The USDA RHS offers a variety of programs to build or improve housing and essential community facilities in rural areas. RHS offers loans, grants, and loan guarantees for single- and multi-family housing, childcare centers, fire and police stations, hospitals, libraries, nursing homes, schools, first responder vehicles and equipment, housing for farm laborers and much more. RHS also provides technical assistance loans and grants in partnership with non-profit organizations, Indian tribes, State and Federal Government agencies, and local communities.

Under the authority of the Housing Act of 1949 (42 U.S.C. 1471 et seq. ), as amended, the SFHGLP makes loan guarantees to provide low- and moderate-income persons in rural areas an opportunity to own decent, safe, and sanitary dwellings and related facilities. The RHS administers the SFHGLP that provides a 90% Loan Note Guarantee to approved lenders to reduce the lender's risk of extending loans to low- and moderate-income households in rural areas. Approved lenders make the initial eligibility determinations, and the Agency reviews those determinations to make a final eligibility decision.

This program helps lenders work with low- and moderate-income households living in rural areas to make homeownership a reality. Providing affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.

The RHS published a proposed rule on January 27, 2023 (88 FR 5275) to amend the current regulation for the SFHGLP found in 7 CFR part 3555. This final rule will amend 7 CFR part 3555 to implement changes related to the use of Special Servicing Options for Non-Performing Loans. The changes to the current regulation will benefit borrowers by offering a less cumbersome option to eliminate documentation and eligibility challenges for borrowers who do not require payment reduction, while providing lenders more flexibility in their servicing options and reducing program risk of the guaranteed loan portfolio.

The SFHGLP is authorized by section 502(h) of the Housing Act of 1949, (42 U.S.C. 1472(h)), as amended. 7 CFR part 3555 sets forth the regulatory requirements of the SFHGLP which includes policies regarding originating, servicing, holding, and liquidating SFHGLP loans. SFHGLP approved lenders make the initial eligibility determinations, and the Agency reviews those determinations to make a final eligibility decision. In § 3555.303, lenders are provided several traditional servicing options for Non-Performing Loans. The use of special servicing options in § 3555.304 is provided if the traditional servicing options provided in § 3555.303 have been exhausted or the lender has determined that the use of such servicing options would not resolve the delinquency.

RHS is issuing a final rule to amend §§ 3555.303 and .304 to incorporate the MRA as a part of the regular servicing options in § 3555.303 and allow for streamline servicing options in § 3555.304. This final rule also adjusts the MRA process to make it less cumbersome and eliminates documentation and eligibility challenges for borrowers who do not require payment reduction.

The Agency received comments from 12 respondents, including mortgage lenders, associations, and other interested parties. Specific public comments are addressed below:

Public Comment: One respondent suggested that the Agency combine both § 3555.303 (traditional servicing options) with § 3555.304 to maintain the COVID-19 loss mitigation waterfall and provide specific guidance in HB-1-3555. Further, the respondent suggested the Agency maintain the standalone MRA as the first option in the waterfall for borrowers who do not require payment reduction; eliminate financial reviews for seriously delinquent borrowers; retain a target payment reduction of 20 percent for borrowers who cannot resume an affordable new payment; and allow the MRA to be combined with a 30 or 40 year loan modification, allowing borrowers to defer additional principal if MRA funds are available.

Agency's Response: The Agency appreciates the commenter's response. The Agency agrees changes to § 3555.303 in addition to changes in § 3555.304 may assist in loss mitigation and amends the proposed rule accordingly. The final rule incorporates the MRA into § 3555.303, maintaining the MRA as either a standalone option or combined with a loan modification. The Agency agrees additional flexibility in servicing options may assist in preventing unnecessary foreclosures. The final rule amends § 3555.304 to provide streamline servicing options to provide the borrower with at least a 10 percent reduction to their principal and interest payment with no consideration of the borrower's financials. The Agency agrees with the respondent that the option to extend the loan term as suggested may assist in loss mitigation, therefore, the final rule provides the ability to extend the loan term after reamortization up to 40 years when necessary to demonstrate repayment ability. Additionally, the Agency will amend § 3555.303 to add section (b)(3)(vi) indicating the order in which that traditional servicing options will be established.

Public Comment: Four respondents replied that they were in favor of the proposed rule, some indicating that eliminating the subordinate lien is a worthy regulatory reform priority for post-pandemic mortgage servicing. However, they have expressed their opinion that this may place an undue burden on the lender and the borrower for collection of a balloon payment of the non-interest-bearing promissory note at the maturity of the interest-bearing loan. These respondents recommend that the Agency allow servicers to assign the servicing advance MRA to USDA at maturity of the interest-bearing original note, stating that the Agency has greater flexibility to help such homeowners avoid foreclosure.

Agency's Response: The Agency appreciates the support, as well as the suggested revision. It is anticipated that only a small percentage of loans will reach maturity. The Agency has not amended the final rule as recommended; however, the Agency is amending § 3555.303 to allow an MRA to be combined with up to a 40-year loan modification term, allowing borrowers to defer the additional principal if MRA funds are available. The opportunity to defer the additional principal will ensure borrowers are able to achieve the target payment. Additionally, the Agency is not opposed to allowing the servicer additional collection time if the lien is not released prior to the loan, including the MRA, being paid in full. The Agency will continue to work with the industry to provide alternative solutions.

Public Comment: Four respondents requested that clarification be provided in the rule to allow lenders to provide multiple MRAs throughout the life of the loan.

Agency's Response: The Agency appreciates the commenters' responses, as well as the suggested revision. The Agency has amended the rule to allow multiple MRAs and to clarify what conditions must be present to allow additional MRAs.

Public Comment: One respondent suggested that the Agency exempt small servicers from the provisions of the new rule, explaining that requiring servicers to collect the unsecured debt the homeowner owes to USDA puts them in the position of becoming third party debt collectors and creates a different relationship than what a Housing Finance Agency servicer agreed to when their agency agreed to offer and service SFHGLP loans as part of their single-family program offerings.

Agency's Response: The Agency appreciates the commenter's response. It is anticipated that only a small percentage of loans will reach maturity. The Agency has not amended the rule as recommended; however, the Agency is amending the CFR to allow an MRA to be combined with up to a 40-year loan modification term, allowing borrowers to defer the additional principal if MRA funds are available. The opportunity to defer the additional principal will ensure borrowers are able to achieve the target payment. Additionally, the Agency is not opposed to allowing the servicer additional collection time if the lien is not released prior to the loan, including the MRA, being paid in full. The Agency will continue to work with the industry to provide alternative solutions.

Public Comment: One respondent suggested that the Agency require borrowers to execute a standard MRA agreement.

Agency's Response: The Agency appreciates the commenter's response. The Agency understands it is important that variances in State laws are considered. An optional attachment for use by the lender will be made available on the Agency's LINC Training and Resource Library, located at rd.usda.gov/resources/usda-linc-training-resource-library.

Public Comment: One respondent suggested that the Agency allow servicers to recover incentives after completing an MRA.

Agency's Response: The Agency appreciates the commenter's response. The Agency agrees that an incentive for completing the MRA is a reasonable request and will consider them in the future.

Public Comment: One respondent suggested that the Agency provide guidance that specifies how funds are to be applied when the servicer receives funds in excess of the Principal, Interest, Taxes and Insurance (PITI).

Agency's Response: The Agency appreciates the commenter's response. The Agency agrees that it is more beneficial to the borrower to apply any additional funds to the interest-bearing loan first, however, the Agency does not feel it should dictate to the servicer and borrower how partial prepayments should be applied.

Public Comment: One respondent suggested that the Agency provide guidance that specifies how the MRA should be addressed in the event of a short sale or foreclosure bidding process.

Agency's Response: The Agency appreciates the commenter's response. The Agency agrees that guidance should be provided. Such guidance will be provided in Handbook-1-3555.

Public Comment: Two respondents suggested that the Agency permit servicers to modify the repayment date of the MRA.

Agency's Response: The Agency appreciates the commenters' response. The Agency is amending § 3555.303 to allow an MRA to be combined with up to a 40-year loan modification term, allowing borrowers to defer the additional principal if MRA funds are available. The opportunity to defer the additional principal will ensure borrowers are able to achieve the target payment. The Agency is not opposed to allowing the servicer additional collection time if the lien is not released prior to the loan, including the MRA, being paid in full. The final rule revises § 3555.303 to indicate that the MRA may be paid to the Agency when the payment is received from the borrower; or when the mortgage lien is released; or when the borrower transfers title to the property by voluntary or involuntary means.

Public Comment: One respondent suggested that the Agency provide guidance to servicers instructing them to notify borrowers that the MRA balance is coming due no later than six months prior to the maturity of their mortgage and that the Agency provide potential solutions for paying off the remaining MRA balance and that this be included in § 3555.304.

Agency's Response: The Agency appreciates the commenter's response. The Agency agrees that servicers providing advanced notice of the MRA payoff obligation could prevent unnecessary foreclosures and will provide such guidance.

Public Comment: One respondent suggested that the Agency reassess the loss mitigation regulations in § 3555.303 and § 3555.304 to allow for more flexible servicing options to provide borrowers with effective solutions to quickly resolve financial hardships.

Agency's Response: The Agency appreciates the commenter's response. The Agency agrees that additional flexibility in servicing options may assist in preventing unnecessary foreclosure. The final rule amends § 3555.303 to incorporate the MRA into traditional servicing options and amends § 3555.304 to provide streamline servicing options when traditional servicing options have been exhausted, the borrower is at least 90 days delinquent, and prior to any acceleration or foreclosure action.

Public Comment: One respondent suggested that the Agency ensure modified loans with a deferred balance be redelivered to Ginnie Mae.

Agency's Response: The Agency appreciates the commenter's response and agrees that preserving access to liquidity is an important component to preserving affordable homeownership. The Agency will continue to work with Ginnie Mae and others to provide options that preserve liquidity.

The following changes were included in the proposed rule:

In § 3555.304(b)(3), remove language pertaining to title search and recording fees as these services will no longer be utilized by the lender.

As a result of the comments received, § 3555.303 will be amended as follows:

Move (b)(3)(iv) to (b)(3)(i) to emphasize that the lender's lien priority cannot be affected by providing a loan modification. This will renumber the remaining section.

Revise section (b)(3)(iii), formerly (ii), to clarify that fees and costs associated with the delinquency may be included in the loan modification.

Revise section (b)(3)(iv), formerly (iii), to extend the repayment term for up to 40 years from the date of modification.

Add section (b)(3)(vi) indicating that traditional servicing options will be used in the order established to incorporate the addition of the MRA in the traditional servicing waterfall.

Add section (b)(3)(vii) to clarify that a mortgage recovery advance may be considered if the targeted income to ratio mortgage payment cannot be reached.

Add section (b)(4) to incorporate the MRA as a part of traditional servicing options.

Add section (b)(4)(V) to clarify that the lender may file a claim for reimbursement of reasonable title search and/or recording fees.

As a result of the comments received, § 3555.304 will be further amended as follows:

Revise the title of § 3555.304 to change “Special” to Streamline” and replace throughout the section.

Revise (a)(1) to clarify that the lender must exhaust all traditional loss mitigation options prior to offering the streamline servicing options.

Revise (a)(3) to indicate the streamline servicing options must provide the borrower with at least a 10 percent reduction to their principal and interest payment.

Remove (a)(4) since it is no longer applicable to streamlined servicing options.

Revise (b)(1) to eliminate the ratio cap for total debt to income and add that the borrower must be at least 90 days delinquent and streamline servicing shall be considered prior to initiation of any legal acceleration or foreclosure action.

Revise (b)(3) to remove the sentence on fees associated with foreclosure due to the requirement that streamline servicing must occur prior to any legal foreclosure action commencing.

Revise (c) to allow the servicer to extend the repayment term to 40 years, unless limited to 30 years by the investor.

Revise (c)(1) to remove reference to foreclosure fees and costs, as well as tax and insurance advances since foreclosure will not have commenced under the streamline option.

Revise (c)(3) to allow the servicer to extend the repayment term to 40 years, unless limited to provide the borrower a principal and interest reduction of at least 10 percent.

Revise (c)(4) to clarify that if the targeted mortgage payment reduction cannot be achieved using a modification as described in this section, the loan is not eligible for streamline loan servicing and acceleration, or foreclosure may be initiated.

Delete (d) as the section provides guidance for the MRA requirements and procedures, and this entire section has been modified and reincorporated into § 3555.303(b)(4).

This final rule continues the Agency's on-going efforts to improve delivery and mitigate risk of the SFHGLP.

Section 510(k) of Title V the Housing Act of 1949 [42 U.S.C. 1480(k)], as amended, authorizes the Secretary of the Department of Agriculture to promulgate rules and regulations as deemed necessary to carry out the purpose of that title.

This program is not subject to the requirements of Executive Order 12372, “Intergovernmental Review of Federal Programs,” as implemented under USDA's regulations at 7 CFR part 3015.

This final rule has been determined to be non-significant and, therefore, was not reviewed by the Office of Management and Budget (OMB) under Executive Order 12866.

This final rule has been reviewed under Executive Order 12988. In accordance with this rule: (1) unless otherwise specifically provided, all state and local laws that conflict with this rule will be preempted; (2) no retroactive effect will be given to this rule except as specifically prescribed in the rule; and (3) administrative proceedings of the National Appeals Division of the Department of Agriculture (7 CFR part 11) must be exhausted before suing in court that challenges action taken under this rule.

The policies contained in this final rule do not have any substantial direct effect on states, on the relationship between the national government and states, or on the distribution of power and responsibilities among the various levels of government. This rule does not impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required and a federal summary impact statement is not required.

This final rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

The Agency has determined that this final rule does not, to our knowledge, have tribal implications that require formal tribal consultation under Executive Order 13175. If a Tribe requests consultation, the Rural Housing Service will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

This final rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has determined and certified by signature on this document that this rule will not have a significant economic impact on a substantial number of small entities since this rulemaking action does not involve a new or expanded program nor does it require any more action on the part of a small business than required of a large entity.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effect of their regulatory actions on state, local, and tribal governments, and the private sector. Under section 202 of the UMRA, the Agency generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “federal mandates” that may result in expenditures to state, local, or tribal governments; in the aggregate, or to the private sector of $100 million or more, in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This final rule contains no federal mandates (under the regulatory provisions of Title II of the UMRA) for state, local, and tribal governments, or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

In accordance with the National Environmental Policy Act of 1969, Public Law 91-190, this final rule has been reviewed in accordance with 7 CFR part 1970 (“Environmental Policies and Procedures”). The Agency has determined that (i) this action meets the criteria established in 7 CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii) the action is not “connected” to other actions with potentially significant impacts, is not considered a “cumulative action” and is not precluded by 40 CFR 1506.1. Therefore, the Agency has determined that the action does not have a significant effect on the human environment, and therefore neither an Environmental Assessment nor an Environmental Impact Statement is required.

Rural Development has reviewed this final rule in accordance with USDA Regulation 4300-4, Civil Rights Impact Analysis, to identify any major civil rights impacts the rule might have on program participants on the basis of age, race, color, national origin, sex, or disability, gender identity (including gender expression), genetic information, political beliefs, sexual orientation, marital status, familial status, parental status, veteran status, religion, reprisal and/or resulting from all or a part of an individual's income being derived from any public assistance program. This final rule is within a Guarantee-based program. Guarantees are not covered under Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and Title IX of the Education Amendments Act of 1972, as amended, when the Federal assistance does not include insurance or interest credit loans. Lenders must comply with other applicable Federal laws, including Equal Employment Opportunities, the Equal Credit Opportunity Act, the Fair Housing Act, and the Civil Rights Act of 1964. Guaranteed loans that involve the construction of or addition to facilities that accommodate the public must comply with the Architectural Barriers Act Accessibility Standard. The borrower and lender are responsible for ensuring compliance with these requirements.

The program affected by this final rule is listed in the Assistance Listing Catalog (formerly Catalog of Federal Domestic Assistance) under number 10.410, Very Low to Moderate Income Housing Loans (Section 502 Rural Housing Loans).

The information collection requirements contained in this regulation have been approved by OMB and have been assigned OMB control number 0575-0179. This final rule contains no new reporting or recordkeeping requirements that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

Rural Development is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

In accordance with Federal civil rights laws and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information ( e.g., Braille, large print, audiotape, American Sign Language) should contact the responsible Mission Area, agency, or staff office; or the Federal Relay Service at (800) 877-8339.

To file a program discrimination complaint, a complainant should complete a Form AD-3027, USDA Program Discrimination Complaint Form, which can be obtained online at usda.gov/sites/default/files/documents/ad-3027.pdf from any USDA office, by calling (866) 632-9992, or by writing a letter addressed to USDA. The letter must contain the complainant's name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature and date of an alleged civil rights violation. The completed AD-3027 form or letter must be submitted to USDA by:

(1) Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410; or

(2) Fax: (833) 256-1665 or (202) 690-7442; or

(3) Email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

For the reasons discussed in the preamble, the Agency is amending 7 CFR part 3555 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 the 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 modifies the Air Traffic Service (ATS) route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System (NAS).

The FAA published a NPRM for Docket No. FAA 2023-2502 in the Federal Register (89 FR 2525; January 16, 2024), proposing to establish United States RNAV Route Q-108 and revoking RNAV Route Q-104 in the eastern United States. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

United States Area Navigation routes (Q-routes) are published in paragraph 2006 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. FAA Order JO 7400.11H is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

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 establishing RNAV Route Q-108 and revoking Q-104 in the eastern United States. This action supports the NEC ACR Optimization Project to improve the efficiency of the NAS. The amendments are described below.

Q-104: Prior to this final rule, Q-104 extended between the ACORI, AL, waypoint (WP), and the St Petersburg, FL (PIE), Very High Frequency Omnidirectional Range/Tactical Air Navigation (VORTAC). Air Traffic Control (ATC) no longer uses the route. The FAA removes the route in its entirety.

Q-108: Q-108 is a new RNAV route that extends between the Louisville, KY (IIU), VORTAC and the Sea Isle, NJ (SIE), VORTAC. The route overlays Jet Route J-526 between the Louisville VORTAC and the Beckley, WV (BKW), VOR/Distance Measuring Equipment (VOR/DME); RNAV Route Q-34 between the SITTR, WV, WP and the MAULS, VA, WP; RNAV Route Q-97 between the SAWED, VA, WP and the BYSEL, MD, Fix; and RNAV Route Q-439 between the BYSEL Fix and the HOWYU, DE, WP. The new RNAV route provides connectivity between the Louisville, KY area and the Atlantic City, NJ 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 so 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 airspace action of establishing RNAV Route Q-108 and revoking RNAV Route Q-104 qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points); and paragraph 5-6.5b, which categorically excludes from further environmental impact review “Actions regarding establishment of jet routes and Federal airways (see 14 CFR 71.15, Designation of jet routes and VOR Federal airways ) . . .”. As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. Accordingly, the FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 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 the 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 modifies the Air Traffic Service (ATS) route structure as necessary to preserve the safe and efficient flow of air traffic within the NAS.

The FAA published a NPRM for Docket No. FAA-2024-0157 in the Federal Register (89 FR 14602; February 28, 2024), proposing to establish United States RNAV Routes T-489, T-491, T-493, and T-495; amending RNAV Routes T-210, T-336, T-341, and T-349; and revoking RNAV Route T-204 in the eastern United States. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Subsequent to publication of the NPRM, the FAA identified that RNAV Route Q-102 is a non-regulatory air traffic service route that transits international airspace, and which are modified outside of the regulatory process. The FAA removes the amendment of RNAV Route Q-102 from this action.

The FAA inadvertently omitted from the proposed changes that numerous route points would be removed from the route descriptions of RNAV Routes T-210 and T-336 due to those segments forming a turn of less than one degree. The route points remain depicted on aeronautical charts for reference but are removed from the description of each route. The MRUTT, FL, waypoint (WP) and the GUANO, FL, Fix are removed from the description of RNAV Route T-210. The FUTSY, FL, WP; OMMNI, FL, WP; VIZTA, FL, WP; and YONMA, FL, Fix are removed from the description of RNAV Route T-336. This final rule corrects these omissions.

United States Area Navigation routes are published in paragraph 6011 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. FAA Order JO 7400.11H is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

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 establishing RNAV Routes T-489, T-491, T-493, and T-495; amending RNAV Routes T-210, T-336, T-341, and T-349; and revoking RNAV Route T-204 in the eastern United States. This action supports the FAA's NextGen efforts to provide a modern RNAV route structure to improve the safety and efficiency of the NAS. The amendments are described below.

T-204: Prior to this final rule, T-204 extended between the Taylor, FL (TAY), Very High Frequency Omnidirectional Range/Tactical Air Navigation (VORTAC) and the Brunswick, GA (SSI), VORTAC. The FAA removes the route in its entirety.

T-210: Prior to this final rule, T-210 extended between the HADDE, FL, Fix, and the VARZE, FL, WP. The FAA extends T-210 to the west between the HADDE Fix and the MILLP, FL, Fix and to the south between the VARZE Fix and the WEZER, FL, WP. The route extension to the west provides RNAV connectivity to the Marianna, FL, area, and the route extension to the south provides more efficient air traffic control clearances in the Lakeland, FL, area. Additionally, the MRUTT, FL, WP and GUANO, FL, Fix are removed from the route description as they form a turn of less than one degree. As amended, the route extends between the MILLP Fix and the WEZER WP.

T-336: Prior to this final rule, T-336 extended between the TROYR, FL, WP and the VALKA, FL, Fix. The FAA extends T-336 to the northwest between the MILLP, FL, Fix and the TROYR WP. The route overlays VOR Federal Airway V-521 between the Marianna, FL (MAI), VORTAC and the Cross City, FL (CTY), VORTAC. The route extension provides RNAV connectivity to the Marianna, FL, area. The FUTSY, FL, WP; OMMNI, FL, WP; VIZTA, FL, WP; and YONMA, FL, Fix are removed from the route description as they form a turn of less than one degree. Additionally, the FAA changes the TROYR WP name to the CCITY, FL, WP. As amended, the route extends between the MILLP Fix and the VALKA Fix.

T-341: Prior to this final rule, T-341 extended between the MEAGN, FL, WP and the MARQO, FL, WP. The FAA extends T-341 to the northeast between the MARQO WP and the FLRNS, SC, Fix. The route extension provides RNAV connectivity to the Florence, SC, area. Additionally, the FAA adds the FEBRO, FL, WP between the CUSEK, FL, WP and the YELLZ, FL, WP to provide connectivity to RNAV Routes T-343 and T-353, and replaces the WHOOU, FL, WP with the WALEE, FL, WP to provide connectivity to RNAV Route T-207. Lastly, the FAA removes the DULFN, FL, WP from the route description as it does not represent a turn point of one degree or more. As amended, the route extends between the MEAGN WP and the FLRNS Fix.

T-349: Prior to this final rule, T-349 extended between the VARZE, FL, WP and the TROYR, FL, WP. The FAA extends T-349 to the southeast between the VARZE WP and the NEWER, FL, Fix; and to the northwest between the TROYR WP and the LYFEE, AL, WP. The route overlays VOR Federal Airway V-7 between the Wiregrass, AL (RRS), VORTAC and the Cross City, FL (CTY), VORTAC and provides RNAV connectivity between the Fort Lauderdale, FL and the Dothan, AL, areas. Additionally, the FAA removes the MILOW, FL, WP and the MURDE, FL, WP from the route description as those route points do not represent a turn point of one degree or more. Lastly, the FAA changes the TROYR WP name to the CCITY, FL, WP. As amended, the route extends between the NEWER Fix and the LYFEE WP.

T-489: T-489 is a new RNAV route that extends between the BOLTS, FL, WP and the PCANN, GA, WP. The new route overlays a portion of VOR Federal Airway V-35 between the ATTAK, FL, Fix and the PECAN, GA (PZD), VOR/Distance Measuring Equipment (VOR/DME) and provides RNAV routing between the Tampa, FL, area and the Albany, GA, area.

T-491: T-491 is a new RNAV route that extends between the BOLTS, FL, WP and the SIROC, GA, WP. The new route provides RNAV connectivity between the Tampa, FL, area and the Brunswick, GA, area.

T-493: T-493 is a new RNAV route that extends between the BOLTS, FL, WP and the DOOLY, GA, WP. The new route provides RNAV connectivity between the Tampa, FL, area and the Macon, GA, area.

T-495: T-495 is a new RNAV route that extends between the BOLTS, FL, WP, and the BWDEN, FL, Fix. The new route provides RNAV connectivity between the Tampa, FL, area and the Tallahassee, FL, 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 so 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 airspace action of establishing United States RNAV Routes T-489, T-491, T-493, and T-495; amending RNAV Routes T-210, T-336, T-341, and T-349; and revoking RNAV Route T-204 qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points); and paragraph 5-6.5b, which categorically excludes from further environmental impact review “Actions regarding establishment of jet routes and Federal airways (see 14 CFR 71.15, Designation of jet routes and VOR Federal airways ) . . .”. As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. Accordingly, the FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 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 amends Class E airspace extending upward from 700 feet above the surface for Rockingham County, NC, Shiloh Airport, Reidsville, NC.

The FAA published a notice of proposed rulemaking for Docket No. FAA 2024-0319 in the Federal Register (89 FR 19517; March 19, 2024), proposing to establish Class E airspace extending upward from 700 feet above the surface for Rockingham County NC Shiloh Airport, Reidsville, 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.

Subsequent to the publication of the NPRM, the FAA found that even though the airspace was not published in Order 7400.11, the airspace was charted, making this action an amendment. This action corrects this error.

Class E airspace is published in paragraph 6005 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. FAA Order JO 7400.11H is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11. FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This amendment to 14 CFR part 71 amends Class E airspace extending upward from 700 feet above the surface within a 9.1-mile radius of Rockingham County, NC Shiloh Airport, Reidsville, NC, providing the controlled airspace required to support the new RNAV (GPS) standard instrument approach procedures for IFR operations at the airport. 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 so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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:

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 the 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 modifies the Air Traffic Service (ATS) route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System (NAS).

The FAA identified a safety issue with similar sounding route point names, the LAANA, NC, WP and the LANNA, NJ, Fix located 410 NM to the northeast of the LAANA WP which contributes to communications errors resulting from the similar-sounding route point names in radio communications. To remedy this, the FAA is changing the name of the LAANA, NC, WP to the JOHAR, NC, WP in RNAV Route Q-109.

United States Area Navigation routes (Q-routes) are published in paragraph 2006 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. FAA Order JO 7400.11H is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

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 changing the name of the “LAANA”, NC, WP to “JOHAR” in RNAV Route Q-109 to overcome the similar-sounding pronunciation of the LAANA, NC, WP and the LANNA, NJ, Fix which contributes to communications errors resulting from the similar-sounding route point names in radio communications. The amendment is described below.

Q-109: Prior to this final rule, Q-109 extended between the KNOST, OG, WP and the DFENC, NC, WP. The FAA replaces the LAANA, NC, WP with the JOHAR, NC, WP at the same location. As amended, the route continues to extend between the KNOST WP and the DFENC WP.

This action is an administrative change and does not affect the airspace boundaries or operating requirements; therefore, notice and public procedure under 5 U.S.C. 553(b) is unnecessary.

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 so 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 airspace action of amending RNAV Route Q-109 by changing the name of the “LAANA”, NC, WP to “JOHAR” qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points). As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. Accordingly, the FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact statement.

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

Under part 48 of the Commission's regulations, an FBOT must be registered with the Commission in order to provide its members or other participants located in the United States with direct access to its electronic trading and order matching system. 1 Part 48 is authorized by section 738 of the Dodd-Frank Act, which amended section 4(b) of the Commodity Exchange Act (CEA), to provide that the Commission may adopt rules and regulations requiring FBOTs that wish to provide U.S. persons with direct access to register with the Commission. 2 Prior to enactment of the part 48 FBOT registration procedures in 2011, FBOTs relied on no-action letters that were requested by the FBOT and issued by Commission staff in order to provide direct access to U.S. persons. 3

Part 48 provides the procedures, requirements, and conditions to be met by FBOTs that seek to provide their members and other participants in the U.S. with direct access to the FBOT's trade matching system. The regulations set forth, among other things, procedures an FBOT must follow in applying for registration, requirements that an FBOT must meet in order to obtain registration, conditions that an FBOT must satisfy on a continuing basis upon obtaining registration, and provisions for the termination of registration.

On March 1, 2024, the Commission released a proposal  4 to amend § 48.4 to broaden the types of intermediaries eligible for direct access for submission of customer orders to the FBOT to include IBs registered with the Commission as such and located in the United States. 5 An IB is generally defined as an individual or organization that solicits or accepts orders to buy or sell futures contracts, commodity options, retail off-exchange forex or commodity contracts, or swaps, but does not accept money or other assets from customers to support these orders. 6 Currently, § 48.4 only includes certain futures commission merchants (FCMs), commodity pool operators (CPOs), and commodity trading advisors (CTAs) as intermediaries that are eligible for entering orders on behalf of customers or commodity pools (in the case of CPOs) via direct access on a registered FBOT.

In addition, the Proposal proposed to amend § 48.9 to provide registered FBOTs with a procedure to request revocation of their FBOT registration. Further, the Commission proposed to delete § 48.6, which provides for an alternate registration procedure for FBOT's operating under the preexisting staff no-action letter process, because such no-action letter process and no-action letters are no longer in effect.

The Commission received seven comment letters regarding the Proposal. 7 After considering the comments, the Commission is adopting the rule amendments described herein as proposed. The Commission believes the amendments are an appropriate response to market developments that have occurred since part 48 was promulgated in 2011, and will benefit affected markets and their participants by improving competition, risk management and liquidity—while also maintaining the Commission's longstanding protections available to U.S. customers that trade foreign futures and options.

The Commission proposed to amend § 48.4(b) to permit FBOTs to provide direct access to eligible IBs to enter orders directly into an FBOT's trading and order matching system on behalf of U.S. customers. 8 Section 48.4(b) identifies the types of members or other participants located in the U.S. that may enter orders directly into the trading and order matching system of a registered FBOT, and the types of accounts for which orders may be submitted by such members or other participants. In this regard, the types of members or other participants identified in existing § 48.4(b) represent the types of members or other participants that were trading via direct access on FBOTs that operated in reliance on CFTC staff no-action letters at the time part 48 was promulgated. 9 Specifically, § 48.4(b)(1) provides that any member or other participant located in the U.S. may enter orders for their proprietary accounts. 10 Further, § 48.4(b)(2) provides that registered FCMs may submit orders on behalf of their customers. Section 48.4(b)(3) permits certain CPOs to submit orders on behalf of U.S. commodity pools and certain CTAs to submit orders on behalf of U.S. customers provided, however, all trades by the CPO or CTA effected through submission of such orders are guaranteed by a clearing firm registered as an FCM or exempt from FCM registration pursuant to § 30.10. 11 The Commission proposed to amend § 48.4(b) by inserting a new paragraph (b)(4) to provide that eligible IBs may submit orders on behalf of their customers, provided that a registered FCM or firm exempt from FCM registration pursuant to § 30.10 acts as a clearing firm and guarantees all trades of the IB effected through submission of U.S. customer orders to the trading system. The Commission also proposed to amend paragraph (b)(3) to insert the words “registered as such” following “futures commission merchant” to clarify that the reference is limited to FCMs registered with the Commission as such. 12

Direct access is defined in the CEA and part 48 of the Commission's regulations to mean an explicit grant of authority by an FBOT to an identified member or other participant located in the U.S. to enter trades directly into the trade matching engine of the FBOT. 13 This means that the FBOT, as opposed to its members or participants, has identified and permitted a member or participant to enter trades directly into the FBOT's order matching and trade entry system from the United States. 14 For example, a registered FBOT may authorize its members or other participants eligible to handle U.S. customer orders to enter orders on behalf of their U.S. customers or to otherwise permit their U.S. customers to access the trading system using the member's or participant's identifier and grant of authority. In such cases the FBOT permits an identified exchange member or other participant to allow their U.S. customers, who have not been granted direct access by the FBOT, to have access to the exchange's trading systems, subject to a guarantee from an exchange member or other participant. The proposed amendment to § 48.4(b) would permit registered FBOTs to grant explicit authority to eligible IBs to act in such capacity, provided that all trades effected by the IB through submission of U.S. customer orders are guaranteed by a registered FCM or a firm exempt from FCM registration pursuant to § 30.10.

All comment letters received generally support the proposed amendment to § 48.4(b) to permit registered FBOTs to provide direct access to eligible IBs to enter orders on behalf of U.S. customers. 15 Commenters agree that permitting eligible IBs to submit customer orders via direct access to FBOTs would benefit affected markets and market participants. 16 Several commenters observe that markets have evolved and the role of IBs serving as executing brokers has grown since the Commission's adoption of part 48 in 2011. 17 In light of these changes, commenters support the Commission's efforts to update part 48 to ensure that its regulations remain current and reflect changes in the market. 18 Commenters further opine that the Proposal, if adopted, is likely to: provide greater customer choice in, and promote fair competition among, brokers;  19 improve the ability for U.S. participants to manage risk;  20 and increase liquidity in affected markets. 21

The Commission received several comments specifically in support of the proposed condition in § 48.4(b)(4) requiring U.S. customer orders submitted by IBs to be guaranteed by a registered FCM or a firm exempt from FCM registration pursuant to § 30.10. 22 Commenters note that they support the proposed condition because it would extend access to IBs located in the U.S. on the same terms that U.S. CPOs and CTAs currently access FBOTs. 23

On December 16, 2022, the Department of State published a proposed rule (87 FR 77046), to include two new entries to § 120.54 of the International Traffic in Arms Regulations (ITAR) to expand the definition of “activities that are not exports, reexports, retransfers, or temporary imports.” Activities listed in ITAR § 120.54 do not require an authorization from the Department's Directorate of Defense Trade Controls (DDTC). The Department has received delegated authority under section 38 of the Arms Export Control Act (AECA) (22 U.S.C. 2778) to issue regulations regarding the export of defense articles and defense services. It has long used this authority to define what events are controlled as exports and what events are not. Moreover, section 38(b) of the AECA also provides supporting authority, as the Department may by regulation except instances where a license would otherwise be required. Accordingly, the Department proposed this rule to amend ITAR § 120.54 in two ways. First, the proposed rule provided that, subject to certain conditions, the taking of U.S. defense articles outside a previously approved country by the armed forces of a foreign government or United Nations personnel on a deployment or training exercise is not an export, reexport, retransfer, or temporary import. Second, the proposed rule provided that a foreign defense article that enters the United States, either permanently or temporarily, and that is subsequently exported from the United States pursuant to a license or other approval under this subchapter, is not subject to the reexport and retransfer requirements of this subchapter, provided it has not been modified, enhanced, upgraded, or otherwise altered or improved or had a U.S.-origin defense article incorporated into it. In that proposed rule, the Department requested comments from the public. The Department now provides responses to those comments and amends the ITAR, with changes from the proposed rule, through this final rulemaking.

The following are six changes the Department made in this final rule since the development and publication of the December 16, 2022, proposed rule (87 FR 77046). First, to provide additional clarity, the Department inverted the order of proposed paragraphs (a)(6)(i) and (ii). The first provision now notes there is no change in end-use or end-user, and the next provision is the requirement that the items be transported by and remain in the possession of the previously authorized armed forces or United Nations military personnel.

Second, the Department amended the text of proposed paragraph (a)(6)(ii), which will now become paragraph (a)(6)(i), by changing “subject defense article” to “defense article” to reduce unnecessary text.

Third, the Department amended the text of proposed paragraph (a)(6)(i), which will now become paragraph (a)(6)(ii), by adding the phrase “previously authorized” before “armed forces” to reinforce that the armed forces or United Nations (U.N.) military personnel transporting and in possession of the defense articles must be previously authorized end-users of the defense articles.

Fourth, the Department also amended the text of proposed paragraph (a)(6)(i), which will now become paragraph (a)(6)(ii), by revising the phrase “U.N. personnel” to “U.N. military personnel.” The Department added the additional word to ensure that non-military persons associated with U.N. missions, such as civilians, including police, working for various U.N. agencies are not mistakenly believed to be described by the provision.

For the fifth and sixth changes, the Department narrowed the scope of the proposed excluded list of activities that are not exports, reexports, retransfers, or temporary imports, by not excluding temporary imports into the United States, or subsequent exports. Although exports and temporary imports were originally included in the proposed rule, since publication and during the review period, the Department reassessed the inclusion of those activities in light of a comment received, information received from an interagency partner, and the intended purpose of the rule. More specifically, one commenter requested clarification that licenses for temporary imports would not be required under the proposed rule text. The response to this comment is discussed more below, but highlighted aspects of the proposed rule the Department was already focused on. In addition, the Department conferred with interagency partners regarding the Automated Commercial Environment (ACE), the system through which imports, including temporary imports, and exports are reported. Considerations of tracking temporary imports and a long process to change ACE reporting and coding options led the Department to reevaluate this aspect of its proposal in this particular rulemaking. Moreover, the intent of the proposed rule was to consider eliminating the need to submit reexport and retransfer requests for activities that are routinely approved and to provide clarity regarding subsequent control of unmodified foreign-origin defense articles that have been subject to ITAR control while in the United States. The resulting change in this rule does not impose any new obligation or requirement. Rather, it is a reduction in the scope of the broader exemption initially proposed.

Accordingly, the Department added a third limitation to proposed paragraph (a)(6). This third limitation in what will now become ITAR § 120.54(a)(6)(iii), “the defense article is not being exported from or temporarily imported into the United States,” prohibits the applicability of the provision for exports from the United States and temporary imports into the United States. The Department added this third limitation to avoid complications when transiting the U.S. border and to stay within the intent of this portion of the rule, which is to clarify policy regarding reexports and retransfers of defense articles previously authorized for export from the United States and in the possession of the armed forces of a foreign government or United Nations military personnel. This makes express in the regulations a long-standing practice set forth since 2013 in DDTC's publicly available “Guidelines for Preparing Agreements.”

Similarly, the Department added a new paragraph (a)(7)(iii), using the same language as found in new paragraph (a)(6)(iii). The new paragraph (a)(7)(iii) states that a transfer of a wholly foreign defense article is not a controlled event, unless it is an export from, or a temporary import into, the United States. This addition is for clarification purposes only and reinforces that the transfer of a wholly foreign defense article outside of the United States and not otherwise subject to the ITAR does not require authorization.

Two commenters noted the two proposed entries to ITAR § 120.54 help clarify what activities are controlled events subject to the ITAR's jurisdiction. Specifically, both commenters noted the two new entries are appropriately narrow in construing events that are and are not controlled in a manner consistent with U.S. national security interests. One commenter expressed their agreement with proposed paragraph (a)(6) but not paragraph (a)(7). The commenter specifically stated paragraph (a)(7) “says that foreign defense articles, presumably meaning guns, ammunition, and other weapons, will not be subject to the normal procedures of a controlled event. I disagree with this because I believe controlling the flow of weapons is of the utmost importance, and even if the weapons come from a partner country, they deserve a certain level of scrutiny, even if it causes some frustration from interested parties. . . .” The Department notes paragraph (a)(7) is an accurate reflection of the current jurisdiction of the ITAR, which does not control transfers of foreign defense articles that originally entered the United States and have since been exported from the United States if the enumerated criteria in paragraph (a)(7)(i) to paragraph (a)(7)(iii) are all met. Like foreign persons who generally become subject to U.S. laws and regulations when they enter the United States, foreign defense articles that enter the United States generally become subject to U.S. laws and regulations, including the ITAR, while in the United States. However, U.S. laws and regulations generally do not govern the activities of foreign persons abroad. Similarly, foreign defense articles that leave the United States are no longer subject to the ITAR under the circumstances described in paragraph (a)(7). To help illustrate this concept, the Department notes the following scenario—U.S. Company A purchases a foreign defense article from Foreign Company B located outside the United States. The purchased foreign defense article is imported into the United States but U.S. Company A later realizes it no longer needs the foreign defense article and obtains the necessary DDTC authorization to export the foreign defense article back to Foreign Company B. Foreign Company B does not subsequently need further Department authorization to sell the returned foreign defense article to a separate party, assuming the criteria in paragraph (a)(7) are met. As a result, no change is being made to proposed paragraph (a)(7) in response to this comment.

Several commenters expressed appreciation for the Department's effort regarding new paragraph (a)(6). Specifically, these commenters noted proposed paragraph (a)(6) provides “positive assurance to [U.S.] partner countries' armed forces” of an understanding that was previously “only noted in DDTC's Guidelines for Preparing Agreements document” and applauded DDTC for making explicit in the regulations DDTC's long-standing policy expressed in that document that the taking of a defense article outside a previously approved country by the armed forces of a foreign government or international organization is not a controlled event, provided certain criteria are met. One commenter noted that it would simplify the process their country's armed forces must follow to take U.S. defense articles outside a previously approved country during a deployment or on exercises, while another expressed their belief that new paragraph (a)(6) would enhance interoperability amongst allies.

However, one commenter suggested the language of paragraph (a)(6) is too narrow and requested an expansion to enable other foreign or U.S. parties to an agreement (who are not the armed forces of a foreign government or United Nations personnel) to take defenses articles on operations or deployments outside a previously approved country without requesting additional authorization from the Department. The commenter suggested a specific modification to the “Deployment Clause” language included in DDTC's “Guidelines for Preparing Agreements” to implement their suggestion. The Department emphasizes the goal of this rulemaking is to memorialize long-standing Department polices that were specified in the “Guidelines for Preparing Agreements.” Therefore, the Department notes its purposeful limited intent for this rulemaking to be applicable to activities of armed forces of a foreign government or United Nations military personnel. In contrast, the Department assesses that activities undertaken by other foreign or U.S. parties to an agreement who are not the armed forces of a foreign country or United Nations military personnel still warrant additional review and should continue to require authorization from the Department in order to take defenses articles outside a previously approved country. For these reasons, the Department is not revising the text of proposed paragraph (a)(6) in response to this comment.

Another commenter noted with respect to paragraph (a)(6) “that the proposed addition lacks any reference to related technical data.” Specifically, the commenter explained that “codifying the Department's long-standing policy without an explicit reference to `related technical data' might lead to confusion [as to] whether separate authorization is required for the export, reexport, retransfer or temporary import of technical data needed to operate the defense article and/or generated by the defense article.” Subsequently, the commenter suggested adding “and any related technical data” to the term “defense article” in ITAR § 120.54(a)(6). The Department notes, per ITAR § 120.31, “defense article” means any item or technical data designated in ITAR § 121.1; therefore, the addition of “and any related technical data” would be duplicative. For this reason, the Department is not making the changes proposed by this commenter.

As introduced above, one commenter requested that the Department provide clarification that, as a result of this rulemaking, licenses for temporary imports into the United States that meet the criteria of ITAR § 120.54(a)(6) are not required. The Department declines to adopt this recommendation for the reasons previously expressed in this preamble. Specifically, the Department wishes to stay within the intent of this portion of the rule, which is to clarify long-standing policy regarding reexports and retransfers outside of the United States of properly authorized defense articles previously exported from the United States and in the possession of the armed forces of a foreign government or United Nations military personnel. The comment did, however, bring to the attention of the Department the issues which led to the inclusion of new paragraphs (a)(6)(iii) and (a)(7)(iii), as discussed above. The commenter also recommended a revision to proposed paragraph (a)(6) to enable the armed forces of a foreign government or United Nations personnel to “[share] equipment with foreign partners that also have access to the same equipment, albeit via different licenses and agreements” during deployments and training exercises. The Department notes that foreign partners who have access to the same equipment via different licenses and agreements do not always have access to the same configuration of the equipment and thus foreign partners would not always have the ability to make an accurate determination as to whether their specific defense article configurations are the same. Therefore, the Department is not revising the text of the proposed rule as suggested by the commenter.

The same commenter also requested revisions to proposed paragraph (a)(6) to expand the entry to include third-party contractors in addition to the armed forces of a foreign government and United Nations personnel. The Department emphasizes that the goal of this rulemaking is to memorialize long-standing Department polices that were articulated in the “Guidelines for Preparing Agreements.” Therefore, the Department notes its purposeful limited intent for this rulemaking to apply only to the activities of the armed forces of a foreign government or United Nations military personnel. In contrast, activities undertaken by other foreign or U.S. persons who are not the armed forces of a foreign country or United Nations military personnel should continue to require additional authorization from the Department. For these reasons, the Department is not making the changes suggested by this commenter.

The same commenter also requested that “end-use” be removed from proposed paragraph (a)(6)(ii) since Department export control licenses and agreements do not often explicitly include “use by a foreign government (armed forces) for deployment or training exercise,” even though such activity is often an implied end-use. The position of the Department is that the taking of a defense article subject to the reexport or retransfer requirements of the ITAR on a deployment or training exercise outside a previously approved country is not a change in end-use if the enumerated criteria in ITAR § 120.54(a)(6)(i) through (iii) are met. This Department position is applicable even if such deployments or training exercises are not explicitly included on a license or agreement. For this reason, the Department is not revising the text of the proposed rule as proposed by the commenter.

Regarding proposed paragraph (a)(7), the same commenter welcomed this new entry. The commenter further requested the Department provide clarification on several matters. First, the commenter requested clarification as to whether a foreign defense article will become subject to the ITAR's “reexport/retransfer license obligations if it had been modified, enhanced, upgraded or otherwise altered or improved in a manner that changed the basic performance of the item but did not have a U.S.-origin defense article incorporated while it is in the United States.” The Department confirms that in such a scenario the foreign defense article will be subject to the ITAR and will require reexport or retransfer authorizations for all subsequent transfers after it leaves the United States.

The commenter also requested the Department provide “a clear threshold for activities undertaken whilst the wholly foreign defense article is in the United States for controls to be triggered under ITAR § 120.54(a)(7)(i)” and to provide guidance on the meaning of “modified, enhanced, upgraded or otherwise altered or improved in a manner that changed the basic performance.” The Department does not believe it needs to offer definitions of commonly used terms and phrases such as “modified,” “enhanced,” “upgraded” or “otherwise altered or improved.” The regulated community should apply the ordinary meaning of those words consistent with how it has interpreted those terms as they already exist in the ITAR ( e.g., ITAR § 123.4(b)).

Finally, the commenter also requested the Department put in place “a mechanism in U.S. export licenses to indicate that a wholly foreign defense article has been modified, enhanced, upgraded or otherwise altered or improved in a manner that changed the basic performance of the item.” The commenter asserted that, if such a mechanism were not put in place, “that these changes [would] place the onus of identifying whether controls apply on foreign recipients [which] may lead to excessive and unnecessary licensing to avoid non-compliance.” The Department notes that an authorization would be required for a person modifying, enhancing, upgrading, or otherwise altering or improving a foreign defense article while in the United States. Therefore, the subsequent recipient of an altered or improved foreign defense article should have clear notice of whether the criteria in paragraph (a)(7)(i) are met. Consequently, the Department does not envision any excessive or unnecessary licensing will occur because of these changes. For this reason, the Department is not adopting the commenter's recommendation.

One commenter requested that the Department provide additional guidance regarding the word “transported” in paragraph (a)(6)(i). Specifically, the commenter requested guidance or amendments to the proposed rule that would enable transport of defense articles by third-party contractors in addition to the armed forces of a foreign government or United Nations personnel. The Department notes its purposeful limited intent for this rulemaking to be applicable only to the activities of the armed forces of a foreign government or United Nations military personnel. In contrast, activities undertaken by other foreign or U.S. parties to an agreement that are not the armed forces of a foreign country or United Nations military personnel should generally be reviewed on a case-by-case basis and continue to require authorization from the Department. For this reason, the Department is not revising the text of the proposed rule in response to the comment.

The same commenter expressed their support for proposed paragraph (a)(7), noting that it is a “welcome clarification over an issue that has caused different risk-based approaches by [companies] over many years.” The commenter also requested the Department provide additional guidance regarding when a foreign defense article is imported into the United States for testing and how any generated test data should be controlled. In addition, the commenter requested the Department provide further clarification regarding how a foreign defense article that contains U.S.-origin defense articles should be treated when undergoing testing in a foreign country. The Department notes such requests are outside the scope of this rulemaking. For this reason, the Department is not revising the text of the proposed rule in response to this comment.

This rulemaking is exempt from the requirements of section 553 of the Administrative Procedure Act (APA) as a military or foreign affairs function of the United States. Without prejudice to this determination, the Department elected to solicit comments on the proposed regulatory changes and has responded to those comments in this final rule.

Since this rule is exempt from the notice-and-comment rulemaking provisions of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.

This rulemaking does not involve a mandate that will result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

The Office of Management and Budget has determined that this rulemaking is not a major rule within the definition of 5 U.S.C. 804.

This rulemaking does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this rulemaking.

Executive Orders 12866, as amended by Executive Orders 13563 and 14094, 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; distributed impacts; and equity). Because the scope of this rule does not impose additional regulatory requirements or obligations, the Department believes costs associated with this rule will be minimal. Although the Department cannot determine based on available data how many fewer licenses will be submitted as a result of this rule, the amendments to the definition of activities that are not exports, reexports, retransfers, or temporary imports will relieve licensing burdens. Qualitatively, this rule should have significant benefits for industry. The rule will provide more certainty and clarity by expressly stating in regulatory text what was already in Guidelines published by the Department. Additionally, it should have helpful impacts on our nation's foreign policy, more clearly conveying that the Department does not attempt to impose restrictions on other nations transporting defense articles during deployments or training exercises to other foreign countries. In turn, this may also encourage other nations to purchase additional defense articles from U.S. industry. This rule is consistent with Executive Order 13563, which emphasizes the importance of quantifying both costs and benefits, of reducing cost, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” although not significant within the meaning of section 3(f)(1) of Executive Order 12866, by the Office of Information and Regulatory Affairs under Executive Order 12866.

The Department of State reviewed this rulemaking in light of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal law. Accordingly, Executive Order 13175 does not apply to this rulemaking.

This final rule does not impose or revise any new information collections subject to 44 U.S.C. chapter 35.

For the reasons set forth above, the Department of State amends title 22, chapter I, subchapter M, part 120 of the Code of Federal Regulations as follows:

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). Based on these criteria, the Secretary of the Interior conditionally approved the Kentucky program effective May 18, 1982. You can find background information on the Kentucky program, including the Secretary's findings, the disposition of comments, and conditions of approval in the May 18, 1982, Federal Register (47 FR 21434). You can also find later actions concerning Kentucky's program and program amendments at 30 CFR 917.11, 917.12, 917.13, 917.15, 917.16, and 917.17. The regulatory authority in Kentucky is the Kentucky Energy and Environment Cabinet, Department of Natural Resources (herein referred to as the Cabinet).

By letter dated September 19, 2018 (Administrative Record Number KY-2007-01), the Cabinet submitted an amendment to its program under SMCRA (30 U.S.C. 1201 et seq. ), docketed as KY-260-FOR. The amendment seeks to revise the Kentucky Revised Statutes (KRS) to include statutory changes that involve civil penalty escrow accounts, civil penalty fund distributions, self-bonding, and major permit revisions related to underground mining.

The General Assembly of the Commonwealth of Kentucky enacted statutory changes through House Bill 261, which was signed by the Governor on April 2, 2018, and became effective on July 14, 2018. See 2018 Ky. Acts ch. 85. These changes are codified at KRS Chapter 350, Surface Coal Mining, sections 350.0301, 350.064, 350.070, 350.518, and 350.990. The Cabinet was not required to promulgate administrative regulations as a result of the law.

We announced receipt of the proposed amendment in the May 10, 2019, Federal Register (84 FR 20595) (Administrative Record No. KY-2007-17). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on these provisions. We did not hold a public hearing or meeting because none was requested. The public comment period ended on June 10, 2019. No public comments were received.

The following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment as described below with the exception of changes to KRS 350.0301. Any revisions that we do not specifically discuss below concern non-substantive grammatical or editorial changes and can be found in the full text of the program amendment available at www.regulations.gov.

A. Civil Penalty Escrow Account, KRS 350.0301, Petition challenging determination of cabinet—Conduct of hearings—Administrative regulations—Secretary may designate deputy secretary to sign final orders.

Kentucky seeks to revise KRS 350.0301(5) by removing language requiring Kentucky's administrative regulations to include provisions that: (1) require that operators place civil penalty funds in escrow before a formal hearing on the amount of the assessment of the civil penalties; and (2) allow Kentucky to waive the escrow requirement for individuals who demonstrate with substantial evidence an inability to pay the proposed civil penalty assessment into escrow.

OSMRE Finding: In 2005, the Supreme Court of Kentucky decided Commonwealth of Kentucky Natural Resources and Environmental Protection Cabinet v. Kentec Coal Co., Inc., 177 S.W.3d 718 (Ky. 2005), in which the Court concluded that Kentucky's prepayment requirements, codified at the time in the Kentucky Administrative Regulations at 405 KAR 7:092, were in violation of the due process and equal protection clauses of the United States Constitution and section 2 of the Kentucky Constitution, which prohibits arbitrary State action. In response to the Court's decision, Kentucky first removed notice of its prepayment requirements from two documents provided to operators, a Notice of Assessment of Civil Penalties and a Penalty Assessment Conference Officer's Report, and Kentucky added language to those documents making clear that prepayment was no longer required to request a formal administrative hearing. By letter dated March 28, 2006, Kentucky sent us notice of these revisions, which we docketed as Program Amendment No. KY-250-FOR and subsequently disapproved on September 18, 2006 (71 FR 54586). 1

In our decision of September 18, 2006 (71 FR 54586), we concluded that removing the requirement to place civil penalty funds in escrow prior to a formal hearing on the assessment renders the program less stringent than section 518(c) of SMCRA, 30 U.S.C. 1268, and less effective than the Federal regulations at 30 CFR 845.19(a), and therefore disapproved the amendment. As stated in that document, the Supreme Court of Kentucky rulings notwithstanding, section 518(c) of SMCRA and the Federal regulations require prepayment of a proposed penalty if a hearing is requested. Section 518(c) of SMCRA states that should the person charged with the penalty wish to contest the amount of the penalty or the fact of the violation, that person must forward the proposed amount of the penalty to the Secretary for placement into an escrow account pending resolution of the contest. 30 U.S.C. 1268(c). Section 518(c) further states that failure to forward the money accordingly shall result in a waiver of all legal rights to contest the violation or the amount of the penalty. Id. The Federal regulations repeat this requirement, specifying that the petition and proposed penalty amount must be submitted to the Office of Hearings and Appeals. 30 CFR 845.19(a). Federal courts of appeals have found these provisions consistent with the due process and equal protection requirements of the United States Constitution. See, e.g., Graham vs. Office of Surface Mining, Reclamation and Enforcement, 722 F.2d 1106 (3d Cir. 1983).

Kentucky's proposed revision to KRS 350.0301 directly relates to the same revisions that we disapproved on September 18, 2006, codified at 30 CFR 917.12(f). Kentucky's further steps to remove the requirement to prepay the assessed penalty into escrow when administrative hearing is requested continues to render Kentucky's program less stringent that section 518(c) of SMCRA and less effective than the Federal regulations at 30 CFR 845.19(a), and therefore are not approved.

B. Self-Bonding—KRS 350.064, Reclamation bond to be filed by applicant.

Kentucky seeks to revise KRS 350.064(2) by removing language that allows self-bonding in the State. A self-bond is a bond of the applicant and is backed only by the overall financial health of the applicant, without separate surety or specific pledges of collateral. In order to have qualified and received approval for self-bond in Kentucky, the applicant must successfully demonstrate a history of financial solvency and continuous operation and the existence of a suitable agent to receive service of process.

OSMRE Finding: Section 509(c) of SMCRA, 30 U.S.C. 1259, and its implementing regulations at 30 CFR 800.4(d), Regulatory Authority Responsibilities; 30 CFR 800.5, Definitions; 30 CFR 800.12, Form of the Performance Bond; and 30 CFR 800.23, Self-bonding, permit a regulatory authority to accept different forms of performance bonds, including self-bonds, as a mechanism to ensure that funds will be available to complete the reclamation plan if the work has to be performed by the regulatory authority in the event of a forfeiture. The regulatory authority may accept a self-bond without separate surety when the applicant demonstrates, to the satisfaction of the regulatory authority, the existence of a suitable agent to receive service of process and a history of financial solvency and continuous operation sufficient for authorization to self-insure or bond such amount. Some State regulatory programs have accepted self-bonds to guarantee reclamation.

It is reasonable that Kentucky reconsider acceptance of this type of performance bond as a reclamation guarantee. In fact, there are no active self-bonds being held by Kentucky at this time. SMCRA and its implementing regulations do not require that a regulatory authority include a self-bond in their regulatory programs; therefore, we find that the elimination of self-bonding in the Kentucky program renders the program no less stringent than SMCRA and no less effective than the Federal regulations, and we approve this change.

C. Permit Revisions—KRS 350.070, Permit revisions.

Kentucky seeks to revise KRS 350.070(1) by removing language that requires an operator to submit a major permit revision application for an extension of an underground mining area that is more than incidental boundary revisions, but which does not include planned subsidence or other new proposed surface disturbances. Kentucky also seeks to delete subsection (6)(b), which defines the maximum number of acres for a revision to be considered an incidental boundary revision involving underground operations.

OSMRE Finding: Kentucky originally added the above requirement, which we approved, through Kentucky House Bill 707 of 1994, enacted 1995 Ky. Acts ch. 301. See 60 FR 33110 (June 27, 1995). In our approval, we explained that the Federal regulations do not require that areas overlying proposed underground workings be included in the permit area if no surface disturbance is planned. Id. At 33113. Therefore, under those circumstances, where no surface disturbance is planned by an extension of the underground mining area, no permit revision is required.

For the same reason that we approved the inclusion of this requirement in 1994, we approve its removal. Neither SMCRA nor the Federal regulations require Kentucky to include those areas within the permit area. Thus, this amendment does not render Kentucky's program less stringent than SMCRA or less effective than the Federal regulations at 30 CFR 774.13, Permit revisions, or 30 CFR part 784, Underground Mining Permit Applications—Minimum Requirements for Reclamation and Operation Plan.

D. Civil Penalty Funds and Distribution—KRS 350.518, [relating to Kentucky's bond pool], and KRS 350.990, Penalties.

Kentucky seeks to delete KRS 350.518(11), which requires penalty funds in excess of $800,000 in any fiscal year to be equally deposited between: (a) the Kentucky Reclamation Guaranty Fund (KRGF), which finances Kentucky's alternative bonding system, or bond pool; and (b) the Abandoned Mine Land (AML) supplemental fund, which was established under KRS 350.139 and consists primarily of interest generated on funds derived from the forfeiture of conventional bonds, and which is to be used to supplement forfeited conventional bonds that are inadequate to complete the reclamation plan. In a complementary revision, Kentucky seeks to delete similar language from KRS 350.990(1). KRS 350.990(1) further directs that the money disbursed to the KRGF be used for the purposes set forth in KRS 350.500-350.521 (relating to Kentucky's bond pool) and KRS 350.595 (relating to Kentucky's Abandoned Mine Land Enhancement Program, which provides partial bond coverage for eligible remining operations), and that money disbursed to the AML supplemental fund established under KRS 350.139(1) be used for the purposes of that section. In place of these deleted allocations, Kentucky seeks to add language to KRS 350.990(1) that directs that penalties in excess of $800,000 in any fiscal year be deposited into the restricted fund account of the Office of the Commissioner of the Department for Natural Resources to be disbursed for the purposes set out in KRS chapters 350 (Surface Coal Mining), 351 (Department for Natural Resources), and 352 (Mining Regulations). KRS chapters 351 and 352 consist of Kentucky's coal mine safety laws.

OSMRE Finding: We approved the provision to equally distribute civil penalty funds in excess of $800,000 into two specific reclamation funds in KY-218 on May 10, 2000 (65 FR 29949). At that time, civil penalties collected in any fiscal year up to $800,000 were deposited with the State Treasury to the credit of Kentucky's general fund, see KRS 350.139, and any sums in excess of $800,000 were to go to the Kentucky Bond Pool Fund (BPF) (the predecessor to the KRGF). From there, one half of the excess would go to a new bond forfeiture supplemental fund but only when the balance of the BPF was above the maximum of the operating range necessary to ensure solvency ($16 million at the time). A review of the adequacy of the BPF was conducted in 2011; the findings concluded that reclamation performance bonds were not always sufficient to complete reclamation required in approved permits. As a result, the program was amended by KY-256 on January 29, 2018 (83 FR 3948) to ensure bond amounts were adequate to complete reclamation in the event of forfeiture. As part of that effort, Kentucky eliminated the BPF and replaced it with the KRGF, which carried greater safeguards, such as periodic actuarial studies to determine the amount necessary to ensure its solvency. At the same time, Kentucky removed the $16 million minimum balance and, instead, required periodic actuarial studies in order to determine the necessary balance of the KRGF.

In our 2000 approval, we noted that Kentucky was not diverting any money away from the BPF except for proceeds in excess of the amount necessary to guarantee its solvency. See 65 FR 29949 at 29950. In our 2018 approval, we noted that the safeguards provided in the KRGF ensure the KRGF's solvency, and therefore removing the commitment of civil penalty money to the KRGF to achieving a particular minimum balance was not inconsistent with SMCRA or its implementing regulations. See 83 FR 3948 at 3953.

The Kentucky revisions described above broaden the potential uses of civil penalty funds to any purposes set out in KRS chapters 350, 351, and 352, which would include the current purposes laid out for the KRGF and the AML supplemental fund established under chapter 350. Kentucky has the discretion to allocate its funds in a manner that supports the objectives of its program. Unlike performance bond funds, no Federal requirements exist that direct penalty funds be used for reclamation. Our regulations at 30 CFR 845.21 explain our use of Federal civil penalties for reclamation subject to Congressional authorization; however, this provision was the result of a continuing resolution by Congress in 1987, which, for the first time, authorized us to use civil penalty money in this manner and was not part of the broader SMCRA program required of the States. See 53 FR 16016 (May 4, 1988). Because, as was the case when we approved this requirement in 2000, neither SMCRA nor the Federal regulations require civil penalty funds to be used on reclamation, Kentucky's program is not less stringent than SMCRA or less effective than the Federal regulations at 30 CFR 845.21 by using these funds for other purposes; therefore, we approve these revisions.

We solicited public comments and provided an opportunity for a public hearing on the proposed amendment in the May 10, 2019, Federal Register document announcing receipt of this amendment (84 FR 20595). Because no one requested an opportunity to speak at a public hearing, none was held. We did not receive any comments from the public.

On December 3, 2018, under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we requested comments on the amendment from various Federal agencies with an actual or potential interest in the Kentucky program (Administrative Record Nos. KY-2007-08, 09, 10, 11, 12, 13, 14). We did not receive any comments.

Under 30 CFR 732.17(h)(11)(ii), we are required to obtain written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq. ). None of the revisions that Kentucky proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment. However, on December 3, 2018, under 30 CFR 732.17(h)(11)(i), we requested comments from the EPA on the amendment (Administrative Record No. KY-2007-09 and 10). We did not receive any comments from EPA.

Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and the ACHP on amendments that may have an effect on historic properties. On December 3, 2018, we requested comments on the amendment from the SHPO (Administrative Record No. KY-2007-13) and the ACHP (Administrative Record No. KY-2007-11). SHPO responded on December 26, 2018, that they had no comment as the amendment is not likely to cause changes that could impact cultural resources (Administrative Record No. KY-2007-16). We did not receive a response from the ACHP.

Based on the above findings, we are approving Kentucky's amendment submitted to OSMRE on September 19, 2018 (Administrative Record No. KY-2007-01), with one exception. For the reasons stated above, removal of the requirement for civil penalty funds to be placed in escrow before a formal hearing is not approved, and therefore the requirement is not eliminated from Kentucky's program.

To implement the approval of the remaining four provisions, we are amending the Federal regulations at 30 CFR part 917 that codify decisions concerning the Kentucky program. In accordance with the Administrative Procedure Act (5 U.S.C. 500 et seq. ), this rule will take effect 30 days after the date of publication.

This rule would not effect a taking of private property or otherwise have taking implications that would result in private property being taken for government use without just compensation under the law. Therefore, a takings implication assessment is not required. This determination is based on an analysis of the relevant Federal regulations.

Executive Order 12866, as amended by Executive Order 14094, provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB) will review all significant rules. Pursuant to OMB guidance, dated October 12, 1993 (OMB Memo M-94-3), the approval of State program and/or plan amendments is exempted from OMB review under Executive Order 12866, as amended by Executive Order 14094. Executive Order 13563, which reaffirms and supplements Executive Order 12866, retains this exemption.

The Department of the Interior has reviewed this rule as required by section 3(a) of Executive Order 12988. The Department has determined that this Federal Register document meets the criteria of section 3 of Executive Order 12988, which is intended to ensure that the agency review its legislation and proposed regulations to eliminate drafting errors and ambiguity; that the agency write its legislation and regulations to minimize litigation; and that the agency's legislation and regulations provide a clear legal standard for affected conduct rather than a general standard, and promote simplification and burden reduction. Because section 3 focuses on the quality of Federal legislation and regulations, the Department limited its review under this Executive order to the quality of this Federal Register document and to changes to the Federal regulations. The review under this Executive order does not extend to the language of the State regulatory program or to the program amendment that the Commonwealth of Kentucky drafted.

This rule has potential federalism implications as defined under section 1(a) of Executive Order 13132, which directs agencies to “grant the States the maximum administrative discretion possible” with respect to Federal statutes and regulations administered by the States. Kentucky, through its approved regulatory program, implements and administers SMCRA and its implementing regulations at the State level. This rule approves an amendment to the Kentucky program submitted and drafted by the State and, thus, is consistent with the direction to provide maximum administrative direction to States.

The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175 and have determined that it has no substantial direct effects on the distribution of power and responsibilities between the Federal Government and Tribes. The basis for this determination is that our decision on the Kentucky program does not include Indian lands as defined by SMCRA or other Tribal lands and it does not affect the regulation of activities on Indian lands or other Tribal lands. Indian lands under SMCRA are regulated independently under the applicable Federal Indian program. The Department's consultation policy also acknowledges that our rules may have Tribal implications where the State proposing the amendment encompasses ancestral lands in areas with mineable coal. We are currently working to identify and engage appropriate Tribal stakeholders to devise a constructive approach for consulting on these amendments.

Executive Order 13211 requires agencies to prepare a Statement of Energy Effects for a rulemaking that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not significant energy action under the definition in Executive Order 13211, a Statement of Energy Effects is not required.

Consistent with sections 501(a) and 702(d) of SMCRA (30 U.S.C. 1251(a) and 1292(d), respectively) and the U.S. Department of the Interior Departmental Manual, part 516, section 13.5(A), State program amendments are not major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C).

This rule does not include requests and requirements of an individual, partnership, or corporation to obtain information and report it to a Federal agency. As this rule does not contain information collection requirements, a submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not required.

This rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The State submittal, which is the subject of this rule, mostly reflects the State's policy choices not required by or prohibited by Federal law. The part of this rule disapproving one of the State's proposed revisions is based upon corresponding Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this part of the rule would have a significant economic impact, the Department relied upon the data and assumptions for the corresponding Federal regulations.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based on an analysis of the State submittal, which mostly reflects State policy choices not required by or prohibited by Federal law. For the part of this rule disapproving one of the State's proposed revisions, the determination is based on an analysis of the corresponding Federal regulations, which were determined not to constitute a major rule.

This rule will not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. This determination is based on an analysis of the State submittal, which mostly reflects State policy choices not required by or prohibited by Federal law. For the part of this rule disapproving one of the State's proposed revisions, the determination is based on an analysis of the corresponding Federal regulations, which were determined not to impose an unfunded mandate. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

For the reasons set out in the preamble, the Office of Surface Mining Reclamation and Enforcement amends 30 CFR part 917 as set forth below:

Subject to OSMRE's oversight, sec. 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Utah program on January 21, 1981. You can find background information on the Utah program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Utah program in the January 21, 1981, Federal Register (46 FR 5899). You can also find later actions concerning Utah's program and program amendments at 30 CFR 944.15, 944.16, and 944.30.

The Governor of Utah signed H.B. 399 into law on March 21, 2011. On May 16, 2011, OSMRE received a letter from an environmental advocacy group notifying the agency of Utah's legislative changes under H.B. 399 (Administrative Record No. OSM-2012-0011-0010). That letter asserted that H.B. 399 resulted in changes to Utah law that required OSMRE's review and approval through the State program amendment process under 30 CFR part 732 before such legislative changes could become an effective part of Utah's program.

In response to the citizen letter, OSMRE, in a letter dated August 8, 2011, requested that DOGM clarify whether the enactment of H.B. 399 resulted in a change to the Utah program (Administrative Record No. OSM-2012-0011-0005). On October 31, 2011, DOGM provided a response to OSMRE's request. In its response, DOGM explained that H.B. 399 modified title 78 of the Utah Judicial Code (Administrative Record No. OSM-2012-0011-0006). DOGM's letter also stated its uncertainty as to whether the enactment of H.B. 399 represented a change in State law approved as part of the Utah program, modified the rights of any party for judicial review in a manner that would conflict with the requirements of 30 CFR 732.15, or was inconsistent with the Federal law (Administrative Record No. OSM-2012-0011-0006). In a letter dated February 24, 2012, OSMRE determined that a change of condition had occurred under 30 CFR 732.17(e)(2); therefore, OSMRE required DOGM to submit the legislative changes as a proposed program amendment pursuant to 30 CFR 732.17(f) (Administrative Record No. OSM-2012-0011-0007). DOGM submitted the language of H.B. 399 as a State program amendment on April 18, 2012 (Administrative Record No. OSM-2012-0011-0003).

We announced receipt of the proposed amendment in the June 12, 2012, Federal Register (77 FR 34892). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the adequacy of the amendment (Administrative Record No. OSM-2012-0011-0001). We did not hold a public hearing or meeting because one was not requested. The public comment period ended on July 12, 2012. We received three public comments and one comment from a Federal agency.

The following are the findings we made concerning the proposed amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. As described below, we are not approving the amendment.

DOGM's proposed amendment seeks approval to apply the terms of H.B. 399 under Utah's Program. H.B. 399 modified, and was codified under, title 78 of the Utah Judicial Code, Utah Code Ann. sec. 78B-5-828, and applies to environmental actions. “Environmental action” is defined as a cause of action filed on or after May 10, 2011, that seeks judicial review of a final agency action to issue a permit. Utah Code Ann. sec. 78B-5-828(b). This provision specifically applies to permits issued by the Department of Transportation, the School and Institutional Trust Lands Administration, or the Department of Natural Resources (“DNR”), which includes DOGM's coal permitting actions issued pursuant to Utah's program. Utah Code Ann. sec. 78B-5-828(b)(ii)(A)-(C).

Under the proposed amendment incorporating the terms of H.B. 399, a court or agency may not grant a plaintiff's request for temporary relief (administrative stay or preliminary injunction) related to a challenged State environmental permitting decision until the plaintiff posts a surety bond or cash equivalent (herein referred to as a bond or environmental litigation bond). Utah Code Ann. sec. 78B-5-828(3). This bond would be imposed in an amount that either the reviewing agency or court deems sufficient to compensate for damages the defendant may sustain as a result of a stay or injunction later found to have been unwarranted. Utah Code Ann. sec. 78B-5-828(3)(a). The bond is required to be written by a surety licensed to do business within the State and must be made payable to each defendant in the event the plaintiff does not prevail on the merits of the environmental action. Utah Code Ann. sec. 78B-5-828(3)(b)-(c) and (5). A reviewing agency or court decision refusing to require the posting of a bond is immediately appealable. Utah Code Ann. sec. 78B-5-828(6).

While the changes outlined in H.B. 399 (Utah Code Ann. sec. 78B-5-828) apply to multiple State agencies, this final rule pertains only to the application of Utah Code Ann. sec. 78B-5-828 to DOGM's coal permitting actions issued pursuant to the approved Utah program under SMCRA. Utah's program consists of the Utah Coal Mining and Reclamation Act, Utah Code Ann. sec. 40-10-1 through 40-10-31, and the Utah Administrative Code rules, R645-100 through -403. While DOGM's submission does not amend the text of the already approved Utah program, application of Utah Code Ann. sec. 78B-5-828 would markedly alter implementation of the Utah program and render the program inconsistent with, and less stringent and effective than, SMCRA and Federal regulations. Both DOGM, which is responsible for administering the Utah coal program under SMCRA, and the Board of Oil, Gas and Mining (“the Board”), which is an administrative body with rulemaking and adjudicatory responsibilities under Utah's coal program, are entities within DNR and, therefore, are subject to the environmental litigation bond requirement.

SMCRA sec. 503 provides that a State may assume primary responsibility to regulate coal mining and reclamation operations within its State borders. To obtain and maintain primacy under 30 CFR 730.5 and 732.15(a), a State regulatory authority must submit a State program, or proposed amendments thereto, that contain requirements that are consistent with, and no less stringent and effective than, SMCRA and Federal regulations. As the proposed language from H.B. 399 applies to administrative stays issued by a State agency and preliminary injunctions granted by a court, SMCRA requires that Utah's program must provide, at minimum, the same opportunities for judicial review and citizen participation that are available under SMCRA and the Federal regulations.

The approved Utah program is similar to SMCRA and the Federal regulations regarding the available opportunities to seek temporary relief during an administrative hearing or proceeding. After a permit is issued, the Utah program, at Utah Code Ann. sec. 40-10-14(4) and R645-300-212, provides that the Board may grant temporary relief it deems appropriate pending final determination of the proceedings, in accordance with SMCRA sec. 514(d) and 30 CFR 775.11(b). Both the Utah and the Federal programs allow for an administrative hearing prior to judicial review, which would be adjudicatory in nature, regarding the agency's reasons for its permitting decision. The presiding authority may grant temporary relief if the person requesting relief shows that there is a substantial likelihood that they will prevail on the merits of their case, among other criteria. See SMCRA sec. 514(d)(1)-(3) (30 U.S.C. 1264(d)(1)-(3); 30 CFR 775.11(b)(2)(i) through (iv); Utah Code Ann. sec. 40-10-14(4)(a)-(c); and R645-300-212.220, 212.210-212.400. The Utah program, similar to SMCRA and the Federal regulations, leaves discretion to the deciding authority to grant temporary relief during administrative review so long as the above-cited criteria for such relief are satisfied. Neither SMCRA nor the approved Utah program requires the posting of a bond prior to granting a request for temporary relief during administrative review.

Both SMCRA, at sec. 526(e) (30 U.S.C. 1276(e)), and the Utah program, at Utah Code Ann. sec. 40-10-30, establish that administrative hearing decisions are subject to judicial review. Thus, an interested person who participated in the administrative proceedings and is aggrieved by the regulatory authority's decision is provided an opportunity for appeal in a court of competent jurisdiction. SMCRA sec. 514(f) (30 U.S.C. 1264(f)); 30 CFR 775.13; Utah Code Ann. sec. 40-10-14(6); and R645-300-221. As provided under the Utah Code, the Utah Supreme Court has jurisdiction to review all final agency actions resulting from formal adjudicative proceedings. Utah Code Ann. sec. 40-10-14(6)(a); see also the Utah Administrative Procedures Act at Utah Code Ann. sec. 63G-4-403 and 78A-3-102(6) (stating the Utah Supreme Court “shall comply with the requirements of Title 63G, Chapter 4, Administrative Procedures Act, in its review of agency adjudicative proceedings.”). Under the Utah Rules of Civil Procedure (“URCP”), the Utah courts have authority to require that an applicant submit a form of security to the court before it issues an order of injunction. However, URCP rule 65A also allows the court to forgo the security requirement if “it appears that none of the parties will incur or suffer costs, attorney fees or damage as the result of any wrongful order or injunction, or . . . there exists some other substantial reason for dispensing with the requirement of security.” URCP 65A(c). While the Federal Rules of Civil Procedure, at rule 65(c), generally mandate that a court require the posting of a bond before issuing a preliminary injunction in an amount the court deems proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained, neither SMCRA sec. 525(c) (30 U.S.C. 1275(c)) nor sec. 526(c) (30 U.S.C. 1276(c)) contain such a mandate. Rather, the conditions of any temporary relief ordered are reserved (not mandated) to the discretion of the Secretary in administrative proceedings and to the court in judicial proceedings.

In addition to the opportunities afforded to persons challenging a final agency decision, citizen suits filed in court provide another pathway for persons to challenge perceived violations of the Act, including violations of any rule, regulation, order, or permit issued pursuant to the Act or failure to perform a non-discretionary duty. Under the State or Federal citizen suit provision, found at Utah Code Ann. sec. 40-10-21 or SMCRA sec. 520 (30 U.S.C. 1270), an interested person may commence a civil action against the United States or a State agency to the extent permitted by the Eleventh Amendment, or against any other person, to compel compliance with the corresponding State or Federal Act. Utah Code Ann. sec. 40-10-21(4)(b) and SMCRA sec. 520(d) (30 U.S.C. 1270(d)) both provide that, if a temporary restraining order or preliminary injunction is sought through the course of a citizen suit, a court “may” require the filing of a bond or equivalent security in accordance with the applicable rules of civil procedure. Thus, Utah's existing preliminary injunction standards are consistent within the Utah program, at Utah Code Ann. sec. 40-10-14(5), the Utah Administrative Procedures Act at Utah Code Ann. sec. 63G-4-404, and the URCP at rule 65A. The provisions in H.B. 399 that would be implemented under the proposed amendment appear somewhat duplicative of these pre-existing provisions, but some of the other provisions in H.B. 399, including the bond requirement, would cause confusion regarding the appropriate temporary relief to apply with respect to decisions involving coal permitting actions.

While Congress acknowledged a court's authority under SMCRA sec. 520(d) (30 U.S.C. 1270(d)) to require the posting of a bond, the legislative history of this section explains that in drafting the citizen suit provision, the Committee intended “that the courts will carefully consider the circumstances and probable outcome of litigation in deciding whether to require a bond. This will minimize the possibility that this section might be subject to misuse either by the commencement of frivolous actions against environmentally sound operations or as a substitute for other provisions of this bill which impose more precise requirements for citizen participation in the permit application and performance bond release proceedings.” S. Rept. 95-128, 88 (May 10, 1977). Utah's approved program contains this discretionary authority nearly verbatim at Utah Code Ann. sec. 40-10-21(4)(b).

The Utah Code Ann. sec. 78B-5-828 enacted by the Utah legislature as H.B. 399, and submitted by DOGM as a proposed program amendment, is inconsistent with SMCRA's legislative history and would not provide a plaintiff with the opportunities to seek temporary relief when compared with SMCRA and the Federal regulations. The language of the proposed provision would remove a judge's ability and discretion to consider other factors or circumstances that may otherwise be taken into account while deciding whether a bond must be posted and in what amount. Indeed, the proposed amendment mandating imposition of a bond would conflict with existing Utah law that was already approved as part of Utah's program that makes a bond discretionary in judicial proceedings.

When deciding to grant or deny a preliminary injunction or administrative stay, SMCRA and the approved Utah program provide the deciding official with more flexibility. In enacting SMCRA, Congress recognized that “providing citizen access to administrative appellate procedures and the courts is a practical and legitimate method of assuring the regulatory authority's compliance with the requirements of the Act.” S. Rept. 95-128, 59 (May 10, 1977). The effect of the proposed mandatory environmental litigation bond requirement could create an undue financial burden on plaintiffs and potentially deter citizens from bringing good faith actions. This would be inconsistent with SMCRA's purpose to “assure that appropriate procedures are provided for the public participation in the development, revision, and enforcement of regulations, standards, reclamation plans, or programs established by the Secretary or any State under this Act. . . .” SMCRA sec. 102(i). Further, the enactment of H.B. 399, codified as Utah Code Ann. sec. 78B-5-828, is inconsistent with SMCRA's legislative intent that bonds be used on a case-by-case basis as determined by a court.

While State laws may be more stringent than the Federal program, State law cannot conflict with the stated purposes of SMCRA, and State laws cannot provide less opportunities, including for citizen participation, than established under SMCRA and the Federal regulations. The proposed amendment is inconsistent with the congressional intent of assuring public participation and legal access for interested parties in agency decision-making. OSMRE thereby finds that Utah's amendment proposal is inconsistent with, and less stringent and effective than, SMCRA and the Federal regulations. Therefore, in accordance with 30 CFR 732.15(a) and 732.17(h)(10), OSMRE is not approving this amendment. As a result, the proposed amendment submitted by the Division will not become an effective part of the Utah coal mining regulatory program under SMCRA. OSMRE instructs the Division to continue implementing the approved Utah program as it did prior to the enactment of H.B. 399.

We asked for public comments on the amendment (Administrative Record Document ID No. OSM-2012-0011-0001) and received three responses.

We received two public comment letters sent on behalf of Southern Utah Wilderness Alliance (SUWA) and the Sierra Club dated, respectively, June 1, 2012, and July 12, 2012 (Administrative Record ID No. OSM-2012-0011-0013). Both of the letters recommended that OSMRE disapprove the amendment on the basis that it is inconsistent with SMCRA and other applicable Federal rules and that SUWA would be personally harmed by it if approved.

Additionally, we received a comment letter from a private citizen dated July 11, 2012 (Administrative Record ID No. OSM-2012-0011-0012). The commenter also recommended that OSMRE not approve the amendment because it would make environmental protection in the State of Utah more difficult with regard to coal mining operations.

In response to the above comments, we acknowledge the concerns expressed and refer the commenters to our findings in sec. III for a detailed explanation as to why OSMRE is not approving Utah's proposed amendment.

On May 1, 2012, under 30 CFR 732.17(h)(11)(i) and sec. 503(b) of SMCRA, we requested comments on the amendment from various Federal agencies with an actual or potential interest in the Utah program (Administrative Record ID No. OSM-2012-0011-0011). We received comments from one Federal Agency.

The Bureau of Land Management (BLM) commented in a letter dated May 11, 2012 (Administrative Record ID No. OSM-2012-0011-0008). The BLM stated that it agreed that, due to the gravity of such granted requests by judicial actions, the requirement for surety bonding or equivalent provides necessary protection for the interest of all parties involved. In response, and as discussed in sec. III above, the conditions of any temporary relief ordered are reserved to the discretion of the Secretary or the State's deciding official in administrative proceedings, and to the court in judicial proceedings. Existing law provides the deciding official with the necessary flexibility to determine the appropriate conditions of any temporary relief on a case-by-case basis, so long as the standards for such relief are satisfied. Therefore, OSMRE does not approve the proposed amendment.

Under 30 CFR 732.17(h)(11)(ii), we are required to get a written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq. ) or the Clean Air Act (42 U.S.C. 7401 et seq. ). None of the revisions that Utah proposed to make in this amendment pertains to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment.

Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and ACHP on amendments that may have an effect on historic properties. On August 28, 2013, we requested comments from both agencies relative to Utah's proposed amendment (Administrative Record Document ID No. OSM-2012-0011-0011), but neither agency responded to our request.

Based on the above findings, we do not approve Utah's submittal sent to us on April 12, 2012. To implement this decision, we are amending the Federal regulations at 30 CFR part 944, which codifies decisions concerning the Utah program. In accordance with the Administrative Procedure Act, this rule will take effect 30 days after the date of publication.

This rule would not effect a taking of private property or otherwise have taking implications that would result in public property being taken for government use without just compensation under the law. Therefore, a takings implication assessment is not required. This determination is based on an analysis of the corresponding Federal regulations.

Executive Order 12866, as amended by Executive Order 14094, provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB) will review all significant rules. Pursuant to OMB guidance, dated October 12, 1993 (OMB Memo M-94-3), the approval of State program amendments is exempted from OMB review under Executive Order 12866, as amended by Executive Order 14094. Executive Order 13563, which reaffirms and supplements Executive Order 12866, retains this exemption.

The Department of the Interior has reviewed this rule as required by sec. 3 of Executive Order 12988. The Department has determined that this Federal Register document meets the criteria of sec. 3 of Executive Order 12988, which is intended to ensure that the agency review its legislation and proposed regulations to eliminate drafting errors and ambiguity; that the agency write its legislation and regulations to minimize litigation; and that the agency's legislation and regulations provide a clear legal standard for affected conduct rather than a general standard, and promote simplification and burden reduction. Because sec. 3 focuses on the quality of this Federal Register document and changes to the Federal regulations, the review under this Executive order does not extend to the language of the Utah program or to the program amendment that the State of Utah submitted.

This rule has potential Federalism implications, as defined under sec. 1(a) of Executive Order 13132. Executive Order 13132 directs agencies to “grant the States the maximum administrative discretion possible” with respect to Federal statutes and regulations administered by the States. Utah, through its approved regulatory program, implements and administers SMCRA and its implementing regulations at the State level. This rule disapproves an amendment to the Utah program submitted and drafted by the State, to ensure that the State program is “in accordance with” the requirements of SMCRA and “consistent with” the regulations issued by the Secretary pursuant to SMCRA.

The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175 and have determined that it has no substantial direct effects on the distribution of power and responsibilities between the Federal Government and Tribes. The basis for this determination is that our decision on the Utah program does not include Indian lands as defined by SMCRA or other Tribal lands and it does not affect the regulation of activities on Indian lands or other Tribal lands. Indian lands under SMCRA are regulated independently under the applicable approved Federal Indian program. The Department's consultation policy also acknowledges that our rules may have Tribal implications where the State proposing the amendment encompasses ancestral lands in areas with mineable coal. We are currently working to identify and engage with appropriate Tribal stakeholders to devise a constructive approach for consulting on these amendments.

Executive Order 13211 requires agencies to prepare a Statement of Energy Effects for a rulemaking that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not significant energy action under the definition in Executive Order 13211, a Statement of Energy Effects is not required.

Consistent with sec. 501(a) and 702(d) of SMCRA (30 U.S.C. 1251(a) and 1292(d), respectively) and the U.S. Department of the Interior Departmental Manual, part 516, sec. 13.5(A), State program amendments are not major Federal actions within the meaning of sec. 102(2)(C) of NEPA (42 U.S.C. 4332(2)(C). Therefore, there is no need to prepare an environmental assessment under NEPA.

This rule does not include requests and requirements of an individual, partnership, or corporation to obtain information and report it to a Federal agency. As this rule does not contain information collection requirements, a submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) is not required.

This rule, which does not approve the State submittal, will not alter the existing federally approved Utah program, and therefore this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

This rule, which does not approve the State submittal because it would be inconsistent with SMCRA and Federal regulation, does not change the status quo of the existing approved Utah program or its implementation under SMCRA, and this rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based on an analysis of the corresponding Federal regulations, which were determined not to constitute a major rule.

This rule, which does not approve the State submittal because it would be inconsistent with SMCRA and Federal regulation, does not change the status quo of the existing approved Utah program or its implementation under SMCRA, and, therefore, this rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year, nor does the rule have a significant or unique effect on State, local, or Tribal governments or the private sector. This determination is based on an analysis of the corresponding Federal regulations, which were determined not to impose an unfunded mandate. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

For the reasons set out in the preamble, the Office of Surface Mining Reclamation and Enforcement amends 30 CFR part 944 as set forth below:

On June 21, 2024, an organization notified the Coast Guard that it will be conducting a drone show display from 9 p.m. through 4:30 a.m., daily, on August 13 through 15, 2024 and from 6:30 p.m. to 9:30 p.m., daily, on August 15, 17, and 18, 2024. The drones are to be launched from a nearby parking lot approximately 200 feet southwest of the southwestern point of the Hilton Lagoon into the “showbox” located between the following 4 coordinates: 21°16′52.02″ N 157°50′27.88″ W; 21°16′44.24″ N 157°50′29.67″ W; 21°16′40.06″ N 157°50′16.65″ W; and 21°16′47.24″ N 157°50′13.39″ W. In response, on July 17, 2024, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone, Kahanamoku Beach, Honolulu, HI (89 FR 58095), stating why the Coast Guard issued the NPRM and invited comments on the proposed regulatory action related to this drone show. The comment period ended August 1, 2024, and the Coast Guard received no comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable because prompt action is needed to respond to the potential safety hazards associated with the 428 drones flying overhead at a popular surfing spot in Waikiki.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector Honolulu (COTP) has determined that potential hazards associated with the drone show to be used in this display will be a safety concern for anyone within the safety zone. The purpose of this rule is to ensure the safety of personnel, vessels, and the marine environment within the navigable waters of the safety zone before, during, and after the scheduled events.

As noted above, we received no comments on our NPRM published July 17, 2024. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes a safety zone from 9 p.m. on August 13 through 9:30 p.m. on August 18, 2024. The safety zone will be enforced from 9 p.m. to 4:30 a.m., daily, on August 13, 2024, through August 15, 2024 and from 6:30 through 9:30 p.m., daily, on August 15, 17, and 18, 2024. The safety zone will cover all navigable waters located between the following 4 coordinates: 21°16′52.02″ N 157°50′27.88″ W; 21°16′44.24″ N 157°50′29.67″ W; 21°16′40.06″ N 157°50′16.65″ W; and 21°16′47.24″ N 157°50′13.39″ W. The duration of the zone is intended to ensure the safety of persons and vessels and these navigable waters during the scheduled drone shows. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the duration and time-of-day of the safety zone. This safety zone will be of limited duration to minimize any adverse impacts to persons and vessels who would be in the area. Vessel traffic will only be restricted in the limited access area while drones are in the air. Further, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM Marine Channel 16 about the zone and persons or vessels desiring to enter the safety zone may do so with permission from the COTP or a Designated Representative. Advance public notifications will also be made to local mariners through appropriate means, which may include Local Notice to Mariners and Broadcast Notice to Mariners.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting 6 hours that would prohibit entry within the “showbox”. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

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

Purpose of Program: The purpose of the PSSG program is to equitably improve postsecondary student outcomes, including retention, upward transfer, and completions of value, by leveraging data and implementing, scaling, and rigorously evaluating evidence-based activities to support data-driven decisions and actions that lead to credentials that support economic success and further education.

Assistance Listing Number: 84.116M.

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

We published a notice of proposed priorities, requirements, and definitions in the Federal Register on June 7, 2024 (89 FR 48517) (NPP). That document contained background information and the Department's reasons for proposing the particular priorities, requirements, and definitions. There are several differences between the proposed priorities, requirements, and definitions and these final priorities, requirements, definitions, and selection criterion. They include changing Proposed Priority 4 on using data for continuous improvement to a selection criterion and adding examples of evaluation strategies; revising the scaling requirements for the mid-phase and expansion priorities; revising the definition of “completions of value”; and revising the examples of allowable uses of funds to include using data to administer the program effectively at the institution and/or State or system levels, capacity building, rigorous evaluations, technology-assisted supports, tutoring and supplemental instruction, peer mentoring, and support for students with disabilities.

Public Comment: In response to our invitation in the NPP, 23 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: Several commenters praised the Department for conducting rulemaking for the PSSG program and for the proposed priorities, requirements, and definitions. For example, several commenters supported the Department's use of evidence standards within Proposed Priorities 1, 2, and 3, and the use of completions of value. Other commenters supported the Department's proposed uses of funds.

Discussion: We appreciate the support of the grant program and the priorities, requirements, and definitions.

Changes: None.

Comments: Several commenters proposed recommendations for which priorities and selection criteria from the NPP should be utilized in a competition, how the selection criteria should be evaluated, what information applicants should be provided, and other components of the application process. Others suggested that we apply the requirements in the recently updated Uniform Grants Guidance.

Discussion: The components of an individual application, including which specific priorities to use, and the guidelines for the application process are laid out in the notice inviting applications that is developed for each competition and do not require additional rulemaking for this grant program. The requirements from the new Uniform Grants Guidance can be utilized without inclusion in the NFP since they have already gone through rulemaking.

Changes: None.

Comments: One commenter criticized the priorities, stating that it is discriminatory to focus on “underserved students” and that the program lacks accountability measures to prevent misuse of the research project support services for certain students and suggested that there should be an opt-out provision for students.

Discussion: The PSSG program is designed to enable institutions to implement evidence-based projects to support student success for a targeted group of students who are underrepresented among college completers. However, nothing in these priorities precludes applicants from proposing to also serve students who are not included in the definition of “underserved students” yet need additional support to complete college. The program holds grantees accountable through, among other things, monitoring of the grants, which includes requiring grantees to report annually on program-specific performance measures. Regarding the opt-out provisions, institutions manage their own opt-in/opt-out policies with regard to student participation in their grant-funded activities.

Changes: None.

Comments: Two commenters questioned the effectiveness of taking a statistics-focused approach to improving student outcomes.

Discussion: Research demonstrates that data-informed decision-making is an important component of a people-driven continuous improvement process to improve student outcomes, which is the approach promoted in this grant program. 1

Changes: None.

Comments: One commenter expressed concern about the privacy of student data.

Discussion: The Department does not collect individual-level data for the PSSG program. Institutions that use student-level data to support individuals through to completion must comply with the Family Educational Rights and Privacy Act (FERPA) (20 U.S.C. 1232g; 34 CFR part 99).

Changes: None.

Comments: One commenter suggested that the priorities and requirements be used to collect enrollment and persistence data on students with disabilities.

Discussion: Under the final selection criterion under which applicants will identify or describe how they will develop performance and outcome measures, applicants will also describe how they will disaggregate data by student subgroups, which may include students with disabilities if relevant to the project. In addition, under Priorities 1, 2, and 3, projects must be focused on improving outcomes for underserved students, which may include students with disabilities. Nothing in the proposed requirement regarding allowable use of funds precluded support for students with disabilities, but we are explicitly adding it to the list of examples to underscore the importance of supporting this population.

Changes: We have added support for students with disabilities as an explicit allowable student success strategy in the allowable uses of funds requirement.

Comment: One commenter suggested that the Department consider whether the programs in which students are being retained or to which they are transferring meet the value threshold in the definition of “completions of value.”

Discussion: The Department does not have the capacity to apply the value measure at the program level, and PSSG currently is not targeted at the program level. However, we recognize the importance of not limiting this measure to completion. Accordingly, we are revising the definition of “completions of value” to also address retention and transfer outcomes. In responding to Priorities 1, 2, and 3, applicants will be expected to demonstrate how their proposed projects will improve postsecondary success for underserved students by increasing completions of value that lead to further education through upward transfer or graduate education and/or lead to economic mobility.

Changes: We added to the definition of “completions of value” that students must be retained at and/or transfer to institutions conferring completions of value.

Comments: One commenter suggested we retain the focus of the PSSG program on degree completion, rather than establish a new definition of “completions of value,” because they claimed it would be burdensome to the grant application and administration processes for the applicant to demonstrate post-completion return on investment due to limited available data.

Discussion: The Department intends to use existing College Scorecard data and generate additional College Scorecard measures related to completions of value that institutions can use as part of their reporting on this metric for PSSG, since we recognize that it is difficult for some institutions to obtain earnings data.

Changes: None.

Comments: Three commenters suggested that the Department adopt a selection criterion regarding data collection and continuous improvement processes at the institution after the grant period, rather than address the topic through a priority. Another commenter suggested we add examples of evaluation strategies to this priority that include rapid-cycle experimentation, pilots, feasibility studies, and implementation research.

Discussion: We agree with the commenters about the importance of this component to this grant program and believe that if we address it through a selection criterion instead of a priority, it will incentivize more applicants to develop robust data collection and continuous improvement strategies, since it will be factored into the scores of all applicants. While all of the evaluation strategies the commenter mentions are already allowable, we have added them as examples to make it clear for future applicants.

Changes: We have changed Proposed Priority 4 to a selection criterion and added examples of evaluation strategies.

Comments: One commenter suggested that we eliminate Proposed Priority 5, stating that the grant awards should not be selected based on specific strategies to improve retention and completion, and another commenter requested that we keep it. One commenter suggested we include it as an allowable use of funds instead of a priority. Finally, one commenter praised the Department for including this priority but suggested that we add experiential learning in addition to credentials of value.

Discussion: We believe that college-to-career pathways and supports are a critical component of student success, and therefore are retaining this as a priority. We agree with the commenter about the important role experiential learning can play, especially for adult learners with some college but no credential, and added language to the priority to reflect this.

Changes: We have added language to Proposed Priority 5 to indicate that participating in experiential learning can be part of a college-to-career pathway.

Comment: In response to our request in the NPP for feedback on the proposed scale requirements for the mid-phase and expansion tiers of evidence, we received numerous comments with recommendations. A common theme among the commenters was to suggest that we eliminate the use of specific numbers of students required in order to demonstrate scale or, if maintained, lower the number to 350 from EDGAR's current definitions of “strong evidence” and “moderate evidence.” In lieu of using population metrics, commenters had several suggestions, including utilizing the rigor of evaluations, the caliber of the research, the reasonableness of the costs, the strategy to effectively scale, and the impacts on college completion—specifically to advance equity or participant outcomes. One commenter suggested that we use, instead of the proposed scale requirements for the mid-phase and expansion tiers of evidence, a three-part requirement for each grant type that would include requiring all mid-phase and expansion grant applicants to demonstrate they will be able to conduct a well-powered study with the number of students they propose to serve; meet the minimum standard for studies that meet the definition of “moderate evidence” or “strong evidence,” which is 350 students; and implement the intervention at multiple sites with mid-phase grants implemented at multiple campuses and expansion grants implemented either at multiple institutions or multiple campuses, where the campuses serve different types of underserved students or in different locales.

Discussion: We agree with the comments on aligning the scale and multisite requirements with the What Works Clearinghouse (WWC) guidelines defined in EDGAR given one of the stated goals of the program is to generate quality evidence about what works to improve postsecondary student success. Because the WWC guidelines for “moderate evidence” and “strong evidence” do not differ in the required number of sites or scale, we changed the priority language so that the requirements for mid-phase and expansion projects do not include a specific number of students, and we do not differentiate in the number of sites or students required for moderate and strong evidence. We also agree with the comments on ensuring the projects demonstrate positive impact on underserved populations to align with the goal of the program to equitably improve outcomes.

Changes: For mid-phase projects, we have changed the priority to provide that projects must be implemented at multiple institutions of higher education or multiple campuses of the same institution and be intentionally designed to detect the impact of the project, if any, on all students served by the project as well as on at least one population of underserved students (as defined in this document) or between institutions of different locales. For expansion projects, we have changed the priority to provide that projects must be implemented at multiple institutions of higher education and be intentionally designed to detect the impact of the project, if any, on all students served by the project as well as on at least one population of underserved students (as defined in this notice) or between institutions of different locales.

Comments: One commenter suggested adding a priority for projects at lower-resourced institutions serving a significant population of high-need students and with low completion rates or large completion disparities.

Discussion: We agree with the commenter that projects should be at institutions that are lower-resourced and have a significant population of underserved students and completion disparities. That is why the eligibility is targeted to title III and V institutions, which are generally under-resourced institutions with a disproportionate enrollment of students from groups who are underrepresented among college completers, such as students from low-income backgrounds.

Changes: None.

Comments: Numerous commenters suggested we add to the list of allowable uses of funds. Recommendations included adding capacity-building, the costs of rigorous evaluation, data to administer the program, development and use of data systems to leverage integrated data systems, data systems, data capacity support, professional development resources for data and institutional effectiveness researchers, credit for prior learning, adaptive courseware, hybrid-flex courses, peer mentoring strategies, supplemental instruction, mental health, basic needs, and the integration of academic coursework and career advising.

Discussion: We agree with the commenters that all of these are allowable uses. While the list provided in the proposed requirement is not comprehensive, several of the suggested uses are critical components for the PSSG program, so we have added to the list of examples. The list in the proposed requirement included several allowable uses to support Proposed Priority 5, including integrated career planning, counseling, and coaching, work-based learning opportunities, and college-to-career navigation support, so we do not think other examples regarding the integration of academic coursework and career advising are needed. It also already included basic needs and mental health uses. Developing and using data systems is already included as an allowable use and the approaches to do so are not limited by the current language.

Changes: We have added using data to administer the program effectively at the institution and/or State or system levels, capacity building, and rigorous evaluation to the list of examples of allowable uses of funds. We also have added technology-assisted supports, tutoring and supplemental instruction, and peer mentoring as examples of allowable uses of funds for student success strategies.

Comments: One commenter suggested that we provide that if a grantee uses funds to include financial assistance as a component of their project, they must propose to use at least one additional allowable component in conjunction with the financial assistance.

Discussion: The Department does not believe such a stipulation necessary. As a tiered evidence program, PSSG is designed to allow the available evidence of what works in improving postsecondary student outcomes to guide applicants in designing their proposed activities. The Department also believes that applicants are in the best position to determine what uses of funds would best serve to improve their students' postsecondary outcomes. Under each of the priorities, successful applicants will identify the key project components based on their review of the studies they cite as evidence for their projects. The applicant must develop a project that meets the goals of the program as laid out in the priorities but can do so by selecting the tools that they choose.

Changes: None.

Comments: One commenter suggested adding language to the independent evaluation requirement to ensure that the evaluations are “well-designed, well-implemented, and sufficiently powered” to meet WWC standards for “moderate evidence” or “strong evidence.”

Discussion: The Department agrees that the evaluation of these projects should be well-designed, well-executed, and sufficiently powered to yield credible results. We will use selection criteria to ensure that projects include a plan to conduct evaluations that are intentionally designed to meet WWC standards (with or without reservations). As part of the selection process, WWC-certified peer reviewers will assess the rigor of the evaluation plans. Accordingly, it would be redundant to also address this area of focus in the independent evaluation requirement.

Changes: None.

Comment s: While praising the requirement that evaluations be posted to ERIC, two commenters suggested that the Department not put the burden on the grantee to submit the evaluations to ERIC. Instead, they suggested that grantees submit the evaluation reports to the Department within one month of completion and the Department post this information to the Awards page.

Discussion: We disagree with the commenters that requiring the grantee to submit evaluations to ERIC would be burdensome. We agree that it is critical to make sure the evaluations are transparent and made public. We intend to share the evaluations publicly on the Department's website.

Changes: None.

Comments: Several commenters submitted recommendations for the requirements of evaluations that are submitted, including that they use the most updated version of the WWC Handbook; that the evaluations of early-phase projects be designed to meet WWC standards with or without reservations and that the evaluations of mid-phase and expansion grants be designed to meet WWC standards without reservations; that evaluations have methodologies appropriate to the research question being studied; and that the Department provide institutions with clear guidance on how to submit a relevant study for review to determine if a study meets WWC standards, including that the institutions have an equitable opportunity to compete at the expansion phase without being limited based on studies that are readily accessible in WWC.

Discussion: We appreciate the suggestions to ensure that the evaluation methods are all evidence based and high quality. These recommendations do not require rulemaking for this grant program and would be considered in the application and peer review process.

Changes: None.

Comments: Two commenters recommended not restricting the indirect cost rate.

Discussion: The Department maintains limiting the indirect cost reimbursement to 8 percent of a modified total direct cost base. The Department continues to believe that this limitation effectively maximizes the Federal resources that support direct costs associated with the project.

Changes: None.

Comments: Several commenters had recommendations for the types of entities that would be eligible for the grant. Four commenters suggested that eligibility not be limited to institutions that are designated as a title III or V school, including one suggestion that public two-year community and technical colleges be added. Two commenters suggested allowing non-profit organizations to be an eligible entity alone, rather than requiring a partnership with a title III or V institution, and another commenter suggested that we require the institution to be the lead applicant. A couple commenters supported allowing non-profits to apply in partnership with title III or V institutions. One commenter asked that businesses be able to partner with institutions, and one commenter asked that for-profit institutions be prohibited from applying.

Discussion: The Department believes that targeting funding to title III and V institutions is the best use of the available funds because these institutions disproportionately enroll students from groups who are underrepresented among college completers, such as students from low-income backgrounds. Supporting retention and completion strategies at these institutions offers the greatest potential to close gaps in postsecondary outcomes. Additionally, these under-resourced institutions are most in need of Federal assistance to implement and evaluate evidence-based postsecondary college retention and completion interventions. More than half of public two-year institutions are title III/V eligible and would be eligible for a grant. Under the eligibility requirement, non-profits may apply for the funding, as long as they do so in partnership with an institution of higher education. It does not matter which entity is the lead applicant since all entities applying through the partnership are subject to the same “Group Application” requirements under 34 CFR 75.127-129. Given that the innovation would need to occur at an institution, we do not believe it is workable to allow a non-profit to apply without partnership with an institution of higher education. Furthermore, there is nothing that currently prohibits eligible applicants from collaborating with businesses, and for-profit institutions are not eligible institutions.

Changes: None.

Comments: One commenter suggested that we specifically include Hispanic-serving institutions (HSIs) as eligible entities.

Discussion: HSIs are eligible as title III/title V institutions.

Changes: None.

Comments: None.

Discussion: In Proposed Requirement 3, we specified certain circumstances under which the Secretary may waive the matching requirement on a case-by-case basis based on certain showings by the “lead applicant.”

Changes: We have revised Requirement 3, section (b) Waiver Authority, to clarify that data showing certain exceptional circumstances should pertain to the “eligible institution(s)” instead of the lead applicant in order to address circumstances where certain eligible entities apply in partnership with title III or V institutions.

Comments: Two commenters suggested changes to the definition of “completions of value.” One commenter suggested we use Threshold 0 from the Postsecondary Value Commission framework, and another commenter suggested we incorporate local workforce data.

Discussion: Our proposed definition aligns with the Postsecondary Value Commission framework by measuring the percentage of students earning enough to recoup their costs and experience an earnings premium over high school graduates, and adds the percentage of students pursuing further education. We recognize the importance of not comparing schools nationally on earnings and so our definition also utilizes State-level high school earnings data. The Department does not have the capacity to factor in local workforce data.

Changes: We adjusted the definition to clarify how the percentage of students is calculated and how State earnings data is used in the construction of the metric.

Comments: One commenter suggested that in the definition of “underserved student,” we include a more detailed description of “student of color” to align with the Office of Management and Budget (OMB)'s Race and Ethnicity Standards.

Discussion: The term “student of color” is undefined, consistent with the Secretary's Supplemental Priorities, to ensure consistency across the Department's discretionary grant programs and to allow institutions to define the term in a manner they choose, to be consistent with how they do so internally for other purposes.

Changes: None.

The Secretary establishes the following priorities for use in the PSSG Program.

Priority 1—Early Phase.

Projects that are designed to improve postsecondary success for underserved students by increasing completions of value that lead to further education through upward transfer or graduate education and/or lead to economic mobility, and are supported by evidence that meets the definition of Demonstrates a Rationale (as defined in 34 CFR 77.1) or Promising Evidence (as defined in 34 CFR 77.1).

Priority 2—Mid-Phase: Projects Supported by Moderate Evidence.

Projects that are designed to improve postsecondary success for underserved students by increasing completions of value that lead to further education through upward transfer or graduate education and/or lead to economic mobility, and are supported by evidence that meets the definition of Moderate Evidence (as defined in 34 CFR 77.1). Projects under this priority must be implemented at multiple institutions of higher education or multiple campuses of the same institution and be intentionally designed to detect the impact of the project, if any, on all students participating in the project as well as on at least one population of underserved students or between institutions of different locales.

Priority 3—Expansion: Projects Supported by Strong Evidence.

Projects that are designed to improve postsecondary success for underserved students by increasing completions of value that lead to further education through upward transfer or graduate education and/or lead to economic mobility, and are supported by evidence that meets the definition of Strong Evidence (as defined in 34 CFR 77.1). Projects under this priority must be implemented at multiple institutions of higher education and be intentionally designed to detect the impact of the project, if any, on all students participating in the project as well as on at least one population of underserved students or between institutions of different locales.

Priority 4—Projects That Support College-to-Career Pathways and Supports.

Projects that propose to build upon demonstrated progress toward integrating, or that propose a plan to integrate, career-connected learning and advising support into their postsecondary success strategies, which may include participation in experiential learning, to ensure students earn completions of value that lead to economic success and/or further education. Projects may include aligning academic coursework with career pathways and outcomes; developing and implementing program-level credential maps to create college-to-career pathways, including across institutions via transfer; integrating career planning, counseling, and coaching into holistic advising support; offering work-based learning opportunities aligned with students' programs of study; and providing navigation support to help graduates transition from college to career.

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 PSSG Program.

Requirement 1: Uses of Funds.

Program funds must be used for one or more of the following allowable uses of funds:

(a) Developing and using data systems, tools, and training to implement data-driven processes and interventions as part of a comprehensive continuous improvement effort, as well as to administer the program effectively at the institution and/or State or system levels;

(b) Implementing student success strategies, including but not limited to whole-college improvement models; course redesign to implement co-requisite remediation or career-connected math pathways including through use of technology-assisted supports; tutoring and supplemental instruction; intensive, integrated advising models including program maps with progress checks, case management approaches, coaching, and peer mentoring; financial support, including need-based aid, emergency aid, and basic needs and behavioral health support and services; transfer support (as applicable), including four-year transfer maps, co-enrollment and co-advising across institutions, and regional transfer partnerships; support for students with disabilities; career support, including integrated career planning, counseling, and coaching, work-based learning opportunities, and college-to-career navigation support; or other evidence-based student success strategies and capacity building to implement student success strategies; and

(c) Providing for rigorous evaluation of the program interventions.

Requirement 2: Indirect Cost Rate Information.

A grantee's indirect cost reimbursement is limited to eight 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.

(a) Matching Requirement. Grantees must provide a ten percent match, which may include in-kind donations.

(b) Waiver Authority. The Secretary may waive the matching requirement on a case-by-case basis upon a showing of any of the following exceptional circumstances:

(1) The difficulty of raising matching funds for a program to serve an area with high rates of poverty in the eligible institution(s)' geographic location(s), 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;

(2) Serving a significant population of students from low-income backgrounds at the eligible institution(s)' location(s), 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 Higher Education Act of 1965, as amended (HEA); or

(3) Significant economic hardship as demonstrated by low average educational and general expenditures per full-time equivalent undergraduate student at the eligible institution(s)' location(s), 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 of designation of title III and title V institutions.

Requirement 4: Limitation on Grant Awards.

The Department will make awards to only applicants that are not the individual or lead applicant in a current active grant from the PSSG program.

Requirement 5: Supplement-not-Supplant.

Grant funds must be used so that they supplement and, to the extent practical, increase the funds that would otherwise be available for the activities to be carried out under the grant and in no case supplant those funds.

Requirement 6: Independent Evaluation.

Grantees must conduct an independent evaluation of the effectiveness of the project and submit the evaluation report to ERIC, available at https://eric.ed.gov/, in a timely manner.

Requirement 7: Eligible Entities.

Eligible entities are title III or V institutions; nonprofits in partnership with title III or V institutions; States in partnership with title III or V institutions; or systems of public institutions of higher education.

The Secretary establishes the following definitions for use in the PSSG program.

Completions of value measures the percentage of credentials that lead to further education through upward transfer or graduate education and/or that lead to economic mobility through earning enough to experience a premium over high school graduates in one's State and earning enough to recoup one's investment in postsecondary education. The student must also be retained at, or transferring to, an institution that confers completions of value.

Continuous improvement means using plans for collecting and analyzing data about a project component's (as defined in 34 CFR 77.1) implementation and outcomes (including the pace and extent to which project outcomes are being met) to inform necessary changes throughout the project. These plans may include strategies to gather ongoing feedback from participants and stakeholders on the implementation of the project component.

English learner means an individual who is an English learner as defined in section 8101(2) of the Elementary and Secondary Education Act of 1965, as amended, or an individual who is an English language learner as defined in section 203(7) of the Workforce Innovation and Opportunity Act.

Historically Black College or University means an institution that meets the eligibility requirements under section 322(2) of the HEA.

Independent evaluation means an evaluation of a project component that is designed and carried out independently of, but in coordination with, the entities that develop or implement the project component.

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.

Student with a disability means any student enrolled at an institution of higher education (including those accepted for dual enrollment) who meets the definition of an individual with a disability as defined in section 3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102).

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

Underserved student means a student in one or more of the following subgroups:

(a) A student who is living in poverty or is served by schools with high concentrations of students living in poverty.

(b) A student of color.

(c) A student who is a member of a federally recognized Indian Tribe.

(d) An English learner.

(e) A student with a disability.

(f) A student experiencing homelessness or housing insecurity.

(g) A lesbian, gay, bisexual, transgender, queer or questioning, or intersex (LGBTQI+) student.

(h) A pregnant, parenting, or caregiving student.

(i) A student who is the first in their family to attend postsecondary education.

(j) A student enrolling in or seeking to enroll in postsecondary education for the first time at the age of 20 or older.

(k) A student who is working full-time while enrolled in postsecondary education.

(l) A student who is enrolled in, or is seeking to enroll in, postsecondary education who is eligible for a Pell Grant.

(m) An adult student in need of improving their basic skills or an adult student with limited English proficiency.

Using Data for Continuous Improvement.

The extent to which the proposed project will build upon demonstrated progress toward improved student outcomes, or the extent to which the proposed project includes a plan to improve student outcomes for underserved students, by using data to continually assess and improve the outcomes associated with funded activities and sustain data-driven continuous improvement processes at the institution after the grant period.

Applicants addressing this selection criterion must—

(a) Identify, or describe how they will develop, the performance and outcome measures they will use to monitor and evaluate implementation of the intervention(s), including baseline data, intermediate and annual targets, and disaggregation by student subgroups;

(b) Describe how they will assess and address gaps in current data systems, tools, and capacity, and how they will monitor and respond to performance and outcome data to improve implementation of the intervention(s) on an ongoing basis and as part of formative (which may include rapid-cycle evaluation, pilots, feasibility studies, and implementation research) and summative evaluation of the intervention(s); and

(c) Describe how institutional leadership will be involved with, and supportive of, project leadership and how the project relates to the institution's broader student success priorities and improvement processes.

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, definitions, or selection criterion, 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, definitions, and selection criterion only on a reasoned determination that their benefits would justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that would 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, definitions, and selection criterion would be minimal, while the potential benefits are significant. The Department believes that this final regulatory action would not impose significant costs on eligible entities. Participation in this program is voluntary, and the costs imposed on applicants by this regulatory action would be limited to paperwork burden related to preparing an application. The potential benefits of implementing the program would outweigh the costs incurred by applicants, and the costs of carrying out activities associated with the application would be paid for with program funds. For these reasons, we have determined that the costs of implementation would not be burdensome for eligible applicants, including small entities.

We also have determined that this regulatory action would 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, definitions, and selection criterion would not have a significant economic impact on a substantial number of small entities.

The small entities that this final regulatory action would affect are institutions that meet the applicable eligibility requirements. The Secretary believes that the costs imposed on applicants by the final priorities, requirements, definitions, and selection criterion would be limited to paperwork burden related to preparing an application and that the benefits would outweigh any costs incurred by applicants.

Participation in this program is voluntary. For this reason, the final priorities, requirements, definitions, and selection criterion would impose no burden on small entities unless they applied for funding under the program. We expect that in determining whether to apply for PSSG 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 PSSG funds. 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.

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

As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq. ). This helps ensure that the public understands the Department's collection instructions, respondents provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents.

The final selection criterion contains information collection requirements. Under the PRA the Department has submitted this selection criterion to OMB for its review.

A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of the law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number.

Eligible entities under this program are title III or V institutions; nonprofits in partnership with title III or V institutions; States in partnership with title III or V institutions; or systems of public institutions of higher education. The collection of information would include eligible applicants responding to this final selection criterion: Using Data for Continuous Improvement, which we changed from a priority to a selection criterion based on public comment in response to the NPP. The Department will utilize the selection criteria in selecting eligible applicants for funding. Eligible applicants must respond to the selection criteria within the application package for this program. We estimate the annual burden for the information collection to average 8,400 hours, from 210 eligible applicants at 40 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Thus, we estimate the total burden for this collection to be 8,400 hours. At $47.20 per hour, the total annualized estimated cost for 210 eligible applicants to respond to final selection criteria is approximately $396,480.

Consistent with 5 CFR 1320.8(d), the Department is soliciting comments on the information collection through this document. Between 30 and 60 days after publication of this document in the Federal Register , OMB is required to make a decision concerning the collections of information contained in this requirement. Therefore, to ensure that OMB gives your comments full consideration, it is important that OMB receives your comments on the Postsecondary Student Success Grant (PSSG) Program Application Information Collection Request by September 16, 2024. Comments related to the information collection activities must be submitted electronically through the Federal eRulemaking Portal at www.regulations.gov by selecting the Docket ID number ED-2024-OPE-0069 or via postal mail, commercial delivery, or hand delivery by referencing the Docket ID number and the title of the information collection request at the top of your comment. Comments submitted by postal mail or delivery should be addressed to the PRA Coordinator of the Strategic Collections and Clearance Governance and Strategy Division, U.S. Department of Education, 400 Maryland Ave. SW, Room 4C210, Washington, DC 20202-1200.

We consider your comments on this proposed collection of information in—

• Deciding whether the proposed collection is necessary for the proper performance of our functions, including whether the information will have practical use;

• Evaluating the accuracy of our estimate of the burden of the proposed collection, including the validity of our methodology and assumptions;

• Enhancing the quality, usefulness, and clarity of the information we collect; and

• Minimizing the burden on those who must respond. This includes exploring the use of appropriate automated, electronic, mechanical, or other technological collection techniques.

Accessible Format: On request to one of the program contact persons 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, “we,” “us,” and “our” refer to the EPA.

On December 12, 2023 (88 FR 86093), the EPA proposed to approve the following rule into the California SIP.

We proposed to approve this rule because we determined that it complies with the relevant CAA requirements. Our proposed action contains more information on the rule and our evaluation of it.

The EPA's proposed action provided a 30-day public comment period. During this period, we received one comment. The comment discussed the importance of regulating emissions related to the oil and gas industry because of the consequences to humans and the environment. We acknowledge the comment, noting that VCAPCD Rule 71 is exclusively composed of definitions applicable to the VCAPCD rules that regulate emissions from (1) the transfer and storage of reactive organic compound liquids and petroleum material; and (2) processing, production, gathering, and separation of crude oil and natural gas the transfer and storage of reactive organic compound liquids and petroleum material. VCAPCD's clarifying revisions to Rule 71 will improve the enforceability of the control measures in the District's other rules that regulate the oil and gas industry and satisfy the relevant CAA requirements. Therefore, we are approving the rule into the SIP.

No comments were submitted that change our assessment of the rule as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is approving this rule into the California SIP.

The May 11, 2021 version of Rule 71 will replace the previously approved version of this rule in the SIP.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of VCAPCD Rule 71, “Crude Oil and Reactive Organic Compound Liquids,” revised on May 11, 2021, which consists of definitions applicable to local rules that control emissions of volatile organic compounds (VOCs) from (1) processing, production, gathering, and separation of crude oil and natural gas and (2) the transfer and storage of reactive organic compound liquids and petroleum material. The EPA has made, and will continue to make, these documents available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the 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 the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

The State did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA did not perform an EJ analysis and did not consider EJ in this action. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of Executive Order 12898 of achieving EJ for people of color, low-income populations, and Indigenous peoples.

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 15, 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, the Environmental Protection Agency amends part 52, chapter I, title 40 of the Code of Federal Regulations as follows:

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

On May 12, 2020, the State of New York through the Department of Environmental Conservation (NYSDEC or New York) submitted a revision to its SIP to address regional haze for the second implementation period. NYSDEC made this SIP submission to satisfy the requirements of the CAA's regional haze program pursuant to CAA sections 169A and 169B and 40 CFR 51.308.

On March 22, 2024, the EPA published a notice of proposed rulemaking (NPRM) in which the EPA proposed to approve New York's May 12, 2020, SIP submission as satisfying the regional haze requirements for the second implementation period contained in the CAA and 40 CFR 51.308. 89 FR 20384. The EPA is now determining that the New York regional haze SIP submission for the second implementation period meets the applicable statutory and regulatory requirements and is thus approving New York's submission into its SIP.

The specific details of New York's SIP submittals and the rationale for the EPA's approval action are explained in the EPA's proposed rulemaking and are not restated in this final action. For this detailed information, the reader is referred to the EPA's March 22, 2024, NPRM (89 FR 20384).

In response to the EPA's March 22, 2024, NPRM, the EPA received four distinct comments during the 30-day public comment period. One of the comments was submitted in the form of a letter and was signed by three Non-Governmental Organization (NGO) conservation groups writing as a coalition ( i.e., the National Parks Conservation Association (NPCA), Sierra Club, and the Coalition to Protect America's National Parks). The NGO commenters state in their comment letter that they “do not oppose EPA's proposal to approve New York's [Regional Haze] SIP Revision,” but rather “urge EPA to address the issues raised [in the comment letter] before finalizing” the approval.

Two comments received were submitted by individuals. The final comment was submitted by the Mid-Atlantic/Northeast Visibility Union (MANE-VU) in support of the EPA's proposed action.

The specific comments may be viewed in Docket ID Number EPA-R02-OAR-2020-0455 on the www.regulations.gov website. The EPA's summary of and response to those comments is provided below.

Comment: The individual commenter provides various reference materials. Among the reference materials are various links to websites providing general information related to regional haze and other matters, none of which specifically relate to this action.

Response: The EPA acknowledges receipt of the additional information shared by the commenter.

Comment: The individual commenter states that air quality in the average New York City neighborhood is most severely compromised by motor vehicle emissions and hazards created because of climate change. To address this, the commenter promotes the increased availability of public transportation to reduce the need for individual car use, as well as the regulation of motor vehicle emissions. The commenter then suggests the maintenance of electrical power lines should be considered due to their potential to cause wildfires when the states address energy efficiency under Ask 6. Finally, the commenter expresses that they do not support the EPA's approval of New York's SIP until the commenter's concerns are addressed.

Response: The EPA acknowledges the commenter's concerns regarding the impact that motor vehicle emissions and climate change induced hazards have on air quality. Regarding the commenter's promotion of public transportation to reduce the need for individual car use, the EPA has determined that this outside the scope of our proposed action and the EPA will not be providing a specific response to this portion of the comment. As for the commenter's recommendation relating to the regulation of motor vehicle emissions, as provided within the NPRM, New York identified in its submission to the EPA, its consideration of the Heavy Duty Diesel Engine Standard, Tier 3 Motor Vehicle Standards, Light Duty Vehicle GHG Rule for Model-Year 2017-2025, and SIP-approved part 217, “Motor Vehicle Emissions,” when developing its Long-Term Strategy to address emissions of on-road sources. 1

While the commenter expresses concern over the maintenance of electrical power lines to prevent wildfires and claims this should be addressed when States consider energy efficiency under Ask 6, the EPA finds the SIP submission sufficiently addresses the applicable requirements of the CAA and the RHR for the second planning period.

Comment: The NGO commenters express concern with the EPA's suggestion that part of the basis for its approval of New York's SIP revision was the fact that the uniform rate of progress (URP) for several impacted Class I areas is well below the respective 2028 glidepath and stated that the EPA has made it clear that the glidepath is not a safe harbor to avoid requiring additional reasonable progress measures for Class I areas. The NGO commenters posit that the EPA could not rely on the fact that the Class I areas impacted by New York sources were well below their respective URP glidepaths to excuse New York from conducting rigorous Four-Factor Analyses (FFA) to determine whether additional control measures are necessary for reasonable progress.

Response: The EPA has stated that being below the URP glidepath is not a safe harbor ( i.e., not a basis for not evaluating sources, considering the four statutory factors, and potentially requiring control measures), and in evaluating the State's source selection and control measure determinations, the EPA did not rely on the fact that the Class I areas impacted by New York sources are below their respective URP glidepaths. Rather, the EPA factually stated that the 2028 projections for the Class I areas that New York contributes to are all well below their respective glidepaths. This factual statement is necessary to support the determination that New York satisfied the applicable requirements of 40 CFR 51.308(f)(3), relating to reasonable progress goals (RPGs) for each Class I area. Specifically, 40 CFR 51.308(f)(3)(ii)(B), which applies to all States, is satisfied by the analyses the State provided within its long-term strategy, as detailed under Section 10 of the State's submittal, and by the estimated combined visibility benefits of strategies detailed in section 9.5 of the State's submittal. The EPA determined that because the Class I areas that New York contributes to are all well below their respective glidepaths, New York was not required to conduct the “robust demonstration” detailed under 40 CFR 51.308(f)(3)(ii)(B).

Comment: The NGO commenters express concern with the EPA's endorsement of New York's relied upon source selection threshold. The NGO commenters also express concern that New York's use of the MANE-VU's source selection threshold of 3.0 inverse megameters (Mm −1 ), was unreasonably high. Using this threshold, New York identified seven sources, which was then further winnowed down to include only two sources for further consideration of an FFA.

In addition, the NGO commenters express concern that New York failed to select the 29 additional significant sources identified by the Federal Land Managers (FLMs) for detailed FFAs and that the MANE-VU 2 percent or greater sulfate-plus-nitrate threshold, used to determine whether New York emissions contribute to visibility impairment at a particular Class I area, was an extremely low triggering threshold. Thus, the NGO commenters suggest that New York should have used a lower threshold that would have captured a more meaningful portion of in-state sources, such as an emissions over distance (Q/d) threshold of 5 or an equivalent threshold that captures at least 80 percent of the State's haze-forming emissions.

Response: As explained in the NPRM, 2 the EPA does not necessarily agree that the 3.0 Mm −1 visibility impact is a reasonable threshold for source selection. The RHR recognizes that, due to the nature of regional haze visibility impairment, numerous and sometimes relatively small sources may need to be selected and evaluated for implementation of control measures to make reasonable progress. 3 As the EPA has explained, while States have discretion to choose any source selection threshold that is reasonable, “[a] state that relies on a visibility (or proxy for visibility impact) threshold to select sources for FFA should set the threshold at a level that captures a meaningful portion of the State's total contribution to visibility impairment to Class I areas.” In this case, the 3.0 Mm −1 threshold used in MANE-VU Ask 2 identified seven sources in New York (and 22 across the entire MANE-VU region), indicating that it may, in some cases, be unreasonably high.

Notwithstanding the above, in this instance, the EPA proposed to find that New York's additional information and explanation indicated that the State had in fact examined a reasonable set of sources—including sources flagged by the FLMs—and that the State had reasonably concluded that FFAs for its top-impacting sources were not necessary because the outcome would be that no further emission reductions would be reasonable.

While the FLMs identified sources beyond those for which New York conducted FFAs, the State provides in its submittal that the MANE-VU's analysis of these additional facilities, separate of the source selection threshold analysis MANE-VU conducted and previously mentioned, determined they did not require FFAs. Moreover, regarding the facilities identified by the National Park Service (NPS) for FFA consideration, New York provides in its response to comments, that it did reassess the controls on these facilities and determined that more controls were not necessary. 4

Furthermore, the EPA based the proposed approval on the State's examination of its largest operating electric generating units (EGUs) and its industrial commercial institutional (ICI) boilers, at the time of SIP submission, and on the emissions from and controls that apply to those sources, as well as on New York's existing SIP-approved NO X and SO 2 rules that effectively control emissions from the largest contributing stationary-source sectors.

The EPA acknowledges the NGO commenters' suggestion that New York should have used a lower source selection threshold and evaluated additional sources identified by the Federal Land Managers. That said, the RHR does not require States to consider controls for all sources, all source categories, or any or all sources in a particular source category. Rather, States have discretion to choose any source selection methodology or threshold that is reasonable, provided that the choices they make are reasonably explained. 5 To this end, 40 CFR 51.308(f)(2)(i) requires that a State's SIP submission must include “a description of the criteria it used to determine which sources or groups of sources it evaluated.” The technical basis for source selection must also be appropriately documented, as required by 40 CFR 51.308(f)(2)(iii). In this instance, the EPA proposed to find that New York had demonstrated that the sources of SO 2 and NO X within the State that would be expected to contribute to visibility impairment have small emissions of those pollutants, are subject to stringent SIP-approved emission control measures, or both.

New York's information and explanation indicate that the State examined a reasonable set of sources, including sources captured by the other MANE-VU Asks and sources flagged by the FLMs, and reasonably concluded that additional FFAs were not necessary because the outcome would be that no further emission reductions would be reasonable for this planning period.

Comment: The NGO commenters express concern with the EPA's proposed approval of New York excluding sources from a FFA by asserting sources are effectively controlled and exempt from consideration. The NGO commenters reference Regional Haze guidance documents and the CAA to reason that the demonstrations for numerous sources, provided by New York, are highly flawed and fail to adequately demonstrate that facilities within New York are effectively controlled.

Response: The EPA's approval of New York's Regional Haze SIP is based on New York's satisfaction of the applicable regulatory requirements for the second planning period in 40 CFR 51.308(f), (g), and (i). These requirements include that States must evaluate and determine the emission reduction measures necessary to make reasonable progress by considering the four statutory factors and that the measures that are necessary for reasonable progress must be in the SIP. New York's submission includes FFAs in response to Asks 2 (for NO X ) and 3 (for SO 2 emissions from sources across the State). As the EPA explained in the NPRM, in assessing its compliance with these Asks, New York explicitly engaged with the statutory and regulatory requirement to determine measures necessary for reasonable progress based on the four factors. As a result, the EPA proposed in the NPRM to approve New York's SIP submittal as satisfying the requirement of 40 CFR 51.308(f)(2)(i) that a State determine the emission reduction measures that are necessary to make reasonable progress by considering the four factors.

Moreover, New York's long-term strategy relied on several State air pollution control regulations already approved into the SIP, including 6 NYCRR subpart 225-1, Fuel Composition and Use—Sulfur Limitations, 6 NYCRR part 219, Incinerators, and 6 NYCRR subpart 227-2, Reasonably Available Control Technology (RACT) for Major Facilities of Oxides of Nitrogen (NO X ). The EPA finds that these regulations sufficiently address the long-term strategy requirements of the RHR because they establish emission limits for various source categories, which will reduce the formation of visibility impairing pollutants. Thus, the EPA is appropriately finalizing its approval of New York's Regional Haze SIP revision based on the EPA's determination that New York's SIP, including its long-term strategy, satisfies the requirements of 40 CFR 51.308(f)(2)(i).

Contrary to the NGO commenters' arguments, New York's reliance on already effective controls in lieu of FFAs for other sources in the State is not inconsistent with the CAA or the EPA's Regional Haze Guidance. As the comment notes, the EPA stated in the NPRM that the CAA and RHR do not require that every State must analyze the four factors for all sources. Indeed, the Agency also recognizes that analyses regarding reasonable progress are state-specific and that, based on States' and sources' individual circumstances, what constitutes reasonable reductions in visibility impairing pollutants will vary from state-to-state. 6

Accordingly, in both guidance documents, the “Guidance on Regional Haze State Implementation Plans for the Second Implementation Period” issued by EPA in August 2019 (“2019 Guidance”) and the 2021 Clarifications Memo, the EPA recognized that a State may reasonably decide not to select sources that have recently installed effective controls. 7 As the EPA stated in the 2021 Clarifications Memo, “The underlying rationale for the `effective controls' flexibility is that if a source's emissions are already well controlled, it is unlikely that further cost-effective reductions are available.”  8 In such a scenario, per the guidance, the State should explain why it is reasonable to assume that a full FFA would likely result in the conclusion that no further controls are necessary. 9

FEMA is responsible for administering and coordinating the Federal Government's response to disasters pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford Act”). 1 There are two types of disaster declarations provided for in the Stafford Act: emergency declarations  2 and major disaster declarations. 3 Following a major disaster declaration, FEMA may provide several different types of discretionary assistance to applicants such as funding under its Hazard Mitigation Grant Program (HMGP) which is authorized under Section 404 of the Stafford Act. 42 U.S.C. 5170c; 44 CFR 206.40.

HMGP “ensures that State, local, Tribal and territorial governments have the financial opportunity to plan for and implement mitigation measures that reduce the risk of loss of life and property from future natural disasters during the reconstruction process following a disaster.”  4 HMGP funding is time-limited; “the award period of performance for HMGP begins with the opening of the application period and ends no later than 48 months from the close of the application period.” Id.

Under HMGP, FEMA “may contribute up to 75% of the cost of hazard mitigation measures which the President has determined are cost-effective and which substantially reduce the risk of future damage, hardship, loss, or suffering in any area affected by a major disaster.”  5 States (which includes Territories)  6 and Indian Tribal Governments are eligible applicants for HMGP funding, and upon award, will become recipients. 7 State agencies, local governments, private nonprofit organizations, and Indian Tribal Governments  8 are eligible subapplicants for HMGP who, and, upon subaward, will become subrecipients. 9

The HMGP lists all relevant program definitions at 44 CFR 206.431. In HMGP, a “grant application” is a request to FEMA for HMGP funding by a State or Tribal Government that will act as a recipient. 44 CFR 206.431. The “subaward application” is the request to the recipient for HMGP funding by the eligible subrecipient. 44 CFR 206.431; 44 CFR 206.436(a). The “grant award” is the total Federal and non-federal contributions to complete the approved scope of work. 10 The “subaward” means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out as part of the Federal award. 44 CFR 206.431; 44 CFR 206.436(a). The “recipient” is the State or Indian Tribal Government that receives a Federal award directly from FEMA. 11

HMGP applicants follow the procedures set forth at § 206.436. Upon identification of mitigation measures, the applicant submits an HMGP application to the FEMA Regional Administrator. The HMGP application includes a comprehensive narrative identifying intended mitigation projects, State or local contacts, project locations, description and cost estimates, an analysis of the cost-effectiveness of the mitigation measures, work schedules, justification for selection, relevant project management information and subrecipients. See 44 CFR 206.436(c). Applications for HMGP serve to identify the specific mitigation measures for which HMGP funding is requested. Applicants must submit all local HMGP applications (also known as subaward applications or subapplications) and funding requests to the FEMA Regional Administrator within 12 months of the date of the disaster declaration. 12 Under § 206.436(e), however, applicants/recipients may request that the Regional Administrator extend the application time limit by additional 30-to-90-day increments, not to exceed a total of 180 days.

The amount of HMGP funding available to the applicant is based on the estimated total Federal assistance for the major disaster declaration, subject to the sliding scale formula that FEMA provides for disaster recovery. 44 CFR 206.432(b). FEMA establishes the amount of funding available for HMGP for each disaster  13 (called the HMGP “ceiling”) at 12 months after the date of the disaster declaration (called the HMGP “lock-in”). 14 FEMA provides two point-in-time estimates prior to the 12-month lock-in (at 35 days and 6 months) so that the applicant has some approximation of funding availability for each disaster in order to solicit and select among subapplications for mitigation projects. Id. When major fluctuations of projected disaster costs occur, FEMA, at the request of the applicant, may conduct an additional review after the 12-month lock-in. If the resulting review shows that the amount of funds available for HMGP is different than previously calculated, the final lock-in amount will be adjusted accordingly. Id.

FEMA stakeholders have identified the length of the application period and the inability to re-open the application period once it has closed as barriers to applying for assistance under HMGP. 15 Specifically, State, local, Tribal, and territorial (SLTT) stakeholders have indicated they would benefit from additional time to develop quality applications and identified lack of resources, staff, and technical expertise necessary to prepare quality applications in a timely manner, resource challenges in trying to apply for assistance while also managing the response and recovery from a major disaster, failing to have a set HMGP ceiling established until the 12-month mark when the applications are due, and cumulative disasters as circumstances that further exacerbate the challenges to applying for assistance. Id.

Among the feedback received, SLTT entities indicated a need for allowing FEMA to extend or reopen the application period after it closes when disaster assistance recalculations potentially result in increased lock-in ceilings. 16 Between October 1, 2019, and January 1, 2023, applicants submitted 75 requests, out of a total of 171 applications, for extensions beyond the 180 days Regional Administrators are permitted to authorize. Based on analysis of historical data from FEMA's NEMIS database, 17 from 2013-2022, 26.0 percent of applicants submit their applications within 12 months or less, 16.0 percent of applicants request extensions and submit their applications between 12-15 months, 31.3 percent of applicants request extensions and submit their applications between 15-18 months, and 26.7 percent of applicants are unable to complete their applications within the 18 months allowable under the regulations.

FEMA has statutory authority to waive administrative conditions that would prevent applicants from receiving assistance if the inability to meet such conditions is the result of the major disaster. See 42 U.S.C. 5141. FEMA has used this authority to grant extensions beyond 18 months to those applicants who can demonstrate they are unable to meet the deadline as a result of the major disaster. From 2013-2022, for disasters that required extensions beyond the regulatorily-provided 18 months, the average amount of additional time approved by FEMA is approximately 11.6 months; however, this amount includes several major disasters with extraordinary circumstances that require significantly more time to address than typical disasters. The median amount of additional time, which provides a more realistic snapshot, is approximately 6.1 months.

FEMA establishes the amount of funding available for HMGP for each disaster at 12 months after the date of the disaster declaration. 42 U.S.C. 5170c(a). The 12-month application deadline currently in regulation does not provide sufficient time for applicants to submit their applications. In light of the public participation referenced throughout  18 and resultant data analytics research discussed in Regulatory Analysis “B. Executive Orders 12866, `Regulatory Planning and Review' and 13563, `Improving Regulation and Regulatory Review,' ” FEMA now moves to address these identified challenges.

FEMA is amending § 206.436 to extend the HMGP's application period and reopen the registration period under limited circumstances. FEMA is revising § 206.436(d), “Application submission time limit,” to extend the initial deadline for applicants to submit local HMGP applications and funding requests from 12 months to 15 months from the date of disaster declaration. FEMA's historical data shows that 42 percent of applicants are able to submit applications within 15 months (26.0 percent who are able to meet the current 12-month deadline + 16 percent who are able to request an extension and submit by the 15-month extended deadline). FEMA's historical data also shows that setting the initial deadline at 18 months will increase this number by 31.3 percent. FEMA is extending the initial deadline to 15 months instead of 18 months (or longer) to ensure that it is setting an achievable deadline while still maintaining its commitment to timely and effective grants management. The additional 3 months also provides applicants time to receive the 12-month lock in amount and make educated adjustments to the amount of funding they are applying for. This would lessen the administrative burden placed on HMGP recipients and FEMA as it would require fewer application extension requests and responses.

FEMA is making several revisions to § 206.436(e), “Extensions.” Currently, § 206.436(e) provides that an applicant may, with justification, request that the Regional Administrator extend the application time limit by 30 to 90 day increments, not to exceed a total of 180 days. FEMA is revising § 206.436(e) by adding introductory text to state that upon receiving a written request from the applicant, FEMA may extend the application submission timeline as described in new paragraphs (e)(1) and (2). New paragraph (e)(1) retains the language currently in paragraph (e), except that FEMA is increasing 90 days to 120 days and increasing 180 days to 240 days. FEMA is also changing the word “recipient” to “applicant” in the last sentence for accuracy, as “applicant” is an entity applying to FEMA for funding; it is only upon award that the applicant becomes the recipient.

New paragraph (e)(2) provides that FEMA will only consider requests for extensions beyond 240 days for extenuating circumstances outside of the applicant's control. Such requests must be submitted to the Regional Administrator and must include justification. FEMA is adding new paragraph (e)(2) because it understands that extenuating circumstances outside of the applicant's control might prevent the applicant from submitting its application within the 240-day timeframe. FEMA is therefore allowing requests for extensions as a matter of fairness but is requiring such extensions to be coordinated between the FEMA region and FEMA Headquarters and requiring justification to ensure that no application period is extended indefinitely. As described in FEMA's Hazard Mitigation Assistance Program and Policy Guide, a recipient's extension request must (1) describe the extenuating circumstances that prevent the recipient from meeting that application period deadline, (2) document how the recipient implemented HMGP consistent with its Administrative Plan, (3) provide an implementation strategy and goals to use any remaining assistance (including an assessment of the additional time requested and an updated Administrative Plan), and (4) identify any technical assistance that can assist in addressing resource gaps and/or is needed to successfully implement the program. 19

As noted throughout, FEMA stakeholders have identified the length of the application period and the inability to reopen the application period once it has closed as barriers to applying for assistance under HMGP. They have indicated that additional time to develop applications would allow them to not only submit more applications, but better, more complete applications as well. 20 In response, FEMA is adding a new paragraph (f) to allow FEMA to reopen application periods on a limited basis. This paragraph, entitled “Reopening of application period,” provides that FEMA's Assistant Administrator for the Mitigation Directorate may reopen a closed application period for up to 180 days under two circumstances. (FEMA is limiting its ability to reopen a closed application period to 180 days to ensure this remains a limited authority). The first circumstance, addressed in paragraph (f)(1), “Recalculation of assistance,” will allow FEMA to reopen a closed application period if FEMA approves a recalculation of assistance under § 206.432 and an applicant requests to reopen the application period within 60 days of FEMA's recalculation approval.

As stated above, the amount of available HMGP funding is based on a percentage of the estimated total Federal assistance for each disaster declaration. 42 U.S.C. 5170c; 44 CFR 206.432(b). FEMA establishes the HMGP lock-in 12 months after the disaster declaration. Id. In circumstances when a major disaster results in significant fluctuations of projected or actual costs, FEMA, at the recipient's request, may change the “lock-in” amount if the projections or actuals used to determine it were inaccurate enough that the change would be material. Id. However, FEMA currently cannot reopen the application period after it has closed even if there has been an increase to the ceiling amount of assistance. Id. This causes issues for applicants because “lock-in” recalculations can greatly increase the amount of additional HMGP funding but often occur close to the end of, or even outside of, the application period, leaving applicants without additional time to apply for that extra funding.

FEMA is adding new paragraph (f)(1) to allow FEMA to reopen a closed application period to address this issue. FEMA is requiring applicants to submit such requests within 60 days of FEMA's recalculation to ensure that submissions are timely and to prevent an applicant from requesting a reopening after an extended period of time has passed. The second circumstance, addressed in paragraph (f)(2), “Appeal,” will allow FEMA to reopen a closed application period if FEMA grants an appeal under § 206.440 for an application extension denial after an application period is closed. Currently, if FEMA grants an appeal for an application extension denial, FEMA lacks the authority to reopen the application period for that applicant. This results in an inequitable scenario where the applicant wins its appeal but is deprived of a “remedy,” which effectively renders the appeal meaningless. Allowing FEMA to reopen the application period for an applicant whose appeal it has granted would enable FEMA to provide all applicants a more effective and equitable appeals process.

FEMA will redesignate current paragraph (f), “FEMA approval,” as paragraph (g). In new paragraph (g), FEMA will make nonsubstantive revisions such as changing the word “State” to “applicant” for greater accuracy, as well as minor grammatical edits to incorporate the active voice. Lastly, FEMA will redesignate current paragraph (g), “Indian Tribal recipients,” as paragraph (h).

The Administrative Procedure Act (APA) generally requires agencies to publish a notice of proposed rulemaking in the Federal Register and provide interested persons the opportunity to submit comments. See 5 U.S.C. 553(b) and (c). The APA provides an exception to this prior notice and comment requirement for matters relating to public property, loans, grants, benefits, or contracts. 5 U.S.C. 553(a)(2).

FEMA's HMGP program is a grant program through which FEMA obligates funding to State, local, Tribal, and territorial governments, as well as eligible private nonprofit organizations, for post-disaster hazard mitigation measures that reduce the risk of, or increase resilience to, future damage, hardship, loss or suffering in any area affected by a major disaster, or any area affected by a fire for which assistance was provided under section 420 of the Stafford Act. Because this rule relates to FEMA's obligation of grant funding under the HMGP program, it is exempt from notice and comment rulemaking under the APA. In addition to the grants exemption previously noted, this rulemaking serves to increase flexibility in the administration of this mitigation grant program.

While FEMA asserts this rule is exempt from notice and comment procedures, the agency acknowledges its general policy to provide for public participation in rulemaking. 21 FEMA has retained its discretion to depart from this policy as circumstances warrant. 44 CFR 1.3(c). Extending the HMGP application period warrants such a departure from notice and comment rulemaking, because the effort is a result of public comment. FEMA has already received comments from numerous stakeholders in response to a publication of the Hazard Mitigation Assistance (HMA) Program and Policy Guide for public comment  22 expressing concern regarding the challenges they encounter in meeting the current HMGP deadlines  23 and supporting the regulatory changes in this rulemaking. This rule does not impose any additional requirements on applicants; rather, in response to public comment requesting additional flexibilities in the HMGP, 24 it increases flexibility for applicants by allowing more opportunities for them to develop and improve their grant applications to address the effects of climate change and other unmet mitigation needs.

This is a summary of the Commission's Fourth Report and Order in WC Docket Nos. 19-195 and 11-10, released on July 12, 2024. The full text of this document is available at the following internet address: https://www.fcc.gov/document/fcc-takes-steps-update-broadband-data-collection-processes or by using the Commission's EDOCS web page at www.fcc.gov/edocs.

Paperwork Reduction Act. The Fourth Report and Order rulemaking required under the Broadband DATA Act is exempt from review by Office of Management and Budget (OMB) and from the requirements of the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. As a result, the Fourth Report and Order will not be submitted to OMB for review under section 3507(d) of the PRA.

Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs, that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the Fourth Report and Order and Declaratory Ruling to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A). The Commission will submit the draft Fourth Report and Order and Declaratory Ruling to the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, for concurrence as to whether this rule is “major” or “non-major” under the Congressional Review Act, 5 U.S.C. 804(2).

1. In the Infrastructure Investment and Jobs Act of 2021 (IIJA), Congress amended the Broadband DATA Act to require the Commission to resolve any challenges received as part of the BDC “not later than 90 days after the date on which a final response by a provider to a challenge to the accuracy of a map . . . is complete.” Since the inception of the availability challenge processes, the Commission has followed this deadline. However, in the Fourth Report and Order we take steps to codify this deadline and memorialize the Commission's challenge processes in the BDC rules.

2. The following paragraphs describe how the Commission has implemented this 90-day deadline for processing fixed and mobile service challenges, and how we will amend our rules to reflect these existing practices and the minor modifications to those practices. For each type of challenge, we indicate the date on which we deem a provider's response to the challenge to be “final” and “complete” for purposes of triggering the 90-day deadline required by the IIJA. As set forth in the proposed rule published elsewhere in this issue of the Federal Register , we tentatively conclude and seek comment on whether this deadline should apply to fixed and mobile availability challenges only, and not to challenges to data in the Fabric.

3. Fixed Service Challenges. For challenges to the accuracy of fixed broadband availability data and coverage maps, the Commission's rules currently provide that “within 60 days of receiving an alert” to a challenge, “a provider shall reply in the portal by: (i) [a]ccepting the allegation(s) raised by the challenger . . . or (ii) [d]enying the allegation(s) raised by the challenger, in which case the provider shall provide evidence . . . that the provider serves (or could and is willing to serve) the challenged location.” If the provider accepts the allegations raised by the challenger, the provider must “submit a correction for the challenged location in the online portal within 30 days of its portal reply.” The rules state that a provider's failure to respond to the challenge within the applicable timeframe “shall result in a finding against the provider.” “If the provider denies the allegation(s) raised by the challenger,” the rules state that “the provider and the challenger shall have 60 days after the provider submits its reply to attempt to resolve the challenge.” The rules further provide that if the parties are unable to reach consensus within 60 days after submission of the provider's reply in the portal, then the affected provider shall report the status of efforts to resolve the challenge in the online portal, after which the Commission will review the evidence and make a determination, either: (i) in favor of the challenger, in which case the provider shall update its BDC information within 30 days of the decision; or (ii) in favor of the provider, in which case the location will no longer be subject to the “in dispute/pending resolution” designation on the coverage maps.

4. To codify the requirements of the IIJA, we amend our rules to state that in cases where a fixed broadband provider disputes the allegations raised by the challenger, the response from the provider will be final and complete when the provider reports on the status of its efforts to resolve the challenge, at which time, the 90-day deadline for adjudication of the challenge will begin to run. For example, if a consumer submits a challenge to a fixed provider's availability data on February 28 and, after initial review, Commission staff accepts the challenge and alerts the provider (via the BDC system) of the challenge on March 1, the service provider would have until April 30 to either concede or dispute the challenge allegations (by submitting an “initial response” to the challenge in the BDC system). If the provider disputes the challenge allegation on April 30, then the parties would have until June 29 to attempt to resolve the challenge and for the service provider to report on the outcome of those discussions by submitting a “final response” to the challenge in the BDC system. This status report is the “final response by [the] provider.” Accordingly, if the provider continues to dispute the challenge in its final response ( i.e., the challenge has not been resolved by the parties), the 90-day deadline will commence once the provider submits its final response. If the provider submits its final response on the deadline of June 29, Commission staff would thus be required to adjudicate the challenge no later than September 27.

5. The only challenges that require FCC adjudication are those that the challenged provider does not concede and for which the challenger and the challenged provider are unable to reach a consensus. We therefore find that the deadline for FCC action most appropriately begins once the provider has submitted its final response reporting on the status of the parties' efforts to resolve a disputed challenge. Starting the 90-day period when a provider reports on the status of the parties' efforts to resolve the challenge, and not earlier, is consistent with the statutory objective that the adjudication period begin “after the date on which a final response by a provider to a challenge to the accuracy of a map . . . is complete.” We find that this process will also help the Commission adjudicate challenges efficiently because Commission staff will be able to begin the process of review and adjudication as soon as they have information on the outcome of the dispute resolution process.

6. The process we outline above is largely consistent with current Commission practice; however, we modify the existing process in two respects. First, the 90-day deadline for Commission adjudication of a fixed challenge will begin on the day after the service provider submits the status report, regardless of whether that report is provided on or before the 60th day allowed for under the rules. Our former practice was to begin the 90-day period on the day after the deadline for submission of the status report, even when the challenged provider submits the report prior to the deadline. Based on the Commission's experience adjudicating challenges, this change in our process is appropriate in order to more expeditiously adjudicate fixed challenges when a final status report is filed prior to the end of the full 60-day period. Second, we clarify that when a provider corrects or updates its final response before the end of the 60-day resolution period, the adjudication period will restart upon the date of the recertification of the final response (unless the Commission has already adjudicated the challenge prior to the reversion of the final response).

7. Mobile Service Challenges. The Commission's rules provide that, for areas with a cognizable challenge to the accuracy of mobile broadband data and coverage maps, “providers either must submit a rebuttal to the challenge within a 60-day period of being notified of the challenge or concede and have the challenged area identified on the mobile coverage map as an area that lacks sufficient service.” The rules also provide that “[i]f needed to ensure an adequate review, [Office of Economics and Analytics (OEA)] may also require that the provider submit other data in addition to the data initially submitted . . . .” This supplemental data must be submitted within 60 days of OEA's request.

8. We amend our mobile service challenge rules to provide that, when a mobile provider disputes a challenge, the provider's response will be final and complete on the 60th day after the provider is notified of the challenge ( i.e., the deadline for submitting challenge rebuttal data). The 90-day adjudication deadline required under the IIJA will begin to run on the day after the deadline for submitting the challenge rebuttal data, and this will also apply in cases where a provider responds to a challenge sooner than 60 days after it is notified of the challenge. In cases where Commission staff request supplemental data from a provider after receiving the provider's initial response, the adjudication period will restart the day after the deadline by which the supplemental data is due to the Commission (within 60 days of the request for supplemental data). Initiating the adjudication period the day after the deadline for submitting the challenge rebuttal data, or the day after any supplemental data requested by staff is due, will ensure that the Commission has sufficient information to adjudicate challenges and will create administrative efficiencies by synchronizing the timing for resolving challenges with the monthly notifications we issue to providers regarding the status of challenged areas. We recognize that we are adopting different procedures for calculating the adjudication deadline for mobile availability challenges than for fixed challenges. However, this difference is justified because the data involved in submitting fixed and mobile challenges differ considerably, as do the methodologies for staff review and adjudication of fixed and mobile challenges. Mobile challenges are created through on-the-ground speed test data and, in most cases, mobile service providers respond to challenges using similar on-the-ground speed test data—both of which are submitted into the BDC system in a structured format. The BDC system performs analyses of these speed test results based upon hexagonal areas, and Commission staff use the results of these analyses to determine whether or not a challenge should be upheld or overturned. In contrast, fixed availability challenges are based upon a variety of Challenge Category Codes, with a large degree of variation in the types of evidence and information submitted both to create a challenge as well as by fixed providers in seeking to overturn challenges. We note that, under the process we adopt in the Fourth Report and Order, mobile challenges will be resolved considerably more quickly in most instances than the time allowed under the deadline due to the methodology used to review and process mobile challenge data. Accordingly, we believe that this different treatment of mobile and fixed challenge review and adjudication is warranted.

9. Background. The Broadband DATA Act requires the Commission to verify the accuracy of the data reported by broadband internet access service providers. The Act also requires that the Commission conduct regular audits of the information submitted by providers in the BDC. Under the Commission's rules, the Commission must “conduct regular audits of the information submitted by providers in their [BDC] filings,” which “(1) [m]ay be random, as determined by the Commission; or (2) [c]an be required in cases where there may be patterns of filing incorrect information, as determined by the Commission.” In the Second Report and Order (85 FR 50886, August 18, 2020), the Commission determined that it will audit availability data and other information submitted by all types of providers of broadband internet access service ( e.g., mobile and terrestrial fixed wireless, fixed wired, and satellite). The Commission further specified that audit tools will include field surveys, investigations, and annual random audits to verify data accuracy, and that audits may additionally be initiated based on an unusual number of crowdsourced complaints.

10. The Commission has implemented its statutory obligations to verify the accuracy of the data reported in biannual BDC submissions in a variety of ways. As an initial matter, the Commission developed an entirely new system for ingesting, validating, and aggregating provider availability data for publication on the NBM. The new BDC system requires all data to be submitted in a structured format according to rigorous data specifications and imposes comprehensive data-quality checks at the time data is uploaded and submitted into the BDC. These checks identify either “hard” errors that require a correction by the filer prior to certifying and submitting the data, or “soft” flags that alert the filer to a potential anomaly or error and requires an explanation if no change to the data is made. These measures ensure that service providers file higher-quality data.

11. After the close of each biannual BDC filing window, Commission staff conduct verifications of the submitted data to test their accuracy and reliability. These efforts include: review of the “soft” system flags, supporting data submitted in conjunction with availability data, and other filer data to identify potential anomalies or errors; outreach to filers based upon these reviews requesting their correction or explanation of the data; and vetting of subsequent changes to or explanations of the data by providers. Commission staff have performed several thousand data verifications using this process. In addition, Commission staff have initiated formal verification inquiries of the data submitted by certain fixed and mobile broadband providers. In response to such inquiries, providers have been required to submit explanation information relevant to the inquiry, such as network infrastructure data for the targeted verification area.

12. In addition to these verifications, Commission staff have initiated audits of discrete coverage areas within the service availability reported by several mobile service providers. OEA and Wireless Telecommunications Bureau (WTB) staff have conducted these audits in coordination with the Broadband Data Task Force, Enforcement Bureau, Office of Engineering and Technology (OET), and Commission leadership. Commission staff have conducted two variations of mobile audits to date. The first involve on-the-ground testing of mobile service performance in resolution 8 hexagonal cells (“hex areas”) within a single county. Commission staff, in coordination with its third-party contractors, selected the target county to audit and conducted on-the-ground testing based upon a variety of factors, including the number of service providers who claim some amount of network coverage in the county, the number of accessible hex areas in the county, the population density of the county, and the marginal coverage in the area. The second variation of audits involves requests for infrastructure data from service providers for a handful of randomly selected counties. These counties were selected using several of the factors used to identify areas for on-the-ground testing as well as other factors, such as the geography and topography of the counties.

13. To standardize the types of information the Commission requests through formal verification inquires and the second variation of mobile audits, as well as to provide transparency and certainty to service providers, the Commission has released an updated data specification for provider infrastructure data submitted in the challenge, verification, and audit processes. This data specification sets forth standardized, structured data that all service providers (fixed wireline, terrestrial fixed wireless, mobile wireless, and satellite) should be prepared to submit in response to verification inquiries and audits (as well as in response to challenges in instances where mobile wireless service providers are able to respond to mobile challenges with infrastructure data).

14. Discussion. Notwithstanding the clear mandates in the Broadband DATA Act, the Second Report and Order, and the Commission's rules that we verify and audit availability data as part of the BDC, we take this opportunity to clarify the procedural mechanics of our audit rules. Accordingly, we begin by formally delegating authority to OEA, in coordination with WTB, the Wireline Competition Bureau (WCB), and the Space Bureau (SB), to continue to perform audits using the processes and data specifications currently available. We also reaffirm the authority of OEA, in coordination with the relevant bureaus and offices, to continue performing fixed and mobile data verifications using existing methods or any other methods and data specifications it may develop in the future for verifying availability data. We direct OEA, in coordination with WTB, WCB, and SB, to establish methodologies and procedures for selecting service providers (either fixed or mobile) and targeted locations or areas subject to random audit, as well as for determining “patterns of filing incorrect information” sufficient to warrant an audit. In the latter case—as well as in the case of verification inquiries—the methodology(ies) will continue to be based on anomalies or inconsistencies in the data a provider submits as part of its biannual submission and/or information submitted through, or behavior demonstrated in, the availability challenge processes or crowdsource submissions.

15. This delegation of authority specifically includes the authority to identify and select specific providers and geographic areas or Broadband Serviceable Locations subject to formal verification or audit. As part of this delegation, OEA is vested with authority to develop processes or procedures for randomly selecting geographic areas or locations to audit, as well as for determining “cases where there may be patterns of filing incorrect information,” consistent with our rules. OEA, in coordination with WTB, WCB, and SB, is best qualified to make individualized determinations of the areas or locations that should be audited (subject to the conditions in § 1.7006(a) outlined above), given its subject-matter expertise in reviewing the underlying availability data and its understanding of resources ( e.g., budget, staff time) available to perform audits.

16. We further delegate authority to OEA, in coordination with WTB, WCB, and SB (as appropriate), to collect all data required to conduct a thorough and complete audit, including, but not limited to, the information set forth in the BDC Infrastructure Data Specification, on-the-ground mobile performance data (in the case of audits of mobile coverage areas), and any other data OEA determines are necessary to assess an entity's claims that it makes service available to audited locations or areas. This authority permits OEA, in coordination with the relevant bureaus and offices, to use third-party contractors to gather and analyze the collected data, subject to the requirement that Commission staff supervise and direct any third-party contractors used to gather or analyze the data.

17. The part 1, subpart V rules in title 47 refer to the “Digital Opportunity Data Collection” or “DODC.” This is the name formerly given to the data collection that the Commission now refers to as the Broadband Data Collection or BDC. In the Fourth Report and Order, we make ministerial changes to our rules to replace references to the “Digital Opportunity Data Collection” or “DODC” with references to the Broadband Data Collection or BDC, as appropriate. These rule amendments are exempt from notice-and-comment requirements of the Administrative Procedure Act (APA) because they are procedural rules that “do not themselves alter the rights or interests of parties.” Notice and comment for these rule changes are also unnecessary because the edits are non-substantive and have no impact on regulated parties or the public.

18. We next issue a declaratory ruling clarifying that providers must submit more detailed data in subsequent BDC filings when claiming availability for locations or areas that were previously removed through the challenge, verification or audit processes. In doing so, we specify the types of existing data specifications for demonstrating availability at previously removed locations or areas for certain types of challenges. The Broadband DATA Act required that the Commission adopt rules for “the biannual collection and dissemination of granular data . . . relating to the availability and quality of service with respect to terrestrial fixed, fixed wireless, satellite, and mobile broadband internet access service,” and “processes through which the Commission can verify the accuracy of data” submitted by broadband service providers. The Broadband DATA Act recognizes that, due to ongoing changes in the availability of internet services across the United States and its Territories, the Broadband Data Collection is an iterative process and that the NBM must be updated regularly with refreshed data to reflect the on-the-ground reality of mass-market broadband availability. Providers must therefore report availability data as of June 30 and December 31 of each year, which may include expanded coverage since the provider's last filing (due, for example, to build-out of additional infrastructure since the previous submission) and, in some cases, reduced coverage (due, for example, to the retirement of discontinued technologies or infrastructure, or to network capacity constraints preventing the connection of new customers).

19. We clarify that in cases where a provider's claimed availability at a location (in the case of a fixed provider) or in an area (in the case of a mobile provider) is removed from the NBM as the result of a lost or conceded challenge, a verification inquiry, or an audit (together, a “Removed Location or Area”), our rules require the provider to submit updated availability data in a subsequent BDC filing if it can demonstrate that it can make service available to the Removed Location or Area. We interpret the Commission's rules, as well as our statutory obligation to verify the accuracy of the data displayed on the NBM, to require a restoration process for Removed Locations or Areas in order to ensure that the data on the NBM remain accurate and to improve the usefulness of the coverage maps. In so doing, we delegate authority to OEA, in coordination with WCB, WTB, OET, and SB, to develop detailed data specifications setting out the categories of information a provider must submit when seeking to restore a previously Removed Location or Area through a subsequent BDC filing.

20. If a provider's reported availability at a location or in an area is removed from the NBM as the result of a verification, audit, or challenge, a Removed Location or Area is created in the BDC system. The ways in which these Removed Locations or Areas are generated is described below.

21. Verifications and Audits. As discussed above, the Commission has robustly implemented its statutory obligations to verify the accuracy and reliability of broadband availability data that providers submit to the Commission and to audit provider-reported availability data. If, in response to a Commission-initiated verification or audit, a provider is unable to submit sufficient information supporting its reported coverage at a location or area, the verification or audit may lead to a Removed Location or Area, which would include all or part of the area subject to the verification or audit.

22. Service Availability Challenges. The Broadband DATA Act directed the Commission to “establish a user-friendly challenge process through which consumers, State, local, and Tribal governmental entities, and other entities or individuals may submit coverage data to the Commission to challenge the accuracy of” the information on the NBM. In the Third Report and Order (86 FR 18124, April 7, 2021), the Commission adopted rules establishing the fixed availability challenge process, including the procedures the Commission uses to resolve fixed availability challenges. Similarly, the Commission adopted rules for challenges to mobile wireless coverage data based upon lack of service or poor service quality, such as slow delivered speeds.

23. A service availability challenge may result in a Removed Location or Area for several reasons. First, a provider may affirmatively concede a challenge. Second, a provider's failure to respond to a challenge within the applicable timeframes results in a finding against the provider, thereby leading to an automatic concession. An automatic concession may be (i) intentional, because the provider agrees with the challenger and chooses to allow the challenge to automatically result in a finding against that provider or (ii) unintentional, due to a missed deadline, a misunderstanding of the BDC processes, or some other act or omission. Finally, a fixed or mobile availability challenge could be adjudicated by the FCC in the challenger's favor. When a provider concedes or loses a challenge, it must update its availability data to align with the lost or conceded challenge and certify the updated data; the location or area lost or conceded as a result of the challenge process thereby constitutes a Removed Location or Area.

24. Since the launch of the NBM on November 18, 2022, the verification, audit, and challenge processes have been active and have led to meaningful updates to the map. In just the first year following the map's launch, approximately 3.7 million fixed availability challenges were accepted and submitted to providers for response, resulting in more than 2.5 million updates to the fixed availability data on the NBM. In approximately the same timeframe, 35 cognizable mobile challenges resulted in 18 corrections to mobile wireless coverage data on the NBM. To date, FCC staff have initiated thousands of fixed data verification inquiries, as well as audits, which have resulted in updates to hundreds of provider submissions. These processes are open and ongoing, and new verification efforts, audits, and challenges are regularly initiated and resolved. Meanwhile, significant Federal investments in broadband infrastructure have been either awarded or deployed since the launch of the NBM, which will produce meaningful expansions of broadband availability across the United States and Territories.

25. Given the various ways in which broadband service availability can both expand and contract, it is entirely possible, and in fact, very likely, that a provider who previously reported mass-market broadband internet service available at a Removed Location or Area may subsequently make such service available to the Removed Location or Area. It is critical that the BDC be able to capture these types of developments in broadband availability over time.

26. Pursuant to the Act, the BDC captures changes in broadband availability data over time to ensure that the NBM remains accurate. Each BDC filing is a snapshot of broadband availability on a particular date, and each verification, audit, and/or challenge is applicable to availability information at that particular time. However, Removed Locations or Areas “persist” from one BDC filing to the next, in order to promote active participation in the challenge, verification, and audit processes by service providers and to alleviate the need for challengers and the Commission to repeatedly correct previously adjudicated locations or areas. Therefore, it is essential that providers submit updated data into the BDC for Removed Locations and Areas, and that the BDC provide an efficient, standardized way for the NBM to reflect where a provider reports in a subsequent filing that it can make service available at a previously Removed Location or Area. Without such a requirement or pathway to restore Removed Locations or Areas, the NBM would become outdated, and therefore less accurate—contrary to both Congress's and the Commission's intent.

27. Accordingly, we clarify that the requirement that BDC “filings shall be made each year on or before March 1 (reporting data as of December 31 of the prior year) and September 1 (reporting data as of June 30 of the current year)” includes an obligation that providers submit data on service availability to Removed Locations or Areas. Because the BDC rules require providers to report their broadband availability data accurately for each filing round and certify that those filings are accurate, it would be a violation of the Commission's rules for a provider to not report coverage at a Removed Location or Area where it now makes service available.

28. Requiring updates based upon changed circumstances is consistent with our statutory obligation to “establish . . . processes through which the Commission can verify the accuracy of the data submitted” by service providers in the BDC. This includes a process for verifying data submitted through the challenge process “in order to ensure the reliability of that data.” The Broadband DATA Act cannot hold its intended purpose if a service provider is not required to and does not have a pathway for reporting service availability to a location that, though previously unserved, is now capable of receiving the reported service. Clarifying this requirement, and establishing a pathway for restoring a previously Removed Location or Area improves the usefulness of the coverage maps by ensuring that the data on the NBM are timely and accurate. As noted by CTIA—The Wireless Association, where a provider has completed new deployments, service upgrades, or otherwise added more capacity to its network, the BDC must allow that provider to include those locations in a subsequent filing; without such a mechanism to restore these locations, the NBM would be underinclusive and could cause confusion for consumers.

29. Moreover, clarifying this requirement and establishing a pathway for reporting Removed Locations or Areas is consistent with prior Commission direction in the context of mobile wireless coverage data submissions. The Commission previously contemplated that changed circumstances could lead to improved coverage at an area previously lost by a mobile wireless provider in the mobile challenge process. In the Third Report and Order, the Commission stated that if a mobile provider “that has failed to rebut a challenge subsequently takes remedial action to improve coverage at the location of the challenge, the provider must notify the Commission of the actions it has taken to improve its coverage and provide either on-the-ground test data or infrastructure data to verify its improved coverage.” While the Commission did not include similar language regarding fixed challenges, the rationale applies equally to both types of broadband services: if a provider lost or conceded a challenge but the provider is now able to produce additional evidence supporting its claim that it can make broadband service available at the previously Removed Location or Area, the BDC must implement a pathway to restoration.

30. We make clear that the obligation to submit updated data in subsequent filings extends to locations and areas that were removed because the provider previously failed to participate in the challenge processes or provided insufficient evidence in response to the challenge. For example, where a provider automatically conceded a challenge due to a misunderstanding of our rules or the BDC system, it is possible that the provider actually made service available at the resulting Removed Location or Area at the time the challenge was submitted. Similarly, because FCC adjudications are limited to the evidence submitted by the challenger and the provider, a challenge could be upheld due to insufficient evidence submitted by the provider in response to the challenge, even if the provider actually makes service available at the Removed Locations or Areas. In all of these instances, in order for the NBM to accurately reflect, on an ongoing basis, the broadband services that are available at each location or area, we must require providers to submit updated data and establish a pathway for restoring a Removed Location or Area.

31. In order to preserve the integrity of the challenge processes, including our obligation under the Broadband DATA Act to “mitigate the time and expense incurred by, and the administrative burdens placed on, entities and individuals” in our challenge processes, providers must submit data to support a request in a subsequent availability filing to include a Removed Location or Area. Further, a data requirement mitigates the administrative burdens on the Commission to conduct verifications and audits of data submitted by providers at Removed Locations or Areas in subsequent filings.

32. Specifically, a provider must submit detailed information demonstrating that it can now make service available at the Removed Location or Area. The data elements included in the Data Specifications for Provider Infrastructure Data in the Challenge, Verification, and Audit Processes are indicative of the kind of information that we expect to be persuasive in the restoration of locations or areas removed from the NBM as a result of the challenge process, verification inquiries or audits, where infrastructure data would be relevant. Providers are already familiar with these existing data specifications, and for the most part already retain this information. Specifically, fixed provider infrastructure data would be relevant for consumer and bulk fixed availability challenges lost under Challenge Category Codes 4, 5, 6, 8, or 9, and bulk fixed availability challenges lost under Challenge Category Codes 1 or 2. Additionally, mobile provider infrastructure data would be informative when providers seek to restore coverage areas lost in the mobile challenge process as well as removed in response to verification inquiries or audits. While these existing data specifications are persuasive for restoration of locations and areas previously removed based on the above-referenced challenge codes, these data are not relevant to all challenge codes. Further, these data specifications do not include speed test data for mobile service. We, therefore, seek comment, in the proposed rule published elsewhere in this issue of the Federal Register , on what information commenters believe would be persuasive in the restoration of fixed availability data removed from the NBM under the remaining Challenge Category Codes, as well as the potential use of on-the-ground speed test data for restoration of mobile coverage areas.

33. We additionally clarify that the data requirements for restoring a provider's availability to a previously Removed Location or Area are distinct from the rules and standards governing availability challenges. A provider's restored availability information can be subsequently challenged in accordance with rule § 1.7006(d) (for fixed availability data) and (e) and (f) (for mobile availability data).

34. We direct OEA, in consultation with WCB, WTB, OET, and SB, to develop and publish data specifications detailing the information a provider must submit when seeking to restore a previously Removed Location or Area through a subsequent BDC filing—starting with the infrastructure data included in the Data Specifications for Provider Infrastructure Data in the Challenge, Verification, and Audit Processes. We also direct OEA, in consultation with the other named bureaus and offices, to make the necessary system changes to implement the clarifications in the Declaratory Ruling. After the data specifications are published, a provider may upload the specific information necessary to restore a Removed Location or Area in the BDC system. Where Commission staff deems that information sufficient to demonstrate availability, the location or area will be restored on the National Broadband Map.

35. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Establishing the Digital Opportunity Data Collection; Modernizing the FCC Form 477 Data Program, Digital Opportunity Data Collection Third Further Notice of Proposed Rulemaking (Third FNPRM) released in July 2020 (85 FR 50911, August 18, 2020). The Federal Communications Commission (Commission) sought written public comment on the proposals in the Third FNPRM, including comments on the IRFA. No comments were filed addressing the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

36. In the Fourth Report and Order, the Commission takes steps to adopt certain requirements mandated by the Broadband DATA Act, as well as adopting improvements to the data collection. Specifically, the Fourth Report and Order modifies the Broadband Data Collection (BDC) rules to codify expedited challenge adjudication deadlines as required by the Infrastructure Investment and Jobs Act (IIJA), such as a 90-day deadline for fixed services challenges, as well as provide a specific delegation of authority to the Office of Economics and Analytics (OEA), in coordination with certain other bureaus and offices, to conduct audits of broadband data submitted by providers (as required under the Broadband DATA Act). Through the adoption of these rules, the Commission is implementing targeted changes that further address its long-standing objective of working towards closing the digital divide by improving the processes for filers, some of whom consist of small entities.

37. There were no comments filed that specifically addressed the rules and policies proposed in the IRFA.

38. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file comments in response to the proposed rules in this proceeding.

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

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

41. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 or less to delineate its annual electronic filing requirements for small exempt organizations. Nationwide, for tax year 2022, there were approximately 530,109 small exempt organizations in the U.S. reporting revenues of $50,000 or less according to the registration and tax data for exempt organizations available from the IRS.

Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2022 Census of Governments indicate there were 90,837 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number, there were 36,845 general purpose governments (county, municipal, and town or township) with populations of less than 50,000 and 11,879 special purpose governments (independent school districts) with enrollment populations of less than 50,000. Accordingly, based on the 2022 U.S. Census of Governments data, we estimate that at least 48,724 entities fall into the category of “small governmental jurisdictions.”

42. Broadband internet Access Service Providers. The broadband internet access service provider industry has changed since the definition was introduced in 2007. The data cited below may therefore include entities that no longer provide broadband internet access service and may exclude entities that now provide such service. To ensure that this FRFA describes the universe of small entities that our action might affect, we discuss in turn several different types of entities that might be providing broadband internet access service. We note that, although we have no specific information on the number of small entities that provide broadband internet access service over unlicensed spectrum, we included these entities in our Initial Regulatory Flexibility Analysis.

43. Wired Broadband internet Access Service Providers (Wired ISPs). Providers of wired broadband internet access service include various types of providers except dial-up internet access providers. Wireline service that terminates at an end user location or mobile device and enables the end user to receive information from and/or send information to the internet at information transfer rates exceeding 200 kilobits per second (kbps) in at least one direction is classified as a broadband connection under the Commission's rules. Wired broadband internet services fall in the Wired Telecommunications Carriers industry. The SBA small business size standard for this industry classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees.

44. Additionally, according to Commission data on internet access services as of June 30, 2019, nationwide there were approximately 2,747 providers of connections over 200 kbps in at least one direction using various wireline technologies. The Commission does not collect data on the number of employees for providers of these services, therefore, at this time we are not able to estimate the number of providers that would qualify as small under the SBA's small business size standard. However, in light of the general data on fixed technology service providers in the Commission's 2022 Communications Marketplace Report, we believe that the majority of wireline internet access service providers can be considered small entities.

45. Internet Service Providers (Non-Broadband). Internet access service providers using client-supplied telecommunications connections ( e.g., dial-up ISPs) as well as Voice over internet Protocol (VoIP) service providers using client-supplied telecommunications connections fall in the industry classification of All Other Telecommunications. The SBA small business size standard for this industry classifies firms with annual receipts of $35 million or less as small. For this industry, U.S. Census Bureau data for 2017 show that there were 1,079 firms in this industry that operated for the entire year. Of those firms, 1,039 had revenue of less than $25 million. Consequently, under the SBA size standard a majority of firms in this industry can be considered small.

46. Wireline Providers.

47. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry. Wired Telecommunications Carriers are also referred to as wireline carriers or fixed local service providers.

48. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 4,590 providers that reported they were engaged in the provision of fixed local services. Of these providers, the Commission estimates that 4,146 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

49. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. Providers of these services include both incumbent and competitive local exchange service providers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. Wired Telecommunications Carriers are also referred to as wireline carriers or fixed local service providers. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 4,590 providers that reported they were fixed local exchange service providers. Of these providers, the Commission estimates that 4,146 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

50. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the Commission nor the SBA have developed a small business size standard specifically for incumbent local exchange carriers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 1,212 providers that reported they were incumbent local exchange service providers. Of these providers, the Commission estimates that 916 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, the Commission estimates that the majority of incumbent local exchange carriers can be considered small entities.

51. Competitive Local Exchange Carriers (CLECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. Providers of these services include several types of competitive local exchange service providers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 3,378 providers that reported they were competitive local exchange service providers. Of these providers, the Commission estimates that 3,230 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

52. Interexchange Carriers (IXCs). Neither the Commission nor the SBA have developed a small business size standard specifically for Interexchange Carriers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 127 providers that reported they were engaged in the provision of interexchange services. Of these providers, the Commission estimates that 109 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, the Commission estimates that the majority of providers in this industry can be considered small entities.

53. Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for operator service providers. The closest applicable industry with an SBA small business size standard is Wired Telecommunications Carriers. The SBA small business size standard classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 20 providers that reported they were engaged in the provision of operator services. Of these providers, the Commission estimates that all 20 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, all of these providers can be considered small entities.

54. Other Toll Carriers. Neither the Commission nor the SBA has developed a definition for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 90 providers that reported they were engaged in the provision of other toll services. Of these providers, the Commission estimates that 87 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

55. Wireless Providers—Fixed and Mobile.

56. The broadband internet access service provider category covered by these new rules may cover multiple wireless firms and categories of regulated wireless services. Thus, to the extent the wireless services listed below are used by wireless firms for broadband internet access service, the actions may have an impact on those small businesses as set forth above and further below. In addition, for those services subject to auctions, we note that, as a general matter, the number of winning bidders that claim to qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Also, the Commission does not generally track subsequent business size unless, in the context of assignments and transfers or reportable eligibility events, unjust enrichment issues are implicated.

57. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms in this industry that operated for the entire year. Of that number, 2,837 firms employed fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 594 providers that reported they were engaged in the provision of wireless services. Of these providers, the Commission estimates that 511 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

58. Wireless Communications Services. Wireless Communications Services (WCS) can be used for a variety of fixed, mobile, radiolocation, and digital audio broadcasting satellite services. Wireless spectrum is made available and licensed for the provision of wireless communications services in several frequency bands subject to part 27 of the Commission's rules. Wireless Telecommunications Carriers (except Satellite) is the closest industry with an SBA small business size standard applicable to these services. The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

59. The Commission's small business size standards with respect to WCS involve eligibility for bidding credits and installment payments in the auction of licenses for the various frequency bands included in WCS. When bidding credits are adopted for the auction of licenses in WCS frequency bands, such credits may be available to several types of small businesses based average gross revenues (small, very small and entrepreneur) pursuant to the competitive bidding rules adopted in conjunction with the requirements for the auction and/or as identified in the designated entities section in part 27 of the Commission's rules for the specific WCS frequency bands.

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

61. 1670-1675 MHz Services. These wireless communications services can be used for fixed and mobile uses, except aeronautical mobile. Wireless Telecommunications Carriers (except Satellite) is the closest industry with an SBA small business size standard applicable to these services. The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

62. According to Commission data as of November 2021, there were three active licenses in this service. The Commission's small business size standards with respect to 1670-1675 MHz Services involve eligibility for bidding credits and installment payments in the auction of licenses for these services. For licenses in the 1670-1675 MHz service band, a “small business” is defined as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” is defined as an entity that, together with its affiliates and controlling interests, has had average annual gross revenues not exceeding $15 million for the preceding three years. The 1670-1675 MHz service band auction's winning bidder did not claim small business status.

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

64. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. The closest applicable industry with an SBA small business size standard is Wireless Telecommunications Carriers (except Satellite). The size standard for this industry under SBA rules is that a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 331 providers that reported they were engaged in the provision of cellular, personal communications services, and specialized mobile radio services. Of these providers, the Commission estimates that 255 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

65. Broadband Personal Communications Service. The broadband personal communications services (PCS) spectrum encompasses services in the 1850-1910 and 1930-1990 MHz bands. The closest industry with an SBA small business size standard applicable to these services is Wireless Telecommunications Carriers (except Satellite). The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

66. Based on Commission data as of November 2021, there were approximately 5,060 active licenses in the Broadband PCS service. The Commission's small business size standards with respect to Broadband PCS involve eligibility for bidding credits and installment payments in the auction of licenses for these services. In auctions for these licenses, the Commission defined “small business” as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” as an entity that, together with its affiliates and controlling interests, has had average annual gross revenues not exceeding $15 million for the preceding three years. Winning bidders claiming small business credits won Broadband PCS licenses in C, D, E, and F Blocks.

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

68. Specialized Mobile Radio Licenses. Special Mobile Radio (SMR) licenses allow licensees to provide land mobile communications services (other than radiolocation services) in the 800 MHz and 900 MHz spectrum bands on a commercial basis including but not limited to services used for voice and data communications, paging, and facsimile services, to individuals, Federal Government entities, and other entities licensed under part 90 of the Commission's rules. Wireless Telecommunications Carriers (except Satellite) is the closest industry with an SBA small business size standard applicable to these services. The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2017 show that there were 2,893 firms in this industry that operated for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 95 providers that reported they were of SMR (dispatch) providers. Of this number, the Commission estimates that all 95 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, these 119 SMR licensees can be considered small entities.

69. Based on Commission data as of December 2021, there were 3,924 active SMR licenses. However, since the Commission does not collect data on the number of employees for licensees providing SMR services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard. Nevertheless, for purposes of this analysis the Commission estimates that the majority of SMR licensees can be considered small entities using the SBA's small business size standard.

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

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

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

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

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

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

76. 700 MHz Guard Band Licensees. The 700 MHz Guard Band encompasses spectrum in 746-747/776-777 MHz and 762-764/792-794 MHz frequency bands. Wireless Telecommunications Carriers (except Satellite) is the closest industry with an SBA small business size standard applicable to licenses providing services in these bands. The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

77. According to Commission data as of December 2021, there were approximately 224 active 700 MHz Guard Band licenses. The Commission's small business size standards with respect to 700 MHz Guard Band licensees involve eligibility for bidding credits and installment payments in the auction of licenses. For the auction of these licenses, the Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. Pursuant to these definitions, five winning bidders claiming one of the small business status classifications won 26 licenses, and one winning bidder claiming small business won two licenses. None of the winning bidders claiming a small business status classification in these 700 MHz Guard Band license auctions had an active license as of December 2021.

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

79. Air-Ground Radiotelephone Service. Air-Ground Radiotelephone Service is a wireless service in which licensees are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft. A licensee may provide any type of air-ground service ( i.e., voice telephony, broadband internet, data, etc.) to aircraft of any type, and serve any or all aviation markets (commercial, government, and general). A licensee must provide service to aircraft and may not provide ancillary land mobile or fixed services in the 800 MHz air-ground spectrum.

80. The closest industry with an SBA small business size standard applicable to these services is Wireless Telecommunications Carriers (except Satellite). The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

81. Based on Commission data as of December 2021, there were approximately four licensees with 110 active licenses in the Air-Ground Radiotelephone Service. The Commission's small business size standards with respect to Air-Ground Radiotelephone Service involve eligibility for bidding credits and installment payments in the auction of licenses. For purposes of auctions, the Commission defined “small business” as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” as an entity that, together with its affiliates and controlling interests, has had average annual gross revenues not exceeding $15 million for the preceding three years. In the auction of Air-Ground Radiotelephone Service licenses in the 800 MHz band, neither of the two winning bidders claimed small business status.

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

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

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

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

86. 3650-3700 MHz band. Wireless broadband service licensing in the 3650-3700 MHz band provides for nationwide, non-exclusive licensing of terrestrial operations, utilizing contention-based technologies, in the 3650 MHz band ( i.e., 3650-3700 MHz). Licensees are permitted to provide services on a non-common carrier and/or on a common carrier basis. Wireless broadband services in the 3650-3700 MHz band fall in the Wireless Telecommunications Carriers (except Satellite) industry with an SBA small business size standard that classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

87. The Commission has not developed a small business size standard applicable to 3650-3700 MHz band licensees. Based on the licenses that have been granted, however, we estimate that the majority of licensees in this service are small internet Access Service Providers (ISPs). As of November 2021, Commission data shows that there were 902 active licenses in the 3650-3700 MHz band. However, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

88. Fixed Microwave Services. Fixed microwave services include common carrier, private-operational fixed, and broadcast auxiliary radio services. They also include the Upper Microwave Flexible Use Service (UMFUS), Millimeter Wave Service (70/80/90 GHz), Local Multipoint Distribution Service (LMDS), the Digital Electronic Message Service (DEMS), 24 GHz Service, Multiple Address Systems (MAS), and Multichannel Video Distribution and Data Service (MVDDS), where in some bands licensees can choose between common carrier and non-common carrier status. Wireless Telecommunications Carriers (except Satellite) is the closest industry with an SBA small business size standard applicable to these services. The SBA small size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of fixed microwave service licensees can be considered small.

89. The Commission's small business size standards with respect to fixed microwave services involve eligibility for bidding credits and installment payments in the auction of licenses for the various frequency bands included in fixed microwave services. When bidding credits are adopted for the auction of licenses in fixed microwave services frequency bands, such credits may be available to several types of small businesses based average gross revenues (small, very small and entrepreneur) pursuant to the competitive bidding rules adopted in conjunction with the requirements for the auction and/or as identified in part 101 of the Commission's rules for the specific fixed microwave services frequency bands.

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

91. Broadband Radio Service and Educational Broadband Service. Broadband Radio Service systems, previously referred to as Multipoint Distribution Service (MDS) and Multichannel Multipoint Distribution Service (MMDS) systems, and “wireless cable,” transmit video programming to subscribers and provide two-way high speed data operations using the microwave frequencies of the Broadband Radio Service (BRS) and Educational Broadband Service (EBS) (previously referred to as the Instructional Television Fixed Service (ITFS)). Wireless cable operators that use spectrum in the BRS often supplemented with leased channels from the EBS, provide a competitive alternative to wired cable and other multichannel video programming distributors. Wireless cable programming to subscribers resembles cable television, but instead of coaxial cable, wireless cable uses microwave channels.

92. In light of the use of wireless frequencies by BRS and EBS services, the closest industry with an SBA small business size standard applicable to these services is Wireless Telecommunications Carriers (except Satellite). The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

93. According to Commission data as December 2021, there were approximately 5,869 active BRS and EBS licenses. The Commission's small business size standards with respect to BRS involves eligibility for bidding credits and installment payments in the auction of licenses for these services. For the auction of BRS licenses, the Commission adopted criteria for three groups of small businesses. A very small business is an entity that, together with its affiliates and controlling interests, has average annual gross revenues exceed $3 million and did not exceed $15 million for the preceding three years, a small business is an entity that, together with its affiliates and controlling interests, has average gross revenues exceed $15 million and did not exceed $40 million for the preceding three years, and an entrepreneur is an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $3 million for the preceding three years. Of the ten winning bidders for BRS licenses, two bidders claiming the small business status won 4 licenses, one bidder claiming the very small business status won three licenses and two bidders claiming entrepreneur status won six licenses. One of the winning bidders claiming a small business status classification in the BRS license auction has an active licenses as of December 2021.

94. The Commission's small business size standards for EBS define a small business as an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $55 million for the preceding five (5) years, and a very small business is an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $20 million for the preceding five (5) years. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

95. Satellite Service Providers.

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

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

98. Cable Service Providers.

99. Because section 706 of the Act requires us to monitor the deployment of broadband using any technology, we anticipate that some broadband service providers may not provide telephone service. Accordingly, we describe below other types of firms that may provide broadband services, including cable companies, MDS providers, and utilities, among others.

100. Cable and Other Subscription Programming. The U.S. Census Bureau defines this industry as establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature ( e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. The SBA small business size standard for this industry classifies firms with annual receipts less than $41.5 million as small. Based on U.S. Census Bureau data for 2017, 378 firms operated in this industry during that year. Of that number, 149 firms operated with revenue of less than $25 million a year and 44 firms operated with revenue of $25 million or more. Based on this data, the Commission estimates that a majority of firms in this industry are small.

101. Cable Companies and Systems (Rate Regulation). The Commission has developed its own small business size standard for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Based on industry data, there are about 420 cable companies in the U.S. Of these, only seven have more than 400,000 subscribers. In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Based on industry data, there are about 4,139 cable systems (headends) in the U.S. Of these, about 639 have more than 15,000 subscribers. Accordingly, the Commission estimates that the majority of cable companies and cable systems are small.

102. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, contains a size standard for a “small cable operator,” which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than one percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” For purposes of the Telecom Act Standard, the Commission determined that a cable system operator that serves fewer than 498,000 subscribers, either directly or through affiliates, will meet the definition of a small cable operator. Based on industry data, only six cable system operators have more than 498,000 subscribers. Accordingly, the Commission estimates that the majority of cable system operators are small under this size standard. We note however, that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Therefore, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

103. All Other Telecommunications.

104. Electric Power Generators, Transmitters, and Distributors. The U.S. Census Bureau defines the utilities sector industry as comprised of “establishments, primarily engaged in generating, transmitting, and/or distributing electric power. Establishments in this industry group may perform one or more of the following activities: (1) operate generation facilities that produce electric energy; (2) operate transmission systems that convey the electricity from the generation facility to the distribution system; and (3) operate distribution systems that convey electric power received from the generation facility or the transmission system to the final consumer.” This industry group is categorized based on fuel source and includes Hydroelectric Power Generation, Fossil Fuel Electric Power Generation, Nuclear Electric Power Generation, Solar Electric Power Generation, Wind Electric Power Generation, Geothermal Electric Power Generation, Biomass Electric Power Generation, Other Electric Power Generation, Electric Bulk Power Transmission and Control and Electric Power Distribution.

105. The SBA has established a small business size standard for each of these groups based on the number of employees which ranges from having fewer than 250 employees to having fewer than 1,000 employees. U.S. Census Bureau data for 2017 indicate that for the Electric Power Generation, Transmission, and Distribution industry there were 1,693 firms that operated in this industry for the entire year. Of this number, 1,552 firms had less than 250 employees. Based on this data and the associated SBA size standards, the majority of firms in this industry can be considered small entities.

106. We expect that some of the rules adopted in the Fourth Report and Order will impose new or additional reporting, recordkeeping, and/or other compliance obligations on small entities. The Fourth Report and Order modifies the BDC rules to codify the expedited availability challenge adjudication deadlines to implement the IIJA mandate. Commission staff already functionally implemented this deadline for the availability challenge process as required by the IIJA. In an effort to comply with the Broadband DATA Act, we now memorialize in our rules the procedures that Commission staff have followed since the start of the challenge process. The Fourth Report and Order also delegates authority to OEA to collect any and all data required to conduct a thorough and complete audit process. Finally, we formally amend the name given to the data collection from the “Digital Opportunity Data Collection” to the “Broadband Data Collection.” As to the cost of compliance, at present, the record contains insufficient information to either quantify compliance costs for small entities as a result of the adopted rules, or determine whether there will be a need for small entities to hire attorneys, engineers, consultants, or other professionals.

107. The Commission believes that any additional burdens imposed by our audit of provider data are outweighed by the significant benefit to be gained from more precise broadband deployment data. As discussed above, although the Commission cannot quantify the cost of compliance with the requirements in the Fourth Report and Order, we believe the modifications to the BDC rules are necessary to comply with the Broadband DATA Act and complete accurate broadband coverage maps.

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

109. The Commission's actions in the Fourth Report and Order are primarily in response to the legislative enactment of the Broadband DATA Act to develop better quality, more useful, and more granular broadband deployment data, as well as our mandate to codify expedited challenge adjudication deadlines as required by the IIJA. In considering the comments in the record, we were mindful of the time, money, and resources that some small entities incur to complete these requirements.

110. For example, in implementing the IIJA's requirements, we considered alternatives for how the Commission could address situations where a challenger and a challenged provider cannot reach a consensus as § 1.7006(d)(6) requires. In the Fourth Report and Order, we set forth that the shot-clock for Commission action should begin once the provider has reported on the status of the parties' efforts to resolve the challenge. Taking this step allows small and other entities to have sufficient time to resolve challenges on their own, where possible, before Commission staff become involved while helping the Commission adjudicate challenges more efficiently.

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

112. Accordingly, it is ordered, pursuant to sections 1 through 4, 7, 201, 254, 301, 303, 309, 319, 332, 403, and 641 through 646 of the Communications Act of 1934, as amended, 47 U.S.C. 151 through 154, 157, 201, 254, 301, 303, 309, 319, 332, 403, 641 through 646, the Fourth Report and Order and Declaratory Ruling is adopted.

113. It is further ordered that part 1 of the Commission's rules is amended as set forth in Appendix A of the Fourth Report and Order.

114. It is further ordered that the Fourth Report and Order shall be effective 30 days after publication in the Federal Register .

115. It is further ordered that the Declaratory Ruling shall be effective upon adoption by the Commission.

116. It is further ordered that the Office of the Managing Director, Performance Program Management, shall send a copy of the Fourth Report and Order and Declaratory Ruling in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

117. It is further ordered that the Office of the Secretary shall send a copy of the Fourth Report and Order, including the Final Regulatory Flexibility Analysis and the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 1 as follows:

This is a summary of the Commission's Third Report and Order (Order), in MB Docket No. 12-108; FCC 24-79, adopted on July 18, 2024 and released on July 19, 2024. The full text of this document will be available at https://docs.fcc.gov/public/attachments/FCC-24-79A1.pdf and via ECFS at https://www.fcc.gov/ecfs/ . Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to fcc504@fcc.gov or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 1-844-4-FCC-ASL (1-844-432-2275) (videophone).

This Order furthers our efforts to enable individuals with disabilities to access video programming through closed captioning. Closed captioning displays the audio portion of a television program as text on the screen, providing access to news, entertainment, and information for individuals who are deaf and hard of hearing. The Federal Communications Commission requires the provision of closed captioning on nearly all television programming, as well as on a large portion of internet protocol (IP)-delivered programming. Through the Commission's implementation of the Television Decoder Circuitry Act of 1990 (TDCA) and the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA), it has made significant progress in enabling video programming to be accessible to persons who are deaf and hard of hearing. Pursuant to the TDCA, the Commission adopted standards for the display of closed captions on digital television receivers, and those standards enable users to customize caption display by changing the font, size, color, and other features of captions. Subsequently, pursuant to the CVAA, the Commission adopted display standards for other video devices, specifically for apparatus designed to receive or play back video programming transmitted simultaneously with sound. However, many consumers continue to have difficulty accessing the closed captioning display settings on televisions and other video devices—a technical barrier that prevents the use and enjoyment of captioning. Today we take steps to alleviate this problem and thereby ensure meaningful access to captioning.

Specifically, the rule we adopt requires manufacturers of covered apparatus  1 and multichannel video programming distributors (MVPDs) to make closed captioning display settings readily accessible to individuals who are deaf and hard of hearing. We afford covered entities flexibility in how they meet this obligation, and the Commission will determine whether settings are readily accessible to consumers by evaluating the following factors: proximity, discoverability, previewability, and consistency and persistence. We adopt a compliance deadline of two years after publication of this Order in the Federal Register .

Prior to adoption of the TDCA, consumers needed to purchase a separate TeleCaption decoder device and connect it to a television set in order to display closed captions. The TDCA amended section 303 of the Communications Act of 1934, as amended (the Act), to require that television receivers contain built-in decoder circuitry designed to display closed captioning. It also amended section 330 of the Act to require that the Commission's rules provide performance and display standards for such built-in decoder circuitry. In the TDCA, Congress observed that the availability of televisions with built-in decoders “will significantly increase the audience that can be served by closed-captioned television” and outlined the significant benefits of closed captioning for people who are deaf and hard of hearing as well as other segments of the population, including children and older Americans who have some loss of hearing. Congress also mandated in section 330(b) of the Act that the Commission take appropriate action to ensure that closed captioning service continues to be available to consumers as new video technology is developed.

In 1991, the Commission adopted rules that codified standards for the display of closed captioned text on analog television receivers. Following the transition to digital broadcasting, the Commission in 2000 adopted technical standards for the display of closed captions on digital television receivers “to ensure that closed captioning service continues to be available to consumers.” In particular, the Commission adopted with some modifications section 9 of EIA-708, an industry standard addressing closed captioning for digital television, which allows the caption display to be customized for a particular viewer by enabling the viewer to change the appearance of the captions to suit his or her needs. When the Commission adopted the technical standards, it explained that the “capability to alter fonts, sizes, colors, backgrounds and more, can enable a greater number of persons who are deaf and hard of hearing to take advantage of closed captioning.”

In 2010, Congress enacted the CVAA to “update the communications laws to help ensure that individuals with disabilities are able to fully utilize communications services and equipment and better access video programming.” Section 203 of the CVAA broadened section 303(u) of the Act, which previously applied to “apparatus designed to receive television pictures broadcast simultaneously with sound,” to cover “apparatus designed to receive or play back video programming transmitted simultaneously with sound, if such apparatus is manufactured in the United States or imported for use in the United States and uses a picture screen of any size.” Such apparatus must “be equipped with built-in closed caption decoder circuitry or capability designed to display closed-captioned video programming.” In 2012, the Commission adopted performance and display standards for such built-in decoder circuitry in accordance with section 330(b) of the Act, and in particular it adopted functional requirements to ensure that consumers can modify caption display features for IP-delivered programming on covered apparatus. These rules require that apparatus provide functionality that allows users to change the presentation, color, opacity, size, and font of captions, caption background color and opacity, character edge attributes, and caption window color. But the rules do not mandate how users access such features on the device. In the Commission's subsequent proceedings on implementing the accessibility requirements of sections 204 and 205 of the CVAA, Consumer Groups described the difficulties consumers who are deaf and hard of hearing face in accessing closed captioning display features on apparatus used to view video programming.

In November 2015, in a Second Further Notice of Proposed Rulemaking ( Second FNPRM ) in the above-captioned docket, the Commission proposed to adopt rules that would require manufacturers and MVPDs to ensure that consumers are able to readily access user display settings for closed captioning, and on the Commission's authority to do so under the TDCA. 2 Among other things, the Second FNPRM asked whether the Commission should require the inclusion of closed captioning display settings no lower than the first level of a menu, whether such an approach would provide industry with sufficient flexibility, and whether there are “alternative ways to implement this requirement.” In January 2022, the Media Bureau released a Public Notice seeking to refresh the record on the proposals contained in the Second FNPRM. 3 While some comments in the refreshed record assert that caption display settings are accessible, others explain that problems with the accessibility of such settings continue to persist.

In January 2023, the Media Bureau released another Public Notice, seeking comment on a proposal in the record that the Commission require compliance with the following factors when determining whether captioning display settings are readily accessible: proximity, discoverability, previewability, and consistency and persistence. 4 On March 14, 2024, NCTA and a coalition of consumer groups filed in the record a joint proposal to make caption display settings readily accessible. 5 The Media Bureau released a Public Notice seeking comment on the joint proposal. 6

Below, we first find that we have authority under the TDCA to require that closed captioning display settings are readily accessible to consumers. Second, we adopt the requirement that such settings must be “readily accessible,” and we detail factors the Commission will require when making this determination. Third, we explain our finding that the public interest benefits outweigh the costs for a requirement that the closed captioning display settings be readily accessible. Fourth, we find that the rule we adopt herein applies to the full range of devices covered by section 303(u) of the Act, and that both manufacturers of covered apparatus and MVPDs are responsible for compliance with the rule, except that the requirements do not apply to third-party, pre-installed applications that are otherwise covered by section 303(u). Fifth, we discuss the availability of waivers or exemptions based on achievability and technical feasibility. Finally, we establish a compliance deadline of two years after publication of the Third Report and Order in the Federal Register .

Authority. We conclude that the Commission has authority under the TDCA to require that closed captioning display settings be readily accessible to consumers. Section 303(u)(1)(A) of the Act authorizes the Commission to require that “apparatus designed to receive or play back video programming transmitted simultaneously with sound” must “be equipped with built-in closed caption decoder circuitry or capability designed to display closed-captioned video programming.” Section 330(b) of the Act directs the Commission to adopt rules to “provide performance and display standards for such built-in decoder circuitry or capability designed to display closed captioned video programming” and, “[a]s new video technology is developed,” to take such action as it “determines appropriate to ensure that closed-captioning service . . . continue[s] to be available to consumers.”

We find that sections 303(u) and 330(b) authorize the Commission, in implementing the TDCA, to consider the practical usability of closed captioning features by consumers and to adopt “performance and display standards” that will make closed captioning “available to consumers” by ensuring the usability of the display options. We find that meaningful access to user display settings “is essential to making closed captioning `available' to consumers” within the meaning of the TDCA. 7 As Consumer Groups explain, “[i]f a consumer cannot readily locate and use display settings, then closed captioning itself is not truly `available' because the consumer cannot ensure that captions are rendered in a readable and accessible format,” and, thus the directive and purpose of the statute will not be fulfilled. Given “the increased volume and variety of both the programming and devices available to consumers” today, it is “more important now than ever” that the Commission modify its rules to ensure that closed captioning is meaningfully—not just nominally—available to viewers in order to serve Congressional intent. 8 The record shows that expecting consumers to “search[] for settings which are buried in menus” is an “intimidating and frustrating experience.”  9 Thus, simply including captioning circuitry somewhere in a device is not enough to satisfy the requirements of the statute; for the captions to be “available” as Congress intended, consumers must be able to adjust the caption display settings in a manner that makes the captions accessible— i.e., “available” to the consumer.

We find that the structure, text, purpose, and history of the TDCA support Commission authority to regulate consumer access to closed captioning display settings. First, the statutory structure and text support this interpretation. Section 303(u)(1)(A) directs the Commission to adopt regulations that, among other things, require (if technically feasible) that covered devices “be equipped with built-in closed caption decoder circuitry or capability designed to display closed-captioned video programming.” Section 330(b) directs the Commission to adopt “performance and display standards” and to take such action as it deems necessary to ensure that closed captioning continues to be “available,” as new technology is developed. Congress did not define the term “available” for purposes of section 330(b). We believe that the best reading is to interpret “available” to mean that consumers can readily access the various functions and features of closed captioning capability. We find that this reading is supported by the statute as a whole and the surrounding text. Specifically, section 330(b) identifies certain requirements that Commission rules “shall provide” in implementing section 303(u), including “performance and display standards,” a requirement that is sufficiently broad to encompass regulation of how closed captioning is accessed by consumers. Indeed, Consumer Groups discuss the meaning of the word “performance” in the phrase “performance and display standards,” explaining that “[a]n interpretation of the statute that would prohibit the Commission from setting standards for easy access to configuration controls would undermine” Congress's accessibility goals, and the “grant of authority to implement performance standards” provides the Commission with “substantial discretion” in adopting requirements “to specify how users might interact with functions required by those performance standards.” We agree. By exercising our authority in this manner, we fulfill the statutory requirement to include in our rules “performance” standards for closed captioning. In addition, section 330(b) directs the Commission “[a]s new video technology is developed” to “take such action as [it] determines appropriate to ensure that closed-captioning service . . . continue[s] to be available to consumers.” The “take such action as [it] determines appropriate” mandate further supports a broad, rather than narrow, view of the Commission's authority to “ensure that closed-captioning service . . . continue[s] to be available to consumers”—an objective advanced by ensuring access to closed caption display options. We thus believe this interpretation of the statute best reflects the ordinary meaning of the statute and best serves the statutory purpose, as discussed below.

Second, our interpretation is consistent with the express purpose of the TDCA, which is to increase the number of consumers who can avail themselves of closed captioning, with increased demand spurring the provision of more captioned programming. In enacting the TDCA, Congress stated that “to the fullest extent made possible by technology,” persons who are deaf and hard of hearing “should have equal access to the television medium.” Third, we observe that the legislative history reveals that Congress believed the TDCA would increase the audience for closed captioned programming and thereby create market incentives for investment in closed captioned programming. If a covered apparatus has the ability to process and display closed captions but does so in a way that makes it practically infeasible or undesirable for consumers to use that capability, the intent of broadening the potential audience for captioned programming is undermined. By requiring that closed captioning performance and display functionality be “readily accessible,” we fulfill the purpose of the TDCA and Congressional intent as reflected in the legislative history by ensuring that captions are meaningfully available, and we can increase the likelihood that the audience for closed captioned programming will continue to grow as unmet needs are fulfilled, consistent with the statutory purpose.

We do not agree that relying on sections 303(u)(1)(A) and 330(b) of the Act here is “a belated Commission reinterpretation of the TDCA.”  10 To the contrary, the Commission historically has recognized and exercised authority under sections 303(u) and 330(b) of the Act, prior to the enactment of the CVAA, in a manner that supports its exercise of that authority to regulate access to closed captioning display options here. Previously, the Commission concluded that “[i]t is essential” that closed captions be readable, and it relied on sections 303(u) and 330(b) of the Act to adopt closed captioning rules that required consumers to be able to modify settings such as font size and color. Interpreting the TDCA to authorize regulations ensuring that consumers can easily access the required display settings to make closed captions readable, therefore, is entirely consistent with our prior interpretations. For the same reason, there is no logical basis to conclude that Congress, with respect to the TDCA modifications it adopted via the CVAA, interpreted the TDCA as not having granted the Commission authority to regulate access to display settings, as some commenters advocate.

Further, we reject the argument that the penultimate sentence of section 330(b) does not support the adoption of new requirements here because currently there is “no threat to the availability of closed-captioning service.”  11 To the contrary, we find that the requirements we are adopting herein are a proper exercise of our authority under section 330(b) because the record shows that the development of new technology for viewing video programming has made it more difficult for consumers to access the necessary caption display settings. Specifically, consumers today watch video programming on a multitude of different devices, and “it is difficult for consumers to readily anticipate where display settings are located because the location varies depending on the device used.”  12 With the proliferation of online video programming, a consumer that views captioned video programming using the same application or website on multiple devices may adjust the display settings for one device, only to find that the settings need to be adjusted again when the programming is viewed on a different device.

We also disagree with commenters who argue that the directives of sections 303(u) and 330(b) are satisfied as long as closed captioning circuitry or capability is included somewhere in their devices, that the statute's use of the term “available” should be read narrowly to exclude consideration of the accessibility of the closed captioning by consumers, 13 and that section 330(b) does nothing more than “authorize the Commission to update specifications as necessary to keep up with new video technologies.”  14 As explained above, Congress used broad language in section 330(b), authorizing the Commission to “take such action as [it] determines appropriate” to ensure the continued availability of closed captioning. We thus reject ACA's assertion that the Commission's authority under section 330(b) “is limited to updating the specific technical requirements identified in the TDCA” to avoid requiring manufacturers to adhere to “outdated technical requirements.” Further, our interpretation best serves the statutory purpose of ensuring that persons who are deaf and hard of hearing “should have equal access to the television medium.” Thus, we believe our adoption of a rule ensuring the accessibility of closed captioning display functions falls within the broad scope of this language. The language also informs our interpretation and implementation of our authority under section 303(u) to ensure that video apparatus is “equipped” with closed captioning capabilities, which requires both that the apparatus possesses the necessary capabilities and that consumers are able to access them. 15 Thus, our advancement of the objectives identified in section 330(b) also supports our use of section 303(u)(1)(A) authority to adopt the requirements of this order. 16

We further reject arguments that the statutory language does not permit the Commission to regulate the manner in which consumers are able to access and use such circuitry or capability. AT&T, for example, points to language in section 330(b) directing the Commission to ensure that covered apparatus “be able to receive and display closed captioning which have been transmitted by way of line 21 of the vertical blanking interval,” consistent with specific “signal and display specifications.” Yet, that text is preceded by the phrase, “Such rules shall further require,” which belies the notion that Congress intended to use that language to limit the Commission's authority to the implementation of the identified specifications. To the contrary, we conclude that the reference in section 330(b) of the Act to “performance and display standards,” which Congress did not define, includes the regulation of how consumers are able to access and use closed captioning. To interpret the language more narrowly, as some commenters advocate, would have the perverse result of allowing a manufacturer or MVPD to bury those settings so deep in a complicated series of menus that they are not readily accessible, undermining the purpose of the statute to ensure they are “available to consumers.” Further, the reference that AT&T highlights in the statute to the “line 21 of the vertical blanking interval” relates only to analog transmission. There is no vertical blanking interval in digital transmissions. The digital transition occurred in 2009 for the majority of stations, and the requirement contained in this sentence cannot transfer directly into a digital environment. Thus the requirement contained in this sentence cannot reasonably be read to limit the Commission's authority here. The directive in section 330(b) that the Commission “take such action as [it] determines appropriate” supports a broad view of the Commission's authority to ensure that closed captioning “continue[s] to be available to consumers.”

Further, Congress's enactment in the CVAA of sections 303(aa) and (bb) of the Act does not undercut the Commission's exercise of its authority under sections 303(u) and 330(b) of the Act. Section 303(aa) contains accessibility requirements for certain digital apparatus functions and features, while section 303(bb) contains accessibility requirements for certain navigation device functions and features. First, we reject suggestions that sections 303(aa) and (bb) are more specific than sections 303(u) and 330(b) and thus are controlling with regard to Commission authority to regulate consumer access to closed captioning display settings. These arguments invoke the general canon of interpretation that “specific statutory language should control more general language when there is a conflict between the two.”  17 Such an interpretation would represent a narrowing of the authority that the Commission previously understood itself to have and that it has exercised, and there is no indication that Congress intended the CVAA to have such an effect. It is more consistent with the accessibility objectives of the CVAA to conclude that Congress intended sections 303(u), (aa), (bb), and 330(b) of the Act to be available collectively as a source of Commission authority to pursue disability access objectives. 18 While sections 303(aa)(3) and (bb)(2) specifically address access to closed captioning activation, they are silent regarding access to closed captioning display options. 19 Had Congress intended to curtail the Commission's authority to take further action under section 330(b) to promote the continued availability of closed captioning service, it could have done so explicitly. It did not, and we find it unlikely that Congress intended to do so sub silentio.

Second, contrary to the suggestion of some commenters, we find that Congress's decision to require closed caption activation via a mechanism reasonably comparable to a key, button, or icon does not mean that it considered and rejected such a requirement for closed captioning display settings. 20 Rather, as stated above, we find that Congress intended the relevant provisions of the Act—section 303(u), as amended by the CVAA; sections 303(aa) and (bb), added to the Act by the CVAA; and section 330(b), added to the Act by the TDCA—to be available collectively as a source of Commission authority regarding disability access issues. Given Congress's interest in expanding access to video programming through the CVAA, we do not believe that it intended the provisions of that statute to negate the express language of section 330(b) to ensure that closed captions continue to be available to consumers as new video technology is developed, nor the overall intent of the TDCA to bring more programs that are closed captioned into the homes of Americans. Congress required closed caption activation via a certain mechanism in the CVAA, but Congress left it to the Commission's discretion to determine whether and to what extent to regulate other matters pertaining to the ability of consumers to access closed captioning on video apparatus pursuant to its earlier grant of authority, including specifically through establishment of “performance and display standards.”

Third, we disagree with commenters who contend that Congress would not have needed to adopt provisions in the CVAA directing the Commission to require closed caption activation through a mechanism reasonably equivalent to a button, key, or icon if the Commission already had authority pursuant to the TDCA to regulate access to closed captioning display settings. There are legally meaningful differences in the Commission's authority under section 303(u) as compared to sections 303(aa) and (bb) of the Act, which indicate that Congress intended to give the Commission new authority to accomplish a particular purpose, rather than supplant the Commission's authority to adopt closed-captioning regulations pursuant to a specific legal standard under section 303(u). For example, section 303(u)(1)(A) directs the Commission to adopt closed captioning requirements that apply if compliance is “technically feasible,” whereas sections 303(aa)(3) and (bb)(2) contain no such limitation. 21 Additionally, the Commission has statutory authority to exempt certain apparatus from the requirements of section 303(u) that it cannot exercise with respect to the requirements of sections 303(aa)(3) and (bb)(2). Further, the CVAA established deadlines for the Commission to adopt rules initially implementing the requirements of sections 303(aa)(3) and (bb)(2) that differ from those for implementing the CVAA's revisions to section 303(u). There is no logical basis to conclude that the “button, key, or icon” requirement in sections 303(aa)(3) and (bb)(2) presupposes the absence of authority in sections 303(u)(1) or 330(b) to adopt different regulations to ensure that closed captioning performance and display functions continue to be “available” to consumers. Thus, we conclude that enactment of sections 303(aa)(3) and (bb)(2) does not diminish our authority to adopt the new rule set forth herein.

Finally, as a separate and independent basis of authority, in addition to the TDCA, we find authority to adopt accessibility requirements under sections 4(i) and 303(r) of the Act. The Commission is specifically delegated authority under the Act to require that covered apparatus must “be equipped” with closed caption capability and to adopt rules as it “determines appropriate to ensure that closed-captioning service . . . continue[s] to be available to consumers” “[a]s new video technology is developed.” Ensuring that the required caption capabilities are actually accessible by consumers is essential to fulfill these statutory requirements. Otherwise, if a consumer cannot readily locate and use display settings to ensure that captions are rendered in a readable and accessible format, then closed captioning itself is not truly “available” as required under the statute. The rules we adopt today are thus necessary to carry out the specific requirements set forth in sections 303(u) and 330(b) of the Act.

Access to Closed Captioning Display Settings Must Be “ Readily Accessible.” As proposed in the Second FNPRM, we adopt a rule that requires covered manufacturers and MVPDs to ensure that consumers are able to readily access user display settings for closed captioning on covered apparatus pursuant to our authority under the TDCA. Congress directed the Commission to provide performance and display standards for built-in decoder circuitry or capability designed to display closed captioned video programming and to take action to ensure that closed captioning continues to be available to consumers as video programming technology evolves. The rule we adopt herein serves these statutory directives. As discussed below, we afford covered entities (MVPDs and manufacturers) flexibility in how they meet this obligation, and the Commission will determine whether settings are readily accessible to consumers by evaluating the following factors, as described in the March 2024 joint proposal: proximity, discoverability, previewability, and consistency and persistence. 22 Below we explain the public interest benefits of these new requirements. We also describe which devices and entities are covered by the rule, set forth exemptions for achievability and technical feasibility, and set a compliance deadline of two years from publication of the rule in the Federal Register .

“ Readily Accessible.” “Readily Accessible” Requirement in General. We first require manufacturers and MVPDs to ensure that consumers are able to readily access user display settings for closed captioning on covered apparatus. To determine whether particular settings are readily accessible, the Commission will require compliance with the following factors, which we further define below: proximity, discoverability, previewability, and consistency and persistence. 23 Failure to comply with any of the factors may be deemed a violation of the Commission's rules. 24

The readily accessible requirement, which the Commission will evaluate based on the four factors, will ensure that consumers who are deaf and hard of hearing can easily access closed captioning display settings, while still giving covered entities flexibility in the manner of compliance. 25 While display settings already may be readily accessible for some devices, using such settings generally has not been easy for consumers. 26 As Consumer Groups explain, “these functional requirements provide a workable middle ground between strict design mandates and the laissez faire approach called for by industry commenters, allowing the industry substantial flexibility while requiring it to finally address the long-standing gaps in the accessibility of closed captioning display setting interfaces.”  27 We believe that this approach will alleviate the challenges faced by consumers who are deaf and hard of hearing in accessing closed captioning and will ensure that these viewers can adjust the font, size, color, and other features of closed captions wherever they are watching video programming on devices without the undue complexity experienced today. This approach is also consistent with how the Commission has implemented accessibility requirements for closed captioning activation mechanisms on video devices pursuant to sections 204 and 205 of the CVAA. 28

Proximity. In determining whether specific closed captioning display settings are readily accessible, the Commission will require that the settings are “proximate.” For this purpose, “proximity” requires that covered entities “will place . . . the closed caption display settings . . . in one area of the settings (either at the operating system or application level) that is accessed via a means reasonably comparable to a button, key, or icon.”  29 Consumer Groups initially argued that this factor should require access to closed captioning settings in the first level of a menu. 30 Industry objected to this approach as too rigid. Consumer Groups then modified their proposed definition of “proximity,” clarifying that it is intended to ensure that consumers need not navigate a lengthy set of steps and/or switch devices or applications to access closed caption display settings. The subsequent March 2024 joint proposal did not specifically reference that modification and instead further refined the approach to provide that caption display settings should be available in one area of the settings that can be accessed via a means reasonably comparable to a button, key, or icon. We find that requiring proximity pursuant to the revised definition is in the public interest because it will ensure that consumers do not need to complete many steps or switch devices or applications to access closed caption display settings, and it is hereby required by our rules. We believe that the presence of ready access to caption display settings is paramount to the utility of such settings, and the “proximity” requirement will further that aim.

Under the approach we adopt today, industry is afforded flexibility in how precisely to ensure that closed captioning display settings are made readily accessible pursuant to the proximity factor, so long as the settings are available in one area that is accessible via a means reasonably comparable to a button, key, or icon. Making closed captioning display settings available solely or primarily through the use of voice control likely would not be considered proximate. In an Order on Reconsideration, the Commission previously found that closed captioning activation mechanisms that rely solely on voice control do not fulfill the requirement of sections 204 and 205 of the CVAA and our implementing rules that such mechanism be reasonably comparable to a button, key, or icon. The Commission was persuaded by a Petition for Reconsideration filed by Consumer Groups indicating that voice activation is not simple and easy to use for many individuals who are deaf and hard of hearing. We believe that a similar rationale applies here. We cannot find that caption display settings are reasonably accessible if many of the individuals who are intended to benefit from the settings, in other words those consumers who are deaf and hard of hearing, would not actually be able to access them. As in the Order on Reconsideration, we clarify that covered entities are not prohibited from using voice controls to provide access to the area of the settings that contains the closed captioning display settings as long as there is an alternative way that is reasonably comparable to a button, key, or icon for individuals who are deaf and hard of hearing to readily access closed captioning display features. In addition, CTA indicated that at least one device manufacturer was considering a long press of a button on the remote to bring up closed captioning display settings. Compliance with the factors we adopt today is a fact-specific determination, and as a result, we decline to rule definitively on whether any particular means of providing closed captioning display settings is “readily accessible.” We agree with CTA that the long press of a remote control button may be consistent with the proximity requirement, which requires a mechanism reasonably comparable to a dedicated button, key, or icon, but we emphasize that the long press, like any mechanism, also would need to be evaluated to determine compliance with each of the other factors to be considered readily accessible.

Discoverability. In determining whether specific closed captioning display settings are readily accessible, the Commission will require that the settings are “discoverable.” For this purpose, to ensure that the settings are “discoverable,” covered entities must: (1) conduct usability testing to determine if caption display settings can be easily found by working with consumers and disability groups as part of the testing process; (2) make good faith efforts to correct problems identified during the consumer testing process; and (3) train customer-facing employees on how to advise customers with regard to caption display settings. This approach is consistent with the March 2024 joint proposal between NCTA and Consumer Groups. We note that as proposed in some comments, discoverability would have considered whether it is simple and intuitive for a viewer to find closed captioning display settings. Some commenters objected to that formulation as too subjective. The formulation in the March 2024 joint proposal that we adopt here has the benefit of being more objective because it requires entities to conduct usability testing, demonstrate efforts to address problems that arise during such testing, and train customer-facing employees. In addition, this approach is not superfluous of any other existing or new requirement. 31 We believe that discoverability, the ability to find the settings, is central to users' ability to benefit from and receive the value of closed captioning and is therefore in the public interest and is hereby required by our rules. We decline to specify the type of employee training that must be provided, instead concluding that regulated entities should retain flexibility to determine the type of employee training needed in their particular circumstances to ensure that settings are discoverable.

Previewability. In determining whether specific closed captioning display settings are readily accessible, the Commission will require that the settings are “previewable.” For this purpose, “previewability” means whether viewers are able to preview the appearance of closed captions on programming on their screen while changing the closed captioning display settings. As explained in the March 2024 joint proposal between NCTA and Consumer Groups, previewed captions must appear “via a caption box overlaying the programming,” such that [c]ustomers will still be able to see the underlying programming. . . .” The caption preview may include “stock text or caption previews, rather than the captions carried on the specific program,” which “will enable customers to preview captions even in situations where the channel the customer is watching may not include captions at a particular time, e.g., during a commercial break or portions of programming that are uncaptioned due to the nature of the content.” Although the Commission's rules already require apparatus to enable “the user to preview default and user selection of the caption features required by this section,”  32 that provision does not require the preview function to be accessible without exiting the programming. We find that requiring previewability to the extent described herein is in the public interest because it will enable a viewer to see how particular caption display settings work with the program the viewer is watching, and it is hereby required by our rules. 33 A previewability requirement as defined herein will make it efficient for consumers to adjust captions, while giving designers flexibility as to precisely how they modify their interfaces to facilitate previewability.

Consistency and Persistence. In determining whether specific closed captioning display settings are readily accessible, the Commission will require that the settings are “consistent and persistent.” In keeping with the March 2024 joint proposal, for this purpose, “consistency and persistence” means: (1) MVPDs that provide navigation devices must “expose closed caption display settings via an application programming interface (API) that an over-the-top app provider can use upon launch of their app on the device,”  34 the API must “enable the app provider to use the device-level caption settings for its own content, if it chooses,” and “covered entities must notify application developers about this API or similar method through any reasonable means;” (2) MVPDs that provide their own video programming app hosted on third-party devices “will [utilize] the operating system-level closed caption settings of the [apparatus] upon launch of the app on the device;” and (3) manufacturers must ensure that such apparatus “make[ ] those settings available to applications via an API or similar method.”  35 Consumer Groups have explained the difficulties of using different settings for each application on the same platform, and of maintaining the same settings across different platforms. As Consumer Groups explain, a consistency and persistence requirement will subject consumers to “fewer procedures to customize captions for the same service used on different devices and for different services accessed on the same device,” which will reduce the frequency with which consumers must adjust captions.

The approach to consistency and persistence that we adopt today is narrower than the approach previously advocated by the Consumer Groups, which would have required covered entities to ensure that their closed captioning display settings are consistent when the same service is used on different devices and persistent when different services are used on the same device. Industry raised several significant concerns with this broader definition of the “consistency and persistence” factor. We believe that the narrower approach to consistency and persistence that we adopt today, which includes specific requirements that are tailored to the role of each party, will help make display settings more readily accessible to users and therefore is in the public interest.

We recognize that any consistency and persistence requirement could raise certain issues, including how caption display settings should be stored and transmitted, how to address privacy and competitive implications that may arise, and whether to prioritize a preset setting versus a conflicting setting that a user subsequently inputs or a setting input on a device versus a conflicting setting input on an application accessed via the device. However, we do not believe these implementation issues are impediments to the development of solutions that satisfy the consistency and persistence requirement as defined here and we agree with NCTA that these issues “should not stop the Commission from taking positive steps now to benefit consumers.” With respect to CTA's objection that the requirement could compel disclosure of sensitive personal information in violation of state or federal privacy laws, we find that such objections are vague and unsubstantiated and we disagree that the requirements adopted here to provide consumers with consistent settings when different services are used on the same device would have such a result. 36 Similarly, while CTA explains that a television has no way to know if the person using it is the most recent user or a guest, the API-based approach set forth in the joint proposal still will improve the consumer experience and we do not believe that advancements in accessibility should be stalled because video equipment may be accessed by multiple viewers. To the extent compliance concerns remain even with the narrower approach we adopt today, we note that “achievability” and “technical feasibility” exemptions remain available to covered entities, as discussed further below.

Public Interest Benefits of New Display Settings Requirement. We find that the public interest benefits outweigh the costs for a requirement that the closed captioning display settings be readily accessible. In enacting the TDCA, Congress stated that “to the fullest extent made possible by technology,” persons who are deaf and hard of hearing “should have equal access to the television medium.” In the Second FNPRM, the Commission stated that there are important public interest considerations that weigh in favor of ensuring that consumers are able to readily access user display settings for closed captioning. The record supports the continued need for this access, providing numerous examples of user interfaces across various popular platforms, services, and devices that are apparently not readily accessible. 37 When it adopted technical standards for the display of closed captions on digital television receivers, the Commission concluded that “[o]nly by requiring decoders to respond to these various [display] features can we ensure that closed captioning will be accessible for the greatest number of persons who are deaf and hard of hearing, and thereby achieve Congress' vision.” According to Consumer Groups, the ability to alter font, size, color, and other display features of captions is “a critical component of accessing closed captioning” for individuals who are deaf and hard of hearing, allowing them to change the appearance of captions to best meet their particular needs.

Although the rules the Commission adopted in 2000 were intended to provide consumers with the benefits of customizing the appearance of closed captions, these features are not readily accessible to many consumers who are deaf and hard of hearing. When consumers cannot readily access the closed captioning display settings, the benefits of our rule allowing the customization of closed caption display are greatly diminished. Consumer Groups explained in 2016 that “many consumers face the intimidating and frustrating technical barrier of display settings that are difficult to locate and utilize, which prevents viewers from being able to easily customize the captions to be readable.” There is little evidence in the record of significant progress since the Commission proposed caption display settings requirements in 2015. Having to take cumbersome steps to access display settings that make closed captions readable may discourage individuals who are deaf and hard of hearing from using closed captioning to make video programming accessible. If consumers are unable to read default captions ( e.g., if the size of the font is too small) and are unable to locate and use display settings to change the appearance of the captions, they are precluded from using closed captioning at all.

As explained above, our action ensures that the Commission can meet its continuing obligation under the TDCA to take appropriate action to ensure that closed captioning remains available to consumers as new video technology is developed. As Consumer Groups explain, making closed captioning display settings easy to find and use is especially important given the multitude of devices and programming options available to consumers today, which may each require customization to suit a user's needs. 38 We agree with Consumer Groups that “the[ ] goals of removing technical barriers and ensuring practical accessibility and readability of captions would all be advanced by the proposed rule.” The benefits of the rule will extend not only to the deaf and hard of hearing population, but also to other members of the public that utilize closed captioning, including in public places such as restaurants, bars, hotels, hospitals, and nursing homes.

While the record reflects that there will be some costs to industry to comply with the rule we adopt herein, we find that the substantial benefits to consumers outweigh those costs. In the Second FNPRM, we inquired about the costs of the proposal as well as the impact of the proposed rule on small entities. The record does not contain any specific figures or estimates quantifying the costs of compliance. However, industry commenters indicate that modifying access to closed captioning display settings may be “a significant undertaking involving design, development, testing, and manufacture [and] involving coordination among `multiple internal and external design and engineering teams.' ”  39 These commenters assert that the efforts will involve more than a small software modification, but they do not allege that these efforts would be prohibitively burdensome or costly. Other industry commenters state that “[a]dopting a new requirement regarding closed caption display settings . . . would chill innovation.”  40 However, we find that the flexibility allowed in determining how to comply will mitigate this possibility. Taking into account the industry comments, we find that the extensive benefits outlined above will outweigh the compliance costs to industry. The benefits extend to the approximately 48 million Americans who are deaf and hard of hearing, as well as to the DeafBlind community and the millions of individuals with low vision, including many senior citizens. 41 As Consumer Groups state, “The ability to adjust captioning settings is particularly essential for people who have both hearing and vision disabilities. For example, people who are DeafBlind, low vision or color blind often rely on high-contrast visuals and interfaces to be able to read information on screens. By ensuring that these individuals can easily find and adjust the caption display settings, the rules we now adopt will provide the autonomy needed for these individuals to independently customize captions on their own— i.e., to select the color, size, and contrast that best fits their personalized needs for optimal readability and comprehension of content. Enhancing access to video programming in this manner will ensure that such individuals can fully benefit from the news, information and entertainment that video programming makes available to the rest of the general public.” We also believe that the costs of compliance will be mitigated because we give covered entities flexibility in the manner of compliance, which allows them to choose a cost-effective solution, and because the requirements do not apply to third-party, pre-installed applications. Further, to the extent there are companies that already provide closed captioning display settings in a readily accessible manner, they will not need to incur any additional costs to comply.

In the initial comment period, industry commenters asserted that the Commission should take a “wait-and-see approach” to determine if additional accessibility rules are necessary. In particular, industry commenters asserted that manufacturers had been working hard to comply with the accessible user interfaces requirements adopted pursuant to sections 204 and 205 of the CVAA, which were subject to a December 20, 2016 compliance deadline, and that it was premature for the Commission to adopt new rules before evaluating the technical innovations developed by covered entities to meet these accessibility obligations. However, while the accessible user interfaces rules require that closed captioning be activated by a mechanism reasonably comparable to a button, key, or icon on digital apparatus and navigation devices, these requirements do not govern how closed captioning display settings should be accessed on such devices. Further, the record at that time contained few specific examples of how closed captioning display settings actually would be made available to consumers after the December deadline. While the accessible user interface rules and the 2016 compliance deadline were not intended to address access to closed captioning display settings, the Commission now has the benefit of a refreshed record that reflects a lack of progress since the 2016 deadline, and a basis to find that the closed captioning display setting requirements the Commission initially proposed remain necessary. Thus, we do not believe that the section 204 and 205 accessibility requirements obviate the need for Commission action with respect to closed captioning display settings, and we see no reason to further delay rules that are sorely needed by consumers who are deaf and hard of hearing to address the “long and frustrating history” of inaccessible display settings. 42

Covered Devices. As proposed in the Second FNPRM, the rule we adopt herein applies to the devices covered by section 303(u) of the Act—apparatus designed to receive or play back video programming transmitted simultaneously with sound, if such apparatus is manufactured in the United States or imported for use in the United States and uses a picture screen of any size, as interpreted consistently with our precedent in the IP Closed Captioning Order, except that, consistent with the joint proposal, the readily accessible requirements do not apply to third-party, pre-installed applications. 43 Further, consistent with our precedent, the following are not subject to the requirements adopted herein: (1) apparatus exempt from the requirement to be equipped with built-in closed caption decoder circuitry or capability designed to display closed-captioned video programming ( e.g., display-only video monitors, and professional or commercial equipment); (2) equipment for which the requirement has been determined to be not achievable or technically feasible; or (3) equipment for which the requirement has been waived ( e.g., apparatus primarily designed for purposes other than receiving or playing back video programming). In CVAA orders subsequent to the IP Closed Captioning Order, the Commission consistently interpreted the term apparatus to include only applications that are pre-installed by the device manufacturer or that the manufacturer requires the consumer to install after sale. However, the Commission stated that it “will continue to monitor the development of accessible technology in this area and will reevaluate whether we should require the accessibility of consumer-installed MVPD applications at a later date if it appears necessary to ensure access to MVPD programming” by persons with disabilities. Although at that time the Commission observed that there are technical challenges in ensuring that consumer-installed MVPD applications comply with accessible user interface requirements, we recognize that the industry is constantly evolving. Similarly, for purposes of the readily accessible requirement, we credit the decision of the joint proposal to exclude both consumer-installed applications and third-party, pre-installed applications. 44 The exclusion of third-party, pre-installed applications is reasonable in this instance because inclusion would “pose substantially more practical and technical difficulties”  45 due to the types of requirements that are at issue herein—for instance customer service training and usability testing—and the independence of app developers on the one hand and MVPDs and manufacturers on the other. However, we intend to continue to monitor the constantly evolving video programming industry to ensure that people with disabilities are not left behind. Accordingly, if we find that MVPDs and/or manufacturers are not making their applications accessible, or if third-party, pre-installed applications, or new technologies, present accessibility challenges because display settings are not readily accessible, the Commission will consider initiating a rulemaking to determine whether we should impose additional readily accessible requirements. 46

Consumer Groups agree that the rule should be applied broadly to the full range of devices covered by section 303(u) of the Act, which would “promote Congress's goal of ensuring that closed captioning is available to consumers.” AT&T and CTA, on the other hand, argue that the Commission's authority with respect to the TDCA is limited to the accessibility of broadcast television receivers. Contrary to the contention of these industry commenters, the Commission has authority under sections 303(u) and 330(b) of the Act to apply its new rules for consumer access to closed captioning display settings to apparatus beyond broadcast televisions. Although Congress's focus at the time of enactment of the TDCA was on broadcast television-related technical standards, that does not preclude a broader interpretation today. Section 303(u)(1), by its terms, applies broadly to all “apparatus designed to receive or play back video programming transmitted simultaneously with sound.” Although this phrase is not defined in the statute, Congress had amended the original language in 303(u), which had referred to “apparatus designed to receive television pictures broadcast simultaneously with sound.” The Commission has interpreted section 303(u)(1)'s scope broadly. The Commission's interpretation of section 303(u) as extending beyond broadcast televisions thus reflects the ordinary meaning of the statute. Because section 330(b), in pertinent part, simply refers to the “apparatus described in section 303(u),” our analysis of the scope of section 330(b) mirrors our interpretation of the scope of section 303(u).

Covered Entities. Both manufacturers of covered apparatus and MVPDs are responsible for compliance with the rule we adopt herein. The Commission sought comment in the Second FNPRM on whether both manufacturers and MVPDs should be obligated to make it easier for consumers to locate and control closed captioning display settings. Consumer Groups argue that manufacturers and MVPDs should share responsibility in ensuring that consumers can locate and use display settings, particularly because MVPDs have ongoing relationships with subscribers who are likely to turn to them to resolve any issues with accessibility features. We are persuaded by Consumer Groups that there are significant benefits of imposing these requirements on MVPDs as well as manufacturers, including that a consumer who is viewing video programming via an MVPD service would be more likely to contact the MVPD for assistance with user display settings. Industry commenters argue that the TDCA cannot be applied to MVPDs because the Commission's prior rulemakings implementing the TDCA imposed requirements only on manufacturers. We disagree. Whereas the initial order in this proceeding applied certain rules to navigation devices, which were the responsibility of MVPDs, and certain rules to apparatus, which were the responsibility of manufacturers, the overall result was that both manufacturers and MVPDs were subject to the requirements. Similarly in this Order, we hold MVPDs responsible for the apparatus they distribute to consumers, and manufacturers responsible for the apparatus they manufacture.

While the joint proposal submitted in March 2024 was focused on the cable context, it indicated that “the proposals could also serve as a model for other MVPDs and equipment manufacturers.” We believe that it is appropriate and reasonable to adopt the joint proposal to apply to all covered entities. The Media Bureau specifically sought comment on whether the joint proposal should “apply broadly to the devices covered by section 303(u) of the Communications Act of 1934, as amended, and to both manufacturers of covered apparatus and MVPDs.” In response, CTA argued that the Commission “should not hold manufacturers responsible for aspects of the complex video ecosystem that they do not control and over which they do not have sufficient leverage to require compliance with regulatory obligations.” We agree, and we note that the rules we adopt today hold manufacturers responsible for apparatus they manufacture and MVPDs responsible for apparatus they provide to their customers. We agree with Consumer Groups that “just because responsibilities need to be coordinated among various video programming participants is no reason for these responsibilities not to be mandated and fulfilled.”  47

We agree with Consumer Groups that we have the authority to apply the rules we adopt today to MVPDs, as well as manufacturers. Sections 303(u) and 330(b) of the Act operate in tandem. Under section 303(u), the Commission establishes requirements for covered apparatus to be equipped with closed captioning, audio description, and emergency information capability. The first sentence of section 330(b) of the Act, in turn, states that “[n]o person shall ship in interstate commerce, manufacture, assemble, or import from any foreign country into the United States” any apparatus that fails to satisfy the requirements adopted pursuant to section 303(u) of the Act. In other words, the duty to meet the apparatus requirements adopted under section 303(u) applies to any person engaging in the activities identified in section 330(b). MVPDs regularly “ship in interstate commerce” or “import . . . into the United States” the set-top boxes that they distribute to customers. In this respect, the requirements adopted under section 303(u)(1)(A) relating to closed captioning capability flow through to MVPDs by restricting the devices they can ship or import for distribution to their customers. We therefore conclude that, pursuant to the express terms of section 330(b), which states that “no person shall” engage in the specified activities, we will apply our new rule implementing sections 303(u) and 330(b) of the Act to MVPDs for the purpose of proscribing the actions enumerated in the first sentence of section 330(b). 48

Although the statute defines the term “interstate commerce,” it does not separately define the phrase “ship in interstate commerce,” or provide express guidance on how that phrase should be applied to specific types of shipments. We therefore interpret this phrase in a way that best reflects the ordinary meaning of the text and meets the statutory objectives of section 330(b) and section 303(u). We believe it is best to interpret the phrase to apply to the entire transportation path from the point at which the goods leave the seller's warehouse to the point at which the buyer, such as an MVPD, delivers the goods to its own customers—in this context an MVPD's subscribers. Thus, we conclude that the term “interstate commerce” encompasses “commerce” in apparatus deployed by MVPDs to their subscribers, and we interpret the phrase “no person shall ship in interstate commerce” to proscribe an MVPD's deployment of noncompliant set-top boxes or other covered apparatus to subscribers' premises after the applicable compliance deadline, where covered apparatus originated from out of state or traversed state lines.

Our conclusion is supported by cases in which the phrase “in interstate commerce” has been interpreted to refer to the entire stream or flow of commerce with respect to a product. Those cases hold that the flow of interstate commerce does not end once an intrastate shipment begins where a seller transporting goods intrastate “made interstate sales or was `otherwise directly involved in national markets' or . . . the `local market . . . is an integral part of the interstate market in other component commodities or products.' ”  49

In the circumstances at issue here, MVPDs are an active link in the continuous flow of equipment to their subscribers. They typically order equipment from manufacturers that is shipped interstate for deployment to their subscribers. Thus, an MVPD is the pivotal intermediary between the apparatus manufacturer and the MVPD's subscribers, essentially making choices on behalf of its subscribers. This is materially different from situations in which a manufacturer sells to a wholesaler, the wholesaler sells to multiple retailers, and consumers shop at retailers and decide what to buy. Under these circumstances, we find that MVPDs engage in interstate commerce when they procure equipment across state lines and deploy it to subscribers to enable them to view their programming.

This conclusion is reinforced by the statutory context. The statute is intended to protect consumers with disabilities by ensuring that equipment that the MVPD selects on their behalf serves their needs. In this context, it makes sense to view all of the links in the chain as a continuous stream of commerce ultimately destined for the MVPD subscriber. 50 And given the MVPD's intermediary role, interpreting the phrase “ship in interstate commerce” to apply to the MVPD's deployment of apparatus to subscribers' premises best reflects the ordinary meaning of the statutory text and best serves the statutory purpose of ensuring that all consumers who are deaf and hard of hearing should have equal access to television programming. In light of this statutory purpose, and against the backdrop of judicial precedent interpreting the phrase “in interstate commerce,” we conclude that an MVPD that procures covered apparatus from a manufacturer located in another state or foreign country and deploys it to subscribers is shipping apparatus in interstate commerce. 51 Accordingly, we interpret the phrase “no person shall ship in interstate commerce” as prohibiting MVPDs from deploying non-compliant apparatus to subscribers after the applicable compliance deadline. Further, from a policy perspective, we agree with Consumer Groups that MVPDs play an integral role in ensuring that closed captioning service is available because, unlike manufacturers, they have an ongoing relationship with consumers. In addition, to the extent any MVPD manufactures covered apparatus, we note that section 330(b) applies to such MVPDs for that reason alone. For all of these reasons, the statutory language and policy objectives both support application of the rule to MVPDs.

Waivers and Exemptions. Achievability. Because we derive our authority for the rule we adopt herein from section 303(u)(1) of the Act, we find that the requirement for readily accessible caption display settings for covered apparatus that use a picture screen less than 13 inches in size is subject to the achievability provision set forth in section 303(u)(2)(A). Section 303(u)(2)(A) of the Act, as amended by section 203 of the CVAA, specifies that apparatus described in section 303(u)(1) that use a picture screen that is less than 13 inches in size must meet the requirements of that section only if such requirements “are achievable (as defined in section 617 of this title).” In the Second FNPRM, the Commission sought comment on whether the provisions related to achievability in section 303(u) of the Act apply to the requirement that consumers be able to readily access user display settings for closed captioning. Industry commenters argued that we should allow covered entities to seek an exemption on the grounds of achievability, while Consumer Groups argued that it is unnecessary to adopt an achievability exemption because compliance with the rule will involve only a minor software modification. We find that covered apparatus that use a picture screen less than 13 inches in size must meet the requirements of section 303(u)(1), which requires covered apparatus to be equipped with built-in closed caption decoder circuitry or capability designed to display closed captioned video programming, only if such requirements “are achievable.”

The Act defines “achievable” to mean “with reasonable effort or expense,” as determined by the Commission. The Commission will determine whether compliance is “achievable” on a case-by-case basis, consistent with the approach taken by the Commission when implementing section 203 of the CVAA. 52 In particular, the Commission will consider the following factors in determining whether compliance with the requirements adopted herein is achievable in particular circumstances: (1) the nature and cost of the steps needed to meet the requirements of this section with respect to the specific equipment or service in question; (2) the technical and economic impact on the operation of the manufacturer or provider and on the operation of the specific equipment or service in question, including on the development and deployment of new communications technologies; (3) the type of operations of the manufacturer or provider; and (4) the extent to which the service provider or manufacturer in question offers accessible services or equipment containing varying degrees of functionality and features, and offered at differing price points. If a covered entity believes that it is not achievable for it to comply with the rule we adopt herein, it may either (i) seek a determination from the Commission that compliance with the rule is not achievable before manufacturing or importing the apparatus; or (ii) raise as a defense to a complaint or Commission enforcement action that a particular apparatus does not comply with the rules because compliance was not achievable. 53 If a party seeks a determination of achievability before manufacturing or importing the apparatus, it should follow the procedures for an informal request for Commission action pursuant to § 1.41 of our rules.

Technical feasibility. In the Second FNPRM, we also sought comment on whether the technical feasibility exemption in section 303(u) of the Act applies to the requirement that consumers be able to readily access user display settings for closed captioning. As discussed above, we find that it does. In particular, the requirements set forth in section 303(u) of the Act, including the requirement that covered apparatus be equipped with built-in closed caption decoder circuitry or capability designed to display closed captioned video programming, apply only “if technically feasible.” According to industry commenters, the Commission should permit covered entities to seek an exemption based on technical infeasibility. Consumer Groups, on the other hand, contend that the Commission should not adopt a technical feasibility exemption because compliance can be achieved through a simple technical modification, making such an exemption unnecessary. However, section 303(u) clearly specifies that compliance is required only “if technically feasible.”

We interpret the term “technically feasible” consistent with Commission precedent. Notably, to demonstrate that compliance is technically infeasible, covered entities must show that changes to the design of the apparatus to make closed captioning display settings readily accessible are not physically or technically possible, and not just that they are “merely difficult.” We permit parties to raise technical infeasibility as a defense when faced with a complaint alleging a violation of the apparatus requirements adopted herein, or to file a request for a ruling under § 1.41 of the Commission's rules as to technical infeasibility before manufacturing or importing the product.

Legacy navigation devices. We decline to adopt a blanket exemption for “legacy navigation devices that are provided by small and medium-sized MVPDs,” as ACA Connects advocates. 54 To the extent ACA Connects is concerned about devices that were manufactured prior to the compliance deadline, any such concern should be alleviated by our decision not to apply the requirements to such apparatus. It appears that ACA Connects' concern applies to such previously manufactured devices, but to the extent the concern extends to some other category of devices, we reiterate that the waiver and exemption processes adopted herein are available to MVPDs on a case-by-case basis. Because the record does not indicate that an MVPD would need to avail itself of an exemption or extension for every “legacy navigation device,” we find that the availability of case-by-case waivers or exemptions is a preferable solution to an overbroad blanket exemption.

Streamlined process for small and medium-sized providers. ACA Connects asks the Commission to adopt a streamlined waiver process for small and medium-sized providers, enabling them to obtain a waiver without the use of any external resources. We find that the existing waiver and exemption processes are sufficiently flexible to be workable for small and mid-sized providers. Providers have the flexibility to raise achievability and technical feasibility either prior to manufacture or in response to a complaint. Adopting a different process here for small and medium-sized providers would be inconsistent with prior orders adopting the same achievability and technical feasibility provisions. ACA Connects has failed to justify why the same process that has been used in prior proceedings implementing the same provisions should be modified here.

Compliance Deadline. We adopt a compliance deadline after the Office of Management and Budget completes its review of any new or modified information collection requirements under the Paperwork Reduction Act or two years after publication of the Third Report and Order in the Federal Register , whichever is later. In the Second FNPRM, we inquired about the appropriate time frame for requiring covered entities to ensure that consumers are able to readily access user display settings for closed captioning. 55 According to Consumer Groups, “[i]ncluding user display settings in the first level of a menu would require only a small software modification and would not require any hardware design changes,” and thus, an extended period to come into compliance is unnecessary. CTA disputes this contention, arguing that Consumer Groups “fail[ ] to acknowledge the complexity of implementing rules regarding closed captioning display settings.”  56 NCTA, TIA, AT&T, and EchoStar request at least two years to comply, while CTA and ACA Connects assert that three years is a reasonable implementation period. Consumer Groups initially sought a one year compliance deadline, but in the comment cycle following the March 2024 joint proposal they requested two years.

Based on our review of the record, we adopt the compliance deadline included in the joint proposal as clarified in ex parte presentations. Specifically, compliance is required for devices that use next generation operating systems deployed more than two years after publication of the Third Report and Order in the Federal Register . We find the compliance deadline is reasonable, though we encourage covered manufacturers and MVPDs to offer readily accessible closed captioning display settings as soon as it is technically feasible for them to do so. Consistent with the initial order in this proceeding, the requirements adopted herein will not apply to devices manufactured prior to the deadline. 57 MVPDs should, however, “provide new equipment upon request to any customer who is deaf or hard of hearing,” as stated in the March 2024 joint proposal. MVPDs should provide notice to customers who are deaf or hard of hearing when new operating systems are deployed. Based on the record, it appears that the requirement to make closed captioning display settings readily accessible may involve more than a “small software modification.” Even software changes may involve a more substantial design and development process than a simple update.

When the Commission adopted a rule requiring manufacturers of apparatus subject to § 79.105 of the Commission's rules to provide a mechanism that is simple and easy to use for activating the secondary audio stream for audible emergency information, it gave covered entities approximately 17 months to comply. In that proceeding, we similarly acknowledged that covered entities “will need some time for the design, testing, and implementation of a simple and easy to use activation mechanism for the secondary audio stream on covered apparatus,” and concluded that the time granted was sufficient to achieve these steps. In practice, the deadline proved sufficient, with no waiver requests filed pertaining to the requirement contained in § 79.105. Likewise, we believe that a 24-month period will provide covered entities with sufficient time to achieve the steps necessary to comply with the rule adopted herein. 58

We decline to adopt a later compliance deadline for certain mid-sized and smaller MVPDs, as ACA Connects requests, because we find that such an approach is unnecessary and unworkable here. First, a longer deadline for smaller MVPDs is unnecessary because a compliance deadline based on the date of manufacture will ensure that MVPDs can utilize their existing inventory, and because MVPDs will not need to rely on their market power to compel manufacturers to comply since the rules explicitly apply to both entities. Second, a longer deadline for smaller MVPDs is unworkable because it would result in a situation in which provision of a given device that was manufactured after the deadline applicable to manufacturers, but before the deadline applicable to smaller MVPDs, would be a violation for the manufacturer but not the MVPD. We note additionally that an extended deadline for mid-sized and smaller MVPDs was justified when the Commission adopted multiple accessibility requirements in the initial Report and Order, whereas here we adopt a single requirement for accessible closed captioning display settings. To the extent particular MVPDs find that they are unable to comply with the requirements adopted herein, the waiver or exemption procedures discussed above are available to them.

Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) relating to the Third Report and Order. In summary, the Third Report and Order requires closed captioning display settings to be “readily accessible.” The action is authorized pursuant to the Television Decoder Circuitry Act of 1990, Public Law 101-431, 104 Stat. 960, and the authority found in sections 4(i), 4(j), 303(r), 303(u), and 330(b) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(r), 303(u), 330(b). The types of small entities that may be affected by the action fall within the following categories: Cable Television Distribution Services, Cable Companies and Systems (Rate Regulation), Cable System Operators (Telecom Act Standard), Direct Broadcast Satellite (DBS) Service, Satellite Master Antenna Television (SMATV) Systems also known as Private Cable Operators (PCOs), Home Satellite Dish (HSD) Service, Open Video Systems, Broadband Radio Service and Educational Broadband Service, Incumbent Local Exchange Carriers (Incumbent LECs), Competitive Local Exchange Carriers (LECs), Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, and Audio and Video Equipment Manufacturing.

The projected reporting and recordkeeping requirements include that covered entities must notify application developers about the application programming interface (API) or similar method by which covered MVPDs providing navigation devices must expose closed captioning display settings. This notification can be accomplished by any reasonable means. More generally, in the event that an allegation of non-compliance arises against an entity, regardless of the size of the covered entity, it will need to demonstrate how it has complied with the applicable requirements. For example, if there is an allegation that a covered entity has not provided the required employee training, it could refute that allegation by reference to training materials or a training schedule. The Third Report and Order permits small and other covered entities to seek exemptions from the adopted requirements on the basis that compliance is not technically feasibility and/or not achievable, pursuant to section 303(u) of the Act and consistent with our precedent in the IP Closed Captioning Order. 59 To demonstrate that compliance is not achievable—cannot be accomplished with reasonable effort or expense—or is not “technically feasible” will require small and other entities to have records, and to make a filing with the Commission to substantiate such claims. Small and other entities will also have to keep and be able to produce records associated with their compliance in the event they are subject to a dispute or complaint about accessibility.

The other compliance requirements that are applicable to covered small entities include the adoption of a rule that requires manufacturers and MVPDs to ensure that consumers are able to readily access user display settings for closed captioning on covered apparatus. To determine whether particular settings are readily accessible, the Commission requires compliance with the following factors: proximity, discoverability, previewability, and consistency and persistence. The Commission does not otherwise dictate the precise manner of compliance as long as such settings are readily accessible. This approach will ensure that consumers who are deaf and hard of hearing can easily access closed captioning display settings, while still giving small and other covered entities flexibility in the manner of compliance and allowing companies to develop innovative solutions for accessibility.

The Chief Counsel for Advocacy of the Small Business Administration (SBA) did not file any comments in response to the proposed rules in this proceeding.

To minimize the significant economic impact the rules adopted in the Third Report and Order may have on small entities, in the Second FNPRM the Commission inquired whether the provisions of section 303(u) of the Act that allow the Commission to tailor its rules, as necessary, to small entities for whom compliance with such rules is economically burdensome should apply. Consistent with our determination that Section 303(u) of the Act should apply, we considered and find that small entities are able to avoid potentially economically burdensome compliance with the requirements in the Third Report and Order to ensure that users can readily access closed captioning display settings if they are able to demonstrate to the Commission that such compliance is not “achievable” ( i.e., cannot be accomplished with reasonable effort or expense, with the provision limited by statute to apparatus that use a picture screen less than 13 inches in size) or is not “technically feasible.” Two of the four statutory factors that we must consider in assessing achievability are particularly relevant to small entities: (i) the nature and cost of the steps needed to meet the requirements, and (ii) the technical and economic impact on the entity's operations.

In general, we afford covered entities flexibility in how they make closed captioning display settings readily accessible to consumers, and will determine whether settings are readily accessible to consumers by evaluating the following factors: proximity, discoverability, previewability, and consistency and persistence. This approach will ensure that small and other covered entities can choose how to make closed captioning display settings available, as long as such settings are readily accessible to consumers, enabling these entities to decide what works best for them. Our approach will also allow the Commission to address the impact of the rules on individual entities on a case-by-case basis, and to modify application of our rules to accommodate individual circumstances thereby potentially reducing the costs of compliance for such entities. The Commission's adopted definition of the four required factors that we will evaluate to determine whether small and other entities have met their obligation to make display settings readily accessible to consumers is based on a March 2024 joint proposal filed in the record by NCTA and certain Consumer Groups. The meaning of the “discoverability” factor evolved from a previously proposed meaning, which industry objected to as being too subjective, to a meaning that focuses on consumer testing and employee training. This objective definition should make it easier and simpler for covered entities to ensure they are in compliance. Similarly, the meaning of the “consistency and persistence” factor evolved from a previously proposed broader definition, which industry objected to as raising several problems, to a meaning that focuses largely on the use of application programming interfaces (APIs) or comparable tools and the coordination between covered entities. This narrow approach should also make it easier and simpler for small and other covered entities to comply. Additionally, rather than requiring compliance for third-party, pre-installed applications, the Commission explicitly states that the readily accessible requirements do not apply to such applications, which is consistent with the March 2024 joint proposal and will further ease compliance burdens for all entities, including small entities.

In response to commenter ACA Connects, as discussed above, the Commission considered and rejected the request for a blanket compliance exemption for small and medium-sized providers of legacy navigation devices, a streamlined waiver process for such providers, and a later compliance deadline. Our decision is consistent with prior orders, and the record did not provide sufficient justification for the Commission to adopt any other proposed alternatives. To the extent particular small entities find that they are unable to comply with the requirements adopted in the Third Report and Order, the waiver and exemption procedures are available to them.

Based on these considerations, the Commission believes that we have appropriately considered both the interests of individuals with disabilities and the interests of small and other entities who will be subject to the rules, consistent with Congress's intent that “to the fullest extent made possible by technology,” persons who are deaf and hard of hearing “should have equal access to the television medium.”

Paperwork Reduction Act. This document contains new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.

Ordering Clauses. Accordingly, it is ordered that, pursuant to the Television Decoder Circuitry Act of 1990, Public Law 101-431, 104 Stat. 960, and the authority found in sections 4(i), 4(j), 303(r), 303(u), and 330(b) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(r), 303(u), 330(b), this Third Report and Order is adopted , effective thirty (30) days after the date of publication in the Federal Register .

It is further ordered that, pursuant to the Television Decoder Circuitry Act of 1990, Public Law 101-431, 104 Stat. 960, and the authority found in sections 4(i), 4(j), 303(r), 303(u), and 330(b) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(r), 303(u), 330(b), the Commission's rules are hereby amended as set forth in Appendix A, effective thirty (30) days after the date of publication in the Federal Register . Compliance with new § 79.103(e) of the Commission's rules, 47 CFR 79.103(e), which may contain new or modified information collection requirements, will not be required until the Office of Management and Budget has completed its review of any information collection requirements that the Media Bureau determines is required under the Paperwork Reduction Act or two years after the date of publication in the Federal Register , whichever is later. The Commission directs the Media Bureau to announce the compliance date for § 79.103(e) by subsequent Public Notice and to revise § 79.103(e) accordingly.

It is further ordered that the Commission's Office of the Secretary shall send a copy of this Third Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

It is further ordered that the Office of the Managing Director, Performance Program Management, shall send a copy of this Third Report and Order in MB Docket No. 12-108 in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 79 to read as follows:

This final rule revises the DFARS to align it with changes made to the Federal Acquisition Regulation (FAR). FAR Case 2022-006, published in the Federal Register on April 22, 2024, at 89 FR 30210, reorganized and updated FAR part 23. Changes included consolidation of content into particular subparts within part 23 and renaming part 23 along with some of its subparts. FAR Case 2022-006 also moved nonenvironmental matters, to include requirements for a drug-free workplace, from FAR part 23 to part 26.

To align the DFARS with the FAR, this final rule implements corresponding changes to the DFARS. This rule changes the title of DFARS part 223 to “Environment, Sustainable Acquisition, and Material Safety” and the title of subpart 223.3 to “Hazardous Material Identification, Material Safety Data, and Notice of Radioactive Materials.” This rule adds subpart 223.1, Sustainable Products and Services, and moves the content from subparts 223.4 and 223.8 to the newly added subpart 223.1. It moves the content of subpart 223.5, Drug-Free Workplace, to newly added subpart 226.5, Drug-Free Workplace. Consequently, this rule also relocates the contract clause at DFARS 252.223-7004, Drug-Free Work Force, to DFARS 252.226-7003, Drug-Free Work Force.

As a result of this reorganization, and to correspond to changes in the FAR, this rule renumbers or revises the headings of certain DFARS paragraphs. In addition, editorial changes are made in 252.226-7003, paragraph (a), to conform with drafting conventions for definitions.

None of the changes in this rule affect the DFARS substantively. This rule does not alter policy or requirements stated in the DFARS.

The statute that applies to the publication of the FAR is 41 U.S.C. 1707, Publication of Proposed Regulations. Subsection (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment because it only renames an existing DFARS part and existing subparts, and relocates DFARS subparts and paragraphs, to align the DFARS with changes made in the FAR. None of these changes to the DFARS are substantive.

This final rule does not create any new solicitation provisions or contract clauses. It merely relocates an existing clause from DFARS 252.223-7004, Drug-Free Work Force, to DFARS 252.226-7003, Drug-Free Work Force, without substantive change. The rule does not impact the applicability of any existing solicitation provisions or contract clauses to contracts valued at or below the simplified acquisition threshold, for commercial products including COTS items, or for commercial services.

Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, as amended.

As required by the Congressional Review Act (5 U.S.C. 801-808) before an interim or final rule takes effect, DoD will submit a copy of the interim or final rule with the form, Submission of Federal Rules under the Congressional Review Act, to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the Congressional Review Act cannot take effect until 60 days after it is published in the Federal Register . The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by 5 U.S.C. 804.

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require publication for public comment.

This final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, the Defense Acquisition Regulations System amends 48 CFR parts 211, 212, 223, 226, and 252 as follows:

This final rule amends the DFARS to make needed editorial changes to correct mistakes regarding commercial services in DFARS 212.207; the mistakes were part of DFARS Case 2018-D066, Definition of “Commercial Item.” This final rule also corrects a typographical error in a solicitation provision.

Therefore, the Defense Acquisition Regulations System amends 48 CFR part 252 as follows:

This final rule revises the DFARS to implement section 1411 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117-263). Section 1411 repeals 10 U.S.C. 187, which established the Strategic Materials Protection Board, and amends section 10 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h-1) to establish the Strategic and Critical Materials Board of Directors. Therefore, this final rule removes the name “Strategic Materials Protection Board” and inserts the new name “Strategic and Critical Materials Board of Directors” in the DFARS.

The statute that applies to the publication of the Federal Acquisition Regulation (FAR) is 41 U.S.C. 1707, Publication of Proposed Regulations. Subsection (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because the rule only revises all references to the Strategic Materials Protection Board in the DFARS, with no impact on contractors or offerors.

This final rule does not create any new solicitation provisions or contract clauses. It does not impact any existing solicitation provisions or contract clauses or their applicability to contracts valued at or below the simplified acquisition threshold, for commercial products including COTS items, or for commercial services.

Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, as amended.

As required by the Congressional Review Act (5 U.S.C. 801-808) before an interim or final rule takes effect, DoD will submit a copy of the interim or final rule with the form, Submission of Federal Rules under the Congressional Review Act, to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the Congressional Review Act cannot take effect until 60 days after it is published in the Federal Register . The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by 5 U.S.C. 804.

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require publication for public comment.

This final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, the Defense Acquisition Regulations System amends 48 CFR part 225 as follows:

You can find an electronic copy of this rule using the internet by accessing the Government Publishing Office's web page at https://www.govinfo.gov/app/collection/FR to view the daily published Federal Register edition or by accessing the Office of the Federal Register's web page at https://www.federalregister.gov. Copies are also available by contacting the individual identified in the FOR FURTHER INFORMATION CONTACT section.

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires TSA to comply with small entity requests for information and advice about compliance with statutes and regulations within TSA's jurisdiction. Any small entity that has a question regarding this document may contact the person listed in the FOR FURTHER INFORMATION CONTACT section. Persons can obtain further information regarding SBREFA on the Small Business Administration's web page at https://advocacy.sba.gov/resources/reference-library/sbrefa/.

This technical amendment revises 49 CFR 1540.203(c)(8) to correct a technical oversight that limited the type of information prospective noncitizen  1 air cargo workers and other individuals with access to cargo could submit when applying for a security threat assessment (STA). As described in the Air Cargo Screening Interim Final Rule, 74 FR 47672 (Sept. 16, 2009), the procedures for the STA are codified in 49 CFR part 1540, subpart C. Section 1540.203 requires all applicants to submit certain biographic information to TSA to conduct the STA. 2

Paragraph 1540.203(c)(8) requires noncitizens to submit an Alien Registration Number (ARN) that TSA uses to access the pertinent immigration databases. TSA must have this information, or other appropriate identifying documents and information, to complete the immigration portion of the STA. Because there are other documents and information in addition to an ARN that noncitizens may possess that TSA can use to complete the vetting process, it is unnecessary to limit the acceptable documents to the ARN.

For example, applicants may use the Form I-551, Permanent Resident Card; a foreign passport containing a Form I-551 stamp; and certain categories of Form I-766, Employment Authorization Document. Also, applicants may have Customs and Border Protection (CBP) Form I-94 Arrival/Departure Record information that TSA can use to access the database. Note that noncitizens in the U.S. no longer need to complete a paper CBP Form I-94, but can access their Form I-94 online and provide it to employers, schools/universities, or government agencies as needed. (CBP encourages travelers to retrieve their arrival/departure information automatically from the CBP I-94 website, available at https://i94.cbp.dhs.gov/I94/#/home. )

Limiting the information noncitizens may submit to only an ARN prevents individuals who possess other appropriate documents and information from applying for the STA. This was an oversight in the rule drafting phase that TSA now corrects through this technical amendment.

This technical amendment does not alter the immigration standard established under part 1540.203, but rather allows eligible individuals to submit other official and legitimate documents and information to complete the STA. TSA is amending the application form to clarify the documents and information that an applicant may submit to TSA to complete the immigration portion of the STA. TSA will maintain a list of documents on its website that noncitizen applicants may submit as part of the vetting process to facilitate an immigration check.

TSA is issuing this final rule change as a technical amendment without a notice of proposed rulemaking or delayed effective date. The Administrative Procedure Act (APA) authorizes agencies to forgo the notice and comment requirements if it “for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B); see also 5 U.S.C. 553(d)(3) (allowing agency to forgo a delayed effective date for a substantive rule upon a finding of good cause).

TSA believes notice and comment concerning the submission of additional immigration documents is unnecessary as it is a limited, insubstantial amendment meant to correct a drafting oversight. It is unnecessary to seek notice and comment on the rule changes because the new language imposes no new substantive burden and corrects an oversight in drafting. Further, it is unnecessary for the rule to have a delayed effective date as the amendment merely expands the types of documents and information an applicant may provide when applying for an STA and is not a substantive change to the rule. For these reasons, TSA believes that bypassing the ordinary notice and comment procedure and the delayed effected date requirement is justified in the totality of the circumstances.

In addition, 5 U.S.C. 553(b)(A) permits agencies to forgo notice and comment when issuing “rules of agency organization, procedure, or practice,” i.e., a procedural rule. “A useful articulation of the exemption's critical feature is that it covers agency actions that do not themselves alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoints to the agency.”  3 The exemption “preserve[s] agency flexibility when dealing with limited situations where substantive rights are not at stake.”  4 Here, TSA is correcting an oversight in drafting that relates solely to forms of evidence before the agency. As a matter of agency procedure and practice, TSA is allowing noncitizens to submit additional available and acceptable records in their possession that TSA can use in the vetting process to facilitate an immigration check. In addition, the delayed effective date requirements under 5 U.S.C. 553(d) do not apply to procedural rules.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), requires that TSA consider the impact of paperwork and other information collection burdens imposed on the public, and under the provisions of 44 U.S.C. 3507(d), obtain approval from OMB for each collection of information it conducts, sponsors, or requires through regulations. This rule does not call for a new collection of information under the Paperwork Reduction Act of 1995.

Executive Orders 12866 (Regulatory Planning and Review), as amended by Executive Order 14094 (Modernizing Regulatory Review), and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.

The Office of Management and Budget (OMB) has not designated this technical amendment a significant regulatory action under section 3(f) of Executive Order 12866, as amended by Executive Order 14094. Accordingly, OMB has not reviewed this regulatory action. This technical amendment reduces the regulatory burden on noncitizens by revising 49 CFR 1540.203(c)(8) to consider additional information and documents that STA applicants can submit to TSA to conduct its immigration check. This technical amendment does not create or change any substantive requirements.

The Regulatory Flexibility Act of 1980 (RFA)  5 requires that agencies consider the impacts of their rules on small entities. For purposes of the RFA, small entities include small businesses, not-for-profit organizations, and small governmental jurisdictions. Individuals and States are not included in the definition of a small entity. The RFA's regulatory flexibility analysis requirements apply only to those rules for which an agency is required to publish a general notice of proposed rulemaking pursuant to 5 U.S.C. 553 or any other law. See 5 U.S.C. 604(a). As discussed previously, DHS did not issue a notice of proposed rulemaking for this action as exempted by 5 U.S.C. 553(b). Therefore, a regulatory flexibility analysis is not required for this rule.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-38, UMRA) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed rule or final rule for which the agency published a proposed rule, which includes any Federal mandate that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector.

Regulations are only reviewable under UMRA when an agency has published a notice of proposed rulemaking as defined by 5 U.S.C. 553(b). 6 This rule is exempted from notice and comment under 5 U.S.C. 553(b). TSA did not publish a notice of proposed rulemaking; thus, this rule is exempt from UMRA's requirements pertaining to the preparation of a written statement.

Under Executive Order 13132 (Federalism), agencies must consider whether a rule has federalism implications. TSA has determined that this rule does not have federalism implications because it does not create a substantial direct effect on states, on the relationship between the national government and states, or the distribution of power and responsibilities among the various levels of government.

The Trade Agreement Act of 1979 prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. The Trade Agreement Act does not consider legitimate domestic objectives, such as essential security, as unnecessary obstacles. The statute also requires that international standards be considered, and where appropriate, that they be the basis for U.S. standards. This technical amendment will not have an adverse impact on international trade.

TSA assessed the energy impact of this action in accordance with the Energy Policy and Conservation Act (EPCA), 7 and determined that this technical amendment is not a major regulatory action under the provisions of the EPCA.

TSA has reviewed this technical amendment for purposes of the National Environmental Policy Act of 1969 (NEPA)  8 and has determined that this action will not have a significant effect on the human environment. This action is covered by categorical exclusion numbers A3(a) (for actions of a strictly administrative or procedural nature) and (b) (that implement, without substantive change, statutory or regulatory requirements) in DHS Management Directive 023-01 (formerly Management Directive 5100.1), Environmental Planning Program, and Instruction Manual 023-01-001-01, Rev. 1, which guides TSA compliance with NEPA.

Before a rule can take effect, 5 U.S.C. 801, the Congressional Review Act, requires agencies to submit the rule and a report indicating whether it is a major rule to Congress and the Comptroller General. Under 5 U.S.C. 804(3)(C), rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties are not considered to be a rule for the purposes of the Congressional Review Act. This technical amendment is a rule of agency organization, procedure, or practice that will not substantially affect the rights or obligations of non-agency parties, thus is not required to be submitted for review under the CRA.

For the reasons stated in the preamble, the Transportation Security Administration amends 49 CFR part 1540 as follows: