conductor designs (referred to as advanced conductors) with composite or carbon cores, in place of steel, have come into use. Advanced conductors provide a variety of benefits including increased capacity. By increasing the capacity of powerlines it is possible to integrate renewable energy and other sources of electricity into the grid without the need to build new powerlines. Use of advanced conductors reduces line losses ( i.e., power lost during transmission and distribution of electricity) relative to traditional conductors, thereby improving efficiency. 6 Improvements to capacity and efficiency can help to ensure reliability, reduce costs to consumers, and reduce greenhouse gas (GHG) emissions associated with electricity generation, transmission, and distribution.

Upgrading and rebuilding powerlines also can avoid or reduce adverse environmental impacts, such as by relocating small  7 segments of the existing line to avoid a sensitive environmental resource. Upgrading and rebuilding powerlines also can enhance resilience. For example, an upgrade or rebuild project might convert segments of existing overhead powerlines to underground lines or replace old powerline poles to ensure continued safe operations.

Categorical exclusion B4.13 currently applies to upgrading or rebuilding “approximately 20 miles in length or less” of existing powerlines and allows for minor relocations of small segments of powerlines. With this final rule, DOE removes the mileage limitation, adds options for relocating within an existing right-of-way or within otherwise previously disturbed or developed lands, specifies conditions for widening a right-of-way under this categorical exclusion to comply with applicable electrical standards, and adds new conditions.

The potential significance of environmental impacts from upgrading or rebuilding powerlines is more related to local environmental conditions than to the length of the powerlines. For example, the presence of environmentally sensitive resources along the existing right-of-way is more pertinent than the length of the existing powerlines to be upgraded or rebuilt. DOE reviewed environmental assessments for powerline upgrades and rebuilds of various lengths. ( See Technical Support Document, p. 2.) The length of the projects is based on the endpoints, which are commonly substations ( e.g., rebuild the powerline from substation A to substation B). Environmental assessments and other information summarized in the Technical Support Document, as well as DOE's experience with powerline upgrades and rebuilds, do not indicate a particular mileage limit that would mark a threshold for significant impacts. DOE's experience comes from operating transmission systems for more than 50 years that currently include more than 25,000 miles of powerlines.

In this final rule, DOE clarifies options for relocating powerlines within the scope of categorical exclusion B4.13. Relocating segments of a powerline can improve resilience, avoid sensitive resources, or serve other purposes. ( See Technical Support Document, p. 13, DOE/EA-1967 for an example of relocation to avoid a rock fall and landslide area, thereby moving the powerline to a more stable area.) The prior version of B4.13 encompassed “minor relocations of small segments of the powerlines.” This final rule makes the change included in the notice of proposed rulemaking to delete “minor” because it is unnecessary to qualify “relocations of small segments” with “minor.” Also, DOE is revising B4.13 to specify that small segments of powerlines may be relocated “within an existing powerline right of way or within otherwise previously disturbed or developed lands.” The prior version of B4.13 did not include this limitation. In addition, DOE is making three clarifying changes in response to public comment on the notice of proposed rulemaking (discussed in section IV.B of this document). In this final rule, DOE adds “powerline” before “right-of-way” such that B4.13 now specifies that the categorical exclusion applies to projects “within an existing powerline right-of way.” The final rule also specifies that upgrading or rebuilding powerlines might include widening of an existing right-of-way to comply with electrical standards ( e.g., increasing voltage may require a wider clearance to either side of the powerline to avoid fires or other accidents).

Commenters sought clarification regarding whether and how B4.13 includes widening of a right-of-way. A right-of-way may need to be widened to meet electrical standards due to a variety of factors associated with powerline upgrades and rebuilds such as changes in voltage, type of conductor (wires carrying the electrical current), and span length (distance between poles or towers). This widening keeps the area around a powerline clear of vegetation and other potential hazards to reduce risk of fires, power outages, and other accidents. ( See Technical Support Document, p. 36.) Widening a right-of-way was part of the scope of the version of categorical exclusion B4.13 in effect prior to this final rule. ( See, Technical Support Document, p. 18, Categorical Exclusion Determination for the Palisades-Swan Valley Transmission Line Rebuild for a project requiring widening in some areas of the rebuild project.) In this final rule, DOE has added to categorical exclusion B4.13 that, “Upgrading or rebuilding existing electric powerlines also may involve widening an existing powerline right-of-way to meet current electrical standards if the widening remains within previously disturbed or developed lands and only extends into a small area beyond such lands as needed to comply with applicable electrical standards.”

Finally, DOE clarifies that the “categorical exclusion does not apply to underwater powerlines.” These changes in the final rule better state DOE's intention for the changes included in the notice of proposed rulemaking.

The revisions to categorical exclusion B4.13 included in this final rule provide additional flexibility for powerline upgrade and rebuild projects consistent with the requirements for a categorical exclusion. While DOE has removed the mileage limit, DOE will continue to apply the conditions, including integral elements, described in section II of this document when deciding whether a particular proposed action qualifies for categorical exclusion B4.13. This review includes consideration of extraordinary circumstances and integral elements, such as the potential for significant impacts on environmentally sensitive resources, amongst other considerations. At any point during the review of a proposed action, DOE may determine that it must prepare an environmental assessment or environmental impact statement, rather than apply categorical exclusion B4.13 to the proposed action. In other words, inclusion of the revised categorical exclusion B4.13 in DOE's regulations does not bring all powerline upgrade or rebuild projects within the scope of the revised categorical exclusion.

DOE's review of environmental assessments and other information in preparing this rulemaking revealed that proposals to upgrade or rebuild powerlines normally incorporate practices that avoid or reduce potential land disturbance, erosion, disturbance of environmentally sensitive resources, and take other measures to protect the environment in the project area. To account for this, DOE has added a condition requiring that, to qualify for the categorical exclusion, the proposed project be in accordance with applicable requirements and incorporate appropriate design and construction standards, control technologies, and best management practices. This condition, together with the integral elements and consideration of extraordinary circumstances (described in section II of this document), will help to ensure that a proposed upgrade or rebuild of an existing powerline would be sited and designed appropriately.

DOE also is making a conforming change to its class of action, C4, that normally requires an environmental assessment for upgrading and rebuilding existing powerlines more than approximately 20 miles in length. That conforming change removes the reference to powerline length and, instead, clarifies that an environmental assessment normally would be prepared when the proposed action does not qualify for categorical exclusion B4.13.

For purposes of this rulemaking, an energy storage system is a device or group of devices assembled together, capable of storing energy in order to supply electrical energy at a later time. Energy storage can be used to integrate renewable energy (such as wind and solar energy) into the electric grid, help generation facilities operate at optimal levels to meet customer demand, and reduce the use of less efficient generating units that would otherwise run only at peak times. An energy storage system also provides protection from power interruptions and serves as reserve power in case of power outages or fluctuations. The most familiar type of energy storage system is a group of electrochemical batteries and associated equipment referred to as a battery energy storage system. Another form uses a flywheel, which converts excess electricity from the grid to kinetic energy in a fast-spinning rotor. As needed, the stored energy is converted back to electricity and returned to the grid or put to other use.

DOE and others have been developing large-scale energy storage systems for decades. Deployment of these systems has increased over the past decade. Today, energy storage systems support the operation of electric transmission facilities, microgrids, energy generation facilities, and commercial and industrial facilities. 8

In this rule, DOE establishes a new categorical exclusion, B4.14, for the construction, operation, upgrade, or decommissioning of an electrochemical-battery or flywheel energy storage system within a previously disturbed or developed area or within a small area contiguous to a previously disturbed or developed area. Section II of this document includes discussion of DOE's definition of previously disturbed or developed area and DOE's experience referring to contiguous areas in its categorical exclusions. The total acreage used for an energy storage system will be defined by the needs of the proposed project. Based on past experience, DOE anticipates that energy storage systems typically require 15 acres or less and would be sited close to energy, transmission, or industrial facilities. ( See Technical Support Document, p. 41.) Consistent with this expectation and because contiguous land might be undisturbed and undeveloped, DOE proposed that siting outside a previously disturbed or developed area be limited to a “small” contiguous area. DOE would determine whether a contiguous area is small, based on the criteria discussed in 10 CFR 1021.410(g)(2), “in the context of the particular proposal, including its proposed location. In assessing whether a proposed action is small, in addition to the actual magnitude of the proposal, DOE considers factors such as industry norms, the relationship of the proposed action to similar types of development in the vicinity of the proposed action, and expected outputs of emissions or waste. When considering the physical size of a proposed facility, for example, DOE would review the surrounding land uses, the scale of the proposed facility relative to existing development, and the capacity of existing roads and other infrastructure to support the proposed action.” In addition, the notice of proposed rulemaking included conditions that the proposed project be in accordance with applicable requirements (such as land use  9 and zoning requirements) and incorporate appropriate design and construction standards, control technologies, and best management practices. For this final rule, DOE includes those conditions and, in response to public comment, adds a condition that the proposed project also incorporate appropriate “safety standards (including the current National Fire Protection Association 855, Standard for the Installation of Stationary Energy Storage Systems).” ( See section IV.C of this document and Technical Support Document, p. 56.) In addition, DOE would ensure that the proposed project satisfies the integral elements and review the proposal for extraordinary circumstances, as described in section II of this document. This review ensures that DOE considers the potential environmental effects of a proposed energy storage system prior to determining whether categorical exclusion B4.14 applies. In proposing this categorical exclusion, DOE evaluated environmental assessments and findings of no significant impact prepared by DOE and other Federal agencies, categorical exclusion determinations made by DOE, and other information. In response to public comment on the notice of proposed rulemaking, DOE also reviewed additional information on accidents, fires, and other safety considerations, including guidance to improve safety and minimize the risk of fires. ( See Technical Support Document, p. 41.)

For consistency with the new categorical exclusion B4.14, DOE made changes to three related categorical exclusions. Based on its past experience with energy storage systems, in 2011, DOE added “power storage (such as flywheels and batteries, generally less than 10 MW)” as an example of conservation actions in categorical exclusion B5.1, Actions to conserve energy or water. DOE also added “load shaping projects (such as the installation and use of flywheels and battery arrays)” to the list of example actions in categorical exclusion B4.6, Additions and modifications to transmission facilities. In this final rule, DOE has deleted “power storage (such as flywheels and batteries, generally less than 10 MW)” from the examples in B5.1. DOE does not include the 10 MW (megawatt) limit in new categorical exclusion B4.14 because capacity, whether denominated in megawatts as a measure of instantaneous output or megawatt-hours as a measure of the total amount of energy capable of being stored, is not a reliable indicator of potential environmental impacts. Including a capacity limit within the categorical exclusion could mean that technology improvements resulting in more power storage within the same physical footprint may not qualify for the categorical exclusion even though the potential environmental impacts have not changed. DOE also deleted the example of flywheels and battery arrays from B4.6 but retained the reference to “load shaping projects” and added “reducing energy use during periods of peak demand” as a new example. DOE added a note to B4.6 that energy storage systems are addressed in B4.14. DOE also added this note to categorical exclusion B4.4, Power marketing services and activities, which was established in 1992 and lists storage and load shaping as examples. These conforming changes will avoid confusion over which categorical exclusion and associated conditions apply to energy storage systems.

Solar PV technology converts sunlight into electrical energy. Individual PV cells, which may produce only 1 or 2 watts of electricity, are connected together to form modules (otherwise known as panels). The modules are combined with other components ( e.g., to convert electricity from direct current (DC) to alternating current (AC)) to create a solar PV system. These systems can be located in a wide variety of locations and sized for an individual home or business up to utility-scale, generating hundreds of megawatts. 10

Solar PV systems do not release GHGs while operating, though, as with any industrial activity, manufacturing and installing solar PV systems can release GHGs. The U.S. Energy Information Administration reports that, “Studies conducted by a number of organizations and researchers have concluded that PV systems can produce the equivalent amount of energy that was used to manufacture the systems within 1 to 4 years. Most PV systems have operating lives of up to 30 years or more.”  11 Thus, on a life-cycle basis, solar PV systems provide many years of electricity generation without GHG emissions.

DOE established categorical exclusion B5.16, Solar photovoltaic systems, in 2011 to include the installation, modification, operation, and removal of solar PV systems located on a building or other structure or, if located on land, within a previously disturbed or developed area generally comprising less than 10 acres. In this final rule, DOE changes “removal” of a solar PV system to “decommissioning.” Decommissioning encompasses recycling and other types of actions that occur when a facility is taken out of service. DOE also removes the acreage limitation for proposed projects. Based on DOE's experience, acreage is not a reliable indicator of potential environmental impacts. As discussed in section II of this document, the potential significance of environmental impacts is more related to local environmental conditions than to acreage. DOE's review of various environmental assessments indicate that an acreage limit would not serve as an appropriate indicator of significant impacts. This conclusion is illustrated, for example, by environmental assessments for solar PV projects larger than 1,000 acres on previously disturbed or developed land that would not result in significant environmental impacts. ( See Technical Support Document, p. 74.)

The nature and significance of environmental impacts is determined by a proposed project's proximity to and potential effects on environmentally sensitive resources and other conditions that are accounted for in categorical exclusion B5.16, including in the integral elements and in extraordinary circumstances, as described in section II of this document. DOE will consider the integral elements and the presence of any extraordinary circumstances when reviewing a proposed solar PV project's eligibility for this categorical exclusion. This review would ensure that DOE considers potential environmental impacts of a proposed solar PV system prior to determining whether categorical exclusion B5.16 applies. For example, in preparing the Technical Support Document, DOE observed that some large solar PV systems have been proposed for agricultural land. While integrating solar PV systems with farms may provide a variety of economic and environmental benefits to farmers, 12 doing so also raises questions about land use and the protection of important farmlands. One of the integral elements requires that the project must not be one that would have the potential to cause significant impacts on environmentally sensitive resources, including on prime or unique farmland, or other farmland of statewide or local importance (10 CFR part 1021, appendix B, paragraph (4)(v)). The requirement to consider extraordinary circumstances also will help ensure that DOE considers potential impacts on farmland and surrounding communities when deciding whether to apply the categorical exclusion.

Public comments raised concern about impacts of solar PV systems on wildlife and habitat. ( See section IV.D.2 of this document.) In response to those concerns and to clarify DOE's intent, DOE has added a condition that the proposed project be “consistent with applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity.” Further, one of the integral elements applicable to categorical exclusion B5.16 requires that the project must not be one that would have the potential to cause significant impacts on environmentally sensitive resources, including threatened or endangered species or their habitat (10 CFR part 1021, appendix B, paragraph (4)(ii)). The conditions added to B5.16 better ensure that solar PV systems are installed and operated in a manner that is protective of all species and their habitat.

DOE also has made conforming changes in appendix C, Classes of Actions that Normally Require EAs but not Necessarily EISs, and in appendix D, Classes of Actions that Normally Require EISs. These appendices each include a class of actions, C7 and D7, that associates the level of NEPA review for interconnection requests and power acquisition with the power output of the electric generation resource. In 2011, DOE proposed for C7 that an environmental assessment normally would be required for the interconnection of, or acquisition of power from, new generation resources that are equal to or less than 50 average megawatts “and that would not be eligible for categorical exclusion under 10 CFR part 1021” (76 FR 233; January 3, 2011). DOE did not receive public comment on the proposed addition regarding categorical exclusion eligibility. In the 2011 final rule, DOE did not include the condition regarding eligibility for a categorical exclusion. DOE explained this decision by stating “to improve clarity, DOE is removing the previously proposed condition that the new generation resource `would not be eligible for categorical exclusion under this part.' DOE normally would not prepare an environmental assessment when a categorical exclusion would apply. Therefore, the condition is unnecessary and potentially confusing” (76 FR 63784; October 13, 2011). DOE's practice continues to be that it “normally would not prepare an environmental assessment when a categorical exclusion would apply.” However, in light of the change to B5.16—which removes the acreage restriction for solar PV systems, thereby allowing the categorical exclusion to apply to systems generating up to hundreds of megawatts—DOE believes that including a condition in C7 is appropriate and helpful. It will clarify DOE's practice that an environmental assessment is normally required “unless the generation resource is eligible for a categorical exclusion.” DOE did not propose a similar condition in 2011 for D7, which applies to new generation resources greater than 50 average megawatts. DOE has added the same condition to both C7 and D7 for the reasons previously described. For D7, DOE also specifies that an environmental impact statement is not required when an environmental assessment was prepared that resulted in a finding of no significant impact. This is standard practice, and DOE added this text only to avoid any potential confusion.

DOE published a Request for Information (RFI) in the Federal Register on November 15, 2022 (87 FR 68385), to help DOE identify activities associated with clean energy projects and clean energy infrastructure that should be considered for new or revised categorical exclusions. Thirty-three individuals or entities responded to the Request for Information. 13 DOE responded to those comments relevant to this rulemaking in the notice of proposed rulemaking and does not repeat those responses here.

The notice of proposed rulemaking (88 FR 78681; November 16, 3023) announced a public review period ending on January 2, 2024. In response to public requests, DOE subsequently extended the public review period through January 16, 2024 (88 FR 88854; December 26, 2023). DOE received approximately 115 comment submittals from individuals, industry trade groups, environmental and community organizations, state, Tribal, and local governments, and other entities. DOE has considered the comments on the proposed rulemaking received during the public comment period as well as all late comments. DOE has incorporated some revisions suggested in these comments into the final rule. The following discussion describes the comments received, provides DOE's response to the comments, and describes changes to the rule resulting from public comments. Section IV.A of this document includes comment summaries and responses that address DOE's proposed revisions collectively or address related topics such as NEPA implementation. Sections IV.B, IV.C, and IV.D include comment summaries and DOE's responses regarding powerline upgrades and rebuilds, energy storage systems, and solar photovoltaic systems, respectively.

DOE received comments that expressed support for the rulemaking, as well as comments in opposition to the proposed rulemaking. DOE appreciates the commenters adding their perspectives to the rulemaking process. DOE responds to those comments that included detailed feedback on the proposed rulemaking.

Some commenters requested that DOE expand this rulemaking to add additional categorical exclusions for clean energy technologies, electricity transmission, and related programs. These comments include suggestions to add categorical exclusions for carbon capture, utilization, and storage, including the installation of direct air capture technologies; geothermal exploration, permitting, and development; hydrogen pipelines, production, and combustion; adding capacity and making improvements to existing water power facilities; energy generation projects that qualify for investment or production tax credits under the Inflation Reduction Act; small-scale, renewable natural gas projects; small-scale nuclear power reactors (generally less than 350 megawatts); wind power; and other clean energy projects. Comments also suggested that DOE add categorical exclusions for interstate and interregional transmission lines; high-voltage direct current transmission lines; and microgrids. In addition, comments suggested that DOE add new categorical exclusions for vegetation management and expand the list of examples included in DOE's existing categorical exclusion for actions to conserve energy or water (B5.1).

DOE considered each of these comments and decided not to modify this rule to include these suggested new or revised categorical exclusions. DOE currently lacks sufficient technical support to determine whether the suggested activities normally do not result in significant environmental impact. Also, DOE noted that several of the suggestions overlap with DOE's existing categorical exclusions. For example, DOE has applied its existing categorical exclusions to microgrid projects and vegetation management, and DOE's existing categorical exclusions for powerline projects apply to high-voltage direct current lines and alternating current lines. DOE would need to evaluate whether changes to the scope of its existing categorical exclusions would be appropriate. DOE will retain the comments for further consideration in any future rulemaking regarding DOE's NEPA procedures.

Commenters noted that implementation of DOE's proposed changes may be affected by the pending Phase 2 revisions of the CEQ NEPA Implementing Regulations. 14 Some commenters recommended coordination with CEQ on this rulemaking to ensure consistency, while other commenters requested that this rulemaking not proceed until CEQ has promulgated its final rule. DOE consulted with CEQ while preparing this rule consistent with consultation requirements in the CEQ regulations (40 CFR 1507.3(b). This consultation included consideration of whether DOE's changes are consistent with the CEQ regulations.

Other commenters stated that clear environmental regulations and guidelines for the different technologies are still needed and therefore this rulemaking is premature. DOE recognizes that environmental requirements and practices will continue to change as technology advances and awareness increases about potential impacts and ways to avoid or lessen those impacts. DOE's categorical exclusions, including the ones addressed in this rulemaking, require projects to incorporate the requirements and best practices applicable at the time that DOE is considering whether to apply the categorical exclusion to a particular proposed action. In addition, DOE regularly reviews its categorical exclusions to determine whether they continue to be appropriate in light of new information and requirements.

Commenters recommended that DOE evaluate whether the proposed rulemaking could affect coastal uses or resources in states or territories with a Coastal Zone Management Program pursuant to the Coastal Zone Management Act. Commenters recommended that DOE adopt internal procedures to ensure compliance with the Coastal Zone Management Act regardless of the level of NEPA review. DOE recognizes that compliance with the Coastal Zone Management Act is an independent responsibility regardless of the level of NEPA review. DOE will continue its practice of coordinating with the relevant state agency to ensure compliance with the Coastal Zone Management Act, when applicable.

Some commenters expressed concern that the public comment periods on the Request for Information and notice of proposed rulemaking overlapped with the winter holiday season. DOE appreciates that there are competing schedule demands and that these may fall hardest on small organizations and community members. DOE provided an initial 45-day comment period for the Request for Information and reopened that public comment period for an additional 30 days, and DOE extended the 45-day comment period for the notice of proposed rulemaking by 14 days to provide interested individuals and organizations additional time to provide comments. DOE received comments from a broad range of organizations and individuals who raised many substantive issues.

Commenters emphasized the importance of public involvement in decision-making, expressing that under NEPA, affected communities must be able to voice their concerns about projects, especially on public lands. Some commenters stated that creating a categorical exclusion removes safeguards for communities and investigation of adverse impacts, including cumulative impacts. Other commenters stated that the applicability criteria of the proposed rule would require substantive review by DOE to identify a project's eligibility for a categorical exclusion followed by DOE's consideration of the individual conditions in the categorical exclusion, which would deprive DOE of anticipated efficiencies at the expense of public participation. Commenters requested that DOE provide public comment opportunities for categorical exclusion determinations. While DOE may choose to provide opportunities for public comment at any time, DOE's normal practice is not to request public comment before making a categorical exclusion determination. This is consistent with CEQ and DOE NEPA regulations.

Commenters asked DOE to post categorical exclusion determinations (including sufficient information to demonstrate proper use) that rely on the proposed categorical exclusions on the DOE website in a timely fashion for public review. DOE's practice is to post categorical exclusion determinations for actions listed in appendix B of its NEPA regulations, which includes all of the categorical exclusions included in this rulemaking, on the DOE website generally within two weeks of the determination (10 CFR 1021.410(e) and www.energy.gov/nepa/doe-categorical-exclusion-cx-determinations ). A categorical exclusion determination includes a description of the proposed action, the categorical exclusion(s) applied, and confirmation that conditions associated with the categorical exclusion(s) were satisfied.

A federally recognized Indian Tribe expressed concern about the potential impacts of DOE's proposed rule on its treaty reserved rights and cultural resources and practices. As explained in section II of this document, DOE conducts an environmental review at both the stage of establishing or revising a categorical exclusion and at the stage of determining whether one or more categorical exclusions applies to a proposed action. This final rule establishes and revises categorical exclusions in DOE's NEPA procedures; this final rule will not result in environmental impacts and is not a proposal to apply any categorical exclusion to particular proposed actions. When determining whether one or more categorical exclusions applies to a proposed action, DOE conducts a project-specific environmental review. This review includes consideration of extraordinary circumstances and integral elements, including the potential for significant impacts on environmentally sensitive resources, amongst other considerations. “An environmentally sensitive resource is typically a resource that has been identified as needing protection through Executive order, statute, or regulation by Federal, state, or local government, or a federally recognized Indian Tribe” (10 CFR part 1021, appendix B, paragraph (4)). Environmentally sensitive resources include “(i) Property (such as sites, buildings, structures, and objects) of historic, archeological, or architectural significance designated by a Federal, state, or local government, Federally recognized Indian tribe, or Native Hawaiian organization, or property determined to be eligible for listing on the National Register of Historic Places”, among others (10 CFR part 1021, subpart D, appendix B).

Commenters asked DOE to clarify that categorical exclusion B4.13 would apply to projects that receive Federal loans or grants and not only to transmission lines that impact Federal land. Other commenters requested clarification that categorical exclusion B4.13 covers all types of powerlines, including powerlines that feed into a Federal electric transmission system. DOE clarifies here that categorical exclusion B4.13 could apply to proposals for DOE financial assistance, including loans and grants, as well as any other DOE action subject to NEPA, so long as the proposed action satisfies all conditions of the categorical exclusion.

Commenters asked DOE to clarify whether the scope of categorical exclusion B4.13 includes improvements to existing maintenance and repair access roads that are not used for powerline upgrades or rebuilds. Commenters noted that existing access roads may not be suitable for the types of heavy construction equipment associated with rebuilding powerlines and that use of large construction equipment for rebuild projects may require improving existing access roads, such as widening roads, clearing surrounding trees, and adding gravel for stability to allow work under varying weather conditions. DOE responds that categorical exclusion B4.13 could include improvements to, and reconstruction of, access roads, laydown areas, and related work that are part of the proposed action and would take place within the existing right-of-way or relocation area. DOE also could consider whether categorical exclusion B1.13, Pathways, short access roads, and rail lines, would be appropriate for certain needed access roads. Consistent with DOE's NEPA regulations, the full scope of the proposed action must satisfy all conditions of DOE's categorical exclusions, including the integral elements (10 CFR part 1021, subpart D, appendix B) and consideration of extraordinary circumstances, segmentation, and cumulative impacts (10 CFR 1021.410(b)). DOE also notes that where access roads are not suitable for heavy equipment, replacement poles and other equipment sometimes are delivered to the project site by helicopter.

Commenters requested that categorical exclusion B4.13 include use of existing transportation rights-of-way, including those owned by railroads and highways managed on the public's behalf. DOE recognizes that highway and railroad rights-of-way may be appropriate locations for new powerlines. However, different criteria were used to establish highway and railroad rights-of-way than would be used for new powerlines, and DOE does not have sufficient information at this time to support a categorical exclusion for such projects. DOE will retain the comment for potential consideration in a future NEPA rulemaking. Commenters also requested that DOE designate existing transportation rights-of-way as National Interest Electric Transmission Corridors (NIETCs) pursuant to Section 216 of the Federal Power Act. DOE appreciates this suggestion, but designating NIETCs is beyond the scope of this rulemaking.

Commenters asked that DOE ensure that use of categorical exclusion B4.13 be as transparent and clear as possible. Commenters requested that DOE clarify definitions of the applicable conditions, parameter language, and extraordinary circumstances that would determine applicability of the categorical exclusion. DOE responds that to provide transparency in the use of categorical exclusions, DOE began posting categorical exclusion determinations online in 2009. DOE will continue to regularly post categorical exclusion determinations for B4.13 and other categorical exclusions listed in appendix B of DOE's NEPA regulations (10 CFR part 1021, subpart D) at www.energy.gov/nepa/doe-categorical-exclusion-cx-determinations. DOE has added discussion of the conditions that apply to categorical exclusions in sections II, III, and IV of this final rule.

The proposed changes to categorical exclusion B4.13 included relocation of small segments of powerlines within an existing right-of-way or within otherwise previously disturbed or developed lands. Commenters requested that DOE narrow the categorical exclusion, such as by including only actions within the powerline's existing right-of-way, within a minor widening of the existing right-of-way within otherwise previously disturbed or developed lands, or within another existing utility or electric power transmission corridor or right-of-way where active utilities and currently used roads are readily available. DOE appreciates these suggestions but finds that they would limit flexibility to relocate small sections of powerlines to previously disturbed or developed lands that are outside an existing powerline right-of-way and to widen a right-of-way as needed to meet electrical standards, including when the widening extends to a small area beyond previously disturbed or developed lands. Such relocation consistent with the conditions placed on the use of categorical exclusion B4.13 normally would not pose a potential for significant environmental impacts. ( See Technical Support Document, p. 2.) Moreover, such relocation may allow improvements to environmental protection by moving small sections of a powerline around a sensitive resource.

Commenters requested clarification on whether the limitation that small segments of powerlines may be relocated within an existing right-of-way or within previously disturbed land encompasses rights-of-way other than that of the powerline being relocated. DOE intends this language to encompass other powerline rights-of-way so long as safety, reliability and other conditions are met. To help clarify this point, DOE added “powerline” so that the wording in this final rule is “within an existing powerline right-of-way.” Commenters asked that DOE clarify what is considered to be a right-of-way and pointed, as an example, to the Department of Transportation's definition of existing right-of-way for highway projects (23 CFR 771.117(c)(22)). The meaning of right-of-way varies by context. The right-of-way for a powerline may be defined through an agreement, such as an easement, with a private landowner, permit from a land management agency, or other mechanism conveying rights to construct and maintain the powerline and associated facilities. For purposes of this rulemaking, DOE is referring to the cleared right-of-way, i.e., the right-of-way where vegetation management and other practices are necessary for safety reasons ( e.g., to avoid the potential to cause fire). The width of that cleared right-of-way is based on design criteria ( e.g., line voltage). ( See Technical Support Document, p. 36.)

Commenters explained that when upgrading powerlines to a higher voltage, current electrical standards may require wider rights-of-way than were established when powerlines were built. Commenters recommended that categorical exclusion B4.13 include expansion of an existing right-of-way to meet current electrical standards and that DOE revise the categorical exclusion to state that small segments of powerlines may be relocated “within or adjacent to” an existing right-of-way. Commenters also expressed concern about the risk of fire being started by overhead powerlines. DOE includes in this final rule that categorical exclusion B4.13 encompasses widening of the cleared right-of-way to meet current electrical standards. As discussed in section III of this document, the categorical exclusion may only apply when such widening “remains within previously disturbed or developed lands and only extends into a small area beyond such lands as needed to comply with applicable electrical standards.” There are existing rights-of-way that are not bounded entirely by previously disturbed or developed lands. In such locations, it may be necessary to extend part of the right-of-way into undisturbed land in order to meet the applicable electrical code for the entire length of the powerline upgrade or rebuild project. It is common for the widening to be only about 40 feet or less ( i.e., 20 feet or less on each side of the right-of-way). Before deciding whether to apply categorical exclusion B4.13 for such widening, DOE would review the proposed action against all the conditions applicable to categorical exclusion B4.13, including integral elements and the consideration of extraordinary circumstances.

Some commenters stated that powerline projects may fragment or reduce habitat or otherwise adversely affect wildlife by removing trees, widening the right-of-way, creating greater barriers to animal movement, and in other ways. Commenters stated that some of the environmental assessments included in DOE's Technical Support Document involved projects that would remove hundreds of trees. These commenters suggested that DOE had overlooked the potential for significant environmental impacts from these effects on habitat and that an environmental assessment may be better able to account for these impacts. They referred to research linking habitat loss with declines in wildlife populations and to the deaths of birds by collision with powerlines and from electrocution.

Commenters recommended that relocating powerlines avoid bird travel routes and consider alternative designs and structures, visual cues, and other methods to avoid or reduce impacts to birds and other species and their habitats. DOE responds that these are common considerations in planning upgrades and rebuilds of existing powerlines, including relocating or widening rights-of way. DOE's integral elements require that the project must not be one that would have the potential to cause significant impacts on environmentally sensitive resources, including threatened or endangered species or their habitat or species protected under the Migratory Bird Treaty Act (10 CFR part 1021, appendix B, paragraph (4)(ii)). Categorical exclusion B4.13 also requires projects to incorporate appropriate design and construction standards, control technologies, and best management practices, which may include measures to reduce effects on birds. In addition, applicants must comply with all applicable state and Federal laws, including applicable requirements imposed by state wildlife agencies or Federal land management agencies, including to identify potential high-risk bird strike areas, identify shifts in bird flight patterns, and develop marking plans and design features to reduce associated risks. These requirements ensure that projects covered by categorical exclusion B4.13 will not have significant effects on birds.

Other commenters stated that managed lands in forested areas, including transmission line corridors, can provide early successional habitat for native bees and other pollinators, substantially improving species richness and abundance of bees relative to adjacent forest areas. Commenters also stated that transmission corridors can benefit some species of birds, deer, and plants. The ability of these corridors to provide areas for food, nesting, and shelter are enhanced with habitat management practices (such as leaving habitat trees, planting low-growing native vegetation, and removing invasive plant species), which typically accompany transmission development.

DOE recognizes that a combination of adverse and beneficial impacts can accompany upgrades and rebuilds of existing electric powerlines. As described in section II of this document, the terms of categorical exclusion B4.13, including the integral elements, ensure that projects would not have a significant effect on species and habitat. If a project does not satisfy these elements, or extraordinary circumstances exist that make significant effects likely, DOE must prepare an environmental assessment or environmental impact statement, rather than apply a categorical exclusion.

Commenters stated that transmission lines leak sulfur hexafluoride, a greenhouse gas 26,000 more times potent than carbon dioxide. For this final rule, DOE supplemented the Technical Support Document with information regarding sulfur hexafluoride, a potent greenhouse gas that has a high global warming potential. Sulfur hexafluoride is used in gas-insulated switchgears, breakers, and lines in the transmission sector. Transmission operators follow manufacturer guidelines, state requirements, and federal handling and reporting requirements, including the Greenhouse Gas Reporting Program under the Clean Air Act, as applicable, for use and handling of sulfur hexafluoride. Improved engineering and equipment design, advances in leak detection and repair, and alternative insulating gases with lower global warming potentials have resulted in the reduction of sulfur hexafluoride emissions from the electric power sector over time. Further, upgrading and rebuilding powerlines with newer equipment that requires less or no sulfur hexafluoride or has reduced leakage rates and improved monitoring further contribute to a reduction in sulfur hexafluoride emissions across the electric transmission sector. ( See Technical Support Document, p. 40.)

Commenters stated the DOE could encourage programmatic Endangered Species Act Section 7 consultations for specific regions and cited the programmatic biological assessment prepared by DOE's Western Area Power Administration for wind energy development and interconnection requests in the Upper Great Plains Region as a relevant example. DOE responds that the referenced programmatic biological assessment analyzed information and identified a list of conservation measures for 28 species of concern. Western Area Power Administration and the U.S. Fish and Wildlife Service developed a review and approval system based on consistency forms and checklists of conservation measures for each species. If a wind project developer commits to implement the applicable conservation measures, Western Area Power Administration's consultation responsibilities under Section 7 of the Endangered Species Act are concluded when Western Area Power Administration and the U.S. Fish and Wildlife Service review and sign the consistency forms; no separate Section 7 consultation is required unless the particular project involves a listed species, critical habitat, or an effect that was not addressed in the programmatic biological assessment. DOE supports using programmatic consultations and similar approaches to improve the efficiency of implementing the Endangered Species Act, the National Historic Preservation Act, and other laws. These requirements are separate from the requirements of NEPA, and reliance on a categorical exclusion for NEPA compliance does not affect DOE's obligations under other laws.

Commenters stated that, by affecting land previously unused as transmission line right-of-way, rerouting transmission lines may affect local land use, affect people's relation with their environment, and impact neighborhoods and communities. DOE recognizes that these are considerations in developing a proposal to reroute powerlines and relies on the terms of categorical exclusion B4.13, including the integral elements, and the consideration of extraordinary circumstances to ensure that projects would not have a significant effect on communities.

Commenters stated that the environmental assessments included in the Technical Support Document for the notice of proposed rulemaking were prepared for projects in the Bonneville Power Administration and Western Are Power Administration systems. However, the categorical exclusion could be applied to projects in any region of the United States. In response to this comment, DOE reviewed seven additional environmental assessments and findings of no significant impact prepared by other Federal agencies for powerline upgrade or rebuild projects in Kentucky, Minnesota, Mississippi, Missouri, North Dakota, and Wisconsin. These NEPA documents support DOE's determination that powerline upgrade and rebuild projects normally do not pose a potential for significant environmental impacts. DOE added these seven environmental assessments to the Technical Support Document for this final rule.

Commenters also pointed to the environmental assessment for Midway Benton No. 1 Rebuild Project as an example of where project changes were needed to lower potential environmental impacts. DOE included a wide and diverse range of environmental assessments in the Technical Support Document. These environmental assessments and findings of no significant impact demonstrate that, in the aggregate, these types of projects normally do not pose a potential for significant environmental impact and, thus, are appropriate for a categorical exclusion. DOE stated in the Technical Support Document for the notice of proposed rulemaking that, “Inclusion of these environmental assessments does not mean that the proposed projects would have qualified for any categorical exclusion as proposed in this rulemaking. That determination would be made on a case-by-case basis.” ( See Technical Support Document, p. 1.) DOE did not intend to indicate that it had determined that a categorical exclusion would have been appropriate for that project. Rather, DOE found that consideration of the environmental assessment for the Midway Benton No. 1 Rebuild Project, along with other information in the Technical Support Document, helped DOE understand whether the proposed revisions to categorical exclusion B4.13 are appropriate. DOE will continue to consider each proposed project on its own merits in deciding whether to apply a categorical exclusion or prepare an environmental assessment or environmental impact statement.

Commenters stated that the scope of categorical exclusion B4.13 should not include upgrading and rebuilding existing offshore, underwater powerlines. These commenters referred to potential adverse environmental impacts resulting from the propellers on boats used during upgrade and rebuild projects, trenching, turbidity, boulder relocation, and electric fields. DOE did not intend that categorical exclusion B4.13 would include underwater powerlines. DOE has added a statement in this final rule specifying that the categorical exclusion does not apply to underwater powerlines.

One commenter recommended that DOE consider NEPA efficiencies, such as utilizing programmatic regional reviews for transmission projects. The commenter also recommended that DOE streamline NEPA processes to support designation of transmission corridors and financial assistance for transmission projects. DOE supports taking steps to improve the efficiency of NEPA and other environmental review requirements, without undermining the purposes of these processes, to support timely and effective decision making.

Some commenters stated that a categorical exclusion is inappropriate for transmission line upgrade or rebuild projects. DOE responds that these comments express a misunderstanding of the purpose of categorical exclusions and how categorical exclusions are applied to particular proposed actions. For example, some commenters stated that a categorical exclusion determination does not require any environmental documentation beyond that a proposed action belongs in a specific category. As explained in section II of this document, to qualify for the categorical exclusion, a proposed action must satisfy all the conditions in the categorical exclusion, including integral elements, and DOE must evaluate for any extraordinary circumstances. Some commenters pointed to one environmental assessment included in the Technical Support Document that considered impacts on cultural resources and suggested that such analysis would not have been required under a categorical exclusion. In fact, for all categorical exclusions listed in appendix B of its NEPA regulations (10 CFR part 1021), DOE requires consideration of whether the proposed action would violate any applicable environmental requirements and whether the proposed action would have the potential to cause significant impacts on environmentally sensitive resources, including “Property (such as sites, buildings, structures, and objects) of historic, archeological, or architectural significance designated by a Federal, state, or local government, Federally recognized Indian tribe, or Native Hawaiian organization, or property determined to be eligible for listing on the National Register of Historic Places” (10 CFR part 1021, subpart D, appendix B, paragraph (4)(i)). In addition, DOE's responsibility to comply with the National Historic Preservation Act is independent of its NEPA responsibilities. With the revised categorical exclusion B4.13, DOE would have considered the potential impacts on cultural resources before making a decision and could determine that an environmental assessment is more appropriate than applying a categorical exclusion.

Some commenters described the purpose of a categorical exclusion in an overly limiting way, for example, as for actions that are benign or have no adverse effect whatsoever. CEQ, however, defines a categorial exclusion as “a category of actions that the agency has determined, in its agency NEPA procedures (§ 1507.3 of this chapter), normally do not have a significant effect on the human environment” (40 CFR 1508.1(d)). The categorical exclusions included in this rulemaking are consistent with CEQ's regulations.

Some commenters questioned whether additional NEPA review would be necessary for powerlines that already have been reviewed under NEPA. In general, a proposed project in which DOE is financing, undertaking, or providing other support for the upgrade or rebuild of a powerline has the potential to cause environmental effects. The NEPA review process provides methods for DOE to evaluate the potential significance of those impacts. Any documentation from past NEPA or other environmental reviews can inform, and potentially simplify, the required environmental review of the currently proposed project.

Commenters expressed concern regarding the safety of lithium-ion battery energy storage systems, including risks associated with a thermal runaway event. Commenters stated that DOE's Technical Support Document did not address risks from thermal runaway.

A thermal runaway event is when lithium-ion batteries become unstable, potentially resulting in high temperatures, battery failure, venting of gas or particulates, smoke, or fire. As one way to help control the impacts of such an event, a battery energy storage system is comprised of modules that physically isolate and control thermal runaway events from the larger battery energy storage system. Government agencies, including DOE, and standard setting organizations such as the National Fire Protection Association conduct research on thermal runaway events and other accident scenarios involving lithium-ion and other battery technologies. These organizations recommend practices and develop standards to lessen the likelihood and consequence of such events, and to respond to thermal runaway events and other accidents if they occur. For example, to stay current with best practices and knowledge, the National Fire Protection Association updates its standards every three to five years.

Commenters stated that fires at battery energy storage systems are challenging to extinguish and must be allowed to burn out for days. Commenters also stated that fires can emit large volumes of toxic gases, such as hydrogen fluoride, hydrogen cyanide, and hydrogen chloride. Commenters stated that these releases of toxic fumes can result in large plumes that necessitate evacuations of nearby populations and that there is insufficient time to implement a shelter-in-place approach because there is no mechanism to communicate quickly enough to surrounding communities. Commenters further stated that safety standards in the Technical Support Document for the notice of proposed rulemaking did not consider the public health risk of toxic gas released during a battery energy storage system fire.

DOE has supplemented the Technical Support Document in response to these comments. DOE reviewed and added information on hazard consequences analyses that address toxic gas plume dispersion modeling in the event of a battery energy storage system fire or thermal runaway event, including characterization of those toxic gases and potential health effects. These analyses evaluated toxic gas dispersion, including hydrogen fluoride, hydrogen cyanide, and carbon monoxide, using site-specific factors to determine the maximum distance that may result in a level of concern for nearby residents or first responders. These analyses identified the endpoint distances as 30, 51, and 210 feet from the release point. The maximum airborne concentration estimated at these distances is such that nearly all individuals could be exposed to for up to one hour without experiencing or developing irreversible or other serious health effects or symptoms that could impair an individual's ability to take protective action. The analyses indicated that assumptions were chosen that tended to overstate the expected consequences. A hazard consequence analysis is a site-specific analysis, and the examples provided in the Technical Support Document indicate that a safety incident at a battery energy storage facility would generally not result in adverse health impacts beyond the facility's property line. ( See Technical Support Document, p. 63.) Further, DOE notes that battery energy storage facilities that qualify for the new categorical exclusion would be required to incorporate appropriate safety standards including the current National Fire Protection Association 855 Standard. National Fire Protection Association Standard 855 requires the development of emergency response plans.

Commenters also stated that toxic chemicals could be used to put out battery energy storage system fires. Commenters expressed concern about runoff from fire suppression water or fire retardant, the lack of containment systems for this runoff, the resulting risk of soil and groundwater pollution, and potential impacts to water resources. Commenters stated that fire-extinguishing water used at the East Hampton Energy Storage Center in East Hampton, NY, contaminated a sole-source aquifer used for drinking water with toxic chemicals. Commenters stated that fighting battery energy storage system fires could require up to 2 million gallons of water over a three-day period and that there are no spill containment systems in place at battery energy storage systems to catch fire water suppression runoff.

DOE has supplemented the Technical Support Document to include best management practices regarding spill control plans from individual projects as well as requirements from National Fire Protection Association Standard 855 to minimize spill risk during normal operation and in the event of a fire. ( See Technical Support Document, p. 41.) Site-specific spill prevention plans are typically developed for individual projects as a standard best practice. DOE further notes that the emerging consensus in the firefighting community is that water should be used sparingly in responding to battery energy storage system fires to minimize potential risk of contamination to water resources.

Commenters stated that there is a lack of appropriate training for emergency responders in the event of an incident at a battery energy storage system and that available training and resources are limited. National Fire Protection Association Standard 855 requires the development of emergency response plans, mandates initial and annual training, and recommends inclusion of emergency response personnel in these trainings. The Technical Support Document also includes recommendations from the American Clean Power Association and the New York Battery and Energy Storage Technology Consortium and Fire and Risk Alliance for the development of emergency response plans and pre-incident planning and incident response.

Commenters stated that the chance of fire at a utility-scale battery energy storage system is 1 in 30 to 1 in 50 and that the average age of a battery that catches fire is 18 months. Several commenters pointed to past battery energy storage system fires including those in Surprise, AZ, Chandler, AZ, Moss Landing, CA, and in New York State. DOE responds that a recent Pacific Northwest National Laboratory report  15 noted that the Electric Power Research Institute's (EPRI's) database identifies 14 fires involving large, grid-connected battery energy storage systems in the U.S. “To place that number in context, there were 491 large, utility-scale projects in the U.S. as of April 2023, for a fire incidence rate of about 2.9 percent. No [battery energy storage system] fire in the U.S. has resulted in loss of life, and many of the affected facilities were able to resume operation.” DOE acknowledges that battery energy storage facilities present safety risks if not managed properly and have resulted in past safety incidents. DOE reviewed the U.S. fires reported in the EPRI database and confirmed that few if any injuries occurred, apart from the 2019 Surprise, AZ, incident that involved multiple severe injuries. Lessons learned from that 2019 event have since led to improvements in safety standards and first responder training. The battery energy storage systems that qualify for categorical exclusion B4.14 would be built and operated using the most current safety standards, including those identified in the National Fire Protection Association 855 Standard.

Commenters stated that DOE's Technical Support Document included small-scale projects (less than 10 megawatts) and mobile facilities and thus did not consider that the risk of thermal runaway increases with the number of battery cells and facility size. DOE notes that the Technical Support Document for the notice of proposed rulemaking also included environmental assessments for battery energy storage systems ranging from approximately 20 megawatts up to 225 megawatts storage capacity. For this final rule, DOE supplemented the Technical Support Document with information to clarify that appropriate battery energy storage system designs can prevent fire risk from increasing with facility size. Energy storage system failures are designed to be contained to the unit of origin, for example, by providing sufficient spacing between modules or enclosures to avoid a fire from spreading. Systems also may include fire suppression, smoke detectors, sprinkler systems, and fire barriers, as applicable to the design. Because of these safety features, the risk of a fire incident at a battery energy storage project does not increase with project size; the two are decoupled in a well-designed system that prevents a fire in one unit from spreading to neighboring units. ( See Technical Support Document, p. 56.)

Commenters stated that DOE's Technical Support Document was inadequate because the battery energy storage systems included have not been built, and operational safety has not yet been proven. Commenters also asserted that design standards and best management practices cited in the Technical Support Document, such as UL 9540A, are not sufficient to mitigate the risk of thermal runaway. DOE notes that battery energy storage systems have experienced rapid growth in recent years. According to the U.S. Energy Information Administration, currently planned and operational U.S. utility-scale battery capacity totaled around 16 gigawatts at the end of 2023. ( See Technical Support Document, p. 41.) This growth in deployment of battery energy storage systems provides real-world information on design and operation that feeds into efforts to continuously improve the safety of these facilities, such as through the ongoing development and revision of applicable safety standards.

DOE is aware that battery energy storage facilities present a risk of safety incidents, including the risk of a thermal runaway event that may result in fire. To ensure that battery energy storage systems are designed and operated using layers of protection, current best practices, and the most up-to-date standards, categorical exclusion B4.14 may only be used for proposed battery energy storage systems that comply with appropriate safety standards, including the current National Fire Protection Association Standard 855. The requirements and depth of National Fire Protection Association Standard 855 would ensure that battery energy storage systems are designed using current best practices to minimize the potential for a safety incident that could result in a thermal runaway. Also, the National Fire Protection Association Standard 855 requires the development of a hazard mitigation analysis, which is a method to evaluate potential failure modes and their cause and effects, in order to develop methods to prevent failure during system operation. Further, the National Fire Protection Association updates its standards every 3 to 5 years, ensuring that its standards continue to reflect current best practices.

Commenters stated that meeting the including UL 9540A standard cited in DOE's Technical Support Document would not prevent a thermal runaway event once started. DOE notes that in a UL 9540A test a thermal runaway event is intentionally created to better understand how the cell performs under failure, which helps to design fire safety features to limit the propagation of fire from one cell to another, in the event of a failure. Systems that meet UL 9540A, in addition to all the other requirements included in the National Fire Protection Association Standard 855 would ensure layers of protection to prevent accidents and mitigate safety risk. ( See Technical Support Document, p. 56.)

Commenters also stated that DOE's Technical Support Document should not include information from the American Clean Power Association because a lobbyist organization is not an appropriate source for safety standards. DOE includes three reference documents from the American Clean Power Association in the Technical Support Document: a compilation of relevant codes and standards for battery energy storage systems prepared by other organizations, guidelines for first responders in the event of an accident, and a summary of information related to battery energy storage systems. DOE has reviewed these documents and finds them helpful in explaining useful information about the safe operation of battery energy storage systems.

Commenters also requested that DOE issue a new policy that addresses how the public safety risks posed by lithium-based battery energy storage systems should be accounted for in future NEPA actions. DOE will consider whether there is a need for guidance on the consideration of battery energy storage systems in NEPA reviews. However, that is outside the scope of this rulemaking.

Commenters also stated that battery energy storage systems should have sensors that provide information on the presence of flammable gases onsite and that information should be available to emergency responders. DOE has supplemented the Technical Support Document to include information that battery energy storage systems contain fire and gas detection systems. Further, DOE notes that the current National Fire Protection Association Standard 855 contains a variety of provisions related to gas detection; fire control and suppression, measures to prevent explosions and safely contain fires, hazard mitigation analysis, emergency response plans, and requirements for initial and annual training. ( See Technical Support Document, p. 56.)

Commenters requested that DOE investigate whether these energy storage systems emit toxins or carcinogens during normal operation. DOE has supplemented the Technical Support Document with additional information explaining that energy storage systems do not leak chemicals or emit toxic or carcinogenic gases during normal operation. ( See Technical Support Document, p. 41.)

Commenters stated that battery energy storage systems should not be sited near earthquake fault zones, sole-source aquifers, residential areas, densely populated areas, schools, daycare facilities, hospitals, nursing homes, threatened and endangered species, recreational areas, or transportation corridors. Commenters stated that battery energy storage systems should be sited only in desolate areas. Commenters expressed concern that battery energy storage systems would be sited in fire-prone landscapes and that sparks from a fire originating at a battery energy storage system would spread to nearby areas. Commenters stated that disruption to nearby communities should be mitigated, and expressed concern that without adequate planning and siting, important emergency routes, such as to and from hospitals and between nursing homes and hospitals, could be disrupted. Commenters requested that DOE include measures to ensure energy storage systems are not sited on areas of prime or sensitive habitat. DOE incorporates siting considerations into its decision whether to apply categorical exclusion B4.14 to any proposed action. This includes conditions within the categorical exclusion regarding the type of land on which the proposed project may be located, the requirement to be in accordance with land use and zoning requirements, and the integral elements that include the requirement not to pose a significant impact to environmentally sensitive resources. Categorical exclusion B4.14 also requires that, to apply it to a particular proposed project, the proposed action must incorporate safety standards and other specified conditions that reduce the risk of accidents. As noted in the Pacific Northwest National Laboratory's October 2023 report, Energy Storage in Local Zoning Ordinances, there is variation in local siting and zoning considerations for energy storage systems. This report notes that safety is frequently the most important concern expressed in local zoning proceedings for energy storage projects and identifies several case studies for how local planners have mitigated impacts from various jurisdictions. ( See Technical Support Document, p. 59.) At any point during DOE's review of whether categorical exclusion B4.14 applies, DOE can determine that additional information is needed to make a categorical exclusion determination or decide to prepare an environmental assessment or environmental impact statement.

Commenters stated that a battery energy storage system should never be sited in an undeveloped area. Other commenters expressed concern that siting battery energy storage systems on undisturbed land could significantly impact the environment and surrounding communities and requested additional support for DOE's inclusion of undisturbed areas contiguous to previously disturbed or developed areas. Commenters stated that DOE's supporting information relied on an environmental assessment for the Vonore Project that included mitigation measures to reach a finding of no significant impact. DOE responds that, as explained in section III.C of this document, based on past experience, DOE anticipates that energy storage systems typically require 15 acres or less and would be sited close to energy, transmission, or industrial facilities. Consistent with this expectation and because contiguous land might be undisturbed and undeveloped, siting outside a previously disturbed or developed in the new categorical exclusion would be limited to a “small” contiguous area. DOE would consider whether a contiguous area is small, based on the criteria discussed in 10 CFR 1021.410(g)(2)). DOE has revised its Technical Support Document to clarify that there are three EAs and FONSIs that evaluate battery energy storage systems ranging in size up to 225 megawatts located on sites contiguous to previously disturbed and developed areas. ( See Technical Support Document, p. 42.) Further, DOE reviewed the Vonore Project that the commenter suggested relied on mitigation measures in an environmental assessment to reach a finding of no significant impact and notes that the Tennessee Valley Authority indicated that two “non-routine measures would be applied during the construction, operation, and maintenance of the proposed Vonore [battery energy storage system], transmission lines, and access roads to reduce the potential for adverse environmental effects”, not that those measures were necessary to reach a finding of no significant impact. ( See Technical Support Document, p. 50.) Commenters stated that DOE's supporting information included an environmental assessment tiered from a programmatic environmental impact statement. DOE removed this environmental assessment from the Technical Support Document.

Commenters stated that DOE should not limit the categorical exclusion to a “small” or 15-acre area contiguous to previously disturbed or developed areas and that DOE should clarify that there would be no acreage limitation. Commenters stated that DOE's supporting information did not accurately reflect the acreage required and that 25 MW per acre is a more accurate assumption for battery energy storage systems. Commenters also stated that an acreage limitation could result in more densely packed battery energy storage systems with greater risk of thermal runaway. Similarly, other commenters recommended that DOE remove reference to specific acreages that were included in the preamble to DOE's Notice of Proposed Rulemaking and instead use the definition of “small” in 10 CFR 1021.410(g)(2). DOE responds that section II of this document includes discussion of DOE's definition of previously disturbed or developed area and DOE's experience referring to contiguous areas in its categorical exclusions. The total acreage used for an energy storage system will be defined by the needs of the proposed project. Based on past experience, DOE anticipates that energy storage systems typically require 15 acres or less and would be sited close to energy, transmission, or industrial facilities. However, this recognition of that past experience does not indicate an acreage limit on the scope of categorical exclusion B4.14. ( See Technical Support Document, p. 41.) As previously explained, DOE would consider whether a contiguous area is small, based on the criteria discussed in 10 CFR 1021.410(g)(2).

Other commenters stated that 15 acres or less should be added as a numeric limit in the categorical exclusion. DOE considered this suggestion but has concluded that an acreage limit is not an appropriate method for determining whether a project normally would result in significant environmental effects. Rather, the terms of categorical exclusion B4.14, including the integral elements and need to consider extraordinary circumstances, provide a reasoned basis for the categorical exclusion.

Commenters stated that areas contiguous to previously disturbed or developed land may have particular conservation values or be more likely to be located in communities that have historically experienced disproportionate impacts. Commenters requested that DOE require that contiguous areas be evaluated separately under a land use plan, a programmatic environmental impact statement or environmental analysis, or other equivalent decisions that provide detailed analysis and opportunity for public engagement. Similarly, another commenter requested that DOE revise the categorical exclusion conditions to include limitations regarding site dimensions, land use history, and proximate uses and resources to indicate a preference for siting locations where fewer impacts would be expected to occur. Commenters requested that DOE include measures to ensure energy storage systems are not sited on areas of prime or sensitive habitat. Because contiguous land might be undisturbed and undeveloped, DOE proposes that siting outside a previously disturbed or developed area be limited to a “small” contiguous area. DOE would consider whether a contiguous area is small, based on the criteria discussed in 10 CFR 1021.410(g)(2)), “in the context of the particular proposal, including its proposed location. In assessing whether a proposed action is small, in addition to the actual magnitude of the proposal, DOE considers factors such as industry norms, the relationship of the proposed action to similar types of development in the vicinity of the proposed action, and expected outputs of emissions or waste. When considering the physical size of a proposed facility, for example, DOE would review the surrounding land uses, the scale of the proposed facility relative to existing development, and the capacity of existing roads and other infrastructure to support the proposed action.” In addition, the proposed project must be “in accordance with applicable requirements (such as land use and zoning requirements) in the proposed project area and the integral elements listed at the start of appendix B of this part, and would incorporate appropriate safety standards (including the current National Fire Protection Association 855, Standard for the Installation of Stationary Energy Storage Systems), design and construction standards, control technologies, and best management practices.”

Commenters stated battery energy storage systems would result in noise and light pollution and visual impacts for nearby residents. Commenters expressed concern about adverse socioeconomic impacts of battery energy storage systems, stating that the risk of fire, toxic chemical releases, and emergency lockdowns would negatively affect home values, quality of life, and the local economy. DOE has supplemented the Technical Support Document to include additional information regarding potential noise and light pollution impacts from proposed projects. ( See Technical Support Document, p. 41).

Commenters expressed concern regarding disposal of batteries at the end of their useful life and questioned if the batteries would be recycled or taken to hazardous waste landfills. Commenters stated that battery energy storage systems should not be categorically excluded due to the associated environmental impact of rare earth mining for battery materials, as well as the transport of hazardous materials to and from the facility upon decommissioning. Commenters stated that battery energy storage systems are waste-generating facilities with large quantities of hazardous, flammable materials stored onsite. DOE has supplemented the Technical Support Document to include additional information regarding waste management and decommissioning plans for proposed projects. For example, a decommissioning plan should be prepared during project planning that details what will happen when a battery energy storage system reaches its end of life. Decommissioning plans generally should include removal of all structures; recycling of equipment to the greatest extent possible; the proper disposal of non-recyclable equipment in accordance with manufacturer specifications and applicable local, state, and Federal requirements; and re-establishment of vegetation and restoration of the project site. ( See Technical Support Document, p. 41.) In addition, National Fire Protection Association Standard 855 mandates a decommissioning plan for removing and disposing of the system at the end of its useful life.

Commenters stated that a battery energy storage system operating as a new entrant to the electrical grid introduces security vulnerabilities that could adversely affect the electrical grid. DOE has supplemented the Technical Support Document to include additional information regarding the North American Electric Reliability Corporation Critical Infrastructure Protection security requirements for system integrators of certain battery energy storage equipment, including cyber systems, asset categorization, and security system management. DOE also notes that the use of energy storage systems has increased substantially in recent years. This has demonstrated through real world experience that energy storage systems can be safely integrated into the electrical grid and provides experience that is used to improve related guidance and practices. ( See Technical Support Document, p. 56.)

Commenters recommended that if categorical exclusion B4.14 is applied to a proposed project that is within or would affect a state's coastal zone, DOE continue to comply with relevant requirements of the Coastal Zone Management Act. DOE recognizes its responsibility to comply with the Coastal Zone Management Act and will continue to do so. DOE also notes that one of the conditions, or integral elements, for applying categorical exclusion B4.14 to a proposed action is that the proposed action would not “Threaten a violation of applicable statutory, regulatory, or permit requirements for environment, safety, and health, or similar requirements of DOE or Executive Orders” (10 CFR part 1021, subpart D, appendix B). This condition includes compliance with relevant requirements of the Coastal Zone Management Act.

Commenters explained that DOE's categorical exclusion for battery energy storage systems removes transparency for communities and explained that there is a lack of public outreach for proposed battery energy storage systems when applying a categorical exclusion. Some commenters specified that communities should have public review and comment for proposed battery energy storage systems, including for example, potential environmental and safety risks, evacuation plans, and mitigation strategies. DOE responds that to provide transparency in the use of categorical exclusions, DOE began posting categorical exclusion determinations online in 2009. DOE will continue to regularly post categorical exclusion determinations for B4.14 and other categorical exclusions listed in appendix B of DOE's NEPA regulations (10 CFR part 1021, subpart D) at www.energy.gov/nepa/doe-categorical-exclusion-cx-determinations.

Commenters further stated that an alternatives analysis should be required to compare alternatives to battery energy storage system technology, as well as alternative siting locations. DOE considers alternatives, as appropriate, in NEPA reviews and in its decision making. Whether DOE evaluates alternatives for a particular proposed action, and the nature of those alternatives, depends on several factors including the potential for significant impacts and the purpose and need for DOE's action.

In explaining why categorical exclusion B4.14 is limited to electrochemical-battery and flywheel energy storage systems, DOE stated in the notice of proposed rulemaking that, “At this time, DOE has not identified sufficient information to conclude that compressed air energy storage, thermal energy storage ( e.g., molten salt storage), or other technologies normally do not present the potential for significant environmental impacts. DOE welcomes comments that provide analytic support for whether these other energy storage technologies meet the requirements for a categorical exclusion.” Commenters recommended that DOE expand categorical exclusion B4.14 to include any energy storage system that is technologically feasible or was developed either by a DOE laboratory or with financial support from the Federal Government. Commenters also recommended expansion of categorical exclusion B4.14 to include specific energy storage technologies, including above-ground compressed air energy storage; thermal energy storage, including molten salt storage; solid-state thermal batteries; pumped storage hydropower; gravity storage; underground hydrogen storage. DOE appreciates these suggestions, including the rationale provided by the commenters. DOE has determined, however, that it does not currently have sufficient information to determine that these technologies normally do not pose a potential for significant impacts. DOE will retain the comments for consideration in a future rulemaking.

Commenters recommended that categorical exclusion B4.14 include the use of iron-air batteries. Iron-air batteries are a type of electrochemical battery and, therefore, included within the scope of categorical exclusion B4.14.

Commenters suggested that DOE add a new categorical exclusion for combined battery and solar projects. DOE may apply more than one categorical exclusion to a proposed action so long as the potential effects of the total project are analyzed and the proposed action fulfills all the conditions, including integral elements, of each categorical exclusion applied. For example, it could be appropriate to apply categorical exclusions B4.14, Construction and operation of electrochemical-battery or flywheel energy storage systems, and B5.16, Solar photovoltaic systems, to the same proposed action, depending on project- and site-specific conditions. Given this practice, the commenters' suggested addition is unnecessary.

Commenters expressed opposition to specific battery energy storage system projects including those in Morro Bay, CA, East Hampton, NY, Warwick, NY, Holtsville, NY, Covington, WA, and in Eldorado near Santa Fe, NM. Commenters requested to be informed of all future battery energy storage systems. This rulemaking does not involve decisions or actions related to any particular proposed battery energy storage system. As described in section II of this document, before DOE may apply categorical exclusion B4.14 to a particular proposed action, DOE must conduct a project-specific environmental review to determine whether all conditions applicable to the categorical exclusion are met. DOE does not review or have a decision-making role regarding all battery energy storage systems and has no mechanism to inform local residents of all future battery energy storage systems.

There is a potential that birds, particularly waterfowl, perceive large solar PV facilities as water bodies. Underlying this lake effect hypothesis is the possibility that solar panels and water polarize light in a similar way. This might cause birds to try to land or feed on solar PV panels, which could cause bird fatalities and other harms. Some commenters raised this concern and stated that birds may mistake solar panels for water bodies and be stranded, injured, or killed. Commenters requested that best management practices, such as non-reflective coating, increased panel spacing, and vertical positioning of the panels at night for panels on rotating axes, be incorporated into solar facilities to minimize this risk. Other commenters added that certain mitigation measures may depend on the species of bird and other animal being affected, and that mitigation is best addressed in an environmental impact statement. DOE is aware of this potential impact and is one of the Federal agencies sponsoring research to better understand whether birds mistake solar panels for water, whether that might affect behavior, and what effective mitigation is available. ( See Technical Support Document, p. 103.) Categorical exclusion B5.16 includes conditions that require that the proposed project not have significant effects on protected species. At any point in its environmental review of a particular project, DOE can decide to prepare an environmental assessment or environmental impact statement rather than relying on a categorical exclusion.

Commenters stated that insect populations may be at risk from solar PV facilities and that PV panels produce polarized light that may confuse insects seeking water for feeding or breeding purposes, potentially leading to reproductive failure and possible ecosystem effects. DOE has supplemented the Technical Support Document to include research that summarizes the potential for negative impacts, including potential light pollution that may adversely impact aquatic insect breeding, as well as the positive impacts of solar PV systems on insect populations. ( See Technical Support Document, p. 103.) The Technical Support Document summarizes research regarding siting considerations that demonstrate that use of previously disturbed or developed lands, such as former agricultural fields, is preferable to siting on undisturbed land. In addition, use of native mixes of flowering plants and grasses during revegetation can improve the biodiversity of both plant and insect populations, including pollinators, as the habitat matures post-construction. Proper siting of proposed solar PV systems and revegetation plans that use diverse, pollinator-friendly seed mixes would ensure that adverse impacts to insect populations are not significant. Categorical exclusion B5.16 includes conditions that require that the proposed project not have significant effects on protected species. At any point in its environmental review of a particular project, DOE can decide to prepare an environmental assessment or environmental impact statement rather than relying on a categorical exclusion.

Commenters stated that habitat fragmentation and the spread of non-native, invasive species could result from building solar projects along linear corridors such as utility rights-of-way, particularly in cases where the projects are fully fenced. These commenters further stated that land and wildlife managers must assess current wildlife habitat connectivity in the proposed project area, as well as future connectivity needs in light of climate change. DOE appreciates commenters raising concerns about habitat connectivity. DOE's integral elements and consideration of extraordinary circumstances would ensure consideration of these impacts. Nonetheless, to better highlight potential effects on habitat, in this final rule, DOE added conditions to categorical exclusion B5.16 to ensure that proposed solar PV projects would be consistent with applicable plans for management of wildlife and habitat, including plans to maintain habitat connectivity.

Commenters stated that the Wild Springs Solar Project included in the Technical Support Document is not a typical design because the fencing encloses blocks of panels, rather than surrounding the entire project. These commenters stated that the project was designed and sited to avoid prairie dog colony areas. These commenters asserted that if a categorical exclusion had been applied to this project, these protective measures are unlikely to have been taken. Categorical exclusion B5.16 requires that the proposed project not have significant effects on species, habitat, and other local environmental conditions, as well as the use of best management practices. DOE disagrees with the assertion that the protective design elements would not have been included in the project if a categorical exclusion would have been used for NEPA review.

Commenters expressed concerns regarding impacts from toxic dust during construction, visual impacts, lower property values, harm to tourism economies, and a heat island effect. Commenters expressed concern over water use during construction and for dust control and the cumulative impact of dust emissions, both during construction and operation. Commenters stated that categorical exclusion B5.16 must include provisions for effective dust control in desert and dry, wind-prone areas. DOE is aware of these concerns. Dust control and limitations on other effects are encompassed in the requirement that the proposed project be in “accordance with applicable requirements (such as land use and zoning requirements) in the proposed project area and the integral elements listed at the start of appendix B of this part, and would be consistent with applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity, and incorporate appropriate control technologies and best management practices.”

One individual expressed concern about fire risk due to electrical lines associated with solar energy systems. DOE responds that any electrical lines associated with a solar PV system would be required to meet all applicable standards for vegetation management, system design, and other conditions to prevent the lines from causing fires.

Commenters expressed concern over the cumulative effects of removing the 10-acre size limit for solar PV systems in categorical exclusion B5.16, suggesting that the impacts could extend to tens of thousands of acres in a concentrated area. Commenters also stated that the categorical exclusion must not apply to utility-scale solar developments larger than 500 acres because of cumulative impacts. DOE considers cumulative impacts in determining whether to apply a categorical exclusion to a proposed action. DOE's regulations list conditions that must be met before making a categorical exclusion determination. Among these conditions is a requirement to consider “connected and cumulative actions, that is, the proposal is not connected to other actions with potentially significant impacts (40 CFR 1508.25(a)(1)), [and] is not related to other actions with individually insignificant but cumulatively significant impacts (40 CFR 1508.27(b)(7)).” DOE might also consider cumulative impacts in the context of extraordinary circumstances, integral elements, or other conditions such as consistency with applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity. In regard to the suggested 500-acre limit for the categorical exclusion, as explained in section II of this document, DOE does not have a basis for identifying a particular acreage limit for categorical exclusion B5.16. Local conditions are the appropriate basis for assessing the significance of environmental impacts for a particular proposed project.

Commenters identified a need for further guidance on responsible solar buildout, particularly regarding critical wildlife habitats and productive agricultural lands. DOE appreciates this recommendation and expects that guidance and best practices will continue to improve as the technology advances. Categorical exclusion B5.16 includes flexibility to accommodate these changes ( e.g., by providing for consideration of the best practices relevant at the time the proposed action is reviewed).

Other commenters stated that categorical exclusion B5.16 requires that actions “would be in accordance with applicable requirements (such as land use and zoning requirements)” but noted that not all jurisdictions have current planning and zoning that expressly addresses siting of large-scale solar PV projects. Commenters asserted that a large-scale PV solar project, therefore, could be permitted in a corridor or right-of-way without meaningful NEPA review simply because it is not prohibited in those areas under the current zoning and planning requirements. DOE disagrees with this characterization. As explained in section II of this document and in response to comments, DOE must consider several conditions related to environmental impacts before deciding whether to apply categorical exclusion B5.16 to a particular proposed action. In an area without applicable land use and zoning requirements, DOE still would consider whether the proposed project location is on previously disturbed or developed land, applicable requirements and plans for the management of wildlife and habitat, including plans to maintain habitat connectivity, whether the proposed project incorporates appropriate control technologies and best management practices, the integral elements listed in DOE's regulations, and other conditions required of every categorical exclusion, such as consideration of any extraordinary circumstances.

Some commenters proposed edits to narrow DOE's definition of “previously disturbed or developed lands.” DOE considered these suggestions and concluded that the changes are unnecessary. DOE has successfully applied the current definition over more than a decade for a variety of projects involving several DOE categorical exclusions that use the phrase “previously disturbed or developed.” This phrase and definition are only part of the criteria that must be met to use categorical exclusion B5.16. As described in section II of this document and in response to other comments, the use of the categorical exclusion is dependent upon successfully satisfying several conditions related to environmental effects.

Commenters suggested that DOE extend categorical exclusion B5.16 to include agricultural lands, especially where the project developers agree to follow certain practices to protect native habitats and manage stormwater. DOE considers agricultural land potentially within the scope of categorical exclusion B5.16 so long as the proposed action meets all applicable conditions. Those conditions include avoiding significant impacts on habitat and following applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity, among others.

Commenters stated that large, solar PV power plants built on water decrease photosynthesis and primary productivity and may have adverse ecosystem effects. Categorical exclusion B5.16 does not apply to solar PV projects proposed to be located on water. In DOE's NEPA regulations, the term “ `previously disturbed or developed' refers to land” (10 CFR 1021.410(g)(1)).

Commenters expressed concern about environmental impacts of solar panel production, citing the environmental effects and carbon emissions of raw material sourcing, mining, smelting, and refining. The effects of solar panel production are not within DOE's control or responsibility and are therefore outside the scope of DOE's NEPA review for solar PV systems. The scope of categorical exclusion B5.16 includes of installation, modification, and decommissioning of solar PV systems, and the related environmental effects are within the scope of DOE's NEPA review.

Commenters stated that use of the categorical exclusion would prevent public review of materials used in solar panels with potential to leach into landfills and impact water quality. Commenters stated that potential carcinogens such as PFAS (per- and polyfluoroalkyl substances) and metals such as silver, cadmium, and tellurium may be used in solar PV panels. DOE has supplemented the Technical Support Document regarding the safe operation and maintenance of solar PV panels. PV panels are sealed and do not leach chemicals during normal operation. Maintenance and repair of PV panels ensures that broken or cracked PV panels do not leach metals or other potentially hazardous contaminants. Recycling PV panels keeps PV panels out of landfills. ( See Technical Support Document, p. 52.)

Commenters stated that consideration has not been given to the safe decommissioning and recycling of PV panels. DOE conducts research on the safe decommissioning and recycling of PV panels. Categorical exclusion B5.16 includes decommissioning of a solar PV system, and the environmental effects of decommissioning are considered as part of this rulemaking. ( See Technical Support Document, p. 74.) DOE has supplemented the Technical Support Document to include additional information regarding waste management and decommissioning plans for proposed projects. For example, a decommissioning plan should be prepared during project planning and best practices for what will happen when the solar PV project reaches its end of life. Decommissioning plans generally should include removal of all structures, including solar panels and all related equipment; recycling of PV panels and related equipment to the greatest extent possible; the proper disposal of non-recyclable equipment in accordance with manufacturer specifications and applicable local, state, and Federal requirements; and re-establishment of vegetation and restoration of the project site. ( See Technical Support Document, p. 74.) In addition, National Fire Protection Association Standard 855 mandates a decommissioning plan for removing and disposing of the system at the end of its useful life.

Executive Order (“E.O.”) 12866, “Regulatory Planning and Review,” as supplemented and reaffirmed by E.O. 13563, “Improving Regulation and Regulatory Review,” 76 FR 3821 (Jan. 21, 2011) and amended by E.O. 14094, “Modernizing Regulatory Review,” 88 FR 21879 (April 11, 2023), requires agencies, to the extent permitted by law, to (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. Many benefits and costs associated with this final rule are not quantifiable. The direct benefits include reduced cost and time for environmental analysis incurred by DOE, project proponents, and the public. Indirect benefits are expected to include deployment of technologies that improve the reliability and resilience of the Nation's electric grid and that expand electricity generation capacity while reducing emissions of GHGs. For the reasons stated in this preamble, this regulatory action is consistent with these principles.

This regulatory action has been determined not to be “a significant regulatory action” under E.O. 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this action is not subject to review under that Executive Order by OIRA of OMB.

E.O. 12898, “Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations,” as supplemented and amended by E.O. 14096, “Revitalizing Our Nation's Commitment to Environmental Justice for All,” requires each Federal agency, consistent with its statutory authority, to make achieving environmental justice part of its mission. E.O. 14096 directs Federal agencies to carry out environmental reviews under NEPA in a manner that “(A) analyzes direct, indirect, and cumulative effects of Federal actions on communities with environmental justice concerns; (B) considers best available science and information on any disparate health effects (including risks) arising from exposure to pollution and other environmental hazards, such as information related to the race, national origin, socioeconomic status, age, disability, and sex of the individuals exposed; and (C) provides opportunities for early and meaningful involvement in the environmental review process by communities with environmental justice concerns potentially affected by a proposed action, including when establishing or revising agency procedures under NEPA.” DOE provided opportunities for public engagement in this rulemaking, including opportunities for communities with environmental justice concerns, and DOE considered and responded to comments raising environmental justice concerns (section IV of this document). Also, in determining whether the categorical exclusions apply to a future proposed action, DOE will consider whether the proposed action threatens a violation of these Executive Orders, consistent with the first integral element listed in appendix B of DOE's NEPA procedures.

The Department's NEPA procedures assist the Department in fulfilling its responsibilities under NEPA and the CEQ regulations but are not themselves final determinations of the level of environmental review required for any proposed action. The CEQ regulations do not direct agencies to prepare an environmental assessment or environmental impact statement before establishing agency procedures that supplement the CEQ regulations to implement NEPA (40 CFR 1507.3). In establishing a new categorical exclusion and making other changes as described in this final rule, DOE followed the requirements of CEQ's procedural regulations, which include publishing the notice of proposed rulemaking in the Federal Register for public review and comment, considering public comments, and consulting with CEQ regarding conformity with NEPA and the CEQ regulations (40 CFR 1507.3(b)).

In this final rule, DOE finalizes amendments that establish, modify, and clarify procedures for considering the environmental effects of DOE actions within DOE's decisionmaking process, thereby enhancing compliance with the letter and spirit of NEPA. DOE has determined that this final rule qualifies for categorical exclusion under 10 CFR part 1021, subpart D, appendix A6, because it is a strictly procedural rulemaking, and no extraordinary circumstances exist that require further environmental analysis. Therefore, DOE has determined that promulgation of these amendments is not a major Federal action significantly affecting the quality of the human environment within the meaning of NEPA, and does not require an environmental assessment or an environmental impact statement.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by E.O. 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process (68 FR 7990). DOE has made its procedures and policies available on the Office of the General Counsel's website: https://energy.gov/gc under Resources.

DOE has reviewed this rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. The revisions to 10 CFR part 1021 streamline the environmental review for proposed actions, resulting in a decrease in burdens associated with carrying out such reviews. For example, the revisions to DOE's categorical exclusions are expected to reduce the number of environmental assessments that applicants would need to pay to have prepared for DOE's consideration. Applicants may sometimes incur costs in providing environmental information that DOE requires when making a categorical exclusion determination. The Government Accountability Office found in 2014 that there is little data available on the costs for preparing NEPA reviews and that agencies “generally do not reports costs that are `paid by the applicant' because these costs reflect business transactions between applicants and their contractors and are not available to agency officials.”  16 In 2011, DOE estimated the cost of preparing environmental assessments over the prior decade at an average of $100,000 and a median of $65,000. 17 DOE does not have more current cost data. The costs of making a categorical exclusion determination are less than those to prepare an EA. Although DOE does not have data on what percentage of EAs were funded by applicants that qualified as small entities, a beneficial cost impact is expected to accrue to entities of all sizes.

Based on the foregoing, DOE certifies that this final rule will not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. DOE's certification and supporting statement of factual basis will be provided to the Chief Counsel for Advocacy of the Small Business Administration pursuant to 5 U.S.C. 605(b).

This rulemaking imposes no new information or record-keeping requirements. Accordingly, OMB clearance is not required under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) and the procedures implementing that Act (5 CFR 1320.1 et seq ).

Title II of the Unfunded Mandates Reform Act (UMRA) of 1995 (Pub. L. 104-4) requires each Federal agency to assess the effects of Federal regulatory actions on state, local, and tribal governments, in the aggregate, or to the private sector, other than to the extent such actions merely incorporate requirements specifically set forth in a statute. Section 202 of UMRA requires a Federal agency to perform a detailed assessment of the anticipated costs and benefits of any rule that includes a Federal mandate which may result in costs to State, local, or Tribal governments, or to the private sector, of $100 million or more in any one year (adjusted annually for inflation) (2 U.S.C. 1532(a) and (b)). Section 204 of UMRA requires each agency that proposes a rule containing a significant Federal intergovernmental mandate to develop an effective process for obtaining meaningful and timely input from elected officers of State, local, and Tribal governments (2 U.S.C. 1534).

This final rule amends DOE's existing regulations governing compliance with NEPA to better align DOE's regulations, including its categorical exclusions, with its current activities and recent experiences. This final rule will not result in the expenditure by State, local, and Tribal governments in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, no assessment or analysis is required under the UMRA.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any proposed rule that may affect family well-being. This final rule will not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

E.O. 13132, “Federalism,” 64 FR 43255 (Aug. 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt state law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the states and carefully assess the necessity for such actions. DOE has examined this final rule and has determined that it will not preempt state law and will not have a substantial direct effect on the states, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. No further action is required by E.O. 13132.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of E.O. 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of E.O. 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met, or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of E.O. 12988.

The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB.

OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed this final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1)(i) is a significant regulatory action under E.O. 12866, or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. This regulatory action does not have a significant adverse effect on the supply, distribution, or use of energy, and is therefore not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

DOE has determined pursuant to E.O. 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (Mar. 18, 1988), that this final rule would not result in any takings that might require compensation under the Fifth Amendment to the United States Constitution.

As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule prior to its effective date. The report will state that the Office of Information and Regulatory Affairs has determined that this action meets the criteria set forth in 5 U.S.C. 804(2).

The Secretary of Energy has approved publication of this notice of final rulemaking.

This document of the Department of Energy was signed on April 24, 2024, by Samuel T. Walsh, General Counsel, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

For the reasons stated in the preamble, DOE amends part 1021 of chapter X of title 10, Code of Federal Regulations, as set forth below:

The mission of SBA is to “aid, counsel, assist and protect” the interests of small business concerns to “preserve free competitive enterprise” and “maintain and strengthen the overall economy of our nation.” 15 U.S.C. 631(a). SBA accomplishes this mission, in part, through Capital Access programs that bridge the financing gap in the private market and help businesses of all sizes to recover from disasters. Further, 15 U.S.C. 636(a)(1)(B) states that the Administrator may verify the criminal background of the applicant, which grants SBA the flexibility to determine whether and how to consider criminal history in the context of issuing loan guarantees, so long as the loans are of sound value. Congress provided SBA with authority to promulgate rules to carry out these provisions. See 15 U.S.C. 634(b)(6).

SBA has comprehensively reviewed its capital programs' current policies on individuals with criminal history records to ensure that the policies promote SBA's statutory mandates that recognize the importance of small business development in general as well as the responsibility to increase opportunities for certain groups that may not historically have had equitable opportunities for small business ownership. See 15 U.S.C. 631(a), 636(a)(1)(B), 636(b)(1)(A), 636(l), 636(m), 694(b), and 695. It is SBA's position that this final rule supports these Federal statutory mandates. The final rule also supports and reflects changing conditions in how State and local governments and the private sector have broadened access to business capital for qualified people with certain criminal history records and Federal laws and policies, including bipartisan legislation, such as the Second Chance Act of 2008 and the First Step Act of 2018, that have reduced barriers to successful reentry in order to reduce the risk of future criminal justice system involvement. This final rule helps facilitate employment opportunities for individuals with criminal history records and is supported by data and empirical research demonstrating the public safety and economic benefits of doing so.

Based on its review of SBA capital programs' current policies on individuals with criminal history records, SBA recognizes the need to update regulations to reduce barriers to participation in these programs for equitable support for qualified small business owners with certain criminal history records and issued a proposed rule for public comment. As the SBA expands access to capital to more qualified entrepreneurs, it continues to implement additional reforms to mitigate the risk of fraud in its traditional capital programs, including front-end detection protocols conducted by SBA. These safeguards are in addition to ones set and implemented by lenders and local, State, and Federal laws. Currently, the ILP Intermediary Program considers as ineligible businesses with an Associate (as defined by 13 CFR 109.20) that is incarcerated, on parole or probation, or that has been indicted but not convicted for a felony or a crime of moral turpitude; for the Surety Bond Guaranty Program, SBA considers an applicant ineligible if any of the Principals (as defined by 13 CFR 115.10) are under indictment but not convicted, previously convicted of a felony or have received civil judgment regarding business transactions; for the 7(a) and 504 business loan programs, SBA considers an applicant ineligible if the business has an Associate who is incarcerated, on probation, on parole, or is under indictment for a felony or any crime involving or relating to financial misconduct or a false statement, and for Microloans, in addition to an Associate who is incarcerated, an Associate who is on probation or parole for an offense involving fraud or dishonesty; and for the Disaster Loan Program in 13 CFR 123.101(i) (adopted by reference in 13 CFR 123.201 and 123.301) and 123.502(c), SBA considers ineligible any principal owners of the damaged property that are currently incarcerated, or on probation or parole following conviction for a serious criminal offense, with additional specific restrictions for Immediate Disaster Assistance Program (IDAP) loans, that include presently being under indictment, on parole or probation; charged with, arrested for, convicted, placed on pretrial diversion, and/or placed on any form of probation (including adjudication withheld pending probation) for any criminal offense other than a minor motor vehicle violation (including offenses which have been dismissed, discharged, or not prosecuted).

Although the original intent of these restrictions was to protect the performance of SBA's capital programs against a presumed higher likelihood of default, data and research refute the concerns that may have animated SBA's initial rationale. Importantly, SBA reviewed the relevant research and found no evidence of a negative impact on repayment for qualified individuals with criminal history records in any American business loan program. This lack of data demonstrates that continuing to rely on this restriction for that purpose would contradict the available evidence and although the restrictions may have been originally put in place with the goal of protecting program performance, the lack of data suggests continuing to rely on this restriction would reflect an outdated, inaccurate regulatory barrier against individuals with criminal history records. Specifically, research demonstrates that employment increases success during reentry, decreases the risk of recidivism, and strengthens both public safety and economic opportunity. Research also demonstrates that entrepreneurship provides an important and distinct avenue for economic stability given persistent stigma from employers who may decline to hire people with criminal history records. Notably, SBA found several studies showing the difficulty of obtaining employment for formerly incarcerated people (see for example, Investigating Prisoner Reentry: The Impact of Conviction Status on the Employment Prospects of Young Men;   1 from the Department of Justice's National Institute of Justice Grant) and a positive link between employment and successful reentry, including preventing recidivism (see for example, Local Labor Markets and Criminal Recidivism   2 in the Journal of Public Economics). Moreover, because individuals with criminal history records may face barriers in obtaining employment, entrepreneurship can be a productive option, and SBA found several studies showing the potential for entrepreneurship among individuals with criminal records (see for example From Prison to Entrepreneurship   3 in the American Academy of Political and Social Science).

After conducting its review of SBA capital programs' current policies on people with certain criminal history records, SBA posted a proposed rule for public comment. Given the lack of data suggesting program performance issues and the breadth of research indicating the benefits, SBA is removing unnecessary restrictions that limit access to capital for qualified people with certain criminal history records. Furthermore, the proposed rule sought to provide employment opportunities for qualified people with certain criminal history records because expanding access to entrepreneurship strengthens individual and community economic opportunity and growth while also strengthening public safety by facilitating successful reentry and thereby reducing the risk of future criminal justice system involvement.

The Agency received 19 comments on all aspects of the revisions in the proposed rule and on any related issues affecting the 7(a) Loan, 504 Loan, Microloan, ILP, Surety Bond Guarantee Program, and Disaster Loan Programs. (88 FR 63534) There were 17 comments received from separate individuals or entities as follows: three Community Development Companies (CDCs), one trade association, one government entity, seven advocacy non-profit groups, six individuals, and the Federal Register posting itself which tallies as a comment. There was one invalid comment received which was not posted to regulations.gov . The comments received are tallied by each proposal in the section-by-section analysis below. SBA has reviewed and considered those comments and is now issuing a final rule to implement those changes. Throughout this final rule, “currently incarcerated” means “a person who is currently serving a sentence of imprisonment imposed upon an adjudication of guilt.”

Pursuant to its statutory authority to promulgate rules to carry out its mandate, and after considering public comments, SBA is revising several regulatory provisions. See 15 U.S.C. 634(b)(6). SBA is updating the 7(a), 504, Microloan, ILP, Surety Bond Guarantee Program, and Disaster Loan Program regulations requiring criminal background reviews. Specifically, SBA is revising 13 CFR 109.400(b)(15) on “Eligible Small Business Concerns”; 13 CFR 115.13(a)(2)(i) on “Eligibility of Principal”; 13 CFR 120.110(n) on “What businesses are ineligible for SBA business loans?”; 13 CFR 120.707(a) on “What conditions apply to loans by Intermediaries to Microloan borrowers?”; 13 CFR 123.101(i) on “When am I not eligible for a home disaster loan?”; 13 CFR 123.502(c) on “Under what circumstances is your business ineligible to be considered for a Military Reservist Economic Injury Disaster Loan?”; and 13 CFR 123.702(c)(1) and (2) on “Character requirements.”

SBA is revising 13 CFR 109.400(b)(15) for ILP loans to small businesses to remove the restrictions on Associates of an applicant who are on probation or parole; 13 CFR 115.13(a)(2)(i) for surety bond applicants to remove restrictions on a Principal bidding for a contract (as defined in 13 CFR 115.10) who has been previously convicted of a felony or received civil judgment regarding business transactions; 13 CFR 120.110(n) for 7(a) and 504 loans to remove restrictions on businesses with an Associate who is on probation or on parole; 13 CFR 120.707(a) for Microloans to remove restrictions on businesses with an Associate who is currently on probation or parole for an offense involving fraud or dishonesty; and 13 CFR 123.101(i) for physical and economic injury and 13 CFR 123.502(c) for military reservist economic injury disaster loans to remove restrictions regarding principal owners of damaged property who are on probation or parole following conviction for a serious criminal offense.

Further, regarding IDAP loans, in 13 CFR 123.702(c)(1) and (2), SBA will remove restrictions for businesses with an Associate who is presently on parole or probation; that has ever been charged with, arrested for, convicted, placed on pretrial diversion, and/or placed on any form of probation (including adjudication withheld pending probation) for any criminal offense other than a minor motor vehicle violation (including offenses which have been dismissed, discharged, or not prosecuted).

SBA has determined that reducing barriers to these programs for otherwise qualified applicants where one or more of their associates has the criminal justice system involvement described above is necessary to ensure equity and expand economic opportunities. These changes will further the goals of SBA's statutory mandates. SBA believes that modernizing the character requirements regarding consideration of the criminal history records of SBA loan applicants and Associates of business loan applicants is timely and appropriate to reflect changes in the public and private sector that have reduced unnecessary barriers to access to capital and successful reentry. Doing so also promotes equitable consideration for applicants who are ineligible for Federal assistance in SBA's programs due to prior convictions that have been adjudicated and terms of incarceration that have been served. These changes create the opportunity for formerly incarcerated individuals to participate in SBA's loan and surety bond programs and engage in entrepreneurial endeavors that research shows statistically decrease recidivism based on employment and continued engagement within their communities, thereby strengthening public safety. 4 These changes will enable SBA programs to provide capital in the form of Surety Bonds, 7(a), 504, Microloan, ILP, and Disaster loans to more qualified small businesses and disaster survivors, which will strengthen our economy. SBA did not remove or change 13 CFR 120.110(q) regarding ineligibility due to prior default and loss to the Federal Government. Finally, SBA will continue the practices it recently implemented to access certain public data to perform fraud checks prior to approval of any 7(a), 504, or Disaster loans.

SBA received comments requesting modifications for each section of the proposed rule. As the same modifications were repeated for each section, they are addressed in this overview rather than in the section-by-section analysis. Each of the requested modifications or requests and the reason for accepting or not accepting the modification or request is provided below:

(1) SBA should consider retaining the ability to conduct criminal background checks of program applicants and allow additional time to review the information contained therein for the expanded categories of individuals. SBA considered but did not accept the modification proposed by these comments. As SBA noted in the preamble of the final rule Lenders, CDCs, and Microlender Intermediaries may continue background checks if it is in their lending policies to do so. The final rule makes clear that, as the SBA expands access to capital to more qualified entrepreneurs, SBA continues to implement additional reforms to mitigate the risk of fraud in its traditional capital programs, including front-end detection protocols conducted by SBA, and these additional SBA front-end safeguards are in addition to ones set and implemented by lenders and local, State, and Federal laws.

(2) SBA should consider expanding access to capital to small business owners with criminal convictions only if ten years or more have elapsed since the last conviction. SBA considered but did not accept the modification suggested by these comments because (a) the comment did not provide any empirical support as to why a ten-year period (as opposed to another period of time) would strengthen either public safety or economic opportunity; (b) the comment did not provide any empirical support as to why other fact-specific and individualized indicia of rehabilitation and success during reentry in a shorter timespan after conviction should not be given more weight by SBA and the lender than an arbitrary number of years after conviction; (c) SBA determined that a categorial ten-year bar would undermine SBA's ability, through this rulemaking, to honor and incorporate the statutory mandates of 15 U.S.C. 631 that recognize the importance of small business development in general as well as the responsibility to increase opportunities for certain groups that may not historically have had equitable opportunities for small business ownership; and (d) small business applicants commented, and SBA agrees, that this ten-year categorical bar would be overburdensome for compliance. Requiring an additional waiting period for loan eligibility delays access to capital.

(3) SBA should provide additional guidance to lenders, beyond the proposed rule, on how exclusions for criminal convictions may cause a broad disparate impact for persons of color. SBA considered but did not accept this request because the research and analysis proposed by the commenter goes beyond the scope of SBA's authority in this regulatory rulemaking. This final rule is limited to improving equitable access based on criminal background review of applicants seeking to participate in one or more of the programs addressed by this rule.

(4) SBA should develop and issue guidance on this final rule in order to provide clarity to lenders to ensure that they implement its provisions with fidelity. Although enforcement goes beyond the scope of this regulatory rulemaking, SBA will provide future guidance on compliance in Standard Operating Procedures and training by specific programs.

(5) The SBA should work with lenders to reassess their underwriting standards to mirror changes to proposed rule. SBA does not accept this request because SBA does not have authority to mandate changes to lenders' safeguards and standards, and lenders are not obligated to adopt the changes SBA proposed. Lenders' authority to set and implement safeguards and standards is independent, which SBA recognizes and respects.

The current § 109.400(b)(15) for the ILP Program states that ineligible businesses are those with an Associate who is currently incarcerated, on probation, on parole, or has been indicted but not convicted of a felony or crime of moral turpitude. SBA is revising this regulation to remove those barriers while maintaining the prohibition against only those businesses with an Associate who is currently incarcerated or who is indicted but not convicted of a felony or crime of moral turpitude. SBA considered removing the prohibitions related to Associates under indictment in the NPRM. However, upon reconsideration based on its evaluation of public and interagency comments, SBA has decided to retain the existing language related to indictments. This revision is therefore narrowly tailored to reduce barriers to access for qualified formerly incarcerated small business owners who may be eligible to receive a loan through the ILP Program from an existing Intermediary with remaining funds to lend. The proposed rule received a total of 17 public comments of which nine or 53 percent were in support, 5 or 29 percent were in support with modifications and 3 or 18 percent were neutral and did not comment this on proposed rule specifically. The summary overview explains why the modifications were not incorporated into the final rule. SBA is finalizing the rule as proposed while retaining current prohibitions against businesses with an Associate indicted for certain crimes.

The current § 115.13(a)(2)(i) for the Surety Bond program states that ineligible businesses are those with a Principal who is under indictment but is not convicted, or has been previously convicted of a felony, or a final civil judgment has been entered stating that such Person has committed a breach of trust or has violated a law or regulation protecting the integrity of business transactions or business relationships. Through this final rule, SBA is removing those barriers while maintaining the prohibition against only those businesses with a Principal who is currently incarcerated or who is under indictment for a felony. SBA considered removing the prohibitions related to Principals under indictment in the NPRM. However, upon reconsideration based on its evaluation of public and interagency comments, SBA has decided to retain the existing language related to indictments. This revision is narrowly tailored to reduce barriers to access for qualified small business owners with certain criminal history records to compete for Federal and other contract opportunities by obtaining guarantees for surety bid and final payment and/or performance bonds. The proposed rule change received a total of 17 public comments of which 9 or 53 percent were in support, 5 or 29 percent supported with modification and 3 or 18 percent were neutral or did not comment on the proposed rule. The summary overview explains why the modifications were not incorporated into the final rule. SBA is finalizing the rule as proposed while retaining current prohibitions against businesses with an Associate indicted for certain crimes.

The current § 120.110(n) for the 7(a), 504, and Microloan programs states that ineligible businesses are those with an Associate who is currently incarcerated, on probation, on parole, or is under indictment but not convicted for a felony or any crime involving or relating to financial misconduct or a false statement. Through this final rule, SBA is revising this regulation to address the challenges people on probation or on parole have accessing capital while maintaining the prohibition against businesses with an Associate who is currently incarcerated or who is under indictment for a felony or any crime involving or relating to financial misconduct or a false statement. SBA considered removing the prohibitions related to Associates under indictment in the NPRM. However, upon reconsideration based on its evaluation of public and interagency comments, SBA has decided to retain the existing language related to indictments. This revision is narrowly tailored to reduce barriers to access for qualified small business owners with certain criminal history records. Under 15 U.S.C. 636(a)(1)(B), the SBA may verify an applicant's criminal history background, but it does not require such verification, nor does it prohibit loans for people with criminal history records. Lenders, CDCs, and Microloan Intermediaries make risk-based lending decisions. SBA's final rule revision does not impact a Lender's, a CDC's or a Microloan Intermediary's ability to conduct a criminal history background check, in accordance with their own policies, provided they do so in a manner that complies with the Equal Credit Opportunity Act and other relevant laws and does not result in an unjustified discriminatory effect on a protected class group. Lenders can continue to deny loans, for example, where criminal history, when considered along with other information, presents an unacceptable credit risk. The proposed rule received a total of 17 public comments, of which 12 or 71 percent were in support, and 5 or 29 percent support with modifications. No commenters opposed. The summary overview explains why the modifications were not incorporated into the final rule SBA is finalizing the rule as proposed.

SBA proposed to revise § 120.707(a) to increase access to capital to businesses with an Associate who is on probation or parole for an offense involving fraud or dishonesty while maintaining the prohibition against a business with an Associate who is incarcerated. For public safety reasons, however, SBA will retain the prohibition against making a loan to a childcare business, where an Associate is on probation or parole for an offense against children. This change will closely align with the revised requirements for all business loan programs regarding the determination that an applicant with a Principal or Associate that is currently incarcerated is ineligible for assistance and support the flexibility and access to capital for qualified business owners with criminal history records. The proposed rule received a total of 17 public comments, of which 9 or 53 percent were in support, 5 or 29 percent were in support with modifications, 3 or 18 percent were neutral/did not comment and none were opposed. The summary overview explains why the modifications were not incorporated into the final rule. SBA is finalizing the rule as proposed.

The current § 123.101(i) for the Disaster Loan Program states that SBA considers ineligible any principal owners of the damaged property that are presently incarcerated, or on probation or parole following conviction for a serious criminal offense. In this final rule, SBA revises § 123.101(i) to state that the applicant is ineligible to receive a disaster loan when any principal owner of a home that sustained damage is currently incarcerated. The eligibility requirements in § 123.101 are cross referenced in §§ 123.201 and 123.301; therefore, this final rule change will also apply to business property loans as well as economic injury loans. Notwithstanding SBA's final rule change, in accordance with statutory provisions that bar loans to those with certain convictions, SBA will maintain its existing prohibition where such prohibition is required by law. This final rule will align the requirements for all SBA loan programs regarding currently incarcerated applicants and support the flexibility and access to capital for qualified disaster survivors with criminal history records. The proposed rule received a total of 17 public comments, of which 9 or 53 percent were in support, 5 or 29 percent were in support with modifications, and 3 or 18 percent were neutral/did not comment. The summary overview explains why the modifications were not incorporated into the final rule. SBA is finalizing the rule as proposed.

The current § 123.502(c) for the Disaster Loan Program states that SBA considers ineligible any principal owners of the damaged property who are presently incarcerated, or on probation or parole following conviction for a serious criminal offense. In this final rule, SBA revises § 123.502(c) to state that for Military Reservist Economic Injury Disaster loans (MREIDL), the applicant is ineligible to receive a disaster loan when an Associate of a business that sustained damage is currently incarcerated. Notwithstanding SBA's final rule changes for disaster loans, in accordance with statutory provisions that bar loans to those with certain convictions, SBA will continue to consider as ineligible applicants whose eligibility is prohibited by law. This final rule change will align the requirements proposed for all SBA loan programs regarding individuals currently incarcerated and support the flexibility and access to capital for qualified small business owners with criminal history records. The proposed rule received a total of 17 public comments, of which 9 or 53 percent were in support, 5 or 29 percent were in support with modifications, 3 or 18 percent were neutral/did not comment and none were opposed. The summary overview explains why the modifications were not incorporated into the final rule. SBA is finalizing the rule as proposed.

The current § 123.702(c)(1) and (2) for IDAP loans state that SBA considers ineligible any applicant business that has an Associate that who is presently under indictment but not convicted, on parole or probation; charged with, arrested for, convicted, placed on pretrial diversion, and/or placed on any form of probation (including adjudication withheld pending probation) for any criminal offense other than a minor motor vehicle violation (including offenses which have been dismissed, discharged, or not prosecuted). In the final rule, SBA revises § 123.702(c)(1) and (2) to state that the applicant is ineligible to receive an IDAP loan when any principal owner of a home or business that sustained damage is currently incarcerated. SBA will continue to consider as ineligible applicants who are presently under indictment or whose eligibility is prohibited by law. SBA considered removing the prohibitions related to applicants under indictment in the NPRM. However, upon reconsideration based on its evaluation of public and interagency comments, SBA has decided to retain the existing language related to indictments.

In addition to applicants in all programs certifying to having no owners or Associates that are currently incarcerated, SBA will access certain external and widely acceptable and reliable databases to verify eligibility regarding incarceration and criminal history status. While the implementation of the final rule will expand access and thereby increase loan volume, SBA believes that these changes do not compromise the credit quality and performance of the loan portfolios. For example, the Microloan and Surety Bond Guaranty programs have permitted loans to businesses with individuals on parole or probation at no negative impact to overall program performance.

As published in June 2021, The RAND Research Brief  5 estimated that over 200,000 small businesses were affected or disqualified from participating in the Paycheck Protection Program (PPP) due to SBA's rules regarding current indictments and incarceration, and prior criminal convictions and criminal justice system involvement. Predictably, the survival rate of legitimate small businesses that did not receive assistance during the pandemic is lower than those that did receive support. There are several key distinctions between the PPP program and the SBA loan and surety programs at issue here. For example, PPP loans were forgivable while loans in the other SBA loan programs are not, and SBA has developed and implemented additional front-end detection protocols to strengthen program integrity since PPP. This RAND study is useful to highlight the number of otherwise qualified applicants who were ineligible to apply but required SBA assistance in order to survive.

Due to significant barriers to employment for individuals with criminal history records, self-employment and entrepreneurship are often vital avenues to successful reentry and employment. In fact, 28 percent of individuals with criminal history records are self-employed. 6 SBA's general and targeted loan programs should be a resource that provides options that support economic success and growth for individuals and communities, from basic self-employment to becoming employers within communities, and that support successful reentry outcomes, thereby strengthening public safety. Research is clear that reducing barriers to employment reduces recidivism and supports successful reentry, leading to better outcomes for individuals and communities  7 —all of which underscore the necessity for SBA to revisit and update these regulations to remove barriers to small-business employment and business ownership.

Under the final rule, for each program, SBA, Lenders, CDCs, Microloan Intermediaries, Sureties, and ILP Intermediaries, must consider the applicant business ineligible based on criminal history record when there is an Associate or Principal who is currently incarcerated or, depending on the program, under indictment.

SBA's final rule also streamlines SBA's lending criteria by reducing the number of factors that are required to be applied in determining eligibility based on criminal history records of small business owners. Lenders, CDCs, and Microloan Intermediaries make risk-based lending decisions as part of their existing and continuing protocols. Some lenders include conducting criminal history background checks and others do not. SBA's final rule revision does not impact a Lender's, CDC's or Microloan Intermediary's authority or ability to continue to do so, in accordance with their own policies, provided that they do so in a manner that complies with the Equal Credit Opportunity Act and other relevant laws. This proposed rule received a total of 17 public comments, of which 9 or 53 percent were in support, 5 or 29 percent were in support with modifications, 3 or 18 percent were neutral or did not comment on this section and none were opposed. The summary overview explains why the modifications were not incorporated into the final rule. SBA is finalizing the rule as proposed.

One comment recommended that SBA include in this rule an express provision addressing the effect of a judicial declaration of invalidity as to any section or portion of this rule or to parts 109, 115, 120 and 123. The question of severability addresses whether a judicial finding of a provision's invalidity should extend to other provisions or applications or whether it should be limited to the invalid provision or application, leaving in effect the remainder of the rule.

Like the entirety of parts 109, 115, 120 and 123, this rule seeks to implement, to the maximum extent possible, the stated congressional purposes of the Small Business Act and the Small Business Investment Act— i.e., “to . . . aid, counsel, assist, and protect, insofar as is possible, the interests of the small-business concerns in order to preserve free competitive enterprise” and “to foster economic development and to create or preserve job opportunities in both urban and rural areas by providing long-term financing for small business concerns.” See 15 U.S.C. 631 and 695.

This rule includes numerous enhancements to the ILP Program, the Surety Bond Guaranty Program the Business Loan Programs, and the Disaster Loan Programs. The individual sections added or modified in this rule, and those which remain in parts 109, 115, 120 and 123 from prior rulemakings, shall operate independently in service of the stated congressional purposes and the objectives set forth above for this rule.

Accordingly, in the event that any portion or application of the rule is declared invalid or unenforceable as applied to any person or circumstance, SBA intends for the provision to be construed so as to continue to give the maximum effect to the provision permitted by law, including as applied to persons not similarly situated or to dissimilar circumstances, unless such holding is that the provision of these paragraph is invalid and unenforceable in all circumstances. Further, SBA intends that the various other provisions and applications of parts 109, 115, 120 and 123, including those added or modified in this rule, be severable from the unlawful portion, unless such declaration of invalidity renders another section or provision meaningless or deprives that other section or provision of its functionality though only in such circumstances. Moreover, such collateral invalidity is intended only to the extent required by logic or loss of functionality.

As an illustration, if a court were to find unlawful this rule's revisions to the criminal background provisions in the Business Loan Programs (§ 120.110), such finding would have no effect upon this rule's revisions to the criminal background provisions in the Intermediary Lending Pilot (§ 109.400), the Surety Bond Guarantee (§ 115.3) and the Disaster Loan (§§ 123.101, 123.502 and 123.702) Programs, or various other provisions which in no way are dependent upon the criminal background provisions. To further this illustration, if a court were to find unlawful this rule's revisions to the criminal background provisions in the Business Loan Programs (§ 120.110), such finding would have no effect upon any of the other provisions and applications of parts 109, 115, 120 and 123 ( e.g., Eligible uses of proceeds as set forth in 13 CFR 120.120). The foregoing are merely examples and do not express an intent that any other provision be considered non-severable. SBA reiterates that where any provision of this part is declared invalid, any collateral invalidity is intended to the least extent necessary, in order to advance program objectives to the maximum extent possible. Such provisions would help mitigate uncertainty that may result from future court decisions if a lawsuit occurs.

The Office of Management and Budget has determined that this rule is a “significant regulatory action” under Executive Order 12866, as amended by Executive Order 14094. SBA included in the proposed rule and presents in the final rule a Regulatory Impact Analysis for the public's information in the next section. Each section begins with a core question.

Is there a need for this regulatory action?

In accordance with statutory mandates of 15 U.S.C. 631(a), 636(a)(1)(B), 636(b)(1)(A), 636(l), 636(m), 694(b), and 695, the Agency believes it needs to reduce regulatory restrictions for applicants with Associates or Principals based on criminal histories for the SBA Disaster, 7(a), 504, Microloan, ILP and Surety Bond Guaranty programs by reducing the requirement for criminal history records consideration to only applicants with a Principal or Associate currently incarcerated or, depending on the program, under indictment, in the manner proposed above. Many formerly incarcerated persons experience significant barriers in accessing employment and capital and credit often necessary to start a business. The revisions in SBA's final rule will remove barriers to access capital and employment for qualified applicants. SBA will reduce the administrative burden on applicants as well as the need for fingerprints by providing a single succinct directive that SBA determines any applicant with a Principal or Associate that is currently incarcerated or, depending on the program, under indictment, to be ineligible with no further requirements for disclosure of prior criminal history records.

What are the potential benefits and costs of this regulatory action?

SBA does not anticipate significant additional costs or impact on the subsidy to operate the 7(a), 504, Microloan, ILP, Surety Bond Guaranty and Disaster Loan Programs under these proposed regulations because all loans submitted must always meet Loan Program Requirements. In general, the final rule benefits otherwise qualified entrepreneurs who would not otherwise be eligible to apply for these programs due to outdated restrictions that were not evidence-informed, and therefore it strengthens our economy and our public safety.

SBA does not receive information from lenders on how many applicants they decline for 7(a), 504, and Microloans. SBA has received substantial feedback and research from stakeholders that its current rules have presented broad barriers to otherwise qualified individuals with criminal history records that seek financing to start, run, or expand small businesses. This final rule aligns with the statutory mandates in 15 U.S.C. 631 and supports the inference that reducing or removing barriers will result in additional applications from those otherwise qualified small business owners with criminal history records who may have been deterred from applying due to the current prohibitions related to criminal history records.

In the 7(a) and 504 programs, for formerly incarcerated individuals and people not on parole or probation, out of more than 50,000 loans made annually, SBA lenders have submitted to SBA for review approximately 586 Character determination requests containing information on criminal history records involving felonies. SBA declines on average only 17-23 of the requests per year due to the nature of the offense or incomplete judicial records. SBA's Disaster Loan Program has declined 93 individuals for criminal history record background checks between 2018 and 2022, with an additional 1,026 files withdrawn by applicants prior to review during the same period. Microloan Intermediaries do not submit loans to SBA for approval, so SBA does not have data for criminal history records of Microloan applicants. SBA's final rule provides clarity for borrowers who might have otherwise withdrawn their application based on eligibility concerns. Finally, Lenders, CDCs, and Microloan Intermediaries make risk-based lending decisions. The statistics above do not account for any checks conducted by lenders or any resultant applications being withdrawn. Some lenders include conducting criminal history background checks and others do not. SBA's proposed revision does not impact a lender's ability to continue to do so, in accordance with their own policies, provided that they do so in a manner that complies with the Equal Credit Opportunity Act and other relevant laws.

What alternatives have been considered?

SBA considered the impact of maintaining the current rules that deem as ineligible businesses with Principals or Associates currently incarcerated, on parole or probation or convicted of certain financial and other crimes. This would result in continuing barriers for small businesses owned by individuals with criminal history records. Instead, SBA's final rule balances that concern against the risk to SBA of making guarantees and loans to businesses whose Principals or Associates lack the ability to manage and execute day-to-day business operations due to their current incarceration. SBA's final rule also supports disaster survivors during recovery with increased equal access to capital.

The Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs has determined that this rule is not a major rule under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act), 5 U.S.C. 804(2). The annual effect on the economy is less than $100 million.

This action meets applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have preemptive effect or retroactive effect.

This final rule does not have federalism implications as defined in Executive Order 13132. It will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in the Executive order. As such it does not warrant the preparation of a Federalism Assessment.

A description of the need for this regulatory action and benefits and costs associated with this action, including possible distributional impacts that relate to Executive Order 13563, are included above in the Regulatory Impact Analysis under Executive Order 12866.

SBA has determined that this final rule would require that the following forms be revised: SBA Form 1919, “Borrower Information Form,” SBA Form 1244, “Application for Section 504 Loans,” SBA Form 5, “Disaster Business Loan Application,” SBA Form 5C, “Disaster Home/Sole Proprietor Loan Application,” and SBA Form 994, “Application for Surety Bond Guarantee Assistance”.

SBA Form 1919 is approved under OMB Control number 3245-0348. SBA Form 1244 is approved under OMB Control number 3245-0071. SBA Form 5 is approved under OMB Control number 3245-0017 and SBA Form 5C is approved under OMB Control number 3245-0018. SBA Form 994 is approved under OMB Control number 3245-0007.

SBA will revise SBA Form 1919, and SBA Form 1244 to conform to the eligibility change at 13 CFR 120.110(n). When small businesses apply for 7(a) or 504 loans, the estimated hour burden for applicants and lenders will decrease because the criminal history analysis and collection of data will no longer be required.

SBA will revise SBA Form 5 and 5C to conform to the eligibility change at 13 CFR 123.101(i). When disaster survivors apply for disaster loans, the estimated hour burden for applicants will decrease because the criminal history record analysis and collection of data will be reduced.

SBA will revise SBA Form 994 to conform to the eligibility change at 13 CFR 115. 13(a)(2)(i). When small businesses apply for surety bond guarantees, the estimated hour burden for applicants will decrease because the criminal history record analysis and collection of data will no longer be required.

When an agency issues a rulemaking, the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires the agency to “prepare and make available for public comment an initial regulatory analysis” which will “describe the impact of the proposed rule on small entities.” Although the rulemaking may potentially impact a small percentage of loans reviewed by 7(a) Lenders, CDCs, Microloan Intermediaries, ILP Intermediaries, the 44 Sureties that participate in the Surety Bond Guaranty Program, and SBA regarding the disaster loans, SBA does not believe the impact will be significant because this rule streamlines regulatory burdens. However, there may be impacts due to increased loans for businesses with Principals or Associates that have a criminal history record but are not currently incarcerated or under indictment.

SBA reviews approximately 586 Character determination requests annually and declines 3 or 4 percent, or 17 to 23 requests, due to the nature of the offense or incomplete judicial records. The revisions to § 120.110(n) will eliminate the need for 100 percent of these character determination reviews. SBA Form 1919, “SBA 7a Borrower Information Form,” is the application form for the 7(a) Loan Program. SBA Form 1244, “Application for Section 504 Loans,” is the application form for the 504 Loan Program. Each application includes 3 questions that Associates of the applicant must answer regarding their criminal history records. Under the final rule revisions, SBA will eliminate the three current questions and replace them with one new question regarding incarceration or being under indictment. SBA estimates that all applicants for the 7(a) Loan Program and 504 Loan Program will save 5 minutes completing the applications due to these revisions. Intermediaries for the Microloan Program use their own applications for Microloan borrowers, but it is reasonable to assume similar time savings. The 7(a) Loan Program, 504 Loan Program, and Microloan Program make approximately 68,677 loans per year. Saving 5 minutes for each application will result in total time savings of 5,723 hours annually.

For the reasons stated in the preamble, SBA amends 13 CFR parts 109, 115, 120 and 123 as follows:

The PFCSA  1 requires the Commission to promulgate a final rule to require flame mitigation devices (FMDs) in portable fuel containers that impede the propagation of flame into the container. 15 U.S.C. 2056d(b)(1)-(2). However, the Commission is not required to promulgate a final rule for a class of portable fuel containers within the scope of the PFCSA if the Commission determines that:

• there is a voluntary standard for flame mitigation devices for those containers that impedes the propagation of flame into the container;

• the voluntary standard is or will be in effect not later than 18 months after the date of enactment of the PFCSA; and

• the voluntary standard is developed by ASTM International or such other standard development organization that the Commission determines to have met the intent of the PFCSA.

If the Commission determines that any voluntary standard meets these requirements, it must publish the determination in the Federal Register , and the requirements of such a voluntary standard “shall be treated as a consumer product safety rule.” 15 U.S.C. 2056d(b)(4). Under this authority, on January 13, 2023, the Commission published a notice determining that three voluntary standards for portable fuel containers meet the requirements of the PFCSA and would be treated as consumer product safety rules: ASTM F3429/F3429M-20 (pre-filled containers); ASTM F3326-21 (containers sold empty); and section 18 of UL 30:2022 (safety cans). 88 FR 2206.

Portable fuel containers sold pre-filled are within the scope of ASTM F3429/F3429M, Standard Specification for Performance of Flame Mitigation Devices Installed in Disposable and Pre-Filled Flammable Liquid Containers. ASTM lists the standard as a dual standard in inch-pound units (F3429 designation) and metric units (F3429M designation). ASTM F3429/F3429M was first published in 2020. ASTM published a revised version of ASTM F3429/F3429M-23 in May 2023, as ASTM F3429/F3429M-23. On August 22, 2023, the Commission determined that the 2023 revisions met the requirements of section 2056d(b)(3)(A) of the PFCSA. 2 Accordingly, ASTM F3429/F3429M-23 is the current mandatory consumer product safety rule for pre-filled-portable fuel containers. On October 31, 2023, the Commission published a direct final rule creating 16 CFR part 1461 for portable fuel containers to incorporate by reference the revised ASTM F3429/F3429M-23, as well as ASTM F3326-21 and section 18 of UL 30:2022. 88 FR 74342.

Under section (b)(5) of the PFCSA, if the requirements of a voluntary standard that meet the requirements of section (b)(3) are subsequently revised, the organization that revised the standard shall notify the Commission after the final approval of the revision. 15 U.S.C. 2056d(b)(5)(A). Any such revision to the voluntary standard shall become enforceable as the new consumer product safety rule not later than 180 days after the Commission is notified of a revised voluntary standard that meets the conditions of section (b)(3) (or such later date as the Commission determines appropriate), unless the Commission determines, within 90 days after receiving the notification, that the revised voluntary standard does not meet the requirements described in section (b)(3) of the PFCSA. 15 U.S.C. 2056d(b)(5)(B).

On January 29, 2024, ASTM notified the Commission that it has revised ASTM F3429/F3429M-23 with the publication of ASTM F3429/F3429M-24. On February 9, 2024, the Commission published a notice of availability and request for comment regarding ASTM F3429/F3429M-24. 89 FR 9078. The Prefilled Fuel Container Industry Association and the Household & Commercial Products Association submitted comments in support of the revisions in ASTM F3429/F3429M-24. Both commenters noted that the various revisions to the standard are important revisions that will improve consumer safety, and thus they support the Commission adopting ASTM F3429/F3429M-24 as the mandatory standard for prefilled portable fuel containers.

As discussed in section II of this preamble, the Commission determines that the revisions in ASTM F3429/F3429M-24 meet the requirements of section 2056d(b)(3)(A) of the PFCSA. 15 U.S.C. 2056d(b)(3)(A). Accordingly, ASTM F3429/F3429M-24 shall be treated as a consumer product safety rule promulgated under section 9 of the Consumer Product Safety Act (CPSA) effective July 27, 2024, which is 180 days after ASTM's notification. This direct final rule  3 updates the incorporation by reference in the Commission's rule under the PFCSA to reflect ASTM F3429/F3429M-24 as the mandatory standard for prefilled portable fuel containers.

ASTM F3429/F3429M-23 is the current mandatory standard for prefilled portable fuel containers under the PFCSA and has been revised twice since the original publication in 2020. The ASTM F15.72 subcommittee for Pre-Filled Containers of Flammable and Combustible Liquids developed the standard. The standard requires two performance tests of the container's FMD. The first is an endurance test, in which the container is subjected to an external and stationary 2.5-inch flame at the mouth of the container for 30 seconds. The second test is a flashback test, in which the container is subjected to an external flash fire near the container's mouth. The container passes each test if the contents of the container do not catch fire or otherwise ignite in each of five consecutive trials. The two tests determine whether the FMD impedes the propagation of two different types of ignition sources, a stationary flame and a moving flame.

Substantive revisions in ASTM F3429/F3429M-24 are described below and include an FMD retention test, a new option for some rigid containers to test using a different test gas, clarification of the requirements for certifying a “family of containers,” and clarification of existing testing procedures. There are also non-substantive revisions. As discussed below, the Commission concludes that the revisions in ASTM F3429/F3429M-24 meet the requirements of section 2056d(b)(3)(A) of the PFCSA. Thus, the Commission is allowing ASTM F3429/F3429M-24 to become the mandatory consumer product safety rule for pre-filled portable fuel containers pursuant to section 2056d(b)(5) of the PFCSA.

ASTM F3429/F3429M-24 adds a new retention requirement to section 5.6 and a new retention test method as section 11. The new retention requirement and test ensures that an FMD installed in a prefilled portable fuel container is not easily removed by the consumer. The new retention test requires the FMD to resist a 15-lb push force, a 15-lb pull force, and a 25 in-lb torque in each direction. This revision improves safety because it reduces the likelihood that consumers will remove FMDs installed in prefilled portable fuel containers. The Commission therefore concludes that these revisions to the voluntary standard satisfy the requirements of section 2056d(b)(3)(A) of the PFCSA.

ASTM F3429/F3429M-24 revises requirements in section 5.2 for adjusting the gas flow calculation procedures in sections 7.3 and 7.5.2, and it adds a new squeeze test method as section 12 to the standard to permit some rigid containers to be tested with propane or ethane as acceptable test gases in addition to ethylene. Sections 5.2 and 7 detail how the gas flow is calculated; sections 5.2, 7.3, and 7.5.2 add calculation values for propane and ethylene; and section 7.5.2 also corrects a mathematical error with the ethylene value given.

For a container to be tested with propane or ethane, it must: (1) be determined to be rigid or not squeezable by the new squeezing test method (section 12); and (2) the liquid fuel within the container must have a Maximum Experimental Safe Gap (MESG)  4 above a prescribed value respective of the test gas MESG. This revision allows use of a larger mesh-size FMD for such rigid containers which still provides sufficient protection for these rigid containers while also preventing splashing problems and reducing the likelihood of consumers removing the FMD to achieve better fuel flow. Manufacturers reported that focus-group testing indicated that consumers were likely to try to remove or alter the FMD if the flow of liquid contents was not smooth. In non-rigid containers, consumers can squeeze the container to help dispense the liquid contents, but consumers cannot do this with rigid containers. Testing with propane or ethane results in slightly larger hole sizes in the FMD that allows the liquid contents to better pour from a container that cannot be squeezed, and therefore, reduces the likelihood of consumers trying to remove the FMD. This revision improves safety by reducing the likelihood of consumers removing safety features, while ensuring that the safety features still provide the necessary protection. The Commission therefore concludes that these revisions to the voluntary standard satisfy the requirements of section 2056d(b)(3)(A) of the PFCSA.

ASTM F3429/F3429M-24 clarifies the requirements of section 5.8 for certifying a container with the same FMD as another compliant container. ASTM F3429/F3429M-23 does not provide any requirements, guidance, or information regarding the construction of the two containers. In ASTM F3429/F3429M-24, a statement was added to section 5.8 explaining that the different containers must be “made from similar material with a similar wall thickness.” This revision ensures that a container using the same FMD as another but not made from the same material and similar wall thickness requires its own certification test. The change in section 5.8 allows a manufacturer to certify a family of containers with similar designs and wall thicknesses and only variations in sizes with a single certification test but does not allow a manufacturer to certify any container that shares the same FMD with another container certified to F3429-24. This change improves safety by ensuring that FMDs are not accepted when tested on dissimilar containers. The Commission therefore concludes that these changes to the voluntary standard satisfy the requirements of section 2056d(b)(3)(A) of the PFCSA.

ASTM F3429/F3429M-24 revises three test procedures from the 2023 edition of the standard. The first revision applies to the procedures for sample preparation in section 6.1.1.5, clarifying that if the bottom portion of the container is removed for testing, then the FMD and the portion of the container or closure the FMD attaches to shall remain intact.

The second revision to the test procedure is found in a new section 7.5.5 for gas flow calculations under section 7 which clarifies the procedure for flowing gaseous fuel and air into the container. ASTM F3429/F3429M-23 allowed for an increased flow rate of gaseous fuel and air to establish the correct gaseous fuel and air ratio in the container before the test but did not specify when to reduce the flow. The revised standard requires the flow to be reduced 30 seconds before the test starts. This revision ensures the pilot flame outside the container mouth is not affected by an increased outflow used to prepare the container before testing and thus improves consistency in testing from one testing laboratory to another.

The third test procedure revisions are in the endurance test method in section 8 and the flashback test method in section 9, which makes the test procedures in the two test methods consistent with each other. ASTM F3429/F3429M-23 allows the flow rate to be increased in the flashback test but did not include that provision for the endurance test. This change in section 9.4.5.1 of ASTM F3429/F3429M-24 allows the flow rate of gaseous fuel and air to be increased in the endurance test too. As with the endurance test, section 9.4.7 specifies that the flow must be reduced 30 seconds prior to the start of the test. This revision improves the efficiency of the testing laboratory by removing the possibility of testing laboratories confusing inconsistent procedures for the two test methods.

The Commission concludes that these revisions improve safety by facilitating reliable compliance testing.

The revised standard also made several changes to the non-mandatory sections of the standard, such as adding a reference to new appendix information in the scope, adding a discussion to the definition of FMD, indicating that a FMD may be an assembly comprised of several components, removing the term “reserved” from the functional test, and adding information that a functional test is not required, but best practices are included in the appendix. ASTM F3429-23 did not include a functional test but left a “reserved” section as a future possible requirement with non-mandatory practices in the appendix. This “reserved” section confused users of the standard, and this change removes the possibility for such confusion. The Commission concludes that with these non-substantive changes, the standard still satisfies the requirements of section 2056d(b)(3)(A) of the PFCSA.

Sections 1461.3(a) and 1461.4(a)(2) have been amended to incorporate by reference ASTM F3429/F3429M-24 as the new mandatory standard for prefilled portable fuel containers to reflect the Commission's acceptance of revised ASTM F3429/F3429M-24 under the PFCSA.

The Commission is issuing this rule as a direct final rule. Although the Administrative Procedure Act (APA; 5 U.S.C. 551-559) generally requires agencies to provide notice of a rule and an opportunity for interested parties to comment on it, section 553 of the APA provides an exception when the agency “for good cause finds” that notice and comment are “impracticable, unnecessary, or contrary to the public interest.” Id. 553(b)(B).

The purpose of this direct final rule is to codify in the Code of Federal Regulations (CFR) revised ASTM F3429/F3429M-24 as a mandatory consumer product safety rule. Because the Commission has determined that this revision meets the requirements of the PFCSA, it becomes effective by operation of law under the PFCSA 180 days after the Commission was notified of the revision. 15 U.S.C. 2056d(b)(5). Public comments would not alter whether ASTM F3429/F3429M-24 is considered a mandatory consumer product safety rule under the PFCSA. The Commission concludes that when it merely updates the codification of the incorporation by reference for a voluntary standard that is already a mandatory consumer product safety rule by statute under the PFCSA, notice and comment are unnecessary.

In its Recommendation 95-4, the Administrative Conference of the United States (ACUS) endorses direct final rulemaking as an appropriate procedure to expedite rules that are noncontroversial and not expected to generate significant adverse comments. See 60 FR 43108 (Aug. 18, 1995). ACUS recommends that agencies use the direct final rule process when they act under the “unnecessary” prong of the good cause exemption in 5 U.S.C. 553(b)(3)(B). Consistent with the ACUS recommendation, the Commission is publishing this rule as a direct final rule, because CPSC does not expect any significant adverse comments.

Unless CPSC receives a significant adverse comment by May 30, 2024, this rule will become effective on July 27, 2024—the end of the 180-day period specified in the PFCSA. In accordance with ACUS's recommendation, the Commission considers a significant adverse comment to be “one where the commenter explains why the rule would be inappropriate,” including an assertion challenging “the rule's underlying premise or approach,” or a claim that the rule “would be ineffective or unacceptable without a change.” 60 FR 43108, 43111 (Aug. 18, 1995). As noted, this rule merely codifies ASTM F3429/F3429M-24 in the CFR as the mandatory consumer product safety rule under the PFCSA; thus, public comments would not change that circumstance.

If the Commission does receive a significant adverse comment, the Commission will withdraw this direct final rule. Depending on the comment and other circumstances, the Commission may then incorporate the adverse comment into a subsequent direct final rule or publish a notice of proposed rulemaking, providing an opportunity for public comment.

Section 1461.4(a)(2) of the direct final rule incorporates by reference ASTM F3429/F3429M-24. The Office of the Federal Register (OFR) has regulations regarding incorporation by reference. 1 CFR part 51. Under these regulations, agencies must discuss in the preamble to a final rule, ways in which the material the agency incorporates by reference is reasonably available to interested parties and how interested parties can obtain the material. In addition, the preamble to the final rule must summarize the material. 1 CFR 51.5(b).

In accordance with the OFR regulations, section II of this preamble summarizes the major provisions of ASTM F3429/F3429M-24 that the Commission incorporates by reference into 16 CFR part 1461. The standard is reasonably available to interested parties. Until the direct final rule takes effect, a read-only copy of ASTM F3429/F3429M-24 is available for viewing, at no cost, on ASTM's website at: www.astm.org/CPSC.htm. Once the rule takes effect, a read-only copy of ASTM F3429/F3429M-24 will be available for viewing, at no cost, on the ASTM website at: www.astm.org/READINGLIBRARY/. Interested parties can purchase a copy of ASTM F3429/F3429M-24 from ASTM International, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959 USA; telephone: (610) 832-9500; www.astm.org.

Interested parties can also schedule an appointment to inspect a copy of ASTM F3429/F3429M-24 at CPSC's Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, telephone: (301) 504-7479; email: cpsc-os@cpsc.gov.

Section 2056d(b)(5)(B) of the PFCSA provides that not later than 180 days after the Commission is notified of a revised voluntary standard (or such later date as the Commission determines appropriate), such revised voluntary standard shall become enforceable as a consumer product safety rule promulgated under 15 U.S.C. 2058, in place of the prior version, unless within 90 days after receiving the notice the Commission determines that the revised voluntary standard does not meet the requirements in section 2056d(b)(3)(A) of the PFCSA. 15 U.S.C. 2056d(b)(5)(B). Unless the Commission receives a significant adverse comment by May 30, 2024, the rule will become effective on July 27, 2024. This direct final rule's effective date of July 27, 2024, which is the effective date of the ASTM F3429/F3429M-24 revision as a mandatory safety standard, does not alter the previously established effective date of July 12, 2023, for ASTM F3326-21 and section 18 of UL 30:2022 under the PFCSA. Products subject to the requirements of those standards are already required to meet those standards.

The Regulatory Flexibility Act (RFA; 5 U.S.C. 601-612) generally requires agencies to review proposed and final rules for their potential economic impact on small entities, including small businesses, and prepare regulatory flexibility analyses. 5 U.S.C. 603, 604. The RFA applies to any rule that is subject to notice and comment procedures under section 553 of the APA. Id. As discussed in section III of this preamble, the Commission has determined that notice and the opportunity to comment are unnecessary for this rule. Therefore, the RFA does not apply. CPSC also notes the limited nature of this document, which merely updates the incorporation by reference for ASTM F3429/F3429M in the CFR to reflect ASTM F3429/F3429M-24 as the mandatory standard for prefilled containers under the PFCSA.

The Commission's regulations provide a categorical exclusion for the Commission's rules from any requirement to prepare an environmental assessment or an environmental impact statement where they “have little or no potential for affecting the human environment.” 16 CFR 1021.5(c). This rule falls within the categorical exclusion, so no environmental assessment or environmental impact statement is required.

Section 26(a) of the CPSA provides that where a consumer product safety standard is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury unless the state requirement is identical to the federal standard. 15 U.S.C. 2075(a). Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to CPSC for an exemption from this preemption under certain circumstances. 15 U.S.C. 2075(c). The PFCSA deems rules issued under that statute to be a “consumer product safety rule.” Therefore, once a rule issued under the PFCSA takes effect, it will preempt in accordance with section 26(a) of the CPSA.

The Congressional Review Act (CRA; 5 U.S.C. 801-808) states that before a rule can take effect, the agency issuing the rule must submit the rule and certain related information, to each House of Congress and the Comptroller General. 5 U.S.C. 801(a)(1). The CRA submission must indicate whether the rule is a “major rule.” The CRA states that the Office of Information and Regulatory Affairs (OIRA) determines whether a rule qualifies as a “major rule.”

Pursuant to the CRA, OIRA has determined that the rule does not qualify as a “major rule,” as defined in 5 U.S.C. 804(2). To comply with the CRA, CPSC will submit the required information to each House of Congress and the Comptroller General.

For the reasons discussed in the preamble, the Commission amends 16 CFR chapter II as follows:

This document rescinds the Department's 2018 rule entitled “Definition of Employer Under Section 3(5) of ERISA—Association Health Plans.” The 2018 AHP Rule established an alternative set of criteria from those set forth in the Department's pre-rule guidance for determining when a group or association of employers is acting “indirectly in the interest of an employer” under section 3(5) of ERISA for purposes of establishing an AHP as a multiple employer group health plan. The 2018 AHP Rule was a significant departure from the Department's longstanding pre-rule guidance on the definition of “employer” under ERISA. This departure substantially weakened the Department's traditional criteria in a manner that would have enabled the creation of commercial AHPs functioning effectively as health insurance issuers. The 2018 AHP Rule's alternative criteria were, in large part, held invalid by the U.S. District Court for the District of Columbia in New York v. United States Department of Labor. The district court found the bona fide association and working owner provisions in the 2018 AHP Rule were based on an unreasonable interpretation of ERISA that was inconsistent with congressional intent that ERISA applies to employment-based benefit relationships. The Department, after further review of the relevant statutory language, judicial decisions, and longstanding pre-rule guidance, and further consideration of ERISA's statutory purposes and related policy goals, as well as the public comments received on the Department's proposed rule, now rescinds in full the 2018 AHP Rule in order to resolve and mitigate any uncertainty regarding the status of the criteria that were set under the 2018 AHP Rule, allow for a reexamination of the criteria for a group or association of employers to be able to sponsor an AHP, and ensure that guidance being provided to the regulated community is in alignment with ERISA's text, purposes, and policies. The Department now believes that the provisions of the 2018 AHP Rule that the district court held invalid are, at a minimum, not consistent with the best reading of ERISA's statutory requirements governing group health plans.

The Coast Guard will enforce special local regulations in Table 2 to paragraph (i)(2) of 33 CFR 100.501 for the Cambridge Classic Powerboat Race regulated area from 10 a.m. to 6:30 p.m. on May 18 and for the same hours on May 19, 2024. This action is being taken to provide for the safety of life on navigable waterways during this 2-day event. Our regulation for marine events within the Fifth Coast Guard District, § 100.501, specifies the location of the regulated area for the Cambridge Classic Powerboat Race which encompasses portions of the Choptank River and its branches. During the enforcement periods, as reflected in § 100.501(c), if you are the operator of a vessel in the regulated area you must comply with directions from the Patrol Commander or any Official Patrol displaying a Coast Guard ensign.

In addition to this notification of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners and Broadcast Notice to Mariners over VHF-FM marine band radio.

The Coast Guard will enforce special local regulations in 33 CFR 100.801 Table 3, Line 4, for the RiverFest Power Boat Races from 2 through 6 p.m. on May 3, 2024, and from 8:30 a.m. through 6 p.m. on May 4 and May 5, 2024. This action is being taken to provide for the safety of life on navigable waterways during this three-day event. Our regulations for marine events within the Eighth Coast Guard District, § 100.801, specifies the location of the regulated areas for the RiverFest Power Boat Races which encompasses portions of the Neches River adjacent to Port Neches Park. During the enforcement period, as reflected in § 100.80,1 if you are the operator of a vessel in the regulated area you must comply with directions from the designated Patrol Commander.

In addition to this notice of enforcement in the Federal Register, the Coast Guard plans to provide notification of the enforcement periods via Local Notice to Mariners, Marine Safety Information Bulletin, and Vessel Traffic Service Advisory.

The Coast Guard is issuing this temporary rule under authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it's impracticable. The NPRM process would delay the establishment of the safety zone until after the date of the event and compromise public safety. We must establish this temporary safety zone by June 15, 2024, and lack of sufficient time to provide reasonable comment period and then consider those comments before issuing the rule.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector Lower Mississippi River (COTP) has determined that potential hazards associated with waterborne fireworks display will be a safety concern for anyone located on the Lower Mississippi River mile marker 364.5 to mile marker 365.5. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the temporary safety zone during the operation of the waterborne fireworks display.

This rule establishes a safety zone from 8:30 p.m. until 9:15 p.m. on June 15, 2024. The safety zone will cover all navigable waters on the Lower Mississippi River from mile marker 364.5 to mile marker 365.5. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters during the operations of the waterborne fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size, location, and duration of the temporary safety zone. This temporary safety zone will temporarily restrict navigation on the Lower Mississippi River from mile marker 364.5 to mile marker 365.5 in the vicinity of Natchez, MS, on June 15, 2024, from 8:30 p.m. until 9:15 p.m. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners, Local Notice to Mariners, and/or Marine Safety Information Bulletins, as appropriate.

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

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

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

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

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a temporary safety zone lasting approximately one hour that will prohibit entry on the Lower Mississippi River from mile marker 364.5 to mile marker 365.5. It is 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 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.

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.

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

The Coast Guard will enforce safety zone regulations in 33 CFR 165.801 Table 3, Line 1, for the Port Neches Riverfest fireworks display from 8:30 through 10 p.m. on May 4, 2024, or in the event of rain, on May 5, 2024 for the same time period. This action is being taken to provide for the safety of life on navigable waterways before, during, and after a pyrotechnics display. Our annual fireworks displays and other events in the Eighth Coast Guard District requiring safety zones, § 165.801, specifies the location of the safety zone for the Riverfest fireworks display which encompasses a 500-yard radius around the fireworks barge anchored on the Neches River in approximate position 29°59′51″ N 093°57′06″ W (NAD83). During the enforcement period, as reflected in § 165.801, if you are the operator of a vessel in the regulated area you must comply with directions from the Captain of the Port or designated representative.

In addition to this notice of enforcement in the Federal Register , the Coast Guard plans to provide notification of the enforcement periods via Local Notice to Mariners, Marine Safety Information Bulletin and Vessel Traffic Service Advisory.

The Coast Guard is issuing this temporary rule under authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. It is impracticable to publish an NPRM because we must establish this temporary safety zone by May 4, 2024 and lack sufficient time to provide a reasonable comment period and consider those comments before issuing the rule.

Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable because establishing the safety zone by May 4, 2024, is necessary to protect all waterway users during scheduled race events.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Marine Safety Unit Port Arthur (COTP) has determined that the potential hazards associated with high-speed drag boat races are a safety concern for persons and vessels operating on the Sabine River. Possible hazards include risks of injury or death from near or actual contact among participant vessels and spectators or mariners traversing through the safety zone. This rule is needed to protect all waterway users, including event participants and spectators, before, during, and after the scheduled event.

This rule establishes a temporary safety zone from 9 a.m. on May 4, 2024, through 6 p.m. on May 5, 2024, and will be enforced each day from 9 a.m. through 6 p.m.. The safety zone covers all navigable waters of the Sabine River, extending the entire width of the river, adjacent to the public boat ramp located in Orange, TX, bounded on the north by the Orange Municipal Wharf at latitude 30°05′50″ N and to the south at latitude 30°05′33″ N. The duration of the safety zone is intended to protect participants, spectators, and other persons and vessels in the navigable waters of the Sabine River during high-speed drag boat races and will include breaks and opportunities for vessels to transit through the regulated area. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size, location, and duration of the safety zone. This safety zone encompasses a less than half-mile stretch of the Sabine River that will be enforced for eight hours on two consecutive days. Moreover, the Coast Guard will issue Broadcast Notice to Mariners (BNMs) via VHF-FM marine channel 16 about the zone. Daily enforcement periods will include breaks that will provide an opportunity for vessels to transit through the regulated area, 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 rule will not have a significant economic impact on a substantial number of small entities.

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule may 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.

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

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that is effective for eight hours on each of two days that will prohibit entry on less than a one-half-mile stretch of the Sabine River. It is 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 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.

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.

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

On October 24, 2022, VA published a proposed rule in the Federal Register (87 FR 64190) that would amend CHAMPVA exclusions to allow coverage of telephonic (audio-only) medical visits. VA also proposed removing specified quantitative limits on coverage for inpatient and outpatient mental health/substance use disorder (SUD) care appointments, i.e., inpatient and outpatient mental health services, residential treatment, institutional services for partial hospitalization, substance withdrawal management in a hospital setting or rehabilitation facility, outpatient SUD services, and family therapy for SUD. This would align the delivery of CHAMPVA mental health/SUD care with the Department of Defense (DoD) TRICARE program, current standards of practice in mental health and SUD care, and the goals of the Mental Health Parity and Addiction Equity Act of 2008. 87 FR at 64193. VA also proposed removing the current preauthorization requirement for outpatient mental health visits in excess of 23 per calendar year and/or more than two (2) sessions per week. In addition, VA proposed removing cost sharing requirements for certain contraceptive services and prescription or nonprescription contraceptive products that are approved, cleared, or granted by the FDA.

VA provided a 30-day comment period, which ended on November 23, 2022. VA received 14 comments on the proposed rule, of which 7 comments were supportive and did not suggest changes or clarifications from the proposed rule. Commenters generally expressed support for all the proposed changes, but we received substantive comments with recommendations for change on audio telehealth coverage as well as the cost sharing exemption for contraceptives. We address these substantive comments below. Based on these comments, VA adopts the proposed rule as final, with changes.

VA proposed amending its regulations to remove the exclusion of audio-only telehealth for CHAMPVA beneficiaries for services provided on or after May 12, 2020. As proposed, the amendment would apply retroactively and allow reimbursement of medically necessary audio-only telehealth services for CHAMPVA beneficiaries dating back to the date TRICARE published a similar interim final rulemaking (85 FR 27927 May 12, 2020). CHAMPVA beneficiaries would be required to file a claim for reimbursement within 180 days of the effective date of a final rulemaking.

One commenter suggested VA publish guidance to providers and patients related to the retroactive reimbursement period notice. The commenter suggested VA send text alerts notifying beneficiaries on how to file a claim for reimbursement. VA thanks the commenter for the suggestion and VA will take it into consideration, but utilization of specific communication methods for outreach is outside the scope of this rulemaking. However, we note that VA does have a communications plan in place to alert potential beneficiaries as well as providers of this retroactive change in audio-only telehealth coverage. We make no changes based on this comment.

The remaining six comments suggested changes to the proposed rule. All of the comments recommended changes related to the coverage and cost sharing requirements for contraceptive services and products.

Before addressing these comments, we first correct an erroneous statement we made at the proposed rule stage. When we proposed amending § 17.272(a)(28) to provide for CHAMPVA coverage of nonprescription contraceptives used as emergency contraceptives we incorrectly indicated in the proposed rule that TRICARE does not provide coverage for nonprescription contraceptives used as emergency contraception. In accordance with 10 U.S.C. 1074g(a)(2)(F), as implemented by 32 CFR 199.21(h)(5), the TRICARE Pharmacy Benefits Program covers over the counter Levonorgestrel 1.5 mg tablet ( e.g., Plan B One-Step) as emergency contraception at no cost if obtained at a military medical treatment facility or retail pharmacy (not home delivery).

VA proposed amending § 17.274 to exempt contraceptive services, and contraceptive products approved, cleared, or granted by FDA from cost sharing requirements. We proposed amending § 17.274 by adding a new paragraph (f) to state that cost sharing and annual deductible requirements under 38 CFR 17.274(a) and (b) do not apply to: (1) surgical insertion, removal, and replacement of intrauterine systems and contraceptive implants; (2) measurement for, and purchase of, contraceptive diaphragms or similar FDA approved, cleared, or granted medical devices, including remeasurement and replacement; (3) prescription contraceptives, and prescription or nonprescription contraceptives used as emergency contraceptives; (4) surgical sterilization; and (5) outpatient care or evaluation associated with provision of services listed in proposed paragraph (f)(1) through (4). We also proposed amending § 17.272(a)(28) to state that nonprescription contraceptives are excluded from CHAMPVA coverage, except those non-prescription contraceptives used as emergency contraceptives.

All six substantive comments suggested that CHAMPVA coverage of contraceptives should include all nonprescription contraceptives. Most of these comments generally suggested that VA should expand coverage to all nonprescription contraceptives. We note that the Department of Health and Human Services (HHS), the Department of the Treasury, and the Department of Labor have historically interpreted the ACA as not requiring coverage of contraceptives without cost-sharing unless the individual has a prescription for the preventive product.

Other commenters provided additional reasons for providing coverage for the additional nonprescription contraceptives. For instance, one commenter explained that nonprescription contraceptives are an important option, especially for those who face barriers to care such as living in rural areas or are without reliable transportation. Another commenter explained that it was critical to provide nonprescription contraceptives because there are barriers to obtaining prescription-only contraception and the FDA is considering allowing certain prescription daily birth control pills to become over the counter instead of prescription-based. Another commenter stated that every individual is different and has different contraceptive needs and therefore all options should be covered without cost sharing.

One commenter noted that any cost associated with contraception, even a small amount, could be a barrier for individuals to access needed contraception. This commenter suggested specific changes to the regulatory text to reflect their suggested changes. The commenter suggested that VA: remove that language in proposed § 17.272(a)(28) that would have excluded coverage of nonprescription contraceptives; revise the language in § 17.272(a)(75) to include coverage for nonprescription contraceptives; and revise § 17.274(f)(3) to exempt all nonprescription contraceptives from cost sharing requirements. The commenter stated that these changes would effectively allow CHAMPVA coverage for both prescription and nonprescription contraceptives and exempt them all from cost sharing requirements.

We make no changes based on comments suggesting that VA should expand coverage to all nonprescription contraceptives. TRICARE does not cover over the counter contraceptives such as condoms, nonprescription spermicidal foams, jellies or sprays. CHAMPVA similarly excludes these items from plan coverage. We note that the ACA does not currently require private health insurers or Medicaid plans to cover these items without cost sharing and without a prescription. We also note that VA is required under 38 U.S.C. 1781(b) to provide CHAMPVA care in the same or similar manner to TRICARE, not the ACA.

We agree with commenters that any cost associated with contraception could be a barrier for individuals to access contraception. Similar concerns are seen with copayment obligations for health care and medication. The issue is not exclusive to CHAMPVA beneficiaries. As noted, TRICARE excludes coverage for prophylactics (condoms), spermicidal foams, jellies, and sprays not requiring a prescription.

In addition, we note here that in July 2023 the FDA has approved an oral contraceptive Opill (norgestrel) for nonprescription use to prevent pregnancy—the first daily oral contraceptive approved for use in the U.S. without a prescription. Opill is now commercially available for purchase without a prescription at pharmacies, convenience stores and grocery stores, as well as online. While VA makes no changes in this rulemaking regarding cost sharing for non-emergency contraceptives not requiring a prescription, VA will consider further amendments to facilitate access to certain family planning options including daily oral contraceptives approved, granted, or cleared by the FDA not requiring a prescription, such as Opill.

We stated in the proposed rule that TRICARE currently requires cost sharing for certain family planning care and services not provided by a military medical treatment facility (87 FR 64194), but did not specify how the proposed rule differed from TRICARE relative to cost sharing for contraceptives and family planning. Currently TRICARE covers reversible medical contraceptives with no cost-share as a preventive health benefit. TRICARE is also covering tubal sterilization procedures with no cost-shares for certain TRICARE-enrolled beneficiaries when the care is sought and delivered by a network provider as a clinical preventive service. By law, applicable cost sharing still applies to oral contraceptives and other prescription pharmaceutical agents dispensed through the TRICARE Pharmacy Benefit Program.

As background, the law directs VA to provide CHAMPVA beneficiaries with medical care “in the same or similar manner and subject to the same or similar limitations as medical care” furnished to DoD TRICARE Select beneficiaries. 38 U.S.C. 1781(b) (emphases added). That text recognizes differences may exist between the two programs' respective beneficiary populations and their needs. Further, CHAMPVA beneficiaries (unlike TRICARE beneficiaries) include family caregivers of veterans, not just eligible dependents. 38 U.S.C. 1720G(a)(3)(A)(ii)(IV). Congress did not require that CHAMPVA coverage be identical to that provided under TRICARE. VA has previously regulated to provide CHAMPVA benefits beyond those benefits offered by TRICARE if providing such health care would better promote the long-term health of CHAMPVA beneficiaries. Thus, consistent with the statute's plain meaning, VA provides CHAMPVA beneficiaries certain care that is “similar,” but not necessarily identical, to care provided to beneficiaries of TRICARE.

The distinctions made by TRICARE relative to copayment obligations are based on whether the service is prescribed or provided by a military medical treatment facility or a network provider, and in a few cases, the TRICARE plan in which the sponsor is enrolled. Several factors are weighed by VA when determining if a specific type of CHAMPVA benefit coverage should differ from that under TRICARE, including the makeup of the beneficiary population eligible for CHAMPVA (see 38 CFR 17.271(a), as well as agency priorities and policy considerations.

Eligibility for TRICARE is broader than that for CHAMPVA. CHAMPVA eligibility categories include the spouse or child of a veteran who has been adjudicated by VA as having a permanent and total service-connected disability; the surviving spouse or child of a veteran who died as a result of an adjudicated service-connected condition(s); or who at the time of death was adjudicated permanently and totally disabled from a service-connected condition(s); the surviving spouse or child of a person who died on active military service and in the line of duty and not due to such person's own misconduct; certain individuals designated as a Primary Family Caregiver; and, an eligible child who is pursuing a course of instruction approved under 38 U.S.C. chapter 36, and who incurs a disabling illness or injury while pursuing such course of instruction. By contrast, TRICARE eligibility categories include active duty service members and their family members; retirees and their families; family members of activated Guard/Reserve members; non-activated Guard/Reserve members and their families who qualify for care under the Transitional Assistance Management Program; retired Guard/Reserve members at age 60 and their families; certain survivors; Medal of Honor recipients and their families; and, qualified former spouses. As noted, cost sharing obligations for certain types of contraceptive care or services under TRICARE is dependent on whether the patient is active duty or whether the care or service is prescribed by a network provider.

VA's motto is “to fulfill President Lincoln's promise to care for those who have served in our nation's military and for their families, caregivers, and survivors.” We do not believe TRICARE's statutorily required copayment obligations for these listed contraceptive and family planning services and products compels VA to follow suit. As explained above, those eligible for CHAMPVA are the spouse, surviving spouse, child, and caregiver of a qualifying veteran sponsor which in most cases is either a VA rated permanently and totally disabled veteran or a veteran that died of a VA rated service-connected condition, and not otherwise eligible for TRICARE. We note that removing the cost sharing obligation alleviates any further financial burden on such households. VA believes that exempting the services and products listed in § 17.274(f) from cost sharing will benefit CHAMPVA beneficiaries and will retain that exemption in the final rule, with changes as explained below.

In addition to the issues above related to coverage and cost sharing for nonprescription contraceptives, two of the six commenters raised other issues. One of the commenters also suggested that language in proposed § 17.274(f) was not clear as to whether CHAMPVA coverage of contraceptives would include only those contraceptive methods and services expressly listed in paragraph (f), or also include “similar” contraceptive methods and services and FDA-approved, cleared, or granted products. This commenter stated that, without clarification, § 17.274(f) as proposed could be read to not cover those products that might be approved, cleared, or granted by the FDA in the future, and specifically stated that VA should ensure the inclusion of injectable contraceptives as an express type of contraceptive to be covered. The commenter suggested revising § 17.274(f)(1) as proposed to remove the word “[S]urgical” at the beginning of paragraph (f)(1) and adding at the end of the paragraph language that reads “or similar FDA approved, granted, or cleared contraceptives that require insertion, removal, and replacement by a health care provider.” This commenter also suggested adding a new paragraph (f)(3) to ensure explicit coverage of injectable contraceptives or similar FDA approved, granted, or cleared contraceptives that require administration by a health care provider. In adding a new paragraph (f)(3), the commenter lastly suggested that a renumbered paragraph (f)(4) (pertaining to exempting prescription contraceptives, and nonprescription contraceptives used as emergency contraceptives) should include at the end language that qualifies such contraceptives be those “approved, granted, or cleared by the FDA.”

VA agrees with the commenter's suggestions and makes the following changes accordingly. VA revises § 17.274(f)(1) as proposed to remove the word “[S]urgical” from the beginning of the paragraph and, at the end of the paragraph, add language to ensure that similar FDA approved, granted, or cleared contraceptives requiring insertion, removal and replacement by a health care provider would be covered. VA will also add a new § 17.274(f)(3) to ensure that injectable contraceptives or similar FDA approved, granted, or cleared contraceptives that require administration by a health care provider would be covered. By adding a new § 17.274(f)(3), we will renumber paragraphs (f)(3) through (f)(5) as proposed to be paragraphs (f)(4) through (f)(6), respectively, and will revise renumbered paragraph (f)(4) to add language that clarifies all prescription, or nonprescription contraceptives used as emergency contraceptives, must otherwise be “approved, granted, or cleared by the FDA.”

Finally, another commenter suggested that VA policy be amended to allow a prescription for up to 13-month supply of combined hormonal methods of contraceptives to improve contraceptive continuation. We do not make changes from the proposed rule based on this comment as it relates to a clinical practice matter beyond the scope of the proposed rule. We note that a patient's condition may change over time, requiring an adjustment of medication. In addition, a 12-month duration of a prescription corresponds to the scheduling of annual comprehensive care visits. VA policy permits a 12-month supply of combined hormonal methods of contraceptives, and a VA medical facility may have standard operating procedures in place allowing extension of fills greater than 12 months in certain circumstances.

Current VHA Directive 1108.07(1), General Pharmacy Service Requirements, establishes that prescriptions must generally be filled for no more than a maximum three-month (90-day) supply of medication at a time, although exceptions can be made for non-controlled medications and supplies and for oral contraceptives. Therefore, VA pharmacies are already authorized to fill a longer term of this medication when requested by the CHAMPVA beneficiary and the health care provider under the CHAMPVA In-house Treatment Initiative (CITI) program. For CHAMPVA services furnished by non-VA providers, VA does cover such prescriptions for a maximum 90-day supply of medication per fill with three refills if prescribed by the non-VA health care provider and filled by the non-VA pharmacy. See CHAMPVA Operational Policy Manual chapter 2, section 22.1. VA intends to amend this section of the operational manual to allow for an exception for oral contraceptives.

Based on the rationale set forth here and in the supplementary information to the proposed rule, VA adopts the proposed rule as final, with changes.

Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 (Executive Order on Modernizing Regulatory Review) supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review established in Executive Order 12866 of September 30, 1993 (Regulatory Planning and Review), and Executive Order 13563 of January 18, 2011 (Improving Regulation and Regulatory Review). The Office of Information and Regulatory Affairs has determined that this rulemaking is a significant regulatory action under Executive Order 12866, as amended by Executive Order 14094. The Regulatory Impact Analysis associated with this rulemaking can be found as a supporting document at www.regulations.gov.

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). The factual basis for this certification is that this regulation updates CHAMPVA coverage to remove the exclusion for audio-only telehealth, removes limitations on outpatient mental health visits, and exempts certain contraceptive services and contraceptive products that are approved, cleared, or granted by the FDA from cost sharing requirements. It also removes the exclusion of CHAMPVA coverage for nonprescription contraception used in an emergency. The changes to the regulation only affect individuals who are CHAMPVA beneficiaries. Absent this rulemaking, health care providers who may be small entities would still receive payment for services, the payment would be from the CHAMPVA beneficiary and not from VA. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This rule will have no such effect on State, local, or Tribal governments, or on the private sector.

This rule includes provisions constituting a revision to a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that require approval by OMB. Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking action to OMB for review and approval.

OMB assigns control numbers to collections of information it approves. VA may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. In this case, OMB previously assigned OMB Control Number 2900-0219 to an information collection that will be revised through this regulation. The information collection under 2900-0219 has a current Paperwork Reduction Act (PRA) clearance that expires on October 31, 2024. If OMB does not approve the revision to this collection of information, as requested, VA will immediately remove the provisions containing the collection of information or take such other action as is directed by OMB.

The collection of information associated with this rulemaking contained in 38 CFR 17.272 addresses only the revised number of respondents attributable to this rulemaking. OMB previously approved the part of the information collection under 2900-0219 related to filing of CHAMPVA health benefits claims using VA Form 10-7959a for a total of 9,167 burden hours, based on an estimate of 55,000 respondents annually. Section 17.272(a)(44) would remove the exclusion of CHAMPVA benefits coverage for audio-only telehealth. Previously denied claims for audio-only telehealth would have to be resubmitted by the provider, or by the CHAMPVA beneficiary if the beneficiary has already paid for that medical service, using VA Form 10-7959a with supporting evidence. VA anticipates that the number of respondents submitting claims will increase as a result of this rulemaking. Applying the anticipated increase to 74,914 annual respondents, at 10 minutes per response, VA estimates an increase in the annual burden to 12,486 hours for respondents submitting claims using VA Form 10-7959a.

Estimated cost to respondents per year: VA estimates the annual cost to respondents to be $371,583.36. This is based on Bureau of Labor Statistics mean hourly wage data for BLS wage code “00-0000 All Occupations” of $29.76 per hour × 12,486 hours.

A notice of this revision to the information collection under 2900-0219 was published in the proposed rule on October 24, 2022, at 87 FR pages 64190-64196. VA did not receive any public comments related to the increase in the burden hours for the revised information collection.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

Denis McDonough, Secretary of Veterans Affairs, approved this document on April 17, 2024, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.

For the reasons stated in the preamble, the Department of Veterans Affairs (VA) amends 38 CFR part 17 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

On July 10, 2023 (88 FR 43483), EPA published a Notice of Proposed Rulemaking (NPRM) for the State of New Hampshire. The NPRM proposed to determine that the State has adopted regulations meeting the requirements for reasonably available control technology (RACT) for the 2008 and 2015 ozone national ambient air quality standards (NAAQS), to approve amendments to a related regulation that New Hampshire revised as part of its RACT certifications for these two NAAQS, to approve a revision to the State's definition of emergency generator, and removal from the SIP of two previously issued RACT orders affecting coal-fired cyclone boilers operated by Merrimack Station located in Bow, New Hampshire. EPA received a comment letter from the Sierra Club dated August 9, 2023, that opposed New Hampshire's NO X RACT limits applicable to coal-fired cyclone boilers. We approved the portions of the proposal unaffected by this comment letter in a final rule published on September 6, 2023 (88 FR 60893). In this final rule, we are approving the remaining portions of these SIP revisions, which include requirements within New Hampshire's Env-A 1300 establishing RACT requirements for coal-fired electrical cyclone boilers, the portions of New Hampshire's NO X RACT certifications for the 2008 and 2015 ozone standards that pertain to requirements for coal-fired cyclone boilers, and we are taking final action to withdraw from the New Hampshire SIP two RACT orders that contain less stringent requirements for cyclone boilers. Please see our July 10, 2023 proposed rule for additional background and a more detailed explanation of our proposed action.

As mentioned, we received one comment letter on our July 10, 2023 proposed approval, which was from the Sierra Club and expressed opposition to the proposed approval of New Hampshire's (NH's) NO X RACT requirements applicable to the coal-fired cyclone boilers operated by Granite Shore Power at its Merrimack Station electrical generating facility located in Bow. Our responses to the comments raised by Sierra Club appear below.

Comment: Sierra Club commented that the emission rate of 0.22 lbs/MMBtu for two coal-fired cyclone boilers at Merrimack Station, herein referred to as units MK1 and MK2, is inadequate as RACT. Sierra Club commented that, since 2018, MK1 and MK2 consistently demonstrated the ability to meet a 24-hour average emission rate at or below 0.20 lbs/MMBtu, which is 10% lower than NH's emissions limit of 0.22 lbs/MMBtu, and thereby asserted that the state's limit is too lenient.

Response: New Hampshire developed its NO X RACT emissions limits for MK1 and MK2 in consideration of a number of factors. One such factor was the observation that the selected emissions limit of 0.22 lbs NO X /MMBtu represented emission reductions of 83% and 91% from uncontrolled levels for MK1 and MK2, respectively, 1 which is a high level of control. Given MK2's larger size and emissions, the emissions weighted average reduction from uncontrolled levels for both units combined is 88% based on emissions data for 2022. This level of control is near the upper end of the emission reduction capability of selective catalytic reduction (SCR) control systems as noted within EPA control technology explanatory materials, such as the agency's fact sheet on SCR NO X control technology, which indicates a control range of between 70-90% is achievable from such systems. 2 Additionally, correspondence dated May 25, 2018 from the facility owner, Granite Shore Power, to the New Hampshire DES indicated that a more restrictive normal operating mode emission rate of 0.20 lbs/MMBtu on a 24-hr basis that was originally considered by NH DES was beyond the original emission reduction control capability of the units when they were newly installed. Granite Shore Power reiterated this point in a January 17, 2020 correspondence to the New Hampshire DES concerning regional haze requirements in which they note that the revised NO X RACT limits “represent the most effective use of the SCR, given that the system must be operated year round at or above its design capacity to demonstrate compliance.”

In 2018 as New Hampshire was developing its NO X RACT emissions limit for MK1 and MK2, the state reviewed the emissions data from the continuous emissions monitoring systems (CEMS) on the units collected in 2000, when the equipment was newly installed, through 2007. Merrimack Station installed a second SCR control unit in 1999 due to the Ozone Transport Region (OTC) NO X budget program. Previously only one of the Merrimack Station units had SCR, installed circa 1995. This period of time coincides with the period of time that Electric Generating Units (EGUs) in New Hampshire had new emission control obligations under the OTC's NO X Budget program. 3 This program began in 1999 and continued through 2002, at which point most of the EGUs transitioned to the EPA's first ozone season NO X control program, that being the NO X SIP Call. 4 Although EGUs in New Hampshire were not required to participate in the EPA's NO X SIP Call program, New Hampshire maintained, as an anti-backsliding measure, the OTC NO X Budget program's ozone season cap for sources located in the state, including MK1 and MK2, beyond 2002. EPA facilitated oversight of New Hampshire's post-2002 NO X Budget program by creating a separate account referred to as the “NH NO X Program” on its Clean Air Markets Program Data (CAMPD) website. 5

New Hampshire's selection of 0.22 lbs NO X /MMBtu, to be met on a 24-hour averaging time basis, is reasonable from a statistical perspective. The emissions limit New Hampshire chose corresponds to the emissions rate representative of the 95th percentile emissions rate for days of operation without a startup or shutdown event. In other words, MK1 and MK2 operated at or below an emission rate of 0.22 lbs NO X /MMBtu 95 percent of the time between 2000 and 2007, which as mentioned above coincided with the time period when the SCR controls were newly installed and MK1 and MK2 were subject to the requirements of the OTC's NO X budget program that began in 1999.

The data Sierra Club show in Table 2 of their comment letter are based on monthly averages, whereas the limits being approved herein for Merrimack Station are short term, 24-hour averages. Shorter term limits are harder to meet and require that the control system be consistently and effectively run. Conversely, a 30-day average can be met despite days on which the controls are not run effectively, or perhaps not run at all, as long as there are enough days of operation below the emission limit to average this out. If the short-term emissions limit NH requires for MK1 and MK2 were set at a lower rate, such as 0.20 or below as Sierra Club suggests, there would be many days with violations due to minor fluctuations in the rate of the chemical reaction that occurs between the catalyst system, ammonia, and oxygen, which accomplishes the reduction in NO X emissions in the effluent from the equipment. NH reviewed historic data and identified periods of time when the facility's controls produced low daily emissions rates. Importantly, during those past time periods, the facility was not required to meet a 24-hour emissions rate. By imposing a new, 24-hour emissions limit, NH had to choose an emissions rate that was feasible, given the normal fluctuations in the boiler and control system operations, that the facility could reasonably be expected to meet every day. Although historic data showed the facility could meet a 0.22 rate 95% of the time, that also means that it did not meet that rate 5% of the time. It now will be required to meet that rate 100% of the time. A description of how SCR control systems operate and the various aspects of the induced chemical reaction that occurs to change the nitrogen oxides released from the combustion process to elemental nitrogen and water vapor is contained within the SCR Air Pollution Control Fact Sheet included in the docket for this final rule.

New Hampshire also considered limits adopted by other states for similar equipment in making its NO X RACT determination, but could not find reasonable comparisons based on coal type, boiler design type, boiler age, and control technology. This point is discussed in further detail below. Lastly, we note that the SCR control systems operated by Merrimack Station were amongst the first such units installed on coal-fired electric utility boilers in the U.S., with MK2's SCR being installed in 1995, and MK1's in 1999. Despite the age of the control equipment, the overall NO X control efficiency as noted above remains at a high level. Additionally, as explained further in the TSD accompanying this final action, by observing the hourly emissions rate data available from EPA's Clean Air Markets Program Database (CAMPD) website it can be clearly seen that achievement of this rate on a 24-hour averaging time basis requires the continuous operation of the SCR controls, as even one or two hours of operation without the controls engaged while heat input is high would jeopardize achievement of the short term, 0.22 lbs/MMBtu emission limit.

Comment: Sierra Club commented that other coal-fired cyclone boilers are required to meet lower emissions limits and included data for other cyclone boilers to support its claim. Sierra Club also provided data on NO X emission rates at Merrimack Station and asserted that lower NO X emission rates are achievable and should be required by RACT.

Response: EPA agrees that there are other coal-fired cyclone boilers that are required to meet lower emissions limits. However, EPA's review of the characteristics of the coal-fired cyclone boilers identified as such within its Clean Air Markets and National Electric Energy Data System (NEEDS) databases and operating since 2009 indicates that only two units, the now closed Dallman units 31 and 32 in Illinois, have technical specifications similar to the Merrimack units in that they were bituminous coal fired cyclone boilers whose NO X emissions were controlled solely by SCR. However, those units are not directly comparable to MK1 and MK2 for a number of reasons, including their smaller size, newer age of the SCR control equipment, and for comparison to MK2, that unit's inordinately high uncontrolled emission rate of 2.4 lbs. NO X /MMBtu, which is considerably higher than the average emission rate for bituminous coal-fired cyclone boilers of 1.3 lbs/MMBtu as documented within Table 1.1-3 of section 1.1 of EPA's emissions factors reference document, AP-42. Although we did identify several other bituminous coal-fired cyclone boilers within EPA databases, those boilers operated additional NO X control equipment not used by MK1 and MK2, most often overfire air (OFA) systems. The boilers located at the New Madrid and Thomas Hill facilities in Missouri noted by Sierra Club also operate OFA systems in addition to the SCR control system. Granite Shore Power (GSP), Merrimack Station's owner, recently evaluated the feasibility of retrofitting its cyclone boilers with additional NO X emission control equipment including an overfire air system as part of a technical analysis it performed at the request of the New Hampshire Air Resources Division (NH-ARD). The state made this request as it developed its SIP revision for the Regional Haze program. As New Hampshire notes within its May 5, 2022, Regional Haze Plan, GSP concludes that retrofitting MK1 and MK2 was not feasible for the following reason:

“OFA would result in reduced boiler performance, potential boiler modifications to boiler surface areas, increased fouling, boiler tube erosion, and cyclone wear. Any installation is complicated by, if not impossible, due to the engineering and design challenges of the windbox configuration and screen tubes at Merrimack. In addition, the installation of an OFA system after the installation of an SCR is likely to produce little to no improvement in NO X reductions. Any of these changes would also have the potential to negatively impact the removal capability of the FGD (flue gas desulfurization)   6 and the collection capability of the ESPs (electrostatic precipitators   7 ).” As documented within section 4.2.9 of its May 5, 2022, Regional Haze Plan Periodic Comprehensive Revision, New Hampshire reviewed and agreed with Granite Shore Power's assessment that NO X emissions from the coal-fired boilers at Merrimack Station are well controlled and subject to appropriate NO X emissions limits. Large boilers like these vary considerably in their design and operational characteristics, and so retrofits possible for some equipment may not be possible elsewhere.

EPA has reviewed New Hampshire's assessment of the information provided by GSP and agrees with the state's conclusion that requiring installation of new equipment at the Merrimack units, such as OFA, is not economically feasible for purposes of RACT. The facility is scheduled to permanently cease coal-fired boiler operations no later than June 1, 2028 as indicated by a recent agreement between Granite Shore Power, the EPA, the Sierra Club, and the Conservation Law Foundation. 8 Leading up to this cessation in operations, there is a declining need for output from the facility by the region's electrical grid operator, ISO-New England; there has been limited or non-acceptance of offers to produce electricity from this facility in the forward capacity auctions conducted by ISO-New England. 9 Given this limited remaining use of these units, combined with the fact that the facility's current SCR NO X control systems already achieve a high level of control, the cost of new controls per ton of emission reduction achieved is not economically feasible for purposes of RACT.

Comment: Sierra Club commented that other states require lower emissions limits for coal-fired power plants. In its comments, Sierra Club asserted that several other states, including Pennsylvania, New Jersey, Maryland, and Delaware, impose lower emission limits at coal-fired power plants.

Response: EPA agrees that other states require lower emissions limits for coal-fired cyclone boilers. However, as noted above, New Hampshire and EPA have not identified coal-fired boilers that offer an appropriate or equivalent comparison to the units at Merrimack Station. Sierra Club points to lower short-term emission limits adopted by other states for coal-fired boilers, such as Delaware's 0.125 lbs/MMBtu limit based on a 24-hour averaging time, and Maryland's 0.10 lbs/MMBtu limit which is also based on a 24-hour averaging time and includes all modes of operation. However, none of the coal-fired boilers in these states match the type of boiler and fuel type of Merrimack Station's boilers, which as mentioned are bituminous fueled cyclone boilers operating only SCR controls that were installed many years ago. The only coal-fired electric utility boiler in Delaware is located at the Indian River Generating Station in Dagsboro and is a dry-bottom, turbo-fired boiler. Regarding Maryland, the coal-fired boiler located at the AES Warrior Run Cogeneration facility in Cumberland is an atmospheric circulating fluidized bed boiler, the two coal boilers at Brandon Shores are both dry bottom boilers with circular wall burners, and the coal boiler at Wagner Station is a supercritical steam boiler. Therefore, EPA concludes from a technical perspective that limits deemed RACT for these specific units in New Hampshire  10 should be higher than limits in Delaware and Maryland.

Sierra Club also points to RACT limits for coal-fired boilers located in Pennsylvania that EPA recently finalized with a Federal Implementation Plan published in the Federal Register on August 31, 2022, 11 as an example of more restrictive emissions limits in other states relative to what New Hampshire has required for the coal units at Merrimack Station. A number of factors differentiate the units at Merrimack Station compared with those located in Pennsylvania. For example, none of the Pennsylvania units are of the high-emitting, cyclone boiler configuration as both units at Merrimack Station. Additionally, the Merrimack Station boilers are much smaller than the Pennsylvania units. Most of the units addressed in the Pennsylvania RACT FIP are between 600 and 900 MW, whereas the Merrimack units are around 100 MW and 300 MW. As a result of their smaller size, the Merrimack units have considerably lower annual emissions. Over the past five years (2019 through 2023), the total annual NO X emissions from both Merrimack units ranges from 175 to 500 tons/year. As a point of comparison, the Keystone and Conemaugh facilities in Pennsylvania each had average annual NO X emissions over 4500 tpy since 2019. The low annual emissions at Merrimack combined with their very low utilization and required stop of use in 2028 leads to any additional controls at Merrimack being not economically feasible for purposes of RACT.

Comment: Sierra Club commented that recent air pollution transport rules such as the Revised Cross-State Air Pollution Rule Update (RCU) for the 2008 ozone NAAQS and the Good Neighbor Plan (GNP) for the 2015 ozone standard contain more restrictive emission rates than what New Hampshire requires for NO X limits for MK1 and MK2.

Response: The requirements within EPA's transport rules do not offer legitimate comparisons to the emission limits New Hampshire has set as RACT limits for Merrimack Station's coal-fired cyclone boilers for a number of reasons. First, regarding the RCU, EPA did not establish short term emission limits for coal-fired EGU boilers within that rule, but rather only imposed ozone season, 12 mass-based emissions budgets. These budgets were based in part on a statistical analysis showing that coal-fired EGUs equipped with existing SCR are capable of achieving an emissions rate of 0.08 lbs/MMBtu on a fleetwide average and over an entire ozone season. Additionally, the RCU allows a facility to remain in compliance if the facility holds sufficient emissions allowances to cover the amount of emissions produced. See 86 FR 23056, 23090 (April 30, 2021). New Hampshire's RACT emissions limits are structured much differently, requiring that the facility meet a NO X emissions rate of 0.22 lbs/MMBtu on a short-term, 24-hour averaging time basis. Additionally, the historical data New Hampshire analyzed for these particular units indicate that this is near the limit of what SCR at these units is capable of achieving. As explained elsewhere in this notice, emissions limits with short averaging times are more difficult to meet because there is less time to offset emissions that occur while operating above the emissions limit with emissions produced during times of operation below the limit.

Regarding comparisons to the NO X reductions required of electric utility boilers subject to the GNP, a statistical analysis similar to the RCU of fleetwide emissions performance over an entire ozone season informed the identification of emissions rates used to set state-level EGU budgets. Thus, similar to the RCU as mentioned above, these rates do not offer a good comparison to the short-term limits New Hampshire requires for MK1 and MK2. Although the GNP, unlike the RCU, adds an additional, short term, 24-hour average backstop daily rate of 0.14 lbs NO X /MMBtu for coal-fired boilers with SCR, 13 there are substantial differences in how EPA established and will implement that backstop rate within the trading program versus how New Hampshire established and implements its NO X RACT limits for Merrimack Station's coal-fired boilers. First, we note that the GNP's 24-hour backstop rate will only apply to emissions during the ozone season that exceed by more than 50 tons a daily average NO X emissions rate of 0.14 lb/MMBtu. New Hampshire's limits apply year-round and do not excuse the first 50 tons, or any amount of emissions, that exceed its emissions limits. 14 Furthermore, the GNP's 24-hour backstop rate, if exceeded beyond the 50 ton exemption mentioned above, can be complied with via the surrender of emissions allowances at a 3 for 1 surrender ratio; New Hampshire's limits do not offer this type of compliance option. Additionally, we note that EPA determined its 24-hour backstop daily rate based on a review of the average emitting characteristics of most coal fired boilers in operation during 2021. New Hampshire determined the NO X RACT emission rates for the Merrimack Station boilers based on the emitting and operational characteristics of these specific units. In the GNP, the EPA observed that even units considered to be running their controls optimally had some days (most often less than 5% of days) where the rates were higher. However, the emission increases on these days were minimal. EPA used a similar methodology in employing the 95th percentile of observed daily operating emissions rates in selecting the backstop daily emissions rate for SCR-controlled coal boilers in the GNP. 15 As an example, for a unit with a seasonal rate of 0.08 lbs NO X /MMBtu, EPA determined that it would be expected that, on average, about 4.7% of the daily rate values would be higher than 0.14 lb/MMBtu.

Comment: Sierra Club commented that NH's emissions limits for a different coal-fired electrical generating facility in the state, Schiller Station, are only slightly higher than those for Merrimack Station, despite the fact that the Schiller Station units controlled by SNCR, a less effective control strategy, inferring that Merrimack Station's more capable SCR controls are not being as effectively run as they should be.

Response: EPA agrees that New Hampshire has imposed NO X emissions limits on the coal-fired boilers at Schiller Station of 0.25 lbs/MMBtu that are only slightly higher than the limits imposed on the Merrimack Station units, despite the latter operating SCR controls, and the former operating less effective SNCR controls. However, this is not indicative of unduly lax requirements for units MK1 and MK2 relative to the Schiller units, but rather, points to the higher uncontrolled NO X emission rates for the Merrimack Station units relative to the Schiller units. According to Table 1.1-3 of AP-42, the uncontrolled NO X emissions rate for Merrimack Station's bituminous fueled cyclone boilers is 33 lbs of NO X per ton of coal burned, which is the highest emission rate for any type of coal fired boiler listed within the table. 16 Schiller Station operates two dry-bottom, wall-fired coal boilers, which AP-42 indicates have an uncontrolled emissions rate of 22 lbs of NO X per ton of coal burned, and a fluidized bed boiler, which AP-42 indicates has an uncontrolled emissions rate of between 5.0 to 15.2 lbs of NO X per ton of coal burned. Given the differences in uncontrolled emission rates and NO X control technology of the coal-fired boilers at these facilities, comparisons of the NO X emissions rates do not offer an effective means of gauging the stringencies of the applicable emissions rates. The Merrimack Station units operate the more costly, more effective NO X control equipment compared to what the Schiller Station units run; technical resources that describe the control effectiveness of various NO X emission reduction control techniques rank SCR control systems higher than SNCR control systems. 17

Comment: Sierra Club commented that in light of recent information showing that SCR control systems can be operated at low-temperature levels that occur during periods of startup and shutdown with no detriment to control efficacy or longevity, New Hampshire does not need to allow the units to emit more on days when these operating modes occur by providing daily emission limits of 4.0 and 11.5 tons per day for MK1 and MK2, respectively.

Response: In the aforementioned response to comments received on its proposed Regional Haze SIP, New Hampshire notes that approximately one fourth of the operating hours in the year prior to the establishment of the NO X RACT emission rates in question were hours spent in startup or shutdown modes when operating conditions, in particular temperature, did not permit the operation of the SCR control systems. The state therefore concluded that setting one overall emissions limit that combined the hours spent in startup and shutdown mode, during which the SCR controls would not operate, with the hours spent in steady state operation, during which the SCR controls would operate, would have necessitated issuance of an all-encompassing emissions limit higher than the limit New Hampshire ultimately decided upon for times of steady state operation. By choosing to adopt separate limits for these operating modes, New Hampshire's emissions rate structure requires that MK1 and MK2 meet a lower emissions rate for the majority of the time it is operating, that being operation under steady state conditions with the SCR control equipment functioning. A separate alternate emission limit (AEL) applicable during startup and shutdown modes ensures that the emissions that occur during those times are also subject to an emissions cap as well as recordkeeping requirements to document the dates and time spent in startup or shutdown mode. As noted within the update to section 2 of the technical support document included within the docket for this action, the AEL in conjunction with requirements contained within Env-A 1300 and the facility's Title V operating permit mean that the SCRs must be turned on expeditiously once high levels of coal loading begin in order to avoid exceeding the tons/calendar day limit of the AEL.

Sierra Club refers to a sorbent injection technology that can reduce the operating temperature range of the SCR and potentially reduce NO X emissions at low loads. NHDES reviewed the provided references, which describe the technology as allowing the coal-fired boilers operated by Duke Power's Gibson facility to operate its SCRs at a lower temperature than would otherwise be possible, and also enable the coal boilers to run at low loads while still minimizing emissions. NHDES notes, however, that MK1 and MK2 SCRs are not designed to operate at lower temperatures, nor are the boilers intended to operate at low electrical output loads, and so even if modifications were made such that the SCR control equipment could function at lower temperature there would be little benefit, from an emissions reduction perspective, to installing additional controls to enable this. The small benefit in emissions reductions for operating the SCR at lower temperatures is partially due to the level and averaging period of the AEL, which significantly limits the time that these boilers can operate with high fuel input without the SCRs, and therefore limits the amount of total emissions because the units would exceed the 4 tons per day emission limit if they operated with high fuel input without the SCRs in operation. 18 Therefore, NHDES concluded that a lowering of the temperature at which the SCR controls could operate during startup and shutdown would not justify the significant capital costs it would take to install the new control technology Sierra Club mentions. New Hampshire notes that in 2021, MK1 and MK2 operated for approximately 2,155 hours and were started up approximately 26 times. Assuming that the sorbent injection technology mentioned in Sierra Club's comments could lower the temperature at which MK1 and MK2 could operate their SCR controls such that they could be used for an additional hour during startup, this would have resulted in a relatively minor, incremental emission reductions  19 by allowing 26 additional hours of SCR operating time out of 2,155 overall boiler operating hours.

We have reviewed Sierra Club's comment that additional emissions control technology be required for startup and shutdown operations, and New Hampshire's rationale for not requiring it, and agree with the state's conclusion that the additional cost of evaluating, installing, and operating control technology to limit emissions during startup and shutdown is unlikely to be economically feasible given the minimal amount of emissions it would curtail. Furthermore, the recordkeeping and reporting requirements of New Hampshire's NO X RACT regulation enable the state to effectively oversee operations at the facility, including operations during startup and shutdown. For example, the state's oversight requirements recently led to the issuance of an August 23, 2023 letter requesting more information regarding four exceedances of the startup emissions limit that occurred between December 8, 2021, and July 7, 2023. 20 A total of 16.4 tons of excess emissions occurred on these days, and the state is currently evaluating the appropriate enforcement response to these violations.

Comment: Sierra Club also commented that New Hampshire's requirements are not sufficient for regional haze purposes.

Response: This comment is not germane to the subject matter of this action which pertains to New Hampshire's NO X RACT requirements for coal-fired cyclone boilers and does not address regional haze requirements. Therefore, EPA is not addressing this comment here.

EPA is approving RACT requirements limiting NO X emissions from coal-fired cyclone boilers powering electrical generating units that are codified within New Hampshire Air Pollution Control Regulation Env-A 1300: Nitrogen Oxides (NO X ) RACT, portions of New Hampshire's NO X RACT certifications for the 2008 and 2015 ozone standards that pertain to requirements for coal-fired cyclone boilers, and withdrawal from the SIP of two previously issued RACT orders containing emission limits for this equipment that are less stringent than what is contained within the provisions of Env-A 1300 that we are approving within this action.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of portions of New Hampshire Air Pollution Control Regulation Env-A 1300, Nitrogen Oxides (NO X ) RACT; specifically, incorporating by reference Env-A 1303.06(b) and (c) pertaining to the coal-fired cyclone boilers at Merrimack Station, as described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents generally available through https://www.regulations.gov and at the EPA Region 1 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 21

EPA is also finalizing the removal of provisions within Table (d) of 52.1520 pertaining to these coal-fired cyclone boilers by removing Permits “Order ARD-97-001: Source specific NO X RACT Order for Public Service of New Hampshire, Bow, NH; state effective date 4/14/1997” and “Order ARD-98-001: Source-specific NO X RACT order and discrete emission reduction protocols for Public Service of New Hampshire; state effective date 7/17/1998” as described in the amendments to 40 CFR part 52 set forth below.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”

The New Hampshire Department of Environmental Services did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

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

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

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

I. Background

On January 27, 1982, the IHS published regulations imposing restrictions on the use of Federal funding for certain abortions, currently codified at 42 CFR 136.51 through 136.57. 1 These regulations implementing IHS program authority pursuant to 25 U.S.C. 13 and 42 U.S.C. 2001 allowed the use of IHS funds for abortions only when a physician certified that “the life of the mother would be endangered if the fetus were carried to term.” This restriction was to be consistent with a provision in the annual appropriations legislation for the Departments of Labor, Health and Human Services, and Education, sometimes referred to as the “Hyde Amendment,” that restricted the use of Federal funds for certain abortions, which did not automatically apply to IHS funding. 2 The purpose of these IHS regulations was specifically “to conform IHS practice to that of the rest of the Department [of Health and Human Services] in accordance with the applicable congressional guidelines.”  3 In 1988, Congress enacted 25 U.S.C. 1676, explicitly extending any limitations on the use of funds included in HHS appropriations laws with respect to the performance of abortions to apply to funds appropriated to IHS. As such, IHS became subject to the Hyde Amendment as included in annual appropriations legislation.

Since the IHS promulgated these regulations in 1982, Congress has repeatedly revised annual restrictions related to the use of Federal funds for certain abortions. In fiscal year 1994, for instance, Congress revised the Hyde Amendment to include additional exceptions to the general prohibition on the use of Federal funds for abortions, including in instances in which a pregnancy is the result of an act of rape or incest. 4 Similarly, in fiscal year 1998, Congress also altered the standards for when the “life of the mother” may be considered an exception. 5 As relevant here, the Hyde Amendment currently provides that no covered funds “shall be expended for any abortion” or “for health benefits coverage that includes coverage of abortion,” except “if the pregnancy is the result of an act of rape or incest; or . . . in the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless an abortion is performed.”  6

The current IHS regulations do not align with the current text of the Hyde Amendment or with 25 U.S.C. 1676. The IHS has complied with, and will continue to comply with, the statutory exceptions; has clarified its compliance with the statutory limitations through policy directives;  7 and now removes these outdated regulations in their entirety. 8 Doing so will eliminate any potential confusion regarding these outdated regulations and will ensure alignment with the applicable congressional restrictions governing HHS given Congress's enactment of 25 U.S.C. 1676, which independently aligns relevant restrictions applicable to the IHS and HHS. Regulations on this subject are not necessary to implement the IHS's authority. Nor are they necessary to comply with statutory directives. Moreover, amending the regulations to reflect the current Hyde Amendment could cause additional confusion in the future if Congress changes the annual appropriations language, as it has in the past.

The IHS published a notice of proposed rulemaking in the Federal Register on January 8, 2024 (89 FR 896), with a sixty-day comment period, which closed on March 8, 2024. Notification regarding a Tribal consultation session was sent via a Dear Tribal Leader Letter on January 17, 2024. The consultation session was conducted virtually on February 27, 2024. The IHS has reviewed public comments it received and addresses them below.

The IHS received six written comments. 9 Two of the written comments were generally in favor of the removal. These two written comments were submitted by: (1) an individual and (2) a group of 20 individuals and advocacy organizations. Four of the written comments were generally opposed to the removal. These four comments were submitted by advocacy organizations. At the Tribal Consultation session, the IHS received three oral comments from representatives of Indian Tribes. Each of these three oral comments were generally in favor of the removal or non-germane to the removal.

After reviewing both written comments and those comments received orally through the Tribal consultation session, the IHS is finalizing this rule as proposed. Accordingly, this final rule will remove the current IHS Hyde regulations in their entirety, by removing and reserving subpart F, consisting of 42 CFR 136.51 through 136.57. Below, IHS summarizes and addresses all substantive topics raised in comments.

One commenter in the consultation session supported removal of the regulations. That commenter additionally suggested as a policy matter that the IHS consider allowing a nurse practitioner or licensed practitioner other than a physician to certify an abortion in cases in which certification is required. Under the current version of the Hyde Amendment, the IHS cannot make the requested change.

The current version of the Hyde Amendment, made applicable to IHS funding by 25 U.S.C. 1676(a), includes an exception in cases “where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless an abortion is performed.” Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2024, Public Law 118-47, secs. 506-507, title V of Division D, 138 Stat. 703 (2024) (emphasis added). The IHS' removal of the outdated regulations cannot affect the separate statutory requirement that the certification be made by a physician. Therefore, the IHS has not made changes based on this comment.

Another commenter in the consultation session supported removal of the regulations and asked the IHS whether it intends to replace these regulations at a later time. While the IHS appreciates this question, regulations on this subject are not necessary to implement IHS' authority, nor are they necessary to comply with statutory directives. Moreover, amending the regulations to reflect the current Hyde Amendment could cause additional confusion in the future if Congress changes the annual appropriations language, as it has in the past. Therefore, the IHS has not made changes based on this comment. However, the IHS retains the discretion to promulgate regulations at a later date.

The IHS received an additional comment during the consultation session about what Tribes are permitted to do with their own, non-Federal funds. While the IHS appreciates the comment, it is outside the scope of this action. The regulations at issue apply only to IHS' operations as a healthcare provider and payer. Therefore, the IHS has not made changes based on this comment.

One commenter  10 supported removal of the regulations, based on the justifications provided in the notice of proposed rulemaking. The commenter opined that it was common sense to eliminate the regulations, since the IHS is required by 25 U.S.C. 1676 to follow the Hyde Amendment. The commenter also believes that removal would reduce confusion. In addition to agreeing with the justifications provided in the notice of proposed rulemaking, this commenter explained that the outdated regulations could lead to violations of the Equal Protection Clause of the Constitution if enforced. The commenter argued that if the regulation were enforced, American Indian and Alaska Native (AI/AN) people seeking abortions funded by the IHS would be treated differently than other individuals seeking abortions funded by HHS in other circumstances because only the second group would be able to take advantage of all of the exceptions included in the current Hyde Amendment. This comment requires no change to the proposed rule.

One comment, 11 submitted on behalf of a group of individuals, supported the removal but recommended that the IHS address disparate reproductive health outcomes for AI/AN people, including in urban areas, through activities outside of this rulemaking. The comment also recommended that the IHS improve its capacity for abortions consistent with the Hyde Amendment, and provide additional information, education, and engagement with AI/AN people about permitted abortions. This comment also discussed the commenters' opposition to the scope and impact of the Hyde Amendment itself. These comments are outside of the scope of the rulemaking.

Several commenters asked that the IHS retain the regulations as written, specifically 42 CFR 136.53 and 136.54 (the two sections that describe the limitations on the use of IHS funding for abortions). These commenters stated that the Hyde Amendment does not require, only permits, the use of IHS funding for abortion in cases of rape or incest. Therefore, the commenters opined that the IHS regulations are not outdated or in conflict with the current law, and also expressed their belief that abortions should not be provided when a pregnancy is the result of rape or incest. One commenter  12 also expressed concern that, should the Hyde Amendment not be included in the annual appropriations act and these regulations are removed, the IHS would be able to further expand access to abortions.

Congress has intentionally broadened the exceptions to the limitation on the use of Federal funds for abortion to include instances of rape or incest, and has specifically made the current scope of the Hyde Amendment applicable to IHS, via 25 U.S.C. 1676(a). Removing the outdated and unnecessary provisions of 42 CFR 136.53 and 136.54 simply aligns IHS regulations with congressional action. Comments about the substance and application of the Hyde Amendment itself are outside of the scope of this rulemaking.

Should Federal law regarding the use of Federal funds for abortion change in the future, the IHS could consider whether regulatory provisions should be proposed. But this final rule will ensure that the IHS follows applicable statutory provisions at any given time. Therefore, the IHS has not made changes based on these comments.

Two commenters  13 stated that removing the regulations is inconsistent with the IHS mission and authority under the Snyder Act, 25 U.S.C. 13, to provide care and assistance for the “conservation of health,” claiming that providing abortions in the case of rape or incest is not healthcare, and that abortion in general does not conserve the health of the fetus. The IHS has determined that removing 42 CFR 136.53 and 136.54 clearly aligns with congressional action, and this regulatory action simply removes outdated and unnecessary regulations. Comments about the substance and application of the Hyde Amendment itself are outside of the scope of this rulemaking. Therefore, the IHS has not made changes based on these comments.

One commenter  14 stated that providing abortions in the cases of rape or incest is not consistent with the trust relationship between the Federal Government and Tribes, and asserted that it infringes on Tribal sovereignty. The IHS has determined that removing 42 CFR 136.53 and 136.54 clearly aligns with congressional action, and this regulatory action simply removes outdated and unnecessary regulations. Comments about the substance of the Hyde Amendment itself are outside of the scope of this rulemaking. The use of IHS funds for certain abortions does not infringe on Tribal sovereignty. The IHS' clinicians and patients work together to determine the most appropriate treatment in an individual case. Moreover, this action does not affect a Tribe's right to self-determination or self-governance, nor does it impact any Tribe's choice to administer IHS health care programs itself. This action applies only to IHS operations as a healthcare provider and payer. The current regulations also do not reflect a determination that considerations surrounding Tribal sovereignty or the trust relationship forecloses funding for abortions in cases of rape or incest. See 46 FR 22617; 47 FR 4017-18. Therefore, the IHS has not made changes based on this comment.

One commenter  15 suggested that an exception to provide abortions in the cases of rape or incest is inappropriate. Removing the outdated regulations, however, would merely align IHS policy, via 25 U.S.C. 1676, with whatever limitations Congress has imposed at any given time, and with that of the rest of HHS. Comments about the substance of the Hyde Amendment itself are outside of the scope of this rulemaking. Therefore, the IHS has not made changes based on this comment.

C. Comments recommending amending the regulations

Several commenters suggested, as an alternative to retaining the regulations as written, that the IHS consider amending 42 CFR 136.54. Two commenters  16 suggested amending 42 CFR 136.54 to align with the Hyde Amendment. One of these commenters  17 recommended options to incorporate a reference to the Hyde Amendment, or to include a qualifier that, if the limitations in the Hyde Amendment change, the regulations will as well, or to cross reference the Hyde Amendment without describing the exceptions currently contained in that language. One of these commenters  18 explained its view that removing the regulations would cause more confusion to providers, and described problematic historical practices as an example of why clear IHS rules are needed. The IHS finds that these recommendations would merely restate Federal law, and are therefore unnecessary. The IHS disagrees that removal will cause more confusion. To the contrary, amending the regulations to reflect the current Hyde Amendment could cause additional confusion in the future if Congress changes the annual appropriations language, as it has in the past. Since 25 U.S.C. 1676 already applies the Hyde Amendment to IHS by law, regulations reflecting the Hyde Amendment are superfluous. The IHS has also clarified its compliance with the statutory limitations through policy directives and will continue to provide clear guidance to its staff. Therefore, the IHS has not made changes based on these comments.

One commenter  19 recommended amending 42 CFR 136.54 to state that Federal funds are available when a physician has found and certified that, on the basis of his or her professional judgment, “a statutory condition for such funding, referenced in 25 U.S.C. 1676, is satisfied.” The IHS does not view this change as necessary, since 25 U.S.C. 1676 is applicable to the IHS as a matter of law. In addition, the language recommended by the commenter is unclear, because there are no statutory conditions in 25 U.S.C. 1676 itself. This statute instead applies certain other Federal limitations on the use of funds for the performance of abortions to the IHS. Therefore, the IHS has not made changes based on this comment.

One commenter  20 stated that the IHS must publish a supplemental notice of proposed rulemaking to explain why it is removing and not replacing the regulations. The IHS clearly outlined its reasoning for removing the regulations in the proposed rule. 21 Therefore, the IHS has not made changes based on this comment.

One commenter  22 also offered edits to 42 CFR 136.55 (“Drugs and devices and termination of ectopic pregnancies”) to suggest that Federal funds cannot be used for some treatments for ectopic pregnancy. The IHS does not agree and, consistent with these regulations that are now being withdrawn, reaffirms the policy stated in current 42 CFR 136.55 that Federal funds are available for medical procedures necessary for the termination of an ectopic pregnancy. The IHS has existing broad authority under 25 U.S.C. 13 and 42 U.S.C. 2001 to provide healthcare. Accordingly, a regulation stating that funds are available for medical treatments for ectopic pregnancy is unnecessary and the IHS has not made changes based on this comment.

One commenter  23 stated that the certification requirement in 42 CFR 136.54 should be retained, even if other portions were changed or moved, to ensure compliance with Congress's funding limitations. The IHS believes retaining this section of the regulation is unnecessary. The language in the Hyde Amendment, already made applicable to the IHS via 25 U.S.C. 1676(a), currently contains a physician certification requirement. Retaining that language in the regulation could cause confusion in the future if Congress changes the annual appropriations language, as it has in the past. Therefore, the IHS has not made changes based on this comment.

Some commenters also stated that the remaining sections in subpart F should be retained. These commenters stated that the IHS did not provide justification as to why it was removing the entire section, and not just 42 CFR 136.54. As stated in the notice of proposed rulemaking, 24 the sections on recordkeeping and confidentiality of information (42 CFR 136.56, 136.57) are unnecessary to maintain because these requirements are independently required by other laws and regulations that will remain in effect. See, e.g., 45 CFR parts 160, 164 (Standards for Privacy of Individually Identifiable Health Information (The Privacy Rule)); 44 U.S.C. 31 (The Federal Records Act).

Other commenters similarly requested that the sections on recordkeeping and confidentiality of information be maintained, stating that doing so would ensure accountability, confidentiality, and patient safety. The IHS agrees that recordkeeping and confidentiality requirements serve those important purposes. However, the IHS has sufficient safeguards in place for recordkeeping already required by other Federal laws and regulations, and therefore retaining these regulations is unnecessary. The definition of “physician” in 42 CFR 136.52 is also unnecessary as the meaning of “physician” is well-established in practice and law. See, e.g., 42 U.S.C. 1395x(r).

As acknowledged by a different commenter, 25 certain sections (§§ 136.51 (“Applicability”), 136.53 (“General rule”)) only exist in relation to other sections of subpart F, and thus are superfluous upon the removal of 42 CFR 136.54. Finally, the IHS has existing broad authority under 25 U.S.C. 13 and 42 U.S.C. 2001 to provide healthcare; accordingly, and as described above, 42 CFR 136.55 is unnecessary. Therefore, the IHS has not made changes based on these comments.

One commenter  26 stated that, as a policy matter, the IHS should not use Federal funds for drugs or devices to prevent implantation of the fertilized ovum. The IHS disagrees with this assertion and the removal of 42 CFR 136.55 makes no changes to IHS' existing authority to use Federal funds for the purposes described in the regulatory language being removed. The IHS' broad authority under 25 U.S.C. 13 and 42 U.S.C. 2001 authorizes the IHS to use Federal funds for necessary medical care such as contraception and therefore the IHS does not accept the commenter's policy suggestion to limit the use of funds for this purpose. Therefore, the IHS has not made changes based on this comment.

One commenter  27 explained its view that abortion harms AI/AN people, and recounted some of the history of maltreatment of AI/ANs. These comments are outside of the scope of this action, which merely aligns IHS regulation with statutory text. Therefore, the IHS has not made changes based on this comment.

One commenter  28 made suggestions for changing IHS policy, including statements in IHS policy about the impact of State law on IHS activities, but recognizes that these policy matters are separate from this rulemaking. The IHS also considers these comments outside of the scope of the rulemaking, and therefore has not made changes based on that discussion.

Another commenter  29 stated that the IHS failed to conduct a federalism analysis pursuant to Executive Order 13132, suggesting that IHS clarify whether “its regulations can preempt state law and, if so, address the federalism implications of its rule.” The IHS complied with the requirements of Executive Order 13132. 30 Removing these outdated and unnecessary regulations does not impose a substantial direct requirement or cost on State or local governments, as they apply only to IHS operations as a healthcare provider and payer. This action to remove outdated and unnecessary regulations does not have any preemptive effect. Therefore, the IHS has not made changes based on this comment.

Two commenters  31 stated that the IHS should focus its efforts on services for victims of sexual assault, and improving maternal and infant health, instead of removing the outdated rules. The IHS notes that it has a detailed Sexual Assault policy and a robust Maternal and Child Health Program, which will not be affected by the removal of the outdated regulations. The comment is thus outside of the scope of this action, which merely removes outdated and unnecessary regulations. Therefore, the IHS has not made changes based on these comments.

Executive Order 12866, as amended by Executive Order 14094, and Executive Order 13563 direct agencies to assess all costs and benefits of available regulatory alternatives. Section 3(f) of Executive Order 12866, as amended by Executive Order 14094, defines a “significant regulatory action” as any regulatory action that is likely to result in a rule that may: (1) have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of the Office of Information and Regulatory Affairs (OIRA) for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in the Executive order, as specifically authorized in a timely manner by the Administrator of OIRA in each case. OIRA has determined that this final rule is a significant regulatory action as defined by Executive Order 12866, section 3(f).

This action will not have a significant economic impact on Indian health programs. Therefore, the regulatory flexibility analysis provided for under the Regulatory Flexibility Act is not required.

Executive Order 13132, “Federalism,” establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct requirement costs on State and local governments or has federalism implications. HHS has determined that this final rule, which removes outdated regulations, does not impose such costs or have any federalism implications.

This rule does not have a substantial direct effect on one or more Indian Tribes under Executive Order 13175, because it only removes outdated regulations that do not align with the current statutory text of the Hyde Amendment, with 25 U.S.C. 1676, or with current IHS practice.

HHS has determined that this final rule does not have a significant impact on the environment.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires the IHS to consider the impact of paperwork and other information collection burdens it imposes on the public. The IHS has determined no new requirement for information collection is associated with this final rule. This action does not affect any information collections.

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act, 5 U.S.C 801 et seq. ), OIRA has determined that this rule does not meet the criteria set forth in 5 U.S.C. 804(2).

We have examined the impacts of this rule as required by section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA; March 22, 1995; Pub. L. 104-4). Section 202 of UMRA requires that a covered agency prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted for inflation). In 2024, that threshold is approximately $183 million (in 2023 dollars). If a covered agency must prepare a budgetary impact statement, section 205 further requires that it select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with the statutory requirements. In addition, section 203 requires a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule. Based on information currently available, we expect the combined impact on State, local, or Tribal governments and the private sector does not meet the UMRA definition of unfunded mandate.

For the reasons set forth in the preamble, the Department of Health and Human Services amends 42 CFR part 136 as follows:

This is a summary of Commission's Report and Order , in GN Docket No. 23-65 and IB Docket No. 22-271; FCC 24-28, adopted and released on March 15, 2024. The full text of this document is available for public inspection online at https://docs.fcc.gov/public/attachments/FCC-24-28A1.pdf. The Report and Order was corrected by an erratum released on April 18, 2024. The changes made by the erratum are included in this document.

1. In the Report and Order , the Commission adopts a regulatory framework—the first of its kind in the world—to enable collaborations between satellite operators and terrestrial service providers to offer ubiquitous connectivity directly to consumer handsets using spectrum previously allocated only to terrestrial service. We anticipate that supplemental coverage from space, or SCS, will enable consumers in areas not covered by terrestrial networks to be connected using their existing devices via satellite-based communications.

2. In the Report and Order , to allow satellite communications on spectrum previously allocated only to terrestrial services, the Commission modifies the United States Table of Frequency Allocations to authorize bi-directional, secondary mobile-satellite service (MSS) operations in certain spectrum bands that have no primary, non-flexible-use legacy incumbents, Federal or non-Federal. Accordingly, the list of bands that will be available for the provision of SCS (the SCS Bands) is as follows:

• 600 MHz: 614-652 MHz and 663-698 MHz;

• 700 MHz: 698-769 MHz, 775 MHz-799 MHz, and 805-806 MHz;

• 800 MHz: 824-849 MHz and 869-894 MHz;

• Broadband PCS: 1850-1915 MHz and 1930-1995 MHz; and

• AWS-H Block: 1915-1920 MHz and 1995-2000 MHz.

3. For these bands, the Commission finds it in the public interest to limit SCS authorizations to the following geographically independent areas (GIAs): (1) the contiguous United States (CONUS); (2) Alaska; (3) Hawaii; (4) American Samoa; (5) Puerto Rico/U.S. Virgin Islands; and (6) Guam/Northern Mariana Islands. Given the novel technical challenges at play when introducing satellite communications to terrestrial spectrum, we believe that a GIA restriction is necessary in the initial SCS framework because it minimizes the risk of potential interference to geographically-adjacent, co-channel license areas. For these bands, the Commission authorizes SCS only where one or more terrestrial licensees—together holding all licenses on the relevant channel throughout a defined geographically independent area—lease access to their spectrum rights to a participating satellite operator, whose part 25 license reflects these frequencies and the geographically independent area in which they will offer SCS.

4. In the Report and Order , the Commission also adopts entry criteria that non-geostationary satellite orbit (NGSO) and geostationary satellite orbit (GSO) operators must meet in order to apply for or modify an existing part 25 license to operate satellites in the SCS Bands in the United States and its territories. Specifically, we establish an SCS framework allowing satellite operators to apply to modify a current part 25 license to include SCS where: (1) the satellite operator has one or more leasing notification(s) or application(s), or in the case of FirstNet, a Form 601, on file with the Commission to access the spectrum allocated for MSS provision of SCS from a single terrestrial licensee or multiple licensees that hold, collectively or individually, all co-channel licenses throughout a GIA; (2) the current part 25 space station licensee or part 25 grantee of market access for NGSO or GSO satellite operation seeks modification of authority to provide SCS in the same geographic areas covered in the relevant GIA; and (3) the terrestrial devices involved in SCS qualify as “licensed by rule” earth stations under the new provisions of part 25. Similarly, satellite operators may apply for an initial part 25 license with authority to provide SCS if they meet requirements (1) and (3) above, and if in their part 25 application, those operators seek to provide SCS in the same geographic areas covered in the relevant GIA.

5. Our actions to facilitate the deployment of SCS will serve several important public interest goals for the Nation. First, the SCS framework will expand the reach of communications services, particularly emergency services, so that connectivity and assistance is available in more remote places. Second, the SCS framework will spur advancements in cutting-edge, space-based technologies that will position the United States as a global leader in this arena. And third, the SCS framework will continue our efforts to promote the innovative and efficient use of our Nation's spectrum resources in ways that foster creative collaborations among users.

6. In crafting this new framework, it is essential that we balance the desire to accelerate innovative SCS operations that will serve these critical public interest goals with the need to retain service quality of terrestrial networks, protect spectrum usage rights, and minimize the risk of harmful interference, both domestically and internationally. Accordingly, the framework we adopt in the Report and Order represents an initial step to encourage the development of SCS while minimizing the risks of harmful interference to existing terrestrial and satellite networks that support non-Federal and Federal users. In the future, as the marketplace for SCS develops, we plan to build on the framework we adopt in the Report and Order , to enable deployment of SCS in additional bands and scenarios. We will also continue to monitor the nascent SCS marketplace to consider modifications and address proposals that do not fit neatly within our framework by waiver.

7. In addition, the Commission considered a framework for authorizing terrestrial devices to communicate with a space station in the SCS context. In the Report and Order , the Commission adopts a license by rule approach for terrestrial devices as earth stations communicating with a satellite network for the purposes of SCS. Specifically, so long as the terrestrial devices connecting to the SCS network are doing so pursuant to an effective part 1 leasing arrangement or agreement and are operating within the existing technical parameters of their Office of Engineering and Technology (OET) equipment authorization, the terrestrial licensee's license parameters, and applicable part 22, 24, or 27 rules, then those devices will be licensed as earth stations by rule without the need to file a part 25 earth station application for additional authority.

8. In recognizing the importance of 911 service to emergency response and disaster preparedness, we adopt interim 911 text and call routing requirements for terrestrial providers that use SCS arrangements to extend coverage areas. Specifically, we require terrestrial providers to transmit all 911 voice calls and texts to a Public Safety Answering Point (PSAP) using location-based routing or an emergency call center. Terrestrial providers must also transmit location information and the user's phone number to facilitate dispatch and callback capabilities at the receiving PSAP. We also require terrestrial providers that use SCS to file annual reports with the Commission, submit a privacy certification, and provide consumer disclosures regarding SCS 911 connectivity.

9. Under the SCS framework, satellite operators and terrestrial licensees providing SCS must comply with existing satellite and terrestrial rules to avoid harmful interference into radio astronomy and related services. The Commission also amended some of its technical rules as they apply to SCS. In addition, the new MSS allocations will remain subject to the United States' international obligations under treaties, bilaterial or multilateral agreements, the International Radio Regulations, and other instruments of the International Telecommunication Union (ITU).

10. The requirements in §§ 1.9047(d)(2), 9.10(t)(3) through (5), and 25.125(b)(1) and (2) and (c) constitute new or modified collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. They will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought, but did not receive, specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission describes impacts that might affect small businesses, which includes more businesses with fewer than 25 employees, in the Final Regulatory Flexibility Analysis.

11. The Regulatory Flexibility Act (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, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in the Report and Order on small entities. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking (NPRM) released in March 2023 in this proceeding (88 FR 21944, Mar. 16, 2023). The Commission sought written public comment on the proposals in the NPRM including comments on the IRFA. No comments were filed addressing the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

12. The Commission will send a copy of the Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

13. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM released in March 2023. The Federal Communications Commission (Commission) sought written public comment on the proposals in the NPRM , including comment on the IRFA. No comments were filed addressing the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

14. In the Report and Order , the Commission takes a major step toward harnessing the power of hybrid satellite-terrestrial networks to connect people to modern communications services. To accomplish this objective, the Commission adopts a regulatory framework to enable collaborations between satellite operators and terrestrial service providers to offer ubiquitous connectivity directly to consumer handsets using spectrum previously allocated only to terrestrial service. Supplemental coverage from space (SCS) will enable consumers in areas not covered by terrestrial infrastructure to be connected using their existing devices via satellite-based communications. The framework the Commission adopts in the Report and Order balances the desire to accelerate innovative SCS operations that will serve these critical public interest goals with the need to retain service quality of terrestrial networks, protect spectrum usage rights, and minimize the risk of harmful interference, both domestically and internationally. The objectives of the framework include facilitating ubiquitous wireless coverage across the Nation, expanding the availability of emergency communications to consumers and the geographic range of first responders to provide emergency services, and promoting competition in the provision of wireless services to consumers.

15. In the Report and Order , to allow satellite communications on spectrum previously allocated only to terrestrial services, the Commission modifies the United States Table of Frequency Allocations (U.S. Table) to authorize bi-directional, secondary mobile-satellite service (MSS) operations in certain spectrum bands that have no primary, non-flexible-use legacy incumbents, Federal or non-Federal. For these bands, the Commission authorizes SCS only where one or more terrestrial licensees—together holding all licenses on the relevant channel throughout a defined geographically independent area (GIA)—lease access to their spectrum rights to a participating satellite operator, whose part 25 license reflects these frequencies and the GIA in which they will offer SCS. The list of bands (SCS Bands) that will be available for the provision of SCS is as follows:

• 600 MHz: 614-652 MHz and 663-698 MHz;

• 700 MHz: 698-769 MHz, 775 MHz-799 MHz, and 805-806 MHz;

• 800 MHz: 824-849 MHz and 869-894 MHz;

• Broadband PCS: 1850-1915 MHz and 1930-1995 MHz; and

• AWS-H Block: 1915-1920 MHz and 1995-2000 MHz.

16. In an effort to realize the public interest benefits of SCS as soon as possible, while minimizing the risk of harmful interference, the Commission adopts the proposal to limit SCS authorizations to the following GIAs: (1) the contiguous United States (CONUS); (2) Alaska; (3) Hawaii; (4) American Samoa; (5) Puerto Rico/U.S. Virgin Islands; and (6) Guam/Northern Mariana Islands.

17. Additionally, in the Report and Order , the Commission adopts rules requiring a part 25 license as a necessary component of an SCS authorization that must be obtained prior to commencing SCS. The Commission also adopts entry criteria that non-geostationary satellite orbit (NGSO) and geostationary satellite orbit (GSO) operators must meet to apply for or modify an existing part 25 license to operate satellites in SCS Bands. The Commission adopts rules to establish a license by rule approach for terrestrial devices as earth stations communicating with a satellite network for the purposes of SCS. Furthermore, the Report and Order authorizes SCS based on a lease arrangement or agreement between one or more terrestrial licensees and one or more satellite operators, subject to the restrictions adopted. The Commission also adopts limited amendments to the service rules governing satellite and terrestrial licensees to enable the provision of SCS.

18. Similarly, the Commission adopts certain technical rules, including requiring terrestrial device equipment authorization grantees to modify existing, or obtain new, equipment authorizations for previously certified terrestrial devices and also grants a limited waiver of certain rules. The Commission also addresses international coordination, stating that SCS will be authorized pursuant to a secondary MSS allocation in the U.S. Table. These operations may not cause harmful interference to—and shall not claim protection from—any station operating in accordance with ITU provisions, whether in the United States or internationally. Finally, the Commission clarifies that the SCS framework is limited to operations performed in the bands designated in the Report and Order for SCS and remains separate from the service rules for MSS systems. Consequently, the rules the Commission adopts in the Report and Order represent an initial step to encourage the development of SCS while minimizing the risks of harmful interference to existing terrestrial and satellite networks that support non-Federal and Federal users.

19. Parties that filed comments did not specifically reference the IRFA in their comments; however, some commenters, some of which include small entities, expressed concerns that the proposal in the NPRM in which a single terrestrial licensee must hold all co-channel licenses in a given GIA would either limit SCS to large carriers with nationwide authority over a block of spectrum, or, at a minimum, exclude smaller or regional terrestrial operators from participation in the framework. These concerns are discussed in greater detail in section F of this FRFA.

20. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.

21. The Chief Counsel did not file any comments in response to the proposed rules or policies in this proceeding.

22. 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 rules adopted herein. 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.

23. Small Businesses, Small Organizations, Small Government Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe, at the outset, three broad groups of small entities that could be directly affected herein. First, where there are industry specific size standards for 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.

24. 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 revenue of $50,000 or less according to the registration and tax data for exempt organizations available from the IRS.

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

26. 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.

27. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms in this industry that operated for the entire year. Of that number, 2,837 firms employed fewer than 250 employees. Additionally, based on Commission data in the 2021 Universal Service Monitoring Report, as of December 31, 2020, there were 797 providers that reported they were engaged in the provision of wireless services. Of these providers, the Commission estimates that 715 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

28. 600 MHz Band. These wireless communications services are radiocommunication services licensed in the 617-652 MHz and 663-698 MHz frequency bands that can be used for fixed and mobile flexible uses. 600 MHz Band services fall within the scope of the Wireless Telecommunications Carriers (except Satellite) industry where the SBA small business size standard classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

29. Based on Commission data as of November 2021, there were approximately 3,327 active licenses in the 600 MHz Band service. The Commission's small business size standards with respect to 600 MHz Band services involve eligibility for bidding credits and installment payments in the auction of licenses for these services. For purposes of bidding credits, the Commission defined “small business” as an entity with average gross revenues not exceeding $55 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues not exceeding $20 million for each of the three preceding years for the 600 MHz band auction. Pursuant to these definitions, 15 bidders claiming small business status won 290 licenses.

30. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

31. Lower 700 MHz Band Licenses. The lower 700 MHz band encompasses spectrum in the 698-746 MHz frequency bands. Permissible operations in these bands include flexible fixed, mobile, and broadcast uses, including mobile and other digital new broadcast operation; fixed and mobile wireless commercial services (including frequency division duplex (FDD)- and time division duplex (TDD)-based services); as well as fixed and mobile wireless uses for private, internal radio needs, two-way interactive, cellular, and mobile television broadcasting services. Wireless Telecommunications Carriers ( except Satellite) is the closest industry with a SBA small business size standard applicable to licenses providing services in these bands. The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

32. According to Commission data as of December 2021, there were approximately 2,824 active Lower 700 MHz Band licenses. The Commission's small business size standards with respect to Lower 700 MHz Band licensees involve eligibility for bidding credits and installment payments in the auction of licenses. For auctions of Lower 700 MHz Band licenses the Commission adopted criteria for three groups of small businesses. A very small business was defined as an entity that, together with its affiliates and controlling interests, has average annual gross revenues not exceeding $15 million for the preceding three years, a small business was defined as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $40 million for the preceding three years, and an entrepreneur was defined as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $3 million for the preceding three years. In auctions for Lower 700 MHz Band licenses seventy-two winning bidders claiming a small business classification won 329 licenses, twenty-six winning bidders claiming a small business classification won 214 licenses, and three winning bidders claiming a small business classification won all five auctioned licenses.

33. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

34. Upper 700 MHz Band Licenses. The upper 700 MHz band encompasses spectrum in the 746-806 MHz bands. Upper 700 MHz D Block licenses are nationwide licenses associated with the 758-763 MHz and 788-793 MHz bands. Permissible operations in these bands include flexible fixed, mobile, and broadcast uses, including mobile and other digital new broadcast operation; fixed and mobile wireless commercial services (including FDD- and TDD-based services); as well as fixed and mobile wireless uses for private, internal radio needs, two-way interactive, cellular, and mobile television broadcasting services. Wireless Telecommunications Carriers ( except Satellite) is the closest industry with a SBA small business size standard applicable to licenses providing services in these bands. The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of that number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

35. According to Commission data as of December 2021, there were approximately 152 active Upper 700 MHz Band licenses. The Commission's small business size standards with respect to Upper 700 MHz Band licensees involve eligibility for bidding credits and installment payments in the auction of licenses. For the auction of these licenses, the Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. Pursuant to these definitions, three winning bidders claiming very small business status won five of the twelve available licenses.

36. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

37. Cellular Radiotelephone Service. This service is radio service in which licensees are authorized to offer and provide cellular service for hire to the general public and was formerly titled Domestic Public Cellular Radio Telecommunications Service. Cellular Radiotelephone Service falls within the scope the Wireless Telecommunications Carriers (except Satellite) industry, where the SBA small business size standard classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

38. Based on Commission data, as of November 2021, there were approximately 1,908 active licenses in this service. The Commission's small business size standards with respect to Cellular Radiotelephone Services involve eligibility for bidding credits and installment payments in the auction of licenses for these services. For purposes of bidding credits, the Commission has defined “small business” as an entity that either (1) together with its affiliates and controlling interests has average gross revenues of not more than $3 million for each of the three preceding years, or (2) together with its affiliates and controlling interests has average gross revenues of not more $15 million for each of the three preceding years.

39. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

40. Advanced Wireless Services (AWS)—(1710-1755 MHz and 2110-2155 MHz bands (AWS-1); 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands (AWS-2); 2155-2175 MHz band (AWS-3); 2000-2020 MHz and 2180-2200 MHz (AWS-4)). Spectrum is made available and licensed in these bands for the provision of various wireless communications services. Wireless Telecommunications Carriers (except Satellite) is the closest industry with a SBA small business size standard applicable to these services. The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

41. According to Commission data as December 2021, there were approximately 4,472 active AWS licenses. The Commission's small business size standards with respect to AWS involve eligibility for bidding credits and installment payments in the auction of licenses for these services. For the auction of AWS licenses, the Commission defined a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, and a “very small business” as an entity with average annual gross revenues for the preceding three years not exceeding $15 million. Pursuant to these definitions, 57 winning bidders claiming status as small or very small businesses won 215 of 1,087 licenses. In the most recent auction of AWS licenses 15 of 37 bidders qualifying for status as small or very small businesses won licenses.

42. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

43. 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.

44. While the Commission sought to minimize compliance burdens where practicable, the SCS framework adopted in the Report and Order will impose new or additional reporting, recordkeeping, and/or other compliance obligations on small entities. In addition, while it sought comment from concerned parties regarding costs related to those obligations, the record does not contain a detailed cost/benefit analysis that would allow us to quantify such related costs to small entities. The rules adopted in the Report and Order encompass a broad range of leasing, licensing, and technical compliance requirements that are summarized in further detail below.

45. Part 25 License Entry Criteria. The Report and Order effectuates SCS in certain flexible-use bands previously allocated solely for terrestrial use by the adoption of rules to authorize satellite-to-terrestrial (uplink and downlink) operations in these bands whereby a NGSO or GSO satellite operator may apply for a new or modify an existing part 25 authorization when that entity meets certain prerequisites, or “entry criteria.” The “entry criteria” requires the satellite operator intending to modify its existing part 25 application in order to provide SCS to include a certification that provides the following information: (1) the satellite operator has one or more leasing notification(s) or application(s), or in the case of FirstNet, a Form 601, on file with the Commission to access the spectrum allocated for MSS provision of SCS from a single terrestrial licensee or multiple licensees that hold, collectively or individually, all co-channel licenses throughout a GIA; (2) the current part 25 space station licensee or part 25 grantee of market access for NGSO or GSO satellite operation seeks modification of authority to provide SCS in the same geographic areas covered in the relevant GIA; and (3) the terrestrial devices involved in SCS qualify as “licensed by rule” earth stations under the new provisions of part 25. Similarly, satellite operators may apply for an initial part 25 license with authority to provide SCS if it shows that it meets requirements (1) and (3) above, and if in their part 25 application, those operators request to provide SCS in in the same geographic areas covered in the relevant GIA.

46. In its adopted rules, the Commission maintains its existing part 25 rules for obtaining and modifying a license and applies them to the SCS framework. Under this framework, meeting the proposed entry criteria would allow small and other entities to apply to modify its existing satellite authorization. However, all related applications—including those seeking modification, lease applications, and earth station equipment certifications—must first be granted to provide SCS. Thus, the Report and Order's requirements are in addition to the existing underlying reporting, recordkeeping, and compliance requirements. We further note, however, that due to the significant costs involved in SCS development and deployment, we anticipate that few satellite operators affected by this rulemaking would qualify under the definition of “small entity.”

47. Part 1 Leasing. In the Report and Order , the Commission adopts a framework authorizing SCS by amending its part 1 leasing rules to permit terrestrial licensees to lease terrestrial spectrum rights to satellite operators for the purpose of providing SCS. In order to properly comply, the adopted rules require applicants for and current licensees of the authorized SCS bands to provide the following information using the current FCC Form 608: (1) a certification that the parties are entering into the leasing arrangement for the purpose of fulfilling the part 25 entry criteria; (2) a description of which method, single or multiple terrestrial licensee, the parties are utilizing to meet the part 25 entry criteria; and (3) if the parties are utilizing the spectrum leasing arrangement under the multiple terrestrial licensee method, the parties must: (a) describe the nature of the leasing arrangement(s); and (b) demonstrate how the entirety of the GIA is covered by the lease arrangement(s). The Commission believes that this requirement will improve the level of interference protection licensees receive in the band; and will create a more predictable and transparent spectrum environment for any current and future users of the band(s). This process also utilizes the Commission's current application approval and notification processing procedures because it will remove unnecessary delay by utilizing the procedures that are already in place. Further, in light of these limited changes to the current application procedures, the Commission does not believe that small entities will have to hire professionals to comply with the Report and Order .

48. Part 25 Automatic Termination. In the Report and Order , the Commission retains the current part 25 rules regarding automatic termination of station authorizations to satellite licensees seeking to provide SCS jointly with a terrestrial operator, and adds a rule whereby the termination of any lease(s) that allow for the use of specific terrestrial spectrum for SCS is a trigger for automatic termination of the part 25 license. This requirement utilizes and applies the Commission's current part 25 automatic termination process. In light of these limited changes to the current procedures, the Commission does not believe that small entities will have to hire professionals to comply with the Report and Order .

49. 911 Call Transmission Requirements. In the Report and Order , the Commission establishes on an interim basis that terrestrial providers must transmit all SCS 911 calls and texts to a PSAP using either an emergency call center or location-based routing. Terrestrial providers must also transmit location information and the user's phone number to facilitate dispatch and callback capabilities at the receiving PSAP. This interim step will balance the need for SCS 911 voice calls and texts to be routed to the appropriate PSAP with the need for terrestrial providers to have flexibility in their implementation of SCS. Under this approach, terrestrial providers must either: (1) use information regarding the location of a device, including but not limited to device-based location information, and transmit the phone number of the device used to send the SCS 911 voice call or SCS 911 text message and available information to an appropriate PSAP; or (2) use an emergency call center, at which emergency call center personnel must determine the emergency caller's phone number and location and then transfer or otherwise direct the SCS voice call or SCS text message to an appropriate PSAP. In addition, the Commission requires terrestrial providers that use SCS to file an SCS 911 report with the Commission on an annual basis, by October 15th of each year, that explains how their SCS deployments have supported 911 call/text routing to the geographically appropriate PSAP with sufficient location information. Terrestrial providers that utilize SCS to extend coverage must maintain records of SCS 911 voice calls and 911 text messages received under their SCS arrangements and received at their emergency centers. The Commission finds that these reporting and location-based routing requirements represent minimally burdensome requirements when weighed against the necessity of 911 service for emergency response and disaster preparedness. Further, while these recordkeeping and reporting requirements present new obligations for small entities, we note that these measures will promote the Commission's objectives regarding transparency and accountability in routing SCS voice calls and 911 text messages and provide useful data. Additionally, to advance consumer awareness of the extent to which SCS is used to provide connectivity to 911, the Commission adopts consumer disclosure requirements for terrestrial providers to inform their subscribers of the limitations when using SCS to contact 911. Finally, there is a one-time requirement that, prior to use of SCS location information to meet the Commission's 911 rules, terrestrial providers must certify that neither they nor any third party they rely on to obtain SCS location information will use that information or associated data for any non-911 purpose, except with prior express consent or as otherwise permitted or required by law. The certification also must state that terrestrial providers and any third party they rely on to obtain SCS location information will implement measures sufficient to safeguard the privacy and security of the information.

50. Market Area Boundary Limits. In the Report and Order , the Commission maintains the existing market area boundary limits in parts 22, 24, and 27 of the Commission's rules. Noting that SCS partners should be expected to coordinate regarding the technical parameters necessary to avoid co-channel interference with one another's operations. Although the introduction of SCS into spectrum licensed for terrestrial networks should have no impact to other radio systems operating in the band within the same or nearby geographical areas, the Commission adopts a rule to limit the signal levels from SCS at and beyond the terrestrial operator's licensed area to be the same as those defined for terrestrial operation in each respective band. More specifically, the Commission maintains the existing market area boundary limits established in parts 22, 24, and 27 of the Commission's rules. These limits have also been used and shown to be feasible for operations similar to SCS. SCS can therefore only be deployed on the condition that stations using these frequencies will not cause harmful interference to, or claim protection from harmful interference caused by, an international station operating in accordance with the provisions of the Constitution, the Convention, and the Radio Regulations of the ITU.

51. The Commission recognizes that managing time varying signal levels from SCS space stations, which may be moving and utilizing multibeam transmissions, will require careful and dynamic management of power level and beams for small and other entities. Satellite operators must also account for multiple overlapping and changing satellites or beams covering the same areas, as well as leakage and interference from side beams. Therefore, the power limit for interference protection at any given point or area should be applied to aggregation of power received across all visible beams and satellites at all times as they move over any given point or area. In addition, operators may need to cease beam transmissions in zones to allow for signal degradation from the edge of SCS coverage. Given that the size of such zones depends on target services, satellite and beamforming configuration, and power management solutions which may improve over time, the Commission does not set a limit on the zone size as long as the receive power limits are met.

52. Out of Band Emission (OOBE) Limits. In the Report and Order the Commission adopted a uniform OOBE limit of −120 dBW/m2/MHz for SCS operation across the SCS Bands expressed as a terrestrial power flux-density (PFD) limit. To ensure those adjacent band devices are protected from the risk of harmful interference, we find that both OOBE limits are warranted, and given the nature of SCS, that these limits should be measured and enforced on the ground. In setting these limits, we recognize that different factors may affect the potential for harmful interference due to the inherent difference in propagation effects when the signal is generated from a multibeam satellite constellation compared to when it is transmitted from a terrestrial base station. As a result, we therefore adopt limits that constitute a reasonable middle ground between existing terrestrial OOBE limits and satellite-based limits.

53. The existing OOBE limits for base stations vary across different radio services, and these services are governed by different parts of the Commission's rules ( e.g., parts 22, 24, 27). Although different OOBE limits apply across individual SCS Bands, we believe adopting a uniform PFD limit for supplemental satellite coverage across the various bands is reasonable and provides a simple requirement for satellite operator compliance. To provide a uniform limit across the various SCS Bands, the Commission considers some balancing of these effects for PFD limits that are normalized to both “per MHz” and “per square meter”- i.e., dBW/m2/MHz. We also specify that this PFD limit will apply at 1.5 meters above ground level, a height frequently associated with handset usage that has been used by the Commission when developing interference protection criteria for other wireless services. We believe that this limit represents an equitable- and technologically feasible-balance between the positions expressed in the record and will effectively protect adjacent band operations across the SCS Bands. Further, given that the Commission is breaking new ground in permitting satellite operations to not only operate in bands allocated for terrestrial systems, but permitting them to be fully integrated into those systems, we believe that it is in the public interest to require that those satellites protect terrestrial systems commensurate with the protections they are afforded from terrestrial-only systems. While the out-of-band PFD limits the Commission adopted may require more stringent attenuation than the emission limits specified in § 25.202(f) for satellite operation, the Commission believes that these stricter limits are both necessary and technologically feasible for small and other satellite operators providing SCS.

54. Equipment Authorization for SCS. The adopted rules in the Report and Order also require terrestrial device equipment authorization grantees to modify existing, or obtain new, equipment authorizations for previously certified terrestrial devices to reflect those devices' approval to operate under a part 25 MSS allocation and applicable SCS rules. New applicants should include a request for part 25 on future certification applications for equipment that is capable of operation in an SCS mode. This requirement does introduce a new administrative burden for equipment authorization grantees and applicants, especially as it relates to already certified equipment. The Commission's existing procedures through the permissive change process which enable electrical or mechanical changes to certified equipment when those changes do not affect the characteristics required to be reported to the Commission do not apply here where the only change being made to the certification is adding authorization for part 25. Under the Commission's existing rules, “a change other than a permissive change” requires a grantee to file a new application for certification accompanied by the information specified in part 2 of the Commission's rules. The Commission believes there is good reason to provide grantees a way to effectuate the necessary changes to their equipment authorization grants under the Commission's rules that also minimizes the administrative burdens associated with a new equipment certification application by waiving relevant rule provisions to provide a simplified process for existing grantees to modify their certifications to reflect part 25 authorization for SCS.

55. In granting a limited waiver of its rules, the Commission aims to minimize the burden on small and other equipment certification holders, while ensuring tracking and accountability for devices capable of SCS, and compliance with its prohibition on the authorization of covered equipment. Similarly, for new equipment authorizations, terrestrial devices need only show compliance with the terrestrial technical rules for the rule parts under which they will operate; no additional tests are needed for part 25 SCS capability. Thus, seeking to have the part 25 SCS designation on the equipment certification only requires the applicant to request such a designation pursuant to the SCS rules.

56. International Coordination. In the Report and Order , the adopted rules require that SCS operations that may occur in bands not allocated for such services in the International Table must be consistent with ITU Radio Regulation No. 4.4 and finds that it would serve the public interest to include express conditions in the SCS licenses to ensure that the Commission's obligations are met as the ITU notifying administration for U.S. licensed space station operations. In these cases, the Commission will require additional assurances from SCS licensees that while operating outside of the United States, pursuant to an authorization from another country, the satellite operations will not cause harmful interference into a nearby country. Prior to conducting any communications with earth stations outside the United States, a satellite operator licensed to provide SCS, or applicant for a license to provide SCS, must certify to Space Bureau and the Office of International Affairs (OIA) that it has obtained all necessary authorizations from the relevant country prior to initiation of communications with earth stations in that country. The certification must include steps that were taken to address harmful interference concerns and that these SCS operations will not result in harmful interference to operations that are in conformity with the ITU Radio Regulations in neighboring or nearby countries. The certification must also be accompanied by a demonstration specifying the measures that the U.S. licensee or applicant will take to eliminate any harmful interference immediately, in the event that it is notified of harmful interference resulting from such SCS operations. These requirements are consistent with existing Commission rules, thereby limiting the compliance burden for small and other entities.

57. The RFA requires an agency to provide, “a description of the steps the agency has taken to minimize the significant economic impact on small entities . . . including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

58. As discussed above, the Report and Order adopts an SCS framework that allows, through a collaboration between a terrestrial mobile service provider and satellite operator, transmissions directly from satellites to terrestrial devices on spectrum that was previously allocated and licensed exclusively on a terrestrial basis. In the discussion of the issues, the initial NPRM sought comment on, the Commission raised alternatives and sought input such as a cost and benefit analyses from small and other entities. By requesting such information, the Commission gave small entities the opportunity to broaden the scope of the Commission's understanding of impacts which may not be readily apparent, and offer alternatives not already considered that could minimize the economic impact on small entities.

59. Waiver-Based Approach. The Commission declines to adopt a waiver-based approach to enable SCS, opting instead to enable SCS on a variety of bands in all parts of the United States through generally-applicable rules. Some commenters argued for a waiver-based approach instead, but the Commission believes a generally-applicable rules approach allows the Commission to better serve the public by allowing it to more carefully consider the entire landscape of an issue as well as make more comprehensive policy decisions. However, because there are particular SCS implementations that do not perfectly align with this framework, in order to not discourage or delay other innovative solutions for SCS, the Commission will continue to consider on a case-by-case basis filings for waiver or special temporary authority (STA) made by interested parties for SCS. Permitting case-by-case filings for waiver or STA will allow more flexibility for smaller entities who do not have the resources that larger entities have to participate in providing SCS.

60. Geographically Independent Area (GIA). In the initial NPRM , the Commission proposed to limit the provision of SCS “to instances where a single terrestrial licensee holds all co-channel licenses in the relevant band throughout one of the six GIAs.” In the Report and Order , the Commission adopted the proposal to limit SCS authorizations to the following GIAs: (1) CONUS; (2) Alaska; (3) Hawaii; (4) American Samoa; (5) Puerto Rico/U.S. Virgin Islands; and (6) Guam/Northern Mariana Islands. The Commission adopted its original proposal to limit SCS to GIAs at this time, and acknowledges that this decision does not foreclose the ability for parties with proposals for providing SCS that do not satisfy the framework from applying to the Commission and demonstrating that they will not cause harmful interference. Some commenters, some of which include small entities, suggested this proposal would limit SCS to large carriers with nationwide authority over a block of spectrum, or otherwise exclude smaller or regional terrestrial operators from participation in the framework. Because of these concerns, the Commission has taken the step of expanding its entry criteria so that multiple terrestrial service providers may work with a satellite operator to provide SCS, as long as together those service providers hold all the licenses in the relevant channel throughout a GIA. These more expansive entry criteria help provide an opportunity for broader deployment of SCS both spectrally and geographically and allows additional licensees to participate, while still minimizing the risk of harmful interference.

61. Part 25 License Entry Criteria. In the Report and Order , the Commission adopted rules to authorize satellite-to-terrestrial (uplink and downlink) operations in certain bands whereby a NGSO or GSO satellite operator may apply for a new or modify an existing part 25 authorization where that entity meets certain prerequisites, or “entry criteria.” This approach will significantly expand and enhance secondary markets in a manner that aligns with the Commission's public interest objectives in order to permit spectrum to flow more freely among users and uses in response to economic demand. The Commission believes that by allowing spectrum to be utilized in this way, it will encourage small entities to become more involved in this process and collaborate with larger providers.

62. Furthermore, in the Report and Order , the Commission declined to require part 25 blanket earth station licensing because the comments in the record reflected that blanket licensing would be unnecessarily burdensome to small and other entities. In the initial NPRM , the Commission proposed that a terrestrial licensee seeking to collaborate with a satellite operator to offer SCS must apply for and obtain a blanket earth station license for all of its subscribers' terrestrial devices that will be transmitting to space stations for SCS operations. The Commission sought comment on this approach as well as any other approaches that would be consistent with statutory and international obligations. However, commenters raised significant concerns regarding blanket licensing, and, thus, the Commission instead adopts a license by rule approach for terrestrial devices as earth stations communicating with a satellite network for the purposes of SCS. By not requiring providers to apply for and obtain a blanket earth station license, the Commission removes a barrier that was potentially unnecessarily burdensome, in particular for small entities with limited resources.

63. Part 1 Leasing. The Commission adopts a framework authorizing SCS by amending its part 1 leasing rules to permit terrestrial licensees to lease terrestrial spectrum rights to satellite operators for the purpose of providing SCS. These requirements are consistent with existing Commission part 1 leasing rules, and the Commission will require applicants for and current licensees of the authorized SCS bands to provide the necessary information using current FCC Form 608. This process will benefit small entities by saving time and resources, as it utilizes the Commission's current application approval and notification processing procedures, and it will remove unnecessary delay by utilizing the procedures that are already in place. Additionally, the Commission considered, but declined, to adopt an approach where a lease was not initially required. Some commenters advocated for the adoption of a “two-step” licensing model in response to the NPRM , which would have involved a deployment grant that would not have required a lease initially. However, the Commission believes that a two-step part 25 licensing process would require a duplicative and inefficient use of staff resources that could create a significant economic burden to small entities.

64. Part 25 Automatic Termination. The Commission retains the current part 25 rules regarding automatic termination of station authorizations to satellite licensees seeking to provide SCS jointly with a terrestrial operator and adds a rule whereby the termination of any lease(s) that allow for the use of specific terrestrial spectrum for SCS is a trigger for automatic termination of the part 25 license. The new rule that triggers the current part 25 automatic termination requirement is consistent with the current automatic termination rules. By retaining the current part 25 rules regarding automatic termination, small and other entities will not have to become acquainted with a new set of rules, thus reducing their compliance burden.

65. 911 Call Transmission Requirements. The Commission establishes on an interim basis that terrestrial providers must transmit all SCS 911 calls and texts to a PSAP using either an emergency call center or location-based routing. Terrestrial providers must also transmit location information and the user's phone number to facilitate dispatch and callback capabilities at the receiving PSAP. This interim step will balance the need for SCS 911 voice calls and texts to be routed to the appropriate PSAP with the need for entities to have flexibility in their implementation of SCS. The Commission implements this interim step because some terrestrial 911 requirements may not be feasible at this time and, thus, balanced feasibility with the vital importance of 911 services. In connection with this interim requirement, terrestrial providers that use SCS to extend coverage must maintain records of SCS 911 voice calls and text messages received on their network and emergency call centers. In addition, the adopted rules require terrestrial providers to file an SCS 911 report with the Commission on an annual basis, which will provide critical information regarding SCS 911 connectivity to the Commission while accomplishing it in a manner that does not create a severe burden for entities required to file. The Commission concluded that extending and adapting the existing MSS 911 reporting and location-based routing requirements are minimally burdensome. While these requirements do present new obligations for small entities, these measures will promote transparency and accountability in routing SCS voice calls and provide useful data. In addition, the concurrently adopted Further Notice of Proposed Rulemaking , published elsewhere in this issue of the Federal Register , will also provide an ample record in which the Commission may consider any additional concerns regarding SCS 911-related issues.

66. The Report and Order also establishes disclosure requirements for terrestrial providers to inform their subscribers of the limitations resulting from the use of SCS to contact 911. This disclosure requirement is consistent with the disclosure requirement the Commission adopted for interconnected Voice Over Internet Protocol (VoIP) service providers, demonstrating that it will be familiar to entities and not cause a significant economic impact. While this is a new requirement for providers, it will provide vital information to consumers about the limitations of SCS when contacting 911. The Commission also adopts a rule requiring terrestrial providers to file with the Commission a one-time certification regarding safeguarding the privacy and security of SCS location information. These obligations are consistent with the Commission's existing rules that apply to z-axis and dispatchable location data, as well as location information used for location-based routing; therefore, it will be familiar to terrestrial providers and not create an additional costly burden on small entities.

67. Market Area Boundary Limits. The Commission maintains the existing market area boundary limits in parts 22, 24, and 27 of the Commission's rules, noting that SCS partners should be expected to coordinate regarding the technical parameters necessary to avoid co-channel interference with one another's operations. Although the existing market area boundary limits remain, the Commission states that certain limits may be necessary and applicable to the boundaries of the GIA, including at international borders or boundaries extending into water. Therefore, the Commission adopts a rule to limit the signal levels from SCS at and beyond the terrestrial operator's licensed area to be the same as those defined for terrestrial operation in each respective band.

68. Out of Band Emission (OOBE) Limits. The Commission adopts a uniform OOBE limit for SCS operation across the SCS Bands expressed as a terrestrial PFD limit. The Commission declined to apply the existing OOBE limits for base stations; instead, after the perspective of commenters who expressed mixed views on which OOBE limits to apply, the Commission adopts a uniform PFD limit for SCS, which provides an equitable- and technologically feasible-compromise between the positions expressed in the record and will also effectively protect adjacent band operations across the SCS Bands. Further, by adopting a uniform OOBE limit for SCS operations, entities will not have to become knowledgeable about several different limitations, which will save much needed time and resources for small entities. We note that even though the out-of-band PFD limits adopted may require more stringent attenuation than the emission limits specified in § 25.202(f) for satellite operation, the Commission believes these stricter limits are both necessary and technologically feasible for satellite operators providing SCS.

69. Equipment Authorization for SCS. In the Report and Order , the Commission requires terrestrial device equipment authorization grantees to modify existing, or obtain new, equipment authorizations for previously certified terrestrial devices to reflect those devices' approval to operate under a part 25 MSS allocation and applicable SCS rules. This requirement does introduce a new administrative burden for equipment authorization grantees and applicants, especially as it relates to already certified equipment. The Commission's existing procedures through the permissive change process which enable electrical or mechanical changes to certified equipment when those changes do not affect the characteristics required to be reported to the Commission do not apply here where the only change being made to the certification is adding authorization for part 25. Under the Commission's existing rules, “a change other than a permissive change” requires a grantee to file a new application for certification accompanied by the information specified in part 2 of the Commission's rules. While the Commission believes there is good reason to provide grantees a way to effectuate the necessary changes to their equipment authorization grants under the Commission's rules that also minimizes the administrative burdens associated with a new equipment certification application. The Commission therefore waives relevant provisions to provide a simplified process for existing grantees to modify their certifications to reflect part 25 authorization for SCS. In providing this limited waiver to existing rules, the Commission aims to minimize the burden on equipment certification holders, while ensuring tracking and accountability for devices capable of SCS, and compliance with our prohibition on the authorization of covered equipment. Similarly, for new equipment authorizations, terrestrial devices need only show compliance with the terrestrial technical rules for the rule parts under which they will operate; no additional tests are needed for part 25 SCS capability.

70. International Coordination. In the Report and Order , the Commission requires that SCS operations in bands not allocated for such services in the International Table must be consistent with ITU Radio Regulation No. 4.4 and finds it would serve the public interest to include express conditions in the SCS licenses to ensure that the Commission's obligations are met as the ITU notifying administration for U.S. licensed space station operations. In these cases, the Commission will require additional assurances from SCS licensees that while operating outside the United States, pursuant to an authorization from another country, the satellite operations will not cause harmful interference. Prior to conducting any communications with earth stations outside the United States, a satellite operator licensed to provide SCS, or applicant for a license to provide SCS, must certify to the Space Bureau and OIA that it has obtained all necessary authorizations from the relevant country prior to initiation of communications with earth stations in that country.

71. ECIP Program. The initial NPRM sought comment on eligibility for the Enhanced Competition Incentive Program (ECIP), which the Commission established in July 2022 to facilitate new opportunities for small carriers and Tribal nations to increase access to spectrum, while incorporating provisions to ensure against program waste, fraud and abuse. Given that the framework is primarily intended to facilitate provision of SCS to existing consumer handsets, and ECIP was adopted with requirements tailored specifically towards provision of service through terrestrial base stations, the Commission considered whether to make SCS participants, necessarily engaged in leasing arrangements, eligible for ECIP benefits which could reduce the economic impacts for small carriers and Tribal nations. In the Report and Order , the Commission declines to extend ECIP benefits to stakeholders that presently intend to enter into leasing arrangements for the provision of SCS. The Commission highlights that the provisions of SCS do not align with the goals or entry criteria of the ECIP program and believes it is in the public interest to allow the SCS marketplace and the ECIP program to further develop before determining whether it is appropriate for these two new Commission efforts to support one another.

72. The Commission will send a copy of the Report and Order , including the FRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Report and Order , including the FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Report and Order and FRFA (or summaries thereof) will also be published in the Federal Register.

73. Accordingly, it is ordered that, pursuant to the authority found in sections 1, 4(i), 157, 301, 303, 307, 308, 309, and 310 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 157, 301, 303, 307, 308, 309, and 310, that the Report and Order and Further Notice of Proposed Rulemaking is hereby adopted .

74. It is further ordered that the Report and Order shall be effective 30 days after publication in the Federal Register, with the exception of revisions to §§ 1.9047(d)(2), 9.10(t)(3) through (5), and 25.125(b)(1) and (2) and (c) of the Commission's rules, 47 CFR 1.9047(d)(2), 9.10(t)(3) through (5), and 25.125(b)(1) and (2) and (c), which may contain new or modified information collection requirements and will not be effective until after the Office of Management and Budget completes any review the Wireless Telecommunications Bureau and the Space Bureau determine is required under the Paperwork Reduction Act and provide an effective date by subsequent Public Notice.

75. It is further ordered that, pursuant to section 4(i) of the Communications Act, as amended, 47 U.S.C. 154(i), and § 1.3 of the Commission's rules, 47 CFR 1.3, the following rules are waived, effective immediately upon adoption of the Report and Order and extending until the date that is six months following the effective date announced in the Public Notice issued pursuant to paragraph 268 in the Report and Order , to the limited extent and as described herein: §§ 2.1043(c) and 2.911(c) and (e) of the Commission's rules, 47 CFR 2.1043(c) and 2.911(c) and (e). This temporary waiver is granted only for the purpose of adding a part 25 designation to equipment certifications granted on or before the 60th day after a summary of the Report and Order is published in the Federal Register.

76. It is further ordered that the Commission's Office of the Secretary, SHALL SEND a copy of the Report and Order and Further Notice of Proposed Rulemaking , including the Final Regulatory Flexibility Analysis and the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

77. It is further ordered that the Commission shall send a copy of the Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1, 2, 9, and 25 as follows:

The Puerto Rico, St. Croix, and St. Thomas and St. John fisheries target spiny lobster, and are managed under their respective FMPs. The FMPs were prepared by the Caribbean Fishery Management Council (Council) and NMFS. NMFS implements the FMPs through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

On January 31, 2024, NMFS published a proposed rule to implement management measures described in Framework Amendment 2 and requested public comment (89 FR 6085). The proposed rule and Framework Amendment 2 describe the rationale for the actions contained in this final rule. A summary of the management measures described in Framework Amendment 2 and implemented by this final rule is provided below.

All weights described in this final rule are in round weight.

The Magnuson-Stevens Act requires NMFS and regional fishery management councils to prevent overfishing and to achieve, on a continuing basis, the OY from federally managed fish stocks to ensure that fishery resources are managed for the greatest overall benefit to the Nation, particularly with respect to providing food production and recreational opportunities, and protecting marine ecosystems.

For Puerto Rico and the U.S. Virgin Islands, NMFS, with the advice of the Council, manages fisheries under the Puerto Rico, St. Croix, and St. Thomas and St. John FMPs. The FMPs contain management measures applicable for Federal waters off the respective island group. Federal waters around Puerto Rico extend seaward from 9 nautical miles [nmi; 16.7 kilometers (km)] from shore to the offshore boundary of the EEZ. Federal waters around St. Croix, and St. Thomas and St. John extend seaward from 3 nmi (5.6 km) from shore to the offshore boundary of the EEZ.

For spiny lobster in the U.S. Caribbean EEZ, only commercial landings data are collected. Because recreational landings data are not available, the ACLs for spiny lobster are based on commercial landings and apply to all harvest for the stock, whether commercial or recreational.

In 2019, the Southeast Data, Assessment, and Review (SEDAR) completed three separate assessments for spiny lobster for the Puerto Rico, St. Croix, and St. Thomas and St. John management areas (SEDAR 57). In response to SEDAR 57 and recommendations from their Scientific and Statistical Committee (SSC), the Council prepared Framework Amendment 1 to the FMPs to update the overfishing limits (OFLs), acceptable biological catch (ABCs), ACLs, and accountability measures (AMs) for spiny lobster. NMFS published the final rule that implemented Framework Amendment 1 on March 16, 2023 (88 FR 16194).

After NMFS implemented the final rule for Framework Amendment 1, the Council requested that the NMFS Southeast Fisheries Science Center (SEFSC) conduct an update to SEDAR 57 to provide OFL and ABC estimates for spiny lobster for each island group for 2024 to 2026, which were not included in SEDAR 57. The SEFSC presented results of the 2022 Update Assessment to SEDAR 57 (SEDAR 57 Update) to the Council's SSC at its November-December 2022 meeting. The SSC accepted the SEDAR 57 Update and OFLs and ABCs for spiny lobster under each FMP.

Consistent with the SEDAR 57 Update, and recommendations from the SSC, the Council developed Framework Amendment 2 to prevent overfishing of spiny lobster and achieve OY for each stock, consistent with the requirements of the Magnuson-Stevens Act. For each FMP, the Council recommended ACLs for spiny lobster equal to 95 percent of the ABCs recommended by the SSC, which reflects the Council's management uncertainty buffer.

For spiny lobster, this final rule revises the ACLs in the EEZ around Puerto Rico, St. Croix, and St. Thomas and St. John based on the SEDAR 57 Update.

For the EEZ around Puerto Rico, the ACL for spiny lobster will decrease from the current ACL of 366,965 pounds (lb) or 166,452 kilograms (kg) to 357,629 lb (162,218 kg).

For the EEZ around St. Croix, the ACL for spiny lobster will increase from the current ACL of 120,830 lb (54,807 kg) to 137,254 lb (62,257 kg).

For the EEZ around St. Thomas and St. John, the ACL for spiny lobster will increase from the current ACL of 126,089 lb (57,193 kg) to 133,207 lb (60,422 kg).

In addition to the ACLs described in this final rule, Framework Amendment 2 specifies the OFL and ABC for spiny lobster for Puerto Rico, St. Croix, and St. Thomas and St. John.

For the Puerto Rico FMP, the OFL for spiny lobster will decrease from 438,001 lb (198,673 kg) to 426,858 lb (193,620 kg) and the ABC for spiny lobster would decrease from 386,279 lb (175,213 kg) to 376,452 lb (170,756 kg).

For the St. Croix FMP, the OFL for spiny lobster will increase from 144,219 lb (65,416 kg) to 163,823 lb (74,309 kg) and the ABC for spiny lobster would increase from 127,189 lb (57,691 kg) to 144,478 lb (65,534 kg).

For the St. Thomas and St. John FMP, the OFL for spiny lobster will increase from 150,497 lb (68,264 kg) to 158,993 lb (75,118 kg) and the ABC for spiny lobster would increase from 132,725 lb (60,203 kg) to 140,218 (63,602 kg).

NMFS received two comment submissions on the proposed rule implementing Framework Amendment 2. One comment received was in support of the proposed rule and one was opposed. The comment in opposition included multiple points, which are stated below in three separate comments, along with NMFS' responses. The commenter also noted the need for more research on spiny lobster, which was outside the scope of the proposed rule. There have been no changes to the proposed rule as a result of public comment.

Comment 1: If the purpose of the proposed rule implementing Framework Amendment 2 is to achieve OY and address overfishing, it will not do this.

Response 1: NMFS disagrees that the regulations it has proposed would not achieve OY. These regulations implement Framework Amendment 2, which the Council developed to update OFLs, ABCs, and ACLs for spiny lobster stocks based on the best scientific information available (the SEDAR 57 Update) to prevent overfishing and achieve OY. NMFS has determined that Framework Amendment 2 is based on the best scientific information available, consistent with the Magnuson-Stevens Act.

Comment 2: The action should expand beyond the Caribbean EEZ into other areas where spiny lobsters are fished like Florida.

Response 2: Under the Magnuson-Stevens Act, the Caribbean Council does not have the authority to decide on management measures for areas beyond the range of the Caribbean island management areas. 16 U.S.C. 1852(a)(1)(D). This comment is also beyond the scope of the proposed rule.

Comment 3: In the most recent seasons, Puerto Rico did not come remotely close to exceeding their ACL, so it does not make sense to decrease their ACL. It also does not make sense to increase St. Croix, St. Thomas and St. John's ACL considering they have been significantly under the ACL for years. Additionally, NMFS states that the stocks are not overfished. Therefore, localized management by the proposed action does not make sense, especially considering its skewed effect on fishing in Puerto Rican waters.

Response 3: As described in Framework Amendment 2 and the proposed rule, the SEDAR 57 Update included spiny lobster stocks in Puerto Rico, St. Croix, and St. Thomas and St. John, and updated the OFLs and ABCs for spiny lobster for each island management area. The Council recommended ACLs for spiny lobster in each FMP based on the updated ABCs. Reference points derived from stock assessments help fishery managers determine the level of catch that can be removed from the population each year. If the catch levels used in the stock assessment model are well below the sustainable population level ( i.e., maximum sustainable yield) estimated for the species, then the resulting catch targets (OFL, ABC, and ACL) could increase and fishermen would be able to catch fish that were previously left in the water. This scenario explains the increase in spiny lobster ACLs for St. Croix and St. Thomas and St. John. Conversely, if catch levels used in the stock assessment model are above, or are projected to be above, the sustainable population level estimated for the species, then the resulting catch targets (OFL, ABC, and ACL) could decrease, as is the scenario for Puerto Rico spiny lobster.

SEDAR 57 included landings data through 2016, and the SEDAR 57 Update included landings data through 2021. Catch of spiny lobster in Puerto Rico from 2017 through 2019 increased substantially, requiring accountability-based seasonal closures in fishing years 2021 (86 FR 40787, July 29, 2021) and 2022 (87 FR 38008, June 27, 2022). The next stock assessments for spiny lobster, SEDAR 91, are scheduled to begin in late-summer or early-fall of 2024, and would use updated information for the species.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with Framework Amendment 2, the FMPs, other provisions of the Magnuson-Stevens Act, and other applicable laws.

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

The Magnuson-Stevens Act provides the legal basis for this final rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting and record-keeping requirements are introduced by this final rule. A description of this final rule, why it is being considered, and the purposes of this final rule are contained in the SUMMARY and SUPPLEMENTARY INFORMATION sections of this final rule.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

This final rule contains no information collection requirements under the Paperwork Reduction Act of 1995.

For the reasons set out in the preamble, NMFS amends 50 CFR part 622 as follows: