This final rule affecting the Order (7 CFR part 1217) is authorized by the Commodity Promotion, Research, and Information Act of 1996 (Act) (7 U.S.C. 7411-7425).

USDA issues this final rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This final rule is not a significant regulatory action within the meaning of Executive Order 12866. Accordingly, this action has not been reviewed by the Office of Management and Budget under section 6 of the Executive Order.

This action was reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. AMS assessed the impact of this final rule on Indian Tribes and determined this final rule will not have Tribal implications that require consultation under Executive Order 13175. AMS hosts a quarterly teleconference with Tribal leaders where matters of mutual interest regarding the marketing of agricultural products are discussed. Information about the changes to the regulations will be shared during an upcoming quarterly call, and Tribal leaders will be informed about the revisions to the regulation. AMS will work with the USDA Office of Tribal Relations to ensure meaningful consultation is provided as needed with regard to the changes to the Order.

This final rule was reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect. Section 524 of the Act (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.

Under sec. 519 of the Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The Act provides that the district court of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA's final ruling.

Under the Order, which became effective on August 3, 2011, the Board administers a nationally coordinated program of research, development, advertising, and promotion designed to strengthen softwood lumber's competitive position and expand domestic markets for softwood lumber. This program is financed by assessments on domestic manufacturers and importers of softwood lumber. The Board administers the Order with oversight by the USDA.

This final rule modifies the membership of the Board by adding two domestic manufacturer alternates, one importer alternate, a public member and alternate, and updating HTS numbers. The Board discussed the recommendations over several months and, on May 17, 2023, unanimously recommended the changes to the membership and the update to the HTS numbers. Board members present for the vote represented domestic manufacturers and importers.

Section 1217.40 of the Order provides for the membership of the Board and authorizes these changes. The Board is comprised of 10 domestic manufacturers and four importers who manufacture and domestically ship or import 15 million board feet or more of softwood lumber in the United States during a fiscal period. Currently, the Board struggles to find individuals from under-represented populations who are eligible to serve with the current membership requirements. To mitigate this issue, this final rule adds alternate positions (two for domestic manufacturers; one for importers), a public member, and an alternate public member to the Board.

Unlike most other research and promotion programs, the members on this Board have corporate backgrounds from large, international corporations and serve in leadership positions at their respective companies. Furthermore, according to the Board, about 90% of the manufacturing companies are family owned, therefore these companies typically pass leadership positions on to a family member. It is common industry practice to nominate executive-level employees to serve on the Board, which allows for robust discussions and thoughtful decision making. The Board believes that adding alternates for manufacturers provides succession and development opportunities for prospective nominees.

Adding a public member and alternate also expands the pool of members and allows the Board to tap into broader backgrounds and more diverse perspectives. Ideally, the public member position will be filled by an individual in architecture, construction, engineering, or development sectors, who will participate, voice their opinions, and vote to the benefit to the softwood lumber industry. Much like the alternates for manufacturers, adding an alternate public member creates succession and development opportunities for prospective nominees in the architecture, construction, and engineering industries, as well as an opportunity to provide input and unique perspective on Board actions.

This final rule is the second change to the Board's membership since its inception. In response to industry consolidation in 2019, the membership was reduced from 19 to 14 and more flexibility was added to the Order in terms of certain seats being open to representatives of any size manufacturer or importer. While previous rulemaking sought to decrease membership, this final rule adds certain alternate positions and a public member to help create opportunities for a more diverse and inclusive Board. The Board does not believe they will have difficulty filling the new positions from this final rule because this final rule opens eligibility to a new class of underrepresented and prospective industry members.

In addition to providing more opportunities to recruit diverse candidates, adding alternates will help the Board meet quorum requirements, which became a greater issue after the Board reduced its membership in 2019. Including alternates allows for an absent member seat or vacant seat to be filled as needed to vote on Board motions. Since alternates will not be broken out by size, they may serve in the stead of any size seat if it is from the same region they represent for the two domestic seats, and any importing region for the importer seat.

With the changes to § 1217.40, the membership of the Board increases from 14 to 15 members and four alternates. The new Board will be composed of 10 domestic manufacturer members and two alternates, four importer members and one alternate, and one public member and one alternate. Further, domestic manufacturers will represent three regions: five members and one alternate representing the South region; four members and one alternate representing the West region; and one member representing the Northeast and Lake States region. Alternates for the domestic manufacturers may represent companies of any size. For importer representation, the four members will be two large importers, one small importer, and one importer of any size, while the alternate may represent importers of any size from any region.

As a point of clarification, current § 1217.41(f) of the Order states that no two members shall be employed by a single corporation, company, partnership, or any other legal entity. This final rule maintains this stipulation for alternates, ensuring the Order is not violated and no two members or alternates may be from the same manufacturer or importer. Although there is consolidation in the industry, there are a sufficient number of companies who will be able to fill the 15 member seats and four alternate seats.

Section 1217.44, which is currently titled “Procedure”, is revised to be titled “Alternates”; and it creates the alternate position and explains the role of alternate members on the Board. In the event a member is unable to attend a Board meeting due to death, removal, resignation, disqualification, illness, or any other reason, the alternate from the same group (domestic manufacturer, importer, or public member) and region (if applicable) may serve in the member's stead. For example, if a member is unable to attend a singular meeting, an alternate from the same category could step in and serve as a member, counting towards quorum and will be eligible to vote. However, if a member is unable to serve permanently, the position becomes vacant, and the Board will nominate persons for the vacant seat using the nomination process set forth in § 1217.41. The alternate will serve until the vacancy is permanently filled.

Currently, § 1217.44 specifies the Board's procedures, § 1217.45 specifies the reimbursement and attendance policies when performing Board business, § 1217.46 specifies the powers and duties of the Board, and § 1217.47 specifies prohibited activities. Current §§ 1217.44 to 1217.47 will be redesignated and become §§ 1217.45 to 1217.48 to accommodate the addition of the role of the newly created alternate member positions in § 1217.44. Redesignated §§ 1217.45 to 1217.47 are also revised to include references to alternates.

Section 1217.5 defines conflict of interest for current Board members or Board employees. This section is revised to include alternate members to the Board and is a conforming change.

Section 1217.41 specifies the nomination procedures. This final rule revises §§ 1217.41(b) and (c) and redesignates § 1217.41(g) to include alternate members and the public member. Section 1217.41(b) specifies that domestic manufacturers, importers, and public members and alternates may submit a short background statement outlining their qualifications to serve on the Board. Section 1217.41(c) states that all members and alternates may seek nomination for all open or vacant seats for which they are eligible. Section 1217.41(e) is added to prescribe nomination procedures specifically for the public member and alternate positions on the Board.

The nomination procedure provides that the Board conduct outreach and solicit nominees for domestic manufacturers, importers, and public members who are interested in serving on the Board. A nominee could seek nomination to the Board for all seats for which they qualify. The Board evaluates all nominees and submits one recommended candidate for each open seat and at least one additional nominee for each open seat to the Secretary for consideration. Any additional qualified persons interested in serving in any of the open seats but not one of the two forwarded by the Board are designated as additional nominees for consideration by the Secretary.

Current § 1217.41(f), which states that no two members shall be employed by a single legal entity, is redesignated and revised to include alternates.

Section 1217.42 specifies the term of office. Section 1217.42(a) is revised to include alternates and allow members to serve as an alternate when they are ineligible to serve in the member position after two consecutive terms. In addition, § 1217.42(b) staggers the alternate member position terms so not all alternates will term off the Board at the same time. Like their member counterparts, alternate members are permitted to serve two consecutive, 3-year terms as alternates. If an alternate is nominated and appointed as a member, the eligibility starts over. For example, if an alternate member serves two consecutive terms, they are eligible to serve as a member immediately after their service as an alternate.

Section 1217.43 specifies the removal and filling of vacancies on the Board. Section 1217.43(a) is revised to address the addition of alternates to the Board, and states that if any member or alternate ceases to serve in their appointed capacity, whether they leave their position at their manufacturing or importing entity, or if they no longer qualify as a Board member or alternate in the respective group or region in which they were appointed, that position becomes vacant. Section 1217.43(b) is revised to add alternates, specifying that, similar to members, if an alternate refuses to perform their duties, the Secretary may remove the member or alternate from the Board.

Section 1217.52(h) specifies the HTS numbers and assessment rates on imported softwood lumber. This final rule updates the HTS numbers to the latest codes published by the U.S. International Trade Commission.

In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) is required to examine the impact of the action on small entities. Accordingly, AMS considered the economic impact of this action on such entities.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to the actions so that small businesses will not be disproportionately burdened. The Small Business Administration (SBA) defines, in 13 CFR part 121, small firms which engage in “Support Activities for Forestry” (domestic softwood lumber manufacturers and importers) as those having annual receipts of no more than $11.5 million. 1

The RISI/Fast Markets Random Lengths Publication's yearly average framing lumber composite price was $759 per thousand board feet (mbf) in 2022. Dividing the $11.5 million threshold that defines a small firm which provides “Support Activities for Forestry” by this price results in a maximum threshold of 15.15 million board feet (mmbf) of softwood lumber per year that a domestic manufacturer or importer may ship to be considered a small entity for purposes of the RFA. Table 1 shows the number of entities and the amount of volume they represent that may be categorized as small or large based on the SBA definition. This table is based on data from Forest Economic Advisors (FEA) and Customs and Border Protection (CBP).

Table 1 shows that there was a combined total of 1,187 domestic manufacturers and importers of softwood lumber in the industry in 2022. Of these, 903 entities, or 76 percent, shipped or imported less than 15.15 mmbf and would be considered small based on the SBA definition. These 903 entities domestically manufactured or imported 1.984 billion board feet (bbf) in 2022, less than 4 percent of total volume. The final rule will not disproportionately burden small domestic manufacturers and importers of softwood lumber.

This final rule revises § 1217.44 to add the alternate position, revise § 1217.40 to specifically add four alternates and a public member on the Board and make conforming changes throughout the Order. The Order is administered by the Board with oversight by the USDA. In accordance with program requirements, assessments are collected from domestic manufacturers and importers, and used for research and promotion projects designed to strengthen the position of softwood lumber in the marketplace. Adding two domestic manufacturer alternates, one importer alternate, and one public member and one public member alternate positions will provide more opportunities for diverse candidates to serve on the Board.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements imposed by the Order were approved previously under OMB control number 0581-0093. This final rule will not result in a change to the information collection and recordkeeping requirements previously approved and would impose no additional reporting and recordkeeping burden on domestic manufacturers and importers of softwood lumber.

As with all Federal promotion programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

Regarding alternatives, the Board considered not changing the current Board makeup and continuing to have issues meeting quorum and diverse members serving on the Board. The Board decided against this option to avoid meeting delays and continued concerns with nominations.

Regarding outreach efforts, the full Board determined making these changes will give further opportunity for the industry to engage with the Board and expand the availability of positions to those from under-represented communities and populations. This final rule was discussed by the Industry Relations and Governance Committee on June 29, 2022, and the full Board unanimously recommended rulemaking on August 11, 2022. Further discussions among the Board took place on May 17, 2023.

A proposed rulemaking concerning this action was published in the Federal Register on February 21, 2024 (89 FR 12987). The proposed rulemaking was distributed to all stakeholders of the Board via a newsletter. A copy of the proposed rulemaking was also made available through the internet by AMS via https://www.regulations.gov . A 30-day comment period ending March 22, 2024, was provided for interested persons to respond to the proposal.

During the proposed rulemaking's 30-day comment period, AMS received two comments, which may be viewed on https://www.regulations.gov . One comment did not address the merits of the proposed rulemaking. The second comment was submitted by the Softwood Lumber Board and is in favor of the proposed rulemaking. However, the Board had two points to clarify. Firstly, the Board's intent with adding alternate members is to create succession and development opportunities among perspective nominees, not necessarily junior-level professionals as stated in the proposed rulemaking. Secondly, they elaborated that alternates for domestic manufacturers and importers should not automatically be moved into a member position if there is a vacancy. To keep the Board balanced in terms of large, small, and flexible companies represented, the Board prefers vacant positions to go through a normal nomination process.

AMS agrees with the comments from the Softwood Lumber Board and updated the text in the preamble to this final rule and the regulatory text.

For the reasons set forth in the preamble, the Agriculture Marketing Service amends 7 CFR part 1217 as follows:

On September 16, 2019, Airbus applied for an amendment to Type Certificate No. A28NM to include the new Model A321neo XLR series airplane. The Airbus Model A321neo XLR series airplane, which is a derivative of the Model A321neo Airbus Cabin Flex (ACF) currently approved under Type Certificate No. A28NM, is a twin-engine transport category aircraft that seats up to 244 passengers and has a maximum takeoff weight of 222,667 lbs.

Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Airbus must show that the Model A321neo XLR series airplane meets the applicable provisions of the regulations listed in Type Certificate No. A28NM, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations ( e.g., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Airbus Model A321neo XLR series airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Airbus Model A321neo XLR series airplane must comply with the fuel venting and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.

The Airbus Model A321neo XLR series airplane will incorporate the following novel or unusual design feature:

An integral RCT.

The Airbus Model A321neo XLR series airplane incorporates an integral RCT. This tank is a “center” fuel tank, that would, if approved, be located in the airplane fuselage rather than in its wings. The tank is a “rear” tank, that would be located aft of the center wing fuel tank and behind the wheel bay; it would be in an area of the lower section of the fuselage, partially replacing the aft cargo compartment of the airplane from which this model is derived. The top of the tank would be directly below the floor of the passenger cabin. The fuel tank would be “integral” to the airplane, in that its walls would be part of the airplane structure. The exterior skin of the airplane fuselage would constitute part of the walls of the fuel tank, and these areas are usually separate boundaries (not integral) on other fuselage fuel tanks. An integral fuel tank may be referred to as a conformal fuselage structural fuel tank since boundaries of the fuel tank “conform” with the airplane exterior. The integral RCT is installed in a location that may be exposed to the direct effects of post-crash ground, or pool, fuel-fed fires. An external fuel-fed ground fire or external fuel-fed pool fire is also referred to as `external ground fire'.

The airworthiness standards applicable to the Model A321neo XLR do not contain specific standards for post-crash fire-safety performance of fuel-tank skin or structure. In addition, the integral RCT on the A321neo XLR was not envisaged by the FAA when promulgating requirements related to occupant protection when fuel tanks are exposed to external fuel-fed fires. The FAA considered fuel tank designs in widespread use on transport airplanes, including main fuel tanks and auxiliary fuel tanks when promulgating requirements related to occupant protection. Auxiliary fuel tanks are normally located in the center wing and within cargo holds, and in such cases are sometimes referred to as an auxiliary center tank (ACT).

Airplane manufacturers commonly incorporate a center wing fuel tank as an auxiliary fuel tank to make fuel available for increasing the flight range of the airplane. Continued expansion of range performance requirements has resulted in airplane designs using other areas of the airplane to carry fuel, such as incorporating fuel tanks in the empennage and fuselage. The Airbus model A321neo XLR airplane includes a center wing fuel tank, an integral RCT and the option for additional ACTs within the fuselage. Unlike an integral RCT, a center wing fuel tank and optional ACTs are not expected by the FAA or manufacturers to be exposed to the direct effects of post-crash ground fire because the fuel tank walls are not exterior airplane skin on the center fuel tank or ACT designs.

Due to its unusual configuration, the A321neo XLR's integral RCT will also not incorporate the insulation that usually lines the fuselage skin of a modern transport category airplane. Therefore, the FAA has issued, after notice and comment, a set of special conditions that address that novel or unusual aspect of the A321neo XLR's integral RCT with regard to certain of the FAA's regulatory requirements for thermal/acoustic insulation installations, specifically 14 CFR 25.856(b). Those special conditions, No. 25-825-SC, require that the lower half of the fuselage spanning the longitudinal location of the RCT resist penetration from an external fuel-fed fire, to ensure that the design provides the same level of passenger protection from such fires as do the FAA's existing regulations for such insulation. The special conditions herein address a different flammability aspect of the A321neo XLR's integral RCT.

Pertinent to the fuel tank structure, post-crash-fire occupant survivability is dependent on the time available for occupant evacuation prior to fuel-tank breach or structural failure. Structural failure can be a result of degradation in load-carrying capability caused by a fuel-fed ground fire. Structural failure can also be a result of over-pressurization caused by ignition of fuel vapors inside the fuel tank.

Past experience indicates that occupant survivability following a post-crash fire is greatly influenced by the size and intensity of any fire that occurs. The ability of main fuel tanks, when they have aluminum wing surfaces wetted by fuel on their interior surface, to withstand post-crash-fire conditions, has been demonstrated by tests conducted at the FAA William J. Hughes Technical Center. Results of these tests have verified adequate dissipation of heat across wetted aluminum fuel-tank surfaces so that localized hot spots do not occur, thus minimizing the threat of explosion. This inherent capability of aluminum to dissipate heat also allows the aircraft's lower surface, which is also the fuel tank boundary, to retain its load-carrying characteristics during a fuel-fed ground fire, and significantly delays structural collapse or burn-through for a time interval that usually exceeds evacuation times. In addition, as an aluminum fuel tank with significant quantities of fuel inside is heated, fuel vapor accumulates in the ullage space, exceeding the upper flammability limit relatively quickly and thus reducing the threat of a fuel-tank explosion prior to fuel-tank burn-through.

The center wing tank and optional ACTs are surrounded by fuselage structure and would not be directly exposed to a post-crash ground fire. This inherent separation is also expected to significantly delay structural collapse or burn-through and reduce the threat of explosion for a time interval that usually exceeds evacuation times. Service history of conventional aluminum airplanes has shown that fuel-tank explosions caused by ground fires have been rare on airplanes configured with flame arrestors in the fuel-tank vent lines. The Model A321neo XLR integral RCT may or may not have equivalent capability of past designs approved with existing regulations, due to the RCT design and location being integral with the fuselage.

There are several part 25 requirements that address fire-safety performance of the fuel tanks and fuselage in the Model A321neo XLR certification basis. However, these requirements do not directly or adequately address standards for post-crash fire-safety performance of fuel-tank skin or structure. These standards address failure conditions or minimize the hazard to the occupants in the event ignition of flammable fluids or vapors occurs. For example, § 25.863 requires applicants to minimize the probability of ignition and resultant hazards if ignition occurs for flammable fluid systems on the airplane. Another example is § 25.981(a) which requires applicants to demonstrate no ignition source may be present at each point in the fuel tank or fuel tank system where catastrophic failure could occur due to ignition of fuel or vapors. Specifically, § 25.981(a)(1) requires “determining the highest temperature allowing a safe margin below the lowest expected autoignition temperature of the fuel in the fuel tanks.” Then § 25.981(a)(2) requires “demonstrating that no temperature at each place inside each fuel tank where fuel ignition is possible will exceed the temperature determined under paragraph (a)(1) of this section. This must be verified under all probable operating, failure, and malfunction conditions of each component whose operation, failure, or malfunction could increase the temperature inside the tank.” In addition, § 25.981(a)(3) requires “except for ignition sources due to lightning addressed by § 25.954, demonstrating that an ignition source could not result from each single failure, from each single failure in combination with each latent failure condition not shown to be extremely remote, and from all combinations of failures not shown to be extremely improbable, taking into account the effects of manufacturing variability, aging, wear, corrosion, and likely damage.” These airworthiness requirements address ignition sources and are part of the FAA's regulatory framework for preventing fires and explosions; however, taken together, they do not adequately address the potential for a post-crash external ground fire to affect the safety of airplane occupants.

The FAA therefore determined that the airworthiness standards applicable to the Model A321neo XLR airplane do not contain adequate standards for post-crash fire-safety performance of fuel-tank skin or structure. The FAA therefore proposed that special conditions are needed for the Model A321neo XLR airplane, because the integral RCT design, including location in the lower fuselage, is considered an unusual or novel design feature that could expose the RCT to an external ground fire. Factors influencing occupant survival time when a fuel tank is exposed to a ground-fed fire are the structural integrity of the tank; burn-through resistance; flammability of the tank; and the presence of auto-ignition threats during exposure to a fire. As previously discussed, the FAA issued Special Conditions No. 25-825-SC to address the novel or unusual aspect of the A321neo XLR's integral RCT with regard to requirements for thermal/acoustic insulation installations. The FAA considers the occupant survival time related to the burn-through resistance of the integral RCT to be adequately accounted for in those special conditions.

These special conditions address standards for post-crash fire-safety performance of fuel-tank skin or structure by proposing a requirement to prevent the ignition of fuel vapor during an external fuel-fed ground fire. These special conditions include accounting for the potential for hot surface ignition created by the external fuel-fed fire. As described in FAA Advisory Circular 25.981-1D, “Fuel Tank Ignition Source Prevention Guidelines,” hot surfaces that can exceed the autoignition temperature of the flammable vapor under consideration are considered to be ignition sources. The FAA intends this requirement to adequately protect the airplane occupants from the consequences of an integral RCT exposed to an external fuel-fed ground, or pool fire.

The intention of the requirement for the design to prevent ignition is for the applicant to show that ignition sources do not occur, such as from a hot surface, due to the external heat applied to the integral RCT from an external fuel-fed ground fire. Where previously discussed, § 25.981(a) requires applicants to demonstrate that no ignition source may be present but does not specifically address ignition due to an external fuel-fed ground fire.

To provide the same level of safety as provided by the relevant regulations in this model's certification basis, Airbus must demonstrate that the Model A321neo XLR series airplane has sufficient post-crash fire-safety performance of fuel-tank skin or structure to enable occupants to safely evacuate in the event that the integral RCT is exposed to an external fuel-fed ground fire.

The FAA assessed post-crash-survival time during the adoption of § 25.856 and revisions to appendix F to part 25 at Amendment 25-111 for fuselage burn-through protection. Studies conducted by and on behalf of the FAA indicated that following a survivable accident, prevention of fuselage burn-through for approximately 5 minutes can significantly enhance survivability.

The FAA would consider Airbus showing the design prevents ignition of fuel tank vapors in the integral RCT during at least 5 minutes of exposure to an external fuel-fed ground fire as a sufficient time duration for the purposes of these special conditions. The time duration of 5 minutes is consistent with the studies mentioned above showing prevention of fuselage burn-through for approximately 5 minutes enhances occupant survivability. The requirements of the special conditions and the time duration are consistent with the European Union Aviation Safety Agency Special Conditions No. SC-D25.863-01, Cabin Evacuation—Protection from Fuel Tank Explosion due to External Fuel Fed Ground Fire applicable to integral RCTs.

Airbus may consider a flammability reduction system or ignition mitigation means that complies with § 25.981 when showing compliance with these special conditions, provided the system's performance is demonstrated to meet the special conditions. As discussed previously, showing compliance with only § 25.981(b) is insufficient to show post-crash fire-safety performance of fuel-tank skin or structure. Airbus must also meet these special conditions.

The special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

The FAA issued Notice of Proposed Special Conditions No. 25-23-06-SC for the Airbus Model A321neo XLR airplane, which was published in the Federal Register on May 7, 2024 (89 FR 38004). The FAA received several comments from an individual regarding the proposed special conditions.

The commenter requested the FAA consider how passengers will be made aware of what the commenter described as the “unique” configuration of a fuel tank directly under passenger seats in what is traditionally a location for baggage and cargo. The commenter suggested that the FAA make passengers aware of their proximity to the airplane fuel.

In the Notice of Proposed Special Conditions No. 25-23-06-SC, which was published in the Federal Register , the FAA informed the public of the proposed configuration. As stated in that Notice, while the subject integral RCT is a novel or unusual design feature, the configuration is not unique. Many transport airplanes incorporate fuel tank configurations that result in fuel in close proximity to some passengers. These special conditions address standards for post-crash fire-safety performance of fuel-tank skin or structure. No changes were made to these special conditions as a result of this comment.

The commenter requested the FAA clarify how it addressed the crashworthiness requirements of a fuel tank integral to the fuselage applied by the FAA to the Model A321neo XLR series airplane. The commenter recognized the request is beyond the proposed special conditions.

The FAA disagrees that additional clarification of crashworthiness requirements for the RCT is necessary for these special conditions. The FAA discussed the type certification basis of the Model A321neo XLR series airplane in the Notice of Proposed Special Conditions No. 25-23-06-SC. The crashworthiness requirements applicable to the Model A321neo XLR series airplane are addressed by the type certification basis, and as acknowledged by the commenter, are outside the scope of these special conditions. Therefore, no changes were made to these special conditions as a result of this comment.

The commenter requested the FAA explain what considerations the FAA is making relative to an otherwise survivable accident when the RCT is ruptured and there is an external fuel-fed ground fire already present.

The FAA infers that the commenter requests the FAA further clarify the requirements the FAA applied to the Model A321neo XLR series airplane related to a ruptured RCT in addition to an external fuel-fed ground fire. The FAA considers the commenter's request to be beyond the scope of these special conditions, which addresses standards specifically for the post-crash fire safety performance of fuel-tank skin or structure by establishing a requirement to prevent the ignition of fuel vapor during an external fuel-fed ground fire.

The FAA stated in Notice of Proposed Special Conditions No. 25-23-06-SC, and restated in the discussion above, that several part 25 requirements applicable to the Model A321neo XLR series airplane address fire-safety performance of the fuel tanks and fuselage in the Model A321neo XLR certification basis. These standards address failure conditions or minimize the hazard to the occupants in the event ignition of flammable fluids or vapors occurs. The potential for a ruptured RCT is thus already addressed in the Model A321neo XLR certification basis. Therefore, no changes were made to these special conditions as a result of this comment.

The commenter stated that “the applicant should show not that the design prevents but that it eliminates the possibility that ignition will occur.” The FAA interprets this statement as a request that the FAA require the applicant to fully eliminate any possibility of fuel ignition in the RCT, rather than to minimize the probability of ignition to an acceptable level through ignition-preventative design measures. The FAA does not agree that it is practical to eliminate the possibility that ignition will occur from a design in the case of a fuel tank exposed to a post-crash fuel-fed ground fire. Service experience has shown that existing designs would not meet this standard since aircraft fuel tanks exposed to an external fuel-fed ground fire would eventually experience conditions that would support fuel tank ignition (for example, refer to the fuel tank explosions discussed in the China Airlines Boeing 737 accident report  1 ). These special conditions are necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. The commenter's proposal would set a requirement beyond existing airworthiness standards and place an unnecessary burden on applicants. Therefore, no changes were made to these special conditions as a result of this comment.

The commenter requested the applicant show compliance by testing the capability of the design. The FAA acknowledges that some testing may be necessary to show compliance with these special conditions but does not agree that only testing must be used. To obtain a type certificate the applicant must follow the requirements of § 21.33(b)(1). No specific aspect of the proposed integral RCT, nor requirement of these special conditions, necessitates or requires that the applicant must demonstrate by test to show compliance. These special conditions do not include specific means of compliance since more than one means of compliance may be acceptable. No changes were made to these special conditions as a result of this comment.

The commenter requested the FAA define the flame size and intensity the applicant must use for representing an external fuel-fed ground fire when showing compliance with these special conditions. Such definition is unnecessary. A post-crash external fuel-fed ground fire depends on many factors, including the specific airplane design and fuel types approved for use. Well-established industry standard fire test methods currently exist for powerplant installation fire protection, as well as cabin safety fire protection, that include standardized fire test conditions that are intended to represent a large pool fire. Applicants may consider these standards and any other available fire testing method, if shown to be applicable to these special conditions, when developing test methods for these special conditions. The FAA does not consider it is necessary to identify any specific test conditions as requirements for these special conditions. Therefore, no changes were made to these special conditions as a result of this comment.

The commenter requested the FAA clarify what it means by sufficient time to evacuate to include occupants to move safely away from the aircraft due to the potential impact from a fuel tank explosion to the surrounding area. The commenter stated the 90-second evacuation test time would be insufficient and the 5-minute time referenced in the Notice of Proposed Special Conditions No. 25-23-06-SC may be acceptable if justified by the applicant. The commenter also stated the applicant should include an assessment of other aircraft accidents and time to move survivors clear of the aircraft in the justification.

The FAA does not agree to specify a requirement in these special conditions for additional time for airplane occupants to move away from the airplane once safely evacuated. These special conditions are necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. The considerations of moving occupants away from the airplane as proposed by the commenter apply generally to all airplane designs and are not specifically associated with or affected by the novel or unusual design feature of the RCT. Since these special conditions are intended to establish the same level of safety as the relevant regulations in this model's certification basis, by providing sufficient time for a safe evacuation of all occupants after the initiation of an external fuel-fed ground fire, it is unnecessary to include an additional assessment to account for moving occupants away from the airplane. Therefore, no changes were made to these special conditions as a result of this comment.

The commenter requested that the FAA clarify how it considered maintainability of the design features needed to ensure the original design intent for each airplane as it ages. The FAA infers the commenter requests the FAA to include requirements for the airplane manufacturer to require airplane operators to maintain the critical features of the type design associated with these special conditions for the life of the airplane.

The FAA agrees that critical features that need to be identified by the applicant and maintained in service should be appropriately managed; however, the FAA does not agree these special conditions should include a dedicated requirement to address this need. The FAA considers that the Model A321neo XLR certification basis already includes airworthiness standards that account for ensuring critical design features are maintained in service. Specifically, §§ 25.901(c) and 25.1309(b) include requirements for system safety analysis of propulsion and airplane systems. FAA Advisory Circular 25-19A, Certification Maintenance Requirements, provides guidance on the selection, documentation, and control of Certification Maintenance Requirements (CMR). A CMR is a required scheduled maintenance task established during the design certification of the airplane systems as an operating limitation of the type certificate. The FAA considers it unnecessary to include additional requirements in these special conditions to maintain the type design of critical features since the Model A321new XLR certification basis includes airworthiness requirements that address this issue. Therefore, no changes were made to these special conditions as a result of this comment.

In conclusion, no changes were made to the special conditions as a result of these comments, and the special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to the Airbus Model A321neo XLR series airplane for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would apply to the other model as well.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in the Federal Register . However, as the certification date for the Airbus Model A321neo XLR series airplane is imminent, the FAA finds that good cause exists to make these special conditions effective upon publication.

This action affects only a certain novel or unusual design feature on one model series of airplane. It is not a rule of general applicability.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Airbus Model A321neo XLR series airplanes.

The applicant must show the design prevents ignition of fuel tank vapors (due to hot surface) from occurring in the integral rear center tank during the time required for evacuation. The applicant's showing must also demonstrate that the design provides sufficient time for a safe evacuation of all occupants after the initiation of an external fuel-fed ground fire.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2022-08-12, Amendment 39-22015 (87 FR 26964, May 6, 2022) (AD 2022-08-12). AD 2022-08-12 applied to all The Boeing Company Model 757 airplanes. The NPRM published in the Federal Register on December 21, 2023 (88 FR 88271). The NPRM was prompted by reports of bolt rotation in the engine drag fitting joint and fastener heads and cracks found in the skin of the fastener holes, and the need to reduce the compliance time for certain groups. In the NPRM, the FAA proposed to require repetitive inspections for skin cracking and shim migration at the upper link drag fittings, diagonal brace cracking, and fastener looseness; and applicable on-condition actions. The FAA issued AD 2022-08-12 to address cracking in the wing upper skin and forward drag fittings, which could lead to a compromised upper link and reduced structural integrity of the engine strut, and possible separation of a strut and engine from the airplane during flight.

Since the FAA issued AD 2022-08-12, it was determined that drag fittings made of alternate materials have possibly been installed on some configurations, which could result in reduced structural integrity of the engine strut. The FAA has determined that additional inspections and revised compliance times are needed to maintain structural integrity. Although this AD does not explicitly restate the requirements of AD 2022-08-12, this AD would retain all requirements of AD 2022-08-12. Those requirements are referenced in the service information identified previously, which, in turn, is referenced in paragraph (g) of this AD.

The FAA received comments from The Boeing Company, who supported the NPRM without change.

The FAA received additional comments from five commenters, including Aviation Partners Boeing, Delta Air Lines, UPS Airlines, United Airlines, and FedEx Express. The following presents the comments received on the NPRM and the FAA's response to each comment.

Aviation Partners Boeing has reviewed the NPRM and has determined that the incorporation of STC ST01518SE for installation of blended or scimitar blended winglets does not affect compliance with the mandated actions in the proposed rule. Boeing does not have delegation to approve repairs in areas affected by the scimitar blended winglet configuration of STC ST01518SE. Therefore, Boeing will not be able to use Organization Designation Authorization (ODA) approval in paragraph (j)(3) of this AD to make an alternative method of compliance (AMOC) finding on behalf of the FAA for alternative inspections and corrective actions in areas affected by the scimitar blended winglet configuration of STC ST01518SE. The operators of scimitar blended winglet airplanes subject to this AD should be aware that approval of any alternative inspections and corrective actions as an AMOC to the final rule will only be obtainable from the FAA through the means described in paragraph (j)(1) of this AD.

The FAA agrees. The FAA has not changed this AD in this regard.

Delta Air Lines, FedEx, UPS Airlines, and United Airlines requested revising AMOCs paragraphs (j)(4), (j)(5), and (j)(6) of the proposed rule. Delta Air Lines stated that restrictions of paragraphs (j)(4) through (j)(6) of the proposed rule would put an extreme and unnecessary burden on Model 757 operators. FedEx was concerned that paragraphs (j)(4) and (j)(5) of the proposed rule would prevent continued operation of the affected airplanes until new AMOC approvals could be obtained. UPS Airlines requested revising paragraphs (j)(4), (j)(5), and (j)(6) of the proposed rule to accept AMOCs issued after March 1, 2021. United Airlines stated that paragraphs (j)(4) through (j)(6) of the proposed rule contains exception for previously approved AMOCs for locations at the wing skin and drag fittings at the upper link drag fittings (fasteners 1-18) that will affect the aircraft operations until new AMOC is received, or new inspection is accomplished.

The FAA agrees with the commenters. The FAA has determined that paragraphs (j)(4), (j)(5), and (j)(6) of the proposed rule are not required. The FAA has determined that the Compliance Tables 19 and 20 of Revision 3 of the Boeing Alert Requirements Bulletin 757-57A0073 RB address all existing repairs and existing drag fitting replacement with universal fitting. The FAA has removed paragraphs (j)(4), (j)(5), and (j)(6) of the proposed rule accordingly.

UPS Airlines proposed that the inspection compliance times for some configurations that installed upper link drag fitting made of optional materials be reduced only if this condition has been confirmed by visual inspection and/or maintenance records review.

The FAA acknowledges UPS Airlines' concern. However, the FAA does not agree with the proposed request because UPS Airlines did not submit sufficient data to substantiate that the proposed actions would provide an acceptable level of safety. Under the provisions of paragraph (j) of this AD, the FAA will consider requests for approval of alternative actions and compliance times if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. This AD has not been changed regarding this proposed request.

UPS Airlines also requested to revise paragraphs (h)(1) through (h)(4) of the proposed rule from “Where the Compliance Time columns of the tables” to “Where the Compliance Time columns and notes of the tables.” UPS Airlines explained that both Compliance Time columns and notes in the tables are referred to Boeing Alert Requirements Bulletin 757-57A0073 RB.

The FAA agrees to revise from “Where the Compliance Time columns of the tables” to “Where the Compliance Time columns and notes of the tables” for paragraphs (h)(2), (h)(3), and (h)(4) of this AD, because the notes in compliance tables refer to “On or after the Revision 1 date of Boeing Alert Requirements Bulletin 757-57A0073 RB.” Paragraph (h)(2) of this AD refers to the phrase “the Revision 1 date of Boeing Alert Requirements Bulletin 757-57A0073 RB,” paragraph (h)(3) of this AD refers to the phrase “the Revision 2 date of Boeing Alert Requirements Bulletin 757-57A0073 RB,” and paragraph (h)(4) of this AD refers to the phrase “the Revision 3 date of Boeing Alert Requirements Bulletin 757-57A0073 RB.” However, the FAA does not agree to revise paragraph (h)(1) of this AD, because the notes in the compliance tables only refer to “On or after the Revision 1 date of Boeing Alert Requirements Bulletin 757-57A0073 RB.” The original issue date of Boeing Alert Requirements Bulletin 757-57A0073 RB is not included for paragraph (h)(1) of this AD. The FAA has not changed paragraph (h)(1) of this AD. The FAA has revised paragraphs (h)(2), (h)(3), and (h)(4) of this AD accordingly.

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

The FAA reviewed Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 3, dated May 5, 2023. This service information specifies procedures for a general visual inspection or records check of the wing upper skin at the drag fitting attachment holes for any existing repair; repetitive general visual and detailed inspections for loose fasteners, skin cracking, and shim migration at the upper link drag fittings, and for cracking in the diagonal brace and diagonal brace fittings; repetitive open-hole high frequency eddy current (HFEC) inspections for cracking of the fastener holes and loose bolt holes; and applicable on-condition actions. On-condition actions include performing an ultrasonic inspection for cracks at any repaired upper wing skin location; installing the upper link and upper link pins; replacing drag fittings; installing bolts, washers, and nuts; performing a torque check of fasteners on the affected shims; trimming affected shims and applying chemical conversion coating on the shims, fillet seal, and drag fittings; and repairing cracks, migrated shims, mistorqued bolts, and loose fasteners.

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

The FAA estimates that this AD affects 496 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Bell Textron Canada Limited Model 407 helicopters, serial numbers 54832 through 54931 inclusive, 54933 through 54939 inclusive, and 54942 through 54954 inclusive, with a certain part-numbered fuel system standpipe assembly installed. The NPRM published in the Federal Register on February 20, 2024 (89 FR 12792). The NPRM was prompted by Transport Canada AD CF-2023-11, dated February 23, 2023 (Transport Canada AD CF-2023-11), issued by Transport Canada, which is the aviation authority for Canada. Transport Canada AD CF-2023-11 states that, due to a quality escape, standpipe part number (P/N) 407-062-032-103 may have been delivered with sharp edges at the internal weld joints.

In the NPRM, the FAA proposed to require, with the standpipe removed, inspecting its interior for any sharp edges on each internal weld joint. If there are any sharp edges on any weld joint, the NPRM proposed to require deburring the edges, ensuring not to exceed a certain depth into the tube. The NPRM then proposed to require removing all sanding residue and applying a chemical film to any bare metal surfaces. The NPRM also proposed to require, with the harness assembly removed, inspecting the harness assembly connectors for any mechanical damage and corrosion to the electrical pins, and inspecting the insulation tubing and wires of the harness assembly for any crack and chafing. Depending on these results, the NPRM proposed to require replacing the harness assembly.

If the harness assembly was required to be replaced as a result of the proposed AD requirements, the NPRM proposed to require performing a fuel quantity gauging system calibration. Depending on the calibration results, the NPRM proposed to require replacing the harness assembly and repeating the fuel quantity gauging system calibration. The FAA is issuing this AD to address the unsafe condition on these products.

You may examine the Transport Canada AD in the AD docket at regulations.gov under Docket No. FAA-2024-0232.

The FAA received no comments on the NPRM or on the determination of the costs.

These helicopters have been approved by Transport Canada and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with Canada, Transport Canada has notified the FAA about the unsafe condition described in its AD. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. Accordingly, the FAA is issuing this AD to address the unsafe condition on these helicopters.

The FAA reviewed Bell Alert Service Bulletin 407-21-124, dated February 1, 2022, which specifies procedures for a one-time visual inspection of the internal weld joints of standpipe P/N 407-062-032-103. If there are any sharp edges, this service information specifies rework procedures, which include deburring the sharp edges, removing all residue, and applying a chemical film. This service information also specifies procedures to remove and inspect the harness assembly connectors for any damage to the electrical pins and inspect the insulation tubing and wires for any cracks and chafing.

Additionally, this service information specifies if any damage is found, contacting product support engineering and submitting certain information. Finally, this service information specifies instructions for various fuel procedures and checks.

The FAA also reviewed Fuel Quantity Gauging System, DMC-407-A-95-65-10-01A-273A-A, dated June 2, 2022, of Chapter 95—Instruments, of Bell Model 407 Maintenance Manual, BHT-407-MM, Issue No. 014, dated December 12, 2023, which specifies procedures for a fuel quantity gauging system calibration procedure and inspecting the fuel quantity display information.

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

Transport Canada AD CF-2023-11 requires contacting Bell for disposition instructions if damage is found on the harness assembly, whereas this AD requires removing an affected harness assembly from service and replacing it with an airworthy harness assembly.

The FAA estimates that this AD affects 51 helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Inspecting the interior of the standpipe will take approximately 1 work-hour for an estimated cost of $85 per helicopter and $4,335 for the U.S. fleet.

Inspecting the harness assembly connectors, insulation tubing, and wiring will take approximately 1 work-hour for an estimated cost of $85 per helicopter and $4,335 for the U.S. fleet.

If required, deburring, cleaning, and applying a chemical film to each affected weld joint will take approximately 0.5 work-hour for an estimated cost of $43 per weld joint.

If required, replacing an affected harness assembly will take approximately 1 work-hour and parts will cost approximately $1,071 for an estimated cost of $1,156 per harness replacement.

If required, performing a fuel quantity gauging system calibration will take approximately 10 work-hours for an estimated cost of $850 per procedure.

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

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

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

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

For the reasons discussed above, I certify that this AD:

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

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

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

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

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

The FAA published a notice of proposed rulemaking for Docket No. FAA-2024-0383 in the Federal Register (89 FR 18859; March 15, 2024) to amend Class D airspace extending upward from the surface for Simmons Army Airfield, Fort Liberty, NC. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class D airspace designations are published in Paragraph 5000 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. These updates will be published in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the ADDRESSES section of this document.

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

This action amends 14 CFR part 71 by amending Class D airspace extending from the surface at Simmons Army Airfield, Fort Liberty, excluding 1,400 feet MSL from the vertical limits (previously “including”), updating the airport's geographic coordinates, replacing “Notice to Airmen” with “Notice to Air Missions” in the description, and updating reference to “Chart Supplement” (previously “Airport Facility Directory”). Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations in the area.

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant the preparation of an environmental assessment.

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

Participation and leadership in standards development is crucial to protecting and enhancing U.S. national and economic security and has been instrumental to the global technological leadership of the United States. Standards development underpins U.S. economic prosperity and fortifies U.S. leadership in critical and emerging technologies. The U.S. standards development system is unique because it is built upon a wide variety of processes that are open, voluntary, decentralized, and led by the private sector. These processes feature openness to participation by materially interested stakeholders and consensus-based decision making. Finalized standards are primarily published by private sector standards organizations, not the U.S. Government.

On May 4, 2023, the Biden-Harris Administration announced the “United States Government National Standards Strategy for Critical and Emerging Technology” (USG NSSCET). The USG NSSCET is intended to support and complement existing private sector-led activities and plans, including the American National Standards Institute (ANSI) United States Standards Strategy (USSS), with a focus on critical and emerging technology(ies) (CET). Consistent with the USG NSSCET strategy, the Commerce Department is committed to engaging “with a broad range of private sector, academic and other key stakeholders, including foreign partners, to address gaps and bolster U.S. participation in [CET] standards development activities.” As outlined in the USG NSSCET, the U.S. Government is prioritizing efforts for CET standards development in identified areas that are essential to U.S. national security and competitiveness in critical industries including biotechnologies; positioning, navigation and timing services; communications and networking technologies; and quantum information technologies among others. The USG NSSCET outlines four objectives (investment, participation, workforce, and integrity and inclusivity) and eight corresponding lines of effort to ensure that the United States remains a global leader in developing merit-based standards that embrace transparency, openness, impartiality and consensus, effectiveness and relevance, coherence, and broad participation. More information regarding the USG NSSCET can be found here: https://www.whitehouse.gov/wp-content/uploads/2023/05/US-Gov-National-Standards-Strategy-2023.pdf.

Since 2019, BIS has made a number of revisions to the EAR (15 CFR parts 730-774) that have affected U.S. participation and leadership in standards-related activities. Most recently, BIS published an interim final rule, “Authorization of Certain “Items” to Entities on the Entity List in the Context of Specific Standards Activities” ( see 87 FR 55241 (September 9, 2022)) (the September 2022 rule), that amended the EAR to authorize the release of specified items subject to the EAR when such release is for a “standards-related activity” as defined in the EAR (a term in double quotes indicates the term is defined in part 772 (Definition of Terms) of the EAR). Additional information about that process, the listing of Huawei Technologies Co., Ltd and its non-U.S. affiliates (collectively “Huawei”), and associated licensing requirements can be found at 84 FR 22961 (May 21, 2019) (background section providing a brief overview of how entities are added to the Entity List); see also 87 FR at 55241 (background section describing licensing requirements for Huawei as a result of being added to the Entity List).

The revisions promulgated in the September 2022 rule sought to ensure that export controls do not impede the participation and leadership of U.S. companies in standards-related activities. As noted in that rule, any impediment to U.S. participation in standards development forums is a national security threat to the United States because it not only limits U.S. leadership in standards development, but other countries are already racing to replace U.S. participation with their own leadership and standards. In many cases, a decrease in U.S. participation not only undermines U.S. national security and foreign policy interests but also contributes to a potential future global standards environment that works to oppose U.S. interests.

BIS has been actively involved on issues related to standards and export controls since the addition of Huawei to supplement no. 4 to part 744 (Entity List) of the EAR on May 16, 2019 ( See 84 FR 22961 (May 21, 2019)). The addition of Huawei to the Entity List imposed a license requirement on all exports, reexports and transfers (in-country) to Huawei and its listed affiliates. Since that action and subsequent additions of other Huawei affiliates to the Entity List, BIS has engaged with industry as well as the interagency on export controls and standards-related activities and has published two interim final rules specific to how the EAR treat standards-related activities.

First, to avoid disruption to existing U.S. and global telecommunications networks, on May 22, 2019, BIS issued a Temporary General License (TGL) to authorize certain activities with Huawei, including, among other things, U.S. industry's participation as necessary for the development of 5G standards by a duly recognized standards body when Huawei was also participating in the standards-related activities ( see 84 FR 23468 (May 22, 2019)). The TGL was subsequently extended through August 13, 2020. As the TGL was set to expire, BIS published an interim final rule with a request for comment, “Release of “Technology” to Certain Entities on the Entity List in the Context of Standards Organizations” ( see 85 FR 36719, June 18, 2020) (the June 2020 rule), that amended the EAR to authorize the release of certain technology to Huawei and its affiliates on the Entity List.

The June 2020 rule defined “standards” and “standards organizations” on the basis of the Office of Management and Budget Circular A-119 (OMB A-119) definitions and authorized limited releases of low-level “technology” and “software” to Huawei in the context of “standards” in a “standards organization.” In public comments received in response to the June 2020 rule, U.S. industry raised concerns that the definitions and provisions promulgated in the June 2020 rule were chilling U.S. industry's participation in standards development.

Standards development in the United States, unlike in other countries, is driven by the private sector ( e.g., industry, academia, etc.), which is an important factor that has fueled effective U.S. leadership in standards development. The U.S. Government takes a consultative role in this process through the work of the Department of Commerce's National Institute of Standards and Technology (NIST). Although the countries from which standards proposals originate are identified during standards development and setting activities, company affiliations are generally not known and are not a requirement for membership or participation.

Certain export control-related factors in the standards-making process, including but not limited to BIS's increased use of end-use and end-user controls, led to an environment of uncertainty for U.S. companies. They stopped sharing information and data in international standards bodies and in legitimate standards development activities because of, e.g., the participation of entities listed on the Entity List (other than Huawei) in standards bodies and standards development activities. Standards bodies began to view the United States as a less than ideal place to hold standards meetings and discussions, as U.S. export controls introduced an element of non-openness which is contrary to the spirit and definition of standards organization espoused by OMB A-119. As a result, U.S. leadership in international standards development was at risk in key industries. The lack of U.S. participation in standards that form the foundation of future industrial and commercial development worldwide directly and negatively impacts U.S. national security, and limits U.S. global commercial influence. This encourages foreign actors to develop and promote their own standards across the global community at the expense of the United States. Additionally, U.S. non-participation in the development of standards affects U.S. companies as they must manufacture items that meet foreign standards.

In response to the public comments received on the June 2020 rule and following renewed consultation among government agencies, BIS published the September 2022 rule amending the EAR to authorize the release of specified items subject to the EAR without a license to entities added to the Entity List pursuant to § 744.11 in the narrow circumstance when that release occurs in the context of a “standards-related activity,” as defined in the September 2022 rule. Specifically, BIS clarified the scope and application of standards activities covered by the authorization by removing the defined terms for “standards” and “standards organization” from the EAR and adding a new definition for “standards-related activity” that more accurately reflects the standards-setting landscape. BIS authorized the release of “software” controlled for anti-terrorism (AT) reasons only and items designated EAR99 ( i.e., items subject to the EAR but not identified on the Commerce Control List (supplement no. 1 to part 774) (CCL)) in the scope of the authorization and included the release of specific “software” and “technology” only for the “development,” “production,” and “use” of cryptographic functionality in the authorization. The rule also required that the items were authorized for release only if there was an intent to “publish” the resulting standard. Additionally, the language regarding “standards-related activity” was removed from the License Requirement column in the Entity List and added to §§ 744.11 and 744.16 of the EAR. The September 2022 rule thus revised the scope of the standards authorization to apply to entities on the Entity List with license requirement solely referencing § 744.11 and not other end use and end user license requirements in other sections of parts 744 (Control Policy: End-User and End-Use Based) and 746 (Embargoes and Other Special Controls) of the EAR.

Prior to the June 2020 rule, the majority of entities on the Entity list had, and continue to have, a license requirement that refers to § 744.11. Since the publication of the June 2020 rule, however, BIS has published a number of rules that have expanded end-use and end-user controls. As a result, since the publication of the June 2020 rule, over 400 additional entities have been added to the Entity List with a license requirement that references a provision other than § 744.11. In recognition of these circumstances, in the September 2022 rule, BIS requested comments on whether excluding these other end-use and end-user provisions of the EAR from the authorization would negatively impact and prevent U.S. industry from actively participating and leading in “standards-related activities,” or if export controls and compliance concerns would continue to limit U.S. leadership and participation in standards-related activities, thereby negatively impacting U.S. commercial and national security interests.

Based on public comments received from the September 2022 rule (as summarized in Section D), as well as continued discussions with other U.S. Government agencies and industry, BIS is amending the EAR to ensure that export controls and associated compliance concerns do not continue to impede or jeopardize U.S. participation and leadership in legitimate standards-related activities. The national security threat that results from ceding, and in some cases ceasing, U.S. participation and leadership in standards development and promulgation far outweighs the risks related to the limited release of the authorized low-level technology and software to parties on the Entity List when released in the context of a “standards-related activity.” BIS has concluded that excluding end-use and end-user controls from the authorization has had and will continue to have unintended negative consequences on the U.S. national security interests by curtailing U.S. involvement in legitimate standards-related activities.

As further detailed in the White House report on USG NSSCET discussing the key objective of U.S. participation, the U.S. Government is taking action to “remove and prevent barriers to private sector participation in standards development.” Standards activities and development will continue to drive technological and industrial growth with or without input from U.S. companies. For U.S. industry to keep its leadership role and continued participation in standards development, especially in critical and emerging technologies identified in the USG NSSCET, the U.S. Government must address this issue comprehensively. As public comments to prior efforts to control exports related to standards development have shown, not addressing U.S. industry's uncertainty regarding the end-use and end-user controls in the EAR is counterproductive and endangers U.S. commercial and strategic interests over the long term. To address these concerns and to further streamline and clarify controls over technology and software subject to the EAR as related to standards-related activities, BIS is making the following revisions to the EAR:

1. Moving the authorization for “standards-related activity” that was added to § 744.11 in the September 2022 rule to § 734.10. BIS is also making necessary conforming changes to § 744.16 and the introductory paragraph to supplement no. 4 to Part 744. This final rule does not change existing provisions in these sections regarding patents and whether they are subject to the EAR.

2. Revising the existing definition of `standards-related activity' and adding the revised definition to § 734.10. This rule clarifies that a “standards-related activity” includes activities conducted with the intent to “publish” a standard as well as those conducted for an already “published” standard. BIS revises the definition of “standards-related activity” to remove the phrase “with which compliance is not mandatory.” In addition, in Part 772, BIS is revising the definition for “standards-related activity” to reference § 734.10.

When “technology” or “software” is released for a “standards-related activity,” the same item scope promulgated in the September 2022 continues to apply, i.e., specific “technology” or “software” is not subject to the EAR if the item is designated EAR99, controlled on the CCL for anti-terrorism (AT) reasons only, or the release is of specified “software” and “technology” when specifically for the “development,” “production,” and “use” of cryptographic functionality.

Instructions for submission of comments, including comments that contain business confidential information, are found in the ADDRESSES section of this interim final rule. BIS is requesting comment on whether the revisions promulgated in this interim final rule effectively promote Objective 2 of the USG NSSCET by removing and preventing barriers to private sector participation in standards development.

The summary and responses to the nine relevant comments that BIS received from the September 2022 interim final rule have been separated into seven topic areas. For topics in which the comments expressed the same or very similar viewpoints, BIS has addressed them by topic area rather than by individual comment. For topic areas in which the commenters expressed unique viewpoints, thoughts, or ideas, BIS has addressed the individual comments. The majority of comments have been addressed by the revisions to the EAR promulgated in this rule. BIS greatly appreciates the public comments received and encourages continued engagement and feedback.

Topic Area 1: Limits on standards-related activities due to export controls creates economic and national security risks for the United States.

Five commenters noted that any chilling of U.S. participation and leadership in standards development creates new security risks and vulnerabilities that threaten U.S. economic and national security interests. For example, one commenter stated that when its organization is restricted from engaging in information-sharing activities because those activities are not covered under the definition of “standards-related activities,” its organization loses the opportunity to receive valuable and potentially time-sensitive information about cyber incidents, threats, and vulnerabilities as well as the ability to further discuss those issues among the organization's members and identify needed and appropriate resolutions.

Another commenter stated that “it is important that there be a two-way communication regarding security vulnerabilities discovered in hardware and software items. If participation of Entity List entities is restricted, then security vulnerabilities discovered by these entities, many of which are quite large, may be withheld as they develop their own competing standards after being locked out of access to participation.” The same commenter went on to state that “we believe that the revised EAR exemption, as amended by the IFR, continues to work against the stated intent of the IFR and against the national security interests of the United States by prohibiting the dissemination of technology and software subject to the EAR in the context [of] standards-related activity when these specified items are released by open membership organizations” that develop their standards via an open process available to any member.

Response: BIS understands, as commenters have stated, that limits on the sharing of information in a standards development environment have both economic and national security implications. The national security threat that results from ceding U.S. participation and leadership in standards development and promulgation far outweighs the risks related to the limited release of low-level technology and software to parties on the Entity List in the context of a “standards-related activity” that supports U.S. commercial and economic interests. Therefore, in this rule, BIS is amending part 734 of the EAR so that activities that meet the definition of “standards-related activity” are no longer subject to the EAR. Specifically, when released for a “standards-related activity,” “technology” or “software” is not subject to the EAR if it meets the item scope of 734.10(b)(1) and is released for a “published” standard and/or occurs with the intent that the resulting standard will be “published.”

The USG NSSCET specifically highlights U.S. leadership in standards development of critical technologies. The USG NSSCET Executive Summary explicitly states that: “strength in standards development has been instrumental to the United States' global technological leadership. Standards development underpins economic prosperity across the country and fortifies U.S. leadership in the industries of the future at the same time. Bolstering U.S. engagement in standards for critical and emerging technology (CET) spaces will strengthen U.S. economic and national security.”

Additionally, the Export Control Reform Act of 2018 (ECRA; 50 U.S.C. 4801-4852) states under § 4811(3) that: “the national security of the United States requires that the United States maintain its leadership in the science, technology, engineering, and manufacturing sectors, including foundational technology that is essential to innovation. Such leadership requires that United States persons are competitive in global markets.”

Both the USG NSSCET and ECRA support and endorse the revisions to the EAR to ensure that export controls and licensing requirements do not prove detrimental to or limit the ability of U.S. industry to participate in and lead international standards development across industries, especially in areas critical to United States industrial, commercial, and national security leadership.

Topic Area 2: U.S. export controls continue to hinder U.S. leadership and participation in international standards development.

Six commenters expressed concern that the export controls and license requirements related to the sharing of information in a standards-development forum, as implemented in the September 2022 rule, were continuing to hinder and chill U.S. companies' participation in international standards development. Specifically, one commenter stated that “[o]pen standardization is critical to U.S. leadership across established and emerging technology areas and limiting [the] ability of SSO's [standard setting organizations] would provide significant barriers to U.S. participation and leadership in standardization.” Another commenter noted that the current authorization is “[i]nsufficient to maintain U.S. leadership at organizations that work on standards” and that it does not adequately “support global cooperation on other critical activities conducted by standards organizations.” One commenter stated that unless BIS broadens the scope of the authorization, they anticipate that the organization's legal department will not allow it to participate in any meetings at which Entity List parties could potentially be in attendance.

Four commenters noted that the export controls and license requirements that apply only to U.S. companies have the effect of walling off U.S. standards development from global development and allowing foreign actors to develop and promote their own standards across the global community at the expense of the United States. One of the commenters stated that controls that lead SSOs to limit U.S. entities' participation in global standards development will “fragment the standardization ecosystem that has served U.S. interests well to date . . . .” Another commenter stated that compliant use of the limited authorization “would impose a significant compliance burden as international standards organizations would need to restructure groups to isolate standards related activities from other activities and spend resources to monitor communications among members.” As noted above, another commenter said, “if participation of Entity List entities is restricted, then security vulnerabilities discovered by these entities, many of which are quite large, may be withheld as they develop their own competing standards after being locked out of access to participation.” Finally, a commenter noted that artificial limits on sharing of information favors compliance by larger commercial enterprises at the expense of smaller parties, including other standards organizations that do not have the same resources as large commercial operations.

Response: BIS agrees that the September 2022 authorization is not broad enough to allow U.S. companies to participate freely in standards development due to uncertainty regarding whether the information they are sharing is subject to the EAR and, if so, whether EAR license requirements apply. BIS recognizes the importance of protecting sensitive and leading-edge U.S. technology but understands the national security implications of limiting U.S. participation and leadership in international standards development. BIS appreciates that the U.S. Government needs to apply U.S. export controls in a way that supports and encourages U.S. technological leadership in standards development, particularly in light of efforts by adversarial countries to coordinate, subsidize, and promote activities in international standards bodies for the benefit of their own enterprises and industry leadership. BIS also recognizes that an environment of competing national standards or the exclusion of U.S. companies in international standards development is not advantageous to U.S. commercial or national security interests. Therefore, in this final rule, BIS has made “standards-related activities” not subject to the EAR as long as the “release” of the “software” or “technology” during these activities meets the criteria contained in revised § 734.10 of the EAR. This treatment of “standards-related activity” as defined in § 734.10 will support U.S. companies' efforts to create and maintain a leadership position in the global standards community in all industries.

BIS further agrees that fragmentation in the standards development environment could provide foreign actors and organizations with an opening to develop their own unique and separate international standards, without U.S. industry input or participation, and at the expense of U.S. commercial and national security interests. This fragmentation leads to significant disadvantages for U.S. industry by providing foreign actors with the opportunity to specify their own indigenous benchmarks that U.S. companies must adhere to or lose market share. U.S. non-participation in the foreign development of such standards also affects U.S. companies' bottom line as they must revise their manufacturing processes to meet the foreign standards. This final rule alleviates such concerns by providing U.S. companies the ability to freely participate in all standards-development forums by making the release of software or technology in such forums not subject to the EAR, provided the releases meet the criteria of new § 734.10(b) of the EAR. It also obviates the need for U.S. companies to wall off their input into global standards development.

Topic Area 3: Revise the definition of “standards-related activity.”

BIS received comments requesting that the agency revise, expand, and clarify the definition of “standards-related activity.”

Four commenters suggested that BIS should expand the definition of “standards-related activity.” One commenter stated that the definition should include but not be limited to “the sharing of technical assistance and exchange of information within conformity assessment procedures, with the intent that the resulting standard will be “published” in order to clarify that sharing and exchanging technical information is within the scope of the authorization. Another commenter suggested that the definition is too narrow and should be expanded to “activities outside of “standards-related activities” ” so as to include “many vital functions of international standards organizations that are necessary and incidental to standards related activity but may be conducted outside the context of standards development, such as fostering the exchange of information on developing industry trends and discussions of emerging issues among members.” Another commenter suggested expanding the definition “to include information sharing activities by members of standards organizations on emerging issues and developments.” The last commenter on this topic proposed allowing a standards-related activity to occur if conducted in a Voluntary Consensus Standards Body (VCSB), as defined by OMB Circular A-119. In the September 2022 rule, BIS removed the “standards organization” definition and replaced it with a “standards-related activity authorization.” According to the commenter, however, the VCSB definition does not require that standards be “published.”

Five commenters requested that BIS remove the word mandatory from the definition of “standards-related activity” in part 772 of the EAR. Essentially all of the commenters stated that in the context of standards development, whether or not a standard will be voluntary or mandatory makes no difference to the stakeholders involved in the development of the standard. Additionally, some voluntary standards become mandatory when adopted through national (domestic) regulations, such as international aircraft standards promulgated by the International Civil Aviation Organization (ICAO).

Five commenters stated that the current wording of the authorization implied that standards-related activities were covered by the authorization only before or during publication of the standard. These commenters asked for clarification that such activities continued to be covered by the authorization after publication of the standards. One commenter noted that conformance testing is a vital component in the commercialization of standards compliant products and that the “vast majority of such activities only usefully occur after a standard has been published and compliant products have been produced.” Another commenter noted that “BIS already provides examples of activities that occur in connection with already published standards (promulgating, revising, amending, reissuing, interpreting, implementing . . .)” but that such actions do not occur for a standard that does not yet exist. These commenters gave examples of three SSOs engaged in cellular, wireless, and other devices that routinely engage in standards-related activities for already published standards, such as conformity assessments. Two commenters requested clarification on whether organizations that are not VCSBs that “require a party to be a member of an organization to receive standards in their final form” would qualify for the authorization.

One commenter suggested that BIS extend the current authorization to additional standards activities that occur before the standard is published. According to this commenter, in information and communications technology (ICT) “compliance testing also includes pre-product release activities intended to help products reliably interoperate with other products implementing the same standards. The need for such activities arises from the fact that ICT standards frequently do not provide sufficient detail to ensure complete interoperability without additional tinkering.” This commenter suggests that the additional tinkering is often done via a “plugfest” which is “an activity that allows competing vendors to meet and test their products against each other, often anonymous to each other, to work out the final technical changes necessary to allow consumers and business purchasers to achieve the type of `plug and play' ease of use they require. Because plugfests are usually conducted before products reach the marketplace, and often before their existence or specifications have been publicly disclosed, they are non-public and conducted on a confidential basis. Typically, the technical information exchanged one on one between two vendors includes only that information that is necessary to allow each vendor to work out the cause of a lack of compatibility.”

Response: BIS agrees with most of these comments. In new § 734.10(b), BIS revises and clarifies the scope of what is authorized when released for a “standards-related activity.” When released for a “standards-related activity,” “technology” or “software” is not subject to the EAR once it meets at least one condition in both § 734.10(b)(1) and (2). The scope of the “technology” or “software” covered by the authorization has not been revised and is now listed in § 734.10(b)(1). The conditions in § 734.10(b)(2) clarify that activities that occur after the publication of a standard are included in the definition of “standards-related activity”— i.e., a “standards-related activity” occurring specific to an already “published” standard is included in the authorization. BIS also removed the phrase “with which compliance is not mandatory” from the definition of “standards-related activity.”

BIS is not expanding the definition of “standards-related activity” to include activities that are conducted in a VCSB as the expansion is unwarranted. Based on public comment and engagement with other agencies, BIS has determined that the relevant activities of a VCSB are already captured in the definition of “standards-related activity” or, as in the example provided by the commenter, not subject to the EAR (see discussion in Topic Area 4). BIS welcomes public comments on whether there are additional VCSB activities that are excluded from the current definition of “standards-related activity” and remain subject to the EAR.

Topic Area 4: Expand the definition of “published in § 734.7 of the EAR.”

Comment: Six commenters suggested that the definition of “published” be expanded to cover standards development activities. One commenter suggested that the EAR's definition of “published” should be expanded to include the “sharing of technical assistance and exchange of information within conformity assessment procedures.”

Response: The definition of “standards-development activity” in part 772 already explicitly includes the exchange of technical data in the conformity process provided it is for the purpose of standards-development activities. Therefore, no further revisions are warranted to the definition of “published” to reference the exchange of technical data.

Comment: Another commenter suggested amending the text of § 734.7 of the EAR to replace the phrase “without restrictions upon its further dissemination” with the phrase “in hard copy or electronic form available from, or viewable at, one or more public websites.” The commenter makes this suggestion because “virtually all standards bear copyright notices, and many standards setting organizations (SSOs) add further legends highlighting that copying and further distribution of their standards are prohibited. Some vigorously defend their copyrights in court.” While it is true that many SSOs (and particularly consortia) give their standards away for free, most traditional SSOs derive a significant percentage of their revenues from the sale of their standards. Thus, in the view of this commenter, “requiring unlimited downstream distribution” as provided in existing § 734.7 “would violate the copyrights of SSOs.”

Response: BIS believes that the regulatory amendments to § 734.10 of the EAR promulgated in this rule obviate the need to amend § 734.7 of the EAR to account for standards that may be copyrighted. In this final rule, BIS has removed “standards-related activities” from being subject to the EAR, as long as the release of the “software” or “technology” meets the definition of a “standards-related activity” as defined in part 772 of the EAR, and meets the requirements for “release” in new § 734.10(b)(1) and the conditions of its “release” in new § 734.10(b)(2) of the EAR.

According to the criteria in new § 734.10(b)(2), the “standards-related activity” must be either for a “published” standard or occurs with the intent that the resulting standard will be “published.”

Comment: Another commenter asked for confirmation that “the references to `published' standards in the definition are not limited to standards-related activities only by those involved in the standard's development.” The commenter also asked for confirmation that a third-party entity that is not a member of the organization that published the standard (for example, a consortium or a certification authority) but engages in “standards-related activity” with that standard is consistent with the definition of “published” as used in the definition of “standards-related activity.”

Response: BIS confirms that this scenario is consistent with the definition of “standards-related activity” in § 734.10 and the definition of “published” in § 734.7 of the EAR. The changes in this rule remove standards-related activities from being subject to the EAR when the stated conditions are met; as long as the conditions in new § 734.10(b)(1) and (2) are met, then the activities would not be subject to the EAR.

Comments: One commenter stated that their organization's “model of open membership dissemination does not publish in conformity with the strict publish definition used in the IFR” because although it makes standards readily available to the public, the interested member of the public must also be “willing to agree to the terms and conditions in its membership agreement and pay its dues.” The organization releases the resulting standards to all members without restriction. According to that commenter, “this model does not conform to the strict definition of `published', so [the organization's] standards-related activities do not qualify for the exemption under the terms of the IFR.”

Another commenter suggested that the definition of “published” be amended “to include dissemination to membership organization . . . that are open to the public without restriction, apart from confidentiality responsibilities, standard terms and conditions, a demonstrated interest in the design, development, manufacture or sale of products or services which utilize the standards at issue, and dues or membership fees.” An additional commenter requested clarification regarding the definition of “published” to make “clear whether BIS recognizes that some standards organizations require a party to be a member of the organization to receive standards in their final form.”

Response: The relevant criteria in § 734.7 of the EAR that makes information not subject to the EAR is applicable when the information has been made available to the public without restrictions upon its further dissemination. This does not rely on cost or membership, provided that any member of the interested public could pay the associated membership dues and become a member if they so desired. Further, § 734.7(a)(1) states that unclassified “technology” or “software” is “published” and therefore not subject to the EAR, when it has been made available to the public without restrictions upon its further dissemination such as through “subscriptions available without restriction to any individual who desires to obtain or purchase the published information.”

Topic Area 5: Apply standards authorization to sections of EAR other than § 744.11.

Three commenters expressed concern that the September 2022 authorization continued to chill U.S. industry participation in international standards development because it applied only to releases of “software” and “technology” to entities that were added to the Entity List under § 744.11 of the EAR. These commenters noted that to allow the United States to freely participate in standards development forums, the authorization must be extended to all end users listed in part 744 of the EAR. One commenter stated the “Entity (L)ist is not all encompassing of potentially restricted parties, particularly within context of EAR Part 744. Parties having other [part 744] designations (such as military end-users (MEU) in § 744.21) may be present in such meetings or could otherwise receive the output documentation of such meetings.” Another commenter noted that the authorization “does not address territorial and end-use/end-user controls beyond the Entity List,” which have affected standards organizations and that deter U.S. companies from participating and requiring standards organization to restrict their participation. All three commenters requested the expansion of the authorization to the release of the same types of items enumerated in § 744.11(a)(1) to other part 744 end users.

Another commenter stated that modifications such as expansion or flexibility should be applied to the end-use and end-user controls to enable U.S. industry to remain a thought-leader on standards-related activities. According to this commenter, the current authorization “requires the U.S. party to continually monitor membership of a standards organization to determine whether only parties on the Entity List are present or whether other restricted parties are potential recipients.” This requires U.S. parties to “over screen” and continuously perform and refresh their due diligence to ensure that a non-designated party has not been added to one of the restricted lists.

Two additional commenters expressed the same concern with regard to the amount of resources required to continuously monitor the end-use and end-user controls in part 744 of the EAR. These commenters suggested that the standards authorization be extended to other sections in part 744 but that this extension could be limited to countries listed in Country Group E (supplement no. 1 to part 740) of the EAR.

Another commenter noted that the current sanctions and resulting license requirements for Russia and Belarus extend to certain EAR99 and AT-only controlled items; therefore, these restrictions have an even larger effect on U.S. participation in standards development than Entity List designations. This commenter stated that as long as the standards-related authorization “does not apply to MEU or parties in Russia or Belarus, the international standards environment is likely to continue to fragment, which undermines U.S. leadership in these areas.” This commenter also recommended expanding the authorization to parties outside of Country Group E that are not on the Entity List “so that standards organizations (and U.S. membership) can fully benefit from the intent of the [authorization].”

Three commenters requested that the current standards authorization be expanded to all entities on the Entity List (supplement no. 4 to part 744). One commenter noted that such an expansion would be “critical to US leadership across established and emerging technology areas” and that limiting the authorization to only Entity List entities provides “significant barriers to U.S. participation and leadership in standardization, fragment[s] the standardization ecosystem that has served U.S. interests well to date and create[s] new security risks and vulnerabilities that threaten U.S. economic and national security interests.” Another commenter noted that unless BIS broadens the scope of the authorization, they anticipate that the organization's legal department will not allow it to participate in meetings that may include Entity List entities.

Response: The September 2022 rule expanded the scope of the authorization of releases of “software” and “technology” to all entities that were added to the Entity List under § 744.11 of the EAR.

This rule addresses the commenter's other concerns by removing from EAR jurisdiction “technology” and “software” listed in new § 734.10(b)(1) when they meet at least one condition in new § 734.10(b)(2). This means that the “technology” and “software” will not be subject to the EAR when released for standards-related activities as that term is defined in part 772 of the EAR to all end users listed in part 744 of the EAR.

BIS notes that this change affects major industries in which global participation is crucial to create, maintain, and monitor international safety and operability standards. For example, as two commenters pointed out, the Russian Federal Air Transportation Agency (FATA) and the U.S. Federal Aviation Administration (FAA) both participate in the ICAO, an agency of the United Nations that coordinates the principles and techniques of international air navigation and sets worldwide standards for civil aviation safety. ICAO has members that are subject to unilateral U.S. export controls under part 744 of the EAR beyond the Entity List; however, U.S. participation in the forum is crucial in furtherance of U.S. support of civil air safety, security, efficiency, capacity, and environmental protection and so that the commercial interests of U.S. aircraft manufacturers and aviation equipment manufacturers are sufficiently presented in the discussions. Lack of U.S. participation would cede the development of international standards to foreign actors that may not only disregard U.S. commercial and national security interests but actively work to destabilize them.

This rule addresses these concerns by removing from EAR jurisdiction “technology” and “software” listed in new § 734.10(b)(1) when they meet at least one condition in new § 734.10(b)(2). This means that the specified “technology” and “software” will not be subject to the EAR when released for standards-related activities as that term is discussed in 734.

Topic Area 6: Current authorization and license requirements increase the compliance burden for U.S. companies.

Four commenters stated that the current authorization increases the export control compliance burden of U.S. companies and standards organizations and their members. Two commenters stated this sentiment explicitly, with one commenter adding that “compliant use of the exemption IFR would impose a significant compliance burden as international standards organizations would need to restructure groups to isolate standards related activities from other activities and spend resources to monitor communications among members.” A third commenter stated that “analyzing and complying with uneven or inconsistent rules and exemptions requires additional resources that [their organization] could allocate to projects, training, or developing standards.” The requester asked that BIS keep in mind that it (and other standards organizations) do not have the same resources as large commercial operations.” However, another commenter stated that the changes promulgated in the September 2022 rule reduced the compliance burden on their organization.

Response: One organization's compliance burden has been reduced under the existing regulations, and with the publication of this rule and the changed focus on the activities themselves, BIS fully expects that the compliance burden for the other organizations will also be reduced. This is because this rule removes from EAR jurisdiction “technology” and “software” listed in new § 734.10(b)(1) when they meet at least one condition in new § 734.10(b)(2). Accordingly, the listed “technology” and “software” will not be subject to the EAR when released for “standards-related activities” as that term is discussed in part 734 of the EAR.

Topic Area 7: Use clear language and clarification.

One commenter suggested that BIS use clear language and clarification in future regulations. Specifically, this commenter stated that “any efforts to simplify, clarify or limit [the technology] restrictions would be gratefully received by SSO's, their decision makers, and their members.”

Response: BIS will continue to strive to use clear language and to use guidance, including a frequently asked questions (FAQ) document, to further clarify published regulations in accordance with the Plain Writing Act of 2010.

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

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

2. Notwithstanding any other provision of law, no person is required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This interim final rule involves the collection currently approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to change because this rule does not impose any additional license requirements. Current information regarding this collection of information—including all background materials—can be found at https://www.reginfo.gov/public/do/PRAMain by using the search function to enter either the title of the collection or the OMB Control Number.

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

4. Pursuant to section 1762 of ECRA, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements, including prior notice and the opportunity for public comment.

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared.

Accordingly, parts 734, 744 and 772 of the Export Administration Regulations (15 CFR parts 730 through 774) are amended as follows:

FDA is announcing the availability of a document entitled “Blood Pressure and Pulse Donor Eligibility Requirements: Compliance Policy.” The document addresses certain regulatory requirements for determining donor eligibility that apply to blood establishments that collect blood components for transfusion or for further manufacturing use, including Source Plasma. In the final rule dated May 22, 2015 (80 FR 29841) entitled “Requirements for Blood and Blood Components Intended for Transfusion or for Further Manufacturing Use,” FDA amended the regulations applicable to blood establishments for determining donor eligibility and testing blood and blood components. 1 The revised requirements were implemented in order to assure the safety of the blood supply and to protect donor health. The final rule became effective on May 23, 2016. FDA has developed the document in response to feedback from blood establishments regarding the donor eligibility requirements for blood pressure and pulse in 21 CFR 630.10 and the corresponding requirements for medical supervision in 21 CFR 630.5. The guidance describes the circumstances in which FDA does not intend to take regulatory action for a blood establishment's failure to comply with certain regulations for determining the eligibility of blood donors with blood pressure or pulse measurements outside of the specified limits.

This guidance finalizes the draft guidance entitled “Blood Pressure and Pulse Donor Eligibility Requirements: Compliance Policy; Draft Guidance for Industry” issued on May 24, 2022 (87 FR 31567). Changes made from the draft to the final guidance took into consideration comments received. After considering the comments, we made a few clarifying edits to the guidance and other editorial changes.

This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on blood pressure and pulse donor eligibility requirements and explains our compliance policy with respect to these requirements. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.

While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. The previously approved collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in 21 CFR part 601 have been approved under OMB control number 0910-0338; the collections of information in 21 CFR parts 606 and 630 have been approved under OMB control number 0910-0116.

Persons with access to the internet may obtain the guidance at https://www.fda.gov/vaccines-blood-biologics/guidance-compliance-regulatory-information-biologics/biologics-guidances, https://www.fda.gov/regulatory-information/search-fda-guidance-documents, or https://www.regulations.gov.

On October 6, 2023, the Department of the Treasury (Treasury Department) and the IRS published proposed regulations (REG-117614-14) in the Federal Register (88 FR 69559) under section 367(b) of the Internal Revenue Code (the “Proposed Regulations”) that would implement the regulations announced and described in Notice 2014-32 (2014-20 IRB 1006) and Notice 2016-73 (2016-52 IRB 908), with modifications. This document finalizes the Proposed Regulations without substantive change. Terms used but not defined in this preamble have the meaning provided in the Proposed Regulations.

In response to a request for comments in the Proposed Regulations, one comment was received and is discussed in the Summary of Comment and Explanation of Revisions. This comment is available at https://www.regulations.gov or upon request. No public hearing was held on the Proposed Regulations because there were no requests to speak.

As the preamble to the Proposed Regulations explained, the existing regulations in § 1.367(b)-10 (the “2011 Final Regulations”) contain an anti-abuse rule under which “appropriate adjustments” are made if, “in connection with a triangular reorganization, a transaction is engaged in with a view to avoid the purpose” of the 2011 Final Regulations. See § 1.367(b)-10(d). The anti-abuse rule contains an example illustrating that the earnings and profits of S may, under certain circumstances, be deemed to include the earnings and profits of a corporation related to P or S for purposes of determining the consequences of the adjustments provided for in the 2011 Final Regulations.

Notice 2014-32 described certain clarifications with respect to the scope of the anti-abuse rule and illustrated certain of those clarifications with an additional example. See Notice 2014-32, sections 4.03 and 4.04. The Proposed Regulations proposed to implement those clarifications along with two new examples that further illustrate the broad scope of the anti-abuse rule. See proposed § 1.367(b)-10(d)(3) ( Example 2) (relating to a downstream property transfer) and (d)(4) ( Example 3 ) (relating to a taxable debt exchange). The Proposed Regulations did not propose to alter the anti-abuse rule's operative text, which remains unchanged from the 2011 Final Regulations. Because Examples 2 and 3 (as well as Example 1, which was described in Notice 2014-32) merely illustrate applications of the same operative rule finalized in the 2011 Final Regulations, the adjustments described in those examples reflect adjustments that would be made under the 2011 Final Regulations. That is, these examples illustrate fact patterns to which the anti-abuse rule already applies, independent of the inclusion of the examples in the Proposed Regulations. The additional language that was proposed to be added to § 1.367(b)-10(d)(1) similarly clarifies potential situations to which the anti-abuse rule applies, and therefore also reflects adjustments that would be made under the 2011 Final Regulations, notwithstanding that that language was first described in Notice 2014-32.

The comment asserted that Examples 2 and 3 are an expansion of the operative anti-abuse rule because they involve fact patterns and impose corrective adjustments that were not described in prior guidance and implicate concerns that were not present when the 2011 Final Regulations were issued. The comment claimed that the anti-abuse rule has a narrow application that is limited to scenarios described by the one example in § 1.367(b)-10(d) of the 2011 Final Regulations. In that example, S's earnings and profits are increased where S is “created, organized, or funded to avoid the application of [the 2011 Final Regulations] with respect to the earnings and profits of [a related corporation].” As the comment correctly observed, this adjustment increases the likelihood that the 2011 Final Regulations will apply to treat the P acquisition as a deemed distribution. The comment also argued, however, that the only type of adjustments permitted under the anti-abuse rule are adjustments that increase S's earnings and profits and, moreover, that the anti-abuse rule may impose those adjustments only if they bear on the P acquisition, because the P acquisition is the only type of transaction that can be “in connection with” an applicable triangular reorganization.

The comment contended that Example 3 effectively introduces a new rule by, for the first time, applying the anti-abuse rule to “override” the § 1.367(b)-10(a)(2)(iii) priority rule, which in the example would otherwise prevent the P acquisition from being treated as a deemed distribution. The comment also argued that Example 3 further expands the scope of the anti-abuse rule by applying it “in connection with” a transaction that occurs after the applicable triangular reorganization rather than in connection with the P acquisition itself. The comment similarly asserted that Example 2 presents a fact pattern that is not within the purview of the anti-abuse rule because that example references a regulation that was issued after the TCJA, and as such cannot reflect an abuse that the 2011 Final Regulations contemplate. Therefore, the comment recommended that Examples 2 and 3 should either be eliminated from the final regulations or made to apply only prospectively as of October 5, 2023, the date the Proposed Regulations were filed with the Federal Register .

The Treasury Department and the IRS maintain that Examples 2 and 3 are simply illustrations of the same operative anti-abuse rule—unchanged since it was published in the 2011 Final Regulations—and therefore decline to adopt the comment's recommendation. The comment misunderstands the nature and purpose of the anti-abuse rule, which is intended to serve as a backstop to § 1.367(b)-10 in cases where taxpayers purposely attempt to structure around the application of those regulations. That structuring may take many forms and implicate other technical provisions in ways that are not foreseeable, including by taking advantage of changes in law that create novel planning opportunities. The anti-abuse rule is designed to be adaptable to such changing or unforeseen circumstances and, as such, is not limited to a particular type of avoidance transaction.

This adaptability is reflected in the wording of the anti-abuse rule, which, as described above, applies (i) “if, in connection with a triangular reorganization,” (ii) “a transaction is engaged in with a view to avoid the purpose” of § 1.367(b)-10. Neither of those two elements limit the anti-abuse rule to a specific form of avoidance transaction, as doing so would undercut the adaptability that is essential to the proper functioning of the rule. Moreover, the preamble to temporary regulations issued in 2008 (TD 9400, 73 FR 30301), the predecessor regulations to the 2011 Final Regulations in § 1.367(b)-10, explains that the phrase “in connection with” is “a broad standard that includes any transaction related to the reorganization even if the transaction is not part of the plan of reorganization” (73 FR 30302). The P acquisition is not the exclusive type of transaction that may implicate the anti-abuse rule, nor is there any requirement that such transaction precede the applicable triangular reorganization.

Once the anti-abuse rule applies, “appropriate” adjustments may be made. The types of corrective adjustments that may be appropriate are not circumscribed to a particular set of adjustments for the same reason that the anti-abuse rule is not limited to a particular form of avoidance transaction. That is, the anti-abuse rule naturally accommodates a range of adjustments because the nature of the corrective adjustment will depend on the form of the abusive transaction. These adjustments necessarily include adjustments that may have the effect of modifying the application of technical rules, including the priority rule, as almost any avoidance transaction involves the exploitation of some technical provision. The Treasury Department and the IRS have long maintained that the anti-abuse rule is not defined by the one example described in the 2011 Final Regulations, which uses the phrase “for example” to indicate explicitly that the example is just one possible illustration of the rule and not, as the comment argues, the only possible illustration. See Notice 2014-32, section 3 (expressing the concern that taxpayers “may be interpreting the anti-abuse rule too narrowly . . . .”).

These final regulations do, however, make a minor change to the facts of Example 3. As described in the Proposed Regulations, that example stated that USP did not satisfy the holding period requirement with respect to section 245A because “USP has held its stock in FP for fewer than 365 days.” The Treasury Department and the IRS did not intend for that statement to create any inference as to how the holding period requirement could be satisfied and accordingly revise the example's facts to provide that USP simply “will not” satisfy the holding period requirement.

The comment also questioned why the clarifications to the application of the anti-abuse rule that were described in Notice 2014-32, such as Example 1, were not included among the rules listed in proposed § 1.367(b)-10(e)(2) as having an April 25, 2014, applicability date. Section 1.367(b)-10(e)(2) does not explicitly reference those clarifications because, as noted above, they simply clarify potential situations to which the anti-abuse rule applies. On the other hand, the other changes described in Notice 2014-32 modify substantive rules and are therefore listed under § 1.367(b)-10(e)(2) as having an April 25, 2014, applicability date.

Under the Proposed Regulations, the excess asset basis (“EAB”) rules create a deemed distribution of specified earnings to the foreign acquired corporation from foreign subsidiaries, with specified earnings drawn from each subsidiary on a pro rata basis. See proposed § 1.367(b)-3(g)(1) and (3). A “foreign subsidiary” is defined by reference to the ownership requirements of section 1248(c)(2)(B). Section 1248(c)(2)(B) describes a 10-percent ownership threshold, taking into account the constructive ownership rules in section 958(b). Under that definition, therefore, a foreign subsidiary could include a foreign corporation that the foreign acquired corporation is treated as owning solely through constructive ownership and in which it has no direct or indirect ownership interest. These final regulations make a minor change to § 1.367(b)-3(g)(1) to clarify that possible result. See § 1.367(b)-3(g)(1), fourth sentence (“the distribution is treated as being made through any intermediate owners, or directly from any constructively owned foreign subsidiaries, where applicable” ) (emphasis added).

The Treasury Department and the IRS believe this rule appropriately balances the need for a comprehensive mechanism to correct a foreign acquired corporation's basis imbalance with administrability concerns. For example, while in many cases the basis imbalance could be corrected by taking into account the earnings and profits of the particular subsidiary that participated in an applicable triangular reorganization, that subsidiary may no longer be identifiable or exist when the EAB rules are applied to the foreign acquired corporation. Thus, sourcing specified earnings on a pro rata basis from related foreign corporations provides an administrable rule while reducing the possibility that the basis imbalance goes uncorrected.

The following publications are obsoleted as of July 17, 2024:

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

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the OMB.

The collections of information in § 1.367(b)-1(c)(4)(viii) and (ix) apply to taxpayers that engage in transactions described in § 1.367(b)-3(g) or § 1.367(b)-10. These reporting requirements are necessary for the IRS's audit and examination purposes, and in particular to identify transactions that should be subject to these final regulations.

The information collection is a statement by corporations attached to their timely filed Federal tax returns (or Form 5471, as applicable) that describes certain transactions and computations, as described in §§ 1.367(b)-3(g) and 1.367(b)-10, that are relevant to these final regulations. Any collection burden will be accounted for in OMB control number 1545-0123.

Taxpayers should keep copies of their filed returns and associated documentation as required by section 6001 of the Internal Revenue Code (the Code). These general tax records are already approved by the OMB under control number 1545-0123. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by section 6103 of the Code.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this rulemaking will not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the Regulatory Flexibility Act. As discussed in the preamble to the Proposed Regulations, this certification is based on the expectation that the taxpayers affected by these final regulations will generally be domestic and foreign corporations that participate in certain triangular reorganizations. The triangular reorganizations at issue represent a narrow set of abusive transactions that have typically been engaged in by large, publicly traded corporations. Such transactions are highly sophisticated and are thus unlikely to involve small domestic entities.

Pursuant to section 7805(f) of the Internal Revenue Code, the proposed regulations (REG-117614-14) preceding these final regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on the impact on small business, and no comments were received.

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

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

Any IRS Revenue Procedure, Revenue Ruling, Notice, or other guidance cited in this document is published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

The principal author of these regulations is Brady Plastaras of the Office of the Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

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

On April 6, 2022, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq. ) (IEEPA), issued Executive Order (E.O.) 14071 of April 6, 2022, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression” (87 FR 20999, April 8, 2022). Among other prohibitions, section 1(a)(ii) of E.O. 14071 prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation.

On June 12, 2024, pursuant to delegated authority, the Director of OFAC, in consultation with the Department of State, issued “Determination Pursuant to Section 1(a)(ii) of Executive Order 14071,” which determined that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services: information technology (IT) consultancy and design services; and IT support services and cloud-based services for the following categories of software: enterprise management software and design and manufacturing software.

The determination was made available on OFAC's website ( https://ofac.treasury.gov ) when it was issued. The text of the determination is below.

Pursuant to sections 1(a)(ii), 1(b), and 5 of Executive Order (E.O.) 14071 of April 6, 2022 (“Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression”) and 31 CFR 587.802, and in consultation with the Department of State, I hereby determine that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services:

(1) Information technology (IT) consultancy and design services; and

(2) IT support services and cloud-based services for the following categories of software: enterprise management software and design and manufacturing software (collectively, “Covered Software”).

As a result, the following activities are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control:

The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of IT consultancy and design services or of IT support services or cloud-based services for Covered Software to any person located in the Russian Federation.

This determination excludes the following:

(1) Any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person;

(2) Any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person;

(3) Any service for software that is:

(i) Subject to the Export Administration Regulations, 15 CFR part 730 et seq., (EAR) and for which the exportation, reexportation, or transfer (in-country) to the Russian Federation of such software is licensed or otherwise authorized by the Department of Commerce; or

(ii) Not subject to the EAR and for which the exportation, reexportation, or transfer (in-country) to the Russian Federation of such software would be eligible for a license exception or otherwise authorized by the Department of Commerce if it were subject to the EAR.

This determination shall take effect beginning at 12:01 a.m. eastern daylight time on September 12, 2024.

Purpose of Program: The RDI grant program is designed to provide HBCUs, TCCUs, and MSIs, including Asian American and Native American Pacific Islander Serving Institutions (AANAPISIs), Alaska Native and Native Hawaiian Serving Institutions (ANNH), Hispanic Serving Institutions (HSIs), Native American Serving Non-Tribal Institutions (NASNTIs), and Predominantly Black Institutions (PBIs), and consortia led by an eligible institution of higher education, with funds to implement transformational investments in research infrastructure, including research productivity, faculty expertise, graduate programs, physical infrastructure, human capital development, and partnerships leading to increases in external and sustained funding.

Assistance Listing Number: 84.116H.

Program Authority: 20 U.S.C. 1138-1138d.

We published a notice of proposed priorities, requirements, and definitions in the Federal Register on May 17, 2024 (89 FR 43352) (NPP). That document contained background information and the Department's reasons for proposing the particular priorities, requirements, and definitions. There is one substantive difference between the proposed priorities, requirements, and definitions and these final priorities, requirements, and definitions.

We have added Priority 5, as described below.

Public Comment: In response to our invitation in the NPP, six parties submitted comments on the proposed priorities, requirements, and definitions. Generally, we do not address technical and other minor changes, or suggested changes that the law does not authorize us to make under applicable statutory authority. In addition, we do not address general comments that raised concerns not directly related to the proposed priorities, requirements, or definitions.

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

Comments: One commenter suggested that we modify Proposed Priority 1 to support schools that demonstrate intention and realistic capacity to move from any research status under the American Council on Education's Carnegie Classification System to classification as a Research College and University (RCU) or a Doctoral University with High Research Activity (R2), rather than limiting support to RCU and R2 institutions seeking to move up to classification as R2 or Doctoral University with Very High Research Activity (R1), respectively. The commenter suggested that, if an applicant can demonstrate a realistic prospect of movement into R1, it already has a substantial level of research and development infrastructure and financial capacity.

Discussion: The purpose of the RDI grant program is to support institutions that have limited resources and diverse student enrollments—as the eligible entities, HBCUs, TCCUs, and MSIs, do—with funds to implement transformational investments in research infrastructure to move into R2 or R1 status. Attaining R2 or R1 status assists institutions with recruiting top students and faculty, funding top-of-the-line facilities to conduct research, and producing and disseminating cutting-edge knowledge. While we recognize that a wide range of institutions, regardless of Carnegie classification, could benefit from additional investments in research and development (R&D) infrastructure, the Department believes that these limited funds have the greatest potential to transform R&D infrastructure at institutions if they are targeted to support institutions in making steps towards R2 and R1 status under the Carnegie Classification System. The funding is designed to help institutions move towards R2 or R1 status, regardless of how close they are to achieving it.

Changes: None.

Comments: One commenter proposed amending Proposed Priority 4 to align the Pell Grant recipient threshold from the proposed 50 percent of undergraduate students to the current Department of Education Office of Postsecondary Education standards for Title III and Title V grant programs. The commenter stated that this change would, by aligning requirements across Department programs, ease administrative burden on institutions.

Discussion: The 50 percent Pell recipient threshold in Priority 4 is a higher bar than either of the metrics used for eligibility for titles III and V programs. To be designated as eligible to apply under the titles III and V programs, institutions must demonstrate high enrollment of needy students by meeting either of the following two criteria: (1) at least 50 percent of its degree-seeking students received financial assistance under the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), or Federal Work Study (FWS) programs; or (2) the percentage of its undergraduate degree-seeking students who were enrolled on at least a half-time basis and received Federal Pell Grants exceeded the median percentage of undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants at comparable institutions that offer similar instruction. For purposes of this priority, we believe this higher standard is appropriate because the explanatory statement originally authorizing funding for this program, contained within Division H of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328), specified that these grants are intended to provide “transformational” investments to improve institutions' R&D infrastructure. The Department believes these funds have the highest potential to transform an institution's R&D infrastructure if they are targeted to the institutions with the fewest resources that enroll the highest percentages of needy students. We do not believe that this metric imposes any burden upon applicants because the Department will use administrative data to calculate the Pell percentage for applicant institutions.

Changes: None.

Comments: None.

Discussion: As we stated in the NPP, TCCUs currently have their own Carnegie classification and are not included in the R1, R2, or RCU classifications. Accordingly, we proposed Priority 2 for TCCUs, which uses an alternative measure of their R&D infrastructure. Since publication of the NPP, the American Council on Education announced that starting in 2025, TCCUs will be included in the same classification system as HBCUs, MSIs, and other institutions. 1 Therefore, we are adding a priority for TCCUs that mirrors the priorities for HBCUs and MSIs for use following the change to the Carnegie classifications, while maintaining Priority 2 so that the grant program can support TCCUs until such change occurs.

Changes: We have added Priority 5 to support projects proposed by TCCUs to implement high-quality transformative research capacity initiatives designed to move the institution from R2 to R1, or from RCU to R2, research activity status.

Comments: Three commenters suggested changes to the match and waiver requirements. Two commenters proposed eliminating the match and waiver requirements, and another commenter suggested that schools applying under Priorities 2 or 4 should be exempt automatically from the match requirement.

Discussion: We believe that a match requirement will help ensure that there is sufficient institutional investment in the work supported by the grant to achieve and sustain a transformational impact. We recognize that some applicants will have fewer resources, which is the reason we include the exceptions. Rather than creating exceptions for some types of institutions, we think it is simpler to have a general matching requirement and allow low-resourced schools to qualify for a waiver.

Changes: None.

Comments: One commenter suggested that we revise Proposed Requirement 1, Use of Funds, to include “humanities” under allowable activity 1 and that we further specify that faculty development under activity 14 must improve or enhance faculty capacity to manage R&D projects in fields of research for which funds have been awarded under this program.

Discussion: Under activity 1, grantees may use funds to improve infrastructure relating to the enumerated fields, as well as “other disciplines.” The humanities would constitute another discipline under this allowable use of funds, and, accordingly, no change is required. We designed activity 14 relating to faculty professional development to allow for broad support, based on the specific needs of the faculty in the context of the particular project. We do not think that being more prescriptive would benefit grantees.

Changes: None.

Comments: One commenter recommended not restricting the indirect cost rate.

Discussion: The indirect cost reimbursement is limited to 8 percent of a modified total direct cost base. The Department proposed this limitation in order to maximize the Federal resources that support direct costs associated with the project.

Changes: None.

Comments: One commenter suggested that the definition for Research Colleges and Universities (RCUs) should include an option to use data from an institution's annual financial statements instead of data from the National Science Foundation (NSF) Higher Education Research and Development (HERD) survey.

Discussion: To ensure that the program is supporting transformational investments in R&D infrastructure, consistent with the Explanatory Statement for this program, the Department is using the Carnegie Classifications for Institutional Research to determine an institution's current level of research activity. We believe this is the best measure because of the standardization for doctoral degree production and the measures of institutional dollars expended by the institution annually. Because Carnegie classifications are based on data from the NSF HERD survey, using this measure ensures consistency in how we assess institutional research activity.

Changes: None.

The Secretary establishes the following priorities for use in the RDI grant program.

Priority 1: Funding for Historically Black Colleges and Universities' Research and Development Infrastructure.

Projects proposed by HBCUs to implement high-quality transformative research capacity initiatives and designed to move the institution from R2 to R1, or from RCU to R2, research activity status.

Priority 2: Funding for Tribal Controlled Colleges and Universities' Research and Development Infrastructure.

Projects proposed by TCCUs to improve their research and development activities, including infrastructure, faculty development, and academic programs.

Priority 3: Funding for Minority-Serving Institutions' Research and Development Infrastructure.

Projects proposed by MSIs to implement high-quality transformative research capacity initiatives and designed to move the institution from R2 to R1, or from RCU to R2, research activity status.

Priority 4: MSI Pell Grant Percentage.

Projects proposed by lead applicants with an enrollment of Pell Grant recipients that accounts for 50 percent or higher of their undergraduate student enrollment, as measured by the Department using the most recent data available in the Integrated Postsecondary Education Data System (IPEDS).

Priority 5: Funding for Tribal Controlled Colleges and Universities' Research And Development Infrastructure.

Projects proposed by TCCUs to implement high-quality transformative research capacity initiatives and designed to move the institution from R2 to R1, or from RCU to R2, research activity status.

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

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

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

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

The Secretary establishes the following requirements for use in the RDI grant program.

Requirement 1—Use of Funds. Grantees must conduct one or more of the following activities:

(1) Providing for the improvement of infrastructure existing on the date of the grant award, including deferred maintenance, or the establishment of new physical infrastructure, including instructional program spaces, laboratories, and research facilities relating to the fields of science, technology, engineering, the arts, mathematics, health, agriculture, education, medicine, law, and other disciplines.

(2) Hiring and retaining faculty, students, research-related staff, or other personnel, including research personnel skilled in operating, using, or applying technology, equipment, or devices to conduct or support research.

(3) Supporting research internships and fellowships for students, including undergraduate, graduate, and post-doctoral positions, which may include providing direct student financial assistance and other supports to such students.

(4) Creating new, or expanding existing, academic positions, including internships, fellowships, and post-doctoral positions, in fields of research for which research and development infrastructure funds have been awarded to the grantee under this program.

(5) Creating and supporting inter- and intra-institutional research centers (including formal and informal communities of practice) in fields of research for which research and development infrastructure funds have been awarded to the grantee under this program, including hiring staff, purchasing supplies and equipment, and funding travel to relevant conferences and seminars to support the work of such centers.

(6) Building new institutional support structures and departments that help faculty learn about, and increase faculty and student access to, Federal research and development grant funds and non-Federal academic research grants.

(7) Building data and collaboration infrastructure so that early findings and research can be securely shared to facilitate peer review and other appropriate collaboration.

(8) Providing programs of study and courses in fields of research for which research and development infrastructure funds have been awarded to the grantee under this program.

(9) Paying operating and administrative expenses for, and coordinating project partnerships with members of, the consortium on behalf of which the eligible institution has received a grant under this program, provided that grantees may not pay for the expenses of any R1 institutions that are members of the consortia.

(10) Installing or extending the life and usability of basic systems and components of campus facilities related to research, including high-speed broadband internet infrastructure sufficient to support digital and technology-based learning.

(11) Expanding, remodeling, renovating, or altering biomedical and behavioral research facilities existing on the date of the grant award that received support under section 404I of the Public Health Service Act (42 U.S.C. 283k).

(12) Acquiring and installing furniture, fixtures, and instructional research-related equipment and technology for academic instruction in campus facilities in fields of research for which research and development infrastructure funds have been awarded to the grantee under this program.

(13) Providing increased funding to programs that support research and development at the eligible institution that are funded by the National Institutes of Health, including through their Path to Excellence and Innovation program.

(14) Faculty professional development.

(15) Planning purposes.

Requirement 2—Indirect Cost Rate Information. A grantee's indirect cost reimbursement is limited to 8 percent of a modified total direct cost base. For more information regarding indirect costs, or to obtain a negotiated indirect cost rate, please see www.ed.gov/about/offices/list/ocfo/intro.html.

Requirement 3—Matching Requirements and Exceptions. Grantees must provide a 1:1 match, which can include in-kind donations. The Secretary may waive the matching requirement on a case-by-case basis upon a showing of any of the following exceptional circumstances:

(i) The difficulty of raising matching funds for a program to serve an area with high rates of poverty in the lead applicant's geographic location, defined as a Census tract, a set of contiguous Census tracts, an American Indian Reservation, Oklahoma Tribal Statistical Area (as defined by the U.S. Census Bureau), Alaska Native Village Statistical Area or Alaska Native Regional Corporation Area, Native Hawaiian Homeland Area, or other Tribal land or county that has a poverty rate of at least 25 percent as determined every 5 years using American Community Survey 5-Year data;

(ii) Serving a significant population of students from low-income backgrounds at the lead applicant location, defined as at least 50 percent (or the eligibility threshold for the appropriate institutional sector available at https://www2.ed.gov/about/offices/list/ope/idues/eligibility.html#app ) of degree-seeking enrolled students receiving need-based grant aid under Title IV of the HEA;

(iii) Significant economic hardship as demonstrated by low average educational and general expenditures per full-time equivalent undergraduate student at the lead applicant institution, in comparison with the average educational and general expenditures per full-time equivalent undergraduate student of institutions that offer similar instruction without need of a waiver, as determined by the Secretary in accordance with the annual process for designation of eligible Titles III and V institutions; or

(iv) Information that otherwise demonstrates a commitment to the long-term sustainability of the applicant's projects, such as evidence of a consortium relationship with an R1 institution, a State bond, State matching, planning documents such as a campus plan, multi-year faculty hiring plan, support of industry, Federal grants received, or a demonstration of institutional commitment that may include commitment from the institution's board.

Requirement 4: Limitation on Grant Award s. The Department will only make awards to applicants that are not the individual or lead applicant in a current active grant from the RDI grant program.

The Secretary establishes the following definitions for use in the RDI grant program.

Research 1: Very High Research Spending and Doctorate Production (R1) means that an institution has spent at least $50 million in total research and development (R&D) in a year, as reported to the National Science Foundation (NSF) Higher Education Research and Development (HERD) Survey, and awarded at least 70 research/scholarship doctorates in a year, as reported to IPEDS.

Research 2: High Research Spending and Doctorate Production (R2) means that an institution has spent at least $5 million in total R&D in a year, as reported to the NSF HERD Survey, and awarded at least 20 research/scholarship doctorates in a year, as reported to IPEDS. It does not include institutions designated R1.

Research Colleges and Universities (RCU) means that an institution has spent at least $2.5 million in total R&D in a year, as reported to the NSF HERD Survey. It does not include institutions designated R1 or R2.

Historically Black College or University means an institution that meets the eligibility requirements under section 322(2) of the Higher Education Act of 1965, as amended (HEA).

Minority-Serving Institution means an institution that is eligible to receive assistance under sections 317 through 320 of part A of title III, or under title V of the HEA.

Tribal Controlled Colleges or Universities has the meaning ascribed it in section 316(b)(3) of the HEA.

Underrepresented students means students enrolled in postsecondary, career, or technical education who are in one or more of the following subgroups: (i) A student from a low-income background. (ii) A student who is American Indian, Alaska Native, Asian American, Black, Hispanic or Latino, Native Hawaiian, and/or Pacific Islander.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The potential costs associated with these priorities, requirements, and definitions are minimal, while the potential benefits are significant. The Department believes that this final regulatory action will not impose significant costs on eligible entities. Participation in this program is voluntary, and the costs imposed on applicants by this regulatory action will be limited to paperwork burden related to preparing an application. The potential benefits of implementing the program will outweigh the costs incurred by applicants, and the costs of carrying out activities associated with the application will be paid for with program funds. For these reasons, we have determined that the costs of implementation will not be burdensome for eligible applicants, including small entities.

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

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

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

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

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

The small entities that this final regulatory action will affect are IHEs that meet the eligibility requirements described in section 241(1) of the HEA. The Secretary believes that the costs imposed on applicants by the final priorities, requirements, and definitions will be limited to paperwork burden related to preparing an application and that the benefits will outweigh any costs incurred by applicants.

Participation in this program is voluntary. For this reason, the final priorities, requirements, and definitions will impose no burden on small entities unless they applied for funding under the program. We expect that in determining whether to apply for RDI grant program funds, an eligible applicant would evaluate the requirements of preparing an application and any associated costs, and weigh them against the benefits likely to be achieved by receiving a grant. Eligible applicants most likely would apply only if they determine that the likely benefits exceed the costs of preparing an application. The likely benefits include the potential receipt of a grant as well as other benefits that may accrue to an entity through its development of an application, such as the use of that application to seek funding from other sources to address the institution's R&D infrastructure needs.

This final regulatory action will not have a significant economic impact on a small entity once it receives a grant because it will be able to meet the costs of compliance using the funds provided under this program.

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

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

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

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

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

On January 18, 2024, the Ohio Environmental Protection Agency (Ohio) requested SIP approval of a variety of amendments to its regulations in Ohio Administrative Code (OAC) Chapter 3745-17, entitled “Particulate Matter Standards.” The amended rules include administrative revisions such as the removal of provisions that pertain to facilities that have permanently shut down, renumbering of emissions units for facilities that have combined operations, and modification of wording for phrases that Ohio wishes to rephrase. Ohio amended its request on February 21, 2024, to request EPA not act on the alternate set of opacity limits mentioned in OAC Rule 3745-17-03. Accordingly, EPA is not acting on those provisions.

EPA proposed to approve the requested revisions to OAC Chapter 3745-17 on April 15, 2024, at 89 FR 26115. The notice of proposed rulemaking (NPRM) provides a more complete discussion of the revisions that Ohio requested be approved and EPA's evaluation of these revisions.

The public comment period for this proposed rule ended on May 15, 2024. EPA received two comments on the proposal. All of the comments received are included in the docket for this action.

The first comment came from an anonymous commenter and pertained to environmental spills that have occurred in Ohio. The second comment came from an anonymous commenter and requested that Executive Order 12898 be reviewed, and that Environmental Justice (EJ) be included in the Ohio SIP process.

Executive Order 12898 (59 FR 7629, February 16, 1994) requires that Federal agencies, to the greatest extent practicable and permitted by law, identify and address disproportionately high and adverse human health or environmental effects of their actions on minority and low-income populations. Additionally, Executive Order 13985 (86 FR 7009, January 25, 2021) directs Federal agencies to assess whether, and to what extent, their programs and policies perpetuate systemic barriers to opportunities and benefits for people of color and other underserved groups, and Executive Order 14008 (86 FR 7619, February 1, 2021) directs Federal agencies to develop programs, policies, and activities to address the disproportionate health, environmental, economic, and climate impacts on disadvantaged communities.

As the commentor acknowledged, EPA reviewed Ohio's requested rule revisions and determined that due to the editorial nature of the action being taken this action is expected to have a neutral to positive impact on the air quality of the affected area. Since the action is expected to have a neutral to positive impact, consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples. Additionally, EPA sets the National Ambient Air Quality Standards at a level to protect the public health, with an adequate margin of safety, including the health of at-risk populations, and protect the public welfare from adverse effects. While EPA recognizes the importance of assessing impacts of our actions on potentially overburdened communities, we believe that our approval of Ohio's request for the revision of OAC Chapter 3745-17 would not exacerbate existing pollution exposure or burdens for populations in Ohio.

We do not consider these comments to be germane or relevant to this action and therefore not adverse to this action. The comments lack the required specificity to the proposed SIP revision and the relevant requirements of CAA section 110. Moreover, none of the comments address a specific regulation or provision in question or recommend a different action on the SIP submission from what EPA proposed. Therefore, we are finalizing our action as proposed. EPA encourages the commenters to remain engaged with stakeholders in the effort to protect human health and the environment.

In response to the NPRM, EPA received two comments which were not relevant to the proposed rulemaking. EPA continues to find that the requested revisions warrant approval for the reasons given in the NPRM. Therefore, EPA is approving the revisions to OAC 3745-17 that Ohio submitted on January 18, 2024, with the exception of selected sections of OAC 3745-17-03 as clarified by Ohio on February 21, 2024. Specifically, EPA is approving Ohio rules 3745-17-01, 3745-17-03 [with the exception of the phrase in 3745-17-03(B)(1)(a) reading “Except as provided in paragraph (B)(1)(b) of this rule” and 3745-17-03(B)(1)(b)], 3745-17-04, 3745-17-07, 3745-17-08, 3745-17-09, 3745-17-10, 3745-17-11, 3745-17-12, 3745-17-13, and 3745-17-14, effective August 25, 2023.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Ohio Regulations described in section II of this preamble and set forth in the amendments to 40 CFR part 52 below. EPA has made, and will continue to make, these documents generally available through https://www.regulations.gov, and at the EPA Region 5 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rule of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 1

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

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993), and 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 application of those requirements would be inconsistent with the CAA.

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

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, 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. EPA defines EJ as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”

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

This action is subject to the Congressional Review Act, and 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 CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 16, 2024. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, title 40 CFR part 52 is amended as follows: