BIS is amending the EAR (15 CFR parts 730-774) by making conforming changes to the EAR to ensure that destination names reflect the current destination names that are recognized by the United States Government, by making conforming changes to ensure that the EAR reflects amendments and description of those amendments made pursuant to two recent rules, by making a conforming change to reflect that Cyprus is no longer a Country Group D:5 country, and by clarifying how Russia and the Russian Federation are referenced in the EAR to ensure consistency with the designation of Russia as a U.S. Arms Embargoed destination.

The four sets of changes this final rule makes are described in section II as follows:

A. Conforming changes to the Commerce Country Chart and Country Groups to ensure consistency with destinations names that are recognized by the United States Government;

B. Conforming changes to the Commerce Country Chart entries for Australia and the United Kingdom;

C. Conforming change to reflect Cyprus is no longer a Country Group D:5 country; and

D. Removing obsolete references to Russia and the Russian Federation in provisions that predate the country's addition to Country Group D:5.

This final rule in supplement no. 1 to part 738 (Commerce Country Chart) removes Swaziland from the Commerce Country Chart and replaces it, in alphabetical order, with Eswatini. On April 19, 2018, King Mswati III declared that the country be known as the Kingdom of Eswatini, rather than the Kingdom of Swaziland. BIS makes this change to conform to King Mswati III's declaration, as subsequently formally recognized by the State Department ( see https://www.state.gov/countries-areas/eswatini/ ). This final rule also removes Macedonia (The Former Yugoslav Republic of) from the Commerce Country Chart and replaces it, in alphabetical order, with North Macedonia. BIS makes this change to the conform to the State Department's formal recognition of the new name in February 2019 ( see https://history.state.gov/countries/macedonia ). Lastly, this final rule removes Turkey from the Commerce Country Chart and replaces it, in alphabetical order, with Türkiye. BIS makes this change to conform to the State Department's recognition on January 9, 2023 of the new country's new name ( see https://www.state.gov/countries-areas/turkey/ ). This rule revises only the names of the three countries; the information set forth in each of the three entries otherwise remains the same.

As a conforming change to the changes made to the Commerce Country Chart described above, this final rule removes Swaziland from Country Group B in supplement no. 1 to part 740, Country Groups), and replaces it (in alphabetical order) with Eswatini. Similarly, this rule removes Macedonia (the Former Yugoslav Republic of) from Country Group B and replaces it, in alphabetical order, with North Macedonia.

This final rule also revises the Commerce Country Chart entries for Australia and the United Kingdom in supplement no. 1 to part 738 to align with the policy decisions and regulatory changes described and implemented in the August 19, 2024 interim final rule, “Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership” (89 FR 28594, published and effective on April 19, 2024) (April 19 IFR). Specifically, the April 19 IFR removed the license requirements for national security column 1 (NS1), regional stability column 1 (RS1), and missile technology column 1 (MT1) reasons for control for these two countries, as well as the footnote 3 designations for both of these countries, because the license requirements referenced in footnote 3 were no longer applicable.

This rule corrects inadvertent errors in which a subsequent interim final rule, “Revisions of Firearms License Requirements” (89 FR 34680, published on April 30, 2024, and effective on May 30, 2024) (April 30 IFR), erroneously included an “X” under the NS1, RS1, and MT1 reasons for control for Australia and the United Kingdom and also erroneously included the previously-applicable footnote 3 designation for these two countries. This final rule revises the entries for Australia and the United Kingdom by removing the license requirement for NS1, RS1, and MT1, as well as the footnote 3 designation, for consistency with the intended regulatory changes described in the April 19 IFR.

The changes in this final rule described under this section II.B are limited to removing text (as described above) that inadvertently appeared in the two Commerce Country Chart entries. The April 30 IFR correctly removed the footnote 9 designation for Australia and the United Kingdom. The April 30 IFR addressed the license requirement described in footnote 9 for these two destinations by adding an “X” in the crime control column 2 (CC2) reason for control for these two countries.

The U.S. State Department recently amended § 126.1 of the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130) to specify that Cyprus's status as a proscribed destination is suspended from October 1, 2023 through September 30, 2024 (see 88 FR 63016). Consistent with this change, Cyprus was effectively removed from Country Group D:5. As set forth in the Note to Country Group D:5 in supplement no. 1 to part 740 of the EAR, if there are any discrepancies between the list of D:5 countries and the countries identified by the Department of State as subject to a U.S. arms embargo, the State Department's list shall be controlling. To avoid confusion on the part of exporters, reexporters, and transferors, this final rule removes Cyprus from D:5. D:5 was the only “X” in the entry for Cyprus under Country Group D, so the entry is no longer needed.

The final rule, “Implementation of Sanctions Against Russia Under the Export Administration Regulations (EAR)” (87 FR 12226, published March 3, 2022, and effective February 24, 2022), included amendments to supplement no. 1 to part 740 (Country Groups) of the EAR consistent with the ITAR § 126.1. The March 3 final rule updated the Country Group designation for Russia in supplement no. 1 to part 740 to reflect its identification by the Department of State as a country subject to a United States arms embargo. As noted above, BIS harmonizes the arms embargo-related provisions in the EAR with the Directorate of Defense Trade Control's (DDTC's) regulation of arms embargoes in § 126.1 of the ITAR. Three sections of the EAR, which predated the March 18, 2021 ( see 86 FR 14802) addition of Russia to § 126.1 under the ITAR, continued to separately identify Russia or the Russian Federation from Country Group D:5. These references are unnecessary due to the fact that Russia was subsequently added to Country Group D:5. Specifically, this final rule revises § 734.18(a)(5)(iv); § 740.9(a) introductory text (the fourth and seventh sentences) and paragraph (b)(5)(ii); and § 758.10, Note 1 to paragraph (b)(1), by removing references to Russia or the Russian Federation when the same sentence also refers to Country Group D:5. In the case of § 740.9(b)(5)(ii), the broader exclusion under paragraph (b)(5)(i) means the narrow exclusion under (b)(5)(ii) should not include Russia, which is subject to the broader exclusion as a Country Group D:5 country.

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852. ECRA, as amended, provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.

1. BIS has examined the impact of this rule as required by Executive Orders 12866, 13563, and 14094. Pursuant to E.O. 12866, as amended by E.O. 14094, this final rule has not been determined to be a “significant regulatory action.”

2. Notwithstanding any other provision of law, no person is required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves an information collection approved by OMB under control number 0694-0088, Simplified Network Application Processing System. BIS does not anticipate a change to the burden hours associated with this collection as a result of this rule. Information regarding the collection, including all supporting materials, can be accessed at https://www.reginfo.gov/public/do/PRAMain.

3. This rule does not contain policies with federalism implications as that term is defined under Executive Order 13132.

4. Pursuant to Section 1762 of ECRA (50 U.S.C. 4821), this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation and delay in effective date. Additionally, this rule is exempt from the ordinary rulemaking requirements of the APA pursuant to 5 U.S.C. 553(a)(1) as a military or foreign affairs function of the United States Government.

5. Because neither the APA nor any other law requires that notice of proposed rulemaking and an opportunity for public comment be given for this rule, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable. Accordingly, no Final Regulatory Flexibility Analysis is required, and none has been prepared.

Accordingly, parts 734, 738, 740, and 758 of the Export Administration Regulations (15 CFR parts 730-774) are amended as follows:

In FR Doc. 2024-06800, appearing on page 25519 in the Federal Register on Thursday, April 11, 2024, the following corrections are made:

The Regulations (31 CFR part 501), originally issued August 25, 1997 (62 FR 45098), set forth standard reporting and recordkeeping requirements, license application procedures, and other procedures relevant to the economic sanctions programs administered by OFAC. As described further below, OFAC is providing updates within nine sections of the Regulations: §§ 501.602, 501.603, 501.604, 501.605, 501.801, 501.804, 501.805, 501.806, and 501.807.

OFAC Reporting System for reports of blocked property and rejected transactions. This interim final rule would generally require filers to use the electronic OFAC Reporting System (ORS) for submission to OFAC of initial reports of blocked property and Annual Reports of Blocked Property pursuant to § 501.603(d) and reports of rejected transactions pursuant to § 501.604(d), beginning on August 8, 2024. Electronic submission of reports improves efficiencies in reporting and reviewing data, and thus reduces the overall burden on both filers and the U.S. government over the long term. Many filers currently use ORS, on a voluntary basis, to submit initial reports of blocked property, Annual Reports of Blocked Property, and reports of rejected transactions. OFAC encourages filers to become familiar with ORS and to submit reports using that system in advance of the August 8, 2024 deadline. If a submitter can provide evidence of unique and extraordinary circumstances that would not permit the electronic filing of reports, such as lack of access to the internet, the submitter may request to submit reports in an alternative manner by calling 202-622-2490. Such requests will be subject to a presumption of denial and granted only in writing.

Email Submission of Other Reports. OFAC is amending several sections of the Regulations to require electronic submissions and to remove options for mail submission. OFAC is amending § 501.603(d)(2) to require electronic submission of reports of unblocked or transferred blocked property, as required pursuant to revised § 501.603(b)(3)(i). OFAC will accept such reports of unblocked or transferred blocked property pursuant to revised § 501.603(b)(3)(i) via either email or ORS. OFAC is also amending § 501.605(a) of the Regulations to require submission of the documentation and notifications required therein by email, given the time sensitivity of these reports, and to remove the options for submission by facsimile or mail. Finally, OFAC is requiring email submission or removing the options for mail submission in the following sections of the Regulations: §§ 501.804, 501.805, 501.806, and 501.807. Electronic submission and use of OFAC's website will allow for more efficient receipt and processing of reports and requests from the public.

OFAC is revising § 501.603(b)(3)(i) to require reports within 10 business days of when blocked property is unblocked or transferred, including pursuant to a valid order issued by a U.S. government agency or U.S. court, as set out in that paragraph. This amendment will enable OFAC to ascertain the current status of blocked and unblocked property. Reports need not be submitted for credits of interest payments that would not be transfers of blocked property or debits to blocked accounts for normal service charges, in each case as authorized pursuant to OFAC sanctions. As noted above, filers must submit reports pursuant to this section electronically, either via email to OFACReport@treasury.gov or via ORS. Additionally, in revised § 501.603(d)(1), OFAC is expanding the retention requirement previously in § 501.603(b)(2)(iii) for Annual Reports of Blocked Property to extend to initial reports of blocked property.

OFAC is revising elements of § 501.604 in response to public comments received on the June 21, 2019, interim final rule (84 FR 29055), which expanded the scope of the reporting requirement for rejected transactions.

Clarifying the definition of “transaction.” Several commenters requested clarity on the scope and types of rejected transactions that need to be reported to OFAC by non-financial institutions. In response to these comments, OFAC is amending § 501.604(a) to clarify the scope of the term “transaction” for purposes of that section by specifying that the term includes transactions related to securities, checks, or foreign exchange, as well as sales or purchases of goods or services, thereby clarifying that securities, checks, foreign exchange, and goods and services are not in and of themselves transactions, when not provided as part of a transaction.

Confirmation of the scope of the term “U.S. persons.” OFAC received several comments that requested clarity about whether the term “U.S. persons,” as used in § 501.604, includes U.S. persons other than U.S. financial institutions. OFAC confirms that this reporting requirement applies to all U.S. persons, as identified in the relevant parts of this chapter (or in the case of part 515, persons subject to U.S. jurisdiction), not only U.S. financial institutions.

Clarifying information that must be reported for rejected transactions. Comments received by OFAC also noted that not all information required by OFAC may be readily available at the time a transaction is rejected, and, in many cases, it would be burdensome and sometimes impractical for filers to seek out additional information about transactions that they have already rejected. In light of these concerns, OFAC is amending § 501.604(b) to clarify that the information required therein must be reported only to the extent the information is available to the filer at the time the transactions was rejected.

Additional responses to public comments. Many comments received by OFAC anticipated that the interim final rule would cause a large increase in the volume of rejected transaction reports from non-financial institutions, which the comments suggest would be overly burdensome for businesses to submit as well as for OFAC to review. Since the publication of the interim final rule, however, OFAC has not received a large number of reports of rejected transactions from non-financial institutions as compared to the number of such reports from financial institutions. OFAC does not expect the volume of reported rejected transactions to be overly burdensome for businesses, particularly given that OFAC is providing additional clarity on the scope of rejected transaction reporting through this rule.

Some commenters expressed concerns about the ability to identify all rejected transactions and provide all requested information in a timely manner without significant costs, particularly if this information was not already being gathered in the course of rejecting a transaction. As noted above, OFAC is amending the Regulations to require reporting of only the information that is available to the filer at the time the transaction is rejected. OFAC notes that many businesses already have systems to identify rejected transactions related to OFAC sanctions, so it would be less burdensome for those specific businesses to report those rejected transactions to OFAC. However, OFAC recognizes that there may have been an up-front increase in burden and costs for other businesses, such as some non-financial institutions, that did not already have such a system to identify rejected transactions in place.

OFAC received a few comments questioning the utility to OFAC of receiving rejected transaction reports, particularly from U.S. non-financial institutions. OFAC continues to believe that these reports are valuable to OFAC in supporting its mission, including to identify attempts by sanctioned persons to utilize both financial and non-financial institutions to evade sanctions or further illicit activity.

OFAC is revising the procedures at § 501.806 for requesting release of funds blocked due to “mistaken identity” to extend to a broader category of any property blocked due to “typographical or similar errors leading to blocking.” OFAC is also narrowing the procedures so they are available only to the person that mistakenly blocked the property. In these cases, the person that mistakenly blocked the property may request a “Compliance Release” from OFAC's Compliance Division. Others may continue to request unblocking of property through license applications submitted to OFAC's Licensing Division.

In §§ 501.603(e), 501.604(e), and 501.801(b)(6), OFAC is updating the rules governing the availability of information under FOIA for certain categories of information that are submitted to OFAC pursuant to the Regulations, to clarify that such information will generally be protected from disclosure if OFAC determines that an exemption or exclusion under FOIA applies or the disclosure is otherwise prohibited by law.

In § 501.807, OFAC is clarifying that persons may submit a petition for administrative reconsideration to seek removal of a person or property from the List of Specially Designated Nationals and Blocked Persons (SDN List) or any other list of sanctioned persons maintained by OFAC, and making a technical update to the contact information, including to require submission by email.

OFAC is adding a note to § 501.602 to describe reports OFAC may require financial institutions to provide about accounts or transactions that meet specified criteria to aid in the identification of blocked property. If OFAC has reason to believe an account or transaction (or class of transactions) may involve the property or interests in property of a blocked person, OFAC may instruct the financial to report transactions that meet specified criteria and to notify OFAC prior to processing such transactions. Upon review, OFAC may determine that a reported transaction involves the property or interests in property of a blocked person and may take further action.

OFAC is updating the instructions in §§ 501.603(b)(2)-(3), 501.801(b)(2), and 501.806(d)(5) to request the relevant ORS identification numbers, when available, to support efficient processing of these reports. OFAC is making edits throughout §§ 501.603, 501.604, 501.801, and 501.805 to update the OFAC website links. OFAC is amending § 501.804(b) to add contact information for OFAC. OFAC is also amending §§ 501.603(a)(1) and 501.604 to make clear that the reporting requirements extend to persons subject to U.S. jurisdiction in the case of the Cuban Assets Control Regulations, 31 CFR part 515. Additionally, OFAC is amending § 501.805(a) and (b) to make clear that OFAC records required by FOIA shall be made available in accordance with the provisions of the Regulations in addition to referenced provisions of 31 CFR part 1. OFAC is also amending § 501.805(c) to add an OFAC website link to obtain forms and remove the mail, phone, and in person options.

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

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

Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the collections of information related to the Regulations have been previously approved by the Office of Management and Budget (OMB) under control number 1505-0164. This interim final rule modifies the requirements for certain of the collections of information under the Regulations, such as requiring use of electronic submission for certain reports and clarifying the scope of certain reporting requirements. Specifically, in §§ 501.603 and 501.604, the rule would mandate the use of electronic filing via ORS for initial reports of blocked property and reports of rejected transactions, as well as Annual Reports of Blocked Property, in order to improve efficiencies for both filers and the U.S. government. In addition, OFAC is revising § 501.603(b)(3)(i) to require reports not only when blocked property is unblocked, but also when it is transferred, such as pursuant to a valid order from a U.S. government agency or U.S. court, as further set out in that paragraph. In § 501.604, OFAC is clarifying the scope of rejected transactions and associated information that must be reported to reduce unnecessary burdens on filers. Additionally, the rule will amend § 501.605(a) of the Regulations to allow for only electronic submission of the documentation and notifications required therein, given the time sensitivity of these reports, and to remove the options for submission by facsimile or mail. The rule will also remove the options for mail submission or require email submission in the following sections of the Regulations: §§ 501.804, 501.805, 501.806, and 501.807. OFAC is making other technical and conforming edits in the rule to increase the presence of websites and use electronic reporting, such as in §§ 501.603, 501.604, and 501.801 to update the OFAC website links. Finally, OFAC is amending § 501.805(c) to add an OFAC website link to obtain forms.

These modifications to the collections of information under the Regulations have been submitted to OMB for review and approval under control number 1505-0164. Written comments and recommendations for the modified collection can be submitted by visiting www.reginfo.gov/public/do/PRAMain. Find this document by selecting “Currently Under Review—Open for Public Comments” or by using the search function. Comments are welcome and must be received by June 10, 2024.

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

The likely filers and record-keepers affected by these collections of information contained in 31 CFR part 501 are financial institutions, business organizations, nonprofit organizations, individuals, and legal representatives.

Since OFAC's last filing in June 2021, OFAC has reviewed the data on reporting received and processed between April 4, 2022, and April 4, 2023, to estimate the reporting burden, as set forth below. Given the number and type of reports received and processed during this period, the overall burden of the recordkeeping requirement imposed by § 501.601 is estimated to increase, largely due to the imposition of a broad range of sanctions in response to Russia's unjustified and unprovoked invasion of Ukraine in February 2022, which has led to a large influx of related reporting.

Additionally, the new electronic reporting mandate for some reports may impose initial costs on businesses that do not already file such reports electronically. OFAC is taking into account this potential initial increase in burden and cost for some parts of the private sector in its updated Supporting Statement related to this regulatory amendment. However, in the long term, OFAC expects the use of electronic reporting via ORS to reduce the overall time, cost, and burden of reporting for filers. OFAC estimates that, during the first three months of 2023, less than 1% (estimated 0.03%) of reports for blocked property or rejected transactions were submitted to OFAC using non-electronic methods, while approximately 96% of reports were submitted electronically via ORS, and approximately 3% of reports were submitted electronically to OFAC via email. In its updated Supporting Statement related to this regulatory amendment, OFAC is taking into account a potential small initial increase in burden and cost for the small number of filers (an estimated 3%) who would need to transition from filing reports via traditional mail service or via email to the new ORS electronic system. Overall, OFAC estimates that there should be a minimal overall burden in mandating electronic submission via ORS because nearly all filers currently send reports to OFAC via ORS.

The total burden for this collection is estimated to be:

Estimated Number of Respondents: 136,784.

Frequency of Response: On occasion.

Estimated Total Number of Annual Responses: 136,784.

Estimated Time per Response: Varies by form from 15 minutes to 5 hours.

Estimated Total Annual Burden Hours: 44,220.

Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services required to provide information.

For the reasons set forth in the preamble, OFAC amends 31 CFR part 501 as follows:

Section 2733a of title 10, United States Code, allows members of the uniformed services or their authorized representatives to file claims, and the Secretary of Defense to pay such claims, for personal injury or death caused by a DoD health care provider in a covered military medical treatment facility, as defined in that section. DoD published an interim final rule to establish uniform standards and procedures for adjudicating these claims on June 17, 2021 (86 FR 32194) and a final rule on August 26, 2022 (87 FR 52446). Proposed amendments to this regulation were published in the Federal Register on October 20, 2023 (88 FR 72412), that proposed to apply offsets for payments made by the U.S. Government to economic damages only and clarify when future lost earnings may be awarded. Comments were accepted for 60 days until December 19, 2023. DoD is making no changes to the regulatory text based on the comments received.

A total of 24 comments were posted on the regulatory docket. Summaries of the comments and the Department's responses are as follows.

Two comments from individual members of the public reflected general support for the proposed changes. One of these commenters stated that the proposed changes would benefit Service members and reduce the financial burdens on them and their families following injury or death.

One comment was too general to be actionable. The commenter generally sought to have a fair, efficient, and consistent system without making any suggestions for changes to the proposed rule.

The Department received a number of comments that were outside of the scope of the proposed rule and therefore did not result in changes to the proposed rule. Several comments expressed concerns about the quality of care provided by DoD or the VA and included personal narratives from Service members, their family members, or others on Service members' behalf about specific medical care the Service members received from DoD and VA medical providers. One comment sought to have 32 CFR part 45 extended to all patients of DoD's military health system and not just members of the uniformed services. Another commenter sought to have the doctrine in Feres v. United States, a 1950 Supreme Court decision, overturned to allow Service members to bring lawsuits in Federal court. An individual submitted comments seeking a change related to the definition of “DoD health care provider” in 32 CFR part 45. An additional comment beyond the scope of the regulation recommended that Service members receive copies of their DD Form 2807-1, “Report of Medical History,” and their DD Form 2807-2, “Accessions Medical History Report,” in addition to their DD Form 214, “Certificate of Uniformed Service.” One comment suggested that Service members be educated about the claims process. Finally, one individual generally expressed concerns about the claims process, including a belief that settlements under the process were unfair and lacked transparency.

Comment: A State legislator supported the portions of the proposed rule clarifying when future lost wages may be awarded.

Response: This comment did not recommend any changes to § 45.9 and no changes were made to this section.

Comment: One individual commented that the rule change may provide additional compensation for non-economic harms, although noted that compensation could never make a malpractice victim or survivor whole. A number of comments, including comments from Members of Congress, a local elected official, a State legislator, and individuals sought elimination of the cap on non-economic damages.

Response: DoD did not make any changes as a result of these comments. Section 2733a(g)(2)(B) of title 10, U.S.C., requires DoD to adjudicate claims, including calculating damages, based on uniform national standards consistent with generally accepted standards used in a majority of States in adjudicating claims under the Federal Tort Claims Act (FTCA), 28 U.S.C. 2671 et seq., without regard to the place where the Service member received medical care. This standard in 10 U.S.C. 2733a(g)(2)(B) is a different standard from the FTCA. Under the FTCA, 28 U.S.C. 2672 and 1346(b)(1), the law applied is the law of the place where the medical care was provided. A majority of States, 28, have caps on non-economic damages applicable in medical malpractice claims and therefore DoD has retained the cap on non-economic damages.

DoD administratively removed a description of “physical disfigurement” that used outdated terminology and is unnecessary for purposes of claims adjudication.

Comment: One commenter, a city elected official, was supportive of eliminating offsets from non-economic damages. A State legislator indicated support for the changes that would allow more Service members to receive compensation for non-economic damages than under the current regulation. A number of comments, including from Members of Congress, a State legislator, and individuals, sought to eliminate offsets from the portion of potential malpractice damage awards for economic damages in addition to the portion for non-economic damages. Some comments incorrectly seemed to suggest that “offsets” meant that the Service member's DoD and VA compensation would be reduced. Some comments also seemed to suggest, inaccurately, that the Department is offsetting an amount equal to all VA compensation for all line of duty injuries, not just offsetting the amount of compensation received for those additional injuries caused by malpractice.

Response: Federal law provides a comprehensive system of compensation for military members and their families in cases of death or disability incurred in military service. This system applies to all causes of death or disability incurred in service, whether due to combat injuries, training mishaps, motor vehicle accidents, naturally occurring illnesses, household events, with limited exceptions ( e.g., when the member is absent without leave or the injury is due to the member's intentional misconduct or willful negligence). This compensation system also applies to injuries incurred in service caused by medical malpractice.

Offsets from economic damages account for the fact that compensation has already been paid or will be paid by the Government for economic injuries caused by the malpractice. In other words, the claimant has already received, is receiving, or will be receiving compensation from the U.S. Government on account of his or her economic losses. For example, VA disability ratings “represent as far as can practically be determined the average impairment in earning capacity” resulting from service-related injuries. ( See 38 CFR 4.1) DoD is required by 10 U.S.C. 2733a(g)(2)(B) to apply the law in the majority of states when adjudicating Service member medical malpractice claims. Offsetting economic damages for compensation already paid by the United States is consistent with general tort law principles that states would apply.

The fact that offsets are made from potential medical malpractice damages awards does not change a Service member's entitlement to the DoD or VA compensation. The same amount of DoD or VA compensation is still paid to a claimant even if the claimant receives an award of medical malpractice damages. What happens with offsets is that the applicable amount of DoD or VA compensation is subtracted from the medical malpractice damages award that otherwise would be payable.

Additionally, offsets are made only for the amount of compensation received from the DoD or VA that is related to the medical conditions caused by the malpractice. The amount of compensation for medical conditions unrelated to the malpractice is not offset. For example, if a Service member receives VA disability compensation both for a combat injury to her hand and for an injury to her knee caused by malpractice, only the amount of compensation for the knee injury would be used as an offset from the proposed damages award.

DoD did not make changes to this section.

Pursuant to 5 U.S.C. 553(d), DoD has decided not to delay the effective date of this rule and to make it effective immediately. The final rule relieves a restriction on the amount of non-economic damages claimants may receive. Moreover, there is good cause not to delay the effectiveness of this rule. The amendments apply to claims received by DoD on or after the date this final rule is published in the Federal Register and to claims pending before DoD on that date. An immediate effective date allows more timely adjudication of those claims currently pending which would be impacted by the final rule and more timely payments to those claimants. Further, delaying the effective date would result in no benefit to claimants because the final rule imposes no burdens on them and therefore they do not need time to prepare for compliance with the final rule.

Executive Orders 12866 (as amended by Executive Order 14094) and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distribution of impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been determined to be a significant regulatory action under paragraph 3(f) of the amended Executive Order 12866. Accordingly, it has been reviewed by the Office of Management and Budget as required by these Executive orders.

This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

The General Counsel of the Department of Defense certified that this final rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. Therefore, the Regulatory Flexibility Act, as amended, does not require a regulatory flexibility analysis.

Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates require non-Federal spending in any one year of $100 million in 1995 dollars, updated annually for inflation. This final rule does not mandate any requirements for State, local, or tribal governments, nor affect private sector costs.

It has been determined that this final rule does not impose new reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995.

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

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

The amendments adjust and update certain portions of the regulation related to calculation of damages. Currently, DoD offsets from both economic and noneconomic damages compensation made by DoD and VA on account of the injuries from malpractice. The amendments apply offsets to economic damages only. Under the current rule, a claimant who has little or no economic damages would be unable to recover any damages if the compensation that the claimant already receives or will receive from DoD and VA for the injuries from malpractice exceeds the total amount of potential economic and non-economic damages. Under the amendment, these claimants will be able to recover non-economic damages because the amount of the DoD and VA compensation will no longer be used to offset the non-economic damages.

The amendments also include two changes that were made to better describe the applicable principles used when adjudicating claims to make the rule clearer for claimants. First, language was added to address medical rehabilitation as it relates to future lost earnings by explicitly stating the principle that future lost earnings do not continue beyond the point when DoD determines that the claimant is, or is expected to be, medically rehabilitated and able to resume employment. Second, because 10 U.S.C. 2733a(b)(5) prevents recovery for claims that are allowed to be settled and paid under any other provision of law, language was added to explicitly state that an injury or condition does not result in lost earnings for purposes of this regulation if the lost earnings stem from disability discrimination, since disability discrimination is compensable under other provisions of law. These principles, if applicable to the facts of a claim, already would have been applied in adjudicating those claims. Therefore, these changes will have no meaningful economic impact.

At the end of Fiscal Year 2022, there were approximately 1,410,000 Active Duty Service members, and 440,000 Reserve and National Guard members eligible for DoD healthcare benefits. These uniformed Service members will be able to file claims with DoD alleging malpractice from care at DoD military medical treatment facilities as defined in 10 U.S.C. 2733a.

DoD does not estimate that any additional claims will be filed as a result of the amendments to the regulation. Since the enactment of 10 U.S.C. 2733a, individuals who believe they have been subjected to malpractice have filed claims involving injuries ranging from minor injuries to death, regardless of the potential application of offsets.

Regardless of the number of claims in which malpractice occurred, the only claims in which damages will be awarded are those which exceed the offsets for any payment to be made. The amendments solely impact non-economic damages. No amendments are being made that impact offsets from economic damages.

Similar to malpractice claims under the FTCA, claims payable under this regulation could include a wide range of non-economic damages depending on their facts. A claim involving minor pain and temporary injuries would result in a lower non-economic damages award than a claim involving significant, continuing pain and/or debilitating injury. Initially, non-economic damages were capped at $500,000. This cap was raised to $600,000 in August 2022 and again to $750,000 in October 2023.

Based on claims adjudicated under this part in 2021 and 2022, four claims were adjudicated in which offsets were applied. In two of these claims, the economic damages alone were larger than the offsets so the payouts would not have been impacted had the amendments been in effect. Only for the remaining two claims would the outcome have been different had the amendments been in effect. In one claim, an additional $200,000 would have been paid to the claimant if offsets had not been made from non-economic damages. In the other claim, an additional $100,000 would have been paid to the claimant if offsets had not been made from non-economic damages.

Claims in 2021 and 2022 may not necessarily be representative of claims in future years. Claims were accepted beginning January 1, 2020, but could only begin to be adjudicated beginning on July 17, 2021, when the interim final rule at 86 FR 32194 became effective. The first claims adjudicated under this new process were claims that did not require a decision on the merits of whether malpractice occurred, such as claims that were denied because the alleged malpractice fell outside the statute of limitations in 10 U.S.C. 2733a(b)(4). Just as with claim resolution processes involving non-Service member claims, more complex claims, which tend to involve higher amounts of damages, require time for review. Since Service members' claims have only been able to be adjudicated since July 17, 2021, more complex claims may still be under adjudication, and the two claims that would have had a different outcome in 2021 and 2022 may not be representative of the number of claims that would be impacted going forward.

Taking the limited information DoD has into account, DoD estimates that the amendments to the regulation will affect two claims per year. The average of the additional non-economic damages at issue in the two claims which would have been impacted if this regulation had been in effect was $150,000. Assuming $150,000 additional would be paid in two claims, the estimated total additional transfers from the Government to claimants therefore would be $300,000. Of this, the first $100,000 of each of the two claims would be paid by DoD, with the remainder to be paid by the Treasury.

There could be significant variation in the number of claims that would be impacted by the amendments to the regulation from year to year. In some years, there could be no claims affected by the amendments, so there would be zero additional transfers from the Government to claimants. In other years, there could be more claims impacted by the amendments and/or claims involving different amounts of non-economic damages than the $150,000 estimate. For example, assuming that in another year there were four claims in which non-economic damages would be paid and assuming the non-economic damages in these four claims would be paid at the cap of $750,000, this would lead to transfers of $3 million from the Government to claimants.

The amendments to the regulation will allow some Service members to receive compensation for non-economic damages that they would not have been able to receive under the current regulation. The amendments afford some Service members additional compensation in light of the non-economic harms they have experienced as a result of malpractice.

Accordingly, the Department of Defense amends 32 CFR part 45 to read as follows:

On December 8, 2023, an organization notified the Coast Guard that it will be conducting high-speed powerboat races from 6 a.m. through 6 p.m. each day from May 24, 2024, through May 26, 2024. The races will take place between mile marker 228.1 and mile marker 228.8 on the Red River, Shreveport, LA, and involve approximately 55 powerboats ranging from 14 to 18 feet in length. No spectator craft will be allowed in the regulated area. The Captain of the Port Sector Lower Mississippi River (COTP) has determined that potential hazards associated with the high-speed powerboat race would be a safety concern for participants, participant vessels, and general public. In response, on March 25, 2024, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Special Local Regulation: Red River, Shreveport, LA (89 FR 20577). There we stated why we issued the NPRM and invited comments on our proposed regulatory action related to this fireworks display. During the comment period that ended April 10, 2024, we received one comment.

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 immediate action is needed to respond to the potential safety hazards associated with the high-speed powerboat race would be a safety concern for participants, participant vessels, and general public.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70041. The Captain of the Port Sector Lower Mississippi River (COTP) has determined that potential hazards associated with the high-speed powerboat race would be a safety concern for participants, participant vessels, and general public. The purpose of this rule is to ensure safety of vessels and the navigable waters in the regulated area before, during, and after the scheduled event.

As noted above, we received one comment to our NPRM published March 25, 2024. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM. The Coast Guard conducted a National Environmental Policy Act (NEPA) analysis for this marine event and determined not be a danger to the environment. In addition, the Coast Guard will monitor the event via contact with the sponsor and the sponsor will have adequate boat crew on-site.

This rule establishes a temporary special local regulation from 6 a.m. to 6 p.m. each day on May 24, 2024 through May 26, 2024. The temporary special local regulation will cover all navigable waters within from mile marker 228.1 to mile marker 228.8 in Shreveport, LA. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the high-speed powerboat races. 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, duration, and time-of-day of the special local regulation, which will impact mile marker 228.1 to mile marker 228.8 on the Red River for 12 hours each day. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the regulated area, breaks in the racing will provide vessels opportunity to transit, and the rule allows vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received zero comments from the Small Business Administration on this rulemaking. 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 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 special local regulation lasting approximately 12 hours on three separate days that will prohibit entry of persons or vessels during the Red River Rumble F1 Powerboat Showdown high-speed powerboat races. It is categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to 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 is proposing to amend 33 CFR part 100 as follows:

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 doing so would be impracticable and contrary to the public interest. The Coast Guard was not made aware of the swim event with sufficient time to publish a NPRM, take public comments, consider those comments, and issue a final rule by June 9, 2024, the scheduled date of the event..

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 and contrary to the public interest due to the potential safety hazards associated with with a swim event taking place in heavily traffic harbor.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Boston (COTP) has determined that potential hazards associated with swim events occurring in a heavily traffic harbor in the vicinity of Piers Park, Boston Inner Harbor, East Boston, Massachuesetts. This rule is needed to to facilitate the safety to the martime public and the event participants from the hazards associated with swim events until the conclusion of the event.

This rule establishes a safety zone from 7 a.m. to noon on June 9, 2024. The safety zone will cover all the navigable waters of a portion of Boston Inner Harbor in the vicinity of Piers Park, East Boston, specifacly within a box bound by the following coordinates: Corner #1 42°21′41.22″ N, 071°2′22.6″ W, thence to Corner #2 42°21′26.53″ N, 071°2′32.28″ W, thence to Corner #3 42°21′2.59″ N, 071°1′32.92″ W, thence to Corner #4 42°21′13.14″ N, 071°1′24.6″ W', and returning to the point of origin. The duration of the zone is intended to protect event participants, support personnel, vessels and the marine environment in these navigable waters during the swim event. No vessel or person will be permitted to enter the safet zone without obtaining permission from the COTP or a designated representative.

Requests to enter the zone will be considered and reviewed on a case-by-case basis. The COTP may be contacted by telephone at (856) 416-3015 or can be reached by VHF-FM channel 16. Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed to minimize wake and comply with all lawful directions issued by the COTP or the 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 Executive Order 12866. 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, duration, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of Boston Inner Harbor in the vicinity of Piesr Park, East Boston, MA, in support of a swim event on June 9, 2024. Additionally, this safety zone will be of limited duration, five hours, to minimize any adverse impacts to vessels who seek to transit the navigable waters. Moreover, the Coast Guard will issue a Local Notive to Mariners well in advance of the event and a Broadcast Notice to Mariners via VHF-FM marine channel 16 regarding the zone prior to commencement of the event, 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. 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 safety zone lasting for a period of five hours that will prohibit entry within the designated safety zone during a swim event. 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 November 20, 2023, VA published in the Federal Register , at 88 FR 80649, a proposed rule revising its regulations to implement section 2207 of the Act (Pub. L. 116-315), which amended sec. 2306 of title 38, United States Code, by adding a new subsection (h), to create a new memorialization authority for the National Cemetery Administration (NCA) to furnish, upon request, an urn or commemorative plaque for a veteran whose cremated remains are not interred. The public comment period ended January 19, 2024, and VA received nine comments. VA will address each in greater detail below but notes generally that six commenters expressed concerns with the rulemaking, two commenters supported the rulemaking, and one commenter's comment is considered beyond the scope of the rulemaking.

One commenter criticized the proposed rule as poorly written and lacking in foresight, suggesting the rulemaking was a cost-saving measure at the expense of the veteran community. While the expressed opinions about the regulatory work product are outside the scope of the rulemaking, we address this commenter's remarks about the underlying statutory authority implemented by this final rule. The commenter noted that a veteran who receives a commemorative plaque or urn would be prohibited from interment in a “national/state” cemetery in addition to being prohibited from receiving a headstone, marker, or medallion. The commenter also expressed concern about the effect of this outcome on grants for interment and care of remains.

The commenter is partially correct in that, if VA furnishes a commemorate plaque or urn for a veteran, § 38.634(a)(3)(i) and (ii) would prohibit VA from providing a Government headstone or marker and interring the veteran in a VA national cemetery. However, the proposed rule correctly explains this prohibition is based on statutory law, not a budgetary decision. See 38 U.S.C. 2306(d)(4) (authorizing VA to provide a medallion in lieu of a headstone or marker) and (h)(2) (prohibiting VA, after furnishing a plaque or urn, from providing a headstone or marker (and, by extension, a medallion provided in lieu of a headstone or marker) and interring the eligible individual in a VA national cemetery).

Additionally, we clarify for this commenter that VA grant-funded cemeteries are not prohibited from interring an individual who receives a commemorative plaque or urn, as VA national cemeteries are prohibited from doing so in sec. 2306(h)(2)(B); therefore, VA grant-funded cemeteries may inter a veteran who has received a plaque or urn and provide perpetual care of that veteran's gravesite. VA will make no changes based on commenter's concerns about the statutory restrictions in sec. 2306(h) implemented in this final rule.

Three commenters provided detailed feedback on multiple issues, which VA will address by subject matter below.

Commenters expressed concern that when a claimant accepts a Government-furnished commemorative plaque or urn for an eligible deceased veteran, the veteran is prohibited from future interment in a VA national cemetery or receiving a Government-furnished headstone or marker. The commenters noted that acceptance of “relatively low cost” items would deny the significant burial benefit and perpetual care of a veteran's gravesite. These commenters generally criticized the proposed rule's disqualification of a veteran's remains from interment in a VA national cemetery or a VA grant-funded cemetery as counter to the larger purpose of “honoring veterans and providing perpetual care” of their gravesites. The commenters were concerned that if a VA grant-funded cemetery interred a veteran who received a commemorative plaque or urn, such interment would violate the terms of grant funding under 38 U.S.C. 2408 and adversely impact a cemetery's eligibility to receive the VA plot or interment allowance. The commenters also cited to possible administrative burdens to verify whether a veteran has received a commemorative plaque or urn. The commenters noted financial burdens for VA grant-funded cemeteries to cover costs of furnishing a headstone or marker at their expense to veterans who received a commemorative plaque or urn and are interred in such cemeteries because VA would otherwise provide headstones or markers for veterans interred in those cemeteries.

First, VA reiterates that the purpose of the commemorative plaque and urn benefit is to honor veterans for their service for families that choose not to inter their loved one. The commemorative plaque or urn is authorized as a Federal benefit provided to an eligible deceased veteran instead of a headstone or marker, under sec. 2306(h)(1); and if furnished, VA is prohibited from interring that veteran in a VA national cemetery and providing a headstone or marker for such individual, under sec. 2306(h)(2)(A) and (B).

The commenters implied that because commemorative plaques and urns are “relatively low cost,” VA's provision of these items should not affect a veteran's eligibility for burial. VA clarifies that the cost of the commemorative plaque or urn is irrelevant to VA's obligation to follow the law, which prohibits VA from interring an eligible veteran in a VA national cemetery or furnishing a VA headstone or marker if we have furnished a commemorative plaque or urn for that veteran. Consistent with sec. 2306(h)(2), these express prohibitions must be implemented in regulations as proposed.

Additionally, the prohibitions in sec. 2306(h)(2) only affect burial in a VA national cemetery and the provision of a Government headstone or marker. Statutory eligibility for burial in a VA national cemetery is defined in sec. 2402, but sec. 2306(h)(2) prohibits VA from interring such veteran in a national cemetery or providing a Government headstone or marker for that veteran. If a VA grant-funded cemetery receives a request to inter a veteran for whom VA has furnished a commemorative urn or plaque, the cemetery may inter that veteran, and the prohibitions in sec. 2306(h)(2) would have no impact on existing or future VA grant-funding terms and conditions. VA grant-funded cemeteries are operated for the interment of eligible veterans and their eligible family members, including veterans who received a commemorative plaque or urn. Similarly, eligibility of certain cemeteries to receive the VA plot or interment allowance under sec. 2303 for the interments of eligible veterans would be unaffected by VA furnishing a commemorative plaque or urn for veterans interred in those cemeteries. However, if a cemetery, including a VA grant-funded cemetery, inters a veteran for whom VA furnished a commemorative plaque or urn, sec. 2306(h)(2)(A) prohibits VA from providing a Government headstone or marker for such veteran, and the cemetery would need to provide a headstone or marker through some other means.

VA understands the administration and financial burdens raised by the commenters. However, VA's provision of a commemorative plaque or urn for an eligible veteran and the prohibitions in sec. 2306(h) do not directly affect any non-VA national cemetery's decision to inter that veteran.

The commenters expressed uncertainty about processes for VA grant-funded cemeteries or other stakeholders to verify whether a veteran was furnished a commemorative urn or plaque. VA plans to include information on a public facing online tool that stakeholders can use to find such information. We stress that information in such online tool would not be intended to be determinative of a veteran's eligibility for interment in any cemetery, but instead would be designed to provide stakeholders, which potentially include every cemetery or burial services provider in the nation, information to support their business decisions regarding the interment of a veteran subject to prohibitions under sec. 2306(h).

VA appreciates these comments raising concerns regarding restrictions in the underlying statutory authorities, including sec. 2306(h). However, VA is obligated to implement the current authority as proposed and makes no changes based on these comments.

The commenters noted the common practice of families delaying interment of cremated remains until surviving spouses and dependents have passed, which could affect long-term chain of custody of the commemorative plaque or urn. They raised concerns that decisions affecting the disposition of remains may fall to a family representative, generations removed, who may be unfamiliar with the prohibitions in sec. 2306(h) and the impact on other VA benefits. Additionally, commenters noted that because a veteran received a plaque or urn in lieu of interment in a VA national cemetery or a Government headstone or marker, there is a risk of the cremated remains of such veterans being unattended, resulting in an increase in those veterans' remains becoming unclaimed. One commenter asserted that the commemorative plaque and urn program would “not help increase the number of eligible deceased veterans interred in a governmental cemetery.”

VA appreciates these comments, however, as explained, sec. 2306(h)(2) expressly bars VA from interring in a VA national cemetery or furnishing a headstone or marker to a veteran for whom VA has furnished a commemorative plaque or urn. There is no exception to this mandated prohibition.

Further, sec. 2306(h)(4)(A) mandates that any commemorative plaque or urn provided upon request for an eligible deceased veteran “shall be the personal property of the next of kin or other such individual.” In our proposed rule, VA specified many practical limitations of our authority to furnish a commemorative plaque or urn to raise the public's awareness. We also proposed an “applicant” definition to minimize the potential for unintended forfeitures of benefits, family disputes, and duplicate claims. Additionally, applicants must certify they are authorized to make decisions about the disposition of veteran's remains and certify their awareness of other precluded benefits, before submitting a claim for a plaque or urn. VA will continue to raise awareness of the limitations of sec. 2306(h) by providing detailed information about the commemorative plaque and urn program, following the effective date of this final rulemaking. However, VA has no jurisdiction over a commemorative plaque or urn once it has been furnished and must defer to a veteran's family members to maintain control of a furnished plaque or urn as their personal property.

Similarly, VA has no ability to control circumstances that result in remains of veterans becoming unclaimed by a family member or personal representative. VA has several benefit authorities supporting unclaimed veterans and those who bring remains to VA to ensure dignified burials. However, sec. 2306(h) prohibits VA from interring the unclaimed remains of a veteran for whom VA has furnished a commemorative plaque or urn. Again, the prohibition only applies to interment in VA national cemeteries, not to other cemeteries where burial of the unclaimed remains of a veteran, for whom VA has provided a commemorative plaque or urn, is not expressly prohibited.

Regarding the comment that the rule will not increase interments in “governmental cemeteries,” we reiterate that provision of a commemorative plaque or urn would bar interment only in a VA national cemetery. Further, as noted above, the purpose of the law is to provide an appropriate commemorative benefit to families that do not intend to inter their loved one in a cemetery. Finally, regardless of whether the availability of this benefit might affect a family's decision regarding interment in a VA cemetery, VA does not have authority to disregard the express limitations in the statute.

VA will make no changes to the rulemaking based on comments critical of the plaque and urn statutory authority.

Two commenters suggested including a procedure for returning a commemorative plaque or urn to reestablish eligibility for other veteran burial benefits. They added that not including such a provision would lead to irreversible decisions adversely affecting veterans and their families. Another commenter suggested regulatory procedures for returning a commemorative plaque or urn to governmental control “whether in National, State, or Tribal cemeteries.” This commenter suggested VA grant reinstatement “with legitimate justification as a part of a request to cancel the initial decision to receive a commemorative plaque or urn in lieu of burial.”

VA understands the commentors' concerns, but the concept of reinstatement does not apply because VA has no authority to alter the prohibitions under sec. 2306(h). Further, while provision of a commemorative plaque or urn for an eligible veteran prohibits VA from interring such veteran in a national cemetery or furnishing a headstone or marker for such veteran, it does not invalidate the underlying criteria for a veteran's eligibility for burial in a VA national cemetery. The concept of “reinstatement” or “reversing” a decision affecting burial eligibility is technically inaccurate because VA furnishes a commemorative plaque or urn to eligible veterans. VA must confirm the individual meets the statutory criteria for eligibility as a veteran who served in the Armed Forces on or after April 6, 1917, who is eligible for a headstone or marker under sec. 2306(d) (or would be so eligible but for the date of the individual's death), and whose cremated remains are not interred. These criteria apply to VA's decision to furnish a requested plaque or urn and have no further impact, except on subsequent requests for burial in a VA national cemetery or a headstone or marker. The provision of either burial in a VA national cemetery or a headstone or marker is prohibited under sec. 2306(h)(2). As explained above, such veterans can be interred in any other cemetery with no impact on other VA benefits, except VA's provision of a headstone or marker. And, under 38 U.S.C. 2402(a)(5), an eligible spouse, surviving spouse, or dependent would not be prohibited from receiving a Government headstone or marker or being interred in a VA national cemetery. VA grant-funded cemeteries and veterans' family members or representatives may still submit claims for other VA benefits that are based on an individual's qualifying military service and other applicable criteria.

Lastly, VA has no authority to cancel a decision granting a requested benefit to allow the claimant to request a different benefit. Revision of a decision on grounds of clear and unmistakable error, renouncement of rights to monetary benefits, and withdrawal of a supplemental claim, higher-level review, or a notice of disagreement do not apply in the context suggested by the commenter. Even if VA agreed with the commenter's suggestion to implement a return process in this final rule, VA has no authority to do so. VA is bound by sec. 2306(h) requirements and will make no changes based on these comments.

Two commenters expressed concern about the impact of the sec. 2306(h) prohibitions on veterans and their surviving spouses who are both entitled to distinct burial benefits. Both commenters raised the following hypothetical scenario: a veteran's spouse requested and received a commemorative plaque or urn for the deceased veteran; but, upon the death of the veteran's spouse, the family now wants to inter the veteran's spouse in a VA national cemetery or Arlington National Cemetery. Each commenter noted that a short-term decision of a veteran's spouse to not inter the veteran in a VA national cemetery and, instead, request a commemorative plaque or urn has long-term consequences for future surviving family members for whom VA cannot provide burial in a national cemetery or a headstone or marker for the veteran's eligible spouse. We clarify that the prohibition in sec. 2306(h)(2) applies only to burial in VA national cemeteries, not Arlington National Cemetery. However, prior to applying for a commemorative plaque or urn, VA encourages potential applicants to check directly with agencies that operate other cemeteries (including the Department of Defense regarding Arlington National Cemetery) concerning any potential adverse impact on eligibility for interment in such other cemeteries resulting from receipt of VA's plaque or urn benefit. As previously explained in this rulemaking, veterans who receive a commemorative plaque or urn may be interred in any other cemetery with no impact on other VA benefits, except VA's provision of a headstone or marker; and their eligible spouse, surviving spouse, or dependent would not be prohibited from receiving a headstone or marker or being interred in a VA national cemetery, although they would not be interred with the veteran.

One commenter suggested VA allow the veteran to be interred with the spouse if the spouse is already interred in a VA national cemetery, noting that including the urn “would not add an additional cost to VA” and would “be no different than including a memento in the casket.” While VA agrees that in certain scenarios, there would seemingly be negligible or no “cost” to allow such practice, the law explicitly prohibiting interment in a VA national cemetery of a veteran for whom VA has furnished a commemorative plaque or urn does not grant VA the authority to consider cost. VA is mandated to enforce the statutory prohibition. Second, the commemorative urn containing the cremated remains of an eligible veteran is a VA benefit intended to honor the veteran's service and sacrifice to this Nation. As explained in the preamble of the proposed rule, VA cautions families, and will continue to caution families, about the prohibitive impact of requesting a commemorative plaque or urn for a veteran. Once the final rule becomes effective, VA will provide extensive information about the plaque and urn authorities, impacts on VA burial and memorialization, and other critical issues on the VA public-facing web page.

One commenter suggested VA allow families to return the plaque or urn and reinstate eligibility for interment in a VA national cemetery and a Government headstone or marker. The commenter likened the return of a plaque or urn to the return of a Government headstone or marker when a decedent is moved from a VA national cemetery to a private cemetery. As explained in response to a similar comment suggesting reinstatement, this is not currently authorized under sec. 2306. Further, the Government headstone or marker installed in a VA national cemetery is not returned to VA when a family disinters a loved one and reinters the remains in a private cemetery. VA regulations in 38 CFR 38.630(b)(5)(iii) and 38.631(b)(5)(i) and (iii) provide that all Government-furnished burial and memorial headstones and markers remain the property of the United States Government in perpetuity and must be properly disposed of when they are removed from any cemetery, except burial headstones and markers may be relocated to a different gravesite following disinterment. By contrast, sec. 2306(h)(4)(A) mandates that any commemorative plaque or urn furnished for an eligible veteran is the personal property of the next of kin or such other individual as the Secretary considers appropriate. Additionally, sec. 2306(h)(4)(B) provides that the Federal Government shall not be liable for any damage after the date a commemorative plaque or urn is furnished. As explained in the preamble of the proposed rule, VA is aware of the complexity of the plaque and urn benefit, and we will continue to inform families of issues that they may need to manage if their request for a commemorative plaque or urn is granted. However, because these comments attack the statutory mandates implemented in this final rule, VA will make no changes based on these comments.

One commentor wrote that VA's provision of the commemorative urn under sec. 2306(h), as opposed to reimbursing the cost of such an urn, has financial implications for funeral homes, which traditionally sell urns to veteran families. VA acknowledges the commenter's concern and relies on information provided by the U.S. Small Business Administration (SBA) in determining if this regulatory action would have a significant impact on a substantial number of small entities. VA considers 1% or higher of the total number of entities within a North American Industry Classification System (NAICS) industry to be a “substantial number.” In determining whether a regulatory action may have a “significant impact” on small entities, VA uses a revenue test for each specific NAICS code that may be affected. Any regulatory action that generates a cost of 3% or higher on that NAICS code's annual revenue is deemed to have a “significant impact. As explained in the Regulatory Flexibility Act (RFA) section of the proposed rule and this final rule, VA's analysis regarding the cost of commemorative plaques and urns, along with the Paperwork Reduction Act (PRA) costs of the rulemaking, yields a potential impact of $234,535.10 on the funeral home industry, which equates to a potential de minimis cost of $139.27 per funeral home ($234,535.10/1,684 estimated caseload). Based on this analysis and revenue test, the rulemaking will not have a significant economic impact on funeral homes.

Further, VA has no alternative but to implement the commemorative plaque or urn benefit in regulation and will make no changes based on this comment.

One of the two commenters who supported the rulemaking also expressed concern about the amount of time required for VA to implement the regulation that is necessary for an applicant to obtain a commemorative plaque or urn, and that an applicant should not be denied the benefit due to the delay in implementation of the authority. VA clarifies that the rule does not establish eligibility criteria that would preclude an eligible applicant from obtaining a commemorative plaque or urn for an eligible veteran who was deceased prior to the implementation of the regulation but on or after April 6, 1917, which is the eligibility date established under section 2306(h)(3). VA proposed the regulation to implement the new authority as expeditiously as possible, and it will become effective within thirty days of publication of this final rule in the Federal Register . VA will update its website to provide information about the new benefit and how to apply for it. No changes to the rulemaking are needed based on these comments.

Finally, VA addresses the comment outside the scope of the rulemaking that requested an amendment to 38 U.S.C. 2306 to provide eligibility for burial for veterans who “who commit suicide due to PTSD, or possible drug induced impulsiveness.” VA clarifies that the rule only implements new statutory authority for the commemorative plaque or urn benefit for veterans with qualifying service; it does not establish eligibility criteria that pertain to cause of death. Cause of death has no bearing on eligibility. This means that a veteran who dies by suicide still may be eligible for a plaque or urn or other burial benefit. The comment also requested eligibility for veterans who are not “registered” with VA. VA clarifies that veterans do not need to be previously registered or affiliated with VA in any manner for someone to apply for a commemorative plaque or urn for their remains. VA will encourage veterans and family members who are interested in the new benefit to visit the VA web page for more information about how to apply. VA makes no changes based on the comment.

Executive Orders 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 (Modernizing Regulatory Review) supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review established in Executive Orders 12866 and 13563. The Office of Information and Regulatory Affairs has determined that this rulemaking is not a significant regulatory action under Executive Order 12866, as amended by Executive Order 14094. The Regulatory Impact Analysis associated with this rulemaking can be found as a supporting document at www.regulations.gov.

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). This conclusion is based on the cost of commemorative plaques and urns and the Paperwork Reduction Act costs of the rulemaking to arrive at a potential impact of $234,535.10 on the funeral home industry, which equates to a potential de minimis cost of $139.27 per funeral home ($234,535.10/1,684 estimated caseload). 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 an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.

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

This final rule adding 38 CFR 38.634 contains a new collection of information under the Paperwork Reduction Act of 1995. OMB has assigned control number 2900-0937 to this information collection, and this information collection is pending final OMB approval. 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. If OMB does not approve the collection of information as requested, VA will immediately remove the provision containing a collection of information or take such other action as is directed by OMB.

The collection of information contained in 38 CFR 38.634 is described immediately following this paragraph, under its respective title.

• Title: Request for Commemorative Plaque or Urn.

• OMB Control No: 2900-0937.

• CFR Provision: 38 CFR 38.634.

• Summary of collection of information: The new collection of information in proposed § 38.634 would require information necessary to establish the identity of a deceased veteran to verify burial eligibility under 38 U.S.C. 2402 for purposes of furnishing a commemorative plaque or urn, as authorized under 38 U.S.C. 2306(h). It would also require information regarding the applicant's relationship to the deceased veteran, the applicant's certification as to certain factual matters, and the applicant's contact information.

• Description of need for information and proposed use of information: The information would be used by VA to verify an individual's service in the Armed Forces on or after April 6, 1917; eligibility for a headstone, marker, or medallion that VA has not yet furnished under sec. 2306(d); and that the individual's remains were cremated and not interred. Information regarding the applicant's relationship to the deceased veteran would be used to verify that the applicant is a family member empowered to make decisions regarding memorialization of the veteran and disposition of any remains.

• Description of likely respondents: Veterans' family members.

• Estimated number of respondents per year: 1,684.

• Estimated frequency of responses per year: This is a one-time collection.

• Estimated average burden per response: 10 minutes.

• Estimated total annual reporting and recordkeeping burden: VA estimates the total annual reporting and recordkeeping burden to be 280.6667 hours (1,684 respondents × 10 minutes/60 minutes).

• Estimated cost to respondents per year: VA estimates the annual cost to respondents to be $8352.64. Using VA's average annual number of 1,684 respondents, VA estimates the total information collection burden cost to be $8352.64 per year (280.6667 burden hours (1,684 respondents × 10 minutes/60 minutes) × $29.76 mean hourly wage).

* To estimate the respondents' total information collection burden cost, VA uses the Bureau of Labor Statistics (BLS) mean hourly wage for “All Occupations” of $29.76. This information is available at https://www.bls.gov/oes/2022/may/oes_nat.htm#00-0000.

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not satisfying the criteria under 5 U.S.C. 804(2).

Denis McDonough, Secretary of Veterans Affairs, approved and signed this document on April 11, 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 set forth in the preamble, the Department of Veterans Affairs amends 38 CFR part 38 as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

You may access a frequently updated electronic version of 40 CFR part 180 through the Office of the Federal Register's e-CFR site at https://www.ecfr.gov/current/title-40.

Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2021-0613 or EPA-HQ-OPP-2023-0347 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 9, 2024. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2021-0613 or EPA-HQ-OPP-2023-0347, by one of the following methods:

• Federal eRulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at https://www.epa.gov/dockets/where-send-comments-epa-dockets#express.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at https://www.epa.gov/dockets.

In the Federal Register of October 21, 2021 (86 FR 58239) (FRL-8792-04-OSCPP), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP IN-11550) by Spring Regulatory Sciences, on behalf of Oxiteno USA, LLC, 3200 Southwest Freeway, Suite 1200, Houston, TX 77027. The petition requested that 40 CFR 180.910 be amended by establishing an exemption from the requirement of a tolerance for residues of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts (CAS Reg. No. 499781-63-4) when used as an inert ingredient (adjuvant or surfactant) in pesticide formulations applied to growing crops or raw agricultural commodities pre- and post-harvest. This document referenced a summary of the petition prepared by Oxiteno USA, LLC, which is available in the docket at https://www.regulations.gov. There were no comments received in response to the notice of filing.

In the Federal Register of Wednesday, July 26, 2023 (88 FR 48179) (FRL-10579-06-OSCPP), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP IN-11782) by SciReg, Inc., 12733 Director's Loop, Woodbridge, VA 22192 on behalf of Bi-PA NV. The petition requested that 40 CFR 180.920 be amended by establishing an exemption from the requirement of a tolerance for residues of cocamidopropyl betaine (CAS Reg. No. 61789-40-0) when used as an inert ingredient (surfactant) in pesticide formulations pre-harvest at levels up to 10% w/w in pesticide formulations. This document referenced a summary of the petition prepared by Bi-PA NV, which is available in the docket at https://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petitions and in accordance with its authority under FFDCA section 408(d)(4)(A)(i), EPA is establishing an exemption for residues of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts that includes a limitation of 25% w/w in pesticide formulations to account for potential aquatic toxicity. A revised petition was submitted by Oxiteno USA, LLC, to support this change to the petitioned-for exemption.

Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. When EPA makes a safety determination for an exemption from the requirement of a tolerance, FFDCA section 408(c)(2)(B) directs the Agency to take into account the considerations in section 408(b)(2)(C) and (D). Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance or exemption and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .” Section 408(b)(2)(D) lists other factors for EPA's consideration when making safety determinations, including the validity, completeness, and reliability of available data, nature of toxic effects, available information concerning the cumulative effects of the pesticide chemical and other substances with a common mechanism of toxicity, and available information concerning aggregate exposure levels to the pesticide chemical and other related substances.

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no harm to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(c)(2)(A), and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of these actions. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine, including exposure resulting from the exemptions established by this action. EPA's assessment of exposures and risks associated with 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine follows.

EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in this unit.

The toxicological database of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts is supported by data regarding cocamidopropyl betaine and to a lesser extent, two other alkylamidopropyl betaines. EPA has determined that it is appropriate to bridge alkylamidopropyl betaine data to assess 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts due to similarities in the manufacturing processes, functional groups/structure, composition, and physical/chemical properties, and among the available human health toxicity and ecological toxicity data of these substances.

1-Propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine exhibit moderate acute toxicity via the oral and dermal routes. No inhalation studies were available but, based on their physical-chemical properties, they are not expected to volatilize and therefore are not expected to be an inhalation toxicant.

They were shown to be a moderate dermal irritant in some studies and a non-irritant in others. They are severe eye irritants. Although some skin sensitization effects were seen in the acute studies, these chemicals contain byproducts that are known to cause sensitization. Therefore, it is possible the effects are from chemical byproducts and with proper manufacturing controls, these irritating components can be decreased.

The repeated-dose toxicity studies showed no concern for systemic effects. Local irritation was seen in the forestomach of dams in subchronic studies and in one developmental toxicity study following gavage administration. This forestomach irritation likely resulted in the decreased maternal body weight gain and food consumption and the associated developmental effects observed at the highest dose tested ( i.e., post-implantation loss and decreased mean fetal body weight). Due to the bolus administration of the compound (which may increase the irritation potential of a chemical), the lack of a forestomach in humans, and the developmental effects occurring at very high doses only, the effects observed are not considered relevant for human health risk assessment.

Although no specific neurotoxicity studies were conducted, there was no evidence of neurotoxicity following repeated dosing. The neurotoxicity observed following acute dosing occurred at doses not relevant for risk assessment purposes ( i.e., doses >1,000 mg/kg). Furthermore, concern for carcinogenicity is low, based on negative results in mutagenicity studies, and the lack of structural alerts for carcinogenicity.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern (LOC) to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see https://www.epa.gov/pesticide-science-and-assessing-pesticide-risks/overview-risk-assessment-pesticide-program.

The hazard profiles of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine are adequately defined. Overall, these chemicals are of low to moderate acute toxicity, and low subchronic and developmental toxicity. No toxicity relevant for risk assessment was observed up to 1,000 mg/kg/day. Therefore, no toxicological endpoints of concern or PODs were identified and a qualitative risk assessment for 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine was performed.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine, EPA considered exposure under the proposed exemptions from the requirement of a tolerance. EPA assessed dietary exposures from 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine in food as follows.

Dietary exposure (food and drinking water) to 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine may occur following ingestion of foods with residues from their use in accordance with these exemptions. However, a quantitative dietary exposure assessment was not conducted since a toxicological endpoint for risk assessment was not identified.

2. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., textiles (clothing and diapers), carpets, swimming pools, and hard surface disinfection on walls, floors, tables).

1-Propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine may be present in pesticide and non-pesticide products that may be used in and around the home. However, a quantitative residential exposure assessment was not conducted since a toxicological endpoint for risk assessment was not identified.

3. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance or exemption, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

Based on the lack of systemic toxicity in the available database, EPA has not found 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine to share a common mechanism of toxicity with any other substances, and 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine do not appear to produce a toxic metabolite produced by other substances. For the purposes of these tolerance exemptions, therefore, EPA has assumed that 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine do not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at https://www.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act (FQPA) safety factor. In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

Based on an assessment of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine, EPA has concluded that there are no toxicological endpoints of concern for the U.S. population, including infants and children. Because there are no threshold effects associated with 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts or cocamidopropyl betaine, EPA conducted a qualitative assessment. As part of that assessment, the Agency did not use safety factors for assessing risk, and no additional safety factor is needed for assessing risk to infants and children.

Because no toxicological endpoints of concern were identified, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children, from aggregate exposure to 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts or cocamidopropyl betaine residues.

An analytical method is not required for enforcement purposes since the Agency is not establishing a numerical tolerance for residues of 1-propanaminium, 3-amino-N-(2- carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts or cocamidopropyl betaine in or on any food commodities. EPA is establishing a limitation on the amount of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and cocamidopropyl betaine that may be used in pesticide formulations. This limitation is based on the potential for aquatic toxicity and will be enforced through the pesticide registration process under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. 136 et seq. EPA will not register any pesticide formulation for food use that exceeds 25% 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts and/or 10% cocamidopropyl betaine in the final pesticide formulation.

Therefore, an exemption from the requirement of a tolerance is established for residues of 1-propanaminium, 3-amino-N-(2-carboxyethyl)- N,N -dimethyl-, N-coco acyl derivatives, inner salts (CAS Reg. No. 499781-63-4) when used as an inert ingredient (adjuvant or surfactant) up to 25% w/w in pesticide formulations applied to growing crops or raw agricultural commodities pre- and post-harvest under 40 CFR 180.910.

An exemption from the requirement of a tolerance is also established for residues of 1-propanaminium, 3-amino-N-(carboxymethyl)- N,N -dimethyl-, N-coco acyl derivatives, hydroxides, inner salts (CAS Reg. No. 61789-40-0), also known as cocamidopropyl betaine, when used as an inert ingredient (surfactant) up to 10% w/w in pesticide formulations applied to growing crops pre-harvest under 40 CFR 180.920.

This action establishes exemptions from the requirement of a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the exemptions in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal governments, on the relationship between the National Government and the States or Tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Office of the Federal Register's e-CFR site at https://www.ecfr.gov//.

Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2022-0887 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before July 9, 2024. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2022-0887, by one of the following methods:

• Federal eRulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at https://www.epa.gov/.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at https://www.epa.gov/.

In the Federal Register of February 23, 2023 (88 FR 11401) (FRL-10579-01-OCSPP), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of pesticide petition (PP 2E9030) by the Interregional Research Project No. 4 (IR-4), North Carolina State University, 1730 Varsity Drive, Venture IV, Suite 210, Raleigh, NC 27606. The petition requests to amend 40 CFR 180.677 by establishing tolerances for residues of cyflumetofen (2-methoxyethyl α-cyano-α-[4-(1,1-dimethylethyl)phenyl]-β-oxo-2-(trifluoromethyl)benzenepropanoate), including its metabolites and degradates, in or on the following raw agricultural commodities: berry, low growing, subgroup 13-07G at 0.6 parts per million (ppm); fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.6 ppm; and vegetable, cucurbit, group 9 at 2 ppm. Upon the establishment of these tolerances, IR-4 requested that EPA remove the existing tolerances in 40 CFR 180.677 for residues of cyflumetofen (2-methoxyethyl α-cyano-α-[4-(1,1-dimethylethyl)phenyl]-β-oxo-2-(trifluoromethyl)benzenepropanoate) in or on cucumber at 0.3 ppm; grape at 0.60 ppm; and strawberry at 0.6 ppm. That document referenced a summary of the petition prepared by IR-4, which is available in the docket at https://www.regulations.gov. One comment was received in response to the notice of filing. EPA's response to the comment is discussed in Unit IV.C.

Based upon review of the data supporting the petition and in accordance with its authority under FFDCA section 408(d)(4)(A)(i), EPA is establishing one tolerance at a different level than petitioned-for. The reason for this change is explained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified therein, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for cyflumetofen including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with cyflumetofen follows.

In an effort to streamline its publications in the Federal Register , EPA is not reprinting sections that repeat what has been previously published for tolerance rulemakings for the same pesticide chemical. Where scientific information concerning a particular chemical remains unchanged, the content of those sections would not vary between tolerance rulemakings, and EPA considers referral back to those sections as sufficient to provide an explanation of the information EPA considered in making its safety determination for the new rulemaking.

EPA has previously published tolerance rulemakings for cyflumetofen in which EPA concluded, based on the available information, that there is a reasonable certainty that no harm would result from aggregate exposure to cyflumetofen and established tolerances for residues of that chemical. EPA is incorporating previously published sections from these rulemakings as described further in this rulemaking, as they remain unchanged.

Toxicological profile. For a discussion of the Toxicological Profile of cyflumetofen, see Unit III.A. of the final rule published in the Federal Register of May 8, 2019 (84 FR 20037) (FRL-9990-60).

Toxicological points of departure/Levels of concern. A summary of the toxicological endpoints for cyflumetofen used for human health risk assessment is discussed in Unit III.B. of the May 8, 2019, rulemaking.

Exposure assessment. EPA's dietary exposure assessments have been updated to include the additional exposures from the petitioned-for tolerances. No acute dietary exposure and risk analyses were performed since there were no appropriate toxicological effects attributable to a single dose observed in available toxicity studies for either the general population or for females 13 to 49 years of age. The chronic dietary (food and drinking water) exposure and risk assessment for cyflumetofen was conducted using the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID) Version 4.02. This software uses 2005-2010 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey/What We Eat in America, (NHANES/WWEIA). An unrefined chronic dietary (food and drinking water) analysis was conducted using tolerance-level residues, default processing factors, empirical processing factors, and 100% crop treated assumptions.

Drinking water exposure. EPA has revised the cyflumetofen drinking water assessment (DWA) since the May 8, 2019, final rule and the final rule published in the Federal Register of December 6, 2021 (86 FR 68915) (FRL-9234-01-OCSPP). The DWA provides updated estimated drinking water concentrations (EDWCs) for cyflumetofen residues of concern in surface water and groundwater. The use patterns for current and proposed uses were modeled using new pesticide in water calculator scenarios. The updated EDWCs for use in human health risk assessment are 0.59 μg/L for acute exposures, 0.11 μg/L for non-cancer chronic exposures and 0.10 μg/L for cancer exposures generated from exposure in surface water.

Non-occupational exposure. There are no new proposed residential (non-occupational) uses for cyflumetofen at this time; however, there are registered uses of cyflumetofen on commercial vegetable gardens and ornamental plants. EPA's residential exposure assessment has changed since the May 8, 2019, final rule based on a revised practice. Because all current cyflumetofen labels require handlers to wear personal protective equipment, EPA assumes that cyflumetofen is applied by professional applicators, not residential (homeowner) applicators. Therefore, the current assessment does not consider exposure to residential handlers or exposure from direct homeowner applications to ornamentals or home gardens.

There are registered uses of cyflumetofen to commercially treat garden vegetables that could be subsequently purchased at a retail location for transplant into a residential setting and treated ornamental plants that can be purchased by consumers. EPA considers post-application exposure resulting from this scenario to be negligible because residues are expected to decline significantly during the time from application in a commercial setting to consumer purchase at a retail location. Also, there is no dermal hazard for cyflumetofen since no systemic effects were observed in the dermal study up to the limit dose. Therefore, a quantitative residential post-application dermal risk assessment is not required.

Cumulative exposures. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to cyflumetofen and any other substances and cyflumetofen does not appear to produce a toxic metabolite produced by other substances. For the purposes of this action, therefore, EPA has not assumed that cyflumetofen has a common mechanism of toxicity with other substances.

Safety factor for infants and children. EPA continues to conclude that there are reliable data to support the reduction of the Food Quality Protection Act (FQPA) safety factor from 10X to 1X. See Unit III.D. of the May 8, 2019, rulemaking for a discussion of the Agency's rationale for that determination.

Aggregate risk and Determination of safety. EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing dietary exposure estimates to the acute population adjusted dose (aPAD) and chronic population adjusted dose (cPAD). Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated total food, water, and residential exposure to the appropriate points of departure (PODs) to ensure that an adequate margin of exposure (MOE) exists.

An acute dietary risk assessment was not conducted as toxicological effects attributable to a single dose were not identified. Therefore, cyflumetofen is not expected to pose an acute risk. Chronic dietary risks are below the Agency's level of concern of 100% of the cPAD; the chronic dietary exposure estimate for all infants, the most highly exposed population subgroup, is 7.6% of the cPAD. Because EPA has determined that there are no residential exposures, the chronic dietary risk is the same as the overall chronic aggregate risk for cyflumetofen and is not of concern.

As stated in Unit III.A. of the May 8, 2019, final rule, EPA concluded that the nonlinear approach for assessing potential cancer risk is appropriate. The chronic risk resulting from aggregate exposure to cyflumetofen is below the Agency's level of concern; therefore, the Agency concludes that there is not a cancer risk of concern from exposure to cyflumetofen.

Therefore, based on the risk assessments and information described above, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children, from aggregate exposure to cyflumetofen residues. More detailed information on this action can be found in the document titled “Cyflumetofen. Human Health Risk Assessment for the Proposed New Use on Vegetable, Cucurbit, Group 9, Label Amendment for Vegetable, Fruiting, Group 8-10, and Crop Group Expansion of Berry, Low Subgroup 13-07G and Fruit, Small, Vine Climbing, Except Fuzzy Kiwifruit, subgroup 13-07F.” in docket ID number EPA-HQ-OPP-2022-0887.

For a discussion of the available analytical enforcement method, see Unit IV.A. of the final rule published in the Federal Register of July 1, 2020 (85 FR 39491) (FRL-10009-25).

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4).

Codex has not established an MRL for residues of cyflumetofen in or on cucurbit vegetable group 9, bell pepper or non-bell pepper. Codex has established MRLs for residues of cyflumetofen in or on strawberry at 0.6 ppm and in or on grape, table and grape, wine at 0.6 ppm. The U.S. tolerances for berry, low growing, subgroup 13-07G and fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F are being established at 0.6 ppm and are harmonized with the relevant Codex MRLs.

One comment was received on the notice of filing. The comment is an inquiry from the People's Republic of China, requesting that EPA explain the reasons for removing the existing tolerances for strawberries and grapes and establishing new crop group tolerances for berry, low growing, subgroup 13-07G and fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F, thus expanding tolerance coverage for these crops. The commenter also requested that the Agency provide the test data used for risk assessment of the relevant fruits.

Under FFDCA section 408, EPA is authorized to establish tolerances for pesticide chemical residues in food. EPA establishes tolerances for each pesticide based on data on the pesticide residues and assesses the potential risks to human health posed by that pesticide. A tolerance is the maximum permissible residue level established for a pesticide in raw agricultural commodities and processed foods. The crop group regulations currently in 40 CFR 180.40 and 180.41 enable the establishment of tolerances for a group of crops based on residue data for certain crops that are representative of the group. Strawberry is a representative crop for the crop subgroup 13-07G, and grape is a representative crop for the crop subgroup 13-07F.

The data supporting the strawberry and grape tolerances were submitted to the Agency and were reviewed and reported in the document titled “Cyflumetofen. Petition for the Establishment of Permanent Tolerances and Registration for Use on Citrus (Crop Group 10-10), Pome Fruits (Crop Group 11-10), Tree Nuts (Crop Group 14-12), Grape, Strawberry, and Tomato. Summary of Analytical Chemistry and Residue Data.”, D408531, D. Wilbur, 09-July-2013. In the current action, EPA is expanding the grape tolerance to fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F and expanding the strawberry tolerance to berry, low growing, subgroup 13-07G as stated in the document “Cyflumetofen. Proposed Section 3 Registration for the New Use on Vegetable Cucurbit, Group 9, Label Amendment for Vegetable, Fruiting, Group 8-10, and Crop Group Expansion of Berry, Low Subgroup 13-07G and Fruit, Small, Vine Climbing, Except Fuzzy Kiwifruit, Subgroup 13-07F. Summary of Analytical Chemistry and Residue Data” and the document “Cyflumetofen. Human Health Risk Assessment for the Proposed New Use on Vegetable, Cucurbit, Group 9, Label Amendment for Vegetable, Fruiting, Group 8-10, and Crop Group Expansion of Berry, Low Subgroup 13-07G and Fruit, Small, Vine Climbing, Except Fuzzy Kiwifruit, subgroup 13-07F.” All three documents can be found in docket ID number EPA-HQ-OPP-2022-0887.

EPA reviewed the available residue data and is establishing the tolerance for resides of cyflumetofen in or on vegetable, cucurbit, group 9 at 0.3 ppm rather than at 2 ppm as IR-4 requested. IR-4 calculated the tolerance of 2 ppm by including the metabolite B-1 in the residue levels. However, the only residues included in the tolerance expression are for the parent compound, cyflumetofen. Using the residues for cyflumetofen but not metabolite B-1, EPA calculated the tolerance for resides of cyflumetofen in or on vegetable, cucurbit, group 9 to be 0.06 ppm, which is covered by the established tolerance of 0.3 ppm in or on cucumber. Therefore, EPA is establishing the tolerance for residues of cyflumetofen in or on vegetable, cucurbit, group 9 at 0.3 ppm.

Therefore, tolerances are established for residues of cyflumetofen: (2-methoxyethyl α-cyano-α-[4-(1,1-dimethylethyl)phenyl]-β-oxo-2-(trifluoromethyl)benzenepropanoate), including its metabolites and degradates, in or on berry, low growing, subgroup 13-07G at 0.6 ppm; fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.6 ppm; and vegetable, cucurbit, group 9 at 0.3 ppm. EPA is removing the established tolerances for strawberry at 0.6 ppm; grape at 0.60 ppm; and cucumber at 0.3 ppm as unnecessary upon the establishment of the new tolerances.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal governments, on the relationship between the National Government and the States or Tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

Section 474(a)(3) of the Social Security Act (the Act) authorizes Federal reimbursement for title IV-E foster care program administrative costs, which are defined as costs “found necessary by the Secretary for the provision of child placement services and for the proper and efficient administration of the State [title IV-E] plan.” This authorization applies to an Indian tribe, tribal organization, or tribal consortium that has an approved title IV-E plan, in the same manner as it applies to states.

This rule is published under the authority granted to the Secretary of Health and Human Services (the Secretary) by section 1102 of the Act, 42 U.S.C. 1302. Section 1102 of the Act authorizes the Secretary to publish regulations, not inconsistent with the Act, as may be necessary for the efficient administration of the functions with which the Secretary is charged under the Act.

Many families that come to the attention of a child welfare agency are in the midst of or recovering from familial, health, housing, or economic challenges or crises. These obstacles can impede a family's ability to provide a safe and stable environment for their children. 1 Addressing these obstacles to restore a family's stability and safety and prevent a child from being removed from their home is critical to a child's well-being. This is because removal, even for a short period of time, exposes the child to a range of trauma and stress. 2 A child who is at risk of entering foster care has better outcomes when they remain safely at home compared to when they are placed into foster care. 3 Access to independent legal representation can help stabilize families, improve safety, and reduce the need for more formal child welfare system involvement, including foster care. 4 For families with children that have been placed in foster care, independent legal representation can expedite reunification and improve permanency or help provide access to needed supports for youth transitioning out of the child welfare system. 5

HHS regulations at 45 CFR 1356.60(c) detail cost-sharing requirements for the Federal and non-Federal share of title IV-E foster care program expenditures for the cost of administrative activities. A title IV-E agency may claim FFP at the rate of 50 percent for allowable title IV-E foster care administrative costs. A title IV-E agency may also claim FFP for allowable administrative costs incurred by any other public agency or tribe which has an agreement in effect under which the other agency has placement and care responsibility of a title IV-E eligible child pursuant to 472(a)(2)(B)(ii) of the Act. Another “public agency” is a child placing agency authorized by state/tribal law to operate services to children and families, with supervision by the title IV-E agency (Child Welfare Policy Manual section (CWPM) 8.1G #1). Examples of other public agencies may be found in section G of the CWPM and could include the state/tribal juvenile justice agency, a court, or state/tribal mental health agency. The regulation at § 1356.60(c)(2) provides examples of allowable title IV-E foster care administrative expenditures that are necessary for the administration of the title IV-E agency's plan, such as preparation for and participation in judicial determinations, referral to services, development of the case plan, case reviews, and case management and supervision.

ACF policy historically allowed title IV-E agencies to claim FFP for the foster care administrative costs of “preparation for and participation in judicial determinations” as described in § 1356.60(c)(2)(ii), only for the title IV-E agency's (and if applicable, the Indian tribe or other public agency's) legal representation. However, in 2019, ACF revised the policy to allow title IV-E agencies to also claim FFP for the administrative costs of independent legal representation provided by attorneys representing children who are candidates for title IV-E foster care, children who are in title IV-E foster care, and the children's parent(s) in all stages of foster care legal proceedings (CWPM 8.1B #30, 31, and 32). This policy was revised to ensure that reasonable efforts are made to prevent removal and finalize the permanency plan; and parents and youth are engaged in and complying with case plans. This policy change was well received and generated positive interest from title IV-E agencies and child welfare and legal partners. A “candidate” for title IV-E foster care is a child who is potentially eligible for title IV-E foster care maintenance payments and is at serious risk of removal from their home as evidenced by the title IV-E agency either pursuing the child's removal from the home or making reasonable efforts to prevent such removal (section 472(i) of the Act). Further, the agency must document the child's candidacy for title IV-E foster care maintenance payments through one of the three acceptable methods identified in the CWPM, such as a case plan (CWPM 8.1D #2), which we further explain in section IV of this final rule. A child is not considered a candidate for title IV-E foster care when the title IV-E agency has no formal involvement with the child or simply because the child has been described as “at risk” due to circumstances such as social or interpersonal problems or a dysfunctional home environment (CWPM 8.1D).

ACF published the September 2023 notice of proposed rulemaking (NPRM) proposing to codify and expand the policy in CWPM 8.1B #30, 31, and 32 (88 FR 66769, Sept. 28, 2023). Recent research, as described in the September 2023 NPRM, demonstrates that providing independent legal representation early in foster care proceedings and other civil legal proceedings can help prevent children from entering foster care, and for youth already in foster care it can improve the rate of reunification and result in more permanent outcomes for the child and the family. The NPRM proposed that providing independent legal representation to a child who is a candidate for or in title IV-E foster care, their parent(s), and their relative caregiver(s), to prepare for and participate in civil legal proceedings is an allowable administrative cost when necessary to carry out the requirements in the agency's title IV-E foster care plan in accordance with section 471(a) of the Act.

For Indian children that have been placed in foster care and are subject to the Indian Child Welfare Act (ICWA), and their families, early representation of an Indian child's tribe in foster care proceedings promotes stability for the child by minimizing unnecessary separation of children and their parents, maximizing placements of the child with extended family and other preferred placements, and avoiding unintended consequences adverse to a child's interests, such as loss of tribal membership and benefits. 6 ICWA was passed by Congress in 1978 to address the long history of failing “to recognize the essential tribal relations of Indian people and the cultural and social standards prevailing in Indian communities and families” (25 U.S.C. 1901(5)). ICWA protects the “best interests of Indian children and promotes the stability and security of Indian tribes and families by the establishment of minimum federal standards for the removal of Indian children from their families and the placement of such children in foster or adoptive homes which will reflect the unique values of Indian culture, and by providing for assistance to Indian tribes in the operation of child and family service programs” (25 U.S.C. 1902). 7

As one tribal leader told Congress, tribes cannot long survive as “self-governing” communities if they cannot pass their “heritage” on to the next generation. Holyfield at 34 (citation omitted). Congress thus recognized that, by severing that connection to future generations, the breakup of Indian families threatens “the continued existence and integrity of Indian tribes.” 25 U.S.C. 1901(3). The Federal Government has an interest in ensuring that Indian tribes, vested with a statutory right to intervene in state foster care placement proceedings in accordance with 25 U.S.C. 1911(c), have legal representation to preserve and protect the continued existence and integrity of Indian tribes. As the Supreme Court noted in a case interpreting ICWA, “Congress [ ] found that the breakup of Indian families harmed not only Indian children and their parents, but also their tribes.”  8

The information provided by the tribe's attorney provides the cultural and social standards of the child's tribe that are necessary for the court to make essential determinations that reasonable efforts were made as required under the title IV-E plan. For example, the Act requires the court to determine whether the agency made reasonable efforts to finalize a permanency plan. The tribal attorney's representation of the cultural and social standards for family connection, reunification and what permanency looks like in the child's tribe, may be necessary to finalize the permanency plan for an Indian child. For another example, if adoption is the permanency plan for an Indian child, the tribal attorney can provide information on customary adoption, which ensures “the same stability and permanence of traditional adoption without terminating parental rights.”  9

This final rule supports the goal of tribal self-governance by supporting Indian families, both by minimizing unnecessary separations of Indian children from their parents and by maximizing their placement with extended family, other tribal members, or other tribal families when they cannot remain with their parents.

This final rule advances the Administration's priority of equity for those historically underserved and adversely affected by persistent poverty and inequality (Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government [Jan. 20, 2021]). Research documents the overrepresentation of certain racial and ethnic groups in foster care relative to their representation in the general population. African American and American Indian or Alaska Native children are at greater risk than other children of being placed in out-of-home care. They stay in foster care longer and have disparate outcomes. For example, they are less likely to reunify with their families. 10

In FR Doc. 2024-09373, appearing on page 37948 in the Federal Register of Monday, May 6, 2024, the following corrections are made:

The Northern Pacific Halibut Act of 1982 (16 U.S.C. 773-773k) (Halibut Act), gives the Secretary of Commerce responsibility for implementing the provisions of the Convention between Canada and the United States for the Preservation of the Halibut Fishery of the North Pacific Ocean and Bering Sea (Convention), signed at Ottawa, Ontario, on March 2, 1953, as amended by a Protocol Amending the Convention (March 29, 1979).

The Secretary of State, with the concurrence of the Secretary of Commerce and on behalf of the United States, has accepted regulations recommended by the International Pacific Halibut Commission (IPHC), in accordance with the Convention, which govern the Pacific halibut fishery in all regulatory areas, and include the 2024 catch limit for the Area 2A non-tribal directed commercial fishery. The IPHC's Area 2A is located off the coasts of Washington, Oregon and California, and includes the area south of Point Chehalis, WA, (lat. 46°53.30′ N) to the U.S./Mexico border. NMFS published the IPHC regulations in the Federal Register on March 18, 2024 (89 FR 19275) to provide notice of their immediate regulatory effectiveness and to inform persons subject to the regulations of their restrictions and requirements (50 CFR 300.62).

In accordance with 16 U.S.C. 773c(c) of the Halibut Act, the Pacific Fishery Management Council (Council) developed a catch sharing plan (CSP) guiding the framework distribution of the overall Area 2A allocation of Pacific halibut across the various sectors. Based on the 2024 Area 2A fishery constant exploitation yield (FCEY) of 1.47 million pounds (667 mt), net weight ( i.e., the weight of Pacific halibut that is without gills and entrails, head-off, washed, and without ice and slime), and the allocation framework in the CSP, the non-tribal directed commercial Pacific halibut fishery allocation for 2024 is 249,338 pounds (113 mt), net weight (89 FR 19275, March 18, 2024).

This final rule implements annual management measures for 2024 for the directed commercial Pacific halibut fishery in Area 2A that are not part of the annual IPHC regulations, specifically fishing periods and fishing period limits. This final rule adopts, without changes, the annual management measures from the proposed rule published on March 13, 2024 (89 FR 18368). Specifically, this action establishes two 58-hour fishing periods and four fishing period limits ( i.e. vessel catch limits) across eight vessel size classes for both fishing periods.

Fishing periods, often referred to as fishery openers, are the times during the IPHC coastwide commercial Pacific halibut season when fishing in the non-tribal directed commercial Pacific halibut fishery in Area 2A is allowed. NMFS is implementing two fishing periods open for 58 hours each. The first fishing period will begin on June 25, 2024, at 8 a.m. PDT and close on June 27, 2024, at 6 p.m. PDT. The second fishing period will begin on July 9, 2024, at 8 a.m. PDT and close on July 11, 2024, at 6 p.m. PDT.

Following the initial two fishing periods, NMFS will assess fishery harvest and determine if the fishery has attained the non-tribal directed commercial allocation. If harvest estimates indicate the allocation has not been reached, NMFS may determine that subsequent fishing period(s) are necessary to attain the allocation. If a third fishing period occurs, it would occur no sooner than 3 weeks after the second fishing period. A third fishing period, and any subsequent fishing periods, would be announced in the Federal Register through inseason action consistent with 50 CFR 300.63(e).

A fishing period limit, also called a vessel catch limit, is the maximum amount of Pacific halibut that may be retained and landed by a vessel during one fishing period. Each vessel may retain no more than the current fishing period limit of Pacific halibut for its vessel class, which is determined by vessel length. NMFS is implementing the non-tribal directed commercial fishing period limits shown in table 1 below. Fishing period limits are intended to ensure that the Area 2A directed commercial fishery does not exceed its allocation, while also providing fair and equitable access across participants to an attainable amount of harvest.

If NMFS determines that more than two fishing periods are warranted, NMFS will set new associated fishing period limits and any such fishing period limits for subsequent fishing periods will be set equal across all vessel classes. Any subsequent fishing period limits would be announced in the Federal Register through inseason action consistent with 50 CFR 300.63(e).

The Area 2A non-tribal directed commercial fishery, which occurs south of Point Chehalis, WA, (lat. 46°53.30′ N), will open on June 25, 2024, at 8 a.m. PDT and close on June 27, 2024, at 6 p.m. PDT, and will re-open on July 9, 2024, at 8 a.m. PDT and close on July 11, 2024, at 6 p.m. PDT. The fishery's fishing periods may be adjusted inseason consistent with 50 CFR 300.63.

NMFS published a proposed rule on March 13, 2024 (89 FR 18368) and accepted public comments on the 2024 Area 2A Pacific halibut directed commercial fishery annual management measures through April 12, 2024. NMFS received one public comment.

Comment 1: NMFS received a comment from a member of the public expressing the opinion that retention of a Pacific halibut weighing over 150 pounds should not be allowed.

Response: Size limits were not within the scope of this action. However, NMFS has determined that this action is based on the best scientific information available. For 2024, the IPHC adopted a minimum size limit for commercial fisheries in its annual management measures (89 FR 19275, March 9, 2024). In addition, the IPHC previously examined maximum size limits  1 and is conducting ongoing research activities examining factors that influence Pacific halibut biomass. Consistent with its statutory and other obligations, NMFS will continue to keep abreast of the IPHC's ongoing research and ensure that its regulatory actions, including its approval of annual Pacific halibut management measures, are based on the best scientific information available.

Regulations governing the U.S. fisheries for Pacific halibut are developed by the IPHC, the Pacific Fishery Management Council, the North Pacific Fishery Management Council, and the Secretary of Commerce. Section 5 of the Halibut Act of 1982 (Halibut Act, 16 U.S.C. 773c) allows the Regional Council having authority for a particular geographical area to develop regulations governing the allocation and catch of Pacific halibut in U.S. Convention waters as long as those regulations do not conflict with IPHC regulations.

This final rule is exempt from review under Executive Order 12866 because this action contains no implementing regulations.

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.

NMFS, with the advice of the Gulf of Mexico Fishery Management Council (Council), manages the reef fish fishery, which includes gag, in Federal waters of the Gulf of Mexico (Gulf), under the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP). The Council prepared the FMP, which the Secretary of Commerce approved, and NMFS implements the FMP through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

On October 18, 2023, NMFS published a notice of availability for the review of Amendment 56 and requested public comment (88 FR 71812). On November 9, 2023, NMFS published a proposed rule for Amendment 56 and requested public comment (88 FR 77246). NMFS approved Amendment 56 on January 17, 2024.

Gag in Gulf Federal waters are found primarily in the eastern Gulf. Juvenile gag are estuarine dependent and often inhabit shallow seagrass beds. As gag mature, they move to deeper offshore waters to live and spawn. Gag is managed as a single stock with a stock annual catch limit (ACL) that is further divided or allocated into commercial and recreational sector ACLs. Currently, that allocation of the stock ACL is 39 percent to the commercial sector and 61 percent to the recreational sector. All weights in this final rule are given in gutted weight.

Commercial fishing for gag is managed under the individual fishing quota (IFQ) program for groupers and tilefishes (GT-IFQ program), which began on January 1, 2010 (74 FR 44732, August 31, 2009; 75 FR 9116, March 1, 2010). Under the GT-IFQ program, the commercial quota for gag is set 23 percent below the gag commercial ACL, and NMFS distributes allocation (in pounds) of gag on January 1 each year to those who hold shares (in percent) of the gag total commercial quota. Both gag and red grouper, another grouper species managed under the GT-IFQ program, have a commercial multi-use provision that allows a portion of the gag quota to be harvested under the red grouper allocation, and vice versa. As explained further in Amendment 56, the multi-use provision is based on the difference between the respective gag and red grouper ACLs and quotas. However, if gag is under a rebuilding plan, as will occur under Amendment 56 and this final rule, the percentage of red grouper multi-use allocation is equal to zero. Commercial harvest of gag is also restricted by area closures and a minimum size limit.

NMFS, with the advice of the Council, manages the recreational harvest of gag with an ACL, an annual catch target (ACT) set approximately 10 percent below the ACL, in-season and post-season accountability measures (AMs) to prevent and mitigate overfishing, seasonal and area closures, a minimum size limit, and daily bag and possession limits.

The most recent stock assessment for gag was completed in 2021 through Southeast Data, Assessment, and Review 72 (SEDAR 72), and concluded that the gag stock is overfished and is undergoing overfishing as of 2019. Compared to the previous assessment for gag, SEDAR 72 used several improved data sources, including corrections for the potential misidentification between black grouper and gag, which are similar looking species, to better quantify estimates of commercial discards. SEDAR 72 also used updated recreational catch and effort data from the Marine Recreational Information Program (MRIP) Access Point Angler Intercept Survey and Fishing Effort Survey (FES) through 2019. Prior to SEDAR 72, the most recent stock assessment for gag was SEDAR 33 Update (2016), which indicated that gag was not subject to overfishing and was not overfished. The SEDAR 33 Update used recreational catch and effort data generated by the MRIP Coastal Household Telephone Survey (CHTS).

SEDAR 72 also accounted for observations of red tide mortality directly within the stock assessment model. Gag is vulnerable to red tide events and was negatively affected by these disturbances in 2005, 2014, 2018, and projected for 2021. Modeling changes were also made in SEDAR 72 to improve size estimates of gag retained by commercial and for-hire (charter vessels and headboats) fishermen, and private anglers.

The Council's Scientific and Statistical Committee (SSC) reviewed the results of SEDAR 72 in November 2021 and concluded that the assessment was consistent with the best scientific information available and suitable for informing fisheries management. On January 26, 2022, NMFS notified the Council that gag was overfished and undergoing overfishing, and the Council subsequently developed a rebuilding plan for gag through Amendment 56.

At its January 2022 meeting, the Council requested that the NMFS Southeast Fisheries Science Center update the SEDAR 72 base model by replacing MRIP-FES landings estimates for the Florida private angling mode with landings estimates produced by the Florida Fish and Wildlife Conservation Commission's State Reef Fish Survey (SRFS). Historically, SRFS estimates a slightly higher fishing effort, and therefore a larger harvest of gag, by private anglers and state charter vessels (in Florida) than MRIP-CHTS, but SRFS estimates a substantially smaller harvest of gag by private anglers and state charter vessels than MRIP-FES. This alternative model run of SEDAR 72 (“SRFS Run”) used MRIP-FES data for the federally permitted charter vessel and shore modes, and data from the Southeast Region Headboat Survey (SRHS) for federally permitted headboats. The results of the SRFS Run were presented to the Council's SSC at its July 2022 meeting. The SSC found the SEDAR 72 SRFS Run to be consistent with the best scientific information available. The SSC determined that SRFS is a comprehensive survey for the gag private angling component of the recreational sector given that greater than 95 percent of private angling landings of gag are captured by the SRFS sampling frame and the SRFS program's collection protocol has been certified by the NMFS Office of Science and Technology as scientifically rigorous. NMFS worked in conjunction with the State of Florida to develop a calibration model to rescale historic effort estimates so that they could be compared to new estimates from SRFS. This calibration model was peer-reviewed and approved through the NOAA Office of Science and Technology in May 2022. Information about the calibration and the SSC's review of the SEDAR 72 SRFS Run can be found here: https://gulfcouncil.org/meetings/scientific-and-statistical-meetings/july-2022/. The results of the SEDAR 72 SRFS Run were consistent with the results of the SEDAR 72 base model in that both concluded that the gag stock is overfished and undergoing overfishing.

At the time that NMFS and the Council developed Amendment 56, the Council recognized that NMFS could not likely implement a potential final rule until 2024. Further, the Council recognized that maintaining the previously implemented catch limits for gag in 2023 would continue to allow overfishing. Therefore, the Council sent a letter to NMFS, dated July 18, 2022 (Appendix A in Amendment 56), requesting that NMFS implement interim measures that would reduce overfishing by reducing the gag stock ACL from 3.120 million pounds (lb) or 1.415 million kilograms (kg) to 661,901 lb (300,233 kg). The Council determined, and NMFS agreed, that for this short-term reduction in harvest it was appropriate to maintain the current allocation of the stock ACL between the sectors of 39 percent commercial and 61 percent recreational, and the availability of red grouper multi-use and gag multi-use under the IFQ program. In addition to the reduction in the catch limits, the Council requested that the recreational fishing season for 2023 begin on September 1 and close on November 10, rather than the existing open season of June 1 through December 31. NMFS agreed and implemented these interim measures through a temporary rule effective on May 3, 2023 (88 FR 27701, May 3, 2023). The measures in the temporary rule were initially effective for 180 days, and then NMFS extended them for up to 186 additional days (through May 2, 2024; 88 FR 69553, October 6, 2023), so NMFS could solicit and review public comments on the proposed rule and Amendment 56, and prepare final regulations as appropriate. Because the SSC's review of the SEDAR 72 SRFS Run occurred after the Council's decision to request interim measures for gag, the recreational catch limits in the temporary rule are consistent with MRIP-FES calibrated landings, and are not directly comparable to the catch limits recommended in Amendment 56 and this final rule.

Based on the results of the SEDAR 72 SRFS Run and SSC recommendations, the Council recommended the following changes for gag through Amendment 56:

• Revise the maximum sustainable yield (MSY) proxy, optimum yield (OY), and status determination criteria (SDC);

• Establish a rebuilding plan for the stock, and revise the overfishing limit (OFL), acceptable biological catch (ABC), and stock ACL consistent with that rebuilding plan;

• Revise the commercial-recreational allocation of the stock ACL and set new commercial and recreational sector ACLs, sector ACTs, and commercial quota;

• Modify the recreational AMs; and

• Revise the Federal recreational fishing season.

The current MSY proxy is based on the yield associated with a fishing mortality rate (F) associated with the maximum yield per recruit (F MAX ). The SSC recommended a more conservative MSY proxy using the yield associated with F that would result in a spawning stock biomass (SSB) of 40 percent of the spawning potential ratio (SPR; F 40 % SPR ), where SPR is the ratio of the SSB to its unfished state. This revised MSY proxy of F 40 % SPR was used to specify the long-term OY and SDC, and informs the catch level projections produced by the SEDAR 72 SRFS Run.

For gag, the sector allocations of the stock ACL affect the catch level projections produced by SEDAR 72. As more of the stock ACL is allocated to the recreational sector, the proportion of recreational discards and associated mortality increases. Recreational discard mortality rates of gag are assumed to be less than commercial discard mortality rates but the total number of recreational discards is considerably greater than the number of commercial discards. Generally, a gag caught and released by a recreational fisherman has a greater likelihood of survival than by a commercial fisherman because of how and where they fish. However, because of the much higher numbers of gag that are released by the recreational sector compared to the commercial sector, the total number of discarded fish that die from recreational fishing exceeds dead discards from commercial fishing. This results in additional mortality for the stock and a lower projected annual yield, which means a lower OFL, ABC, and stock ACL. However, higher number of dead discards is not due to any change in how the recreational sector operates in the fishery but occurs because the SEDAR 72 SRFS Run data estimated greater fishing effort, and consequently a greater number of fish being caught, which included discards and the associated mortality from discarding fish.

After analyzing multiple alternatives for allocating the stock ACL between the fishing sectors, the Council determined and recommended to NMFS that using the allocation of 35 percent commercial and 65 percent recreational would best represent the historic landings for each sector while accounting for the change from data produced by the Marine Recreational Fisheries Statistics Survey (MRFSS) to SRFS data. Based on the results of the SEDAR 72 SRFS Run and the allocation ratio, the Council recommended OFLs and ABCs for gag during 2024-2028, and recommended the stock ACL be set equal to the ABC.

This final rule will modify the gag stock and sector ACLs, sector ACTs, commercial quota (which is equivalent to the commercial ACT), recreational AMs, and recreational fishing season as described further.

The 2023 temporary rule for gag implemented the current commercial ACL and commercial quota of 258,000 lb (117,027 kg) and 199,000 lb (90,265 kg), respectively, and the recreational ACL and ACT of 403,759 lb (183,142 kg) and 362,374 lb (164,370 kg), respectively. These catch limits are based on the results of the initial SEDAR 72 base model run, which included recreational landings estimates generated using MRIP-FES.

Amendment 56 and this final rule will set the stock ACL for gag at 444,000 lb (201,395 kg) in 2024, and will allocate approximately 35 percent to the commercial sector and approximately 65 percent to the recreational sector. This results in a 155,000-lb (70,307-kg) commercial ACL and a 288,000-lb (130,635-kg) recreational ACL for 2024. As explained in the proposed rule and in this final rule, these catch limits are based on the results of the SEDAR 72 SRFS Run. Because of the different surveys used to estimate recreational landings that were then used to determine the current catch limits and the catch limits in this final rule, the catch limits are not directly comparable. However, the catch limits in this rule are a significant reduction compared to the catch limits that would go back into effect if the 2023 temporary rule expires with no further action. Catch levels will be set from 2024 through 2028, which increase during the time series. The 2028 catch levels will continue after 2028 unless modified by subsequent rulemaking. All of the catch levels recommended by the Council in Amendment 56 were rounded down to the nearest thousand pounds. Therefore, the sum of the sector ACLs does not equal the stock ACL.

Based on the Council's recommendation, this final rule will set the commercial quota equal to the commercial ACT, and the commercial quota will be approximately 5 percent below the commercial ACL. The current buffer between the commercial ACL and commercial quota is 23 percent. The Council recommended reducing this buffer, because there have been considerable improvements in the estimation of commercial landings and discards of gag since NMFS implemented the buffer in 2012. Further, the fraction of gag discarded compared to the total number of gag caught by the commercial sector has remained low. NMFS does not expect the actions in Amendment 56 and this final rule to significantly increase commercial discards of gag. Therefore, the commercial quota, the amount of gag allocation that NMFS distributes annually to IFQ shareholders, will be approximately 95 percent of the commercial ACL.

For the recreational sector, the current buffer between the ACL and ACT is approximately 10 percent. The Council recommended a more conservative ACT than if they had applied the ACL and ACT control rule, which would have resulted in a 10 percent buffer between the ACL and ACT. Instead, the Council recommended doubling that buffer to increase the probability of rebuilding gag by accounting for uncertainty in managing the recreational harvest and further reducing fishing mortality and discards that result from directed harvest. NMFS agrees, thus, this final rule will implement a recreational ACT that is approximately 20 percent below the recreational ACL. Table 1 shows the catch levels recommended in Amendment 56, and except for the stock ACL, these catch levels are included in the regulatory text at the end of this rule.

Currently for the recreational sector, the AMs require NMFS to prohibit harvest of gag for the rest of the fishing year when recreational landings reach its ACL. The AMs also state that if the recreational ACL for gag is exceeded in a fishing year, then in the following fishing year, NMFS will maintain the prior year's ACT at the same level, unless the best scientific information available determines that is unnecessary, and the fishing season duration will be set based on the recreational ACT. In addition to the previous measures, if gag is overfished and the recreational ACL is exceeded in a fishing year, NMFS will reduce the ACL and ACT in the following fishing year by the amount of the ACL overage, unless the best scientific information available determines that is unnecessary. Amendment 56 and this final rule change the recreational AMs to require that NMFS prohibit harvest when the recreational ACT is projected to be met regardless of whether there was an overage of the recreational ACL in the prior year. NMFS and the Council expect this change, in combination with the increased buffer between the recreational ACL and ACT, to decrease the likelihood of recreational harvest exceeding the recreational ACL. The larger buffer between the recreational ACL and ACT will also reduce the level of discards associated with directed harvest, increasing the probability of meeting the 18-year rebuilding time.

This final rule will also remove the recreational AM that requires the previous year's ACT to be maintained in the year following an overage of the recreational ACL. Because the stock is overfished and NMFS is required to reduce the ACL and ACT by any overage, an additional adjustment that retains the lower ACT is unnecessary.

Before NMFS implemented the temporary recreational fishing season for gag in 2023, the recreational season for gag was open each year from June 1 through December 31 (79 FR 24038, April 25, 2016). During the effective period of the temporary rule, the recreational fishing season opened on September 1 and was to close on November 10, 2023, unless NMFS projected the recreational ACL would be harvested prior to that date. On October 4, 2023, NMFS published a temporary rule in the Federal Register closing the recreational harvest of gag effective on October 19, 2023 (88 FR 68495).

This final rule will modify the recreational fishing season for gag so the season begins each year on September 1. Unlike the season implemented by the temporary rule, Amendment 56 and this final rule do not establish a predetermined season closure date. Consistent with the changes to the AMs, NMFS will close the gag recreational season when landings reach the recreational ACT. NMFS will use the best data available to project the duration of the recreational season in 2024 and in following years. NMFS expects to have better estimates of recreational fishing effort and catch of gag for a season beginning September 1 after data from 2023 are finalized. This should reduce the uncertainty in projecting an appropriate closure date for the 2024 recreational fishing season. Once the recreational ACT for gag is projected to be met and harvest is closed, recreational fishing for gag would not resume before the end of the year because data would not be available in time for NMFS to determine whether landings did reach the ACT and potentially reopen harvest.

In addition to the measures that will be codified in regulations through this final rule, Amendment 56 revises the MSY proxy, OY, and SDC for gag. Further, Amendment 56 revises the gag OFL, ABC, and sector allocations of the stock ACL.

Based on the results of SEDAR 72, Amendment 56 revises MSY proxy, OY, and the SDC used to determine whether overfishing is occurring or the stock is overfished. The proxy for MSY is defined as the yield when fishing at F 40 % SPR , where SPR is the ratio of SSB to its unfished state. The maximum fishing mortality threshold (MFMT) is equal to F 40 % SPR . The minimum stock size threshold (MSST) is defined as 50 percent of the biomass at the new MSY proxy. The OY is conditional on the rebuilding plan, such that if the stock is under a rebuilding plan, OY is equal to the stock ACL; and if the stock is not under a rebuilding plan, OY is equal to 90 percent of MSY or its proxy. Currently, MSY is defined in the FMP as F assuming F MAX , and the MFMT is F MAX . The MSST is defined as 50 percent of the biomass at F MAX . The OY is defined as 75 percent of the yield at F MAX . The changes to the MSY, OY, and SDC represent a more conservative approach to management that will rebuild the gag stock to a more robust size, which should be more resilient to episodic mortality from environmental factors including red tide and other harmful algal blooms, and sustainable levels of fishing mortality.

Amendment 56 establishes a rebuilding plan and sets the rebuilding time for gag at 18 years, which is based on the amount of time the stock is expected to take to rebuild if fished at 75 percent of the MSY proxy (yield at F 40 % SPR ). Amendment 56 evaluated two other rebuilding times: 11 years, which is the minimum time to rebuild in the absence of fishing mortality; and 22 years, which is twice the minimum time. In addition, the Council initially considered an alternative rebuilding time of 19 years, which is based on the minimum rebuilding time plus one generation time (8 years for gag). Because this option resulted in a rebuilding time similar to fishing at 75 percent of the MSY proxy, the Council removed this alternative from further consideration (Appendix C in Amendment 56). The Council also discussed whether to consider in more detail a rebuilding time between 11 years and 18 years. The Council decided not to add an additional alternative because a slightly shorter rebuilding time would provide minimal benefits to the stock but increase the negative impacts to fishing communities.

Consistent with the rebuilding time recommended by the Council, Amendment 56 revises the OFL and ABC, and sets the stock ACL equal to the ABC. In addition, Amendment 56 revises the sector allocation percentages of the stock ACL from 39 percent commercial and 61 percent recreational to 35 percent commercial and 65 percent recreational, and revises the sector ACLs consistent with the revised allocations as stated earlier in this final rule. The OFL and ABC values by year from 2023 through 2028 are shown in table 2. However, the OFL and ABC values in 2023 are not directly comparable to the OFLs and ABCs from 2024 through 2028, because they are based, in part, on recreational landings estimates produced by the different surveys discussed earlier. Values in 2028 will continue for subsequent fishing years unless modified through another action by the Council or NMFS.

NMFS also clarifies the regulations at 50 CFR 622.8(c) with this final rule. These regulations allow NMFS to re-open harvest for a stock in the same fishing year if data indicate that a quota or ACL was not reached as previously projected. Several stocks have ACTs that are also codified in regulation as quotas. However, some ACTs, such as the recreational ACT for gag, do not have corresponding quotas, and therefore may not appear to be included in the current authority to re-open. NMFS is modifying the regulations in section 622.8(c) to provide a more general reference to allowable harvest levels. This will be consistent with the framework procedures in the relevant fishery management plans that allow NMFS to re-open harvest if additional data show that NMFS closed a season prematurely.

NMFS received 33 comments in response to the notice of availability for Amendment 56, and 10 comments were received on the proposed rule. Comments ranged widely in scope, with some supporting Amendment 56 without modification, while others urging disapproval. In general, recreational fishermen and groups supporting recreational fishing are in favor of the revised allocation percentages of the stock ACL for gag between the commercial and recreational sectors in Amendment 56 and this final rule. Commercial fishermen, commercial fishing organizations, and environmental groups generally supported maintaining the current allocation percentages of the stock ACL for gag between the commercial and recreational sectors. Some comments that NMFS received were outside the scope of this action. These comments included suggestions that the for-hire component of the recreational sector be moved to the commercial sector; concern that predation and depredation by sharks and goliath grouper are responsible for much of the decline in abundance of gag and reef fish abundance in general; concern of interspecies competition with red snapper and triggerfish on the reefs due to perceived inadequate management of these species; concern that fertilizer runoff is a causal factor in the decline of gag; NMFS should provide an annual health check to ensure the rebuilding plan for gag is on track; and NMFS and the Council should be managing the reef ecosystem as a whole rather than just by individual fish species. Comments specific to Amendment 56 and the proposed rule are grouped as appropriate and summarized below, each followed by NMFS' respective response.

Comment 1: Several commenters did not support the proposed recreational season. Suggested alternatives included a June 1 start date; seasons from November through February, and October to January; or shorter, intermittent season openings ( e.g., a season open a few weeks at a time throughout the summer and fall).

Response: The Council recommended, and NMFS approved, the recreational season start date in Amendment 56 of September 1 to try to provide the longest season possible. The analysis in Amendment 56 indicated that beginning the season on September 1 would result in the longest recreational fishing season of the alternatives considered. For example, initial estimates are that a June 1 start date would result in a recreational season lasting only 16 days. Regarding the suggested October through January season and November through February season, NMFS estimated that the high fishing effort and catch rates during October through December would result in fewer fishing days than a September 1 starting date. Shorter seasons, including intermittent season openings, are more likely to result in derby-like (race to fish) fishing, where greater effort and greater numbers of fish are harvested in a shorter period, and fishermen may decide to go out in more dangerous weather and sea conditions. The September season start date promotes safety of human life at sea to the extent practicable, consistent with National Standard 10 (NS 10) of the Magnuson-Stevens Act.

Comment 2: The recreational season should be fixed, and NMFS should not prohibit harvest before the established closure date.

Response: NMFS disagrees that it is appropriate to allow fishing until a fixed annual closure date. The Magnuson-Stevens Act requires AMs, which the NS 1 guidelines explain are management controls to prevent ACLs, including sector ACLs from being exceeded [50 CFR 600.310(g)]. The recreational AMs for gag at 50 CFR 622.41(d)(2)(i) require NMFS to prohibit further harvest when NMFS estimates that recreational landings will reach or have reached the applicable catch limit. Allowing fishing to continue until a date certain after NMFS determines that landings would reach the catch limit would not be consistent with the AMs. In 2023, the Council recommended and NMFS implemented, a recreational fishing season for gag that opened on September 1 and was to close no later than November 10, for a maximum of 70 days. However, NMFS explained that if the best available data indicated that the catch limit would be harvested before the end of the 70-day period, NMFS would implement a recreational closure prohibiting harvest of gag for the remainder of the fishing year. When NMFS analyzed in-season data that became available during the 2023 open season, NMFS determined that the 2023 ACL for gag had been harvested and closed the recreational season on October 19, 2023. Amendment 56 and this final rule do not specify an end date to the recreational season, which has an opening date of September 1, 2024. Consistent with the AMs, NMFS will use the best scientific information available to determine when recreational harvest will reach the applicable catch limit and close the season on that date.

Comment 3: Several commenters suggested closing commercial and recreational fishing for reef fish for a year or making gag catch and release only until the population rebuilds. Another commenter suggested further reductions to the gag catch limits for the commercial and recreational sectors.

Response: As described in Amendment 56, the NMFS Southeast Fisheries Science Center produced models to predict the effect of reducing gag catch to different levels and estimate how quickly those reduced catch levels would rebuild the gag stock. The models estimated that even if there were no fishing mortality, including no dead discards, the stock would take 11 years to rebuild. Thus, implementing a total fishing closure for 1 year, including no catch and release fishing (and thus no landed catch), or further reducing landed catch limits would not be expected to result in a substantial reduction in the time needed to rebuild the stock. In addition, a complete closure of gag fishing would result in the loss of important fishery-dependent and biological information that help monitor stock rebuilding and in determining appropriate management of gag and other reef fish species. In addition, prohibiting fishing for 1 year or further reducing the catch limits would increase adverse social and economic effects on fishermen and communities that are reliant on gag. (See the response to Comment 4 for more information on the expected economic effects of Amendment 56 and this rule.)

Comment 4: The low quotas are causing economic hardships for commercial fishermen who cannot pay their bills.

Response: NMFS agrees that the significant reduction in the commercial quota for gag is expected to have adverse economic effects on commercial fishing businesses, and some commercial vessels and fishing businesses may not be earning an economic profit. However, the most recent available data does not indicate that the average commercial fishing vessel that harvests gag or the average commercial fishing business that possesses quota shares for gag is not able to cover its costs or earn an economic profit. Available data suggests that vessels harvesting gag earn economic profits equal to about 32 percent of their annual gross revenue on average. Further, available data suggests that expected economic profits from the harvest of IFQ species (red snapper, groupers, and tilefishes) for all commercial fishing businesses that possess gag shares are at least $29.4 million. This estimate does not account for any economic profits that may accrue to businesses with gag shares that also own commercial fishing vessels that harvest non-IFQ species. Such profits are likely to be small because harvest of IFQ species accounts for around 84 percent of commercial IFQ vessels' annual revenue and economic profits from the harvest of non-IFQ species tend to be smaller than those from IFQ species. Given that there are 455 commercial fishing businesses that possess gag quota shares, the average annual expected economic profit per commercial fishing business is at least $64,620.

Most of these expected economic profits (84 percent) are the result of owning IFQ quota shares for red snapper. Only approximately 1.7 percent of their expected economic profits is thought to be due to the ownership of gag quota shares, and NMFS expects this rule to affect economic profits only from the ownership of gag shares. More specifically, the action to change the sector allocation, implement a rebuilding plan, and change the stock ACL will reduce the commercial quota from 939,000 lb to 212,000 lb (425,923 kg to 96,162 kg) on average from 2024 through 2028. However, average annual commercial landings of gag from 2017 through 2021 were only 492,401 lb (223,349 kg), which is noticeably below the current commercial quota. Therefore, the expected average reduction in annual commercial landings is 280,401 lb (127,188 kg), far less than the reduction in the commercial quota. In addition, the expected reduction in commercial landings is expected to initially increase the average ex-vessel price of gag from $6.10 per lb to $7.78 per lb in 2024, and then gradually decrease to $6.96 per lb in 2028. This increase in the ex-vessel price is expected to partially offset the adverse effects of the expected landings reduction. Thus, the expected reduction in ex-vessel revenue for gag on average is approximately $1.57 million per year. Given an average annual allocation price of $1.03 per lb for gag, the expected reduction in commercial landings of gag is expected to reduce economic profits to these commercial fishing businesses by about $288,813, or by approximately $635 per commercial fishing business. Thus, NMFS expects the reduction in economic profits to be around 1 percent on average per commercial fishing business as a result of the action to change the sector allocation, implement a rebuilding plan, and change the stock ACL. NMFS does not expect a 1 percent reduction in economic profits to cause an economic hardship for the average commercial fishing business that possesses quota shares for gag.

Comment 5: The gag population is healthy. The catch level reductions for gag are unnecessary.

Response: NMFS disagrees that the reduction in the gag catch limits are unnecessary. The most recent stock assessment for gag (SEDAR 72), completed in 2021, is the best scientific information available, indicates that the gag stock is overfished and undergoing overfishing, and that a reduction in the catch limits is necessary to rebuild the stock. The assessment included a multi-day data review workshop and several webinars, was peer reviewed, and was reviewed by the Council's SSC. NMFS recognizes that the abundance of gag varies across locations. However, gag is managed as a single stock in the Gulf, and the stock assessment, which used Gulf-wide data, concluded that the overall abundance has declined since the previous gag stock assessment was completed in 2016. This conclusion is supported by the inability of both the commercial and recreation sectors to harvest their allotted catch limits of gag. In the last 5 years covered by SEDAR 72 (2015 through 2019), the combined commercial and recreational harvest exceeded 50 percent of the gag stock ACL only once (2016).

Comment 6: Recreational data used in making decisions for gag management, such as the assessment and catch-per-unit-effort calculations, have too much error and should not be used. NMFS should only use recreational data that have less than 25 percent standard error.

Response: The Magnuson-Stevens Act requires that fishery conservation and management decisions be based on best scientific information available. The percent standard error associated with an estimate reflects the uncertainty in that estimate. Although NMFS recognizes that reducing standard error in recreational catch estimates for gag would be beneficial, the estimates for recreational catch that are used in Amendment 56 are based on best scientific information available, and are thus appropriate to be used in management. Sometimes the data determined to be the best scientific information available do not have a PSE of less than 25 percent, but the data are necessary and appropriate to be used for management. NMFS sets catch levels (such as ABC and ACL) to address both scientific and management uncertainties. As newer and better data become available, NMFS will update analyses and methodologies to reduce uncertainty in future management decisions. However, the management measures implemented through this final rule are based on best scientific information available at the time they were developed.

Comment 7: Gag shortages are caused by man-made red tide caused by pollution. Red tides are one of the primary drivers of mortality and the cause of overfishing. Red tide is not sufficiently addressed in the management actions within Amendment 56 as required by the Magnuson-Stevens Act and the NS 1 guidelines. In addition, the amendment should include management actions that address climate change impacts. The climate vulnerability analysis (CVA) indicates that gag has a high overall vulnerability to climate change impacts, yet no management considerations are suggested to alleviate the risks. An MSY proxy of 40 to 50 percent of the SPR is a more appropriate baseline for conservation of the stock but does not directly mitigate impacts from environmental conditions and therefore is not a sufficient management action to address the environmental conditions that are contributing to overfishing.

Response: NMFS recognizes that red tide is one of the primary drivers of mortality for gag, and that gag are highly susceptible to negative impacts of climate change (as indicated by the CVA for gag). Red tide has occurred throughout the known history of the Gulf, and while not man-made, there is evidence suggesting that human induced factors, including pollution, may increase the intensity of red tide events. Still, despite extensive research on causes and factors exacerbating red tide events, much is unknown about these events and how to reduce the negative effects they have on the environment and, specifically, on gag. Further, the timing, location, and intensity of red tide is intermittent, not predictable, and highly variable, as are their effects on gag. For example, while red tide can be associated with large mortality events for gag, it is also often associated with higher than normal recruitment of gag in the following year (presumably due to density dependence mechanisms of gag ecology, such as less competition for food or ideal habitat).

Regarding climate change, the CVA for gag identified the sensitivities and exposures that contribute to the stock's high vulnerability. However, the analysis recognized that few studies have examined the effect of climate factors on the population productivity and distribution of gag, and that it is unclear how any changes will impact abundance and distribution of the stock. Thus, although NMFS is concerned about the increasing negative impacts of climate change on gag as estimated by the CVA and how these factors, in addition to red tide, may negatively affect gag population dynamics in the future, NMFS has determined that Amendment 56 includes measures that sufficiently address the uncertainty related to these impacts.

The SEDAR 72 gag stock assessment directly considered the expected mortality associated with red tide but NMFS models do not account for the increased recruitment associated with these events due to the high level of uncertainty associated with this process. This is because while increased recruitment after a red tide event is predictable, the magnitude of the increase is not.

Despite the uncertainty, Amendment 56 contains management changes to take a more precautionary approach, such as using rebuilding catch projections that are based on the SSB for males and females combined as opposed to just female SSB, and modifying the MSY proxy to be F 40 % SPR . These changes are expected to help mitigate the adverse effects of both red tide events and climate change by directly accounting for male SSB, which has been recognized as a limitation on rebuilding, and rebuilding the stock to a larger size stock size based on the revised MSY proxy. NMFS does not agree that the MSY proxy should be set at a more conservative level. As explained in Section 1.1 of Amendment 56, the SSC recommended an MSY proxy of F 40 % SPR based on gag's susceptibility to episodic mortality from red tide and guidance from a 2019 study by Harford et al. The SSC concluded that an MSY proxy of F 40 % SPR would allow the stock to rebuild to a more robust level of SSB making it more resilient to environmental influences like red tide and to changes in fishing mortality. NMFS agrees with the SSC that an MSY of F 40 % SPR is sufficiently conservative to address current and foreseeable mortality due to fishing and environmental factors.

Comment 8: Amendment 56 and this final rule violate section 303(a)(15) of the Magnuson-Stevens Act, which requires hard catch limits and AMs that will ensure that ACLs will not be exceeded and overfishing will not occur in the fishery. There is no certainty that the measures included in Amendment 56 and the proposed rule will end overfishing. While Amendment 56 includes a 20 percent buffer between the recreational ACL and ACT, the ACT is not an effective recreational AM because it does little to address discards either in or out of season, and targeted recreational catch is not driving overfishing. Further, by admitting that an exact accounting of total gag mortality cannot be determined at this time, NMFS concedes that Amendment 56 does not include legally sufficient ACLs and AMs.

Response: Amendment 56 and the FMP are consistent with the requirements of section 303(a)(15) of the Magnuson-Stevens Act, which requires the FMP to include ACLs, at a level such that overfishing does not occur, and AMs. With respect to discarded fish, there is no requirement in this provision to separately specify or monitor discard mortality. The NS 1 guidelines define catch as including both landed fish and dead discards [50 CFR 600.310(f)(1)(i)]. However, the NS 1 guidelines also state that the ABC, on which the ACLs are based, may be expressed in terms of landings as long as estimates of bycatch and any other fishing mortality not accounted for in the landings are incorporated into the determination of ABC [50 CFR 600.310(f)(3)(i)]. The OFL, ABC, and ACLs specified in Amendment 56 are derived from SEDAR 72 SRFS Run, which accounted for dead discards estimates that were derived from the best scientific information available. Thus, an exact accounting of total mortality is not necessary to apply the AMs to constrain harvest to the ACLs, which are expressed in terms of landed fish only. In addition, as explained in response to Comment 10, NMFS recognizes that a significant portion of past gag recreational catch occurred when the recreational season is closed, and is thus discarded, but NMFS expects the significant reduction in the stock ACL as well as the larger buffer between the recreational ACL and ACT, to result in much lower overall gag mortality as required by the rebuilding plan.

Comment 9: The rebuilding plan is legally insufficient because there are no interim measures to monitor the total mortality from discards, as only landings are used for management in non-assessment years.

Response: NMFS disagrees that the rebuilding plan is not legally sufficient. It is unnecessary to monitor discards directly because the rebuilding catch limits are expressed as landed fish. Discard mortality is incorporated into the determination of these catch limits through the SEDAR 72 SRFS Run, which is consistent with the best scientific information available.

Comment 10: The management measures in Amendment 56 and the proposed rule are insufficient to provide at least a 50 percent probability of rebuilding the gag stock because they do not adequately address discard mortality resulting from recreational sector bycatch. The projections from the stock assessment assume that discards will be reduced proportionally to landed catch but this assumption has been proven false. The private recreational sector discards an estimated 90 percent of gag that are caught, suggesting that the majority of gag interactions occur as non-target interactions. The actions in the amendment do not reduce discards, and Amendment 56 suggests these actions are likely to increase discards, because under the rebuilding plan, increased regulatory discarding of gag would occur during any open fishing season for co-occurring target species ( e.g., red grouper, red snapper). In order to reduce discards to appropriate levels, fishery managers must rely on the improbable scenario that individual anglers take action to intentionally avoid gag and therefore reduce their collective discard rates.

Response: NMFS disagrees that the measures being implemented do not provide at least a 50 percent probability of rebuilding the stock. While NMFS recognizes that a significant portion of past gag recreational catch occurred when the recreational season is closed and, therefore, was discarded, the basis for the commenter's assumption that the majority of gag interactions occur as non-target interactions is unclear. Further, NMFS does not agree that this means imposing new stricter catch limits will not rebuild the stock as projected.

With respect to the recreational sector, this rule will further reduce the allowable harvest by increasing the buffer between the recreational ACL and the ACT by 10 percent more than necessary to account for the uncertainty in constraining recreational harvest. This additional 10 percent reduction in recreational harvest will further reduce mortality and increase the probability of rebuilding.

NMFS also disagrees that the assumption that discards will be reduced proportionally to landed catch “has been proven false.” NMFS does not have comparable catch or effort data to test this assumption because of the lower catch limits and changes in the dates of the recreational season. Thus, NMFS cannot precisely predict the effects of the management measures in this final rule until we have appropriate data, which will likely be after a few years of rebuilding (including the changes in recruitment, etc. ) has been completed. Further, many factors affect angler behavior and discards, including changes in the number of fish recruiting (entering) the fishery, open and closed seasons for other reef fish species, and prevailing economic conditions which can affect the amount of angler fishing effort and catch and discard rates.

NMFS expects the change to a September 1 opening date for the recreational season to result in recreational fishermen targeting gag in shallower and colder waters than the previous season, which should further increase survivability of released fish and result in additional escapement contributing to rebuilding the stock. Consistent with section 304(e)(7) of the Magnuson-Stevens Act, NMFS will review rebuilding plan progress. If NMFS determines that adequate progress is not being made because fishing mortality (both landings and discards) exceeds the level necessary to rebuild the gag stock, NMFS will notify the Council and recommend further conservation and management measures, including potential development and implementation of a new or revised rebuilding plan.

Comment 11: The rebuilding plan is legally insufficient because the rebuilding projections (and increases in the ACL) are dependent on the assumption that the sectors will operate as they have in recent years, which we know to be a false assumption.

Response: The stock assessment model requires assumptions about future fishing behavior to produce appropriate catch limit recommendations. The SEDAR 72 SRFS Run assessment projections assume that selectivity, discarding, and retention were the same as the most recent year, which was 2019. This is the best available scientific information at the time those projections were developed. NMFS does not have any data to determine the extent or magnitude of any potential changes to fishing practices. As new data become available on any changes in fishing practices, NMFS can revisit the assessment assumptions as appropriate. NMFS can also use any new data to improve in-season management. For example, NMFS recognizes that changing the start date of the recreational fishing season from June 1 to September 1 is likely to change how the recreational sector operates both during and outside of the open season. While the scope of the effects from the change are not well understood, NMFS is in the process of fully analyzing 2023 data, during which the gag catch limits were reduced and the recreational season started on September 1. Since the 2023 interim regulations are more directly comparable to those being implemented in Amendment 56 and the final rule, NMFS will be more able to accurately predict and anticipate factors such as recreational fishing effort, harvest rates, in-season and out-of-season bycatch rates, and other variables that may result in differential effects to the gag population. Thus, as more appropriate and comparable data are collected, NMFS has the ability to mitigate negative impacts and can take steps to ensure the schedule to rebuild the gag stock is maintained.

Comment 12: Amendment 56 is insufficient to provide at least a 50 percent probability of rebuilding success because it would increase the ACLs each year after 2024. By 2027, the commercial ACL will be only approximately 50 percent of 2022 commercial landings but the recreational ACL will be greater than 2022 recreational landings as estimated by MRIP-CHTS. NMFS should implement a precautionary constant catch approach for gag that would maintain catch at baseline levels and would not proceed with increases until there are tangible signs of stock improvement. A constant catch approach paired with more frequent interim assessments and monitoring of discarding and red tide trends would add baseline protection to this highly vulnerable stock and improve the likelihood of rebuilding success.

Response: NMFS disagrees that because the catch limits for gag increase over time, the probability of rebuilding success will be less than 50 percent and that a more precautionary constant catch approach is appropriate. First, the rebuilding plan is based on the stock assessment, which was informed by the more conservative MSY proxy of F 40 % SPR and the recommendations from the Council and SSC that include the increases to the commercial and recreational ACLs adopted in this final rule. Second, NMFS will set the recreational season length based on when the recreational ACT is projected to be met as specified in the revised AMs. It is inappropriate to compare the MRIP-CHTS recreational landings estimate from 2022 to the 2027 recreational ACT, which is based in part on SRFS data. Using consistent recreational data from SRFS, the recreational ACT increases from 230,000 lb (104,326 kg) in 2024 to 600,000 lb (272,155 kg) in 2028, which is well below average recreational landings from 2017 through 2021, which were over 1.2 million lb (544,311 kg). Even if the ACL were the management target, the recreational ACL for 2028 is only 751,000 lb (340,648 kg), which is approximately 63 percent less than the 1.2 million-lb (544,311-kg) average. Finally, a constant catch approach that keeps the stock ACL at the 2024 baseline level would increase the adverse economic and social effects on fishery participants and fishing communities, without significant benefits to stock. As explained in Amendment 56, a rebuilding plan that is based on no fishing mortality would be expected to rebuild the stock in 11 years, as opposed to the 18-year rebuilding plan implemented in this final rule. Thus, a constant catch rebuilding plan that keeps the 2024 stock ACL of 444,000 lb (201,395 kg) is unlikely to result in a significant reduction of the projected rebuilding time but would increase the negative social and economic impacts as discussed in Chapters 4, 5, and 6 of Amendment 56. This would not be consistent with section 304(e)(4) of the Magnuson-Stevens Act, which requires that the rebuilding period for an overfished stock be as short as time possible, taking into account both the biology of the stock and the needs of fishing communities or NS 8, which requires, in pertinent part, that conservation and management measures minimize adverse economic impacts on such fishing communities to the extent practicable.

Comment 13: Amendment 56 is insufficient to provide at least a 50 percent probability of rebuilding success because it fails to address the key biological vulnerabilities of the gag stock including reducing mortality of older, male fish and improving male recruitment (escapement of females and transitioning males) from nearshore reefs so that a greater percentage can become older and transition to male.

Response: NMFS disagrees with the premise that male gag mortality and recruitment need to be addressed directly for the rebuilding plan to have a least a 50 percent chance of success. Amendment 56 includes several measures that address concerns related to male gag mortality and recruitment. A long history of harvesting large males and large fecund females is a large part of the issue with the current sex ratio of gag. Amendment 56 substantially reduces allowable harvest of gag for both the commercial and recreational sectors, which is expected to reduce overall mortality of gag, including that of older adult male fish, and increase male recruitment. In addition, the discard mortality rate is relatively low in the recreational sector due to the generally shallower depth of fishing when compared to the commercial sector, so there would be reduced mortality from reduced catch limits contributing to rebuilding the stock in the long run. Further, NMFS expects the commercial sector to be able to avoid large individuals specifically due to more selective fishing practices as they manage their limited individual fishing quota allocations, which should result in improvements in the stock by reducing pressure on these large gag. Reduced catch limits are also expected to result in greater recruitment of male gag because they will result in more fish in the population, and thus more fish will be available to move to deeper offshore waters to transition to male.

In addition to the lower catch limits, the change in the recreational fishing season from a June 1 start date to a September 1 start date is expected to result in reduced harvest of male gag, which are found almost exclusively in deep water. Fishermen have often reported at Council meetings that gag feed more aggressively when water temperatures are cooler, and particularly when nearshore waters are cooler. Further, studies have shown that discard mortality is lower when fish are caught and released into cool surface water compared to warm surface water. Thus, capturing and releasing gag during summer months, especially from deeper water where barotrauma becomes an increasingly influential factor on discard mortality for gag, is likely to result in increased discard mortality compared to capturing and releasing gag during comparatively cooler fall and winter months. Because directed fishing effort for gag in summer months is typically conducted in greater average depths than in fall months, the probability of harvesting or discarding dead a male gag is higher by comparison in these summer months. Therefore, changing to a September opening of the recreational season is expected to contribute to a reduced mortality of adult male gag.

Comment 14: Amendment 56 violates Magnuson-Stevens Act NS 9 because it allocates fish to the recreational sector and away from the commercial sector. NMFS data estimates that the commercial sector was responsible for less than 1 percent of all gag discards between 1993 and 2019. Choosing an alternative that provides a lower catch limit to the recreational sector and consequently provides a higher gag stock ACL would allow for less waste, more landings, and minimize discards. In addition, the Bycatch Practicability Analyses (BPA) in Amendment 56 does not analyze whether the FMP contains measures to reduce bycatch to the extent practicable, and has no discussion of other measures that could reduce bycatch or bycatch mortality, for example, whether requiring larger circle hooks could reduce catch of smaller grouper; and time or area closures and the effects on bycatch. Other significant discard analyses, including projections, should have been considered and included in the rebuilding plan. Examples include projections at higher and lower discard rates than is assumed, higher uncertainty, etc., to identify at what level of discarding may be occurring on an annual basis. A thorough discard analysis is critical to ensuring the proposed management measures will end overfishing and rebuild the stock. Additional analysis should also have been done to minimize out-of-season discarding through other measures, such as spatial closures or discarding rates during other species' open seasons, and the ABC should reflect any uncertainty from these analyses.

Response: NS 9 requires that conservation and management measures, “to the extent practicable: (1) minimize bycatch; and (2) to the extent bycatch cannot be avoided, minimize the mortality of such bycatch.” Conservation and management measures must also be consistent with all of the other National Standards and maximization of net benefits to the Nation. As the National Standard guidelines explain, 10 factors should be considered when determining consistency with NS 9. Some of these factors include population effects for the bycatch species; changes in the economic, social, or cultural value of fishing activities, and non-consumptive uses of fishery resources; changes in the distribution of benefits and costs; and social effects [50 CFR 600.305(d)(3)]. Thus, NS 9 does not require that management measures result in the greatest stock size as the comment appears to suggest. Rather, NMFS must consider and account for the different economic, social, and cultural objectives of the commercial and recreational sectors when determining whether management measures minimize bycatch and bycatch mortality to the extent practicable. Participants in the commercial sector tend to seek to maximize harvest and efficiency while participants in the recreational sector tend to seek to maximize access and fishing opportunities. The sectors operate differently to achieve those objectives, and these differences impact fishing behavior, which generally results in more discards by the recreational sector.

The BPA (Appendix H in Amendment 56) provides information about gag bycatch and bycatch mortality, and discusses the 10 factors in the NS 9 guidelines at 50 CFR 600.350(d)(3), which include summaries of the biological, economic, and social effects presented in Chapter 4 of Amendment 56. As noted in Section 4.2.2 of Amendment 56, the impacts to the gag stock are similar under both allocation alternatives because the overfishing limits are based on a fixed level of fishing mortality. The recreational sector is responsible for more discards and more dead discards than the commercial sector. Therefore, Preferred Alternative 3 (Preferred Option 2b) in Action 2, which changes the allocation percentages, allows for slightly less total harvest than Alternative 2 (Option 2b), which would retain the current allocation percentages, reducing the stock ACL by approximately 9,000 lb (4,082 kg) in 2024 (about 2 percent). However, NMFS expects both Alternative 2 and Alternative 3 in Action 2 to reduce discards when compared to Alternative 1 (no action) due to the substantial reduction in catch limits, and the numbers and rates of discards and discard mortality between Alternatives 2 and 3 are expected to be similar. NMFS also expects an additional reduction in recreational discards associated with directed fishing as a result of the increase in the buffer between the recreational ACL and ACT from 10.25 to 20 percent, and the requirement that NMFS prohibit recreational harvest when the ACT is projected to be met.

With respect to the economic and social effects on both the commercial and recreational sectors, the expected negative impacts are a result of the need to implement a rebuilding plan that requires a significant reduction in the total allowable harvest of gag (see Amendment 56 BPA Criterion 6, 8, 9, and 10, and Sections 4.2.3 and 4.2.4). The new allocation percentages result in an increase in those negative effects for the commercial sector and a decrease in those effects for the recreational sector. However, the revised allocation represents the historical harvest of the two sectors during the same time period as the original allocation (1986 through 2005) updated only to reflect that there has been a change in the survey used to estimate recreational landings. Given the need to account for the different objectives of the commercial and recreational sectors, and provide for the greatest overall benefit to the Nation with respect to both food production and recreational opportunities NMFS has determined that gag bycatch and bycatch mortality are minimized to the extent practicable in both the FMP and Amendment 56.

While NMFS agrees that additional research and analyses could be conducted in the future to determine more precise impacts that bycatch may have on the catch projections or if there are other measures that could further reduce gag bycatch and bycatch mortality, NMFS is required to implement a rebuilding for gag within 2 years of notification to the Council that gag is overfished and, consistent with NS 2, NMFS used the best scientific information available to develop the rebuilding plan for gag and address the various requirements of the Magnus-Stevens Act, including NS 9. As discussed at the Council's January 2024 meeting, NMFS and the Council intend to review additional data and analyses to determine whether additional measures to reduce bycatch of gag ( e.g., time or area closures) are practicable. The Council initially considered including additional measures, such as increasing the number of area closures, to Amendment 56 but determined that it was not practicable to do so because before implementing new time or area closures, it was necessary to gather further data and analysis was needed on the impacts of the current closed areas ( i.e., Madison-Swanson and Steamboat-Lumps marine protected areas). In addition, after the rebuilding plan has been in effect for a few years, it may be possible to perform alternative stock assessment analyses that incorporate new information on discards in the recreational sector and use the results from those additional analyses to inform the bycatch practicability analysis.

Comment 15: NMFS needs to clarify how dead discards are accounted for in setting the MSY and OY.

Response: Dead discards are accounted for in specifying both the MSY and OY for the gag stock through the stock assessment. The NS 1 guidelines define MSY as “the largest long-term average catch or yield that can be taken from a stock or stock complex under prevailing ecological, environmental conditions and fishery technological characteristics ( e.g., gear selectivity), and the distribution of catch among fleets.” 50 CFR 600.310(e)(1)(i)(A). OY is the long-term average desired yield from a stock that provides “the greatest overall benefit to the Nation, particularly with respect to food production and recreational opportunities,” is reduced from the MSY to take into account economic, social, and ecological factors, and in the case of an overfished fishery, provides for rebuilding to a level consistent with producing the MSY in such fishery. 16 U.S.C. 1802(33); see also 50 CFR 600.310(e)(3)(i). Amendment 56 defines MSY as the yield when fishing at F 40%SPR and defines OY based on rebuilding status, such that: if the stock is under a rebuilding plan, OY is equal to the stock ACL; if the stock is not under a rebuilding plan, OY is equal to 90 percent of MSY or its proxy. The catch projections produced from the SEDAR 72 SRFS Run are based on the MSY proxy specified in Amendment 56 and account for discard mortality. As explained in Amendment 56, during the rebuilding plan OY is set equal to the stock ACL because this is the amount of fish that, over the rebuilding time, would allow the stock to rebuild to a level that is consistent with producing MSY. When rebuilding is complete the OY will be set at 90 percent of the MSY or proxy, which is consistent with the OY set for other reef fish species in Amendment 48 to the FMP (87 FR 34811 June 8, 2022). As explained in Amendment 48, an OY of 90 percent of the MSY or proxy is an intermediate level (between 85 and 95 percent of the MSY of proxy) that balances the need to protect the stock and allow for both food production and recreational opportunities. After the stock rebuilds and if new information indicates that that this OY may not be appropriate, NMFS and the Council can consider that new information and whether to revise the OY.

Comment 16: Amendment 56 will cause hardship to recreational fishermen but will not hurt commercial fishermen. Recreational fishing seasons are getting shorter, as demonstrated by both the recreational gag and red grouper seasons in 2023. However, commercial harvest goes on unabated. Commercial and recreational regulations should be the same.

Response: NMFS disagrees that it is appropriate to have the same regulations for commercial and recreational fishing, and that Amendment 56 only negatively affects recreational anglers. Amendment 56 and this final rule will reduce the commercial and recreational ACLs for gag for each sector to levels substantially lower than average landings from 2017 through 2021. In addition, although both the commercial and recreational sectors have failed to catch or even approach their respective catch limits in recent years, the percent reduction for each sector ACL in this rule compared to their respective recent landings is similar. Commercial fishing is managed differently than recreational fishing to address the economic, social, and cultural goals of each sector. Recreational fishing is managed primarily with bag limits, size limits, and seasons to allow the maximum number of participants the opportunity to fish. The commercial sector operates under an IFQ program, which allows commercial fishermen to harvest their share of the gag quota at any time during the year. So, unlike the recreational sector, there is no closed commercial season. Because the IFQ program gives individual commercial fishermen the flexibility to fish any time during the year, it prevents “derby-like” fishing that can create unsafe fishing conditions as fishermen race to catch as many fish as possible before a catch limit is reached. In addition, the IFQ program allows fishermen to supply fish over the course of the season, which allows for consumers to be able to purchase the fish throughout the year. However, regardless of when they fish during the year, fishing by both sectors is constrained by their respective annual harvest limits.

Comment 17: Amendment 56 and this final rule violate NS 4 of the Magnuson-Stevens Act because they allocate fish away from the commercial sector to account for the discards in the recreational sector, which is not fair and equitable and does not promote conservation.

Response: NMFS has determined that Amendment 56 and the final rule are fair and equitable and reasonably calculated to promote conservation, consistent with NS 4. The Council initially reviewed allocation options based on six different times series of landings data, but removed some options from further consideration because they resulted in relatively minor differences. In Amendment 56, the Council evaluated retaining the existing allocation percentages and updating those percentages using the SRFS recreational landings estimates calibrated to the same time series (1986 through 2005) that was used in setting the original allocation percentages. The Council determined, and NMFS agrees, that updating the allocation percentages using the SRFS calibrated recreational landings results is fair and equitable because it accounts for the transition to using SRFS data to estimate recreational catch while maintain the same referenced time series.

As explained in response to Comment 14, recreational fishing for gag (and many other reef fish species) typically involves higher numbers of discards than for the commercial sector, and the sector allocation percentages approved in Amendment 56 ( i.e., Alternative 3, Option 2b in Action 2) reduce the total ACL by approximately 9,000 lb (4,082 kg) when compared to the percentages proposed in Alternative 2b. However, the OY includes both recreational opportunities and food production, and the commercial and recreational sectors have different objectives, and operate differently to achieve those objectives. The Council and NMFS must consider and account for these differences when determining whether an allocation fairly and equitably allocates fishing privileges and provides the greatest overall benefit to the Nation with respect to both food production and recreational opportunities. Further, the large reduction in the total allowable harvest in Amendment 56 is not a result of the shift in sector allocation of the stock ACL but the result of SEDAR 72 and the determination that the stock is overfished and undergoing overfishing.

Comment 18: The Council failed to follow its allocation review policy by combining the allocation decision with decisions related to catch limits and rebuilding times. The Council's allocation policy requires a comprehensive allocation review and an after-the-fact determination that Amendment 56 includes that review is not sufficient. Further, the Council and NMFS suggest that the “sector allocation ratio in Alternative 2 results in a de facto reallocation to the commercial sector of approximately 4 percent,” but no allocation review was performed to evaluate this reallocation. If de facto reallocation arguments are to be used as justifications for management changes, then their use must be consistent with all NMFS and Gulf Council allocation policies and guidance.

Response: The process for evaluating and changing the commercial-recreational allocation percentages through Amendment 56 was consistent with NMFS and Gulf Council policies and guidance. The Council's Allocation Review Guidelines address the situation that resulted in Amendment 56, recognizing that, “[i]n some instances, e.g., following a stock assessment, the Council may elect to skip a formal allocation review and directly proceed with the development of an FMP amendment. In these cases, these guidelines would not apply.” The most recent stock assessment (SEDAR 72) indicated that the gag stock was overfished and undergoing overfishing, and incorporated the updated SRFS recreational catch estimates. Therefore, the Council and NMFS used Amendment 56 to develop a rebuilding plan and review the sector allocations to determine whether an adjustment was appropriate. The review incorporated into Amendment 56 included an evaluation of allocation options, and all of the relevant ecological, economic, social, and performance factors identified in the relevant Council and NMFS polices and guidance, including the Council's Allocation Policy and NMFS' Procedural Directive 01-119-01.

Comment 19: Automatic reallocation based on SRFS is arbitrary, and retrospectively adjusting historical landings estimates from 30 years ago is fraught with uncertainty. Allocation decisions should not be based on SRFS data until the accuracy of the data is resolved.

Response: NMFS disagrees that there was an automatic reallocation and that is not appropriate to use SRFS data to adjust the commercial-recreational allocation percentages in Amendment 56. Amendment 56 included an alternative to retain the current allocation percentages and an alternative to adjust those percentages using SRFS calibrated landings. As explained in response to Comment 17, the Council recommended, and NMFS agrees, that it is appropriate to adjust the allocation to 65 percent recreational: 35 percent commercial based on the same 1986 through 2005 time series with updated SRFS landings estimates. Although there is uncertainty related to the SRFS calibration, as explained previously, this was reviewed and approved by peer-review through the NMFS Office of Science and Technology in May 2022. NMFS has determined that SRFS landings estimates are best scientific information available, and thus that it was appropriate to use these estimates to inform the allocation decision recommended by the Council in Amendment 56 and being implemented in this final rule.

Comment 20: Revised estimates of recreational landings based on SRFS do not provide all of the necessary information for allocation decisions. Had SRFS been used initially in the stock assessment, it would have generated higher OFLs, ABCs, and ACLs for both sectors, allowing the commercial sector to increase its harvest.

Response: NMFS disagrees that it is appropriate to speculate on possible changes to commercial landings and the commercial-recreational allocation had SRFS data been available to use in prior stock assessments. NS 2 requires that management measures be based on the best scientific data available and calibrated SRFS recreational catch estimates were not available to use prior to the SEDAR 72 SRFS Update. Even if it were appropriate and correct to assume that the stock ACL would have been higher had this new data been available previously, it does not automatically follow that commercial harvest would have been larger. As noted in the Regulatory Flexibility Act Analysis in Chapter 6 of Amendment 56, the average commercial landings of gag from 2017 through 2021 were only 492,401 lb (223,349 kg), well below the commercial quota of 939,000 lb (425,923 kg).

Comment 21: The Council passed a motion to delay implementing new use of FES until the pilot study examining issues with the design of FES has been completed and deemed consistent with best scientific information available. If this analysis was done for SRFS, it is reasonable to assume the same result, so proceeding with reallocation in Amendment 56 is premature and inconsistent with recent Council actions.

Response: At its January 2024 meeting, the Council passed a motion to delay decisions about whether to change allocations of ACLs between the commercial and recreational sectors that were based on MRIP-FES data. SEDAR 72 and Amendment 56 both use recreational landings data based on SRFS to recommend catch levels for the recreational harvest of gag. NMFS disagrees that approving and implementing Amendment 56 is inconsistent with the Council's decision to delay potential actions that involve commercial-recreational allocations and use data generated from MRIP-FES or that it is reasonable to assume that the results of the pilot studies are applicable to SRFS. The MRIP-FES collects recreational trip information for specified 2-month periods, and over the course of the previous year. The Council's motion was in response to the results of one pilot study conducted by the NMFS Office of Science and Technology that evaluated a potential source of bias in MRIP-FES effort questions; specifically, the order in which two questions were presented. This pilot study found that estimates for private angler effort were generally 30 to 40 percent lower for shore and private boat modes than produced from the current design. However, the study was conducted over a relatively short period (6 months) using a smaller sample size than the full FES sample. NMFS is currently conducting a larger scale follow-up study. It is unknown whether this larger scale study will produce the same results as the initial pilot study. Information about the study, next steps, and the anticipated timeline can be found at https://www.fisheries.noaa.gov/recreational-fishing-data/fishing-effort-survey-research-and-improvements.

The Council's motion reflects the Council's intention to defer recommendations related to any changes to commercial-recreational allocations that incorporate MRIP-FES data until the ongoing research to determine the impacts of these changes to the survey is complete. The motion is not relevant to NMFS' review and implementation of the updated allocation percentages in Amendment 56, which are based in part on the calibrated time series of SRFS estimates of private recreational effort as incorporated into the SEDAR 72 SRFS Run and are separate from MRIP-FES. SRFS creates a universe of reef fish anglers by requiring anyone who harvests certain reef fish from a private vessel in Florida to obtain the State Reef Fish Angler designation, which, makes an angler eligible to receive a questionnaire in the mail that asks about their fishing activity in the previous month. More information on the SRFS questionnaire can be found at https://myfwc.com/research/saltwater/fishstats/srfs/program/. The SRFS questionnaire is more narrowly focused than the MRIP-FES questionnaire. Therefore, NMFS does not believe it is reasonable to assume that the potential bias identified with the MRIP-FES questionnaire would be indicative of similar bias with SRFS.

Comment 22: Action 3 in Amendment 56, which reallocates gag away from commercial fishermen to the recreational sector, is not consistent with the purpose and need of Amendment 56 and violates the Magnuson-Stevens Act. Providing greater allocation to the recreational sector, which accounts for the vast majority of discards and discard mortality, will not allow the stock to rebuild as projected in this rebuilding plan.

Response: The allocation percentages recommended by the Council in Amendment 56 do not reduce the probability of rebuilding the gag stock. The OFLs and ABCs recommended by the SSC were derived from SEDAR 72, which accounts for dead discards by both sectors, and the risk of overfishing the stock is the same for both of the allocation alternatives considered by the Council. As explained in response to Comment 10, NMFS expects the combined management measures in Amendment 56 ( i.e., reduction in catch limits, increased buffer between the recreational ACL and ACT, and change in recreational season start date) to rebuild the stock as projected. Therefore, NMFS has determined that the allocation percentages recommended in Amendment 56 are consistent with the purpose and need statement.

Comment 23: The rule does not clarify how any overage of the recreational ACL in 2023 will be addressed in 2024 given that the 2023 ACL is derived in part from MRIP-FES data and the 2024 ACL is derived in part from SRFS data. The amendment should include clarity surrounding the calibration and consistency of the catch limits [of data used from the different recreational surveys].

Response: Regulations at 50 CFR 622.41(d)(2)(iii) require that if gag are overfished and gag recreational landings exceed the applicable ACL, NMFS will reduce the ACL for that following year by the amount of the ACL overage in the prior fishing year, and reduce the ACT by the amount of the ACL overage in the prior fishing year, unless the best scientific information available determines that a greater, lesser, or no overage adjustment is necessary. NMFS has determined that recreational landings in 2023 exceeded the recreational ACL as specified in the interim regulations and that adjustments to the 2024 recreational ACL and ACT are appropriate. To reconcile the different data used to specify the 2023 and 2024 ACLs, NMFS has determined what the 2023 recreational ACL would have been after calibrating from MRIP-FES to SRFS data, and intends to use 2023 SRFS estimates to determine the overage of that recreational ACL. That overage will then be deducted from the 2024 recreational ACL and ACT as specified in Amendment 56 and this final rule. The 2024 commercial ACL and ACT will not be effected, and the rebuilding projections as specified in Amendment 56 will also remain unchanged. More information will be made available when NMFS publishes the temporary rule specifying the 2024 recreational catch limits.

Pursuant to section 304(b)(3) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with Amendment 56, the FMP, other provisions of the Magnuson-Stevens Act, and other applicable law.

There is good cause under 5 U.S.C. 553(d)(3) to establish an effective date for this final rule of less than 30 days after the date of publication. On November 28, 2023, NMFS published a temporary rule to withhold a portion of the commercial allocation of gag for the 2024 fishing year in anticipation of the reduction in the commercial quota in this final rule (88 FR 83040). If this final rule is not effective on June 1, 2024, the regulations at 50 CFR 622.22(a)(4) require NMFS to distribute the previously withheld commercial allocation to shareholders. NMFS was unable to publish this final rule 30 days in advance of June 1, 2024, because NMFS received several significant comments on the proposed rule, which required more time than anticipated to consider and provide responses. If allocation is distributed on or after June 1, NMFS would be unable to withdraw that allocation from the shareholder accounts and commercial harvest would not be constrained to the reduced catch limits for gag in his final rule. Allowing this additional commercial harvest would be contrary to the public interest because it could result in overfishing of gag and would be inconsistent with the approved rebuilding plan in Amendment 56 that was developed as required by section 304(e)(4) of the Magnuson-Stevens Act. Further, a 30-day delay in the effective date of this final rule would also cause confusion by allowing the recreational season for gag to open for a brief period beginning on June 1, 2024. And if this rule became effective after a 30-day delay, the recreational season would close again and not reopen until September 1, 2024. Having this final rule effective on June 1, 2024, avoids any confusion about when recreational fishing is allowed.

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.

A final regulatory flexibility analysis (FRFA) was prepared. The FRFA incorporates the initial regulatory flexibility analysis (IRFA), a summary of the significant issues raised by the public comments in response to the IRFA, NMFS' responses to those comments, and a summary of the analyses completed to support the action. NMFS' response to one public comment regarding the Executive Order 12866 analysis is in the SUPPLEMENTARY INFORMATION section of the preamble (see Comment 4 in the Comments and Responses section). A copy of the full analysis is available from NMFS (see ADDRESSES ). A summary of the FRFA follows.

The objective of this final rule is to use the best scientific information available to end overfishing of gag and rebuild the stock to a level commensurate with MSY, consistent with the authority under the Magnuson-Stevens Act. All monetary estimates in the following analysis are in 2021 dollars.

Amendment 56 revises the MSY, OY, and SDC for gag based on the results of the updated SEDAR 72 SRFS Run as reviewed by the Council's SSC. The definition of MSY changes from F MAX to the yield when fishing at F 40%SPR . The definition of MFMT changes from being equal to F MAX to being equal to the fishing mortality at the MSY proxy ( i.e., F 40%SPR ). The definition of MSST changes from 50 percent of the biomass at F MAX to 50 percent of the biomass at the new MSY proxy. OY is currently defined as 75 percent of the yield at F MAX . The new definition of OY is conditional on whether a rebuilding plan is in place. Specifically, if the stock is under a rebuilding plan, OY will be equal to the stock ACL. However, if the stock is not under a rebuilding plan, OY will be equal to 90 percent of MSY or its proxy.

Amendment 56 also revises the sector allocation of the stock ACL from 39 percent commercial and 61 percent recreational to approximately 35 percent commercial and 65 percent recreational. Amendment 56 also establishes a rebuilding plan based on the amount of time the stock is expected to take to rebuild based on the yield when fishing at 75 percent of F 40%SPR , which is equal to 18 years. In turn, the rebuilding plan in combination with the new sector allocation changes the OFL, ABC, stock ACL, commercial ACL, and the recreational ACL. Based on the current allocation of the stock ACL between sectors, the OFL, ABC, stock ACL, commercial ACL, recreational ACL, commercial quota, and recreational ACT would be 4.180 million lb (1.896 million kg), 3.120 million lb (1.415 million kg), 3.120 million lb (1.415 million kg), 1.217 million lb (0.552 million kg), 1.903 million lb (0.863 million kg), and 0.939 million lb (0.426 million kg), and 1.708 million lb (0.775 million kg), respectively, in 2024 and future years if no action was taken. The recreational portion of the OFL, ABC, stock ACL, the recreational ACL, and the recreational ACT would be based on MRIP-CHTS data. Under the new sector allocation and rebuilding plan, the OFL, ABC, stock ACL, recreational ACL, commercial ACL, recreational ACT, and commercial quota are reduced in 2024 but subsequently increase through 2028 as indicated in tables 1 and 2 earlier in this rule. The recreational portion of the revised OFL, ABC, stock ACL, the recreational ACL, and the recreational ACT are based on recreational landings estimates used in the SEDAR 72 SRFS Run. Therefore, the different stock ACLs and recreational ACLs and ACTs are not directly comparable.

This final rule also revises the buffer between the recreational ACL and ACT, which is currently 10.25 percent ( i.e., the recreational ACT is 89.75 percent of the recreational ACL). Under this final rule, the buffer between the recreational ACL and ACT is approximately 20 percent ( i.e., the recreational ACT is approximately 80 percent of the recreational ACL).

In addition, this final rule also modifies the buffer between the commercial ACL and quota, and sets the quota equal to the ACT. The commercial quota is currently set at approximately 77 percent of the commercial ACL. The commercial ACT is not codified in regulations. This final rule sets the commercial ACT equal to approximately 95 percent of the commercial ACL and sets commercial quota equal to the commercial ACT. Thus, the commercial quota is approximately 95 percent of the commercial ACL.

Lastly, this final rule changes the recreational season start date and modifies the recreational AMs for gag. Specifically, the recreational season start date is changed from June 1 to September 1 each year. The current AM requires NMFS to prohibit harvest when the recreational ACL is projected to be met, whereas this final rule requires NMFS to prohibit harvest when the recreational ACT is projected to be met. The current AM also requires NMFS to maintain the recreational ACT for the following fishing year at the level of the prior year's ACT unless the best scientific information available determines that maintaining the prior year's ACT is unnecessary. This provision is removed under this final rule. Given these individual actions, this final rule is expected to regulate commercial fishing businesses that possess gag shares in the GT-IFQ program and for-hire fishing businesses that target gag.

The gag commercial quota is allocated annually based on the percentage of gag shares in each IFQ account. For example, if an account possesses 1 percent of the gag shares and the commercial quota is 1 million lb (0.45 million kg), then that account would receive 10,000 lb (4,536 kg) of commercial quota for gag. Although it is common for a single IFQ account with gag shares to be held by a single business, some businesses have multiple IFQ accounts with gag shares. As of July 8, 2021, there were 536 IFQ accounts, of which 506 IFQ accounts held gag shares. These accounts and gag shares were owned by 455 businesses. Thus, NMFS assumes this final rule would regulate 455 commercial fishing businesses.

A valid charter vessel/headboat permit for Gulf reef fish is required to legally harvest gag on a recreational for-hire fishing trip. NMFS does not possess complete ownership data regarding businesses that hold a charter vessel/headboat permit for Gulf reef fish, and thus potentially harvest gag. Therefore, it is not currently feasible to accurately determine affiliations between vessels and the businesses that own them. As a result, for purposes of this analysis, NMFS assumes each for-hire vessel is independently owned by a single business, which is expected to result in an overestimate of the actual number of for-hire fishing businesses regulated by this final rule.

NMFS also does not have data indicating how many for-hire vessels actually harvest gag in a given year. However, in 2020, there were 1,289 vessels with valid charter vessel/headboat permits for Gulf reef fish. Further, gag is only targeted and almost entirely harvested in waters off the west coast of Florida. Of the 1,289 federally permitted vessels, 803 were homeported in Florida. Of these 803 federally permitted vessels, 62 are primarily used for commercial fishing rather than for-hire fishing purposes, and thus are not considered for-hire fishing businesses ( i.e., 1,227 vessels are for-hire fishing businesses). In addition, 46 of these permitted vessels are considered headboats, which are considered for-hire fishing businesses. However, headboats take a relatively large, diverse set of anglers to harvest a diverse range of species on a trip, and therefore do not typically target a particular species exclusively. Therefore, NMFS assumes that no headboat trips would be canceled, and thus no headboats would be directly affected by this final rule.

However, charter vessels often target gag. Of the 803 vessels with a valid charter vessel/headboat permit for Gulf reef fish that are homeported in Florida, 695 vessels are charter vessels. A recent study reported that 76 percent of charter vessels with a valid charter vessel/headboat permit in the Gulf were active in 2017, i.e., 24 percent were not fishing. A charter vessel would only be directly affected by this final rule if it is used to go fishing. Given this information, NMFS' best estimate of the number of charter vessels that are likely to harvest gag in a given year is 528, and thus NMFS estimates this final rule would regulate 528 charter fishing businesses.

For RFA purposes, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (50 CFR 200.2). A business primarily involved in the commercial fishing industry is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and its combined annual receipts (revenue) are not in excess of $11 million for all of its affiliated operations worldwide. NMFS does not collect revenue data specific to commercial fishing businesses that have IFQ accounts; rather, revenue data are collected for commercial fishing vessels in general. It is not possible to assign revenues earned by commercial fishing vessels back to specific IFQ accounts and the businesses that possess them because quota is often transferred across many IFQ accounts before it is used by the business on a vessel for harvesting purposes, and specific units of quota cannot be tracked. However, from 2017 through 2021, the maximum annual gross revenue earned by a single commercial fishing vessel was about $3.25 million. Based on this information, all commercial fishing businesses regulated by this final rule are determined to be small entities for the purpose of this analysis.

For other industries, the Small Business Administration has established size standards for all major industry sectors in the United States, including for-hire businesses (North American Industry Classification System code 487210). A business primarily involved in for-hire fishing is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has annual receipts (revenue) not in excess of $12.5 million for all its affiliated operations worldwide. The maximum annual gross revenue for a single headboat in the Gulf was about $1.38 million in 2017. On average, annual gross revenue for headboats in the Gulf is about three times greater than annual gross revenue for charter vessels, reflecting the fact that businesses that own charter vessels are typically smaller than businesses that own headboats. Based on this information, all charter fishing businesses regulated by this final rule are determined to be small businesses for the purpose of this analysis.

NMFS expects this final rule to regulate 455 of the 536 businesses with IFQ accounts, or approximately 85 percent of those commercial fishing businesses. Further, NMFS expects this final rule would regulate 528 of the 1,227 for-hire fishing businesses with valid charter vessel/headboat permits for Gulf reef fish, or approximately 43 percent of those for-hire fishing businesses. NMFS has determined that, for the purpose of this analysis, all regulated commercial and for-hire fishing businesses are small entities. Based on this information, NMFS expects the final rule to affect a substantial number of small entities.

Because NMFS does not collect revenue and cost data for the commercial fishing businesses that are expected to be regulated by this final rule, direct estimates of their economic profits are not available. However, economic theory suggests that annual allocation (quota) prices should reflect expected annual economic profits, which allows economic profits to be estimated indirectly. Further, the 455 businesses with gag shares also own shares in the other IFQ share categories and thus are expected to earn profits from their ownership of these shares as well, i.e., red snapper, red grouper, shallow-water grouper, deep-water grouper, and tilefish.

However, economic profits will only be realized if the allocated quota is used for harvesting purposes. For example, practically all of the commercial quota of red snapper has been used for harvesting in recent years, and so it is assumed that all of that quota will be harvested in the foreseeable future. Important management changes have occurred for red grouper, which partly resulted in 96 percent of the commercial quota being harvested in 2021. Thus, this analysis also assumes that all of the red grouper quota will be harvested in the future as well. However, only 82 percent of the deep-water grouper quota, 38 percent of the shallow-water grouper quota, and 73 percent of the tilefish quota was harvested from 2017 through 2021, and that is expected to continue in the foreseeable future. For gag, the quota utilization rate from 2017 through 2021 was approximately 52 percent. Given these quota utilization rates in combination with average annual allocation prices from 2017 through 2021 and annual commercial quotas in 2021, NMFS estimates that the total expected economic profits for commercial fishing businesses with gag shares are at least $29.4 million per year at the present time. This estimate does not account for any economic profits that may accrue to businesses with gag shares that also own commercial fishing vessels that harvest non-IFQ species. Such profits are likely to be small because harvest of IFQ species accounts for around 84 percent of commercial IFQ vessels' annual revenue and economic profits from the harvest of non-IFQ species tend to be smaller than those from IFQ species. Given that there are 455 businesses with gag shares, NMFS expects the average annual economic profit per commercial fishing business is at least $64,620.

Most of these economic profits (84 percent) are the result of owning red snapper shares. Only approximately $502,930 (or 1.7 percent) of the expected economic profits is due to the ownership of gag shares. This final rule is only expected to affect economic profits from the ownership of gag shares.

Specifically, the action that changes the sector allocation of the stock ACL and implements a rebuilding plan, which changes the stock ACL, reduces the commercial ACL and commercial quota from 1.217 million lb (552,022 kg) and 939,000 lb (425,923 kg) to 275,000 lb (124,738 kg) and 212,000 lb (96,162 kg) on average from 2024 through 2028. However, average annual commercial landings of gag from 2017 through 2021 were only 492,401 lb (223,349 kg), noticeably below the commercial quota. Because average annual landings exceed the commercial quotas for 2024 through 2028, it is assumed all of the proposed commercial quota will be harvested in each year through 2028, and the expected average reduction in annual commercial landings will be 280,401 lb (127,188 kg). Initially, NMFS expects the reduction in commercial landings to increase the average ex-vessel price of gag from $6.10 per lb to $7.78 per lb, or by $1.68 per lb, in 2024. However, NMFS expects the increase in ex-vessel price to gradually decrease through 2028 as the quota and landings increase, resulting in an ex-vessel price of $6.96 in 2028. The increase in the ex-vessel price would partially offset the adverse effects of the landings reduction. Based on the above information, NMFS expects a reduction in annual ex-vessel revenue for gag of approximately $1.57 million on average, or about $3,451 on average per commercial fishing business. Given an average annual allocation price of $1.03 per lb for gag from 2017 through 2021, NMFS expects the reduction in commercial landings of gag to reduce economic profits to these commercial fishing businesses by about $288,813, or by approximately $635 per commercial fishing business. Thus, NMFS expects economic profits to be reduced by around 1 percent on average per commercial fishing business as a result of the action to change the sector allocation and implement a rebuilding plan that reduces the stock ACL.

The action that sets the commercial ACT equal to 95 percent of the commercial ACL and sets the commercial quota equal to the commercial ACT causes the commercial quota to be equal to 95 percent of the commercial ACL as opposed to approximately 77 percent of the commercial ACL. As such, this action is expected to increase the commercial quota relative to what it would be otherwise. The increase still yields commercial quotas below the recent average commercial landings, and thus NMFS assumes all of the expected increase in the quota will be harvested. Specifically, NMFS expects the average annual increase in the commercial quota and landings from 2024 through 2028 to be about 48,527 lb (22,011 kg), which would increase average annual revenue by $267,371, or by about $588 per commercial fishing business. Again, assuming an average annual allocation price of $1.03 per lb, NMFS expects economic profit to commercial fishing businesses to increase by $49,983 per year, or about $110 per commercial fishing business, as a result of this action.

Combining these expected increases in revenue and profits with the decreases discussed earlier, NMFS expects this final rule to decrease average revenue for commercial fishing businesses by about $1.31 million per year from 2024 through 2028, or by $2,868 per commercial fishing business. The total reduction in economic profits for commercial fishing businesses is expected to be $238,830, or $525 per commercial fishing business, which represents a decrease of about 0.8 percent.

According to the most recent estimates of economic returns for charter vessels, average annual economic profit per charter vessel is $27,948. The action to change the sector allocation and implement a rebuilding plan, which would change the stock ACL, would change the gag recreational ACL from its current value of 1.903 million lb (863,186 kg) to 510,000 lb (231,332 kg) on average from 2024 through 2028. As explained previously, the current and new recreational ACLs are not directly comparable because they are based, in part, on recreational landings estimates derived from different surveys. However, average recreational landings from 2017 through 2021 were approximately 1.265 million lb (573,794 kg). Given that average recreational landings have been considerably greater than the recreational ACT in this final rule, all of the recreational ACT is expected to be harvested in the future. NMFS expects the reduction in the recreational ACT to reduce the recreational season length from 214 days to 25 days in 2024. However, the season length is expected to steadily increase to 120 days by 2028 and the average season length from 2024 through 2028 is expected to be 64 days. The reduction in the season length would reduce the number of angler trips targeting gag on charter vessels. From 2024 through 2028, the average reduction in angler trips targeting gag on charter vessels is expected to be 20,976 trips per year. Net Cash Flow per Angler Trip (CFpA) is the best available estimate of profit per angler trip by charter vessels. According to a recent study (available from NMFS see ADDRESSES ), CFpA on charter vessels is estimated to be $150 per angler trip. Thus, NMFS estimates the total reduction in charter vessel profits from this action to be $3.146 million per year. The average reduction in economic profit per charter fishing business would therefore be about $5,960, or approximately 21.3 percent of their current economic profit, per year.

In combination with the action to require NMFS to close the recreational season based on when the recreational ACT, rather than the recreational ACL, is projected to be met, the action to increase the buffer between the recreational ACL and recreational ACT from 10.25 percent to 20 percent is expected to reduce the recreational season length further from the action to change the sector allocation and implement a rebuilding plan. Specifically, the season length is expected to be further reduced by 2 days in 2024 (open for 23 days instead of 25), though this reduction is expected to gradually increase to 24 days by 2028 (open for 96 days instead of 120 days). The average additional reduction in the recreational season length per year is expected to be 12 days (open for 52 days instead of 64). Again, a reduction in the season length is expected to reduce the number of angler trips targeting gag on charter vessels. From 2024 through 2028, the average reduction in angler trips targeting gag on charter vessels is expected to be 2,125 trips per year. Based on an estimate of $150 in economic profit per angler trip, NMFS estimates the reduction in charter vessel profits from this action to be $318,690 per year. The average reduction in economic profit per charter vessel $604 per year, or about 2.2 percent on average per charter fishing business.

The action that changes the recreational season start date from June 1 to September 1 is expected to increase the recreational season length from 23 days to 59 days in 2024, and from 52 days to 81 days on average from 2024 through 2028. However, because there are many fewer charter trips targeting gag in the fall months (September through December) compared to the summer months (June through August), this action is expected to further decrease the number of angler trips targeting gag on charter vessels. Although the reduction in trips from 2024 through 2028 varies slightly from year to year, the average reduction per year is 1,610 trips. Based on an estimate of $150 in economic profit per angler trip, NMFS expects this action to decrease economic profits for charter vessels by about $241,500 per year, or by $456 per charter vessel. This would result in a decrease of economic profits by around 1.6 percent on average per charter fishing business.

Based on the above, NMFS expects the total reduction in target trips by charter vessels per year as a result of this final rule to be 24,711 trips. NMFS expects this reduction in trips to reduce economic profits for charter vessels by a total of about $3.707 million per year, or approximately $7,020 per charter vessel. Thus, annual economic profit per charter fishing business is expected to be reduced by approximately 25.1 percent on average.

Six alternatives, including the status quo, were considered for the actions to change the sector allocation of the stock ACL to 35 percent to the commercial sector and 65 percent to the recreational sector, establish a rebuilding plan of 18 years based on the amount of time the stock is expected to take to rebuild if fished at the yield from fishing at 75 percent of F 40 % SPR , and change the catch levels for 2024 through 2028 as specified in table 1. The status quo alternative would have retained the current sector allocation of the stock ACL of 39 percent to the commercial sector and 61 percent to the recreational sector based on MRIP-CHTS recreational landings data. The status quo alternative would not have established a rebuilding plan or modified any of the catch limits based on MRIP-FES and SRFS landings estimates. This alternative was not selected because the sector allocation would have been based in part on MRFSS recreational landings estimates, which is no longer consistent with the best scientific information available and would effectively result in a reallocation to the commercial sector of approximately four percent, which the Council did not consider to be equitable. This alternative also would not have rebuilt the gag stock or ended overfishing as required by the Magnuson-Stevens Act.

A second alternative would have also retained the current sector allocation of the stock ACL of 39 percent to the commercial sector and 61 percent to the recreational sector, but would have established a rebuilding plan of 11 years assuming a fishing mortality rate of zero. This alternative would have revised the OFL based on the projections from the SEDAR 72 SRFS Run and would have set all of the other catch levels through 2028 at zero. However, as with the status quo alternative, the sector allocation would have been based in part on MRFSS recreational landings data. Further, prohibiting harvest of gag would not be expected to eliminate all fishing mortality, as some gag would still be expected to be discarded and die as fishermen continue fishing for other species that live in similar habitats as gag. This alternative was not selected because, as discussed above, MRFSS is not consistent with the best scientific information available, and would result in a de facto reallocation from the recreational to the commercial sector of approximately four percent, which the Council did not considerable to be equitable. Further, because it is not feasible to eliminate dead discards of gag when fishermen are targeting other species, it is unlikely the stock would actually be rebuilt in 11 years. This alternative would have also resulted in significantly larger adverse economic effects on commercial and charter fishing businesses compared to the action in this final rule.

A third alternative would have also retained the current sector allocation of the stock ACL of 39 percent to the commercial sector and 61 percent to the recreational sector. But, like the action in this final rule, the third alternative would have established a rebuilding plan of 18 years and changed the catch levels based on the projections from the SEDAR 72 SRFS Run. This alternative would have ended overfishing and rebuilt the stock in 18 years. But, as with the status quo and the second alternative, the sector allocation of the stock ACL would be based on MRFSS recreational landings data. Thus, this alternative was not selected because MRFSS is not the best scientific information available, and would effectively result in a reallocation from the recreational sector to the commercial sector of approximately four percent.

A fourth alternative would have also retained the current sector allocation of the stock ACL of 39 percent to the commercial sector and 61 percent to the recreational sector, but would have established a rebuilding plan of 22 years and changed the catch limits based on the projections from the SEDAR 72 SRFS Run. This alternative would have ended overfishing and rebuilt the stock while allowing greater harvest and resulting in smaller adverse economic effects on commercial and charter fishing businesses compared to the action in this final rule. However, it was not selected because the stock is expected to take 4 more years to rebuild compared to the action in this final rule, and the Magnuson-Stevens Act requires overfished stocks to be rebuilt in as short a time period as possible, taking into account various factors. This alternative was also not selected because the use of MRFSS recreational landings data is not consistent with the best scientific information available, and would effectively result in a reallocation to the commercial sector of approximately four percent.

Like the action in this final rule, a fifth alternative would have changed the sector allocation of the stock ACL to 35 percent to the commercial sector and 65 percent to the recreational sector based in part on recreational landings estimates from MRIP-FES, SRHS, and SRFS for 1986 through 2005. As with the second alternative, the fifth alternative would have also established a rebuilding plan of 11 years assuming a fishing mortality rate of zero and used SEDAR 72 SRFS Run projections to change the OFL. The other catch limits would have been set at zero. As discussed earlier, prohibiting harvest of gag would not be expected to eliminate all fishing mortality, as some gag would still be expected to be discarded and die as fishermen continue fishing for other species that live in similar habitats as gag. This alternative was not selected because it is not feasible to eliminate dead discards of gag when fishermen are targeting other species, and therefore it is unlikely the stock would rebuild in 11 years. This alternative would have also resulted in significantly larger adverse economic effects on commercial and for-hire fishing businesses compared to the proposed action.

Like the action in this final rule, a sixth alternative would have changed the sector allocation of the stock ACL to 35 percent to the commercial sector and 65 percent to the recreational sector based in part on recreational landings estimates from MRIP-FES, SRHS, and SRFS data for 1986 through 2005. However, this alternative would have also established a rebuilding plan of 22 years. This alternative would be based on the best scientific information available, end overfishing, and rebuild the stock. This alternative would have also resulted in higher catch limits and therefore resulted in small adverse economic effects on commercial and for- hire fishing businesses compared to the proposed action. However, this alternative was not selected because it is expected to take 4 more years to rebuild compared to the action in this final rule, and the Magnuson-Stevens Act requires overfished stocks to be rebuilt in as short a time as possible, taking into account various factors.

Two alternatives, including the status quo, were considered for the action to increase the buffer between the recreational ACL and recreational ACT from 10.25 percent to 20 percent. The status quo alternative would have maintained the buffer between the recreational ACL and recreational ACT at 10.25 percent based the yield at 75 percent of F MAX . However, as explained previously, use of F MAX as a proxy for F MSY is not consistent with the best scientific information available.

The second alternative would have revised the recreational ACT using the Council's ACL and ACT Control Rule based on recreational landings data from 2018 through 2021. This alternative would have resulted in a 10 percent buffer between the recreational ACL and ACT, which would have left the buffer essentially unchanged. This alternative was not selected because the Council concluded it was necessary to increase the buffer between the ACL and ACT to reduce the probability of the recreational sector exceeding its ACL, reduce the likelihood of overfishing, and reduce the level of discards associated with directed harvest, which together are expected to increase the probability of meeting the 18-year timeline for rebuilding the gag stock.

Two alternatives, including the status quo, were considered for the action to set the commercial ACT equal to 95 percent of the commercial ACL and set commercial quota equal to the commercial ACT. The status quo alternative would have maintained commercial ACT, which is based on the yield at 75 percent of F MAX , and a commercial quota set at 86 percent of the commercial ACT. This alternative was not selected because it is based on F MAX , which is no longer consistent with the best scientific information available.

The second alternative would have set the commercial ACT equal to 86 percent of the commercial ACL and, like the action in this final rule, set the commercial quota equal to the commercial ACT. This alternative was not selected because the Council determined that a 14 percent buffer between the commercial ACL and ACT is too high and unnecessarily limits commercial harvest due to reduced uncertainty in the estimates of commercial landings and discards.

Three alternatives, including the status quo, were considered for the action to change the recreational season start date from June 1 to September 1 and require NMFS to close the recreational season based on when the recreational ACT is projected to be met rather than the recreational ACL. The status quo alternative would have maintained the recreational season start date of June 1 and required NMFS to close the recreational season based on when the recreational ACL is projected to be met. This alternative was not selected mainly because it would have resulted in a shorter average recreational season length (75 days) compared to the action in this final rule (81 days) for 2024 through 2028. In general, a longer fishing season would result in more fishing opportunities for both the private and for-hire components of the recreational sector. Further, shifting fishing effort to a historically low-effort month (September) may reduce the overall magnitude of recreational discards compared to starting the season in June. Shifting fishing pressure to the fall would also be expected to reduce directed effort for gag in deeper waters, which may further reduce the probability of harvesting or discarding dead male gag.

The second alternative would have retained the June 1 start date for the recreational season. But, like the action in this final rule, this alternative would have required NMFS to close the recreational season based on when the recreational ACT is projected to be met. This alternative was not selected mainly because it would have resulted in a shorter average recreational season length (52 days) compared to the action in this final rule (81 days) for 2024 through 2028. In general, a longer fishing season would result in more fishing opportunities for both the private recreational and for-hire components of the fishery. Further, shifting fishing effort to a historically low-effort month (September) may reduce the overall magnitude of recreational discards compared to starting the season in June. Shifting fishing pressure to the fall would be expected to reduce directed effort for gag in deeper waters, which may further reduce the probability of harvesting or discarding dead male gag.

The third alternative would have changed the recreational season start date to October 1. But, like the action in this final rule, this alternative would have required NMFS to close the recreational season based on when the recreational ACT is projected to be met. This alternative was not selected because it would have resulted in a shorter average recreational season length (63 days) compared to the action in this final rule (81 days) for 2024 through 2028 and would have also resulted in greater adverse effects to charter fishing businesses. In general, a longer fishing season would be expected to result in more fishing opportunities for both the private and for-hire components of the recreational sector.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, NMFS prepared a fishery bulletin, which also serves as a small entity compliance guide. Copies of this final rule are available from the Southeast Regional Office, and the guide, i.e., fishery bulletin, will be sent to all known industry contacts in the Gulf reef fish fishery and be posted at: https://www.fisheries.noaa.gov/tags/small-entity-compliance-guide?title=&field_species_vocab_target_id=&field_region_vocab_target_id%5B1000001121%5D=1000001121&sort_by=created. The guide and this final rule will be available upon request.

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: