The Commission promulgated the Amplifier Rule in 1974 to address sellers' failure to provide essential pre-purchase information regarding the performance of home entertainment amplifiers. 2 Specifically, manufacturers described their products' performance through power output claims ( e.g., “25 Watts”), but tested their amplifiers under a variety of conditions and procedures that rendered different results for the same products. Thus, consumers could not effectively use advertised wattage claims to compare brands or determine how individual amplifiers would perform. At the time, the Commission noted, “[s]ince the mid-50's the [audio] industry” had failed “to agree upon a single industry standard which is meaningful to the consumer.”  3 Accordingly, the Rule standardized the measurement and disclosure of some, but not all, performance characteristics of power amplification equipment to “assure that . . . performance characteristics are based upon conditions of normal use by the consumer, i.e., conditions which are encountered in the home.”  4

Under the Rule, sellers making certain power claims ( i.e., for power output, power band or power frequency response, or distortion characteristics) must disclose power output measured under specified test conditions. For example, amplifiers must be tested at an ambient air temperature of at least 77 °F (25 °C). 5 The Rule, however, does not specify values for three test conditions that significantly affect power output measurements: (1) load impedance;  6 (2) rated power band or power frequency response;  7 and (3) total harmonic distortion (“THD”). 8 Instead, the original Rule required sellers to disclose these values when making certain power claims. 9 In 2000, the Commission eliminated this disclosure requirement in “media advertising” but retained the requirement in product brochures and manufacturer specification sheets. 10

Pursuant to its ongoing regulatory review schedule, on December 18, 2020, the Commission published an advance notice of proposed rulemaking (“ANPR”) seeking comment on the Amplifier Rule. 11 Specifically, the ANPR sought comments regarding possible Rule improvements, the continuing need for the Rule, the Rule's costs and benefits, as well as whether, and how, technological or economic changes have affected the Rule.

In response, the Commission received 550 unique comments, including comments from amplifier and speaker manufacturers, amplifier sellers and purchasers, and engineers or journalists in the audio field. 12 All but one commenter supported retaining the Rule. 13 Based on this near universal support, the Commission concluded there was a continuing need for the Rule.

Although commenters overwhelmingly supported the Rule, some recommended amendments. For example, many commenters urged the Commission to require uniform power band, load impedance, and THD limits to prevent manipulation of these three test conditions. 14

Consistent with these comments, FTC staff found such manipulation ubiquitous in the marketplace. Specifically, FTC staff found dozens of examples of the same equipment advertised with significantly different power output claims. 15 Using specification sheets on manufacturers' websites, FTC staff confirmed these widely divergent claims resulted from different testing parameters.

Based on the comments and FTC staff's review, the Commission found requiring disclosure of test conditions is unlikely to prevent deceptive power output claims. Test conditions are highly technical and require complex calculations to convert claims into apples-to-apples power output comparisons. Thus, the average consumer is unlikely to understand or use the disclosed test conditions to avoid deception. 16 This problem is exacerbated by the fact that consumers now shop online more frequently, providing fewer opportunities to listen to equipment before purchasing.

To address widespread misleading power output claims, the Commission published a notice of proposed rulemaking (“NPRM”), proposing an amendment to the Amplifier Rule to standardize the three test conditions. 17 Specifically, the Commission proposed the following standard values: (1) a load impedance of 8 ohms; (2) a power band of 20 Hz to 20 kHz (except for self-powered subwoofer systems); and (3) a THD limit of less than 0.1%. FTC staff's review found amplifiers are generally designed to drive a nominal load impedance of 8 ohms; 20 Hz to 20 kHz covers the normal range of human hearing;  18 and 0.1% THD does not audibly distort a signal. Several commenters suggested these test conditions, and many manufacturers' specification sheets already disclose power outputs tested at 8 ohms, 20 Hz to 20 kHz, and at THD limits of, or slightly below, 0.1%.

The Commission received nine unique comments in response to the NPRM. 19 While most of the commenters either broadly supported the regulation of power output claims or the standardization of test conditions, 20 two expressed concern about the THD limit. They explained many vacuum tube and solid state amplifiers “would not be able to qualify for a power output claim” under the proposed 0.1% limit. 21 Accordingly, they recommended the Commission allow manufacturers to disclose their chosen THD level rather than set a fixed limit. Additionally, one commenter recommended replacing the term “total harmonic distortion” with “THD with noise,” or “THD+N,” to align the Rule with the Commission's original intent. 22

In response to these comments, the Commission issued a supplemental notice of proposed rulemaking (“SNPRM”) that modified its NPRM proposal standardizing test conditions in three ways. 23 First, it proposed updating the Rule's reference to “total harmonic distortion” with “total harmonic distortion plus noise” (“THD+N”). 24 Second, the Commission proposed raising the THD+N limit to 1.0% to address commenters' concern that a significant number of amplifiers on the market cannot qualify for any power output claim under the NPRM proposal's 0.1% limit. 25 Third, the Commission proposed requiring sellers to designate power output disclosures under § 432.2 with the text “FTC Power Output Rating.” Further, if sellers make Optional Disclosures under § 432.4, they would have to state “This rating does not meet the FTC standard,” to help consumers distinguish between the two. 26

Additionally, the Commission proposed making four non-substantive changes to update and clarify the language of the Rule: (1) eliminating unnecessary language in § 432.4 that currently incorporates § 432.2's requirement to disclose the test conditions; (2) consolidating all standardized test conditions into a single section, § 432.3, to make the Rule easy to use; (3) modifying § 432.3(e) to clarify amplifiers must meet the standard for impedance, power band, and THD+N at all levels from 250mW to the disclosed level; and (4) updating § 432.4's prohibition against using an “asterisk” to make required disclosures to reflect modern usage. 27

Finally, the Commission proposed formalizing its long-standing guidance that, for multichannel systems, the FTC power output rating under § 432.2 requires the manufacturer to fully drive, at a minimum, the front-left and front-right channels used for stereo programming. 28

The Commission received four unique comments in response to the SNPRM. Two commenters fully supported the SNPRM proposal, noting the importance of a consistent standard that applies to all manufacturers. 29 Another commenter suggested the Commission require manufacturers to disclose supplemental information relating to whether the manufacturer measured THD+N for harmonics beyond the 20 Hz to 20 kHz bandwidth. 30

The final commenter, Consumer Technology Association (“CTA”), opposed the Commission's SNPRM proposal. 31 CTA recommended the Rule allow manufacturers to set the testing parameters for power band and impedance, stating generally that certain component and integrated amplifier devices are not designed to put out power at the 20 Hz to 20 kHz power band and 8 ohm impedance specifications proposed in the SNPRM. CTA also requested the Rule require measuring harmonic distortion using THD at 1 kHz. CTA explained using THD+N over the entire 20 Hz to 20 kHz bandwidth, as required by the Commission's SNPRM proposal, would capture the hum of the commercial power supply as well as sampling noise. Finally, CTA recommended against using the disclosure “This rating does not meet the FTC standard,” to distinguish Optional Disclosures under § 432.4 from FTC power output disclosures under § 432.2. CTA noted this phrase could have the unintended consequence of denigrating acceptable international standards used by manufacturers in making power output claims in their Optional Disclosures.

Based on the record, the Commission amends the Rule to standardize the testing conditions as proposed in its SNPRM, with one small exception. Specifically, the Rule as amended requires power output ratings under § 432.2 to use 8 ohms load impedance, 20 Hz to 20 kHz power band, and THD+N of 1.0%. Two of the four SNPRM comments wholly supported the Commission's proposal, and the remaining comments did not raise any issues that warrant modifying or supplementing these standard parameters. Specifically, the Commission will not require disclosure of supplemental information regarding the bandwidth used for testing the harmonics. As the commenter proposing the recommendation acknowledged, “since most people can't even hear the fundamental at 20kHz, let alone the second harmonic, there is no need to measure anything beyond 20kHz.”  32 The Commission agrees and declines to adopt this recommendation.

The Commission also declines to adopt the recommendation to allow manufacturers to set the power band and impedance parameters. While CTA stated in general terms that certain manufacturers produce amplifier devices not designed to generate power output in accordance with the FTC standard test conditions, it neither identified any affected manufacturers nor included data indicating the proportion of affected models. 33 In addition, the amended Rule does not increase costs for affected manufacturers by requiring them to modify their products to meet the FTC standard, as suggested by CTA. 34 The amended Rule only requires compliance with the FTC standard when sellers make power related claims. If a manufacturer does not want to comply with the FTC standard, it need not make such a claim. Moreover, to the extent the manufacturer wants to rate power output using “in device” parameters different from the FTC standard, it may do so using Optional Disclosures under § 432.4.

The Commission also declines to adopt CTA's recommendation to base the maximum harmonic distortion parameter on THD at 1 kHz. While the Commission understands that amending the Rule to require power output ratings at 1.0% THD+N over the full 20 Hz to 20 kHz power band will capture some additional types of distortion ( e.g., distortion from the power supply), this is precisely what the Commission intended when it first promulgated the Rule in order to cover the range of distortion generated by the amplifier during typical home use. 35 The amendment accords with the Commission's goals for the Rule.

The Commission also amends the Rule in accordance with the SNPRM to require the use of specific language to distinguish Optional Disclosures under § 432.4. However, it clarifies that when using such disclosures, sellers should use the phrase “This rating was not tested under the FTC standard” rather than the proposed “This rating does not meet the FTC standard.” The use of this more neutral phrase should resolve CTA's concern about denigrating the use of accepted international standards in making Optional Disclosures while still serving the purpose of alerting consumers that the seller used a different test procedure.

With respect to the other amendments proposed in the SNPRM, namely the four non-substantive changes and the formal adoption of the 2010 Commission guidance for multichannel systems, none of the commenters raised any specific concerns or recommendations. Accordingly, the Commission amends the Rule to incorporate each of these five remaining proposals as follows.

First, the Commission eliminates language in § 432.4 that the Rule will no longer require. Second, the Commission consolidates all standard test conditions into a single section. Currently, the Rule has two sections that contain standard test conditions. Section 432.3 entitled “Standard Test Conditions” contains most of the Rule's test condition requirements; however, the requirement to test using “minimum sine wave continuous average power output, in watts, per channel . . .” appears in § 432.2(a). Consolidating these requirements should make the requirements easier to find. 36

Third, the Commission modifies § 432.3(e) to clarify amplifiers must meet the standard for impedance, power band, and THD+N at all levels from 250mW to the disclosed level. Retaining this requirement from the current rule  37 while standardizing test conditions should ensure the advertised power claim does not mask lower power levels at which the amplifier would not meet the FTC's standard.

Fourth, the Commission updates § 432.4's prohibition against using an “asterisk” to make disclosures required under the Rule. The new proposal modernizes this language to similarly prohibit the use of footnotes and other notations typically used to obscure disclosures in advertising. 38

Finally, the Commission formalizes its guidance regarding how channels in a multichannel amplifier must be driven when measuring power output under the FTC standard. The FTC standard requires all “associated channels” to be fully driven when measuring power output of the amplifier. 39 In 2010, the Commission found that “associated channels” for multichannel systems include, at a minimum, the front-left and front-right channels used for stereo programming, and issued guidance stating that power output measurements that do not meet this floor violate the Rule. 40 While ANPR commenters proposed a variety of alternative standards for driving multichannel amplifiers, 41 and the NPRM specifically solicited evidence regarding normal usage of multichannel amplifiers, 42 no commenters on either the ANPR or the NPRM provided evidence regarding real-life use of multichannel systems. Likewise, the SNPRM solicited comments on formalizing the Commission's 2010 guidance, but the Commission received none. Accordingly, considering the Commission's 2010 finding and in the absence of any evidence supporting an alternative, the Commission modifies § 432.2 to formalize its long-standing guidance on “associated channels” for multichannel amplifiers—that is, at least the front-left and front-right channels used for stereo programming must be driven simultaneously. 43

The Commission has found that using expedited procedures in this rulemaking serves the public interest. Expedited procedures support the Commission's goals of clarifying and updating existing regulations without undue expenditure of resources, while ensuring that the public has an opportunity to submit data, views, and arguments on whether the Commission should amend the Rule. In the NPRM, the Commission announced that it would use the following procedures pursuant to 16 CFR 1.20: (1) publishing a notice of proposed rulemaking; (2) soliciting written comments on the Commission's proposals to amend the Rule; (3) holding an informal hearing, if requested by interested parties; and (4) announcing final Commission action in this document published in the Federal Register . Because none of the commenters requested an informal hearing, the Commission, in its discretion, did not schedule an informal hearing.

Under section 22 of the FTC Act, 15 U.S.C. 57b-3, the Commission must issue a preliminary regulatory analysis for a proceeding to amend a rule if the Commission: (1) estimates that the amendment will have an annual effect on the national economy of $100 million or more; (2) estimates that the amendment will cause a substantial change in the cost or price of certain categories of goods or services; or (3) otherwise determines that the amendment will have a significant effect upon covered entities or upon consumers. In the NPRM and SNPRM, the Commission preliminarily determined that the proposed amendments to the Rule will not have such effects on the national economy, on the cost of sound amplification equipment, or on covered businesses or consumers. In developing these proposals, the Commission has sought to minimize prescriptive requirements and provide flexibility to sellers in meeting the Rule's objectives. The Commission requested but received no comments on the economic effects of the amendments to the Rule, other than CTA's comment addressed above. 44 A final regulatory analysis is not required because the Commission finds that the amendments will not have such effects on the national economy, on the cost of sound amplification equipment, or on covered businesses or consumers.

The Regulatory Flexibility Act (“RFA”), 5 U.S.C. 601-612, requires that the Commission conduct an analysis of the anticipated economic impact of the amendments on small entities. The purpose of a regulatory flexibility analysis is to ensure that an agency considers potential impacts on small entities and examines regulatory alternatives that could achieve the regulatory purpose while minimizing burdens on small entities. The RFA requires that the Commission provide an Initial Regulatory Flexibility Analysis (“IRFA”) with a proposed rule and a Final Regulatory Flexibility Analysis (“FRFA”) with a final rule, if any, unless the Commission certifies that the rule will not have a significant economic impact on a substantial number of small entities.

The Commission believes that the amendments would not have a significant economic impact upon small entities, although they may affect a substantial number of small businesses. Specifically, the change in the disclosure requirements should not significantly increase the costs of small entities that manufacture or import power amplification equipment for use in the home. In the SNPRM, the Commission certified that the proposed amendments would not, if promulgated, have a significant impact on a substantial number of small entities. The Commission noted that, while a substantial number of the entities covered by the Rule likely qualify as small businesses, the Commission did not anticipate that the amendments would result in higher costs for covered entities because manufacturers already test power output for their amplifiers. The Commission nonetheless determined that it was appropriate to publish an IRFA to inquire into the impact of the proposed amendments on small entities. The Commission received no comments regarding the SNPRM's certification or IRFA. Therefore, based on available information, the Commission certifies that amending the Rule will not have a significant economic impact on a substantial number of small businesses.

The current Rule contains various provisions that constitute information collection requirements as defined by 5 CFR 1320.3(c), the definitional provision within the Office of Management and Budget (“OMB”) regulations implementing the Paperwork Reduction Act (“PRA”). OMB has approved the Rule's existing information collection requirements through April 30, 2024 (OMB Control No. 3084-0105). As described above, the Commission is proposing amendments to simplify power output measurements by standardizing test parameters. The amendments do not change the frequency of the testing or disclosure requirements specified under the Rule. Accordingly, FTC staff does not anticipate that this change will result in additional burden hours or higher costs for manufacturers who already test power output for their amplifiers, in many cases testing amplifiers under the conditions specified by the proposed amendments. Therefore, the amendments do not require further OMB clearance.

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

For the reasons stated above, the Commission amends 16 CFR part 432 as follows:

Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, 124 Stat. 1376, approved July 21, 2010) (Dodd-Frank), HUD's Office of Housing Counseling (OHC) provides support to a nation-wide network of HUD-certified counseling agencies and State Housing Finance Agencies that provide counseling to individuals seeking information about financing, maintaining, renting, or owning a home. In addition to establishing the OHC, Dodd-Frank directed HUD to issue regulations necessary to carry out the testing and certification of housing counselors in HUD programs. On December 14, 2016, HUD published a final rule implementing these requirements for most HUD programs (81 FR 90632). In recognition of HUD's government-to-government relationship with Tribal governments, and HUD's Tribal Consultation policy, HUD conducted Tribal consultation before implementing requirements for Tribes, Tribally designated housing entities (TDHEs), and other Tribal entities. On December 18, 2020, HUD published a Dear Tribal Leader Letter to inform Tribal leaders about the Housing Counselor Certification Final Rule and that the Department would be soliciting their feedback through Tribal consultation. 1

Subsequently, HUD hosted two virtual Tribal consultation sessions and six listening sessions to gather input on the potential implications of the Tribal Housing Certification requirements. HUD then published a proposed rule implementing testing and certification requirements for housing counselors for employees of Tribes, TDHEs, and other Tribal entities conducting housing counseling required or provided in connection with the Indian Housing Block Grant (IHBG) and Indian Community Development Block Grant (ICDBG) programs on January 26, 2023 (88 FR 4923) (the proposed rule).

The proposed rule proposed codifying a housing counselor certification requirement by adding a new subpart F to 24 CFR part 214 that would apply only for the IHBG and ICDBG programs. To provide counseling for those programs, an individual could become a “HUD-certified housing counselor” by working for a participating agency and meeting all requirements of part 214, including passing a housing counselor certification examination under § 214.103(n) or by working for an Indian Tribe, TDHE, or other Tribal entity, and passing a housing counselor certification exam under the new § 214.600(c). This new Tribal certification exam would consider the unique status of Tribal trust land, mortgaging Tribal trust land, and account for the distinct framework of nondiscrimination requirements as they apply to Tribes and Tribal recipients of IHBG and ICDBG funds at 24 CFR 1000.12 and 1003.601.

After considering comments received from the public through the Federal Register as well as through consultation with Tribes during three consultation sessions and six listening sessions, HUD promulgates this final rule. The final rule adopts the proposed rule with three minor changes. First, instead of revising the definition of HUD certified housing counselor in 24 CFR 214.3, HUD is adding a definition for HUD-certified Tribal housing counselor. This change is being made to clearly distinguish between the two types of counselors and does not alter the substantive requirements for certification approval. Second, HUD is clarifying in 24 CFR 214.600(d) that an Indian Tribe, TDHE, or other Tribal entity must be a participating agency in order for an individual working for one, who also meets the requirements under 24 CFR 214.103(n), to provide housing counseling in connection with programs other than IHBG and ICDBG. Third, HUD is adding paragraph (e) to 24 CFR 214.600 to establish a 4-year transition period to allow Tribal grantees sufficient time to ensure that housing counselors can be certified while also establishing the alternative Tribal regulatory scheme previously outlined in the proposed rule. HUD appreciates the public comments received in response to its January 26, 2023, proposed rule, thanks all Tribal stakeholders for their invaluable feedback during the rulemaking process, and looks forward to engaging more as HUD works to develop a Tribal certification exam.

HUD received 16 distinct comments from Tribes, individuals, housing counseling providers, Indian Housing Authorities, and advocacy groups through the Federal Register as well as additional comments through the third Tribal consultation. This section includes a summary of the significant issues raised by the public comments that HUD received in response to its proposed rule and through the third Tribal Consultation.

Several commenters provided general support for the proposed rule and noted that it respected Tribal sovereignty and accounted for the unique nature of Tribes. One commenter noted that housing is a significant need in Tribal communities and housing counseling is often unavailable to Tribal members. Some commenters supported HUD for working with Tribal officials and including their input. One commenter noted that they appreciated HUD's approach as Tribal consultation is a prerequisite for implementing any rules that affect Tribal programs or communities.

Several commenters supported specific aspects of the proposed rule. One commenter noted that the proposed rule simplified the eligibility and certification process. Another commenter supported HUD's proposal to allow TDHEs to participate in HUD's Housing Counseling Program. Commenters stated the proposed rule would make it more feasible for TDHEs to comply with the requirements than those that apply more broadly in HUD's counseling regulations.

Several commenters in the third Tribal consultation suggested that HUD convene a Tribal advisory committee to oversee the implementation of the rule.

HUD Response: HUD appreciates the commenters' support and feedback. This final rule provides an alternative regulatory standard that complies with the statutory requirements of Dodd-Frank and recognizes the unique status of Tribal land and housing programs in Indian country.

HUD agrees with the commenters that recommended working with a Tribal advisory committee to advise HUD on the implementation of this final rule. In this case, HUD intends to work with two existing federal advisory committees, HUD's Tribal Intergovernmental Advisory Committee and the Housing Counseling Federal Advisory Committee (HCFAC) in soliciting advice regarding implementing this rule.

Several commenters stated that the proposed rule is not deferential to the Tribal right of self-determination and does not recognize Tribal sovereignty and the unique challenges Tribes face. Commenters stated that the proposed rule should allow Tribes to account for their differing cultures, economic conditions, customs, resources, and geography. Some commenters also stated that they did not feel the proposed rule was responsive enough to the feedback provided during listening sessions and encouraged further consultation between HUD and Tribal communities to ensure accessible, culturally-informed, and relevant housing counseling services. Commenters recommended that HUD engage more with Tribes in designing a process and a program that reimagines HUD's current Housing Counseling Program to better recognize Tribal expertise and acknowledge Tribal self-determination. One commenter stated that the Native American Housing Assistance and Self-Determination Act of 1996, as amended (NAHASDA) (25 U.S.C. 4101), already allows IHBG grant funds to be used to pay for housing counseling services and does not require an examination process. Another commenter noted that neither NAHASDA nor the ICDBG program mandate housing counseling.

Commenters stated that the proposed rule may make it difficult for Tribal entities to run housing programs and ultimately decrease access to housing counseling. A commenter said Tribal housing counselors would have to take and pass a rigorous examination with content that did not include questions related to Tribal housing issues. Another commenter stated that the proposed rule would undermine the decades of work put in to improve Tribal counseling organizations and essentially nullify the capacity that has been built. Some commenters stated that the proposed rule would have the effect of diminishing the services provided to Tribal members, as it could limit the ability of Tribes to use the IHBG program, or other programs that have a counseling requirement. Commenters noted the proposed rule could be especially burdensome for small and rural Tribal entities and reduce access to housing counseling in these communities. One commenter noted the costs would be passed on to homebuyers. Another commenter noted the proposed rule did not take into consideration ways to provide more housing counseling services and only focused on additional regulatory compliance.

One commenter recommended an abbreviated version of the Housing Counseling Plan be embedded in the NAHADSA Annual Indian Housing Plan. Another commenter suggested HUD allow existing staff of Tribes, TDHEs and other Tribal entities to constitute a housing counseling organization in § 214.600. One commenter noted that Tribes already have housing counseling programs that better fit their needs.

HUD Response: HUD recognizes the unique challenges in Indian Country and understands that commenters have concerns about how this new requirement will be implemented. HUD is required to implement Dodd-Frank and the statutory requirement that counseling provided under, or in connection with, IHBG and ICDBG be carried out by certified counselors. However, in doing so, HUD is committed to implementing the counselor certification for IHBG and ICDBG in a manner that respects Tribal sovereignty and the right of self-determination and which addresses the substantial feedback provided by Tribes.

HUD, through a contractor, will develop the Tribal housing counselor certification training, online study guide, and examination and to host the website. HUD will ensure the exam content is appropriately tailored while considering and balancing compliance with statutory requirements, the unique status of trust land, mortgaging tribal trust land, and respect for Tribal sovereignty and self-determination. When developing the examination, HUD may seek to engage with Tribes, TDHEs and other Tribal entities to gather their input in designing an exam that recognizes Tribal expertise and acknowledges Tribal self-determination.

Through this rule, HUD addressed the concern that the rule could be especially burdensome for small and rural Tribal entities. Specifically, HUD is establishing an alternative regulatory standard for Tribes and will allow employees of Indian Tribes, TDHEs, and other Tribal entities to become certified housing counselors if they pass the certification examination under § 214.600(c) without the requirement that they also work for an approved housing counseling agency. To further minimize burden for all Tribes, including small and rural Tribal entities, HUD will also provide access to existing free study material and free study material that accounts for any tailored exam components that it develops in collaboration with Tribes, TDHEs, and other Tribal entities.

Finally, HUD is establishing a 4-year transition period to ensure that Tribes have enough lead time to ensure staff are properly prepared to complete and pass the certification exam.

Through all these actions, it is HUD's hope that the result will be the appropriate implementation of Dodd-Frank in a manner that considers the unique status of Tribes and ensures that Tribes are able to get all housing counselors certified in a timely manner.

Several commenters proposed ways to make the proposed rule more deferential to Tribes' unique needs. Commenters noted that Tribes, TDHEs and Community Development Funding Institutions (CDFI) have already created housing counseling programs that fit the unique needs of Tribes. Commenters suggested that HUD should recognize certifications from Native American housing counselor certification curricula that many Tribal housing entities already use. Some commenters suggested that HUD incorporate existing curricula or adopt certifications from the National American Indian Housing Council (NAIHC), NeighborWorks, Oweesta, etc. Several commenters suggested in the third Tribal consultation that HUD use existing curricula and examinations, including Pathways Home: A Native Homeownership Guide, to satisfy the statutory requirement for a certification examination that addresses the six core competency areas.

Several commenters suggested HUD establish an advisory committee comprised of representatives from Tribal entities and stakeholders who could advise HUD on how to devise culturally relevant criteria and exam content for Tribal-specific HUD counselor certification requirements. Some commenters expressed concern about applying the current housing counselor standards to Tribal entities. Some commenters requested HUD allow Tribes to determine the content for inclusion in the relevant exam curriculum. One commenter noted that if HUD created a certification process rooted in Tribal expertise and Tribal self-determination, HUD could expand this certification process for all HUD-funded Tribal programs.

Some commenters requested HUD change certification requirements because staff in Tribal governments are often divided between ownership and rental programs and may have difficulty passing the exam. Commenters also asked HUD to adjust the certification requirements to align more closely with the rental counseling needs of TDHEs, Tribes, and Tribal CDFIs. One commenter requested clarification about what the “fair housing laws and rules” competency requirement at § 214.600(c)(1)(iv) will include in the certification exam based on the limited application of certain Fair Housing requirements for Tribes and Tribal grantees. Another commenter asked HUD what measures HUD is taking to ensure certification covers the unique status of all Tribal communities. Commenters also asked whether the certification standards would be the same for TDHEs as other HUD-approved housing counseling agencies.

One commenter proposed that the cost of certification should be less than $100 and should be clearly disclosed by HUD.

One commenter in the third Tribal consultation expressed confusion over the need for the § 214.103(n) examination or the forthcoming certification examination under § 214.600(c) or both exams to be certified to counsel within IHBG or ICDBG programs.

HUD Response: While commenters suggested HUD establish an advisory committee comprised of representatives from Tribal entities and stakeholders to advise HUD regarding designing culturally relevant criteria and exam content for Tribal-specific HUD counselor certification, HUD has decided against establishing such an advisory committee. In reviewing this comment, HUD recognized that requirements of the Federal Advisory Committee Act (5 U.S.C. Chapter 10) would limit its ability to fully engage Tribes in the development of the certification examination. Additionally, it has typically not been the Department's procedure to establish an advisory committee for the purpose suggested by the commenter and the Department has other means of soliciting public input. As discussed in this preamble, HUD is fully committed to soliciting the advice and recommendation of Tribes in the development of the examination.

HUD recognizes the certification exam codified at § 214.103(n) does not assess knowledge of the unique property and administrative requirements that apply to trust land and other restricted Tribal lands. For example, the housing counselor certification exam codified at § 214.103(n) does not reflect the unique way that civil rights requirements apply to Tribes and other Tribal grantees under HUD's IHBG and ICDBG programs under 24 CFR 1000.12 and 1003.601. While there are exemptions from certain fair housing and civil rights laws and requirements for tribes and TDHEs when administering specific HUD funds, individuals and families do have certain civil rights protections and continue to be able to assert fair housing and nondiscrimination claims, including against other parties that may be involved such as lenders, or private landlords. Identifying what civil rights protections can be asserted and against whom they can asserted is a nuanced and fact-based analysis. Given this, HUD plans to develop a Tribal certification exam that is appropriately tailored and that will ensure that housing counselors can appropriately counsel families about their rights. HUD appreciates the comment recommending that it incorporate existing curricula or adopt certifications from the NAIHC, NeighborWorks, Oweesta, or Pathways Home to satisfy the statutory requirement for a certification examination that addresses the six core competency areas. While HUD cannot accept these alternate curricula to fulfill the certification requirements of Dodd-Frank, HUD has reviewed this material and will use it to inform the development of the HUD examination. The statute does not allow for these alternative curricula to substitute for an exam created by HUD and its contractor.

To clarify the understanding of the commenter regarding whether a housing counselor would need to be certified under § 214.103(n), § 214.600(c), or both exams to be certified to counsel within IHBG or ICDBG programs, housing counseling provided under or in connection with IHBG or ICDBG programs must be conducted by a HUD certified counselor who has passed either the § 214.103(n) examination or the certification examination under § 214.600(c). The counselor can choose to take one or both exams to meet the certification examination requirement.

Some commenters asked HUD to consider implementing Dodd-Frank-compliant, culturally relevant training based on existing counseling programs that Tribal housing programs have used and that would build skills and competency in staff. One commenter pointed out that Tribes, TDHEs, and Tribal CDFIs have already spent resources on training. Another commenter asked for organizations that manage Tribally focused counseling training to be updated on examination and curricula requirements. One commenter asked HUD to include information about Federal Indian Law in any trainings.

Commenters also requested that HUD increase access to training resources, including making trainings available to TDHEs immediately, stating that training resources to prepare for certification are only available to HUD-certified counselors.

HUD Response: HUD agrees with the commenters and will provide access to existing free study material and free study material that accounts for any tailored exam components that it develops in collaboration with Tribes, TDHEs, and other Tribal entities, to implement this final rule. HUD may solicit Tribal input by providing drafts of study materials developed for the exam prior to public release to consider feedback. The rule also provides a four-year transition period after the effective date of this final rule or 30 days after HUD makes the Tribal certification examination available, whichever is later for individual counselors to be certified. HUD will publish a document in the Federal Register to announce the start of testing and the certification requirement. HUD will use this time to make these resources available in addition to taking other steps to ensure that Tribes can meet the certification requirements once they go into effect.

Several commenters asked whether funding would be provided for hiring Tribal housing counselors, especially for small Tribes and TDHEs. One commenter asked whether TDHEs would be eligible for HUD funding that is currently earmarked for HUD-approved housing counseling agencies and whether this would lead to an increase in overall program funding. Commenters requested that HUD make funding available to allow Tribes to hire the necessary staff, or to give money to Tribes, TDHEs, Tribal entities, or Tribal CDFIs for housing counseling activities, such as the certification examination. One commenter asked HUD to modify subpart F of the proposed rule to allow grants to support Tribal housing counselors certified under subpart F if statutory or regulatory barriers to Tribal eligibility are removed.

Some commenters expressed concerns that HUD's proposed requirements would put a strain on Tribal resources. Commenters noted that Tribal governments manage a variety of programs, and adding additional requirements could add to their administrative burdens. One commenter pointed out that Tribes, TDHEs, and Native CDFIs have already spent resources on other similar trainings. Another commenter stated that HUD had understated the impacts of the proposed rule, both regarding fiscal cost and time and capacity constraints.

Commenters noted the proposed rule could cause hiring and retention challenges for Tribal entities. One commenter noted that counselor turnover, which is already a challenge in non-Native American communities, would be a problem for many organizations. This commenter emphasized the unique human capital challenges faced by small, geographically dispersed communities. Another commenter noted requiring counselors to be certified at the time of hiring could cause difficulties in recruiting staff and could limit the Tribal populations' eligibility for employment. The commenter noted that they currently provide on-the-job training for employees after they are onboarded and recommended that the proposed rule allow a grace period of six months for new hires pursuing a counselor position.

Another commenter asked HUD to consider whether the HUD-certified counselor had to be employed by a HUD-approved housing counseling agency, Tribe, TDHE, or other Tribal entity, or whether a Tribal entity could be allowed to contract out counseling activities. Commenters noted many Tribes hire consultants or seek virtual counseling services from other providers.

Several commenters in the third Tribal consultation expressed concern over a lack of technical assistance available to those that do choose to join HUD's Housing Counseling Program.

HUD Response: HUD does not have appropriated funding or authority under Section 106 to provide Indian Tribes with the direct grant assistance suggested by commenters. HUD understands, however, that funding is currently available to qualified nonprofit 501(c) organizations and state and local governmental entities including Indian Housing Authorities considered state or local housing agencies under State law.

HUD also recognizes that costs will be incurred by Tribes, TDHEs, and Tribal organizations because of the written examination requirement. In the past, HUD presented the examination in the most cost-efficient way feasible and offered both online and in-person examinations at a low cost. In addition, HUD has offered free study materials for individuals to use in preparation for the examination.

HUD disagrees that it understated implementation costs in the proposed rule. HUD examined and studied the costs related to the development of and preparation for a housing counselor certification examination in connection with its 2016 final rule implementing certification requirements for most HUD programs. HUD has drawn from these insights to implement this final rule in a way that minimizes costs and burden.

To further minimize costs and support implementation of Tribal housing certification, HUD will provide dedicated staff and training for this new requirement and will host a web page for Tribes, TDHEs, and Tribal organizations that includes free study materials, training curriculum, and other resources to support the transition to this new requirement.

Commenters noted concerns that the proposed rule would increase reporting and compliance costs for Tribal entities. One commenter stated that the proposed rule would require significant additional resources and technical assistance to develop the required infrastructure for reporting and compliance. Some commenters suggested changes to the proposed rule to mitigate this increase in cost. A few commenters suggested that there be no penalty for TDHEs that do not have certified HUD counselors on staff, but rather a TDHE should be able to explain how they provide counseling services by referral or partnerships. One commenter suggested removing some of the reporting and compliance aspects of the HUD Housing Counseling Program and instead embedding reporting and compliance within the established NAHASDA Indian Housing Plan and Annual Performance Report. The commenter suggested including the Quarterly HUD 9902 form as an attachment to that report and eliminating the HUD 9910 or consolidating it into monitoring and counseling tracking in existing software if additional funding was provided to adapt this software.

HUD Response: HUD agrees with commenters that the submission of HUD forms, when applicable, should be consolidated to reduce existing reporting burdens. However, the final rule imposes no new reporting burdens because Tribes, TDHEs and other Tribal entities conducting housing counseling provided under or in connection solely with IHBG and/or ICDBG are not subject to subparts A through E of 24 CFR part 214, including the requirement to counsel at least 30 clients within a 12-month period. Tribes, TDHEs and other Tribal entities remain subject to the reporting requirements under IHBG and ICDBG and are exempt from compulsory participation in HUD's Housing Counseling Program unless the entities also provide counseling under or in connection with certain other HUD programs.

Commenters proposed changes to the proposed rule's applicability in § 214.300(a)(8), which contains counseling service requirements for rental housing programs. Specifically, the commenters noted that many Tribes and TDHEs have separate rental and homebuyer programs, or primarily deal with rental housing, so the certification should not apply to tenant services staff and rental department staff. Commenters noted the proposed rule change applies to IHBG and ICDBG and recommended that a counselor who is certified as working for a Tribe, TDHE or other Tribal entity should be able to provide counseling to people outside of these programs. One commenter requested clarification on whether a counselor that works for a Tribal entity will also need to work for a HUD-approved housing counseling agency. Another commenter asked how a TDHE could become a HUD-approved housing counseling agency and whether a TDHE could partner with a national intermediary without 501(c)(3) status. One commenter in the third Tribal consultation encouraged HUD to allow Tribes, TDHEs and other Tribal Entities to be deemed HUD-approved upon partnering with a HUD-approved organization.

HUD Response: For those not participating in HUD's Housing Counseling Program, HUD encourages partnerships with other HUD-approved housing counseling agencies, Tribes, TDHEs, and other Tribal entities ( e.g., a HUD-approved Native CDFI) with a certified housing counselor on staff to improve community access to housing counseling services. HUD encourages partnerships that best meet the needs of Tribal communities, as determined by those communities.

This final rule exempts Tribes, TDHEs, and other Tribal entities from compulsory participation in HUD's Housing Counseling Program unless the entities also provide counseling under or in connection with other HUD programs (programs other than IHBG and ICDBG). If an individual working for an Indian tribe, TDHE, or other Tribal entity provides housing counseling for HUD programs other than ICDBG and IHBG, that individual is required to comply with the existing housing counselor certification requirement of 24 CFR 214.103(n) ( i.e., pass the examination and work for a HUD-approved housing counseling agency).

Some commenters expressed concern over how quickly Tribes would have to come into compliance with the proposed rule. The commenters questioned whether a three-year transition period, as proposed in the proposed rule, would be enough time to address planning and training needs. One commenter noted that HUD-approved Housing Counseling Agencies were given four years to comply with testing requirements and Tribal entities should be given at least the same amount of time. One commenter stated that a counselor who is already certified should have the same time frame to take any additional exams that are created out of this proposed rule as someone who currently holds no certification.

HUD Response: HUD agrees and will provide for an additional 12 months to comply with Tribal certification requirements, consistent with the time afforded to HUD-approved housing counseling agencies and counselors complying with the requirements of 24 CFR 214.103(n). The Tribal certification examination is not yet available, but HUD will issue updates in the Federal Register or other means regarding the Tribal certification exam release date as the testing development phase progresses and the implementation date nears.

Under E.O. 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. E.O. 13563 (Improving Regulations and Regulatory Review) directs Executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” E.O. 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. E.O. 14094 (Modernizing Regulatory Review) amends section 3(f) of E.O. 12866, among other things.

This final rule brings HUD's IHBG and ICDBG Programs into compliance with statutory requirements added by Dodd-Frank and required by other HUD programs since 2016. This final rule provides a streamlined compliance option consistent with the statutory requirement and responsive to Tribal consultation. This rule was determined not to be a “significant regulatory action” as defined in section 3(f) of Executive Order 12866 as amended by Executive Order 14094 and is not an economically significant regulatory action and therefore was not subject to OMB review.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule would not have a significant economic impact on a substantial number of small entities.

HUD has determined that this rule will not have a significant economic impact on all entities, including small entities. As discussed in the preamble, this final rule revises the Housing Counseling Program to require that counselors providing counseling funded under or in connection with IHBG or ICDBG be certified. Tribes, TDHEs and other Tribal entities conducting housing counseling provided under or in connection solely with IHBG and/or ICDBG are not subject to subparts A through E of 24 CFR part 214. By not being subject to these subparts, these entities avoid the bulk of compliance costs, allowing them to allocate the savings toward addressing the unique needs of their communities.

Further, the requirement for individual counselors to be certified provides a four-year transition period after the effective date of this final rule. This four-year period provides ample notice of the need to be skilled in the required areas. HUD will also provide access to existing free study material that accounts for any tailored exam components that it develops, reducing costs associated with training and compliance.

For these reasons, the undersigned certifies that this rule would not have a significant economic impact on a substantial number of small entities.

This rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction; or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

E.O. 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either: (1) imposes substantial direct compliance costs on State and local governments and is not required by statute, or (2) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Order. This rule does not have federalism implications and would not impose substantial direct compliance costs on State and local governments nor preempts State law within the meaning of the Order.

The information collection requirements contained in this final rule have been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a valid control number.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This rule does not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of UMRA.

Accordingly, for the reasons stated in the preamble, HUD amends 24 CFR parts 214, 1000, and 1003 as follows:

The Coast Guard will enforce multiple safety zones for annual events in the Captain of the Port San Diego Zone listed in 33 CFR 165.1123, Table 1 to § 165.1123 and 33 CFR 165.1124, Table 1 to § 165.1124, for events occurring in the month of July as listed next.

The regulations listed in Table 1 to § 165.1123, will be enforced for the following events during the dates and times indicated below:

The regulations listed in Table 1 to § 165.1124, will be enforced for the following events during the dates and times indicated below:

Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within these safety zones during an enforcement period is prohibited unless authorized by the Captain of the Port San Diego or his designated representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port San Diego via channel 16, VHF-FM. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port San Diego or his designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice of enforcement is issued under authority of 33 CFR 165.1123, 33 CFR 165.1124, and 5 U.S.C. 552(a). In addition to this notice of enforcement in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port San Diego determines that the safety zone need not be enforced for the full duration stated in this notice, he may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

To promote consistent, clear, and open decision-making processes, the USPTO issued an interim process for PTAB decision circulation and internal PTAB review in May 2022. The processes were put in place to support a consistent and clear approach to substantive areas of patent law and PTAB-specific procedures, while maintaining open decision-making processes. The USPTO subsequently issued a Request for Comments (RFC) seeking public input on these processes. 87 FR 43249-52 (July 20, 2022); 87 FR 58330 (Sept. 26, 2022) (extending comment period). After reviewing feedback received from the public in response to the RFC, the USPTO made some modifications to the interim process and issued a Standard Operating Procedure 4 (SOP4) on October 5, 2023, available at https://www.uspto.gov/sites/default/files/documents/ptab_sop_4-2023-oct.pdf. The processes set forth in SOP4 replaced the former interim process and provided further details requested by the public. Following the proposed rule and solicitation of public comments, 88 FR 69578 (Oct. 6, 2023), this final rule revises the rules of practice to implement, in regulation, key aspects of the processes used for circulation and review of decisions within the PTAB.

This final rule provides that the USPTO Director, Deputy Director, and Commissioners for Patents and Trademarks are not involved, directly or indirectly, in the decision-making of panels of the PTAB prior to issuance of a decision by the panel. In addition, no PTAB Management Judge nor any officer or employee of the Office external to the Board is involved, directly or indirectly, in panel decision-making unless a panel member has requested their input or they are a member of the panel. The adoption of any feedback received by the panel is entirely optional and solely within the discretion of the panel.

This final rule also requires that if the Office establishes additional procedures governing the internal circulation and review of decisions prior to issuance, no Management Judge or officer or employee external to the Board shall participate, either directly or indirectly, in any such review. The adoption of any feedback received pursuant to such review is entirely optional and solely within the discretion of the panel.

Finally, this final rule provides that decisions of the Board are expected to comport with all statutes, regulations, binding case law, and written Office policy and guidance applicable to Board proceedings. The rule further provides that all policy and guidance binding on panels of the Board shall be in writing and made public.

On September 16, 2011, the America Invents Act (AIA) was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). The AIA established the PTAB, which is made up of administrative patent judges (APJs) and four statutory members, namely the USPTO Director, the USPTO Deputy Director, the USPTO Commissioner for Patents, and the USPTO Commissioner for Trademarks. 35 U.S.C. 6(a). In panels of at least three members, the PTAB hears and decides ex parte appeals of adverse decisions by examiners in applications for patents; appeals of adverse decisions by examiners in reexamination proceedings; and proceedings under the AIA, including inter partes reviews, post-grant reviews, and derivation proceedings. 35 U.S.C. 6(b), (c). Under the statute, the Director designates the members of each panel. 35 U.S.C. 6(c). The Director has delegated that authority to the Chief Judge of the PTAB. See PTAB Standard Operating Procedure 1 (Revision 15) (SOP1), Assignment of Judges to Panels, available at https://www.uspto.gov/sites/default/files/documents/SOP%201%20R15%20FINAL.pdf.

The Office recognizes that it is important that the PTAB maintain a consistent and clear approach to substantive areas of patent law and PTAB-specific procedures, while maintaining open decision-making processes. Starting in May 2022, the USPTO used an interim process for PTAB decision circulation and internal PTAB review. See “Interim process for PTAB decision circulation and internal PTAB review,” available at https://www.uspto.gov/interim-process-ptab-decision-circulation-and-internal-ptab-review. That interim process was replaced by SOP4, which issued October 5, 2023. The processes set forth in SOP4 are substantially similar to the interim process, except for the change described below to the Circulation Judge Pool (CJP) review. SOP4 further sets forth additional details requested by stakeholders.

Under the prior interim process, certain categories of PTAB decisions were required to be circulated to the CJP, a pool of non-management APJs, prior to issuance. To provide for judicial independence and in response to stakeholder feedback, under the process set forth in SOP4, circulation to the CJP is now optional. The CJP is made up of a representative group of non-management APJs who collectively have technical/scientific backgrounds and legal experience that reflects the PTAB judges as a whole. The CJP is modeled after both the Federal Circuit's previous circulation to the Senior Technical Assistant and the Federal Circuit's 10-day circulation process for precedential decisions. See United States Court of Appeals for the Federal Circuit, Internal Operating Procedures, Redlined Copy, 18 (Mar. 1, 2022), available at https://cafc.uscourts.gov/wp-content/uploads/RulesProceduresAndForms/InternalOperatingProcedures/IOPs-Redline-03012022.pdf (describing the previous circulation to the Senior Technical Assistant); United States Court of Appeals for the Federal Circuit, Internal Operating Procedures, 10 section 5 (July 22, 2022), available at https://cafc.uscourts.gov/wp-content/uploads/RulesProceduresAndForms/InternalOperatingProcedures/InternalOperatingProcedures.pdf (describing the 10-day circulation process for precedential decisions).

The CJP's role is to provide the panel with information regarding potential conflicts or inconsistencies with relevant authority, including PTAB precedential decisions, director guidance memoranda, and other written Office and Board policies and guidance. The CJP also provides the panel with information regarding potential inconsistencies with informative or routine PTAB decisions and suggestions for improved readability and stylistic consistency. The panel has the final authority and responsibility for the content of a decision and determines when and how to incorporate feedback from the CJP. The APJs on the panel are required to apply pertinent statutes, rules, binding case law, and written policy and guidance issued by the Director or the Director's delegate that is applicable to PTAB proceedings. All policies and guidance applicable to PTAB proceedings that the APJs are required to apply are written.

The CJP may have periodic meetings with PTAB Executive Management ( i.e., PTAB Chief Judge, Deputy Chief Judge, Vice Chief Judges, Senior Lead Judges, and those acting in any of the foregoing positions) to discuss issued panel decisions and general areas for potential policy clarification. PTAB Executive Management may discuss these issued decisions or areas for potential policy clarification with the Director for the purposes of (i) considering whether to issue new or updated policies or guidance, for example, through regulation, precedential or informative decisions, and/or a Director guidance memorandum; and (ii) considering sua sponte ( i.e., on the Director's own initiative) Director Review of a decision.

With respect to PTAB management ( i.e., PTAB Executive Management and Lead Judges), under the interim process, any panel member, at their sole discretion, could consult with one or more management team members regarding a decision prior to issuance. SOP4 builds on that process and sets forth details on how a panel member may optionally consult with a designated PTAB Management Pre-Issuance Optional Review team in addition to the CJP described above. The team is designated by PTAB Executive Management and may include a Vice Chief Judge, a Senior Lead Judge, Lead Judges, and those acting in any of the foregoing positions. If consulted, the PTAB Management Pre-Issuance Optional Review Team can provide information regarding the consistent application of USPTO and Board policy, applicable statutes and regulations, and binding case law. Adoption of any suggestions provided as a result of such consultation is optional. Unless consulted by a panel member, PTAB management does not make suggestions to a panel regarding the substance of any pre-issuance decision, either directly or indirectly through the CJP.

The PTAB internal circulation and review processes set forth in SOP4 promote decisional consistency and open decision-making by reinforcing that the adoption of all the CJP and requested PTAB management feedback is optional, that members of PTAB management do not provide feedback on decisions prior to issuance unless they are a panel member or a panel member requests such feedback, and that the PTAB panel has the final authority and responsibility for the content of a decision. Additionally, the processes provide a mechanism by which the Director could be made aware of decisions to consider for sua sponte Director Review and areas to consider for issuing new or modified USPTO or Board policy to promote the efficient delivery of reliable intellectual property rights.

All consultations are covered by conflict of interest policies. If a member of the CJP or PTAB management has a conflict of interest, they are required to notify the other members of their respective team and recuse themselves from any discussion or analysis of that decision. In determining whether a conflict of interest exists, the USPTO follows the guidance set forth in the Standards of Ethical Conduct for Employees of the Executive Branch at 5 CFR part 2635 and will consult with the Department of Commerce Ethics Law and Programs Office, as necessary, to resolve any questions pertaining to conflicts of interest.

In response to the RFC issued in July 2022, 87 FR 43249-52, and extended in September, 87 FR 58330 (September 26, 2022), the USPTO received over 4,300 comments from a wide range of stakeholders, including individuals, associations, and companies, on all aspects of the RFC, including specific responses to question 13 (which asked if any changes should be made to the interim PTAB decision circulation and review processes) and question 14 (which asked what other considerations should be taken into account with respect to the interim PTAB decision circulation and internal review processes). All of the comments are publicly available at the Federal eRulemaking Portal at https://www.regulations.gov/document/PTO-P-2022-0023/comments.

Several commenters emphasized the need for judicial independence and review processes that reduce influence by USPTO senior management on PTAB panels. Other commenters emphasized the value of transparency in the PTAB's processes and requested that further details on the CJP be made public. One commenter stated that, even when the CJP reviews a decision prior to issuance, it should not discuss the decision with PTAB management until the decision is issued by the panel. Another commenter believed that the value of the CJP may be outweighed by concerns with undue pre-issuance influence by the Director and suggested abandoning the CJP procedure in favor of entrusting the APJs and the Director Review process with maintaining consistency and quality of PTAB decisions.

On October 6, 2023, after careful consideration of the public input received in response to the RFC, the USPTO published a notice of proposed rulemaking to set forth the policies and standards that govern internal pre-issuance circulation and review of decisions within the PTAB. See 88 FR 69578. The notice of proposed rulemaking provided for a 60-day comment period.

The Office received a total of nine comments from eight organizations and one individual. The Office appreciates the thoughtful comments representing views from various public stakeholder communities. All of the comments are publicly available at the Federal eRulemaking Portal at https://www.regulations.gov/document/PTO-P-2023-0012-0001.

Commenters were generally supportive of the proposed rule and agreed with the Office that the rule would promote consistent, clear, and open decision-making processes. A few commenters suggested some modifications to certain provisions of the proposed rule. A summary of the comments and the USPTO's responses are provided below. The Office's responses address the comments that are directed to the proposed changes set forth in the notice of proposed rulemaking. Any comments directed to topics that are beyond the scope of the notice of proposed rulemaking are not addressed.

Comment 1: One commenter suggested that pre-issuance review by nonpanel members should be eliminated because the harms outweigh any potential benefits. Another commenter acknowledged that discussions among fellow judges can improve the quality and consistency of decisions. However, this commenter suggested that any such discussions with nonpanel members should be kept at a general level and should not include the specific facts or issues presented by a particular case.

Response: The USPTO agrees with commenters who noted that internal pre-issuance circulation and review of decisions within the PTAB helps to promote consistent, clear, and open decision-making processes and, therefore, the USPTO does not adopt the suggestions to eliminate optional pre-issuance review or to keep discussions at a general level. The pre-issuance review processes set forth in the rule are consistent with processes adopted by courts. For example, as described above, the CJP was modeled after both the Federal Circuit's previous circulation to the Senior Technical Assistant and the Federal Circuit's 10-day circulation process for precedential decisions. Also, judges in other tribunals often consult with fellow judges in order to take advantage of accumulated experience. The Office also notes that any pre-issuance review at the PTAB by the CJP or other nonpanel judges is entirely optional and helps the PTAB maintain a consistent and clear approach, which is important to stakeholders and the patent system at large.

Comment 2: One commenter suggested that, to the extent case-specific facts or issues are discussed outside of the panel, either with Management or non-Management Judges, the content of those discussions should be disclosed to the parties of record. Another commenter recognized that full transparency on this matter may not be practical or even desirable and, therefore, suggested that the Office provide statistical information regarding how often a panel seeks input from PTAB management.

Response: The Office appreciates these thoughtful comments regarding transparency. However, because the requests for input from nonpanel members are part of the deliberative process, the Office will not publicly disclose information regarding such requests. As one commenter acknowledged, the APJs should feel comfortable seeking internal input to promote consistency and efficiency without the potential chilling effects of public scrutiny before a decision is rendered. The Office also notes that other tribunals with similar processes, such as the U.S. Court of Appeals for the Federal Circuit, also do not disclose such information.

Further, it is unlikely that meaningful statistics could be provided because it would not be possible to track every time a judge informally reaches out to a nonpanel member for input. The use of statistics to track every instance of such behavior could discourage judges from seeking such input, which is beneficial for a consistent and clear approach at the Board. The Office will continue to provide other statistics that are useful to the public, such as those regarding Director Review requests and decisions.

Comment 3: Two commenters expressed concern about the language in proposed § 43.6 that all decisions of the Board are expected to comport with “written agency policy and guidance applicable to Board proceedings” in addition to applicable statutes, regulations, and binding case law. One of the commenters suggested deleting this language because any policy that is important enough for the Board to follow should undergo the rulemaking procedures of the Administrative Procedure Act (APA). The other commenter recognized that, in some circumstances, the USPTO will need to act before APA rulemaking can be completed—for example, when responding to a court decision invalidating USPTO policy or in response to other exigencies. That commenter suggested revising the language such that, under compelling circumstances, Board decisions would be required to comport with temporary policy or guidance, which shall expire within 18 months unless replaced by a rule implemented via notice-and-comment rulemaking.

Response: These suggestions are not adopted. The Office will retain the language regarding comporting with “written agency policy and guidance applicable to Board proceedings” (except for replacing “agency” with “Office,” as explained below) because notice-and-comment rulemaking is not required for all Office policy and guidance applicable to Board proceedings. See, e.g., 5 U.S.C. 553(b)(3)(A); Lincoln v. Vigil, 508 U.S. 182, 196-97 (1993). The Office seeks to retain flexibility in implementing written guidance to efficiently and transparently address the workings of the Board and to maintain consistency in proceedings. As stated in the rule, all policy and guidance binding on panels of the Board is written and made public.

Comment 4: One commenter suggested that if the Office establishes procedures governing internal circulation and review of decisions to one or more designated non-Management Judges, that the Office should first obtain public input on such procedures.

Response: The USPTO agrees that it is important to obtain public input on procedures governing internal circulation and review of decisions at the Board. The Office issued a Request for Comments seeking input on its interim PTAB decision circulation and internal review processes, including the requirement to circulate decisions to a pool of non-Management Judges. After considering the public input received in response to the RFC, the USPTO replaced the interim process with SOP4, which sets forth the details of the optional circulation process to the CJP and further details of the composition of the CJP. The final rule further specifies limits governing any procedures created for internal circulation and review of decisions prior to issuance by one or more designated members of the Board (such as a CJP), including that no Management Judge or an officer or employee external to the Board shall participate directly or indirectly in any such review.

Comment 5: One commenter observed that Congress expressly assigned decisions on institution to the Director and suggested adding a provision to § 43.3 to reinforce that the Director alone, rather than a panel, may issue a decision on institution.

Response: The Office does not adopt this suggestion and notes that it appears to be based on a misapprehension of the rule. The rule does not preclude paneling a proceeding to the Director alone prior to institution provided it is done in accordance with public Board paneling guidance. As a general matter, however, the Director will exercise authority and oversight over decisions on institution, as well as final written decisions, pursuant to the Director Review process. As provided by the final rule, the Director is not involved, directly or indirectly, in the decision-making of panels at the PTAB prior to issuance of a decision by the panel.

Comment 6: One commenter suggested modifications to some of the definitions set forth in § 43.2 and minor modifications to certain other provisions of the rules.

Response: The USPTO appreciates the thoughtful suggestions and careful review of the proposed rule. The Office adopts the suggestion to modify the definition of “Panel” set forth in § 43.2 to remove the reference to Standard Operating Procedure 1. The Office further adopts the suggestion to modify § 43.3(b) to clarify that the prohibition of paragraph (a) shall not apply to an individual in paragraph (a) who is a member of the panel. In view of the additional suggestions, the Office made minor modifications to § 43.4(b) and (c) to clarify that a panel member may additionally request input from an officer or employee of the Office external to the Board and that it is within the sole discretion of the panel to adopt any edits, suggestions, or feedback provided to the panel as part of a review requested under paragraph (b). For example, as described in SOP4, a panel member may seek input from a PTAB Management Pre-Issuance Optional Review team regarding a decision prior to issuance and may optionally seek input from another USPTO business unit by indicating that in its request. See SOP4 section II. The Office further agrees that Management Judges do not exercise review authority over a proceeding, and, accordingly, adopts the suggestion to eliminate the proposed provision from § 43.4(d) related to the review authority over the proceeding. After careful consideration, the Office does not adopt the remaining minor suggestions. For example, the suggestion to add additional open-ended language to the definition of “Proceeding” set forth in § 43.2 was not adopted because the definition set forth in the final rule encompasses all proceedings assigned to the Board.

Comment 7: One commenter requested clarification on the scope and timing of pre-issuance review and the composition and qualification of the review teams. The commenter further requested clarification on the types of decisions eligible for review and how the PTAB will resolve conflicts or disagreements between reviewers and panel members. Additionally, the commenter requested clarification on how review will affect the finality or appealability of PTAB decisions. The commenter suggested that the rule or an accompanying guidance document explain these details.

Response: The USPTO agrees that clarification of certain details regarding pre-issuance review is important. SOP4 sets forth the details on the composition of the CJP and the designated PTAB Management Pre-Issuance Optional Review Team as well as further details on the review processes. Under SOP4, a panel member may, at their sole discretion, choose to circulate any decision for pre-issuance review by the CJP or the PTAB Management Pre-Issuance Optional Review team. As set forth in SOP4 and the final rule, the panel has the sole discretion to adopt any suggestions or edits made from any optional pre-issuance review it seeks. SOP4 also sets forth details on the post-issuance review process, which may be used to flag decisions to the Director for further action, including consideration for sua sponte Director Review. The details of the Director Review process, including how a party may request Director Review and the appealability of Director Review decisions, are set forth on the Revised Interim Director Review process web page, available at https://www.uspto.gov/patents/ptab/decisions/revised-interim-director-review-process.

Upon careful consideration of the public comments, the Office adopts the provisions in the proposed rule with minor changes for additional clarity and consistency, which are noted below.

In this final rule, the Office modifies the title of § 43.1 to “Scope” and clarifies that the definition of “Management Judge” set forth in § 43.2 includes individuals that serve as a rating official for one or more Administrative Patent Judges. For clarity, the Office adds a definition of “Office” to § 43.2 and, for consistency in the rule, replaces “agency” with “Office” in § 43.6. The Office eliminates the reference to Standard Operating Procedure 1 from the definition of “Panel” in § 43.2 and clarifies that the panel members are assigned to a particular proceeding or an aspect thereof. The Office also clarifies that the definition of “Proceeding” set forth in § 43.2 includes any proceeding under part 42. The Office modifies the title of § 43.3 to clarify that § 43.3 places limits on the Director's and other individuals' involvement in panel decisions. The Office modifies § 43.3(b) to delete “proceeding” and clarify that the prohibition does not apply to any individual in paragraph (a) who is a member of the panel. The Office adds a minor provision to § 43.3(d) to clarify that the Chief Administrative Patent Judge or delegates shall panel or repanel proceedings only in accordance with public Board paneling guidance. The Office makes minor modifications to § 43.4(b) and (c) to clarify that a panel member may request input from an officer or employee of the Office external to the Board, adds “officer” to § 43.4(a), and adds “Office” to the title of § 43.4. The Office modifies § 43.4(d) to eliminate “and exercises no review authority over the proceeding prior to the issuance of the panel's decision on the merits.” The Office modifies § 43.5(a) to add an officer or employee external to the Board also shall not participate in any review of decisions by non-management judges.

Upon careful consideration of the public comments, the Office adopts the proposed rule with a few minor changes in the rule language, as discussed above. This final rule adds part 43 to set forth regulations governing the pre-issuance circulation and review of decisions within the PTAB. The USPTO issues this final rule to promote consistent, clear, and open decision-making processes while protecting judicial independence and increasing transparency of USPTO processes.

The USPTO adds § 43.1 to define the scope of the rules set forth in part 43.

The USPTO adds § 43.2 to set forth definitions for terms used in part 43.

The USPTO adds § 43.3 to specify that the Director and other high-level officers of the USPTO are not involved in panel decisions prior to their issuance, either directly or indirectly.

The USPTO adds § 43.3(a) to prohibit the Director, Deputy Director, Commissioner for Patents, and Commissioner for Trademarks from communicating, directly or indirectly, with any member of a panel regarding a decision, prior to issuance of that decision by the panel.

The USPTO adds § 43.3(b) to provide that paragraph (a) does not apply to any individual in paragraph (a) who is a member of the panel and also specifies that when sitting as a member of a panel, the individual is a coequal member of the panel and the individual exercises no review authority over the proceeding prior to the issuance of the panel's decision on the merits.

The USPTO adds § 43.3(c) to clarify that nothing in § 43.3 shall prevent the Director or their delegate from communicating with a panel as to resource needs or the procedural status of any proceeding. This provision permits Office leadership to engage in communications of a purely administrative or logistical nature that are necessary to ensure the effective and efficient administration of the Office. Communications with a panel attempting to influence or direct the outcome or reasoning of any decision is not permitted under this provision.

The USPTO adds § 43.3(d) to specifically delegate to the Chief Administrative Patent Judge the Director's power to designate panels of the Board under 35 U.S.C. 6(c). This provision specifies that the Chief Administrative Patent Judge and delegates of the Chief Administrative Patent Judge shall panel or repanel proceedings only in accordance with public Board paneling guidance. This provision prohibits the Director from directing or otherwise influencing the paneling or repaneling of any proceeding prior to issuance of the panel decision. The provision permits the Director to issue generally applicable paneling guidance to be applied to proceedings before the Board. The provision further permits the Director, when reviewing or rehearing an issued panel decision, to direct the repaneling of the proceeding in a manner consistent with public Board paneling guidance, through an Order entered into the record.

The USPTO adds § 43.4 to limit involvement by Board management or an officer or employee of the Office external to the Board in the review and circulation of decisions prior to issuance. The provision ensures judicial independence of Board panels while permitting a panel member to request input on issues when desired.

The USPTO adds § 43.4(a) to prohibit any Management Judge or an officer or employee of the Office external to the Board from initiating communication, directly or through intermediaries, with any member of a panel regarding a decision, prior to issuance of that decision.

The USPTO adds § 43.4(b) to provide an exception to paragraph (a) in the event a member of the panel requests input from a Management Judge or an officer or employee of the Office external to the Board prior to issuance of the decision. This provision specifies that requesting input is optional and the decision to request input is solely within the discretion of an individual panel member.

The USPTO adds § 43.4(c) to specify that it is within the panel's sole discretion to adopt any edits, suggestions, or feedback provided by a Management Judge or an officer or employee of the Office external to the Board received in response to a request for input, and the panel has the final authority and responsibility for the content of a decision.

The USPTO adds § 43.4(d) to provide that paragraph (a) does not apply to a Management Judge who is a member of the panel and specifies that when sitting as a member of a panel, a Management Judge is a coequal member of the panel.

The USPTO adds § 43.4(e) to clarify that nothing in § 43.4 shall prevent a Management Judge from communicating with a panel as to resource needs or the procedural status of any proceeding. This provision permits Board management to engage in communications of a purely administrative or logistical nature that are necessary to ensure the effective and efficient administration of the Board. Communications with a panel attempting to influence or direct the outcome or reasoning of any decision are not permitted under this provision.

The USPTO adds § 43.5 to govern procedures for circulation of decisions to, and review of decisions by, a designated group of non-Management Judges if the Office sets forth additional procedures for such circulation. The provision promotes consistent, clear, and open decision-making by permitting peer review of decisions prior to issuance, while respecting the judicial independence of panels by providing that all feedback from such review is optional and at the panel's sole discretion to adopt.

The USPTO adds § 43.5(a) to provide that no Management Judge or an officer or employee external to the Board shall participate in any such circulation and review procedures. This provision further provides that if a decision is circulated to the designated non-Management Judges for review prior to issuance, the reviewing judges will not discuss the substance of the circulated decision with a Management Judge prior to issuance by the panel, except with a Management Judge who is a member of the panel.

The USPTO adds § 43.5(b) to specify that any edits, suggestions, or feedback provided following circulation and review to the designated non-Management Judges are optional and in the sole discretion of a panel to accept. This provision also sets forth that the panel has final authority and responsibility for the content of a decision and determines whether and how to incorporate any feedback provided.

The USPTO adds § 43.6 to provide that all decisions of the Board are expected to comport with all applicable statutes, regulations, binding case law, and written Office policy and guidance applicable to Board proceedings. This provision also specifically states that there is no unwritten Office or Board policy or guidance that is binding on any panel of the Board and further requires that all written policy and guidance binding on panels of the Board shall be made public. Thus, this provision makes clear there is no unwritten or non-public guidance that judges are required to follow.

A. Administrative Procedure Act: The changes in this rulemaking involve rules of agency practice and procedure and/or interpretive rules. See Perez v. Mortg. Bankers Ass'n, 135 S.Ct 1199, 1204 (2015) (Interpretive rules “advise the public of the agency's construction of the statutes and rules which it administers.” (citation and internal quotation marks omitted)); Nat'l Org. of Veterans' Advocates, Inc. v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (Rule that clarifies interpretation of a statute is interpretive.).

Accordingly, prior notice and opportunity for public comment are not required pursuant to 5 U.S.C. 553(b) or (c) or any other law. See Perez, 135 S. Ct. 1199, 1206 (Notice-and-comment procedures are required neither when an agency “issue[s] an initial interpretive rule” nor “when it amends or repeals that interpretive rule.”); Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), do not require notice and comment rulemaking for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice”) (quoting 5 U.S.C. 553(b)(3)(A)).

However, the USPTO chose to seek public comment before implementing the rule to benefit from the public's input.

B. Regulatory Flexibility Act: For the reasons set forth herein, the Senior Counsel for Regulatory and Legislative Affairs, Office of General Law, United States Patent and Trademark Office, has certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule will not have a significant economic impact on a substantial number of small entities. See 5 U.S.C. 605(b).

The rule sets forth expressly the rules governing the circulation and review of decisions of the Board prior to issuance by a panel. The changes do not create additional procedures or requirements or impose any additional compliance measures on any party, nor do these changes cause any party to incur additional cost. Therefore, any requirements resulting from the rule are of minimal or no additional burden to those practicing before the Board.

For the foregoing reasons, this rulemaking will not have a significant economic impact on a substantial number of small entities.

C. Executive Order 12866 (Regulatory Planning and Review): This rulemaking has been determined to be not significant for purposes of Executive Order 12866 (September 30, 1993), as amended by Executive Order 14094 (April 6, 2023).

D. Executive Order 13563 (Improving Regulation and Regulatory Review): The Office has complied with Executive Order 13563 (January 18, 2011). Specifically, and as discussed above, the Office has, to the extent feasible and applicable: (1) made a reasoned determination that the benefits justify the costs of the rules; (2) tailored the rules to impose the least burden on society consistent with obtaining the regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) involved the public in an open exchange of information and perspectives among experts in relevant disciplines, affected stakeholders in the private sector and the public as a whole, and provided on-line access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across government agencies and identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes.

E. Executive Order 13132 (Federalism): This rulemaking pertains strictly to Federal agency procedures and does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (August 4, 1999).

F. Executive Order 13175 (Tribal Consultation): This rulemaking will not: (1) have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (November 6, 2000).

G. Executive Order 13211 (Energy Effects): This rulemaking is not a significant energy action under Executive Order 13211 because this rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

H. Executive Order 12988 (Civil Justice Reform): This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (February 5, 1996).

I. Executive Order 13045 (Protection of Children): This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (April 21, 1997).

J. Executive Order 12630 (Taking of Private Property): This rulemaking will not affect a taking of private property or otherwise have taking implications under Executive Order 12630 (March 15, 1988).

K. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), the USPTO will submit a report containing the rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the Government Accountability Office. The changes in this rulemaking are not expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this rulemaking is not a “major rule” as defined in 5 U.S.C. 804(2).

L. Unfunded Mandates Reform Act of 1995: The changes set forth in this rulemaking do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

M. National Environmental Policy Ac t: This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

N. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions which involve the use of technical standards.

O. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3549) requires that the Office consider the impact of paperwork and other information collection burdens imposed on the public. This rulemaking does not involve an information collection requirement that is subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3549). This rulemaking does not add any additional information requirements or fees for parties before the Board.

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to, a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

P. E-Government Act Compliance: The USPTO is committed to compliance with the E-Government Act to promote the use of the internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Throughout this document, “we,” “us,” and “our” refer to the EPA.

On April 16, 2024, 1 the EPA proposed to approve portions of the “Final Coachella Valley Extreme Area Plan for the 1997 8-Hour Ozone Standard,” dated December 2020 (“Coachella Valley Ozone Plan” or “Plan”), into the California SIP, along with the entirety of a second submittal, the “VMT Offset Demonstration.”  2 For the Coachella Valley Ozone Plan, we proposed to approve all elements of the Plan except the reasonably available control technology demonstration, which we planned to address in subsequent proposal. Our proposed action contains more information on the two submittals and our evaluation.

The EPA's proposed action provided a 30-day public comment period. During this period, we received comments from Air Law for All (ALFA). These comments addressed the EPA's proposed approval of the Coachella Valley Ozone Plan's RFP demonstration and other issues related to nonattainment planning elements not addressed in the EPA's proposal. No adverse comments were directed at the EPA's proposal to approve the Plan's RACM demonstration, attainment demonstration, or the EPA's proposed finding that the State has satisfied the clean fuels or advanced control technology for boilers requirement. In this action, the EPA is taking final action only on these elements of the Coachella Valley Ozone Plan for which we received no adverse comment. The EPA intends to address our proposed approval of the Plan's RFP demonstration and the separately submitted VMT Offset Demonstration in a future rulemaking.

This final action will generally be neutral or not contribute to a reduction in adverse environmental and health impacts on all populations in the Coachella Valley, including people of color and low-income populations in the area. At a minimum, the approved action would not worsen any existing air quality and is expected to ensure the area is meeting requirements to attain air quality standards. Further, there is no information in the record indicating that this action is expected to have disproportionately high or adverse human health or environmental effects on a particular group of people. In responding to public concerns about environmental justice in Eastern Coachella Valley, the South Coast Air Quality Management District (SCAQMD) noted that (1) Assembly Bill 617 funding has reduced pollutant emissions in Eastern Coachella Valley by 63.1 tpy of nitrogen oxides (NO X ), 7.5 tpy of Volatile Organic Compounds (VOC), and 5.3 tpy of diesel particulate matter, 3 and (2) the SCAQMD has provided $966,667 in energy efficiency upgrades, reducing energy costs for homes within designated environmental justice areas of Indio and Eastern Coachella Valley. 4 The SCAQMD Final 2016 Air Quality Management Plan, which included additional information for the Coachella Valley Ozone Plan such as more detailed information regarding emissions inventory development, also identifies an Environmental Justice Advisory Group established to “advise and assist SCAQMD in protecting and improving public health in SCAQMD's most impacted communities through the reduction and prevention of air pollution.”  5

Pursuant to section 110(k)(3) of the CAA, and for the reasons provided in our April 16, 2024 proposed rule, the EPA is taking final action to approve into the California SIP the following elements of the “Final Coachella Valley Extreme Area Plan for the 1997 8-Hour Ozone Standard,” dated December 2020 under CAA section 110(k)(3):

• The RACM demonstration as meeting the requirements of CAA section 172(c)(1) and 40 CFR 51.1105(a)(1) and 51.1100(o)(17); and

• The attainment demonstration as meeting the requirements of CAA section 182(c)(2)(A) and 40 CFR 51.1105(a)(1) and 51.1100(o)(12).

We are also finalizing our proposal to find that the State has satisfied the clean fuel or advanced control technology for boilers requirement in CAA section 182(e)(3) for the Coachella Valley for the 1997 ozone NAAQS.

These requirements and related parts of the SIP submittal were evaluated separately from the RFP demonstration and the substitution of NO X emissions reductions for VOC emissions reductions in the EPA's April 16, 2024 notice of proposed rulemaking.

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

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);

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

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

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

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

• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a State program;

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

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

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

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

The State did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. However, as described in section III (Environmental Justice Considerations) of this document, the District has an advisory group to address EJ and has taken prior EJ-focused actions within the Coachella Valley. The EPA did not perform an EJ analysis and did not consider it in this action. Due to the nature of this action, this action is expected to have a neutral to positive impact on the air quality of Coachella Valley. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of Executive Order 12898, to achieve environmental justice for people of color, low-income populations, and Indigenous peoples.

This action is subject to the Congressional Review Act, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 12, 2024. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

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

On April 26, 2024, we published a final rule for 2024 and 2025 summer flounder and scup, and 2024 black sea bass recreational management measures (89 FR 32374). That final rule included one error in the background section. On page 32374, the final rule states “the 2024 and 2025 Federal recreational scup management measures are a 10-inch (25.4-centimeters (cm)) minimum fish size, a 50-fish per person possession limit, and a year-round open season.” This is incorrect; the Federal scup possession limit is 40 fish per person as correctly stated in regulatory text.