The Energy Policy and Conservation Act, Public Law 94-163, as amended (“EPCA”), 1 authorizes DOE to issue a direct final rule establishing an energy conservation standard for a product on receipt of a statement submitted jointly by interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of covered products, States, and efficiency advocates), as determined by the Secretary of Energy (“Secretary”), that contains recommendations with respect to an energy or water conservation standard that are in accordance with the provisions of 42 U.S.C. 6295(o) or 42 U.S.C. 6313(a)(6)(B), as applicable. (42 U.S.C. 6295(p)(4))

The direct final rule must be published simultaneously with a notice of proposed rulemaking (“NOPR”) that proposes an energy or water conservation standard that is identical to the standard established in the direct final rule, and DOE must provide a public comment period of at least 110 days on this proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) Not later than 120 days after issuance of the direct final rule, DOE shall withdraw the direct final rule if: (1) DOE receives one or more adverse public comments relating to the direct final rule or any alternative joint recommendation; and (2) based on the rulemaking record relating to the direct final rule, DOE determines that such adverse public comments or alternative joint recommendation may provide a reasonable basis for withdrawing the direct final rule. (42 U.S.C. 6295(p)(4)(C)) If DOE makes such a determination, DOE must proceed with the NOPR published simultaneously with the direct final rule and publish in the Federal Register the reasons why the direct final rule was withdrawn. ( Id. )

After review of comments received, DOE has determined that it did receive adverse comments on the direct final rule. However, based on the rulemaking record, the comments did not provide a reasonable basis for withdrawing the direct final rule under the provisions in 42 U.S.C. 6295(p)(4)(C). As such, DOE did not withdraw this direct final rule and the direct final rule remains effective. Although not required under EPCA, where DOE does not withdraw a direct final rule, DOE typically publishes a summary of the comments received during the 110-day comment period and its responses to those comments. This document contains such a summary, as well as DOE's responses to the comments.

In a direct final rule published on May 31, 2012 (“May 2012 Direct Final Rule”), DOE prescribed the current energy conservation standards for residential clothes washers (“RCWs”) manufactured on or after January 1, 2018. 77 FR 32308. 2 These standards are set forth in DOE's regulations at 10 CFR 430.32(g)(1). The current standards are defined in terms of a minimum allowable integrated modified energy factor (“IMEF”), measured in cubic feet per kilowatt-hour per cycle (“ft 3 /kWh/cycle”), and maximum allowable integrated water factor (“IWF”), measured in gallons per cycle per cubic foot (“gal/cycle/ft 3 ”), as measured according to the test procedure at 10 CFR part 430, subpart B, appendix J2 (“appendix J2”).

In a final rule published on June 1, 2022 (“June 2022 TP Final Rule”), DOE finalized a new test procedure at 10 CFR part 430, subpart B, appendix J (“appendix J”), which defines new energy efficiency metrics: an energy efficiency ratio (“EER”) and a water efficiency ratio (“WER”). 3 87 FR 33316, 33319. For both EER and WER, a higher value indicates more efficient performance.

On March 3, 2023, DOE published a NOPR (“March 2023 NOPR”) proposing to establish amended standards for RCWs, defined in terms of the EER and WER metrics as measured according to appendix J. 88 FR 13520.

On September 25, 2023, DOE received a joint statement (“Joint Agreement”) recommending standards for RCWs that was submitted by groups representing manufacturers, energy and environmental advocates, consumer groups, and a utility. 4 In addition to the recommended standards for RCWs, the Joint Agreement also included separate recommendations for several other covered products. 5 The amended standard levels recommended in the Joint Agreement for RCWs are presented in Table II.1, expressed in terms of the EER and WER metrics as measured according to the newly established test procedure contained in appendix J. Details of the Joint Agreement recommendations for other products are provided in the Joint Agreement posted in the docket for this rulemaking. 6

After carefully considering the recommended energy conservation standards for RCWs in the Joint Agreement, DOE determined that these recommendations were in accordance with the statutory requirements of 42 U.S.C. 6295(p)(4) for the issuance of a direct final rule and published a direct final rule on March 15, 2024 (“March 2024 Direct Final Rule”). 89 FR 19026. DOE evaluated whether the Joint Agreement satisfies 42 U.S.C. 6295(o), as applicable, and found that the recommended standard levels would, among other things, result in significant energy savings and are technologically feasible and economically justified. Id. at 89 FR 19113-19120. Accordingly, DOE adopted the recommended efficiency levels for RCWs as the amended standard levels in the March 2024 Direct Final Rule. Id.

The standards adopted in the March 2024 Direct Final Rule apply to product classes listed in Table II.2 and that are manufactured in, or imported into, the United States starting on March 1, 2028. The March 2024 Direct Final Rule provides a detailed discussion of DOE's analysis of the benefits and burdens of the amended standards pursuant to the criteria set forth in EPCA. Id.

As required by EPCA, DOE also simultaneously published a NOPR proposing the identical standard levels contained in the March 2024 Direct Final Rule. 89 FR 18836. DOE considered whether any adverse comment received during the 110-day comment period following the publication of the March 2024 Direct Final Rule provided a reasonable basis for withdrawal of the direct final rule under the provisions in 42 U.S.C. 6295(p)(4)(C).

As discussed in section I of this document, not later than 120 days after publication of a direct final rule, DOE shall withdraw the direct final rule if: (1) DOE receives one or more adverse public comments relating to the direct final rule or any alternative joint recommendation; and (2) based on the rulemaking record relating to the direct final rule, DOE determines that such adverse public comments or alternative joint recommendation may provide a reasonable basis for withdrawing the direct final rule. (42 U.S.C. 6295(p)(4)(C)(i))

DOE received comments in response to the March 2024 Direct Final Rule from the interested parties listed in Table III.1. 7

A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record. 8 The following sections discuss the substantive comments DOE received on the March 2024 Direct Final Rule as well as DOE's determination that the comments do not provide a reasonable basis for withdrawal of the direct final rule.

NYSERDA and CEC reiterated their sustained support for the recommendations issued their October 5, 2023 letter. 9 (NYSERDA and CEC, No. 519 at p. 1)

AHAM supported the March 2024 Direct Final Rule for RCWs because it establishes standards that are consistent with recommendations submitted in the Joint Agreement. (AHAM, No. 525 at p. 1) AHAM commented that it finds DOE has satisfied all EPCA criteria for issuing the March 2024 Direct Final Rule because the recommended energy conservation standards were designed by the Joint Stakeholders (including manufacturers of various sizes as well as consumer, environmental, and efficiency advocacy groups; a utility; and some States) to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified in accordance with the provisions of 42 U.S.C. 6295(o); and because DOE issued the March 2024 Direct Final Rule with a proposed rule identical to the standard established in the March 2024 Direct Final Rule and allowed 110 days for public comment, which is consistent with EPCA requirements. (AHAM, No. 525 at pp. 7-8)

ASAP et al. supported the standards in the March 2024 Direct Final Rule, as they reflect the recommendation in the Joint Agreement submitted to DOE in September 2023 in conjunction with AHAM. (ASAP et al., No. 527 at pp. 1-2)

CFA et al. strongly supported the March 2024 Direct Final Rule, which they noted is one of many completed and pending efficiency standards that will together significantly reduce consumer costs and climate pollution, as well as reduce emissions of nitrogen oxides, which cause health issues. (CFA et al., No. 528 at pp. 1-2)

DOE received comments from individual commenters who expressed support for the standards promulgated in the March 2024 Direct Final Rule. (Gómez de la Torre, No. 516 at p. 1; Leamy, No. 518 at p. 1; Finn, No. 524 at p. 1; Anonymous, No. 530 at p. 1)

Rep. Bice submitted a comment in opposition to the standards adopted in the March 2024 Direct Final Rule. (Rep. Bice, No. 517 at p. 1)

Word and Daquin commented that they are harmed by the March 2024 Direct Final Rule because their choice of preferred RCW would be eliminated by the rule. Word and Daquin recommended DOE repeal the March 2024 Direct Final Rule and withdraw the proposed rule. (Word and Daquin, No. 521 at p. 10)

The AGs of FL et al. asserted that the March 2024 Direct Final Rule over-regulates American households and requested that DOE reconsider it. (AGs of FL et al., No. 526 at p. 1) The AG of MT expressed agreement with the AGs of FL et al.' s comments. (AG of MT, No. 529 at p. 1)

As discussed in more detail below, DOE has determined that these comments do not provide a reasonable basis to withdraw the March 2024 Direct Final Rule.

DOE received comments regarding DOE's statutory authority to regulate the water use of RCWs.

Word and Daquin commented that DOE has gone beyond its statutory authority in increasing water efficiency standards of certain consumer appliances without lawful authority. Word and Daquin asserted that DOE lacks the authority to increase the stringency of water use standards for products other than showerheads, faucets, water closets, and urinals. (Word and Daquin, No. 521 at p. 1)

Word and Daquin also commented that based on the history of EPCA and the recent ruling of the Fifth Circuit Court of Appeals, DOE does not have the authority to regulate the water use of RCWs. Word and Daquin commented that the Fifth Circuit Court of Appeals recognized that “No part of [EPCA] indicates Congress gave DOE power to regulate water use for energy-using appliances.” Louisiana v. United States Dep't of Energy, 90 F.4th 461, 471 (5th Cir. 2024). Word and Daquin also noted that according to the Fifth Circuit, “EPCA does not appear to contemplate overlap between the products subject to `energy' regulation and those subject to `water' regulation,” noting that this is because the statute authorized DOE to regulate “energy use, or, [. . .] water use,” and “[t]he word `or' is almost always disjunctive.” Id. at 470-471 (quoting Encino Motorcars, LLC v. Navarro, 584 U.S. 79, 80 (2018)). Word and Daquin asserted that the March 2024 Direct Final rule, in requiring a minimum water efficiency ratio for clothes washers beyond that required by statute, is irreconcilable with the opinion of the Fifth Circuit Court of Appeals. ( Id. at pp. 1-5)

The AG of MT disputed DOE's interpretation of its statutory authority and asserted that DOE does not have authority to act contrary to the plain text of EPCA. (AG of MT, No. 529 at pp. 6-7)

As discussed in the March 2024 Direct Final Rule, EPCA prescribed energy conservation standards with both energy and water use requirements for RCWs. 89 FR 19026, 19032. In establishing energy conservation standards with both energy and water use performance standards for RCWs, Congress also directed DOE to “determin[e] whether to amend” those standards. (42 U.S.C. 6295(g)(9)(B)) Congress's directive, in section 6295(g)(9)(B), to consider whether “to amend the standards in effect for RCWs” refers to “the standards” established in the immediately preceding paragraph, 6295(g)(9)(A), where Congress established energy conservation standards with both energy and water use performance standards for RCWs. Indeed, the energy and water use performance standards for RCWs (both top-loading and front-loading) are each contained within a single subparagraph. See id. Accordingly, DOE's authority, under 6295(g)(9)(B), includes consideration of amended energy and water use performance standards for RCWs.

Similarly, DOE's authority under 42 U.S.C. 6295(m) to amend “standards” for covered products includes amending both the energy and water use performance standards for RCWs. Neither section 6295(g)(9)(B) nor section 6295(m) limit their application to “energy use standards.” Rather, they direct DOE to consider amending “the standards,” 42 U.S.C. 6295(g)(9)(B), or simply “standards,” Id. 6295(m)(1)(B), which may include both energy and water use performance standards.

EPCA, as codified, contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1))

The AG of MT commented that the fact the Joint Agreement is contingent upon other parts being implemented conflicts with the anti-backsliding provision of EPCA. (AG of MT, No. 529 at pp. 1-2)

DOE addressed this issue in the March 2024 Direct Final Rule. As discussed there, the Joint Agreement was contingent upon DOE initiating rulemaking processes to adopt all of the recommended standards. In other words, DOE could not pick and choose which recommendations in the Joint Agreement to implement. See 89 FR 19026, 19036. As described, DOE's adoption of the recommended standards conforms with the anti-backsliding provision in 42 U.S.C. 6295(o)(1).

The AG of MT stated that DOE must consider energy efficiency over the entire product lifecycle. The AG of MT agreed with DOE's statement that conscientious energy use is more complicated than increasing efficiency alone, and the AG of MT referenced documents with quotes from DOE officials testifying to this sentiment. The AG of MT commented that DOE's use of a single lifespan in its analysis for this rulemaking was in error, and given its statements about the energy consumed in raw materials, manufacturing, etc., its efficiency standards may violate anti-backsliding prohibitions in EPCA when shorter lifespans are considered, especially if the full fuel cycle (“FFC”) costs of short lifespans are accounted for. (AG of MT, No. 529 at pp. 3-4)

As described in the March 2024 Direct Final Rule, DOE did not use a single lifespan in its analysis for the RCWs rulemaking. Instead, DOE assigned a range of lifespan from 1 to 30 years, based on the Weibull lifetime distribution. DOE further notes that the lifetime distribution used in the March 2024 Direct Final Rule is based on actual lifetime values in the field, which were developed from historical shipments data and surveys. 89 FR 19026, 19060. In addition, DOE is unaware of data that suggests a different lifetime associated with the technology options considered in the March 2024 Direct Final Rule, and no such data was provided by stakeholders. Id.

As discussed previously, DOE may not prescribe an amended standard that increases the maximum allowable energy use or decreases the energy efficiency of a covered product. Further, EPCA defines the term “energy use” to mean the quantity of energy directly consumed by a consumer product at point of use, determined in accordance with test procedures under 42 U.S.C. 6293. (42 U.S.C. 6291(4)) EPCA similarly defines “energy efficiency” to mean the ratio of the useful output of services from a consumer product to the energy use [as that term is defined] of such product, determined in accordance with test procedures under 42 U.S.C. 6293. (42 U.S.C. 6291(5)) Neither the energy use nor the energy efficiency of a product, as those terms are defined in EPCA, is dependent upon the lifespan of the product. As a result, product lifespan has no effect on whether an amended standard violates the anti-backsliding provision in 42 U.S.C. 6295(o)(1).

As product lifespan does not affect energy use or energy efficiency as defined in EPCA, DOE has determined that the comment provided by the AG of MT does not provide a reasonable basis for withdrawal of the March 2024 Direct Final Rule.

DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including RCWs. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:

(1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard;

(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;

(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;

(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;

(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;

(6) The need for national energy and water conservation; and

(7) Other factors the Secretary considers relevant.

DOE received several comments on its determination of economic justification under the statutory criteria.

Rep. Bice asserted that increased standards will lead to increased production costs for manufacturers, which will subsequently lead to increased costs to consumers. Rep. Bice added that the adopted standards will limit consumer choice, drive up prices, and impose onerous regulations on American manufacturers, many of whom are small businesses. (Rep. Bice, No. 517 at p. 1)

The AGs of FL et al. commented that while they acknowledge that DOE has reduced the stringency as compared to the previously proposed standards, the March 2024 Direct Final Rule does not weigh heavily enough the appliance cost increase that the rule will cause and that will be borne by American consumers. (AGs of FL et al., No. 526 at p. 1)

DOE considered the impacts to manufacturers, including the potential increase in manufacturing costs, in the manufacturing impact analysis in the March 2024 Direct Final Rule. 89 FR 19026, 19071-19077, 19092-19098. At the adopted standard levels, DOE's data demonstrate no lessening of consumer choice, product utility, or performance would occur. DOE estimates that approximately 49 percent of annual shipments currently meet the adopted standard levels. Id. at 89 FR 19119. In the March 2024 Direct Final Rule, the life-cycle cost (“LCC”) analysis calculated the distribution of impacts across a nationally representative sample of US households. As demonstrated by the LCC analysis, at the adopted standard, the average LCC savings are positive for all product classes and the fraction of consumers experiencing a net LCC cost is about 12 percent. Id. Therefore, the March 2024 Direct Final Rule did consider the economic impact of the standard on the manufacturers and on the consumers of the products subject to such standard (42 U.S.C. 4296(o)(2)(B)(i)(I)), and DOE has determined that the comments provided by the AGs of FL et al. and Rep. Bice do not provide a reasonable basis for withdrawal of the March 2024 Direct Final Rule.

AHAM commented that the recommended standards are economically justified as required by 42 U.S.C. 6295(o)(2)(B)(i)(I) and will not result in lessening of utility, reliability, performance or availability of RCWs considered under 42 U.S.C. 6295(o)(2)(B)(i)(IV). AHAM commented that under the standards adopted in the March 2024 Direct Final Rule, only 2 percent of consumers would experience a net cost. AHAM commented that the standards adopted in the March 2024 Direct Final Rule also decrease the number of low-income consumers that could experience a net cost. In addition, AHAM noted that manufacturer costs to comply with the final standard are less under the March 2024 Direct Final Rule than under the previously proposed standards. (AHAM, No. 525 at p. 6)

ASAP et al. commented that the amended standards will particularly benefit low-income consumers, who spend three times more of their income on energy costs compared to non-low-income households. ASAP et al. commented that the standards will also benefit renters, whose landlords might not otherwise purchase energy-saving RCWs. (ASAP et al., No. 527 at p. 2)

CFA et al. commented that the standards adopted in the March 2024 Direct Final Rule will reduce energy use by about 10 percent relative to the least-efficient RCW sold today while also cutting water waste, and for a household replacing an inefficient top-loading RCW, the new standards will provide annual utility bill savings of $23 on average. CFA et al. further noted that the average PBP for low-income households for top-loading and front-loading RCWs are 3.5 years and 0.7 years, respectively. (CFA et al., No. 528 at p. 1)

The AG of MT stated that DOE's reliance on the Energy Information Administration's (“EIA's”) Annual Energy Outlook 2023 (“ AEO2023” ) for pricing trends is faulty due to federal rulemakings being issued that will force existing generating capacity offline, spike electricity demand, and decrease fossil fuel supply, as illustrated with several documents attached to the comment. (AG of MT, No. 529 at p. 5)

DOE contends that AEO2023 remains the best available source for projections of future energy price trends based on adopted energy policies. DOE also performed sensitivity analyses using alternate AEO2023 growth scenarios with low and high energy prices relative to the reference scenario in the March 2024 Direct Final Rule to assess the impact of alternative energy price projections. 89 FR 19026, 19059. The results of these scenarios are available in appendix 10D of the March 2024 Direct Final Rule Technical Support Document (“TSD”) and show that consumers of residential clothes washers would still experience positive cumulative consumer net present value (“NPV”) even when considering lower and higher energy prices.

Therefore, the March 2024 Direct Final Rule did take into account energy price variability in its analysis, and DOE has determined that the comment provided by the AG of MT does not provide a reasonable basis for withdrawal of the March 2024 Direct Final Rule.

The AG of MT stated that DOE acknowledges but disregards consumer preference and assumes consumers are ignorant. The AG of MT attached studies demonstrating consumer preference for product lifetime over energy consumption, and the AG of MT commented that these longer-life appliances may use less energy over the entire life cycle and be a lower cost to the consumer. (AG of MT, No. 529 at p. 2)

DOE did not disregard consumer preference but rather noted in the March 2024 Direct Final Rule that the economics literature provides a wide-ranging discussion of how consumers trade off up-front costs and energy savings in the absence of government intervention. 89 FR 19026, 19113. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements, as the AG of MT alleged in their comment. There is evidence that consumers undervalue future energy savings as a result of (1) a lack of information; (2) a lack of sufficient salience of the long-term or aggregate benefits; (3) a lack of sufficient savings to warrant delaying or altering purchases; (4) excessive focus on the short term, in the form of inconsistent weighting of future energy cost savings relative to available returns on other investments; (5) computational or other difficulties associated with the evaluation of relevant trade-offs; and (6) a divergence in incentives (for example, between renters and owners, or builders and purchasers). Id. at 89 FR 19114 Having less-than-perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher-than-expected rate between current consumption and uncertain future energy cost savings. Id.

Potential changes in the benefits and costs associated with a standard due to changes in consumer purchase decisions were included in the analysis for the March 2024 Direct Final Rule in two ways. Id. First, if consumers forgo the purchase of a product in the standards case, as estimated based on price elasticity related to empirical data on appliances, this decreases sales for product manufacturers, and the impact on manufacturers attributed to lost revenue is included in the manufacturer impact analysis. Id. Second, DOE accounts for energy savings attributable only to products actually used by consumers in the standards case; if a standard decreases the number of products purchased by consumers, this decreases the potential energy savings from an energy conservation standard.

Further, the AG of MT stated that the reliability of products affected by the rulemaking will decrease due to complexity increases, which the commenters asserted is supported by engineering facts illustrated in a document attached to their comment, yet DOE does not address this issue. The AG of MT also commented that complexity increases will lead to less economic viability of repair, which is not reflected in DOE's assumption that the rulemaking will have no impact on lifespan. The AG of MT commented that DOE disregards the fact that reliability can be increased by lightening the electrical, mechanical, thermal, and other conditions of operation of the components, which tends to decrease energy efficiency but results in less repair downtime and longer times before replacement and, therefore, decreased costs, as illustrated in attached documents. (AG of MT, No. 529 at pp. 3-5)

AHAM commented that the March 2024 Direct Final Rule addresses AHAM's key concerns with the March 2023 NOPR. AHAM added that the technology options DOE identified for meeting the standard levels in the March 2024 Direct Final Rule are established technologies used in the market today and do not negatively impact product reliability. (AHAM, No. 525 at p. 7)

ASAP et al. commented that they did not expect the standards in the March 2024 Direct Final Rule to have any impact on product reliability because the amended standards can be met with simple design changes that have already been incorporated in many models on the market today. ASAP et al. presented a figure of historical data from EIA's Residential Energy Consumption Survey (“RECS”) showing that the distribution of RCW age remained largely unchanged between 2005 and 2020 as RCW efficiency improved. (ASAP et al., No. 527 at pp. 4-5)

In contrast to the comment from the AG of MT and as noted in the March 2024 Direct Final Rule, DOE did take into consideration the cost of repair and included higher repair costs for more efficient products when supported by available data. See 89 FR 19026, 19059. Hence, notwithstanding theoretical conjecture that higher-efficiency products may have poor reliability based on simplified textbook models, no real-world evidence or data related to the technologies used at the adopted standard levels can be found clearly supporting such a correlation. The AG of MT did not specify how the attached documents on network node analysis and reliability theory correspond to the technologies used at the adopted standard levels for RCWs. In the absence of data specific to the technologies used in RCWs, DOE has no practical basis to model the theoretical concern from the AG of MT at the adopted standard levels.

DOE further notes that the lifetime distribution used in the March 2024 Direct Final Rule is based on actual lifetime values in the field, which were developed from historical shipments data and surveys. DOE did not find that the average lifetime for RCWs has changed. 89 FR 19026, 19060. DOE is unaware of data that suggests a different lifetime associated with the technology options considered in the March 2024 Direct Final Rule, and no such data was provided by stakeholders. In response to the March 2024 Direct Final Rule, AHAM commented that the adopted standard will not impact the reliability of products, and hence lifetime of the product, at the adopted level, and it further stated that the standard levels are achievable by technology readily available on the market. (AHAM, No. 525 at p. 6) As there is no data to suggest different lifetime distributions for products at the adopted standards level, the comment from the AG of MT does not provide a reasonable basis for withdrawal of the March 2024 Direct Final Rule.

As discussed in the March 2024 Direct Final Rule, DOE did take into account product reliability, lifetimes, and cost of repair when considering the LCC of more efficient products when supported by available data. See 89 FR 19026, 19060. Therefore, the March 2024 Direct Final Rule did take into account consumer purchase decisions in its analysis, and DOE has determined that the comment provided by the AG of MT does not provide a reasonable basis for withdrawal of the March 2024 Direct Final Rule.

The AG of MT stated their belief that greenhouse gas (“GHG”) emissions and climate change impacts should not be part of EPCA rulemakings, but given their inclusion, DOE must consider them throughout the entire life cycle of the product, including manufacturing and potential reductions in lifespan due to increased complexity. The AG of MT commented that the March 2024 Direct Final Rule failed to adequately address these full life cycle impacts. (AG of MT, No. 529 at p. 6)

As previously stated in section III.C of this document, the comment from the AG of MT points to a statement made to the U.S. Senate Subcommittee on Energy to indicate that 40 to 60 percent of the carbon footprint for many consumer products can be attributed to the supply chain. 10 However, the McKinsey report, which is the primary source for the statement made to the U.S. Subcommittee on Energy, is only referring to the manufacturing company's energy and carbon footprint that can reside upstream in its supply chain and does not include the energy and emissions associated with the usage phase of the appliance life cycle, which represents more than 90 percent of the total for large appliances. 11 As such, the energy and carbon footprint associated with supply chain likely accounts for approximately 4 to 6 percent of the overall carbon footprint of a product. Furthermore, there is no data suggesting that the supply chain carbon footprint would be different between baseline units and units that meet the adopted standard. In the March 2024 Direct Final Rule, DOE accounted for the environmental and public health benefits associated with the more efficient use of energy, including those connected to global climate change, as they are important to take into account when considering the need for national energy conservation under EPCA. ( See 42 U.S.C. 6295(o)(2)(B)(i)(IV)) 89 FR 19026, 19110-19113. This analysis focused on the estimated reduced emissions expected to result during the lifetime of RCWs shipped during the projection period. Id

The AG of MT stated that the Interagency Working Group's (“IWG's”) SC-GHG based on global impacts is inconsistent with EPCA's requirements for standards to consider economic implications to U.S. consumers. The AG of MT claimed that DOE erroneously appears to assume that all the benefits accrue to U.S. citizens, despite using global values. The AG of MT cited the case of Louisiana v. Biden to demonstrate questions related to the accuracy of the IWG's SC-GHG estimates. (AG of MT, No. 529 at p. 6)

DOE reiterates its view that the environmental and public health benefits associated with more efficient use of energy, including those connected to global climate change, are important to take into account when considering the need for national energy conservation. ( See 42 U.S.C. 6295(o)(2)(B)(i)(IV)) In addition, Executive Order 13563, which was reaffirmed on January 21, 2021, stated that each agency must, among other things, “select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity).” Regarding the use of global SC-GHG values, many climate impacts that affect the welfare of U.S. citizens and residents are better reflected by global measures of SC-GHG. In addition, assessing the benefits of U.S. GHG mitigation activities requires consideration of how those actions may affect mitigation activities by other countries, as those international mitigation actions will provide a benefit to U.S. citizens and residents by mitigating climate impacts that affect U.S. citizens and residents.

The AG of MT stated the monetized GHG benefits largely accrue centuries in the future, well beyond the rulemaking analysis period. The AG of MT also stated that DOE improperly mixed discount rates in its cost-benefit analysis. (AG of MT, No. 529 at p. 6)

DOE's March 2024 Direct Final Rule analysis considers the costs and benefits associated with 30 years of shipments of a covered product. Because a portion of products shipped within this 30-year period continue to operate beyond 30 years, DOE accounts for energy cost savings and reductions in emissions until all products shipped within the 30-year period are retired. 89 FR 19026, 19073. In the case of carbon dioxide emissions, which remain in the atmosphere and contribute to climate change for many decades, the benefits of reductions in emissions likewise occur over a lengthy period; to not include such benefits would be inappropriate. Id.

With regards to discount rates used, the IWG found that the use of the social rate of return on capital (7 percent under current Office of Management and Budget Circular A-4 guidance) to discount the future benefits of reducing GHG emissions inappropriately underestimates the impacts of climate change for the purposes of estimating the SC-GHG. Consistent with the findings of the National Academies and the economic literature, the IWG continued to conclude that the consumption rate of interest is the theoretically appropriate discount rate in an intergenerational context and recommended that discount rate uncertainty and relevant aspects of intergenerational ethical considerations be accounted for in selecting future discount rates. Regarding mixing discount rates, DOE consulted the National Academies' 2017 recommendations on how SC-GHG estimates can “be combined in Regulatory Impact Analyses (“RIAs”) with other cost and benefits estimates that may use different discount rates.” The National Academies reviewed several options, including “presenting all discount rate combinations of other costs and benefits with [SC-GHG] estimates.” 89 FR 19026, 19080. 12

EPCA specifies the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4))

The AGs of FL et al. stated that the March 2024 Direct Final Rule does not account for the lower performance of RCWs that AHAM identified through members' independent testing of RCWs at the new standard level. 13 (AGs of FL et al., No. 526 at p. 3) The AGs of FL et al. asserted that the standards in the March 2024 Direct Final Rule will leave consumers struggling with washers that take longer to clean clothes. (AGs of FL et al., No. 526 at p. 1)

Rep. Bice asserted that the adopted standards will limit consumer choice. (Rep. Bice, No. 517 at p. 1)

ASAP et al. commented that the amended standards will improve washing performance for top-loading RCWs and will not impact other performance attributes. ASAP et al. added that RCWs that already meet the new standards provide improved washing performance relative to less-efficient models, as demonstrated by Consumer Reports studies. (ASAP et al., No. 527 at pp. 2-3)

ASAP et al. also commented that the standards in the March 2024 Direct Final Rule can be met across the entire capacity range of top-loading RCWs, so indicating that the standards will not preclude the availability of smaller-capacity RCWs. ( Id. at p. 4) ASAP et al. noted that the amended standards will not require an increase in cycle time. ASAP et al. further commented that there is no evidence that the frequency of running multiple RCW cycles has increased over time or will increase in the future as a result of the amended standards. ( Id. at pp. 3-4)

AHAM commented that it supported the energy conservation standards in the March 2024 Direct Final Rule because DOE's data demonstrate, and industry experience confirms that RCWs at the amended standard level can maintain good cleaning performance and that the amended standards do not preclude the ability to provide high wash temperatures. AHAM further commented that there is no significant difference in cycle time between RCWs in its data set that are less efficient than the amended standards and those that just meet the standard levels. Thus, AHAM commented that it supported the energy conservation standards adopted in the March 2024 Direct Final Rule. (AHAM, No. 525 at p. 3)

AHAM commented that the energy conservation standards adopted in the March 2024 Direct Final Rule will not result in significant lessening of utility, reliability, performance, or availability of the covered products as prohibited under the so-called “safe harbor” exception of 42 U.S.C. 6295(o)(2)(B)(IV). ( Id. at p. 6)

AHAM further noted that the energy conservation standards adopted in the March 2024 Direct Final Rule are equivalent to current ENERGY STAR levels for many product classes, and that there are a wide range of products meeting the adopted standards currently available on the market. AHAM therefore does not anticipate that the energy conservation standards recommended in the Joint Agreement and established in the March 2024 Direct Final Rule will negatively affect features or performance, including cycle time. ( Id. at p. 5)

NYSERDA and CEC reiterated their support for the recommendations in the Joint Agreement and echoed the clarification regarding “short cycle” products made in the February 15, 2024 letter to DOE by ASAP and AHAM. This clarification specified that the recommendations in the Joint Agreement did not address “short cycle” products for clothes washers, clothes dryers, and dishwashers as so-called “short cycle” product classes did not exist at the time the recommendations were submitted to DOE and do not exist at this time. 14 This letter also highlighted that the signatories to the Joint Agreement do not anticipate that amended standards will negatively affect features or performance, including cycle time. (NYSERDA and CEC, No. 519 at p. 1)

DOE determined that the March 2024 Direct Final Rule would not result in the unavailability of products that are substantially the same as those currently available in the United States. 89 FR 19026, 19108-19109. Therefore, DOE has determined that the comments provided by Rep. Bice and the AGs of FL et al. do not provide a reasonable basis for withdrawal of the March 2024 Direct Final Rule.

Under 42 U.S.C. 6295(p)(4), interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of covered products, States, and efficiency advocates), as determined by DOE, may submit a joint recommendation to DOE for new or amended energy conservation standards.

The AGs of FL et al. questioned the expertise and relevancy of several advocacy groups who contributed to the Joint Agreement ( i.e., the Alliance for Water Efficiency, Earthjustice, the Northwest Energy Efficiency Alliance, the Natural Resource Defense Council, and the National Consumer Law Center). The AGs of FL et al. asserted that none of the advocacy groups has expertise in setting energy efficiency standards for RCWs. (AGs of FL et al., No. 526 at pp. 4-5)

The AGs of FL et al. commented that there were several other groups that commented on the March 2023 NOPR but did not appear in the joint statement. The AGs of FL et al. stated that the joint agreement did not include the National Apartment Association (“NAA”) and the National Multifamily Housing Council (“NMHC”). NAA and NMHC previously raised concerns about the effects of the rulemaking on mass-appliance purchases, which will disproportionately affect low-income individuals. (AGs of FL et al., No. 526 at pp. 5-6)

The AGs of FL et al. commented that while Massachusetts, New York, and California supported the standards adopted in the March 2024 Direct Final Rule, 21 States cautioned DOE about the March 2024 Direct Final Rule's effects on consumer welfare; the AGs of FL et al. asserted that EPCA requires DOE to receive the concurrence of States across the ideological spectrum in order to proceed with a direct final rule rather than acknowledge only the few opinions in favor without receiving the support of a majority of States. The AGs of FL et al. commented that many States also previously raised legal concerns with DOE's previously proposed rule, which they stated were not resolved in the March 2024 Direct Final Rule. The AGs of FL et al. commented that States have a direct interest in protecting consumers and are also directly affected by the rule because many State entities purchase clothes washers. (AGs of FL et al., No. 526 at p. 6)

The AG of MT agreed with the AGs of FL et al.' s concerns over the participants in the Joint Agreement underlying the March 2024 Direct Final Rule, along with their concerns that the group does not comply with EPCA. (AG of MT, No. 529 at p. 1)

The AGs of FL et al. stated one concern was that DOE engaged in “administrative arm-twisting” and indicated that AHAM's change of approach from opposing to supporting the energy efficiency standards in question reflects a subtle example of the effect of DOE's arm-twisting on AHAM. (AGs of FL et al., No. 526 at p. 4)

AHAM commented that the stakeholders who submitted the Joint Agreement are representative of a wide range of expert and relevant points of view—including manufacturers of various sizes representing nearly 100 percent of the market for consumer clothes dryers; consumer, environmental, and efficiency advocacy groups; a utility; and several States that participated in the negotiation discussions and filed comments in support of the agreement. AHAM concluded that the March 2024 Direct Final Rule benefits both the manufacturers and consumers that these organizations represent. (AHAM, No. 525 at p. 5)

In response to the comments regarding whether the Joint Agreement was submitted by persons fairly representative of relevant points of view, DOE reiterates that 42 U.S.C. 6295(p)(4) states that if the criteria in 42 U.S.C. 6295(o) are met, the Secretary may issue a final rule that establishes an energy conservation standard “[o]n receipt of a statement that is submitted jointly by interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of covered products, States, and efficiency advocates), as determined by the Secretary.” (42 U.S.C. 6295(p))

As stated in the March 2024 Direct Final Rule, DOE determined that this requirement was met. 89 FR 11434, 19038. The Joint Agreement included a trade association, AHAM, which represents 12 manufacturers of the subject covered products—RCWs. Id. The Joint Agreement also included environmental and energy-efficiency advocacy organizations, consumer advocacy organizations, and a gas and electric utility company. Id. Additionally, DOE received a letter in support of the Joint Agreement from the States of New York, California, and Massachusetts ( see comment No. 506). Id. DOE also received a letter in support of the Joint Agreement from the gas and electric utility, San Diego Gas and Electric, and the electric utility, Southern California Edison ( see comment No. 507). Id. Representatives from each of the relevant points of view described in 42 U.S.C. 6295(p)(4) supported the Joint Agreement.

DOE has ample authority to accept a joint statement in these circumstances. EPCA does not require that the Joint Agreement be representative of every point of view. Nor does it require that a statement be submitted by all interested persons. Rather, it requires a statement from a sufficient number and diversity of “interested persons” such that the statement is “fairly representative of relevant points of view.” The Joint Agreement presented here is such a statement, as the Secretary determined.

Contrary to the commenters' suggestion, EPCA does not include any requirement that “relevant points of view” must include ideologically opposed points of view. Rather, EPCA ensures a diversity of opinions and interests by requiring that parties that provide a joint agreement must be fairly representative of relevant points of view (including representatives of manufacturers of covered products, States, and efficiency advocates), as determined by the Secretary. (42 U.S.C. 6295(p)(4)(A))

Moreover, regardless of whether amended energy conservation standards are recommended as part of a joint agreement or proposed by DOE, the standards have to satisfy the same criteria in 42 U.S.C. 6295(o). Thus, once DOE has determined that a joint agreement was submitted by interested persons that are fairly representative of relevant points of view, DOE then determines whether the joint agreement satisfies the relevant statutory criteria. As a result, in evaluating whether comments provide a reasonable basis for withdrawing a direct final rule, it is the substance of the comments, not the number of stakeholders that submit statements in favor of, or opposed to, the joint agreement, that determines whether a rule should be withdrawn.

DOE also finds the contention that the Joint Agreement parties are not competent to present a statement for the purposes of section 6295(p) meritless. Contrary to the characterizations by the AGs of FL et al., the parties to the Joint Agreement have an established historical record of participation in DOE rulemakings and have submitted detailed comments in the past that demonstrate a thorough understanding of the technical, legal, and economic aspects of appliance standards rulemakings, including factors affecting specific groups such as low-income households.

In a follow-up letter from the parties to the Joint Agreement, each organization provided a brief description of its background: American Council for an Energy-Efficient Economy is a nonprofit research organization and its independent analysis advances investments, programs, and behaviors that use energy more effectively and help build an equitable clean energy future. Alliance for Water Efficiency is a nonprofit dedicated to efficiency and sustainable use of water that provides a forum for collaboration around policy, information sharing, research, education, and stakeholder engagement. ASAP organizes and leads a broad-based coalition effort that works to advance new appliance, equipment, and lighting standards that cut emissions that contribute to climate change and other environmental and public health harms, save water, and reduce economic and environmental burdens for low- and moderate-income households. AHAM represents more than 150 member companies that manufacture 90 percent of the major portable and floor care appliances shipped for sale in the United States. CFA is an association of more than 250 non-profit consumer and cooperative groups that advances the consumer interest through research, advocacy, and education. Consumer Reports is a mission-driven, independent, nonprofit member organization that empowers and informs consumers, incentivizes corporations to act responsibly, and helps policymakers prioritize the rights and interests of consumers in order to shape a truly consumer-driven marketplace. Earthjustice is a nonprofit public interest environmental law organization advocating to advance clean energy and combat climate change. National Consumer Law Center supports consumer justice and economic security for low-income and other disadvantaged people in the United States through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training. National Resources Defense Council is an international nonprofit environmental organization with expertise from lawyers, scientists, and other environmental specialists. Northwest Energy Efficiency Alliance is a collaboration of 140 utilities and efficiency organizations working together to advance energy efficiency in the Northwest on behalf of more than 13 million consumers. Pacific Gas and Electric Company represents one of the largest combined gas and electric utilities in the Western United States, serving over 16 million customers across northern and central California. 15

Finally, DOE notes that it had no role in requesting that the parties to the Joint Agreement submit the Joint Agreement or in negotiating the terms of the Joint Agreement. As noted in the Joint Agreement itself, the parties negotiated and accepted the agreement based on the totality of the agreement. DOE's participation was limited to evaluating the joint submission under the criteria set forth in 42 U.S.C. 6295(p).

Therefore, DOE reaffirms its determination that the Joint Agreement was submitted by interested persons that are fairly representative of relevant points of view.

The AGs of FL et al. commented that there were many comments made by AHAM, Whirlpool, and GE Appliances in previous rounds of the rulemaking that the AGs of FL et al. found were not adequately addressed in the March 2024 Direct Final Rule. For example, the AGs of FL et al. stated that the March 2024 Direct Final Rule does not address Whirlpool's concern that DOE did not conduct a North American integrated supply-chain analysis. The AGs of FL et al. commented that the March 2024 Direct Final Rule neglects to address AHAM's previous concern that RCWs will not be able to maintain certain features and functionalities and households at or near the poverty line would be negatively affected by having to purchase new RCWs. The AGs of FL et al. commented that although AHAM later authored a joint agreement in favor of the March 2024 Direct Final Rule, DOE did not adequately address the concerns listed in AHAM's earlier comment and therefore does not assuage concerns that the new energy efficiency standards will raise prices for RCWs with disproportionate harm to low-income households. (AGs of FL et al., No. 526 at pp. 2-4)

Regarding the comments from the AGs of FL et al. that DOE did not respond in the March 2024 Direct Final Rule to the comments submitted by signatories to the Joint Agreement and other stakeholders in response to the March 2023 NOPR, DOE notes that the commenters misunderstand DOE's direct final rule authority under EPCA. As discussed in the March 2024 Direct Final Rule, DOE was already conducting a rulemaking to consider amending the standards for RCWs when the Joint Agreement was submitted. 89 FR 19026, 19036. After receiving the Joint Agreement, DOE initiated a separate rulemaking action and subsequently issued the March 2024 Direct Final Rule after determining that the recommendations contained in the Joint Agreement were compliant with 42 U.S.C. 6295(o). Id. The March 2024 Direct Final Rule is a separate rulemaking, conducted under a different statutory authority from DOE's prior rulemaking in the March 2023 NOPR, and DOE has no obligation to consider comments submitted in response to that prior rulemaking in a different rulemaking. Further, both the efficiency levels and compliance periods proposed in the March 2023 NOPR are different from those adopted in the March 2024 Direct Final Rule.

Even though DOE was not required to consider comments from the March 2023 NOPR, DOE did in fact consider relevant comments, data, and information obtained through the March 2023 NOPR. This included the issues that the AGs of FL et al. asserted DOE ignored in the March 2024 Direct Final Rule.

In response to concerns about manufacturer supply chain, DOE noted in the March 2024 Direct Final Rule that six of the nine OEMs with top-loading standard-size products offer models that meet the adopted standard level, while for the front-loading standard size RCWs, approximately 92 percent of shipments already meet the adopted standard level. 89 FR 19026, 19093. Given that a significant portion of the market already meets or exceeds the adopted standard, it is very unlikely that the adopted standard will impact the RCW product supply chain.

Additionally, in the March 2024 Direct Final Rule, DOE specifically addressed the ability of RCWs to maintain certain features and functionalities. 89 FR 19026, 19100. For example, DOE determined that the adopted standards would not require substantive reduction in hot water temperature on the hottest temperature selection in the Normal cycle. The adopted standards would not preclude the ability to provide wash temperatures above 85 degrees Fahrenheit, would not preclude the ability to provide total cleaning scores for top-loading units equally as high as the highest scores currently achieved by units at lower efficiency levels, and would not preclude the ability to provide mechanical action score comparable to cores for units at lower efficiency levels, Id. at 89 FR 19102-19103.

AHAM commented that DOE satisfactorily responded to AHAM's comments and concerns regarding clothes washer performance and safety concerns, baseline level definition, product class definitions, the economic value of water, consideration of low-income consumers, consideration of well and septic system users, test cloth availability, and harmonization of compliance dates for other laundry products. AHAM stated that the compliance timeline reduces the cumulative regulatory burden of this rulemaking and those for other major appliances. AHAM further commented that the energy conservation standards adopted in the March 2024 Direct Final Rule maintain important consumer features and utilities. AHAM commented that it agrees with DOE that the standard levels in the March 2024 Direct Final Rule can maintain good cleaning performance and do not preclude the ability to provide high wash temperatures. (AHAM, No. 525 at pp. 3-8)

ASAP et al. also commented that DOE's testing found that the standards finalized in the March 2024 Direct Final Rule can be achieved with wash temperatures and “wear and tear” scores comparable to or better than those of lower-efficiency units. (ASAP et al., No. 527 at p. 3)

In the March 2024 Direct Final Rule, DOE considered the impact on low-income households by performing a LCC subgroup analysis for low-income households. 89 FR 19026, 19067-19071. Notably, consistent with the Joint Agreement, in the March 2024 Direct Final Rule DOE adopted a lower standard level for top-loading and front-loading standard-size RCWs than the level proposed in the March 2023 NOPR. DOE estimated that the adopted standard level would result in 12 percent of low-income households experiencing a net cost due to the standard, compared with 14 percent at the proposed level in the March 2023 NOPR.

The AGs of FL et al. recommended that before enacting these stringent new standards for RCWs, DOE return to formal rulemaking or, at a minimum, to proceed with informal notice-and-comment rulemaking to allow States and other relevant parties to participate in rulemaking processes that affect nearly every household appliance and also ensure a minimal level of political accountability by giving visibility to internal agency deliberations. The AGs of FL et al. further commented that the lack of a formal process does not allow people the opportunity to comment on rules that touch the lives of nearly all Americans. (AGs of FL et al., No. 526 at pp. 1, 6-8) The AG of MT similarly recommended DOE halt the rulemaking. (AG of MT, No. 529 at p. 7)

The AG of MT expressed concern about pretext and circumvention of the Administrative Procedure Act (“APA”), regarding DOE's conduct in this rulemaking and in recent litigations. (AG of MT, No. 529 at pp. 1-2)

AHAM stated that interested parties have had ample opportunity to comment through multiple stages of rulemaking. AHAM noted that, in fact, the March 2024 Direct Final Rule process provided an extra 110 days for interested parties to review DOE's final rule and submit comments—which met EPCA requirements. (AHAM, No. 525 at p. 5)

In response, DOE notes that Congress granted DOE the authority to issue energy conservation standards as direct final rules subject to certain conditions and procedural requirements. As discussed in the March 2024 Direct Final Rule, DOE determined that the Joint Agreement was submitted jointly by interested persons that are fairly representative of relevant points of view and the adopted energy conservation standards as recommended in the Joint Agreement would result in significant energy savings and are technologically feasible and economically justified as required under 42 U.S.C. 6295(o) and provided supporting analysis. 89 FR 19026, 19037-19038.

Additionally, DOE notes it followed the procedures in 42 U.S.C. 6295(p)(4) to publish a direct final rule in the Federal Register simultaneously with a NOPR proposing identical standards and allowed 110 days for public comment. See 89 FR 19026. Regarding the comment about formal rulemaking, DOE has met all of its statutory requirements under its direct rule authority, which does not require formal rulemaking. 16

Finally, regarding the comments about the APA, EPCA mandates the substance and process by which DOE establishes energy conservation standards and develops direct final rules. While the APA provides DOE direction in areas in which EPCA is silent, EPCA is a comprehensive statutory mechanism for the development, implementation, and enforcement of energy conservation standards.

The test procedures at appendices J and appendix J2 contain introductory notes that specify the dates of applicability for each test procedure. Among other details, these introductory notes currently specify the following:

• For RCWs, manufacturers must use the results of testing under appendix J2 to determine compliance with the relevant standards at 10 CFR 430.32(g)(4) as they appeared in January 1, 2022 edition of 10 CFR parts 200-499.

• For RCWs, manufacturers must use the results of testing under appendix J to determine compliance with any amended standards provided in 10 CFR 430.32(g) that are published after January 1, 2022.

The March 2024 Direct Final Rule reorganized 10 CFR 430.32(g) by renumbering the currently applicable standards at 10 CFR 430.32(g)(4) to 430.32(g)(1) and adding the amended standards promulgated by the March 2024 Direct Final Rule at 10 CFR 430.32(g)(2).

In this document, DOE updates the introductory notes to both appendix J and appendix J2 to reference 10 CFR 430.32(g)(1) with regard to the currently applicable standards for RCWs and 10 CFR 430.32(g)(2) with regard to the amended standards promulgated by the March 2024 Direct Final Rule.

EPCA directs DOE to consider any lessening of competition that is likely to result from new or amended standards. (42 U.S.C. 6295(p)(4)(A)(i) and (C)(i)(II); 42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General of the United States (“Attorney General”) to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the Attorney General in making this determination, DOE provided the Department of Justice (“DOJ”) with copies of the March 2024 Direct Final Rule, the corresponding NOPR, and the March 2024 Direct Final Rule TSD for review. DOE has published DOJ's comments at the end of this document.

In its letter responding to DOE, DOJ concluded that, based on its review, the direct final rule standards for RCWs are unlikely to have a significant adverse impact on competition.

In summary, based on the previous discussion, DOE has determined that the comments received in response to the direct final rule for amended energy conservation standards for RCWs do not provide a reasonable basis for withdrawal of the direct final rule. As a result, the energy conservation standards set forth in the direct final rule became effective on July 15, 2024. Compliance with these standards is required on and after March 1, 2028.

This document of the Department of Energy was signed on October 10, 2024, by Jeffrey Marootian, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

For the reasons set forth in the preamble, DOE amends part 430 of chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A330-800 and A330-900 series airplanes. The NPRM published in the Federal Register on February 21, 2024 (89 FR 12993). The NPRM was prompted by AD 2023-0169, dated September 4, 2023, issued by EASA, which is the Technical Agent for the Member States of the European Union (EASA AD 2023-0169) (also referred to as the MCAI). The MCAI states that a protective cap was found still in place on the drain hole of a fire extinguishing pipe. Further investigations indicated that this failure to remove those caps may have occurred on other airplanes. This condition, if not detected and corrected, could lead to accumulation of water and ice in the pipe and, in case of an engine fire, prevent extinguishing that engine fire, possibly resulting in reduced control of the airplane.

In the NPRM, the FAA proposed to require a one-time GVI of the engine fire extinguishing pipe drain hole and, depending on findings, removal of the protective cap, as specified in EASA AD 2023-0169. The FAA is issuing this AD to address the unsafe condition on these products.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2024-0233.

The FAA received a comment from Air Line Pilots Association, International (ALPA) who supported the NPRM without change.

This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data, considered the comment received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

EASA AD 2023-0169 specifies procedures for a GVI of each engine fire extinguishing pipe drain hole and, if found, removal of the protective cap. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 8 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

Section 7805(a) authorizes the Secretary to prescribe all needful rules and regulations for the enforcement of the Code.

Section 3405(a)(1) of the Internal Revenue Code of 1986 (Code) requires the payor of any periodic payment to withhold income tax from the payment. Under section 3405(a)(2), an individual generally may elect not to have section 3405(a)(1) apply with respect to periodic payments made to the individual. Section 3405(b)(1) requires the payor of any nonperiodic distribution to withhold income tax from the distribution. Under section 3405(b)(2), an individual generally may elect not to have section 3405(b)(1) apply with respect to any nonperiodic distribution.

Section 3405(e)(2) defines a periodic payment as a designated distribution that is an annuity or similar periodic payment. Section 3405(e)(3) defines a nonperiodic distribution as any designated distribution that is not a periodic payment. A designated distribution is defined in section 3405(e)(1) as generally any distribution or payment from or under an employer deferred compensation plan, an individual retirement plan (as defined in section 7701(a)(37) of the Code), or a commercial annuity. For this purpose, an employer deferred compensation plan is defined in section 3405(e)(5) as any pension, annuity, profit sharing, or stock bonus plan or other plan deferring the receipt of compensation, and a commercial annuity is defined in section 3405(e)(6) as an annuity, endowment, or life insurance contract issued by an insurance company licensed to do business under the laws of any State.

Section 3405(e)(1)(B) identifies certain amounts or payments that are not a “designated distribution” for purposes of section 3405 withholding. Under section 3405(e)(1)(B)(iii), any amount that is subject to withholding under subchapter A of chapter 3 of the Code (relating to withholding of tax on nonresident aliens and foreign corporations) by the person paying such amount or which would be so subject but for a tax treaty is not a designated distribution.

Section 3405(e)(13)(A) provides generally that, in the case of any periodic payment or nonperiodic distribution that is “to be delivered outside of the United States and any possession of the United States,” no election may be made under section 3405(a)(2) or (b)(2) with respect to such payment, with the result that withholding may not be waived. Section 3405(e)(13)(B) provides that section 3405(e)(13)(A) does not apply if the recipient certifies to the payor, in such manner as the Secretary of the Treasury may prescribe, that the recipient is not (i) a United States citizen or a resident alien of the United States, or (ii) an individual to whom section 877 of the Code applies. Section 877(h) provides that section 877 applies to certain nonresident alien individuals whose expatriation date, as defined in section 877A(g)(3), is before June 17, 2008.

Notice 87-7, 1987-1 CB 420, provides guidance under section 3405(e)(13)(A) to payors of designated distributions with respect to their duty to withhold income tax from such distributions. The notice applies to designated distributions for the following categories of payees: (1) payees who have provided the payors with a residence address outside of the United States;  1 (2) payees who have provided the payors with a residence address within the United States; and (3) payees who have not provided the payors with a residence address.

Notice 87-7 specifies that, if a payee has provided the payor with a residence address outside of the United States, the payor is required to withhold income tax from designated distributions to the payee. If a payee has provided the payor with a residence address within the United States, the payor is required to withhold income tax from these distributions to the payee unless the payee has elected no withholding in accordance with the applicable provisions of section 3405. If a payee has not provided the payor with a residence address, the payor is required to withhold income tax from designated distributions; included within this category is a payee who has provided the payor with an address for the payee's nominee, trustee, or agent without also providing the payee's residence address.

On May 31, 2019, the Department of the Treasury (Treasury Department) and the IRS published a notice of proposed rulemaking regarding withholding on certain periodic payments and nonperiodic distributions under section 3405 (other than eligible rollover distributions) in the Federal Register (84 FR 25209). No comments responsive to the notice of proposed rulemaking were received, and no public hearing was requested or held. Thus, this final regulation adopts the provisions of the proposed regulation with no modifications except for the change in the applicability date to January 1, 2026, and other minor changes in wording that are nonsubstantive.

This document contains a final regulation under section 3405(e) that provides withholding guidance for payors of periodic payments and nonperiodic distributions under section 3405(a) and (b), respectively. The regulation generally addresses a payor's obligation to withhold under section 3405(a) and (b) in the following situations: (1) payments to payees with a military or diplomatic Post Office address; (2) payments to payees with a residence address located within the United States; (3) payments to payees with a residence address located outside of the United States or who have not provided a residence address; and (4) payments subject to withholding under subchapter A of chapter 3 (sections 1441 through 1446 of the Code).

For purposes of section 3405(e)(13)(A), the regulation treats an Army Post Office (APO), a Fleet Post Office (FPO), or a Diplomatic Post Office (DPO)  2 address as an address located within the United States. In 1986, when this provision was added to the Code by the Tax Reform Act of 1986, Public Law 99-514 (TRA '86), it was one of several provisions intended to increase compliance with the internal revenue laws by United States persons resident abroad and green card holders. The Senate Finance Committee Report for TRA '86 indicates a concern, based on data gathered by the General Accounting Office (GAO), 3 that the percentage of taxpayers who fail to file returns is substantially higher among Americans living abroad than it is among those resident in the United States, and that it is often difficult for the IRS to enforce compliance by these taxpayers. S. Rep. No. 99-313, at 390 (1986).

The GAO data referred to in the legislative history does not include United States military personnel and their families as taxpayers who are living abroad. Johnny C. Finch, United States Citizens Living in Foreign Countries and Not Filing Federal Income Tax Returns, United States General Accounting Office, May 8, 1985. In addition, enforcement of compliance by individuals receiving mail at an APO, an FPO, or a DPO address generally does not involve the same challenges as enforcing compliance by other taxpayers living abroad. Because APO, FPO, and DPO delivery destinations are generally United States military or diplomatic facilities, taxpayers with an APO, an FPO, or a DPO address commonly maintain a current or former employment or contractor relationship with the United States government. Moreover, these addresses generally are treated as “domestic” by the United States Postal Service. United States Domestic Mail Manual, 608.2.2.

For these reasons, the Treasury Department and the IRS have determined that treating a United States military or diplomatic post office address as located within the United States for purposes of section 3405(e)(13)(A) is consistent with the tax avoidance concerns underlying the enactment of that provision. Accordingly, the regulation provides that designated distributions to United States military and diplomatic personnel or their families are not treated as delivered outside of the United States solely because those payments or distributions are to be delivered to an APO, an FPO, or a DPO address.

The regulation imposes withholding requirements on payors regarding certain payees who have provided the payor with a residence address located within the United States. Under Notice 87-7, payors are not required to withhold if a payee provides a residence address located within the United States and the payee elects no withholding. Notice 87-7 does not specifically address whether payors are required to withhold when a payee provides a residence address located within the United States, but also provides payment instructions indicating that the funds are to be delivered outside of the United States. As explained in the Background section of this preamble, the mandatory withholding for amounts to be delivered outside of the United States was enacted because Congress was concerned about noncompliance. Section 3405(e)(13)(A) refers to “any periodic payment or nonperiodic distribution which is to be delivered outside of the United States.” Consistent with the text of section 3405(e)(13)(A) and its purpose, the regulation requires payors to withhold in certain circumstances when a payee provides a residence address located within the United States but also provides payment instructions indicating that the funds are to be delivered outside of the United States.

Unless section 3405(e)(13)(B) (which provides an exception for certain nonresident aliens) applies, if the payee's residence address that is provided to the payor is located outside of the United States, the payor is required to withhold income tax under section 3405 from any designated distribution, without regard to the delivery instructions and without regard to any attempt to elect no withholding. Thus, for example, withholding under section 3405 would be required even if a payee with a foreign residence address has requested that the distribution be deposited with a financial institution located within the United States. Given the ease with which the funds deposited with a financial institution in the United States can be withdrawn by a person located outside the United States, the Treasury Department and the IRS have concluded that the payee's residence address is more likely to be indicative of the place the distribution is ultimately to be delivered than the location of the financial institution. The same requirement to withhold income tax under section 3405 applies if a payee has not provided a residence address to the payor. Furthermore, a payee who has provided the payor with an address for the payee's nominee, trustee, or agent without also providing the payee's residence address has not provided a residence address for purposes of this regulation.

These rules are consistent with the approach in Notice 87-7, which uses the residence address of the payee in order to determine whether a taxpayer is permitted to make an election not to have withholding apply under section 3405(a)(2) or (b)(2). The Treasury Department and the IRS have determined that this interpretation articulated in Notice 87-7 provides an administrable standard that has been relied upon for many years, is consistent with the TRA '86 legislative history, and appropriately addresses tax avoidance concerns underlying section 3405(e)(13)(A). 4

In accordance with section 3405(e)(1)(B)(iii), the regulation clarifies that a designated distribution does not include a distribution that is subject to withholding under subchapter A of chapter 3 (or that would be subject but for a tax treaty). Therefore, the withholding rules under section 3405(a) and (b) do not apply to such a distribution. For example, section 3405(a) or (b) withholding would not apply to a United States-source distribution to a nonresident alien individual from a trust described in section 401(a) of the Code. In such a case, the withholding rules of section 1441 (within subchapter A of chapter 3) that apply to nonresident aliens would apply to such a distribution. See § 1.1441-1(b)(1).

This regulation applies with respect to payments and distributions made on or after January 1, 2026. However, taxpayers may apply the regulation to earlier payments and distributions. Notice 87-7 is obsoleted with respect to payments and distributions made after December 31, 2025.

The IRS notice cited in this preamble is published in the Cumulative Bulletin and is available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402.

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

The collection of information related to the withholding requirements is captured within the forms and instructions for Forms W-4P and W-4R. Both of these forms are approved under OMB Number 1545-0074. This regulation does not alter any previously approved information collection requirements contained within the forms and instructions for Forms W-4P and W-4R, and this regulation does not create new collection requirements not already approved by the Office of Management and Budget.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6) it is hereby certified that the collection of information in this regulation will not have a significant economic impact on a substantial number of small entities. The number of small entities potentially affected by this regulation is unknown but could be substantial because based on data and information available to the Treasury Department and the IRS, most defined benefit and defined contribution retirement plans are sponsored by small employers (defined as employers with fewer than 100 employees), while annuities and IRAs are typically set up by large financial institutions. Although a substantial number of small entities is potentially affected by this regulation, the Treasury Department and the IRS have concluded that this regulation will not have a significant economic impact on a substantial number of small entities. This is because the main purpose and effect of this regulation is to treat military and diplomatic post office addresses the same as residence addresses located within the United States for purposes of income tax withholding, and payors of distributions from retirement plans and annuities are already processing distributions to payees with residence addresses located within the United States. Accordingly, this regulation will not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required.

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

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

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

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

The principal author of this regulation is Jeremy Lamb, of the IRS Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes (EEE)). However, other personnel from the Treasury Department and the IRS participated in the development of the regulation.

Accordingly, 26 CFR part 31 is amended as follows:

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

On March 8, 2024 (89 FR 16712), 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.

The EPA's proposed action provided a 30-day public comment period. During this period, we received two comments. The comments discussed California's legalization of recreational marijuana and its impact on air quality. Upon review, the EPA determined that the comments fail to raise issues germane to the proposed revisions to SCAQMD Rule 1118, which exclusively regulates emissions of VOCs and NO X from refinery flares. The rule revisions being approved with this action increase rule enforceability by correcting the previously identified director's discretion deficiency in our September 22, 2022 action. Therefore, we have determined that these comments do not necessitate a response, and the EPA will not provide specific responses to the comments in this notice.

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 January 6, 2023 version of Rule 1118 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 SCAQMD Rule 1118, “Control of Emissions from Refinery Flares,” amended on January 6, 2023, which regulates emissions of VOCs and NO X from refinery flares. 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 Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

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

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

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

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

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

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

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

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

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

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

The State did not evaluate environmental justice 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 environmental justice for people of color, low-income populations, and Indigenous peoples.

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 20, 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, “we,” “us,” and “our” refer to the EPA.

On April 30, 2024 (89 FR 34178), 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.

The 30-day public comment period for the proposed rule ended on May 30, 2024. During this period, the EPA received one comment, which argued for closure or assessment of a carbon tax on marijuana dispensaries and reduction of cannabis production in San Diego due to the greenhouse gas emissions associated with cannabis production. After reviewing the comment, the EPA has determined that the comment fails to raise issues germane to the proposed rulemaking, which proposed to expand exemptions to a permitting rule to include horizontal grinders and the processing of mixtures of green material and food material. Therefore, we have determined that this comment does not necessitate a response, and the EPA will not provide a specific response to the comment in this notice.

Because the one comment received was irrelevant to this action, and as authorized in section 110(k)(3) of the Act, the EPA is approving SDAPCD Rule 11, “Exemptions From Rule 10 Permit Requirements” into the California SIP. The October 13, 2022 version of this rule will replace the previously approved version of this rule in the SIP.

In this rule, the EPA is finalizing rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference SDAPCD Rule 11, “Exemptions From Rule 10 Permit Requirements,” revised on October 13, 2022, which provides specific permit exemptions for sources otherwise requiring a permit. The EPA has made, and will continue to make, these materials available through https://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 Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

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

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

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

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

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

• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it proposes to approve 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 Clean Air Act.

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rules do 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, Feb. 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 environmental justice 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 E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

This action is subject to the Congressional Review Act, and 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 December 20, 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:

This is a summary of the Commission's document in PS Docket No. 23-239, released September 10, 2024. The full text of this document is available by downloading the text from the Commission's website at: https://docs.fcc.gov/public/attachments/DA-24-900A1.pdf.

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 this Report & Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

1. By this document, the Federal Communications Commission's (FCC or Commission) Public Safety and Homeland Security Bureau (Bureau) announces a 15-business day filing window for applications from entities seeking designation by the Commission as a Cybersecurity Labeling Administrator (CLA) and Lead Administrator. 1 The Bureau also provides determinations regarding application format, filing fees, selection criteria, sharing of expenses, Lead Administrator neutrality, and confidentiality and security requirements in this document.

2. In March 2024, the Commission established a framework for a voluntary cybersecurity labeling program for consumer wireless Internet of Things (IoT) products (IoT Labeling Program), which includes selecting third party administrators to support the program. The Commission delegated authority to the Bureau to open an initial filing window to receive applications from entities seeking authority to be recognized as a CLA and those seeking to be recognized as the Lead Administrator (see Cybersecurity Labeling for Internet of Things, 89 FR 61242 (July 30, 2024) ( IoT Labeling Order )). 2 CLAs will be authorized by the Commission to certify use of the FCC IoT Label, which includes the U.S. government certification mark (U.S. Cyber Trust Mark), by manufacturers whose products are found to be in compliance with the Commission's IoT cybersecurity labeling program rules. The Lead Administrator will, among other duties, act as liaison between the Commission and CLAs, conduct stakeholder outreach to identify and/or develop and recommend to the Bureau technical standards and testing procedures for at least one class of IoT products, and in collaboration with CLAs, the FCC, and other stakeholders, develop and execute a plan for a consumer education campaign.

3. In a public notice released in June, 2024 the Bureau proposed that applications be submitted in narrative format via email and sought comment on this tentative determination (see Public Safety and Homeland Security Bureau Requests Comment on Implementation of the Cybersecurity Labeling for Internet of Things Program, 89 FR 58312 (July 18, 2024), at 58313 ( June 2024 IoT Labeling Public Notice )). We continue to believe that the information to be submitted by entities applying to be a CLA or Lead Administrator lends itself to a narrative discussion of their qualifications and adopt the narrative format proposed. While ioXt argues that a fillable form would better ensure uniformity among applications, we believe the evaluation criteria and CLA/Lead Administrator responsibilities in the IoT Labeling Order are specific enough to allow for tailored applicant responses and comparative evaluation by the Commission at this time. In addition, as outlined by the Wi-Fi Alliance, “. . . a narrative format will better allow CLA applicants to describe in detail their expertise, the types of cybersecurity assessments in which they are involved, and how those activities and other qualifications will enable them to perform the CLA role. Because all these attributes are imperative to the performance of CLA responsibilities, a narrative will best allow the Commission to assess applicant qualifications.” UL Solutions also supports a narrative-format application, noting that this format will allow applicants to provide the detailed information needed to support their applications. TÜV SÜD also commented that email is functional, and that a fillable form, while helpful for clarification, should also include a narrative text field so applicants can add relevant information. One commenter, ioXt, expressed concern that a “narrative email” may require additional communication between staff and applicants to obtain all necessary information to evaluate an application. We note that an enumeration of the evaluation criteria, and additional application instructions, including a “Frequently Asked Questions” link, are also provided below in this document and will provide further guidance to applicants. Further, the Bureau has considered and anticipates that staff may need to respond to applicant questions during the application review process and has designated staff for that purpose below.

4. Entities applying to be a CLA or the Lead Administrator must file a narrative explanation of their qualifications to the Office of the Secretary. 3 Consistent with the record, we determine that CLA and Lead Administrator applications and supporting documentation shall be treated as presumptively confidential. Each page of the application must be clearly and conspicuously labeled “CONFIDENTIAL, NOT FOR PUBLIC INSPECTION.” As we expect applications will contain commercially sensitive and proprietary information that the Commission routinely treats as confidential, applications shall remain presumptively confidential, regardless of disposition of the application. We decline to publish applications as a matter of course, including for those entities selected as CLAs or the Lead Administrator. We disagree with commenters who argue that the value of understanding CLA methodologies outweighs confidentiality protections, as Commission evaluators will still have the opportunity to review the applicant's testing methodologies submitted to the agency. Maintaining the presumptive confidentiality of CLA and Lead Administrator applications, including those applications that are approved by the Bureau, will provide applicants with assurances that the commercially sensitive business information they submit in conjunction with their voluntary participation in the FCC's Program will not be publicly disclosed. 4 We believe maintaining the presumptive confidentiality of these applications will encourage additional entities to submit applications for these voluntary roles. Thus, in announcing the entities selected as CLAs and Lead Administrator, we only plan to make public the entity's name and their contact information.

5. While the Bureau will review the narrative applications received via email, we seek to leverage existing procedures, including records management, by building on a framework for the filing of confidential materials that the Commission has used in the past. Consistent with that historical approach, applicants must file the application and supporting materials with the Office of the Secretary either via hand or messenger delivery, by commercial overnight courier, or First-Class or overnight U.S. Postal Service mail. A copy must be sent to the Bureau via email as a password protected .pdf file to CyberTrustMark@fcc.gov. Additional instructions on submitting applications are provided below.

6. In the June 2024 IoT Labeling Public Notice, the Bureau sought comment on whether a filing with the Commission by an entity that is seeking to be a CLA or Lead Administrator constitutes an application under section 8 of the Communications Act, and if so, whether an existing FCC fee category would cover such applications or if a new application fee category should be established. In addition, the Bureau sought comment on what fee the Commission should charge in connection with such a filing, if applicable. Commenters do not opine on whether it is appropriate to charge application fees. The Association of Home Appliance Manufacturers (AHAM), however, explains that if fees are charged, they “should not be cost prohibitive to the point where it unnecessarily limits those entities that wish to apply.” TÜV SÜD does not comment on whether a fee should be assessed, but does indicate that if a fee is assessed, the Commission should set a new fee category.

7. In this instance, our IoT Labeling Program derives in part from our authority to hold and utilize a registered certification mark. In reviewing applications to be a CLA or Lead Administrator, we therefore are not acting solely under our Communications Act authority, but also to protect our registered certification mark. Given this dual role, at this time, we do not believe that the nature of our review of the applications is such that they should be subject to an application fee. 5 We recognize that the process for applying to be a CLA or Lead Administrator may evolve with time. As such, we do not wholly foreclose adopting application fees in the future. Given these facts coupled with the lack of support in the record, the Bureau will not assess FCC application fees on CLA and Lead Administrator applications at this time.

8. The Bureau declines to expand the CLA and Lead Administrator selection criteria beyond what is set out in the IoT Labeling Order. In the June 2024 IoT Public Notice, the Bureau sought comment on whether there are additional areas of expertise or specific requirements a CLA applicant should be required to demonstrate in addition to those listed in the Order. The Bureau also asked what additional criteria, if any, the Bureau should take into consideration during the Lead Administrator selection process, as well as safeguards the Bureau might adopt to ensure the stakeholder process remains competitively neutral and whether all selection criteria should be weighted the same.

9. NCTA suggests that “when selecting a Lead Administrator, the Bureau should consider candidates' ability to maintain the Program's integrity when translating the substantive technical security requirements into recommended standards and test procedures, and do so without creating unnecessary deterrents for manufacturer participation in the Program.” We agree that a Lead Administrator's maintenance of the Program's integrity during the 90-day stakeholder process and resulting recommendations is very important to the success of the Program. However, the Bureau finds that the criteria outlined in the IoT Labeling Order are sufficient to ensure the selected Lead Administrator has the technical experience and the high integrity expected of an entity supporting an FCC program. This position is supported by UL Solutions, which states the “[ IoT Labeling Order ] did not neglect any important considerations for assessing the qualifications of organizations to serve as CLAs or as the Lead Administrator.” We believe that the public/private partnership and close collaboration between industry and other stakeholders contemplated in the IoT Labeling Order, along with the Commission's oversight, will ensure that there are adequate guardrails to maintain the Program's integrity in this regard.

10. NCTA also encourages the Bureau to evaluate Lead Administrator applications for their ability to avoid conflicts of interest, including any relationships the Lead Administrator applicant may have that could create the appearance of impropriety or a conflict of interest, such as complaints from manufacturers, and suggests evaluating whether Lead Administrator applicants have the financial resources to avoid such conflicts going forward. We disagree that it is necessary to take additional measures when evaluating applications for this purpose. Existing application criteria require an applicant to describe their organization structure, including an explanation of how it will avoid personal and organizational conflict when processing applications, and demonstrate implementation of controls to eliminate actual or potential conflicts of interests (both personal and organizational), to remain impartial and unbiased. In addition, the Future of Privacy Forum urges the Bureau to “consider requiring program administrators to possess relevant privacy expertise as well as cybersecurity expertise.” We agree that privacy is an integral aspect of cybersecurity, and note that existing application criteria require applicants to possess both privacy and cybersecurity expertise, including demonstrated expert knowledge of the National Institute of Standards and Technology (NIST) cybersecurity guidance and recommended criteria and labeling program approaches, which include privacy among their core cybersecurity capabilities.

11. We also note that the Wi-Fi Alliance recommends that in addition to demonstrating their “[e]xpert knowledge of FCC rules and procedures associated with product compliance testing and certification,” CLA applicants also demonstrate their experience in this area. Wi-Fi Alliance recognizes that while a lack of current experience with developing and implementing security standards should not be disqualifying, it would serve the public interest for the Bureau to include this “additional requirement, particularly concerning specific IoT products where cybersecurity standards have already been developed and tested.” The Wi-Fi Alliance encourages the Bureau to give a preference to CLA applicants with this experience. The Bureau declines to require applicants to demonstrate previous experience with FCC rules and procedures associated with product compliance testing and certification as a condition precedent to being an approved CLA or give preference to CLA applicants with this experience. In particular, applicants are always encouraged to provide any additional information that helps demonstrate their expertise or experience under the relevant criteria and, providing examples of an applicant's experience where applicable, in general, will provide more information from which the Bureau can evaluate an application. Additionally, CTIA proposes criteria for evaluating CLA applications to include a minimum of 5-10 years of experience managing a cyber certification program and proven experience in running or participating in a working group on cybersecurity standards. While we agree that this set of criteria can be useful to demonstrate a “proven track record,” we are concerned that requiring such specific criteria may unnecessarily exclude applicants that otherwise may have appropriate knowledge and expertise. Therefore, we decline to adopt this recommendation.

12. We conclude that we will maintain the criteria as set out in the IoT Labeling Order for the initial round of CLA and Lead Administrator applications. The Bureau, jointly with OMD and, to the extent necessary, Office of General Counsel, will receive and review administrators' applications for compliance with each criteria set forth in the IoT Labeling Order and to best ensure the success of the program. We note that UL Solutions recommends certain requirements be defined in greater detail to avoid subjective determinations, but we believe that the IoT Labeling Order provided a comprehensive list of required criteria that covers the breadth of expertise and capabilities necessary to select a CLA and Lead Administrator at this early stage of the program and is neutral toward applicants. Further, as noted above, applicants are not limited to providing the required criteria listed in the IoT Labeling Order, but have the flexibility to offer additional expertise or selection criteria they believe are pertinent and support their application ( e.g., expected costs/budget for Lead Administrator to carry out their responsibilities, information to support their ability to carry out the respective responsibilities, etc.). Should the Bureau conclude that it would be appropriate to open subsequent filing windows, we may seek comment on, and consider adoption of, additional selection criteria at that time.

13. As discussed in the IoT Labeling Order, authorizing one or more CLAs subject to Commission oversight to handle the routine administration of the program will help to ensure its timely and consistent rollout, and independent third-party CLAs will bring trust, consistency, and an impartial level playing field to the IoT Labeling Program and will provide the required expertise for the administration of the program. Leveraging the expertise of multiple existing program managers and using pre-existing systems and processes that meet our program specifications will minimize administrative delay and ensure the Commission effectively utilizes the expertise of those entities who have made investments in their own cybersecurity labeling programs. Entities that have experience working with manufacturers and IoT conformity and standards testing, as required in the criteria adopted in the IoT Labeling Order, will also best be able to promote an efficient and timely rollout of the IoT Labeling Program.

14. We disagree with CTIA's suggestion that the Bureau adopt a flexible approach with respect to International Organization for Standardization/International Electrotechnical Commission (ISO/IEC) 17065 accreditation requirements for CLAs with a certain level of experience to avoid unnecessary costs and delays. CTIA posits that “[accreditation] can be costly and time-consuming to obtain and is unnecessary for prospective CLAs that have demonstrated track records in managing similar certification programs.” Instead, CTIA proposes for entities with at least 5-10 years of experience running certification programs, ISO/IEC 17065 accreditation should be optional. In contrast, A2LA submits that the “ISO/IEC 17065 accreditation requirement will be of benefit to the FCC and the consumers it serves by providing necessary risk mitigation . . . Claiming a certain number of years' experience is not equivalent to demonstrating technical competence or compliance.” The IoT Labeling Order and accompanying rules require that all CLAs obtain ISO/IEC 17065 accreditation to the Commission's scope within six months of the effective date of the adopted standards and testing procedures. The Commission previously determined that “leveraging accredited industry bodies to perform conformity assessments will `speed the establishment of the program and increase the program's ultimate quality.' ” As such, we decline to adopt CTIA's suggested exemption. Alternatively, CTIA recommends an 18-month grace period to obtain such accreditation, for entities that have a proven track record of successfully managing a certification program. The Commission recognized it would take time for selected CLAs to obtain ISO/IEC 17065 accreditation and for that reason found it appropriate to conditionally approve CLAs and allow an additional six months for selected administrators to obtain accreditation. While we decline to adopt a blanket 18-month grace period, we are mindful that some entities may require more than six months to obtain accreditation. We think the Commission's existing rule waiver procedure is an appropriate and sufficient vehicle for CLAs that cannot meet the accreditation deadline to request a waiver of the rule along with their requested extension period.

15. We also disagree with CTA's suggestion that conditional approval of CLA applications will allow CLAs to certify products to use the FCC IoT Label before obtaining ISO/IEC 17065 accreditation to the Commission's scope. 6 The Commission indicated that CLA applications will be conditionally approved in order to expedite initial deployment of the FCC's program. However, CLAs that have not demonstrated that they have received ISO/IEC 17065 accreditation to the Commission's scope will not be recognized and approved by the Bureau to receive applications or otherwise approved to authorize use the FCC IoT Label.

16. It is premature for the Bureau to address the specific scope of the Commission's accreditation program as the standards and testing procedures have not yet been adopted. However, we emphasize that each CLA will be required to obtain ISO/IEC 17065 accreditation to the FCC scope before it will be recognized by the Commission as an entity authorized to certify a product as being compliant with FCC IoT Labeling Program rules and authorize use of the FCC IoT Label consistent with the IoT Labeling Order.

17. The June 2024 IoT Labeling Public Notice sought recommendations for an effective mechanism for CLAs to share the Lead Administrator's expenses. Parties are generally in agreement that Lead Administrator startup costs will be higher than the Lead Administrator's ongoing costs once the program is stood up and should be reflected in the CLA's cost sharing obligations. UL Solutions recommends an initial standup fee for the Lead Administrator and a per-certificate fee going forward. The Wi-Fi Alliance recommends the Lead Administrator submit to the Bureau a claim for expenses incurred in the performance of its duties, which if approved, would be shared proportionally among the CLAs, with the proportionality being based on the annual number of products the CLA certifies to use the FCC IoT Label. The Wi-Fi Alliance notes that Lead Administrator expenses subject to sharing by the CLAs should be limited to those “that are unique to the Lead Administrator as Lead Administrator,” and not related to its activities as a CLA.

18. The Bureau recognizes that the Lead Administrator's expenses incurred as a result of the performance of its duties under this program must be reasonable and accurately reflect its actual costs. In addition, it is also important to ensure each CLA shares in the Lead Administrator's costs as required by the IoT Labeling Order and that the costs shared reflect the Lead Administrator's actual and reasonable expenses incurred as a result of performance of its Lead Administrator duties and only those expenses incurred in its capacity as Lead Administrator. To ensure this occurs, the Lead Administrator is required to implement internal controls adequate to ensure its operations maintain best practices to protect against improper payments and to prevent fraud, waste, and abuse in its handling of funds. Once selected, the Lead Administrator will also submit to the Bureau and OMD, an estimate of its forward-looking costs including, separately, program stand-up costs and ongoing program costs to perform the Lead Administrator duties for the Lead Administrator's upcoming calendar year, which will be reviewed by CLAs, PSHSB, and OMD for reasonableness, and if determined to be reasonable by PSHSB and OMD, will be used to estimate the overall CLA cost sharing obligation. 7

19. Consistent with the IoT Labeling Order, each CLA will share in these Lead Administrator costs, however, we decline to establish the methodology for such cost sharing and instead rely on CLAs and the Lead Administrator to determine the sharing methodology, which should be reasonable and equitable and will be subject to ongoing oversight by the Commission. Further, we require the Lead Administrator to submit to the Bureau and OMD, an annual, independently audited, statement of program expenditures and monies received from the CLAs due before the end of the calendar year. The Bureau will provide further guidance on CLA cost sharing once the CLAs and the Lead Administrator have been selected.

20. Neutral Treatment of CLAs and Other Stakeholders. In the IoT Labeling Order, the Commission recognized the competitive implications of an entity being both the Lead Administrator and a CLA. The June 2024 IoT Labeling Public Notice sought comment on what safeguards, if any, the Bureau should adopt to ensure Lead Administrator neutrality as a potential competitor of other CLAs. The Bureau also asked whether there are additional safeguards, beyond those contemplated in the IoT Labeling Order, the Bureau should adopt to ensure the stakeholder engagement process and related recommendations the Lead Administrator makes to the Commission ( e.g., standards and testing criteria and label design) are consensus-based and competitively neutral.

21. Commenters emphasize the importance of ensuring Lead Administrator neutrality to prevent actual, as well as perceptions of, unfair economic advantage by the Lead Administrator over other CLAs, and support adopting reasonable safeguards to do so. We share ioXt's concern that if the Lead Administrator gained an economic advantage by passing on fees to other CLAs, for example, CLAs would have to raise their prices, which would pass on the costs to the manufacturers, and then on to consumers. In order to ensure impartiality, A2LA recommends considering ISO/IEC 17065 requirements, which describe a mechanism (often a committee) for safeguarding impartiality and assuring a competitively neutral environment between the Lead Administrator, CLAs, and other stakeholders. TÜV SÜD also recommends that Lead Administrator neutrality be evaluated on a yearly basis, with the possibility of triggering an investigation by the Commission and revocation of Lead Administrator designation. Infineon suggests requiring a “firewall” to separate the Lead Administrator from its role as CLA, similar to those instituted by law firms to avoid conflicts between multiple clients' interests. Somos, Inc. recommends applying relevant rules from its role as the North American Numbering Plan Administrator to the Lead Administrator, including impartial allocation of resources, transparency, non-discrimination, avoidance of conflicts of interest, and compliance with regulations.

22. We agree that ensuring Lead Administrator neutrality “is critical to maximizing the Program's credibility and fostering trust among stakeholders,” and we believe the IoT Labeling Order sufficiently addresses the concerns raised in the record. We note that the requirement that the Lead Administrator be accredited to ISO/IEC 17065 will ensure that the entity is appropriately aligned with those impartiality mechanisms. Further, we require all CLA applicants, including those applying to be the Lead Administrator, to demonstrate implementation of controls to eliminate actual or potential conflicts of interests, including remaining impartial and unbiased. The Bureau will evaluate such applications to ensure rigorous compliance with these criteria. We also note that approval of the Lead Administrator may be subject to withdrawal by the Commission upon a determination of just cause, and this includes failing to follow those impartiality requirements. The Lead Administrator must be committed to neutrality and impartiality, consistent with the IoT Labeling Order. Because we anticipate those measures will be sufficient, we are not persuaded of the need to adopt additional requirements at this time.

23. Finally, CTA proposes asking prospective CyberLABs and CLAs to attest that they meet the requirements in the (draft) CTA-2119 Scheme Assessment Framework, as an industry consensus standard to preserve neutrality when assessing applicant entities. We decline to adopt this requirement at this time, given that the draft CTA-2119 Framework has not undergone public notice and comment. However, we may reconsider this proposal at a later date, once the Labeling Program's standards and testing procedures have been finalized. 8

24. Transparency in 90-day Stakeholder Process. As an initial matter, we emphasize that the IoT Labeling Order requires the Lead Administrator to “provide equitable recommendations to the Commission to encourage the broadest possible participation of CLAs within the parameters of the FCC's rules.” Therefore, while we believe it is premature to adopt additional rules in this regard, we note that UL Solutions emphasizes the importance of transparency in the stakeholder collaboration process, stating that the Lead Administrator should invite a wide variety of stakeholders and ensure they all have sufficient opportunity to have their views heard and participate in manageable working groups. Further, UL Solutions states that recommendations made to the Commission should also include dissenting views and how those dissenting views were addressed, which would be considered in the final rules adopted by the Commission. UL Solutions also recommends the importance of a clear and transparent process to shield the Lead Administrator from accusations or perceptions of bias when recognizing accredited CyberLABs. TÜV SÜD similarly proposes safeguards, such as a mandatory consultation round before making critical decisions regarding recommendations to the Commission.

25. While we do not adopt additional guardrails at this stage, we reiterate the position in the IoT Labeling Order that the Lead Administrator should ensure participation from a wide variety of stakeholders and consider various resources when developing the IoT Labeling Program recommendations. As noted above, ISO/IEC 17065 accreditation is required for all CLAs, including the Lead Administrator, and adherence to that standard requires the convener of working groups to develop recommendations (here, the Lead Administrator), and achieve a balanced representation of interests, such that no single interest predominates. We agree that transparency in the 90-day stakeholder process is of the highest importance and the Bureau expects to provide additional guidelines on that process when it announces the selection of CLAs and the Lead Administrator.

26. The Bureau adopts its proposal from the June 2024 IoT Labeling Public Notice that manufacturer applications submitted to CLAs are presumptively confidential and CLAs are required to maintain this confidentiality. CLAs will be required to maintain the confidentiality of non-public information received as part of an application for authority to use the FCC IoT Label, and must implement appropriate administrative, technical, procedural, and physical safeguards to protect the confidentiality of information received by the CLA and protect against the unauthorized disclosure and unauthorized use of non-public information received as a result of its participation in the FCC IoT Labeling Program.

27. We agree with commenters that the program would benefit from a presumption of confidentiality for filings and related information provided to CLAs from applicants seeking use of the FCC IoT Label, which would encourage manufacturer participation and protect proprietary technology and trade secrets. We disagree with commenters that such a presumption of confidentiality is not necessary due to the public-facing nature of the label. While this is true for product information required to be disclosed in the registry if approval is granted, this would not be the case for products that are denied authorization to bear the FCC IoT Label. In addition, as discussed above, we expect that applications submitted to the Commission by CLAs will also continue to be treated as presumptively confidential. We emphasize here that information submitted by manufacturers to CLAs, the Lead Administrator, and/or CyberLABs, in the course of seeking authority to use the FCC IoT Label, including but not limited to applications and test reports, and information submitted to the Lead Administrator by a lab seeking recognition as a CyberLAB ( i.e., authorized to conduct conformance testing under the Commission's IoT Labeling Program) are not agency records of the Commission. Only information submitted to the Commission, such as submissions in furtherance of applications by entities seeking authority from the Commission to be a CLA and/or Lead Administrator, are records of the Commission.

28. In the June 2024 IoT Labeling Public Notice, the Bureau tentatively concluded that the requirements of the Federal Information Security Modernization Act of 2014 (FISMA) apply to the Lead Administrator and CLAs. 9 Some commenters oppose a FISMA requirement, stating that it would “strongly discourage CLAs from applying to the program,” and that FISMA has not been applied by other agencies supporting analogous programs, such as the Health and Human Services Department's Office of the National Coordinator's (ONC) certification program for health IT products. While we acknowledge these concerns, alone, they are not dispositive for not applying FISMA.

29. FISMA was enacted to ensure that each federal agency develops, documents, and implements an agency-wide program to secure federal information systems from unauthorized access, use, disclosure, disruption, modification, or destruction. Given this scope, we reconsider our tentative conclusion to apply FISMA to CLAs and the Lead Administrator and determine that, as presently contemplated, neither the CLAs nor the Lead Administrator will operate an information system on behalf of the agency. That is so because the Commission has no plans to establish any interconnection between its systems and the Lead Administrator's or CLA's information systems; indeed, the FCC does not expect to routinely request, obtain access to, otherwise collect, use, process, or maintain the data or information held by the Lead Administrator or the CLAs, excepting for investigative purposes. Moreover, although the Lead Administrator will receive information from CLAs and applicant manufacturers necessary for it to carry out its responsibilities under the FCC's program, and CLAs will receive and evaluate applications and supporting data from applicant manufacturers, this, without more, does not mean that the Lead Administrator or CLAs are managing their information systems “on behalf of” the FCC.

30. Nevertheless, we agree with NCTA that “[c]lear guidelines, safeguards, and protocols for handling confidential information should be established to prevent unauthorized disclosure” and believe that other mature security frameworks may be applied to CLAs and the Lead Administrator to reduce the risk of unauthorized access, use, disclosure, disruption, modification, or destruction of program data. Accordingly, we require that all CLAs and the Lead Administrator create, update, and implement cybersecurity risk management plans. Such a cybersecurity risk management plan must identify the cyber risks that the entity faces, the controls used to mitigate those risks, and the steps taken to ensure that these controls are applied effectively to their operations. The plans must also describe how each entity employs its organizational resources and processes to ensure the confidentiality, integrity, and availability of its information and information systems. These requirements are consistent with the National Cyber Strategy and are in keeping with a whole-of-government effort to “establish cybersecurity requirements to support national security and public safety.” We expect that creating, updating, and implementing a cybersecurity risk management plan will help protect each CLA and the Lead Administrator from serious national security threats.

31. We note that, under this approach, each entity has flexibility to structure its cybersecurity risk management plan in a manner that is tailored to its operations after consideration of a variety of factors, provided that the plan demonstrates that the entity is taking affirmative steps to analyze security risks and improve its security posture. We further note that an entity could successfully demonstrate satisfaction with this requirement by following an established risk management framework, such as the NIST Cybersecurity Framework (CSF) or Risk Management Framework (RMF). CLAs and the Lead Administrator security plans should be informed by established cybersecurity best practices such as the standards and controls set forth in the Cybersecurity and Infrastructure Security Agency (CISA) Cybersecurity Cross-sector Performance Goals and Objectives (CISA CPGs), ISO/IEC 27001, NIST Special Publication 800-53 (rev 5), or the Center for Internet Security Critical Security Controls (CIS Controls) version 7.1 or later. These frameworks are designed to be scalable and adaptable to the needs and capabilities of companies both large and small, are well understood by industry, and are flexible. CTIA and CTA argue compliance with a commercial equivalent framework to FISMA, such as ISO 27001 can “take a year or more at a cost upwards of $100,000.” However, these cost and timelines would not apply to this program, because while we require entities to implement security plans reflecting standards and controls, such as ISO/IEC 27001, we do not specifically require a CLA or the Lead Administrator to be certified to ISO/IEC 27001. Moreover, we expect that many entities in the industry that might seek to be CLAs or the Lead Administrator will have adopted plans along the lines we require here and may have obtained such certifications in the ordinary course of business. And in any event, we find that any costs that might be incurred by an entity seeking to be a CLA or Lead Administrator are outweighed by the benefits that will redound to such entities themselves, the industry more broadly, and U.S. national security from our requiring such entities to take these steps to protect the confidentiality, integrity, and availability of the information they hold—including from other entities in the industry—and the information systems they maintain. We expect risk management plans to contribute to the CLAs' and the Lead Administrator's existing internal security practices that maintain the confidentiality, integrity, availability of all information received in support of this program without significantly increasing the time or costs of participation. 10

32. We additionally require each applicant seeking to serve as a CLA or Lead Administrator to submit with its application an attestation that it already has created and implemented—or upon selection will create and implement—a cybersecurity risk management plan as described above—which will demonstrate compliance with these requirements as well as the entity's cybersecurity expertise and capabilities, knowledge of NIST's cybersecurity guidance, and knowledge of federal law and guidance governing the security and privacy of information systems. We also require that CLAs and the Lead Administrator make such cybersecurity risk management plans available to the Commission upon request. Access to cybersecurity risk management plans will allow the Commission to confirm whether plans are being regularly updated, to review a specific plan as needed, or to proactively review a sample of plans to confirm they sufficiently identify the cybersecurity risks to the Lead Administrator and CLAs in this program. In such circumstances, cybersecurity risk management plans would be presumptively confidential.

33. Any domestic, independent, 11 non-governmental entity eligible to enter into a licensing agreement with the FCC may apply for the role of CLA and/or Lead Administrator;  12 however, an applicant cannot be owned or controlled by, or affiliated with, any entity that produces equipment on the FCC Covered List or is otherwise prohibited from participating in the IoT Labeling Program, to include companies named on the Department of Commerce's Entity List and the Department of Defense's List of Chinese Military Companies.

34. Applicants seeking the role of CLA must demonstrate the following:

a. Applicant is not owned or controlled by or affiliated  13 with any entity identified on the Commission's Covered List, or is otherwise prohibited from participating in the IoT Labeling Program, 14 including being an entity identified on the Department of Commerce's Entity List or on the Department of Defense's List of Chinese Military Companies;

b. Applicant is not owned or controlled by or affiliated with any person or entity that has been suspended or debarred from receiving federal procurements or financial awards, to include all entities and individuals published as ineligible for award on the General Service Administration's System for Award Management;

c. Description of Applicant's organization structure;  15

d. Implementation of controls to eliminate actual or potential conflicts of interests (both personal and organizational), particularly with regard to commercially sensitive information, to include but not limited to, remaining impartial and unbiased and prevent Applicant from giving preferential treatment to certain applications particularly with regard to applicants from entities with whom the CLA has a business relationship ( e.g., application line jumping or same level of scrutiny when reviewing the application) and from implementing heightened scrutiny of applications from entities not members or otherwise aligned with the CLA;  16

e. Description of the process(es) Applicant will use to evaluate applications seeking authority to use the FCC IoT Label;  17

f. Cybersecurity expertise and capabilities, in addition to industry knowledge of IoT generally, and IoT Labeling requirements;

g. Expert knowledge of NIST's cybersecurity guidance, including but not limited to NIST's recommended criteria and labeling program approaches for cybersecurity labeling of consumer IoT products;

h. Expert knowledge of FCC rules and procedures associated with product compliance testing and certification;  18

i. Knowledge of Federal law and guidance governing the security and privacy of agency information systems; and

j. The ability to securely handle large volumes of information, including a description of Applicant's related internal security practices.

35. Applicants seeking the role of CLA must also commit to complying with the obligations of CLAs under the IoT Labeling Order and the Commission's rules, including but not limited to the following:  19

a. Obtaining accreditation pursuant to all of the requirements associated with ISO/IEC 17065 with the forthcoming FCC program scope;  20

b. The ability ( e.g., appropriate testing equipment, and personnel with the necessary technical expertise and training) to conduct post-market surveillance activities, such as audits, in accordance with ISO/IEC 17065;

c. Implementation of a process for receiving complaints alleging an IoT product does not support the cybersecurity criteria conveyed by the Cyber Trust Mark and referring those complaints to the Lead Administrator;

d. Collaborating with the Lead Administrator and other stakeholders to develop those items to be submitted to the Commission within 90 days of election of the Lead Administrator, and listed in 47 CFR 8.221(a)(4); and

e. Being an active participant in the consumer education campaign led by and in coordination with the Lead Administrator.

36. In addition to the above requirements for CLA applications, Lead Administrator applicants must demonstrate the following:

a. Description of Applicant's previous experience in IoT cybersecurity;  21

b. Description of Applicant's previous roles, if any, in IoT labeling;  22

c. Description of Applicant's capacity ( e.g., available resources, systems, infrastructure etc.), and commitment to execute the following Lead Administrator duties:  23

i. Interfacing with the Commission on behalf of CLAs, which includes but is not limited to, submitting to the Bureau all complaints alleging a product bearing the FCC IoT Label does not meet the requirements of the Commission's labeling program;

ii. Conducting stakeholder outreach, coordinating with CLAs and other stakeholders, and moderating stakeholder meetings;

iii. Accepting, reviewing, and approving or denying applications from labs seeking recognition as a lab authorized to perform the conformity testing necessary to support an application for authority to affix the FCC IoT Label, and maintaining a publicly available list of Lead Administrator-recognized labs and a publicly available list of labs that have lost their recognition;

iv. Within 90 days of selection as Lead Administrator, in collaboration with the CLAs and other stakeholders ( e.g., cyber experts from industry, government, and academia) submitting to the Bureau:

(a) Recommendations identifying and/or developing the technical standards and testing procedures for the Commission to consider with regard to at least one class of IoT products eligible for the IoT Labeling Program;

(b) A recommendation on how often a given class of IoT products must renew their request for authority to bear the FCC IoT Label, which may be dependent on the type of product, and that such a recommendation be submitted in connection with the relevant standards recommendations for an IoT product or class of IoT products;

(c) A recommendation on procedures for post market surveillance by the CLAs;

(d) Recommendations on the design of the FCC IoT Label, including but not limited to labeling design and placement ( e.g., size and white spaces, product packaging) and whether to include the product support end date on labels for certain products or category of products; and

(e) Recommendations with regard to updates to the registry including whether the registry should be in additional languages, and if so, to recommend specific languages for inclusion.

d. Recommending appropriate modifications to the IoT Labeling Program standards and testing procedures within 45 days of publication of updates or changes to the NIST guidelines, or adoption by NIST of new guidelines, to stay aligned with NIST guidelines;

e. Developing, in collaboration with CLAs and other stakeholders, a consumer education campaign, submitting the consumer education plan to the Bureau, and participating in consumer education;

f. Receiving complaints about the Labeling Program, including but not limited to consumer complaints about the registry and coordinating with manufacturers to resolve any technical problems associated with consumers accessing the information in the registry;

g. Facilitating coordination between CLAs; and

h. Submitting to the Commission any other reports upon request of the Commission or as required by Commission rule.

i. Any additional information Applicant believes demonstrates why they should be designated the Lead Administrator.

37. All applications MUST include the following certification statements under penalty of perjury or they will be dismissed:

a. Applicant certifies that all statements made in this application and in the exhibits, attachments, or documents incorporated by reference are material, are part of this application, and are true, complete, correct, and made in good faith, see 47 CFR 1.17, 8.220, 8.221.

b. Applicant certifies that neither the Applicant nor any other party to the application is subject to a denial of Federal benefits pursuant to § 5301 of the Anti-Drug Abuse Act of 1988, 21 U.S.C. 862, because of a conviction for possession or distribution of a controlled substance. See 47 CFR 1.2002(b) for the definition of “party to the application” as used in this certification.

c. The Applicant certifies that it is not delinquent on any debts to the Commission, see 47 CFR 1.1910.

d. Applicant acknowledges that willful false statements made on the application or on any attachments are punishable by fine and/or imprisonment (18 U.S.C. 1001) and/or forfeiture (47 U.S.C. 503).

38. The Application must be signed and dated by the individual authorized to sign on behalf of the Applicant. FAILURE TO SIGN THE APPLICATION MAY RESULT IN DISMISSAL OF THE APPLICATION.

39. The Bureau expects CLA and Lead Administrator applications and supporting documentation to be filed confidentially. Each page of the application must be clearly and conspicuously labeled “CONFIDENTIAL, NOT FOR PUBLIC INSPECTION.” Applicant must file an original and one copy of each filing and supporting materials with the Office of the Secretary. All filings must reference PS Docket No. 23-239 and be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission. Filings can be sent by hand or messenger delivery by commercial overnight courier, or First-Class or overnight U.S. Postal Service mail.

• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary are accepted between 8:00 a.m. and 4:00 p.m. at 9050 Junction Drive, Annapolis Junction, MD 20701. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

• Commercial overnight deliveries (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.

• U.S. Postal Service First-Class, Express, and Priority mail must be sent to 45 L Street NE, Washington, DC 20554.

40. An electronic version of the application and supporting material is required to be submitted to FCC staff as a .pdf file via email to CyberTrustMark@fcc.gov. The document must be password protected and the password communicated in a separate email to CyberTrustMark@fcc.gov. Submissions may be broken into multiple emails when necessary.

41. Applications should be received by the Commission as soon as possible, but no later than October 1, 2024. Applicants requiring additional time may request an extension of time for up to 10 additional calendar days to complete their applications. Applications received after October 1, 2024 from an entity that has not been approved an extension of time, will not be accepted and will be dismissed. Procedures for submitting applications are set forth below.

• Instructions. General filing instructions can be found in Appendix A of the Commission's Public Notice, DA-24-900, released September 10, at this link: https://docs.fcc.gov/public/attachments/DA-24-900A1.pdf.

• Frequently Asked Questions (FAQs). The FAQs are available at https://www.fcc.gov/CyberTrustMark.

• FCC Notice Required by the Paperwork Reduction Act. The FCC Notice Required by the Paperwork Reduction Act can be found in Appendix D of the Commission's Public Notice, DA-24-900, released September 10, at this link: https://docs.fcc.gov/public/attachments/DA-24-900A1.pdf.

• Privacy Act Statement. The Privacy Act Statement can be found in Appendix E of the Commission's Public Notice, DA-24-900, released September 10, at this link: https://docs.fcc.gov/public/attachments/DA-24-900A1.pdf.

• Requirement for an FCC Registration Number (FRN). We remind all applicants that they must have an FRN to file their applications. An FRN is the 10-digit number assigned to all individuals and entities that transact business with the Commission, and it must be provided any time an applicant submits or updates their application.

• Applicant Does Not Have an FRN. If an applicant does not have an FRN, the applicant must obtain an FRN through the Commission Registration System (CORES) web page at https://apps.fcc.gov/cores/userLogin.do.

○ For additional assistance, submit a help request at https://www.fcc.gov/wireless/available-support-services or call the FRN Help Desk at (877) 480-3201 (Monday-Friday, 8 a.m.-6 p.m. ET).

○ If the applicant has further questions, an email can be sent to CyberTrustMark@FCC.gov.

• Applicant has an FRN. If an applicant has an FRN, the applicant must use that FRN with its application.

○ The applicant should not obtain a new FRN if Applicant already has an FRN.

○ An applicant can identify its FRN by accessing records the Commission's Registration Systems (CORES) and click “Search”. Individuals can search by name, or contact related information. Business organizations can search by name, Employer Identification Number (EIN), or contact-related information.

42. After the application filing window closes October 1, 2024, the Bureau will review and evaluate properly filed applications. The Bureau's selection of CLAs and a Lead Administrator will be announced by public notice. The Public Notice will describe the next steps for selected entities, including but not limited to the execution of a licensing agreement and/or other appropriate documentation governing the details of the CLAs' and Lead Administrator's responsibilities and relationship to the Commission.

43. Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, we have prepared a Supplemental Final Regulatory Flexibility Analysis (Supplemental FRFA) concerning the possible impact of the rule changes contained in this document on small entities. The Supplemental FRFA is set forth in Appendix C the Commission's Public Notice, DA-24-900, released September 10, at this link: https://docs.fcc.gov/public/attachments/DA-24-900A1.pdf.

44. Paperwork Reduction Act. This document contains 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.

45. In this present document, we have assessed the effects of requiring CLAs to develop and implement a cybersecurity risk management plan identifying the cyber risks that the entity faces, the controls used to mitigate those risks, and the steps taken to ensure that these controls are applied effectively to their operations. The plans must also describe how the CLA employs its organizational resources and processes to ensure the confidentiality, integrity, and availability of its information and information systems and find that Since applying to be a CLA is voluntary, small entities who do not apply to be a CLA will not be subject to any new or modified reporting, recordkeeping, or other compliance obligations. Small entities that choose to apply to be a CLA, and whose applications are approved by the Bureau, will incur recordkeeping and reporting as well as other obligations to comply with the requirements we adopt in this document. We find that, for the FCC's IoT Labeling Program to have meaning for consumers, CLA requirements must be uniform for both small businesses and other entities. Thus, significance of program integrity, and building confidence among consumers that devices and products containing the Cyber Trust Mark label can be trusted to be cyber secure, necessitates adherence by all entities participating in the IoT Labeling Program to the same rules regardless of size.

46. Accordingly, it is ordered that pursuant to the authority contained in sections 1, 2, 4(i), 4(n), 302, 303(r), 312, 333, and 503 of the Communications Act of 1934, as amended, this document is hereby adopted .

47. It is further ordered that the amendments of the Commission's Rules as set forth in Appendix B are adopted , effective 30 days after publication in the Federal Register , except for the amendment to 47 CFR 8.220(f)(14). The amendment to 47 CFR 8.220(f)(14), which may contain modified information collection requirements, will not become effective until OMB completes any review that the Public Safety and Homeland Security Bureau determines is required under the Paperwork Reduction Act. The Public Safety and Homeland Security Bureau will announce effective dates for this section by publication in the Federal Register and by subsequent Public Notice.

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

49. It is further ordered that the Office of the Managing Director, Performance Program Management, shall send a copy of this document 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 set forth above, part 8 of title 47 of the Code of Federal Regulations is amended as follows:

This is a summary of the Commission's First Report and Order (First R&O), MB Docket No. 22-405; FCC 24-105, adopted on September 24, 2024, and released on September 25, 2024. The full text of this document will be available via the FCC's Electronic Comment Filing System (ECFS), https://www.fcc.gov/cgb/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), (202) 418-0432 (TTY).

This document may contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. All such new or modified information collections will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA, 44 U.S.C. 3507(d). OMB, the general public, and other Federal agencies are invited to comment on any 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 (Pub. L. 107-198, 116 Stat 729 (2002) (codified at 44 U.S.C. 3506(c)(4)). the Commission previously sought specific comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees. In the First R&O, the Commission assessed the effects of the required collection of information on these small entities.

The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs, that these rules are non-major under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the First R&O to Congress and the Government Accountability Office (GAO) pursuant to 5 U.S.C. 801(a)(1)(A).

1. Introduction. In a 2022 document, the Commission's Media Bureau (Bureau) consolidated into one rulemaking proceeding two separate Petitions for Rulemaking, both proposing changes to the rules that the petitioners urged would improve digital FM signal quality and minimize the effect of the digital FM station signal on adjacent channel FM transmissions. Media Bureau Seeks Comment on Petitions for Rulemaking Proposing Amendments to FM Broadcast Digital Radio Rules, Public Notice, DA 22-1226 (MB Nov. 28, 2022) (FM Digital Comment PN). In the first petition, filed December 9, 2019, petitioners National Association of Broadcasters (NAB), Xperi Corporation (Xperi), and National Public Radio (NPR) (collectively Asymmetric Petitioners), requested blanket authorization to set digital power at different levels on each digital sideband, thus allowing a digital FM station to protect, for example, an analog FM station on a lower first-adjacent channel, while enabling an increase in digital power on the upper sideband where there is no adjacent analog FM station or a more distant adjacent station. In the second petition, filed October 26, 2022, NAB and Xperi requested that the FCC update the methodology stations use to determine maximum FM digital power levels. In the Order and notice of proposed rulemaking (NPRM), FCC 23-61, 88 FR 57033 (Aug. 22, 2023), the Commission granted these petitions and sought comment on whether the rule changes proposed by the petitioners would serve the public interest, by providing FM digital stations with the ability to increase power and, concomitantly, increase coverage area, building penetration, and provide a more robust digital signal. The Commission additionally sought comment on: whether such rule changes would cause or increase interference to analog FM stations adjacent to a digital FM station; whether the proposed rule changes would have other adverse effects on incumbent FM stations; whether and to whom notice of increased digital FM power should be provided; and whether additional interference remediation procedures should be introduced.

2. Broadcasters, engineers, and listeners filed comments and reply comments in response to the NPRM. Additionally, commenters such as the Aerospace Industries Association; Air Line Pilots Association, International; Garmin International, Inc.; and the General Aviation Manufacturers Association filed comments expressing concern about higher digital power levels at the upper end of the FM broadcast band causing interference to users in the adjacent Aeronautical Radio Navigation Spectrum (ARNS), from 108.0-117.95 MHz. The commenters state that preliminary industry studies suggest that further testing is needed; to that end, aviation industry commenters are working with NAB and Xperi, but state that comprehensive testing will take additional time. See Supplemental Comments of Air Line Pilots Ass'n, Int'l; Airlines for America; Aviation Spectrum Res., Inc.; The Boeing Co.; Garmin; and GAMA, filed Apr. 1, 2024, at 2-4. See also Letter from First Officer Chris Sidor, Air Line Pilots Ass'n, Int'l, et al., to Marlene H. Dortch, Secretary, FCC, MB Docket No. 22-405, at 3 (filed Sept. 19, 2024) (providing testing updates); Letter from Ashruf El-Dinary, Xperi Inc., to Marlene H. Dortch, Secretary, FCC, MB Docket No. 22-405 (filed Sept. 23, 2024). Accordingly, in the interest of a complete record, the Commission deferred action on the proposal relating to maximum FM digital power levels, and in the First R&O acts only on the proposals relating to the Asymmetric Sideband Petition, with appropriate safeguards for stations on Channels 296-300.

3. Background. The FM digital radio system inserts redundant digital sidebands above and below a station's existing analog signal. The Commission's existing rules assume that digital power is the same on both digital sidebands, i.e., symmetric sideband operation. Currently, an FM station that wishes to employ asymmetric sideband operation, using different power on each digital sideband, must apply for an experimental authorization and renew that authorization annually. The request for experimental authorization must include a showing that the digital sideband signal contours will not overlap adjacent stations' protected contours. NAB, Xperi, and NPR (Asymmetric Petitioners), in the Asymmetric Sideband Petition, assert that with asymmetric sidebands a digital FM station can limit the power of one digital sideband to protect the adjacent analog FM station on that side while concurrently increasing the power of the other sideband in order to expand its overall digital coverage and improve its building penetration. Asymmetric Sideband Petition at 8-9. Similarly, a station could reduce power on the sideband causing interference to another station and maintain the desired power level on the other digital sideband. See NPRM, 38 FCC Rcd at 7169, para. 26. The Asymmetric Petitioners conducted a study that they state demonstrates that many more digital FM stations could increase power on at least one sideband above the current limit of −14 dBc. Out of 10,875 digital FM stations studied in 2017, petitioners contend that 6,120 could increase power on both sidebands to −10 dBc under the current rules, whereas if asymmetric sidebands were allowed, an additional 3,496 stations could increase one sideband to −10 dBc, with another 532 being able to increase one sideband's power to between −14 and −10 dBc. Asymmetric Petitioners also argue that the need to request experimental authorization, and the temporary nature of such authorizations, discourages use of asymmetric sidebands, which in turn limits digital FM stations to the power level needed to protect the adjacent-channel analog FM station that is most susceptible to digital interference. The Asymmetric Petitioners thus requested that the Commission amend its rules to allow FM stations to operate with asymmetric digital sidebands, without having to request experimental authorization to do so, in order to remove unnecessary regulatory barriers and promote broader adoption of terrestrial digital FM broadcasting. Asymmetric Sideband Petition at 8-11.

4. Discussion. The Commission concluded that the record contains considerable support for asymmetric sideband operation, and thus adopted the relevant proposals set forth in the NPRM, with some modifications to the rules that were proposed. (In addition, as proposed in the NPRM, 38 FCC Rcd 7158, n.65, to conform to the publishing conventions of the National Archives and Records Administration's Office of the Federal Register, the Commission added paragraph numbers to the list of definitions in 47 CFR 73.310(a) and (b). The definitions numbered and restated in the First R&O are identical to the current definitions.) The Commission therefore authorized digital FM stations, except stations operating on Channels 296-300, to originate digital transmissions at different power levels on the upper and lower digital sidebands without having to request experimental authorization, consistent with the requirements set forth herein. As further discussed below, a digital FM station need only notify the Commission of asymmetric sideband operation by filing notification on Form 2100, Schedule 335-FM—FM Digital Notification (Schedule 335-FM) in the Bureau's Licensing and Management System (LMS) database.

5. Asymmetric Sideband Operation Authorization. The Commission agreed with the commenters and found that asymmetric sidebands will promote the adoption of digital radio without increasing the risk of interference to existing analog broadcasts. Those commenters that addressed this proposal generally supported it. Some expressed approval of the proposal as being an affirmative step toward broader adoption of digital radio, with some specifically stating that eliminating the need for prior experimental authorization will encourage more stations to adopt FM digital operation. Many commenters opine that asymmetric operation will reduce interference to adjacent-channel analog FM stations, with some offering anecdotal or experimental evidence to support these claims. The Commission's current policy requiring the same power on both the upper and lower digital sidebands limits an FM station's digital power to that needed to protect the adjacent-channel analog FM station most susceptible to interference, regardless of whether there is a need to limit power on the other sideband. Asymmetric Petitioners contended, and commenters agreed, that allowing calculation of the maximum allowable digital FM power on a per-sideband basis allows such stations to optimize their digital signal coverage while still protecting analog FM stations on adjacent channels. The Commission agreed and, based on the record presented, found that it is in the public interest to allow asymmetric sideband operation, except on Channels 296-300, without the need for an experimental authorization.

6. Notice. The Commission further found that allowing a digital FM station to report its asymmetric sideband operation through a simple notification removes a regulatory barrier, compared to the current procedure of applying for an experimental license to operate asymmetrically, and having to file for annual renewals of that authorization. At the same time, the Commission believed it is important for it to track asymmetric operation in order to address any potential interference problems that may arise and to allow stations to identify if their adjacent-channel stations are using asymmetric sidebands. The Commission found that a simple notification should provide the correct balance between its desire to streamline the regulatory burden on stations adopting asymmetric operations and the need to be able to identify stations employing this functionality. The need to track stations employing asymmetric sideband operation includes identifying those stations that discontinue such operation. The Commission therefore similarly required that stations permanently terminating asymmetric sideband operation notify the Commission of such termination on Schedule 335-FM. The Commission also noted that this is consistent with the approach it takes for initial authorization of digital broadcasting. FM broadcast licensees have never needed to file a separate application for authorization to initiate hybrid digital operation; all that has been required is notification to the Commission. The Commission found the public interest would be similarly served by declining to require a separate application to initiate asymmetric sideband operation and allow stations to commence asymmetric sideband operation based on a simple notification.

7. To provide notification to the Commission, stations choosing asymmetric sideband operation will be required to file a revised Schedule 335-FM. The filing of Schedule 335-FM with the Commission does not trigger the release of a separate Public Notice in LMS, but like all LMS forms is searchable and thus available to members of the public using the LMS “Search” function. The Commission concluded this approach will provide the public with real time information on which stations have adopted asymmetric operations.

8. Some commenters sought further modification to the proposal regarding notice of asymmetric band operation. One advocated for the Commission to “maintain a readily accessible record of information” on every station increasing power, suggesting that this would include stations employing asymmetric sideband operation, arguing that listeners may find it difficult to identify digital-to-analog FM interference, and that such a public record of stations altering their digital power profile would assist in identifying interfering stations. Another believed that Schedule 335-FM should be modified to allow the notifying station to provide the effective radiated power (ERP) of the digital signal on both the upper and lower digital sidebands, as well as the total digital ERP. This commenter disagreed with the NPRM's proposal to modify § 73.406(d)(7) through (8) of the Commission's rules to require licensees to file Schedule 335-FM with a short statement of the reason(s) for discontinuing digital operation, including a return to symmetric sideband operation from asymmetric operation. It believed that specifying a reason is unnecessary because such operations “are not mandatory, are a voluntary business choice of the individual station, and the decision may be competitively sensitive.”

9. The Commission concurred with the latter commenter that Schedule 335-FM should be modified to require a party giving notification of asymmetric sideband operation to indicate the digital ERP on both upper and lower digital sidebands, as well as the total digital ERP. The Commission believed that requiring these data to be included in Schedule 335-FM should suffice to advise broadcasters and the public, through LMS, about digital operations. It thus found it unnecessary to adopt the suggestion that it implement a separate database of FM stations broadcasting in hybrid digital mode and the per-sideband digital power of such stations. The Commission concurred with the objection to the proposed requirement of providing a reason for discontinuation, agreeing that it is unnecessary given the voluntary nature of asymmetric sideband operation. It thus adopted the tentative conclusion that Schedule 335-FM notification should be required for any digital FM station that reverts to symmetric sideband operation from asymmetric sideband operation, but did not adopt the proposal to require any such notification of return to symmetric sideband operation to be accompanied by a short statement of the reason(s) for this action.

10. Reporting on Schedule 335-FM. After the effective date of the rules adopted in the First R&O, licensees will be required to use Schedule 335-FM to provide notice to the Commission. This will serve as a replacement for many of the current requests for experimental authorization and informal requests. As noted above, licensees will be required to use Schedule 335-FM to notify the Commission of the commencement or discontinuance of asymmetric sideband operation as a replacement for requests for experimental authorization. A station adopting asymmetric sideband operation must notify the Commission upon commencement of such operation by filing Schedule 335-FM. The Commission directed the Bureau to inform the digital FM station within 30 days of filing Schedule 335-FM if its asymmetric sideband operation is non- rule compliant. The station may commence asymmetric sideband operation upon submitting Schedule 335-FM and may continue such operation unless it receives notice of noncompliance during that 30-day period. Similarly, a digital FM station must notify the Bureau on Schedule 335-FM within 30 days of discontinuing asymmetric sideband operation.

11. The Commission also made an administrative change to the procedures used by licensees seeking to increase digital power above −14 dBc. Those requests, previously submitted by informal request, will be submitted using Schedule 335-FM. This minor administrative change will help streamline processing of these requests and will further the Commission's efforts to transition all broadcast filings to the Bureau's Licensing and Management System (LMS).

12. The 2010 MB DAB Order (Digital Audio Broadcasting Systems And Their Impact on the Terrestrial Radio Broadcast Service, Order, 25 FCC Rcd 1182 (MB 2010)), increased the allowable total power level of an FM station's digital sidebands from the previous maximum of −20 dBc to −14 dBc. 2010 MB DAB Order, 25 FCC Rcd at 1189, para. 16. The −14 dBc power level is for both FM digital sidebands combined; when both sidebands are operating at the same power level, each sideband would operate at −17 dBc, or 3 dB lower than the combined symmetrical digital sideband power, representing one-half of the total allowed digital ERP for each sideband. The same order allowed FM stations, except for grandfathered superpowered stations, to seek additional authorization to increase total digital power above −14 dBc, up to −10 dBc, through an informal request including a showing that such power increase would comply with the formula set forth in the 2010 MB DAB Order, and therefore would not cause harmful interference to adjacent analog FM stations. As noted, in this First R&O the Commission did not revise the formula that determines the maximum permissible digital power a station may use. However, for purposes of administrative efficiency, the Commission modified the current informal process used to request an increase in total digital power above −14 dBc. After the effective date of the rules adopted in the First R&O, digital FM stations must use Schedule 335-FM to request an increase in total digital ERP above −14 dBc, using table 1 to § 73.404(f) adopted in the First R&O, and will also report certain digital power decreases on Schedule 335-FM. Table 1 is based on the table set forth in the 2010 MB DAB Order, 25 FCC Rcd at 1190, para. 20, adapted for use on a per-sideband basis. Certifications of compliance with table 1 to new 47 CFR 73.404(f) must be based on the most restrictive analog field strength of the proponent at any nearby first-adjacent-channel station's 60 dBµ contour. See 2010 MB DAB Order, 25 FCC Rcd at 1190, para. 20. Although the table has been modified, the information submitted by the station is the same as it is currently. After the effective date of the First R&O, a digital FM station will report the following actions (or request authority in the case of an increase of total digital ERP above −14 dBc) by submitting Schedule 335-FM: the initiation of hybrid digital operation; the initiation of asymmetric sideband operation at any power level, as well as the discontinuance of asymmetric sideband operation; an increase of total digital ERP above −14 dBc; or a decrease in total digital ERP from a level above −14 dBc to a level at or below −14 dBc; in other words, an FM digital station not currently operating with total digital ERP above −14 dBc need not report further digital power reductions. A station choosing to operate with total digital ERP between −14 dBc and −10 dBc must still attach to its Schedule 335-FM submission an exhibit demonstrating that the proposed FM digital ERP is permitted for each digital sideband, using table 1 to 73.404(f), adopted in the First R&O. As is the case with the current informal request process, a digital FM station choosing to operate with total digital ERP above −14 dBc may initiate such operation upon approval from the Commission.

13. Changes to “per-sideband” table. Although the Asymmetric Petitioners support the Asymmetric Sideband Petition they co-authored with NPR, they identified shortcomings in the tables presented in the NPRM to determine the maximum allowable ERP of each digital sideband. Asymmetric Petitioners point out that total sideband power is necessarily calculated on a per-sideband basis, computing lower and upper digital sideband power by calculating the field strength of the digital FM station's F(50, 10) contour at its overlap with the 60 dBµ F(50, 50) contour of, respectively, the lower and upper first-adjacent analog stations. The Asymmetric Petitioners contend that the tables in paragraphs 9 and 26 of the NPRM are mis-labeled and thus are incorrect, as are their counterparts in Appendix A to the NPRM, the then-proposed new tables to § 73.404, paragraphs (e) and (f). In their comments, they submitted corrected tables as well as corrections to the proposed rule change to § 73.404.

14. The Commission agreed with Asymmetric Petitioners to the extent that the column headings of the tables in the NPRM were mis-labeled, and further agreed that the maximum permissible FM digital ERP is better displayed on a per-sideband basis, as the combination of the sideband ERPs adds up to the full digital ERP. The Asymmetric Petitioners proposed a per-sideband table, but their proposed table was calculated based upon adoption of the proposals in the NPRM to update the methodology used to determine maximum FM digital power. As no commenters objected to the use of a per-sideband table, and as the Commission did not adopt at this time the proposals to update the methodology for determining FM digital power levels, the Commission modified and adopted Xperi and NAB's corrected “Maximum permissible FM digital ERP per-sideband” table to comport with the current limits on FM digital ERP, as follows:

The reef fish fishery of the Gulf is managed under the Fishery Management Plan (FMP) for the Reef Fish Resources of the Gulf of Mexico (Reef Fish FMP), prepared by the Gulf of Mexico Fishery Management Council (Gulf Council). The CMP fishery is managed under the FMP for CMP Resources in the Gulf of Mexico and Atlantic Region (CMP FMP), prepared by the Gulf Council and South Atlantic Fishery Management Council (South Atlantic Council). The snapper-grouper fishery in the South Atlantic is managed under the FMP for the Snapper-Grouper Fishery of the South Atlantic Region, prepared by the South Atlantic Council. The dolphin and wahoo fishery in the Atlantic is managed under the FMP for the Dolphin and Wahoo Fishery of the Atlantic, prepared by the South Atlantic Council. The Secretary implemented these FMPs through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

The Generic Dealer Amendment established Federal dealer reporting requirements for federally permitted dealers in the Gulf and South Atlantic (79 FR 19490, April 9, 2014). The Headboat Reporting Framework Action established the Southeast Region Headboat Survey (SRHS) electronic reporting program (79 FR 6097, February 3, 2014). The final rule implementing the South Atlantic For-Hire Reporting Amendment included reporting requirements for South Atlantic snapper-grouper, Atlantic dolphin and wahoo, and CMP owners and operators of South Atlantic and applicable Atlantic for-hire vessels (85 FR 10331, February 24, 2020). Amendment 26 to the Reef Fish FMP established an IFQ program for the commercial red snapper component of the Gulf reef fish fishery (71 FR 67447, November 22, 2006). Amendment 29 to the Reef Fish FMP established an IFQ program for the commercial grouper and tilefish components of the Gulf reef fish fishery (74 FR 44732, August 31, 2009). Regulations implementing these Gulf and South Atlantic dealer reporting requirements, IFQ programs, and for-hire reporting requirements require that Federal dealers, IFQ dealers, and for-hire reporting program participants have access to a computer and internet. However, these regulations also specify that during catastrophic conditions, as determined by the RA, the RA may waive or modify the reporting time requirements for Federal dealers and authorize IFQ dealers to use paper-based forms to complete administrative functions for the duration of the catastrophic conditions. The RA must determine that catastrophic conditions exist, specify the duration of the catastrophic conditions, and specify which participants or geographic areas are deemed affected.

Hurricane Milton made landfall in the U.S. in Sarasota County, Florida, in the Gulf as a Category 3 hurricane on October 9, 2024. Strong winds and flooding from this hurricane impacted communities along coastal Florida in both the Gulf and South Atlantic. This resulted in power outages and damage to homes, businesses, and infrastructure. As a result, the RA has determined that catastrophic conditions exist in the Gulf for the Florida counties of Citrus, Hernando, Pasco, Pinellas, Hillsborough, Manatee, Sarasota, and Charlotte. For the South Atlantic, the RA has determined that catastrophic conditions also exist for the Florida counties of Brevard, Indian River, and Saint Lucie.

Through this temporary rule, the RA is authorizing Federal dealers, SRHS program participants, and South Atlantic Federal for-hire operators to delay electronic reporting to NMFS and IFQ dealers in the affected area to use paper-based forms, from October 16, 2024, through November 15, 2024. NMFS will provide additional notification to affected dealers via NOAA Weather Radio, Fishery Bulletins, and other appropriate means. NMFS will continue to monitor and re-evaluate the areas and duration of the catastrophic conditions, as necessary.

Dealers may delay electronic reporting of trip tickets to NMFS during catastrophic conditions. Dealers are to report all landings to NMFS as soon as possible. Assistance for Federal dealers in affected area is available from the NMFS Fisheries Monitoring Branch at 1-305-361-4581.

SRHS program participants may delay electronic reporting of logbooks to NMFS during catastrophic conditions. SRHS participants are to report all logbooks to NMFS as soon as possible.

South Atlantic Federal for-hire operators may delay electronic reporting of logbooks and “Did Not Fish” reports to NMFS during catastrophic conditions. South Atlantic Federal for-hire operators are to report all landings or Did Not Fish reports to NMFS as soon as possible. Assistance for Federal for-hire operators in the affected area is available from the NMFS Southeast For-Hire Integrated Electronic Reporting Program at 1-833-707-1632, Monday through Friday, between 8 a.m. and 4:30 p.m., Eastern Time. The electronic systems for submitting information to NMFS will continue to be available to all Federal for-hire operators, and for-hire operators are encouraged to continue using these systems, if accessible.

NMFS previously provided Federal IFQ dealers with the necessary paper forms and instructions for submission in the event of catastrophic conditions. Paper forms are also available from the RA upon request. The electronic systems for submitting information to NMFS will continue to be available to all dealers, and dealers in the affected area are encouraged to continue using these systems, if accessible. The administrative program functions available to IFQ participants in the area affected by catastrophic conditions will be limited under the paper-based system. There will be no mechanism for transfers of IFQ shares or allocation under the paper-based system in effect during catastrophic conditions. Assistance in complying with the requirements of the paper-based system will be available via the NMFS Catch Share Support line, 1-866-425-7627 Monday through Friday, between 8 a.m. and 4:30 p.m., Eastern Time.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is consistent with the regulations in 50 CFR 622.5(c)(1)(iii), 622.21(a)(3)(iii), 622.22(a)(3)(iii), 622.26(b)(3) (2020), 622.176(b)(3), 622.271(b)(3), and 622.374(b)(3) (2020), which were issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment are unnecessary and contrary to the public interest. Such procedures are unnecessary because the final rules implementing the Gulf IFQ programs, the Gulf and South Atlantic Federal dealer reporting requirements, and Gulf and South Atlantic for-hire vessel reporting requirements, and the SRHS reporting requirements have already been subject to notice and public comment. These rules authorize the RA to determine when catastrophic conditions exist, and which participants or geographic areas are deemed affected by catastrophic conditions. The final rules also authorize the RA to provide timely notice to affected participants via publication of notification in the Federal Register , NOAA Weather Radio, Fishery Bulletins, and other appropriate means. All that remains is to notify the public that catastrophic conditions exist, that Federal dealers and may use paper forms, and that Federal dealers, South Atlantic for-hire permit holders, and SRHS participants may submit delayed reports. Such procedures are also contrary to the public interest because of the need to immediately implement this action because affected dealers continue to receive these species in the affected area and fishermen continue to operate, and need a means of completing their landing transactions and logbook reports. With the power outages and damages to infrastructure that have occurred in the affected area due to Hurricane Milton, numerous businesses are unable to complete landings transactions, fishing reports, and dealer reports electronically. In order to continue with their businesses, IFQ dealers need to be aware they can report using the paper forms, and Federal dealers, South Atlantic for-hire permit holders, and SRHS participants need to be aware that they can delay reporting.

For the aforementioned reasons, there is good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

Regulations governing the summer flounder fishery are found in 50 CFR 648.100 through 648.111. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through North Carolina. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102, and the final 2024 allocations were published on December 21, 2023 (88 FR 88266).

The final rule implementing Amendment 5 to the FMP, as published in the Federal Register on December 17, 1993 (58 FR 65936), provided a mechanism for transferring summer flounder commercial quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the NMFS Greater Atlantic Regional Administrator, can transfer or combine summer flounder commercial quota under § 648.102(c)(2). The Regional Administrator is required to consider three criteria in the evaluation of requests for quota transfers or combinations: (1) the transfers or combinations would not preclude the overall annual quota from being fully harvested; (2) the transfers address an unforeseen variation or contingency in the fishery; and (3) the transfers are consistent with the objectives of the FMP and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The Regional Administrator has determined these three criteria have been met for the transfer approved in this notification.

Maine is transferring 4,000 pounds (lb; 1,814 kilograms (kg)) of summer flounder to Massachusetts through a mutual agreement between the states. This transfer was requested to help address an overage of the Massachusetts 2024 summer flounder quota. The revised summer flounder quotas for 2024 are: Maine, 180 lb (82 kg); and Massachusetts, 619,561 lb (281,028 kg).

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.102(c)(2)(i) through (iv), which was issued pursuant to section 304(b) of the Magnuson-Stevens Act and is exempted from review under Executive Order 12866.