[Federal Register Volume 89, Number 176 (Wednesday, September 11, 2024)]
[Rules and Regulations]
[Pages 73588-73592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20191]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 84
[EPA-HQ-OAR-2024-0065; FRL-11597-01-OAR]
RIN 2060-AW15
Phasedown of Hydrofluorocarbons: Vacated Provisions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The U.S. Environmental Protection Agency is taking final
action to remove regulations from the Code of Federal Regulations that
have been vacated by the United States Court of Appeals for the
District of Columbia Circuit related to the prohibition of disposable
cylinders and tracking of cylinders of hydrofluorocarbons.
DATES: This final rule is effective on September 11, 2024.
ADDRESSES: The U.S. Environmental Protection Agency (EPA) has
established a docket for this action under Docket ID No. EPA-HQ-OAR-
2024-0065. All documents in the docket are listed on the https://www.regulations.gov website. Although listed in the index, some
information may not be publicly available, e.g., Confidential Business
Information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the internet and will be publicly available only in hard-
copy form. Publicly available docket materials are available
electronically through http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Connor Henderson, Stratospheric
Protection Division and Office of Air and Radiation (6205A),
Environmental Protection Agency, 1200 Pennsylvania Ave NW, Washington,
DC 20460; telephone number: 202-564-2177; email address:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Does this action apply to me?
This action may be relevant for you if you produce, import, export,
destroy, use as a feedstock or process agent, reclaim, or recycle HFCs.
Potentially relevant categories, North American Industry Classification
System (NAICS) codes, and examples of potentially relevant entities are
included in table 1. This table is not intended to be exhaustive, but
rather provides a guide for readers regarding entities that may be
interested in this action. If you have questions regarding the
relevance of this action to a particular entity, consult the person
listed in the FOR FURTHER INFORMATION CONTACT section.
Table 1--NAICS Classification of Potentially Relevant Entities
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NAICS Code NAICS industry description
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325120............................ Industrial Gas Manufacturing.
325199............................ All Other Basic Organic Chemical
Manufacturing.
325211............................ Plastics Material and Resin
Manufacturing.
325412............................ Pharmaceutical Preparation
Manufacturing.
325414............................ Biological Product (except
Diagnostic) Manufacturing.
325998............................ All Other Miscellaneous Chemical
Product and Preparation
Manufacturing.
326220............................ Rubber and Plastics Hoses and
Belting Manufacturing.
326150............................ Urethane and Other Foam Product.
326299............................ All Other Rubber Product
Manufacturing.
333415............................ Air-Conditioning and Warm Air
Heating Equipment and Commercial
and Industrial Refrigeration
Equipment Manufacturing.
333511............................ Industrial Mold Manufacturing.
334413............................ Semiconductor and Related Device
Manufacturing.
334419............................ Other Electronic Component
Manufacturing.
334510............................ Electromedical and
Electrotherapeutic Apparatus
Manufacturing.
336212............................ Truck Trailer Manufacturing.
336214............................ Travel Trailer and Camper
Manufacturing.
336411............................ Aircraft Manufacturing.
336611............................ Ship Building and Repairing.
336612............................ Boat Building.
339112............................ Surgical and Medical Instrument
Manufacturing.
423720............................ Plumbing and Heating Equipment and
Supplies (Hydronics) Merchant
Wholesalers.
423730............................ Warm Air Heating and Air-
Conditioning Equipment and Supplies
Merchant Wholesalers.
423740............................ Refrigeration Equipment and Supplies
Merchant Wholesalers.
423830............................ Industrial Machinery and Equipment
Merchant Wholesalers.
423840............................ Industrial Supplies Merchant
Wholesalers.
423860............................ Transportation Equipment and
Supplies (except Motor Vehicle)
Merchant Wholesalers.
424690............................ Other Chemical and Allied Products
Merchant Wholesalers.
488510............................ Freight Transportation Arrangement.
541380............................ Testing Laboratories.
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541714............................ Research and Technology in
Biotechnology (except
Nanobiotechnology).
562111............................ Solid Waste Collection.
562211............................ Hazardous Waste Treatment and
Disposal.
562920............................ Materials Recovery Facilities.
922160............................ Fire Protection.
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II. Basis for Immediate Effective Date
EPA has determined that it is consistent with the Administrative
Procedure Act (APA), 5 U.S.C. 553(d), to make this action effective
September 11, 2024, Section 553(d)(3) provides that final rules shall
not become effective until 30 days after publication in the Federal
Register ``except . . . as otherwise provided by the agency for good
cause found and published with the rule.'' ``In determining whether
good cause exists, an agency should balance the necessity for immediate
implementation against principles of fundamental fairness which require
that all affected persons be afforded a reasonable amount of time to
prepare for the effective date of its ruling.'' Omnipoint Corp. v. Fed.
Commc'n Comm'n, 79 F.3d 620, 630 (D.C. Cir. 1996) (quoting United
States v. Gavrilovic, 551 F.2d 1099, 1105 (8th Cir. 1977)). The purpose
of this provision is to ``give affected parties a reasonable time to
adjust their behavior before the final rule takes effect.'' Id.; see
also Gavrilovic, 551 F.2d at 1104 (quoting legislative history).
The EPA has determined that in light of the nature of this action,
good cause exists to make this final action effective immediately
because the Agency seeks to provide regulatory certainty and clarity as
soon as possible. The removal of vacated regulations from the Code of
Federal Regulations does not change the status quo or impose new
obligations on any person or entity. As a result, there is no need to
provide parties additional time to adjust their behavior, and no person
will be harmed by making the action immediately effective as opposed to
delaying the effective date by 30 days. Accordingly, EPA is making this
action effective immediately upon publication.
III. Removal of Vacated Provisions on Disposable Cylinder Ban and
Cylinder Tracking
On September 23, 2021, EPA signed a final rule that was the first
regulation under the American Innovation and Manufacturing (AIM) Act.
This rule established the initial production and consumption baseline
levels against which the phasedown of production and consumption of
hydrofluorocarbons (HFCs) would be measured, established an initial
methodology for allocating and trading HFC allowances for 2022 and
2023, and created a robust, agile, and innovative compliance and
enforcement system. Phasedown of Hydrofluorocarbons: Establishing the
Allowance Allocation and Trading Program Under the American Innovation
and Manufacturing Act, 86 FR 55116 (October 5, 2021) (hereinafter
referred to as the Allocation Framework Rule). EPA explained in that
rule that it was establishing a comprehensive system of mechanisms that
together and by themselves would discourage and prevent illegal
production, import, and subsequent sales of illegally produced or
imported HFCs. EPA intended for, and designed, these provisions to each
stand independently from the others and to provide significant stand-
alone benefits to deter and identify potential violations, while also
recognizing that these separate provisions work together as a
comprehensive system to deter noncompliance, incentivize future
compliance, and ensure that companies that are complying with statutory
and regulatory obligations are not put at a competitive disadvantage.
Id. at 55166. As part of the suite of compliance and enforcement tools,
EPA finalized a prohibition that as of July 1, 2025, no person may
import or domestically fill HFCs in a disposable cylinder, and as of
January 1, 2027, no person may sell or distribute, or offer for sale or
distribution HFCs contained in a disposable cylinder at 40 CFR 84.5(h).
See id. at 55172-78. As an additional, separate compliance enforcement
tool, EPA finalized a requirement that as of January 1, 2025, all
containers of regulated substances imported, sold, or distributed by
producers and importers have a quick response (QR) code. As of January
1, 2026, the rule would require QR codes on all containers filled, sold
or distributed, or offered for sale or distribution, by all other
repackagers and cylinder fillers in the United States, including
reclaimers and fire suppressant recyclers. Finally, as of January 1,
2027, the rule would require a QR code on every container of regulated
substances sold or distributed, offered for sale or distribution,
purchased or received. 40 CFR 84.23. See id. at 55183-86.
However, on June 20, 2023, the U.S. Court of Appeals for the
District of Columbia Circuit issued an opinion concluding, in relevant
part, that EPA in relying on subsection (e)(2)(B) of the AIM Act had
not identified a provision of the AIM Act giving it authority to ban
disposable cylinders or to require a QR-code tracking system. As a
result of this conclusion, the D.C. Circuit vacated the parts of the
Allocation Framework Rule related to the QR code requirements and
disposable cylinder ban and remanded to the Agency. Heating, Air
Conditioning & Refrigeration Distributors Int'l v. EPA, 71 F.4th 59, 68
(D.C. Cir. 2023).\1\ On August 23, 2023, the D.C. Circuit issued its
formal mandate.
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\1\ As the D.C. Circuit denied the other challenges to the
Allocation Framework Rule raised in this consolidated litigation,
its vacatur was only partial.
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Consistent with the D.C. Circuit's decision, this action removes
from 40 CFR part 84, subpart A certain regulatory provisions that
prohibit use of disposable cylinders and that implement the cylinder
tracking system (including provisions that create auditing obligations
related to the cylinder tracking system). EPA views this removal of
regulatory language that has been vacated by the D.C. Circuit as purely
ministerial in nature.
IV. Good Cause Findings
EPA is removing the identified vacated regulations from the Code of
Federal Regulations without providing an opportunity for public comment
or a public hearing because EPA finds that the Administrative Procedure
Act (APA) good cause exemption applies here. If 5 U.S.C. 553(b)(B) did
not apply, this rule would be subject to the rulemaking procedures in
Clean Air Act (CAA) section 307(d).\2\ However, CAA section
[[Page 73590]]
307(d) does not apply ``in the case of any rule or circumstance
referred to in [5 U.S.C. 553(b)(B)]'' \3\ -- i.e., the good cause
exception noted above.\4\ Section 553(b)(B) allows an agency to
promulgate a rule without providing prior notice and opportunity for
public comment ``when the agency for good cause finds (and incorporates
the finding and a brief statement of reasons therefor in the rule
issued) that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.''
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\2\ The AIM Act provides that the Clean Air Act's section 307
``shall apply to'' actions under the AIM Act ``as though [Section
7675] were expressly included in title VI'' of the Clean Air Act. 42
U.S.C. 7675(k)(1)(C). Clean Air Act Section 307(d) applies to
``promulgation or revision of regulations under subchapter VI of
[the CAA].'' 307(d)(1)(I); 7607(d)(1)(I). See also CAA section
307(d)(3); 42 U.S.C. 7607(d)(3) (requiring publication of a proposed
rule with an opportunity for public comment).
\3\ See CAA section 307(d)(1); 42 U.S.C. 7607(d)(1).
\4\ Section 553(b) generally requires notice-and-comment
rulemaking procedures unless, as here, an exception applies under
section 553(b)(A) or (B). 5 U.S.C. 553(b).
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The EPA has determined that it is unnecessary to provide a public
hearing or an opportunity for public comment on this action because
amending the regulations to remove the vacated disposable cylinder ban
and cylinder tracking provisions is a needed ministerial act. To
address the D.C. Circuit's vacatur of these provisions, as described in
section I of this document, the EPA is removing the affected provisions
from the Code of Federal Regulations. Therefore, this action to remove
the affected regulatory text simply implements the decision of the D.C.
Circuit, and thus, providing an opportunity for public comment or a
public hearing on this issue would serve no useful purpose.
For these reasons, the EPA finds good cause to issue a final
rulemaking to remove the disposable cylinder ban and cylinder tracking
provisions pursuant to 5 U.S.C. 553(b)(B). Therefore, the requirements
of CAA section 307(d), including the requirement for public comment and
hearing on proposed rulemakings, do not apply to this action.
V. Judicial Review
The AIM Act provides that certain sections of the CAA ``shall apply
to'' the AIM Act and actions ``promulgated by the Administrator of
[EPA] pursuant to [the AIM Act] as though [the AIM Act] were expressly
included in title VI of [the CAA].'' 42 U.S.C. 7675(k)(1)(C). Among the
applicable sections of the CAA is section 307, which includes
provisions on judicial review. Section 307(b)(1) provides, in part,
that petitions for review must only be filed in the United States Court
of Appeals for the District of Columbia Circuit: (i) when the agency
action consists of ``nationally applicable regulations promulgated, or
final actions taken, by the Administrator,'' or (ii) when such action
is locally or regionally applicable, but ``such action is based on a
determination of nationwide scope or effect and if in taking such
action the Administrator finds and publishes that such action is based
on such a determination.'' For locally or regionally applicable final
actions, the CAA reserves to the EPA complete discretion whether to
invoke the exception in (ii).
The final action herein noticed is ``nationally applicable'' within
the meaning of CAA section 307(b)(1), as it removes vacated provisions
from the Code of Federal Regulations that apply and were designed to be
implemented uniformly on a national basis. In the alternative, to the
extent a court finds the final action to be locally or regionally
applicable, the Administrator is exercising the complete discretion
afforded to him under the CAA to make and publish a finding that the
action is based on a determination of ``nationwide scope or effect''
within the meaning of CAA section 307(b)(1).\5\ In deciding to invoke
this exception, the Administrator has taken into account a number of
policy considerations, including his judgment regarding the benefit of
obtaining the D.C. Circuit's authoritative centralized review, rather
than allowing development of the issue in other contexts, in order to
ensure consistency in the Agency's approach to allocation of production
and consumption allowances in accordance with EPA's national
regulations in 40 CFR part 84. This final action treats all affected
entities consistently in how the 40 CFR part 84 regulations are
applied. The Administrator finds that this is a matter on which
national uniformity is desirable to take advantage of the D.C.
Circuit's administrative law expertise and facilitate the orderly
development of the basic law under the AIM Act and EPA's implementing
regulations. The Administrator also finds that consolidated review of
the action in the D.C. Circuit will avoid piecemeal litigation in the
regional circuits, further judicial economy, and eliminate the risk of
inconsistent results for different regulated entities. The
Administrator also finds that a nationally consistent approach in this
rulemaking constitutes the best use of agency resources. The
Administrator is publishing his finding that the action is based on a
determination of nationwide scope or effect in the Federal Register as
part of this document. For these reasons, this final action is
nationally applicable or, alternatively, the Administrator is
exercising the complete discretion afforded to him by the CAA and finds
that the final action is based on a determination of nationwide scope
or effect for purposes of CAA section 307(b)(1) and is hereby
publishing that finding in the Federal Register. Under section
307(b)(1) of the CAA, petitions for judicial review of this action must
be filed in the United States Court of Appeals for the District of
Columbia Circuit by November 12, 2024.
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\5\ In the report on the 1977 Amendments that revised section
307(b)(1) of the CAA, Congress noted that the Administrator's
determination that the ``nationwide scope or effect'' exception
applies would be appropriate for any action that has a scope or
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at
323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03.
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VI. Statutory and Executive Order Review
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 14094: Modernizing Regulatory Review
This action is a ``significant regulatory action'' as defined in
Executive Order 12866, as amended by Executive Order 14094.
Accordingly, EPA submitted this action to the Office of Management and
Budget (OMB) for Executive Order 12866 review. Documentation of any
changes made in response to the Executive Order 12866 review is
available in the docket. The removal of vacated requirements from the
Code of Federal Regulations through this action does not impose new or
change existing legal obligations on any person or entity. EPA
describes the vacated provisions, including their expected costs and
benefits, in the HFC Allocation Framework Rule (86 FR 55116, FRL-8458-
02-OAR, published in the Federal Register on October 5, 2021) and the
related regulatory impact analysis (RIA).
The court's decision to vacate these provisions in 2023 changed the
estimated costs and benefits associated with the HFC Allocation
Framework Rule. As shown in table 3-28 of the RIA, EPA estimated the
average annual costs for the refillable cylinder provisions between
2022 and 2050 to be $21.8 million per year at a 3% discount rate and
$35.3 million per year at a 7% discount rate ($2020). While the upfront
costs of establishing a fleet of refillable cylinders was higher than
the average annual cost, after 2026 when the full fleet of disposable
cylinders was in place, the Agency estimated that the requirement would
result in annual cost savings. It was estimated that the replacement of
disposable cylinders
[[Page 73591]]
with refillable cylinders in the United States could also prevent 29
million MTEVe in emissions between 2022 to 2050 (see table 3-21 of the
RIA). The EPA noted emission reductions as co-benefits in the RIA,
therefore emission reductions were not included in topline benefits
estimate for the HFC Allocation Framework Rule. The costs for the
container tracking system finalized in the HFC Allocation Framework
Rule were estimated to cost $7.8 million annually once fully phased in
and were part of the total reporting and recordkeeping burden included
in table 3-13 of the RIA. Both provisions were expected to support
compliance with the overall phasedown targets, ensuring U.S.
consumption and production were below the levels authorized in the AIM
Act and related implementing regulations. More discussion on the costs
and benefits are included in chapters 3 and 5 of the regulatory impact
analysis for the HFC Allocation Framework Rule, with more detail on the
estimated container tracking costs included in the information
collection request (ICR) supporting statement for the proposed rule
``Phasedown of Hydrofluorocarbons: Allowance Allocation Methodology for
2024 and Later Years,'' (87 FR 66372, November 3, 2022).\6\
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\6\ The regulatory impact analysis for the HFC Allocation
Framework Rule can be found on EPA's website at https://www.epa.gov/climate-hfcs-reduction/regulatory-actions-allowance-allocation-and-reporting. The ICR supporting statement associated with the rule can
be found at https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=2060-0734.
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B. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. The Office of Management and Budget (OMB) has previously
approved the information collection activities contained in the
existing regulations and has assigned OMB control number 2060-0734.
There are no additional reporting or recordkeeping requirements
associated with this rule, which takes the ministerial act of removing
certain vacated provisions from the Code of Federal Regulations. Given
the requirements were vacated in the summer of 2023, EPA removed the
burden associated with the refillable cylinder and container tracking
provisions in the comprehensive ICR supporting statement and burden
estimates for the HFC Allocation Program that were transmitted to OMB
for review as part of the final rule ICR package associated with
``Phasedown of Hydrofluorocarbons: Allowance Allocation Methodology for
2024 and Later Years,'' (88 FR 44220). This information was transmitted
to OMB in January 2024 (see OMB control number 2060-0734). Further, we
do not need to take additional comment on these changes, as commenters
had the opportunity to comment on the burden of these provisions and
the change in burden from the court's vacatur in prior rulemaking.
C. Regulatory Flexibility Act (RFA)
This action is not subject to the RFA. The RFA applies only to
rules subject to notice and comment rulemaking requirements under the
Administrative Procedure Act (APA), 5 U.S.C. 553, or any other statute.
This rule is not subject to notice and comment requirements because the
Agency has invoked the APA ``good cause'' exemption under 5 U.S.C.
553(b).
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538 and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any State,
local, or Tribal governments.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the National Government and the States, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have Tribal implications as specified in
Executive Order 13175. To the extent this action has any substantive
effect, EPA is not aware of Tribal businesses engaged in activities
that would be directly affected by this action. Based on the Agency's
assessments, the Agency also does not believe that potential effects,
even if direct, would be substantial. Accordingly, this action will not
have substantial direct effects on 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, as specified in Executive Order 13175. Thus, Executive Order
13175 does not apply to this action.
G. Executive Order 13045: Protection of Children from Environmental
Health Risks and Safety Risks
Executive Order 13045 (62 FR 19885, April 23, 1997) directs Federal
agencies to include an evaluation of the health and safety effects of
the planned regulation on children in Federal health and safety
standards and explain why the regulation is preferable to potentially
effective and reasonably feasible alternatives. This action is not
subject to Executive Order 13045 because it is not a significant
regulatory action under section 3(f)(1) of Executive Order 12866, and
because the EPA does not believe the environmental health or safety
risks addressed by this action present a disproportionate risk to
children. As noted, this action only removes already vacated provisions
from the Code of Federal Regulations so is not anticipated to have any
impact on children.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action only removes from the Code
of Federal Regulations already vacated provisions that applied to
certain regulated substances and certain applications containing
regulated substances, none of which are used to supply or distribute
energy.
I. National Technology Transfer and Advancement Act and Incorporation
by Reference
This rulemaking does not involve technical standards.
J. Executive Orders 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations and
Executive Order 14096: Revitalizing Our Nation's Commitment to
Environmental Justice for All
EPA considers that the human health or environmental conditions
that exist prior to this action have the potential to result in
disproportionate and adverse human health or environmental effects on
communities with environmental justice concerns. EPA did extensive
environmental justice analysis as part of the Allocation Framework Rule
and the most recent Allocation Rule covering 2024-2028 (88 FR 46836,
July 20, 2023), which is documented in the preamble to those
rulemakings and in the associated regulatory impact analysis (RIA) and
RIA addendum.
[[Page 73592]]
The EPA believes that this action is not likely to change existing
disproportionate and adverse effects on communities with environmental
justice concerns. This action only removes from the Code of Federal
Regulations already vacated provisions and is not likely to result in
new disproportionate and adverse effects on communities with
environmental justice concerns.
K. Congressional Review Act (CRA)
This action is subject to the CRA, 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).
List of Subjects in 40 CFR Part 84
Environmental protection, Administrative practice and procedure,
Air pollution control, Chemicals, Climate Change, Emissions, Imports,
Reporting and recordkeeping requirements.
Michael S. Regan,
Administrator.
For the reasons set out in the preamble, EPA is amending 40 CFR
part 84 as follows:
PART 84--PHASEDOWN OF HYDROFLUOROCARBONS
0
1. The authority citation for part 84 continues to read as follows:
Authority: Pub. L. 116-260, Division S, Sec. 103.
Sec. 84.5 [Amended]
0
2. Amend Sec. 84.5 by removing and reserving paragraph (h).
Sec. 84.23 [Removed and Reserved]
0
3. Remove and reserve Sec. 84.23.
Sec. 84.33 [Amended]
0
4. Amend Sec. 84.33 by:
0
a. Removing paragraph (b)(11);
0
b. Redesignating paragraph (b)(12) as paragraph (b)(11);
0
c. Removing paragraph (d)(4); and
0
d. Redesignating paragraph (d)(5) as paragraph (d)(4).
[FR Doc. 2024-20191 Filed 9-10-24; 8:45 am]
BILLING CODE 6560-50-P